We continue to scratch our heads over consumer class actions seeking monetary compensation when the customers received exactly what they paid for. We see them from time to time in the pharmaceutical space, where patients claim monetary compensation even though the prescription drugs they used worked like they were supposed to with no adverse reactions.
It’s vacation time for many of our colleagues. Bexis shrewdly commenced a hiking holiday in Kauai, just in time to greet a hurricane. We were less adventurous. For us, it was enough to knock back poutine and ice wine and walk the old city walls in Quebec. There was one excursion to watch the Drug …
We have written a lot about personal jurisdiction and class actions, and we have particularly questioned how, after BMS, anyone could proceed with a nationwide class action applying state law in a forum where there is no general personal jurisdiction over the defendant. We are not the only ones posing this question, but as…
We never heard the term “slack fill” before we started writing for this blog, but it seems to be getting a lot of attention lately. We enjoyed a podcast from NPR’s Planet Money the other day discussing slack fill in black pepper containers, and we blogged on the FDA’s regulation of slack fill a little more than a year ago. We have to admit, the words are fun to say. “Slack fill.” They snap off your tongue with a certain percussive elegance. Sort of like “Severus Snape.” Or “Coco Crisp,” who is an actual person, a switch-hitting outfielder currently vying for a World Series crown with the Cleveland Indians. (Coco Crisp, whose given name is Covelli Crisp, broke into the big leagues with the Indians in 2002, and he returned to Cleveland just a few months ago after spending six-and-a-half seasons leading off for our beloved Oakland Athletics. His change from the white cleats to black is a big loss for Oakland and, if the Indians beat the Cubs, a bigger win for Coco. But we digress.)
For those who missed our prior post on slack fill, the term refers to empty space, like the extra air in a bag of chips. The variant “nonfunctional slack fill” refers to pointless empty space. It’s just there, serving no purpose, just like a recent slack fill class action that recently met its demise in the Eastern District of New York, Fermin v. Pfizer, Inc., No. 15-cv-2133, 2016 U.S. Dist. LEXIS 144851 (E.D.N.Y. Oct. 18, 2016). In Fermin, the plaintiffs’ alleged that they were “tricked” into purchasing ibuprofen because the containers were too big. Id. at *1. Never mind that the labels prominently and accurately stated exactly what was in the bottles, down to the number of pills. These plaintiffs alleged that the “excessive empty space” in the packaging misled them into purchasing the product, and they purported to represent a class of purchasers under the consumer laws of multiple states. Id.
A class action claiming that a diet supplement was falsely advertised as being an aphrodisiac cries out for bad jokes and silly puns. Are we above all that? Er… sure. The supplement is called IntenseX. (Get it? Why don’t we ever see such clever marketing in law firm websites?) The case is called Sandoval v. Pharmacare US, Inc., 2016 U.S. Dist. LEXIS 140717 (S.D. Cal. June 10, 2016). The lead plaintiffs were from California and Florida. Both alleged breaches of express and implied warranty, violations of California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act, and violation of the federal Magnuson-Moss Warranty Act. The plaintiffs sought certification of a nationwide class of disappointed IntenseX users. The plaintiffs also grumbled that they would accept California and Florida classes as alternatives. The court denied class certification, so there was a happy ending. The court did so after marching through the Rule 23 analysis in a logical, straightforward fashion, so the bits leading up to the climactic noncertification were also happiness-inducing, if not intense.
As usual, the plaintiffs could establish numerosity and (more controversially) ascertainability. Just as usual, the plaintiffs could not establish that common issues predominated over individual ones. The plaintiffs asserted that common to all claims for all class members was whether the representations about aphrodisiac effects were likely to deceive a “reasonable consumer.” But an inference of reliance was not available in this case because there was no evidence that consumers had been exposed to a widespread, long-term marketing campaign. (The court drew a contrast to advertising for tobacco, a product we wanted to use immediately after reading this case.) What’s more, there was no evidence of any shared understanding among consumers as to the promised effects of IntenseX. Even if there was a way to characterize the promise of IntenseX marketing in some general way, the court ruled that the plaintiffs “did not present sufficient evidence that IntenseX is incapable of producing the promised effects.” What would such evidence look like? Even if there were declarations by some disappointed users recounting their sad experiences with IntenseX (think of a bizarro-world version of Dear Penthouse Forum letters), would they truly establish a causal nexus? Consider all the comorbidities that might account for why consumers couldn’t get any satisfaction. Maybe they misplaced their Lionel Richie records, or showed up on date-night wearing socks with sandals.
The Telephone Consumer Protection Act (“TCPA”) potentially touches just about every kind of business, including the business of selling prescription drugs. That is what the Northern District of California grappled with (correctly) in Jackson v. Safeway, Inc., No. 15-cv-04419, 2016 U.S. Dist. LEXIS 140763 (N.D. Cal. Oct. 11, 2016). In Jackson, the plaintiff received a telephone reminder from her pharmacy that she was due for an annual flu shot, which prompted her to go in the next day to receive her shot. Id. at **5-6. Of course, what do you do after you receive disease-preventing medical treatment? You file a class action lawsuit dissing the pharmacy for bothering to call. What is the old saying about no good deed?
For the uninitiated, the TCPA is the federal statute passed in the early 1990s that regulates “telemarketing.” We place that word in quotes for two separate reasons. First, we use quotes to demarcate a term of art—the FCC uses the term “telemarketing” to define significant obligations under the Act. Second, we use quotes to indicate irony (picture us making the familiar “air quotes” gesture as you read this post). Although Congress passed the TCPA to cut down on intrusive “telemarketing” calls, many say that the FCC’s regulations do not target “telemarketers” narrowly enough. That makes other businesses who are reaching out to their customers (like our pharmacy) potential targets for abusive litigation. The stakes are high. The statute imposes penalties of up to $1,500 per violation, and in a society where telephones increasingly serve as our windows to commerce and human relations, those penalties can multiple to large numbers quickly.
A particular target for critics of the regulations is a 2012 FCC order that could have, for example, strengthened an exception for calls made within existing business relationships. But the 2012 order instead abolished that exception, among other provisions. A follow-up order issued in 2015 clarified matters, but that also fell short of expectations for many. One example is the FCC’s definition of an “automated telephone dialing system,” which some say is now broad enough to include our iPhones. We are not so sure, but the ambiguity in the rules is most unwelcome. (You can read Reed Smith’s alert on the 2015 order here.)
We are writing about this here because the district court in Jackson invoked two TCPA exceptions that apply to healthcare: (1) The “exigent healthcare treatment exception,” which creates a safe harbor for “exigent” calls that have a “healthcare treatment purpose” and “are not charged to the calling party”; and (2) the “telemarketing health care exception,” which permits automated calls that deliver “health care” messages from HIPAA covered entities and their business associates.