Consumer Fraud

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As anyone can tell from our class action scorecards (federal and state), plaintiffs have not done very well lately – lately being the last couple of decades – with class actions involving alleged injuries caused by prescription medical products.  Between the general predominance of individualized issues in personal injury cases and the specific focus on the actions of prescribing physicians in prescription-only product cases (thanks to the learned intermediary rule), plaintiffs have suffered defeat after defeat.  While things aren’t perfect, all in all successful class actions for purported prescription medical product injuries are pretty rare.

Each defeat drives the class action purveyors further towards the margins, and recently, in In re Avandia Marketing, Sales Practices & Products Liability Litigation, 2015 WL 1736976 (E.D. Pa. April 16, 2015), one of the more marginal class action damages theories we’ve seen was swept away.

In Avandia, the would-be class representative did not claim to be injured in the slightest – either by the drug’s risks or by deprivation of the drug’s benefits.  As stated in the opinion, “Plaintiff received the drug she was prescribed, took the drug, and alleges neither that the drug failed to do its job (controlling Plaintiff’s blood sugar levels) nor that she was injured by taking the drug.”  Id. at *3.  The only damages that the plaintiff (and supposed class) sought were of the existential variety – some difference in subjective “worth” beyond what was reflected in the purchase price of the drug, purchase price being how value is necessarily determined in a free-market economy.  The complaint itself, doubtless to suppress the numerous individualized issues bubbling below the surface, was appallingly generalized and superficial.  The court observed:

Plaintiff does not allege when or for how long she took Avandia or how much she paid for it; nor does she identify the prescribing physician or allege any facts regarding her medical treatment.  Plaintiff also does not allege that Avandia was ineffective in treating her Type II diabetes, whether she took or would have taken another drug instead of Avandia, or the cost of such other drugs.  Plaintiff seeks damages “equal to the difference between the actual value of Avandia and the value of Avandia had it been as represented by Defendant.”

Id. at *1 (quoting complaint).Continue Reading Illusory Economic Loss Theory Held “Absurd” – Class Action Dismissed

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Since the inception of the blog we’ve taken interest in “flip side” lawsuits in which a plaintiff sues one of our manufacturer clients making allegations diametrically opposed to what we  usually see in product liability litigation – that, far from being injurious or “defective” − our client’s product is so valuable that the plaintiff can’t do without it, and is suing because of some threat to his/her supply of that product.

The first time we commented on such suits, the plaintiffs were suing the government, claiming a constitutional right to try investigational drugs.  We opposed that, knowing that, were such a right recognized, our clients would be the next targets of such constitutionally empowered plaintiffs, because our clients, not  the government, had the drugs in question.  The courts ultimately said “no,” see Abigail Alliance v. von Eschenbach, 495 F.3d 695 (D.C. Cir. 2007), but the lawsuits followed anyway.  Most of these cases involved desperately ill people grasping at investigational straws because there was no cure (or even reliable treatment) for their conditions (muscular dystrophy, multiple sclerosis, and similarly devastating and fatal conditions).  We summed this kind of litigation up recently in reviewing the first comprehensive law review article on the subject.Continue Reading Still No Duty To Supply Drugs – In 22 States

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We have had some time now to ruminate over the South Carolina Supreme Court’s opinion in State of South Carolina ex rel. Wilson v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., No. 2012-206987, 2015 WL 775094 (S.C. Feb. 25, 2014).  In Wilson, the state attorney general brought an enforcement action against the manufacturer of the atypical antipsychotic Risperdal under the state’s Unfair Trade Practices Act (having the dysphonius acronym “SCUTPA” in the opinion) and recovered $327 million in civil penalties. Although the Supreme Court reduced the award to $136 million, it mainly affirmed a verdict that, in our view, has multiple problems.  What problems?  Well, how about a nine-figure civil penalty for “deceptive” conduct when the state neither alleged nor proved that a single person was deceived or that the conduct had any adverse impact on anyone?  We call that a problem, but we’ll get back to that particular point in a moment.

Those who read our 2014 Ten Best column and those who dialed into our teleseminar in January on those cases know a little about Risperdal and the various states’ lawsuits against the drug’s manufacturer.  What happened was that the FDA asked all manufacturers of atypical antipsychotics to review data on diabetes, which resulted in a new warning on diabetes being added to the labels.  The FDA also required a Dear Healthcare Provider Letter, which the manufacturer of Risperdal sent, but the letter included information that was technically off label.

That resulted in an FDA warning letter in April 2004 stating that the DHCP Letter was “false or misleading” in violation of the FDCA, which in turn resulted in the manufacturer sending a corrective DHCP Letter.  Wilson, 2015 WL 775094, at **5-6.  That seems to be when various state attorneys general and their contingent-fee lawyers took interest.  Two of our Ten Best cases of 2014 were state false claims act cases arising out of these events where the states of Louisiana and Arkansas recovered very large judgments against this manufacturer.  Both verdicts were reversed on appeal, which was good news.Continue Reading An Atypical View of Causation and Harm from South Carolina

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Our occasional claims of dyspepsia may be attributed to various things.  Professional witnesses offering personal opinions from the stand, juries deciding based on emotion and bias, plaintiff lawyers being sleazy, and judges writing decisions driven by a predetermined result or just bad reasoning come to mind. Sometimes, we recognize that our discomfort stems, at least in part, from the subject matter of a case extending past the reasonable, yet wide and knowingly self-inflated, bounds of our expertise.  Among our hundreds of posts, more than a handful touch on Drug & Device Law in that they (1) involve cases with our clients’ products far from product liability or (2) involve issues we see in our cases being presented in very different types of cases.  While we may throw in some caveats about how we are treading beyond our usual bailiwick, we still offer our views and perhaps even a somewhat blind rant.  Here we are again—personally, this blogger has skipped the last three weeks for trial preparation and denouement—with a decision in a case that is far afield in some respects, but just does not feel right in about every respect.

The decision of the First Circuit in In re Nexium Antitrust Litig., Nos. 14-1521, 14-1522, 2015 U.S. App. LEXIS 968 (1st Cir. Jan. 21, 2015), affirming a class certification order from the District of Massachusetts is not too surprising if you just consider the courts involved and the name of a drug in the case caption. If you add that, broadly categorized, this is a third party payor case, then our view that the decision does not make much sense is even less surprising.  The allegation in the case, though, is something we find fairly novel and decidedly weird.  Plaintiffs are “union health and welfare funds that reimburse plan members for prescription drugs”—that is, a type of third party payor—and they claimed that the defendant branded manufacturer of a particular heartburn drug and three putative manufacturers of a generic form of the drug conspired to overcharge for the branded drug when they entered into settlements over patent infringement suits that paid the putative generic manufacturers to not try to get their ANDA approvals and sell their own versions for about six more years.  Are you with us so far?  Not being able to sue under federal antitrust laws because the Supreme Court says indirect purchasers are too remote to have a cognizable injury, the plaintiffs sued under state antitrust laws—adopted by half the union specifically to provide a claim not available under federal law—and state consumer protection laws.  They sued in one federal court (the E.D. Pa.) and the case was moved to another by the JPML. They sought a class on behalf of everybody in the U.S. or its territories who paid (or will have paid) any money for the drug, including generic versions not yet on the market, for their own use or use by anybody else.  With our caveat about the limits of our expertise, this lead in makes us start wondering about subject matter jurisdiction, personal jurisdiction post-Bauman (especially with the foreign defendants), how third party payors could be class reps for patients who bought their own drugs or for people who bought drugs for their relative, how a court-approved consent judgment could be considered anti-competitive behavior without running afoul of Noerr-Pennington doctrine,  and how there was not some preemption issue in basing state law liability on an assumption that FDA would have approved one to three ANDAs even if there were no patent issues.  Then we took a deep breath and realized that the Nexium decision did
not address any of that stuff.  It did note, however, that the defendants had already won a jury verdict at trial this past December, but “[t]his, of course, does not moot the case here given the possibility of further proceedings.”  Then we went back to bellyaching about what else was wrong with the basic premise of this case.  Then we had a drink.  And we don’t mean an antacid.Continue Reading Indigestion Inducing Treatment of Class Certification Requirements

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It is the time of year for reflection and resolutions. We look back on the ups and downs of the year that is about to end and look forward to the New Year with hope, promises and predictions.  As for 2015 here at the DDL Blog – we hope we will continue to be helpful and informative to our readers, we promise that Bexis will find at least one decision a quarter worthy of a full-blown tirade, and we predict that McConnell will keep us up-to-date on both legal trends and what’s hot on TV and at the movies.

As for 2014, Bexis is posting his annual Best Of and Worst Of lists.  Keeping with that theme, we decided to post about a case that has some of both, the good and the bad.  The case is Brown v. Johnson & Johnson, 2014 U.S. Dist. LEXIS 173800 (E.D. Pa. Dec. 9, 2014) and it involves the over-the-counter drug Children’s Motrin.  Wanting to end on a high note, we’ll dispense with the low points of the decision first.

First up, the preemption rulings.  The court held that plaintiff’s failure to warn claim was not preempted because the defendant had not shown that it could not have used the CBE process to change the warning label.  Establishing warning preemption in a drug case is an “exacting burden” for defendants requiring clear and convincing evidence that the FDA would have rejected the warning proposed by plaintiff.  Id. at *2-3.  The court applied the same “exacting burden” to defendant’s design-related preemption defense, finding a lack of evidence that the FDA would have rejected a proposed design change as well.  Id. at *6.Continue Reading Celebrating the Highs and Lows

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We again post the day after a holiday, when stores are flooded with shoppers—this time exchanging gifts purchased last time.  We discuss a case involving discussions of “consumer value” and “fair market value.”  So, you might think we would go back to that shopping well.  No.  We have decided to zag.  To us, the opinion on class certifications in Saavedra v. Eli Lilly & Co., No. 2:12-cv-9366-SVW (MANx) (C.D. Cal. Dec. 18, 2014), slip op., evokes another seasonal activity, playoff football.  Depending on how you count the requirements, plaintiffs in a purported class action need to clear three or four hurdles to get the certification they want.  Class certification tends to be a vehicle to settlement, which is what the lawyers who drive class action litigation really want, particularly in the consumer protection context.  Tripping over one of the hurdles typically means the journey was a waste.  In the NFL, four of the twelve playoff teams each need to win three straight games to hoist the Lombardi Trophy; the other eight each need to win four straight.  Teams that lose in the Conference Championship or Super Bowl tend to view the season as a failure, not a success.  The teams and players do profit from incomplete playoff runs, but we are not shaken from our view of the parallel here.

In the top division of college football, there is now a playoff of four teams.  The winner will have to win two straight games.  This would be on top of the conference championship game and “rivalry week” game that each had to win over the preceding weeks.  (Again, three or four hurdles, depending on how you view it.)  We can assume that the three teams that lose in the playoffs will not be “happy to have been here.”  The four universities will have profited quite a bit from the playoffs—and the players not all (which is a different discussion entirely)—but only one will have succeeded once it is done.  Still, once the playoffs start, the champion will be measured objectively:  which team won two playoff games?  In the past, before there was a playoff, the crowning of a champion or champions of this division of college football was a matter of subjectivity:  based on the individual view of the voters of the various groups that might anoint a champion, which team had the best season?   That subjectivity irked fans.  Even with mounds of statistics to measure performance, the lack of the definitive measurable—the results of playoff games—was unsatisfying.  (Yes, we know that the four playoff teams are selected with a large measure of subjectivity, but work with us.)

In consumer protection class actions premised on an alleged misrepresentation about a prescription drug, the plaintiffs should have to allege an objective harm and an objective way to measure it.  When they cannot, they should not have a class (or probably even individual claims of the purported class representatives).  Saavedra comes out of litigation over the risks of withdrawal from a prescription antidepressant.  We have posted previously on summary judgment on warnings claims in personal injury cases with the same product and risk.  Here and here.Continue Reading When It Comes to Class, Objective Is Better Than Subjective

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Before Bryan Cranston was Walter White, terminally ill chemistry teacher turned murderous meth manufacturer; before he was Hal, the clumsy and loving husband on Malcolm in the Middle – he was Tim Whatley.  Jerry Seinfeld’s re-gifting dentist who converted to Judaism just “for the jokes.” So affronted is Jerry for his profession, that Kramer –…

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Yesterday the Third Circuit upheld a District of New Jersey decision denying class certification as to plaintiffs’ consumer fraud and unjust enrichment claims.  Grandalski v. Quest Diagnostics Inc., 2014 U.S. App. LEXIS 17543 (3d. Cir. Sep. 11, 2014).

Plaintiffs alleged that Quest had overbilled them for testing services and their complaint proposed multiple nationwide…

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Here’s the second case that was sent to us by our readers.  It is a favorable decision on one of our many pet peeves, off-label promotion, In re Celexa & Lexapro Marketing & Sales Practices Litigation, 2014 WL 3908126 (D. Mass. Aug. 8, 2014).  On this one, the congratulations belong to Debevoise for winning it, and our thanks to J. Robert Abraham for being so kind as to send us a copy of the decision.

In C&L (the official title is too much of a mouthful) the defendant was sued under the California unfair competition statute (“UCL”) for “restitution” of co-payment the plaintiffs paid for Celexa.  The case was initially brought as a class action (most UCL cases these days are), but certification had been denied earlier because of the predominance of individualized issues.  Among other things, C&L demonstrates the correctness of that determination, since the reliance facts were quite peculiar.

Other than the peculiar UCL damages (personal injury is not recoverable), C&L reads like a learned intermediary rule warning causation case and applies largely the same principles.

Continue Reading Interesting Cases Sent By Users (Part II) Off-Label Promotion

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While most of the buzz late last week concerned the Darvocet affirmance, we also recommend that defense counsel check out this case:  Amos v. Biogen Idec, Inc., 2014 WL 2882104 (W.D.N.Y. June 25, 2014).  Amos involved the prescription drug Tysabri.  The allegation in Amos, as in most Tysabri, cases, is that the drug caused an opportunistic type of CNS infection.

That’s not what interests us about Amos, but rather the product being an innovator drug, not a generic.  That’s why we’re pleased with Amos’s first holding – that design defect claims are preempted.  Ever since our first reading of Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013), we have believed that Bartlett’s rationale mandates impossibility preemption of design defect claims with any drug.  That’s because no drug manufacturer, generic or innovator, can change the design of its drug in any way that alters its safety or effectiveness without getting prior FDA approval of the change.  That’s precisely what the court held in Amos, preemption of design defect claims as to any drug in “interstate commerce,” albeit without much resistance from the plaintiffs:

Continue Reading Interesting Case On A Couple Of Issues

Drug & Device Resources

Bexis’ Book

FDA-regulated products now account for an estimated one-fifth of overall economic activity in the U.S. They have also been the focus of a litigation explosion. This timely guide covers all aspects of litigation involving drugs, medical devices, vaccines and other FDA-regulated prescription products.
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