Ever since we first waded into the issue of “duty to supply” back in 2007 in connection with the litigation that produced Abigail Alliance for Better Access to Developmental Drugs v. von Eschenbach, 495 F.3d 695 (D.C. Cir. 2007), we’ve criticized cases that, either actually or potentially, seek to impose liability – not for defective products – but for failure to supply as much of a non-defective drug as has been prescribed for the plaintiff.  Today, we’re updating that discussion with a recent development, the affirmance of the decision that rejected the concept of “duty to supply” in 22 states.  We blogged about that decision in the district court here.  Plaintiffs thereafter appealed, but dropped their claims asserting a “free-standing duty to supply the market.”  What’s left are described as “acceleration” (that progression of the disease allegedly worsened”) and “contaminant” (related to the production difficulties) claims.

This decision is Hochendoner v. Genzyme Corp., Nos. 15-1446, -1447, slip op. (1st Cir. May 23, 2016).  The allegations in Hochendoner were that production difficulties led to a shortage of the only FDA-approved treatment for Fabry Disease, a progressive condition that is eventually fatal if untreated.  Slip op. at 3-5.  The shortage (which lasted several years) led to rationing, and in response to rationing a bunch of Fabre sufferers tried to sue.  For more details, see our prior post.  Except for one plaintiff, none of them alleged that there was anything wrong with the product they actually received – only that they didn’t receive enough of it, and as a result their pre-existing Fabre Disease symptoms recurred and/or progressed.

The First Circuit affirmed, albeit on different grounds – standing . Although not addressed in the District Court, standing is a “prerequisite” to subject matter jurisdiction, and cannot be waived.  Slip op. at 8.  An interesting procedural point that the court confirmed is that a “plaintiff bears the burden of establishing sufficient factual matter to plausibly demonstrate his standing to bring the action” under TwIqbalId. at 10.  In Hochendoner all but one of the plaintiffs alleged no particularized injury (no doubt because the litigation was a putative class action, and anything particularized is likely to preclude class certification).  Simply being required to take a reduced dose of a drug didn’t come close to actual, particularized injury:

Utterly absent, however, is any allegation linking the alleged acceleration and contaminant injuries to any specific plaintiff. This gap is most apparent with respect to the contaminant theory.  There is simply no assertion at any point in the complaints that any specific plaintiff took or received a dose contaminated with particulate matter.  Rather, the allegation is only that [defendant] produced a batch of [the drug] contaminated with particulate matter − not that contaminated doses were ever shipped or administered to any named Fabry patients.


Continue Reading New Duty To Supply Decision

We have posted many times about cases where a manufacturer of a regulated product is sued over alleged violations of a state consumer protection or deceptive trade practices act because of something allegedly amiss in the product’s name, labeling, advertising, or sales practices.  We know that drug and device manufacturers like the ones we represent can spend resources dealing with state attorneys general over the threat that such suits will be brought.  We cannot recall seeing, let alone posting on, a case where the manufacturer sued the state attorney general because its threat of suit—relayed to major retailers, who stopped selling the product—allegedly hurt its business and constitutional rights.  There would seem to be lots of reasons why an action like this might not be taken by a company that wants to keep doing business in the particular state for other products it manufacturers.  But if you are a one product, dietary supplement company and your presumably large market in Texas disappeared after letters went out based on a determination by the Texas AG’s office, not by a court, then you might be the one to bring suit preemptively.  That is what happened in NiGen Biotech, L.L.C., v. Paxton, No. 14-10923, 2015 U.S. App. LEXIS 17223 (5th Cir. Sept. 30, 2015).

The unusual posture of the case—in comparison to those we usually handle or read—means that it delves into constitutional issues that we knew better back when we clerked and the docket was sprinkled with cases against state actors.  The ones brought by prisoners are remembered more for their unique fact patterns and brand of advocacy than for the constitutional principles they implicated.  NiGen, likewise, holds our interest not because its treatment of sovereign immunity, federal question jurisdiction, and standing has direct implications for the sort of cases that normally fill our posts.  Rather, it shows that a manufacturer can go on the offensive against a state AG who probably thought it could do just about whatever it wanted prior to bringing its own suit.  It is not that we think the manufacturer Nigen is right on the underlying issue of whether the product’s label was deceptive, which touches on some complex constitutional issues, especially since Amarin has come down since this case started.


Continue Reading Going on Offense against State Deceptive Trade Practices AG Actions

Can a plaintiff sue in federal court for consumer fraud when he never purchased and never used the product?  This is not a trick question, and the obvious answer is also the correct answer.  No, he can’t.  But the point raises interesting strategic issues that we will get to in a minute.  The case du jour is Dapeer v. Neutrogena Corp.No. 14-22113-Civ, 2015 U.S. Dist. LEXIS 37644 (S.D. Fla. Mar. 25, 2015), where the plaintiff filed a class action alleging that the labeling for more than 20 different types of sunblock made deceptive sun protection claims.  Id. at **2-3.  Mind you, the plaintiff did not allege sunburn, or any other adverse effect of the allegedly underpowered and purportedly not-so-water-resistant lotions and sprays.  His claims were of the economic type, as class actions these days tend to be, alleging that he would not have purchased the products had he known that the products did not actually block the sun or resist water as well as the labels claimed. Id. at *3.

The problem for the plaintiff was that he had purchased only two of the products, leading the court to conclude that he lacked Article III standing to represent classes asserting claims over the products he never bought.  Apparently, there are district courts that would have allowed this plaintiff to do what he wanted to do, i.e., represent class members on claims involving over 20 products [see id. at *9 n.3], although we cannot see how that can possibly be.  The rule in the Eleventh Circuit seems rock solid:  “[A]t least one named plaintiff must establish Article III standing for each class subclaim.  In other words, Article III standing of a named plaintiff must be established on a claim-by-claim basis within the Eleventh Circuit, and deferring the standing determination to the class certification stage will yield no different result.”  Id. at *9 (citations omitted).

So to have standing in a claim alleging deceptive sales, the plaintiff must have bought the product, and the district court therefore dismissed the claims related to products the plaintiff did not purchase or use.  Id. at *9 (“Here, Plaintiff lacks Article III standing to bring claims on behalf of the . . . products he did not purchase because he cannot conceivably allege any injuries from the products that he never purchased or used.”).  The class action still went forward, but with claims over two products instead of more than 20.


Continue Reading Plaintiff Gets Burned By Article III in Sunblock Class Action

Today we have this guest post from Reed Smith‘s Andrew Stillufsen about a recent defense win in a third party payer (or is it”payor”?) case here in the Eastern District of Pennsylvania.  We hope you find it as interesting as we did.  As usual all credit and/or blame belong to the guest poster.

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Travelers Indemnity Co. v. Cephalon, Inc., is a third party payor case where plaintiffs – workers compensation insurers – claimed that they were injured by paying for prescriptions for defendant drug company’s  pain medications which were written as a result of its alleged off-label marketing of the drug.  2014 U.S. Dist. Lexis 95075 (E.D. Pa. July 14, 2014).  SPOILER ALERT:  as with similar cases, even after extensive discovery and an amended complaint, plaintiffs still failed to allege facts sufficient to establish standing or to support any of their fraud claims.  Motion to dismiss granted.

Before the court could address plaintiffs’ substantive claims, it first had to determine whether the allegations were sufficient to establish standing.    To establish standing, the plaintiff must show that they suffered a cognizable injury. Id. at *16-18.   “The contours of the injury-in-fact requirement, while not precisely defined, are very generous, requiring only that the claimant allege some specific, identifiable trifle of injury.”  Id. at *17.  (citations and internal quotations omitted).  Under the now-familiar TwIqbal analysis, plaintiffs failed to allege sufficient facts to show even a mere “trifle.”

In this case, plaintiffs essentially alleged two theories of injury.  First, they claimed they were injured because “they did not get what they paid for,” as plaintiffs paid for drugs that were not safe or effective due to defendant’s alleged fraudulent off-label marketing.  Second, but for the alleged off-label marketing, plaintiffs  claimed they were injured when they paid for more expensive drugs when less-expensive drugs were available.  Id. at *18-19.


Continue Reading Guest Post – Another Third Party Payor Case Is Shown The Door

“Necessity is the mother of invention.”  “Desperate times call for desperate measures.”  “Bad facts make bad law.”  We see two of three of these adages play out in Carik v. U.S. Dept. of Health and Human Services, No. 12-272 (BAH), 2013 U.S. Dist. LEXIS 168714 (D.D.C. Nov. 27, 2013). To the great credit of

It’s the day after Labor Day.  For some it is the day they mourn the end of summer.  For some, it is the start of the countdown to the holiday season (58 days till Halloween, 86 days till Thanksgiving, 113 days till Christmas).  But for the vast majority, the first week of September means back to school.  Whether it is nervous kindergarteners heading out for the first time, surly teens who have to be dragged out of bed kicking and screaming, or college freshman quickly realizing why no upper classmen take Friday morning classes – it is all part of the back to school ritual.

Which got us thinking about some of the greatest school-based movies.  There are way too many to name, so apologies from the start if we miss your favorite.  But anyone’s short list for high school movies has to include The Breakfast Club, Fast Times at Ridgemont High, Ferris Buehler’s Day Off, Grease, and Dazed and Confused.  Graduating to college you have Goodwill Hunting, The Social Network, The Paper Chase, Higher Learning, Old School, and Back to School

And, of course, the single best movie about college of all time – National Lampoon’s Animal House. “You guys playing cards?”  “Guess what I am now.”  “Was it over when the Germans bombed Pearl Harbor?” “Toga, Toga.”  And who could forget:  “Is that a pledge pin?  On your uniform?”  Of course, true classics like Animal House can’t be replicated, but they can be spoofed.


Continue Reading Monster Beverage Launches Preemptive Strike

We like CAFA – that is the Class Action Fairness Act – because a federal forum is generally much preferred (and becoming moreso after Dukes and Comcast) for class actions involving prescription medical products, not to mention just about anything else.  Thus we cautioned some time ago that the industry could “lose by winning”

Back when Bexis was still at Dechert, we put up a cautionary post called “CAFA Not With Standing.”  In that post we cautioned against using constitutional standing as a defense to class actions with questionable and attenuated damages claims.  Remember CAFA, we pointed out.  The damages sought in state-court class actions need to support federal Article III standing, or else defendants won’t be able to keep the actions in federal court.

Well, yesterday the court in Bouldry v. C.R. Bard, Inc., No. 12-80951-CIV, slip op. (S.D. Fla. Dec. 18, 2012), addressed precisely the situation discussed in that post.  Fortunately, our side won, and the class action stayed in federal court, where there are plenty of other arguments against its validity.

First, we have to point out that Reed Smith was involved in the Bouldry case, so we can’t say as much as we’d like.  We’ll have to stick to the legal propositions.  As for the facts, all we can say is that the Bouldry opinion should be applicable to other attenuated injury class actions, regardless of the product or conduct involved.

Bouldry involved a state class action in Florida alleging that a medical device had a higher risk of failure than it should.  The class consisted of people who had not suffered any failure.  There are good arguments that this sort of at-risk damages are not recoverable under most states’ laws − see our no injury scorecard, and in particular the Shiley heart valve cases from the late 1980s and early 1990s, which addressed similar allegations.  Hint:  the defendant won almost all of them.


Continue Reading At Risk Claims Sufficient To Support Federal CAFA Jurisdiction

About a year ago we reported on the dismissal of what we characterized as a “really bogus” attempted class action in In re McNeil Consumer Healthcare Marketing & Sales Practices Litigation, 2011 WL 2802854 (E.D. Pa. July 15, 2011) (“MCH”). We distilled the 2011 MCH opinion down into four “simple rules” for pleading:

Simple rule #1: If you didn’t buy the product, you can’t claim economic loss from purchasing it.

Simple rule #2: There has to be something wrong with the product before you can sue over it.

Simple rule #3: What you didn’t buy can’t cause you any injury from its mere purchase.  See simple rule #1.

Simple rule #4: Don’t allege physical impossibilities.

We noted at the end of that post that the court in MCH had granted leave to amend, but speculated that the plaintiffs − even though enjoying the excellent representation characteristic of multidistrict proceedings − might well flunk TwIqbal again because they were more interested in alleging something that had a prayer of being certified as a class than they were in stating a claim in the first place.

It turns out we were right.


Continue Reading Still Standing

Not too long ago we advised that it’s a good idea to check whether your plaintiffs were actually alive when they filed their suits.  We’d like to amend that to add that it’s also a good idea to check whether your plaintiffs were financially alive as well.

By that, we mean plaintiffs should be checked