Consumer Class Actions and Mass Torts : Class Action Lawyer & Attorney : J. Russell Jackson : Skadden Law Firm : Complex Class Actions : Consumer Class Actions & Mass Torts Law Blog

New Yorkers always warn: "Don't buy a dog at a pet store!  They all come from puppy mills, are sick, and were raised in deplorable conditions."

But I bought my dog at a mall pet store.  I wasn't shopping for a dog nearly two years ago when Ted came into my life.  But decisions have consequences, and the decision to kill time at a pet store while waiting for friends to arrive for dinner at a nearby restaurant resulted in me sharing my apartment with Mr. Ted E. Bear.

I didn't know much about where he came from.  His papers said a farm in Missouri, my home state.

And frankly, I didn't care.  Although I sincerely hoped he had not come from a puppy mill, he had a very chill personality and I could tell we would get along well together.  If he had the croup and I had to pay for a vet visit, so be it.  (Thankfully, he didn't.)

Given this experience, I read Martinelli v. Petland, Inc., 2010 WL 376921 (D. Ariz. Jan. 26, 2010) with great interest.  In Martinelli, 32 plaintiffs brought a class action against Petland, alleging that they defrauded consumers by selling sick dogs that were raised in puppy mills while representing to the public that the puppies were "healthy," "the finest available," bred by "professional and hobby breeders who have years of experience in raising quality family pets," and "bred under safe and humane conditions by a reputable breeder with proper canine husbandry practices."  Plaintiffs plead causes of action under RICO, state consumer protection statutes, and unjust enrichment.

The court in Martinelli dismissed all but two plaintiffs' RICO and consumer protection claims for failure to adequately plead causation.  The complaint was chock full of allegedly fraudulent statements made by Petland and the breeder, The Hunte Corporation, on websites and in written materials.  Conspicuously absent from the complaint, however, were allegations saying that these statements caused them to make their purchase.  The court noted that "not a single Plaintiff has alleged that he or she ever visited Defendants' websites, received Defendants' written brochures, or relied on a written health certificate or warranty."  Id. at *3.

The court held that "absent some allegation of reliance, Plaintiffs have not pled a 'direct and proximate causal relationship' between Plaintiffs' injuries and [the] purported fraudulent scheme."  Id.  The plaintiffs argued that causation should be inferred as a matter of common sense, as no one would want to purchase defective goods.  But the court noted that even if plaintiffs had received the alleged misrepresentations, the court could not presume that they were material to the plaintiffs' decisions to purchase the animals:

[T]here is no single, common-sense reason for a puppy purchase.  A person might buy a puppy because he falls in love with it in the store window, he has heard it will make a good guard dog, he likes the price, he is referred to the store by a friend, or he finds the store convenient.  It is not necessarily true that every purchaser would base his or her decision on the fact that the puppy was "the finest available" or was bred by professional, hobby, or USDA-approved breeders -- key misrepresentations identified in the amended complaint.

In making their common-sense causation argument, Plaintiffs focus exclusively on the health of the puppies, asserting that "it is illogical that Plaintiffs would purchase their sickly or dying puppy mill puppy absent a misrepresentation as to its health. . . . A person who falls in love with a puppy in the store window might well purchase the puppy in the absence of any representation concerning its health.  However unwise, some people may even buy a sick puppy in order to provide it a good home and nurse it back to health.  It simply cannot be said that a representation concerning the puppy's health is obviously relied on in the same way that a consumer looking for car wax relies on the product's label as "car wax" or in the same way that a person paying for a tax service relies on the assumption that the service will be available.  Plaintiffs conspicuously have failed to allege that they relied on representations concerning the puppies' health, and the Court cannot assume that such representations were the reason Plaintiffs purchased the puppies.

Id. at *4 (citations omitted).

The court dismissed the RICO claims of all plaintiffs except two -- Plaintiffs Moskow and Galatis -- who alleged reliance upon oral representations made by Petland (but not the breeder, Hunte).  Plaintiff Galatis allegedly was specifically reassured by a Petland employee that the puppy was healthy and "(1) it had never been sick, (2) was up to date on his shots, (3) was not hypoglycemic, and (4) was lethargic and quiet only because he was stuck in a cage all day long."  Id. at *5.  Plaintiff Moskow asked whether his puppy was from a puppy mill and he was assured that it was not.  The court held that these oral representations were part of the scheme alleged in the complaint, and it inferred that plaintiffs had relied upon them in making their purchase.  Thus, the RICO claim survived for Plaintiffs Moskow and Galatis.

The court applied the same analysis to the Rule 9(b) challenge to the complaint and to the state consumer protection act claims.  The generic allegations of the vast majority of the plaintiffs failed to sufficiently plead causation:

Plaintiffs assert that reliance is not an element of many state consumer protection claims.  But plaintiffs do not dispute that causation is an essential element.  Indeed, "whether it be termed an issue of reliance or an issue of proximate cause, an appropriate rule is that where the defendant is alleged to have made material misrepresentations or misstatements, there must be a cause and effect relationship between the defendant's acts and the plaintiff's injuries.  Thus, regardless of whether reliance is a required element under state consumer protection statutes, Plaintiffs "must at least allege that they were exposed to the offensive conduct."  Plaintiffs other than Moskow and Galatis have made no such allegation.

Id. at *9 (citations omitted).

The court thus dismissed the state consumer protection claims except for Plaintiff Moskow's claim under the Maine consumer protection act.  (Plaintiff Galatis was from Massachusetts, but the Massachusetts act had not been pled in the amended complaint.)  It also dismissed the unjust enrichment claims for all plaintiffs except Moskow and Galatis; because the two had adequately pled a fraud-based claim, the unjust enrichment claim could stand, the court held.

Finally, the court rejected the defendant's assertion of the economic loss doctrine as a defense to the claims.  Petland argued that because plaintiffs allegedly received damaged goods, they therefore were asserting typical warranty claims that give rise to purely economic loss.  The court disagreed, observing that plaintiffs were seeking damages for being fraudulently induced into entering into the sales contract.

Martinelli is an interesting decision because it parses through the possible motivations underlying the purchase decision and holds that, after already having been given one chance to amend the complaint, a plaintiff cannot plead consumer fraud or RICO without pleading a causal connection between the allegedly fraudulent statements and the reason he made the purchase.  Because this is an essential element of each class member's claim, it seems clear that individual issues would predominate a trial, making class certification unlikely. 

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That Fred Burnside gets TWO gold stars today!  First, he informed me that the Ninth Circuit refused to hear the appeal of the decision denying class certification in the Xbox litigation.  Now he shares with us a well-written opinion from the Washington Supreme Court holding that a trial court in wireless telephone litigation correctly refused to certify a nationwide class action.

The decision in Schnall v. AT&T Wireless Servs., Inc., No. 80572-5 (Wash. Jan. 21, 2010) (en banc) is particularly timely because its reasoning on the Washington Consumer Protection Act stands in stark contrast to the decision I highlighted on Tuesday, which had effectively read the causation requirement out of Florida's Deceptive and Unfair Trade Practices Act.  But I've gotten ahead of myself.

In Schnall, plaintiffs had brought a putative nationwide class action against AT&T Wireless, claiming that its collection of a "universal connectivity charge" violated the customers' contracts and violated Washington's Consumer Protection Act.  The trial court had refused to certify the class, but the intermediate appellate court had reversed, reasoning that the challenge to a standardized contract was capable of class adjudication.

The Washington Supreme Court reversed the class certification, making four important points.  First, the court held that the trial court had not abused its discretion in holding that the need to apply the law of 50 states made the putative nationwide class fail the predominance requirement.  The Washington Supremes observed that the trial court was correct in honoring the choice of law provision in the contracts, which required the application of the law of the place where the customer signed the contract.  Further, it cited at length the federal precedents recognizing that the need to apply the law of 50 states generally makes class certification untenable, because the variations in state laws may swamp common issues and defeat predominance.  Slip op. at 11.  For example, in the context of the Schnall complaint, the court observed that, for those states that recognize it, "[t]he availability of the voluntary payment doctrine alone could abrogate AT&T's liability for all customers who voluntarily paid the [fee] after receiving the informational flyer."  Id. at 12.

Second, the Washington Supremes noted in their analysis of the superiority factor that:

Washington has no interest in seeing contracts executed by AT&T representatives in other states with citizens of those states examined and adjudicated in Washington courts.  Certified as a nationwide class action, this case would present an unwarranted and unnecessary burden on the state judicial system, all at a large cost to taxpayers.  There is no sound reason in this case for this court to force Washington trial courts to entertain the contract claims of citizens from around the nation.  Their state courts are equally as prepared, if not better situated to apply the contract laws of their states.  The trial court did not abuse its discretion by denying nationwide certification of the plaintiffs' contract claims.

Id. at 15 (citation omitted).

Third, the Washington Supremes recognized that the state's Consumer Protection Act ("CPA") does not apply extraterritorially to provide a cause of action to nonresidents whose claims arose in other states.  Id. at 16.  This geographic restriction is inherent in the language of the statute, but as the court recognized, it also emanates from the CPA's "history as a tool used by the State attorney general to protect the citizens of Washington."  Id.  The AG, the court noted, has no power beyond the state's borders and is charged with protecting only Washington residents.  Thus, regardless of whether it is the official Attorney General or a "private attorney general" suing to enforce the statute, the jurisdictional limitation applies and a "private claimant cannot state a CPA claim by proving the defendant's practices affect the public interest or the citizens of another state."  Id. at 17 (emphasis in original).

Fourth -- and this is where the decision stands in stark contrast to the one I discussed on Tuesday -- the Washington Supremes reiterated that even for Washington plaintiffs, proof of causation is an essential element of a CPA claim.  Id. at 18.  Indeed, "proximate cause in a class action cannot be established by 'mere payment' of an allegedly injurious charge."  Id.  Rather, "in the context of private CPA actions where plaintiffs seek damages, more than a mere capacity to deceive must be shown to establish 'some causal link between defendant's unfair act and [consumer's] injury," and, "[i]n the context of private misrepresentation cases, a plaintiff can satisfy the 'but for' causation requirement by showing she relied on the misrepresentation."  Id. at 20 (citation omitted).  In the context of the Schnall case, that meant that where the plaintiff actually knew that the charge was being levied, the alleged "misrepresentation" had been eliminated as the "but for" cause of the injury.  Id. at 21.  Accordingly, even for Washington residents to whom the CPA applied, the issue of causation could be an individual issue that would defeat predominance.  But because the trial court had not analyzed that question sufficiently, the Washington Supremes remanded the case with instruction to consider the question in the context of a statewide class.

The court's conclusion forcefully shuts Washington's doors to putative nationwide class actions:

In sum, we agree with the trial court that this action should not be certified as a nationwide class action.  Washington need not apply its Consumer Protection Act, or its contract laws, to the citizens of other states in order to protect the interests of the citizens of Washington.  A nationwide class would be unmanageable and unduly burdensome on the trial court and the state judicial system and serve no real benefit to plaintiffs who are free to bring statewide class actions in their home states. 

Id. at 22.

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A Pennsylvania intermediate appellate court yesterday affirmed a trial court's decertification of a statewide class action alleging plaintiffs had suffered economic harm from taking Neurontin for uses not approved by the FDA.  See Clark v. Pfizer Inc., No. 754 EDA 2009, 2010 Pa. Super. 6, Slip op. (Pa. Super. Jan. 19, 2010).  In doing so, the court rejected a "fraud on the market" theory and so-called "statistical proof" of causation.  Because my Skadden colleagues worked on the appeal, I'll only briefly summarize its holdings here.

Plaintiffs often cite to Pennsylvania precedents that encourage early and liberal certification of class actions.  But the corollary to such a liberal certification rule, of course, is that where discovery presents evidence that the case cannot be manageably tried as a class, the trial court retains the discretion to decertify the class.  That is what happened in Clark:  the trial court originally had certified a class of Pennsylvania residents, but after discovery and upon the evidence, the court then decertified the class.  It also found that people who benefitted from taking Neurontin could not state a claim, and so it had granted summary judgment as to those class members who had benefitted from taking the medicine.  And it granted summary judgment on the express warranty claim because there was no proof that plaintiffs had received any warranties.

Plaintiffs complained that the trial court -- by granting summary judgment and then decertifying the class -- had put them in an impossible position where absent class members arguably were bound by substantive judgments on their claims, but could not appeal them because there was no proper class.  Under the circumstances, the Superior Court effectively agreed and reversed the trial court's two grants of summary judgment.  Slip op. at 24-25.

But the Superior Court affirmed the trial court's decertification of the class.  The trial court had decertified the class because there were individual questions for each class member as to whether he or she had benefitted from taking Neurontin.  Although the Superior Court acknowledged that this was true, it stressed that the real reason the class could not be certified was that the proposed class failed the typicality, commonality and predominance requirements of the class action rule.  Why?  Because causation (i.e. reliance by each class member's doctor upon a misrepresentation) could not be presumed:

Where there exists various intervening and possibly superseding causes of the damage, liability cannot be determined on a class-wide basis because individual issues would predominate issues of fact and law that are common to the class and the representatives of the class.

Slip op. at 10 (citation omitted).

Plaintiffs' expert had relied on statistical modeling to opine that virtually all of the class members' doctors had relied on the defendants' alleged misrepresentations to prescribe Neurontin for uses not approved by the FDA.  But as a result of discovery, defendants had introduced testimony from Pennsylvania doctors establishing that their prescriptions were based on other factors, not any so-called "misrepresentations."  Citing to the decision in the federal MDL -- In re Neurontin Marketing, Sales Practices & Products Liability Litigation, 257 F.R.D. 315 (D. Mass. 2009) -- the Superior Court rejected any "presumption of causation" or "fraud-on-the-market theory" (slip op. at 11), holding instead that each class member must establish reliance/causation on his or her own to establish a right to recover (id. at 15).  As the court put it:

In sum, statistical probability does not substitute for actual inquiry, as a general showing of percentages does not tend to prove that the class members' specific doctors relied upon Defendants' statements or that Defendants' statements were the proximate cause of an injury.

Slip op. at 16.

Because the issue of causation was an individual question for each class member, the case could not be tried as a class action.

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I have written previously about the proliferation of suits brought by "third party payors" (or "TPPs") -- such as insurers and union health benefit funds -- that appear like ants at a picnic whenever a medicine is recalled, a new warning is mandated, or a pharmaceutical company is accused of marketing a medicine for "off label uses" that have not been approved by the FDA.  Often such claims are dismissed at the pleading stage because it is so difficult to connect any alleged misrepresentation made by a pharmaceutical company to a prescribing doctor's decision to prescribe the medicine. 

A recent decision in the Neurontin MDL makes it plain that even where such claims are allowed to progress past the pleading stage, it is next to impossible for most TPPs to actually prove causation.  See In re Neurontin Marketing and Sales Practices Litig., 2010 WL 53568 (D. Mass. Jan. 8, 2010).  In light of the fact that lawyers from my firm are involved in the case, I'll keep the editorializing to a minimum.

In the Neurontin case, defendants moved for summary judgment against 3 TPPs.  Two of them had not implemented special restrictions on prescribing Neurontin until at the earliest 2004, and they did not allege reliance on any particular statements by the defendant.  The court granted summary judgment as to these TPPs.

First, the court noted that "trial courts have almost uniformly held that in a misrepresentation action involving fraudulent marketing of direct claims to doctors, a plaintiff TPP or class must prove through individualized evidence that the misrepresentation caused specific physicians, TPPs, or consumers to rely on the fraud, and cannot rely on aggregate or statistical proof."  Id. at *9 (citing 4 cases).  The court observed that "[t]he Second Circuit has reached a similar conclusion, despite evidence of widespread fraudulent marketing of cigarettes to consumers, stating that 'not every wrong can have a legal remedy . . . at least not without causing collateral damage to the fabric of our laws.'"  Id. (quoting McLaughlin v. Am. Tobacco Co., 522 F.3d 215, 219 (2d Cir. 2008)).

Tellingly, the court observed that although it had presided over Neurontin-related litigation for more than 10 years, "no evidence has been presented of any doctor who states that she relied on a misrepresentation or omission in prescribing Neurontin for an off-label indication."  Id. at *10.

The court held that because the 2 TPPs "cannot prove which doctor's prescriptions were caused by Defendants' alleged fraudulent misrepresentations or omissions and which were not," summary judgment on causation was appropriate.  Id.  "Plaintiffs must provide a damages model that segregates damages caused by unlawful conduct from damages caused by lawful conduct."  The court held that the TPPs' reliance upon an expert opinion employing an aggregate damages model was insufficient as a matter of law.

(A third TPP's claims survived summary judgment, but that TPP was unusual in that it had alleged direct interactions between the defendant and the TPP's decisionmakers regarding its formulary.  Id. at *2.) 

The decision in Neurontin is another strong link in a long chain of decisions rejecting so-called "aggregate" methods of proof of causation and reliance in third party payor cases.   

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Plaintiffs in consumer fraud class actions often argue that pleading fraud on the market is sufficient to establish a classwide claim for violation of a state consumer fraud act.  But the Illinois Supreme Court recently reiterated that Illinois' Consumer Fraud Act requires individual proof of deception and causation.  In DeBouse v. Bayer Ag, 2009 WL 4843362 (Ill. Dec. 17, 2009), plaintiff had sued Bayer in a class action for economic harm allegedly caused by the cholesterol-lowering medicine, Baycol, which was withdrawn from the market in August 2001 after its use was associated with a serious muscle condition.  

Bayer had moved for summary judgment, arguing that plaintiff could not establish actual deception and that that deception caused plaintiff's harm, as required under the statute.  Plaintiff countered that where the defendant is alleged to have concealed a serious product risk from the medical community and the public at large, individual proof of deception was not required under ICFA.  Plaintiff did not suffer personal injuries from taking Baycol, but alleged that the price she paid was inflated because Bayer had not disclosed the risk of the serious muscle condition.  The plaintiff had testified that she saw no Baycol advertising and knew nothing about the medicine prior to her doctor prescribing it for her. 

The trial court refused to grant summary judgment for the defendant, but certified three questions for interlocutory appeal.

Question 1:  Whether an Illinois consumer who purchases a pharmaceutical product, later withdrawn from the market because it was deemed unsafe, can maintain an action under the Illinois Consumer Fraud Act, even though the pharmaceutical company did not engage in direct communication or advertising to the consumer.

The Illinois Supreme Court answered this question in the negative.  Reviewing a long line of cases interpreting ICFA, the court observed:

The basic principle in each of the foregoing cases is that to maintain an action under the Act, the plaintiff must actually be deceived by a statement or omission that is made by the defendant. . . .

. . . [W]e have consistently rejected the market theory of causation. . . .  [W]e have repeatedly emphasized that in a consumer fraud action, the plaintiff must actually be deceived by a statement or omission.  If there has been no communication with the plaintiff, there have been no statements and no omissions.  In such a situation, a plaintiff cannot prove proximate cause.  We therefore answer the first certified question in the negative.  A consumer cannot maintain an action under the Illinois Consumer Fraud Act when the plaintiff does not receive, directly or indirectly, communication or advertising from the defendant.

Id. at *5.

Question 2:  Whether the Defendant's offering for sale a product in Illinois is a representation to prospective customers that the product is reasonably safe for its intended purpose such that proof of a defendant's failure to disclose safety risks associated with the product to consumers is a violation of the Illinois Consumer Fraud Act.

The Illinois Supreme Court recognized that the answer to the question might depend on the nature of the product being sold.  Accordingly, it limited its response to pharmaceutical products.  The court noted that it had adopted Section 402A of the Restatement (Second) of Torts and comment k, which recognizes that prescription drugs are unavoidably unsafe products:

The Restatement approach reflects the reality that even in their intended and ordinary use, prescription drugs may nonetheless cause harmful side effects in some patients.  A drug manufacturer cannot say with complete certainty that its product, when used as intended, will be reasonably safe for all patients.  As a result, the mere sale of a prescription medication cannot be a representation which serves as the basis for a consumer fraud claim.  Consequently, we answer the second certified question in the negative.

Id. at *7.

Question 3:  Whether fraudulent statements or omissions made by a defendant to third parties, other than the consumer, with the intent that they (1) reach the plaintiff and (2) influence the plaintiff's action and (3) plaintiff relies upon the statements to his detriment, can support an action under the Illinois Consumer Fraud Act.

The Illinois Supreme Court answered this question in the affirmative; misrepresentations that indirectly reach the plaintiff and are relied upon can support an ICFA action.  But the court, reviewing prior decisions, held that this did not mean that a "fraud on the market" theory would support an ICFA claim.  Rather, a plaintiff must establish who received the misrepresentations, that they reached the plaintiff or were acted upon, and that they caused plaintiff's damages:

In this case, DeBouse similarly fails to allege that her particular doctor was actually deceived by any of Bayer's advertisements or statements.  What she does allege is the general deception of 'consumers, the medical community, the health care insurance industry, and the public.' . . .  DeBouse alleges the deception of unspecified persons having no demonstrated connection to her.  As such, DeBouse's claim is likewise based on the market theory that this court has consistently rejected.  Therefore, we hold that the circuit court erred in denying Bayer's motion for summary judgment.

Id. at *8.

The decision in DeBouse is an important example of courts enforcing the reliance and causation elements of state consumer fraud statutes to ensure that only those who actually were deceived and injured by a defendant's representations may recover damages.

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Yesterday Merck won an important appeal in a California Vioxx class action in which plaintiffs had argued that the California Supreme Court's recent decision in In re Tobacco II Cases, 46 Cal. 4th 298 (2009) required the reversal of a trial court's refusal to certify a class action under California's Unfair Competition Law.  See In re Vioxx Class Cases, No. B216521 (Cal. App. -- 2d Dist. Dec. 15, 2009).  The Vioxx Class Cases decision is important because it recognizes that although Tobacco II imposed a new understanding of the UCL's standing requirement, it did not fundamentally alter the other elements of the statute, and a proposed class can still fail the class action prerequisites where the relief requested requires individualized determinations and where the named plaintiffs' claims are not typical of those of other class members.

Vioxx was a Non-Steroidal Anti-Inflammatory Drug ("NSAID") that was used to treat pain until it was removed from the market in 2004.  Unlike aspirin or naproxen, which are NSAIDs that can cause gastrointestinal complications, Vioxx was a "COX-2" inhibitor that was expressly designed to avoid the gastrointestinal effects inherent in NSAIDs like naproxen.  Vioxx was removed from the market after studies determined that it presented a risk of adverse cardiovascular effects.

Plaintiffs brought a statewide class action under the UCL, the False Advertising Act, the Consumer Legal Remedies Act, and common law unjust enrichment.  They sought classwide restitution of the difference in price between what they paid for Vioxx and what they would have paid for a safer, equally effective, pain reliever.  Their economist calculated that price differential to be $8.3 billion nationally, but did not break it down to what allegedly was owed to California purchasers.

Plaintiffs' theory of liability was simple:  Merck knew its drug presented cardiovascular risks, but concealed that fact and marketed Vioxx as safe to the public and to doctors.  Slip op. at 7.  As a result, they said, they were entitled to classwide restitution of the difference between the price of Vioxx and the price of generic naproxen.

Interestingly, in discovery, plaintiffs would not say that they would have taken naproxen instead of Vioxx.  Rather, they would only say that they would not have taken Vioxx if they had known the risks, and that the drug they would have used instead was irrelevant.  Slip op. at 6.

In the trial court, Merck had established that roughly 16,500 people in the US died from gastrointestinal bleeds -- the most common NSAID complication -- each year, and over 100,000 were hospitalized.  It presented medical testimony that for patients with a history of serious gastrointestinal problems who could not tolerate traditional NSAIDs, COX-2 inhibitors like Vioxx were the only appropriate option.  Further, it presented evidence from third party payors -- who were included in the class of purchasers, even though the named plaintiffs were all individuals -- establishing that some third party payors' Pharmaceutical and Therapeutics committees had studied the risks of Vioxx thoroughly and only approved the drug for use with patients who had a history of gastrointestinal disease and had first tried one or two traditional NSAIDs without success.  The third party payors' records also established that when Vioxx was removed from the market, most patients did not switch to generic NSAIDs like naproxen, but rather switched to another branded COX-2 inhibitor with a price comparable to Vioxx.

Merck also established in the trial court that doctors apply their clinical judgment to each patient's unique situation in choosing which pain medicine to prescribe, looking at eight different factors.  Merck also established that doctors rely on different sources of information, with some even rejecting out of hand research the company provides.

On appeal, plaintiffs challenged three conclusions of the trial court.  First, they challenged the trial court's conclusion that the individual plaintiffs' claims were not typical of the claims of third party payors.  Second, they said the trial court erred in concluding that individual issues of reliance barred a class action.  And third, they urged that their method of calculating damages was subject to common, class-wide proof, making classwide restitution appropriate.

Typicality and Third Party Payors

Plaintiffs argued that the individual plaintiffs could represent the interests of the third party payors -- like union health benefit plans -- because if an individual relied on Merck's alleged misrepresentations to buy Vioxx, then the third party payor who paid for most of that prescription should be entitled to recover, too.  The Court of Appeal held that the flaw in this analysis is that it treats the third party payor as a passive entity that pays without having any say in what is prescribed.  But the evidence showed that, at least for some large third party payors, their Pharmaceutical and Therapeutics committees conducted literature reviews and studies, and made their own decisions about what they were going to pay for.  As a result, evidence about what alleged misrepresentations the individuals received or relied upon could not apply to third party payors, and the court could not presume reliance across all third party payors based on any individual's reliance.  Slip op. at 21.  Indeed, for third party payors who only paid for Vioxx where there was a history of gastrointestinal problems and the patient could not tolerate other NSAIDs, every penny it paid for Vioxx was for a patient who benefited from the prescription.  Id. at 22.  Accordingly, the individuals' claims were not typical of the third party payors.

Individual Issues of Reliance Predominate the CLRA Claim

California's Consumer Legal Remedies Act requires some form of causation between the unlawful act and the consumer's damages:  it gives a cause of action to "[a]ny consumer who suffers any damage as a result of the use or employment" of an unlawful act.  Cal. Civ. Code sec. 1780(a) (emphasis added).  Some California cases have held that an "inference of reliance" may arise for the class where a material misrepresentation has been made to the whole class.  But "if the issue of materiality or reliance is a matter that would vary from consumer to consumer, the issue is not subject to common proof, and the action is not properly certified as a class action."  Slip op. at 16.

Plaintiffs suggested that hiding an increased risk of death from cardiovascular complications is about as material as a misrepresentation can get, and that reliance should be inferred to the whole class for purposes of the CLRA.  But the Court of Appeal rejected this notion for four reasons.

First, Vioxx did not present an increased risk of death for all patients, because there were patients with gastrointestinal problems who would have been more likely to die from complications with traditional NSAIDs like naproxen.  Second, the record evidence reflected that there were patients who would still take Vioxx if it were on the market today, and physicians who would still prescribe it.  Thus, for some subset of the class, the cardiovascular risks were not material to their decision whether to take the medicine.  Third, the differences in how doctors study and evaluate the risks of medicines prevented a classwide inference of materiality.  And fourth, the patient-specific factors that doctors evaluate in prescribing a pain medicine also made a presumption of materiality not viable.  For example, a doctor might downplay the clotting risk of Vioxx for a patient already receiving a blood thinner like Coumadin.  Slip op. at 24. 

Individual Issues Regarding Injury and Restitution Predominate the UCL and FAA Claims

The Court of Appeal noted that although the UCL liberalizes the standards for finding liability, it narrowly prescribes the remedies available under the statute:  injunctive relief and restitution.  There was no need for injunctive relief, since the product had been pulled from the market.  So the question was one of restitution.  Plaintiffs' economist proposed comparing the price of Vioxx with the price of generic naproxen, using the difference as the amount of restitution. 

But the Court of Appeal concluded that this approach could not be applied to the class as a whole, because there was substantial record evidence that after Vioxx was withdrawn from the market, most Vioxx patients switched to other similarly-priced brand-name COX-2 inhibitors, not generic naproxen.  Plaintiffs argued that adjudicating the validity of naproxen as a comparison improperly went to the merits of the action, but the Court of Appeal said no.  Rather, it went to whether a "measurable amount" of restitution could be proven on a classwide basis.  The court held that it could not, and that class members thus would have to individually establish the appropriate comparator medicine, and then whether he suffered an injury.  This was a patient-specific issue, the court held, "incorporating the patient's medical history, treatment needs, and drug interactions."

Dicta on the Class Definition

The Court of Appeal was highly critical of the plaintiffs' class definition, which included "all individuals or entities in California who . . . paid some or all of the purchase price for the prescription drug Vioxx."  Slip op. at 6-7.  Besides improperly lumping individuals and third party payors together, the Court of Appeal also was clearly troubled that there was no carve-out for people who suffered physical injuries (slip op. at 5-6, n.4), thereby presenting problems of claim-splitting.  The court said the class definition was overbroad, and that those with physical injuries "should not be bound in an action pursuing only economic damages for the price of Vioxx."  Slip op. at 20, n.16.  Moreover, the class definition also was overbroad because it included those with flat co-payment obligations who would have paid the same amount of co-payment regardless of what drug was applied; they would have suffered no injury, and thus should not be in the class.  Id. 

Moreover, given the fact that -- as the Court of Appeal noted -- many of the class members actually derived benefit from Vioxx's lack of gastrointestinal effects, I would argue that the class definition also should have been required to exclude those people from the class.

The decision in Vioxx Class Cases is an important reminder that the elements of the causes of action for UCL, CLRA, FAA and unjust enrichment claims in California provide important defenses to class certification.  Just because a UCL claim may survive a demurrer does not mean that it can be tried on a classwide basis.  Defendants would be wise to follow Merck's lead and develop strong factual bases for why classwide presumptions are not viable and individual proof of injury should be required.

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In a previous post I had sounded the alarm about Yokoyama v. Midland National Life Insurance Co., 2009 WL 2634770 (9th Cir. Aug. 28, 2009), in which the Ninth Circuit had misread Hawaii's Deceptive Practices Act to reverse the trial court's denial of class certification, holding that neither the class representative nor the class was required under the statute to establish causation in order to recover damages.  Instead, the Ninth Circuit opined, they need only prove a "tendency to deceive" under a so-called "objective" standard.

If that were, in fact, true, it would make Hawaii's Deceptive Practices Act the most liberal consumer fraud act in the country.  But it is not.

This week I published an article in the Federalist Society's periodical Class Action Watch which explains the fundamental flaw in the Yokoyama opinion:  it focuses only on the part of the DPA that defines deceptive conduct, and wholly ignores the private right of action provision that authorizes individuals to sue for damages caused by that deceptive conduct.  It is this latter provision that requires causation for every claimant (both class representative and absent class member) by creating a private right of action for "any consumer who is injured by an unfair or deceptive act or practice forbidden or declared unlawful by" the statutory section the Ninth Circuit relied upon.  Haw. Rev. Stat. sec. 480-13(b) (emphasis added).  As my article explains, the Ninth Circuit previously had addressed the interplay between these two statutory provisions, recognizing that mere deceptive conduct -- without damages caused by such conduct -- was not enough to state a claim under Hawaii's DPA.  Now, the Yokoyama decision -- which wholly fails to address this prior Ninth Circuit precedent -- sits in the casebooks like a proverbial siren, beckoning lawyers and jurists off course from established Hawaii law at their peril.

I was disappointed that no petition for rehearing en banc appears to have been filed, suggesting that this fundamentally flawed precedent is one we will have to live with for years to come.

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Despite conventional wisdom, cruises aren't for everyone.  Roger and Vivian Wang took a two-week European cruise with their two daughters in 2005, and they ended up bringing a class action against Princess Cruise Lines over it.  Their complaint, in a nutshell, was that the cruise line allegedly overcharged for shore excursions, and the Wangs sought to represent a class of "all California residents who were passengers on cruises operated by petitioner who paid prices for shore excursions that were 'in excess of the shore excursion operator's actual price.'"

The Wangs pled five causes of action, including violations of California's Unfair Competition Law, False Advertising Act, and Consumer Legal Remedies Act, as well as common law fraud and negligent misrepresentation.  The trial court granted summary judgment on the two common law claims because the Wangs did not rely upon any alleged misrepresentations made by the defendant.  But it refused to grant summary judgment on the statutory claims, holding that such claims do not require plaintiffs to plead or prove reliance.

This week the California Court of Appeal reversed, holding that the statutory claims should have been dismissed for lack of reliance.  See Princess Cruise Lines, Ltd. v. Superior Court, 2009 WL 3747211 (Nov. 10, 2009).

The evidence on lack of reliance was clear.  Neither of the Wangs had spoken with the defendant prior to purchasing the cruise, nor had they read any of defendant's materials.  Moreover, Ms. Wang had told her travel agent that she wanted to go on the shore excursions whatever they cost.  Thus, not only had the plaintiffs not received any alleged misrepresentations about the price of the shore excursions from defendant, but even if they had, they would not have relied upon them in making the decision to take the shore excursions.

The Court of Appeal looked to the California Supreme Court's recent decision in In re Tobacco II, 46 Cal. 4th 298 (2009), which held that although absent class members do not have to meet the standing requirements imposed on the Unfair Competition Law by Proposition 64, named class representatives do.  As the Court of Appeal in Princess Cruise Lines explained, the Tobacco II decision was clear that named plaintiffs asserting a misrepresentation theory under the UCL must demonstrate actual reliance on the allegedly false or misleading statements.  2009 WL 3747211 at *4.  Because the Wangs had no contact with the defendant, did not read its literature, and based their decision to take the shore excursions on reasons other than representations, "there is no reason to delve into the contention that what is at issue here is a prolonged advertising campaign and that the Wangs do not have to show individualized reliance on specific misrepresentations."  Id. at *5.

The Court of Appeal also used the Tobacco II court's analysis of the phrase "as a result" to conclude that the CLRA also requires proof of actual reliance.  Id. at *7.  (The CLRA grants a cause of action to a consumer "who suffers any damage as a result of the use" of a proscribed act.)

Accordingly, the Court of Appeal held that the trial court should have granted summary judgment not just on the common law claims, but also on each of the statutory claims, for plaintiffs' failure to prove actual reliance.  This decision is an important application of the new standard articulated by the California Supreme Court in In re Tobacco II, and we hope to see more decisions like it in the coming months.

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One of the more interesting developments in the rise of consumer fraud class actions has been the involvement of third party payors (or "TPPs") -- such as union health benefit plans -- as plaintiffs in these cases. These TPPs pay for medicines prescribed for individual members of these health benefit plans; the TPPs maintain a list or "formulary" of approved medicines for which they will pay, and they often contract with a pharmacy benefit manager to manage the formulary and approve claims.

These health and welfare benefit organizations often have a relationship with a plaintiffs' law firm from having made claims in securities class actions.  But consumer fraud cases are far, far different from securities fraud cases because they do not presume reliance; rather, it has to be pled and proven.  And that's where these TPPs often have a problem, because they typically are unwilling to go through their own voluminous documents to establish reliance on an individual doctor-by-doctor basis, and the underlying transactions are covered by privacy laws.  Accordingly, the name of the game for TPPs is to keep the pleadings as generic as possible, so as to avoid these issues and try to skirt by the obvious predominance and superiority problems that they raise.

Yesterday -- in a decision won by my partner, Mark Cheffo -- Judge Kimba Wood dismissed a putative class action of TPPs brought against Pfizer because they failed to plead the necessary reliance.  See Southern Illinois Laborers' and Employers Health and Welfare Fund v. Pfizer Inc., Civ. A. No. 08 CV 5175 (KMW), Slip Op. (S.D.N.Y. Sept. 30, 2009).  In Southern Illinois Laborers, the plaintiffs were eleven health and welfare funds that sought to represent a nationwide class of TPPs that had paid for Lipitor, Pfizer's blockbuster cholesterol-lowering medication.  They asserted causes of action under RICO, state consumer protection statutes, and common law unjust enrichment, negligent misrepresentation, and civil conspiracy.  Plaintiffs alleged that Pfizer (1) misrepresented certain guidelines promulgated by an expert panel regarding who would benefit from lowering low-density lipoprotein (LDL cholesterol) levels, (2) failed to disclose and fraudulently minimized to physicians Lipitor's side effects, (3) misled physicians and pharmacy benefit managers about what patient groups would benefit from taking Lipitor.  They also alleged that Lipitor cost more than other statin medicines, and that they would not have paid a premium for Lipitor but for their reliance on a statement on the defendant's website that said it was lawfully advertising Lipitor.

Applying the strict pleading standard of Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), Judge Wood held that "that Plaintiffs have not adequately alleged causation, and, thus, they lack standing to bring any of their claims against Defendant."  Slip op. at 8.  She did, however, grant Plaintiffs leave to amend most of their claims.

In analyzing the RICO claim, Judge Wood noted that standing requires three elements:  (1) a RICO violation, (2) an injury to the plaintiff's business or property, and (3) a causal relationship connecting the RICO violation to the plaintiff's injury.  She focused on the causation element, which requires that plaintiff plead both a "but for" cause and a "proximate" cause.  Proximate cause, she observed, demands "'some direct relation between the injury asserted and the injurious conduct alleged.'"  Slip op. at 13 (citation omitted).

Plaintiffs advanced three different theories of causation, but the court held that each of them failed.  The first theory -- that physicians' reliance upon Pfizer's alleged misrepresentations about the safety and efficacy of its medicine caused the TPPs' injury -- failed because:

Plaintiffs do not explicitly allege that physicians in fact relied on Defendant's misrepresentations.

     Plaintiffs do not cite a single instance in which a physician received the fraudulent information and decided to prescribe Lipitor based on the information she received.  Plaintiffs do not even explicitly allege the more general claim that physicians in general relied on Defendant's misrepresentations.

Slip op. at 16.

The second causation theory floated by Plaintiffs was that pharmacy benefit managers relied on the Defendant's alleged misrepresentations, which caused the TPPs' injuries.  But again, the court looked to the Complaint to see that it did not alleged that the pharmacy benefit managers in fact relied on misrepresentations "regarding the cost effectiveness, efficacy, or safety of Lipitor when [they] decided to include Lipitor on the recommended formularies.  In addition, Plaintiffs do not specifically allege that Plaintiffs used formularies that were developed by [pharmacy benefit managers]."  Slip op. at 17.

The court gave short shrift to Plaintiffs' third causation theory that their injuries were caused by their reliance on the Defendant's statement on its website that it was marketing Lipitor lawfully.  The website statement was not substantive information about Lipitor and could not have affected the TPPs' assessment of Lipitor's "value, efficacy, and safety."  Id. at 18.  And although the TPPs might have been able to give doctors information to counter the Defendant's representations if they had known it was not marketing to physicians lawfully, even that theory requires an underlying allegation that the doctors were relying on the Defendant's alleged misrepresentations, which the Complaint did not contain.  Judge Wood distinguished the case upon which the Plaintiffs relied -- Desiano v. Warner-Lambert Co., 326 F.3d 339 (2d Cir. 2003) -- because it involved an underlying misrepresentation to TPPs about the safety of a drug.  Here, however, the underlying misrepresentation arguably was "a single, very general misrepresentation on [a] website [that Defendant's] advertising campaign was lawful, when it was not."  Slip op. at 19.

As for the state law claims, the court held that plaintiffs lack Article III standing to bring the claims because they do not expressly allege causation.  Nevertheless, it gave plaintiffs leave to replead all except the following:

• Ohio Consumer Sales Practices Act -- because TPPs are not natural persons who can engage in consumer transactions under the Act.
• Texas Deceptive Trade Practices Act -- because TPPs are not consumers under the DTPA because they do not "use" the goods they buy.
• New Jersey Consumer Fraud Act -- because TPPs are not consumers under the CFA because they do not "use" the goods they buy.
• Illinois Negligent Misrepresentation -- because the economic loss doctrine precludes the TPPs' claims.
• Ohio Negligent Misrepresentation -- because the cause of action applies only to those in the business of supplying information, not tangible products.
• Indiana Negligent Misrepresentation -- because the cause of action is viable only in the context of an employer-employee relationship.

By the way, the post on this case over at Herrmann and Beck's Drug and Device Law Blog has a number of links to their excellent prior posts addressing the problems with third party payor class actions.  Be sure to check it out.

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The Ninth Circuit’s recent decision in Yokoyama v. Midland National Life Insurance Company, 2009 WL 2634770 (9th Cir. Aug. 28, 2009) reflects a fundamental misunderstanding of consumer fraud class actions and – if left untouched by the full panel on rehearing – threatens to do great mischief not only to Hawaii law, but to the law of other jurisdictions as well.

In Yokoyama, three senior citizens sued on behalf of a putative class of Hawaii residents who bought indexed annuity products.  They alleged that the defendant failed to adequately disclose in its brochures the risks associated with such products, and they thus alleged violations of Hawaii’s Deceptive Practices Act, Haw. Rev. Stat. sec. 480-2.

The district court had refused to certify the class, determining that Rule 23(b)(3) applied because the request for money damages predominated, and holding that the proposed class failed that rule’s predominance requirement because each class member would have to establish that he or she was actually misled and damaged thereby, as well as the amount of his or her damages.  See Yokoyama v. Midland Nat’l Life Ins. Co., 243 F.R.D. 400 (D. Haw. 2007).

In reversing the district court, the Ninth Circuit articulated – allegedly for the first time – that its standard of review when reviewing a trial court’s conclusion on an issue of law in the class certification context is de novo review.  Then, it held that the trial court erred because under Hawaii’s DPA, the class members did not have to prove that they relied on any deceptive statement, but only that the statement had a “tendency to deceive.”  Moreover, the court held that there was no need to inquire into what the brokers orally communicated to the senior citizens; the sole issue was whether the brochures “were capable of misleading a reasonable consumer.”  Finally, the court held that the need to calculate damages for each class members could not defeat class certification.

The sweeping effect of the Yokoyama Court’s re-write of Hawaii law is truly stunning:  apparently no class member – not even the named plaintiff – has to establish that he or she relied on a misrepresentation or that it in any way caused his or her injury in order to bring a damages claim under Hawaii’s DPA.  Not even the California has gone so far, divorcing the alleged misrepresentation entirely from any notion of reliance or causation for damages claims.  Notably, the Yokoyama Court reached this conclusion by citing two Hawaii Supreme Court decisions that were wholly inapposite on these issues.

The Yokoyama Court seemed to have no concept for how these products were actually sold.  As the district court had explained, the annuities were sold by independent brokers with different backgrounds and levels of training.  They gave different oral presentations and created on their laptops unique written materials for their customers based on the information the customers provided.  These interactions resulted in the customers’ different choices about which annuities to buy, what index or crediting method to select to achieve the best tax benefits, and how much to invest.

The bottom line is that – as part of these oral interactions – some portion of the putative class members were actually advised of the risks that may not have been mentioned in the brochures, and others were actually benefited and achieved their financial goals:

“Because some independent brokers did disclose, discuss, clarify, or explain the relevant provisions to individual consumers – even putting ‘worst case scenarios’ into writing – an individual inquiry is required to determine the impact of the oral presentation upon each investor, the behavior of the independent broker, and the nature of the relationship between each individual annuitant and his or her independent broker.”

243 F.R.D. at 408-09.

The Yokoyama Court’s opinion would allow people who were not deceived and who were not damaged to recover damages.  This is not only unfair; it makes absolutely no sense.  It also contradicts the express language of Hawaii’s statute:

“Any consumer who is injured by an unfair or deceptive act or practice forbidden or declared unlawful by section 480-2:  (1) May sue for damages sustained by the consumer . . .”

Haw. Rev. Stat. sec. 480-13(b).

Hawaii’s statute expressly requires causation:  if the allegedly deceptive act does not result in injury and damages, Hawaii citizens cannot recover under the statute.  The Yokoyama Court far exceeded the boundaries of the federal judiciary when it effectively re-wrote the legislature’s statute. It also seemingly forgot that Rule 23 is a procedural rule that is not intended to rewrite substantive law; in a class action, defendants must be allowed to present the same defenses to individual claims that they would have presented if the claims were brought individually.  The Yokoyama decision deprives the defendant of that right.

The court’s canard about damages not precluding certification also was overly simplistic.  That principle is applied in cases, like some securities class actions, where the calculation of damages is simplistic.  (E.g., plaintiff held X shares of stock, and the loss was Y dollars per share, so the damages were X x Y.)  But where, as in this case, even calculating the damages requires a highly individualized inquiry, courts frequently deny certification.

There can be little doubt, to those who know annuities, that calculating damages in the Yokoyama class action certified by the Ninth Circuit would be far from formulaic:

“[T]he amount of damage sustained by a single class member would depend on factors such as the financial circumstances and objectives of each class member; their ages; the [annuity plan] selected; any changes in the fixed interest rate for that [annuity plan]; the performance of the selected index; any changes in the index margin for that particular [annuity plan]; any cap on the indexed interest; the length of the surrender periods; whether the individual had undertaken or wanted to undertake an early withdrawal of funds; any benefit the individual policy holder derived from the form of the annuity itself, including the tax deferral of credited interest; and the actual rate of return on the [annuity plan].”

243 F.R.D. at 410-11.

If Yokoyama stands, other courts will be tempted to read the reliance and/or causation provision right out of the text of other states' deceptive trade practice statutes.  The specter of "damages" -- untethered to any concept of actual deception causing subsequent concrete financial injury -- would make the resulting class actions dangerous weapons for coercing settlements with no relation to actual harm, if any.

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One of my all-time favorite bartenders, Howie, just can't believe what I do for a living.  "You mean you defend cases brought by a bunch of people who weren't hurt and didn't have their product break on them," he asks incredulously.

"For a lot of my cases, that's pretty much it."  I respond.

"So what kindof money do they think they're going to get outta these class actions?"

"Well, Howie, sometimes they want everybody who bought the product to get all of their money back.  And sometimes they just want the difference between the value of what they thought they were buying and the so-called "diminished value" of what they actually bought.  And again, they want this for everybody who bought the product, which can be a lot of money."

"Aww, that's ridiculous," Howie says.  Shaking his head and pouring another round, he consoles me:  "Well, Cuz, with cases like that out there for you to defend, at least you ought to win a lot!"

I'll enjoy telling Howie this weekend about Williams v. Nidek Co., Ltd., 2009 WL 226024 (Cal. App. -- 4th Dist. Feb. 2, 2009).  Fortunately, the court in Williams got it right, affirming the denial of class certification.  But the claims in Williams go a long way toward demonstrating everything that is wrong with consumer class action practice today. 

The plaintiffs in Williams had undergone Lasik surgery on their eyes to achieve hyperopic corrections (i.e., corrections for far-sightedness).  The Nidek laser that had been used during their surgeries had not yet been approved by the FDA for hyperopic correction.  (It subsequently was in 2006.)  Plaintiffs claimed that Nidek and plaintiff's doctors violated a host of statutes by "concealing" from plaintiffs that the Nidek laser was not approved by the FDA for this particular kind of Lasik surgery.  But plaintiffs admitted that they had not relied on any representations from the doctors about FDA approval, and they conceded that they "do not contend they were disappointed in the results of the surgery."  Id. at *6.  Indeed, plaintiffs defined a California residents class and a nationwide class, both consisting of people who had had the surgery, but who had not suffered personal injuries.  Id. at n.8. 

Yes, you read that right:  the putative class members were perfectly satisfied with the results of their surgeries and had not been physically injured.  Still, they wanted money back:  either "the entire cost of the surgery (because they did not receive what they had been promised) or, alternatively, the difference between the value of what they had been promised (surgery on an approved Laser) and what they received (surgery on a nonapproved Laser)."  Id. at n.14.

Of course the reason consumer class actions like Williams are pled to exclude the very people, if any, who may have been injured is that including them in the class would present too many individual issues, making class certification inappropriate.  So instead, plaintiffs plead it as a straightforward fraudulent concealment claim for economic harm, thinking that doing so will make it seem like there are fewer individual issues that would predominate a trial of the action.

California's class action rule doesn't mirror the federal Rule 23 exactly, but as it has been interpreted by California's courts, its elements are similar.  In particular, the common issues to be tried on a classwide basis need to predominate over the issues that require individual determination for each class member.  The trial court in Williams concluded that they did not, and the Court of Appeal affirmed.

As the court observed, the bulk of plaintiffs' claims were misrepresentation claims; they "turned on the assertion that the physicians misrepresented the Lasers as appropriate or approved for hyperopic procedures, or intentionally concealed (or negligently failed to disclose) that the Lasers were not approved for such treatments, and/or conspired to engage in such conduct."  Id. at *9.

But as the Court of Appeal recognized, "plaintiffs' misrepresentation/concealment/nondisclosure claims would have required a mini-trial to assess each permutation of the representations made to each class member by 60 to 70 doctors or their staff . . . and required an examination of the informed consent forms signed by the patient, and/or each patient's discussion with his or her doctor or staff, and whether [Nidek's Patient Information Booklet] had been given to some patients by some physicians."  Id. (emphasis in original).  Nidek had distributed, as required by the FDA, a booklet explicitly advising patients that the Laser was not approved for hyperopia.  Id. at n.13.  Moreover, even the named plaintiff's doctor had a patient's informed consent form disclosing that the FDA had not yet approved the Laser for hyperopia.

As the Court of Appeal recognized, these patient-specific mini-trials "would be further complicated by the fact that the physicians making (and the patients receiving) the representations spanned an approximately seven-year period," making "mini-mini-trials" on statute of limitations and tolling issues necessary for each class member.  Id. at *10.  Also, issues inherent to the 60-70 doctors potentially would be added to the mix.

Moreover, by adding the distributor, Nidek -- which had had interactions with many of the doctors, informed them that the hyperopic use was unapproved, and asked them to install software that would prevent use of the Laser to treat hyperopic conditions -- mini-trials also would be necessary addressing Nidek's dealings with each physician.

Even the damages inquiry would require individual mini-trials because the measure of damages required comparing the amounts paid and the value actually received by each patient.  Id. at *11.

The Court of Appeal in Williams clearly reached the right result by affirming the denial of class certification.  And yet it's disappointing that such a frivolous lawsuit had to go even that far:  through costly discovery, dispositive motion practice, and ultimately a class certification hearing. 

Just try explaining to Howie why this suit wasn't easily dismissed at the outset.  If you can do that, the next one's on me.

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