Wednesday, June 27, 2012
Vioxx Consumer Fraud Action gets Booted
We've been watching more soccer lately -- which is to say that we've been watching any soccer at all. The Euro 2012 competition is heating up, with an all-Iberian tilt today, and a battle tomorrow between members of the original, more scary Axis-of-Evil. We do not know a whole lot about futbol, but our unschooled eyes tell us that Spain will meet Germany in the final. Not that we have much of a rooting interest, especially with Ireland and Poland making early exits. Let's face it, we just want an excuse for a party with tapas, brats, sangria, and beer. The Phillies stink this year, so we have to redirect our sports fanaticism somewhere else, even if it is for a sport with not enough scoring and too many fake injuries.
One phrase that keeps coming up in the broadcasts is "the 50-50 ball." (We googled "50-50 ball" and found a Jeff Koons work of art called "Three Ball 50-50 Tank," consisting of three partially submerged basketballs in a fish-tank. It was sold for almost half a million dollars. Is it any wonder that the rich Western countries are the object of so much contempt?) Sometimes a soccer ball will be propelled toward two opposing players with the same opportunity to get it -- thus, the 50-50 aspect. The player who earns possession is the one who is better or who simply wants the ball more. A whole team can go on a run of winning virtually every 50-50 ball. The same thing occasionally happens in hockey games, though we have not yet heard of the "50-50 puck."
That got us to thinking about 50-50 cases. There are many issues in our little playing field where the outcome is, or should be, clear and one-sided. Buckman preemption comes to mind. But there are some issues where the outcome is like a 50-50 ball, where either side could win. That is not necessarily because the merits of the two opposing positions are roughly equal. Would you really expect us ever to say that?! No, it's just that there are certain issues where, as we read the advance slips, it looks like courts are perfectly capable of going either way. Maybe it comes down to political predilections or life experiences, but courts can be as biased or results-oriented as a talking head on Fox news or MSNBC. Maybe better lawyering really can make a difference. Think of parallel violations claims as a means of trying to circumvent preemption. Or think of Daubert challenges when doctors stray beyond their board certifications or rely upon adverse events, case studies, or iffy epidemiology. Or think of consumer fraud actions brought by plaintiffs whose claimed injuries dance with sophistry. We've seen courts go both ways on all these issues. Those cases form a litmus test of sorts, either intellectual or ideological.
Consumer fraud actions are particularly vexing. Used aggressively and interpreted broadly, they threaten to permit plaintiff lawyers to cobble together claims that are bereft of reliance, causation, or injury, that cannot possibly earn their "clients" anything more than nominal relief, yet are an effective means of extortion via inflated attorney fees and costs. Not to put too fine a point on it, but these cases are crap. They are an embarrassment. They make as much sense as a basketball partly submerged in a fish-tank. There is plenty of blame to go around everywhere, including legislators, judges, and lawyers. We've written about some bad outcomes in this area here, for example. And we’ve written about some good outcomes in this area here and here, for example.
The Vioxx litigation recently furnished a good outcome. In re Vioxx, 2012 U.S. Dist. LEXIS 81637 (June 13, 2012). Judge Fallon's opinion offers clear, rigorous reasoning that will be useful for future defense lawyers trying to win the 50-50 ball in consumer fraud actions. First, Judge Fallon reminds us that the Vioxx MDL began way back in 2005. 2012 U.S. Dist. LEXIS 81637 at *4. Time sure goes by when you're having … never mind. That same year, plaintiff Walker filed a Vioxx suit under the District of Columbia False Claims Act, and the case was filed under seal. He later amended the complaint to assert a separate claim under the D.C. Consumer Protection Procedure Act (the "CPPA"). The false claims act claim was dismissed for lack of standing. Now the CPPA claim was being attacked on the same theory. The court agreed with Merck and concluded that the plaintiff had failed to assert either an economic or statutory injury. By the way, there was absolutely no dispute on this score: the plaintiff suffered no physical injury. Vioxx worked. Why are we here?
Judge Fallon tells us that it "is abcedarian" that Article III jurisdiction reaches only justiciable cases and controversies. 2012 U.S. Dist LEXIS 81637 at *8. Wow. Great word. We had to look it up. The first definition is "of or pertaining to the alphabet." Yes, we did notice that "abc" and tardy "d" thing going on there. The second definition is "arranged in alphabetical order." Yawn. That is not really what we have here. We could imagine someone super-clever like Judge Kozinski managing to write an opinion where all the words are in alphabetical order, at least if the case involved zymurgy. But the third definition is in action here: "rudimentary, elementary." Bingo. We pity our poor friends who for the next week will have to listen to us persistently pooh-pooh other people's ideas as "abcedarian." Anyway, the abcedarian issue in the Vioxx case was whether the plaintiff had alleged an invasion of any legally protected interest for which the plaintiff had standing to sue. Under the case law, which Judge Fallon accurately describes as "fact-intensive and somewhat difficult to reconcile" (2012 U.S. Dist. LEXIS 81637 at *9), the plaintiff must allege an injury to either an economic or statutory interest.
The plaintiff argued that he alleged an economic injury from paying more out of pocket for Vioxx than he would have if Merck had not misrepresented its safety profile. The plaintiff cited some cases in support because, frankly, there really are cases going both ways in this area. One of the plaintiff's favorite cases was Shaw v. Marriott International, 605 F.3d 1039, 390 U.S. App. D.C. 422 (D.C. Cir. 2010). Shaw matters a lot because it included an interpretation of the CPPA. Judge Fallon does a nice job of distinguishing Shaw as involving "a much more obvious economic injury; in that case, the defendant misrepresented the price of a hotel room and as a result the plaintiffs paid 18% more than they thought they would pay." 2012 U.S. Dist. LEXIS 81637 at * 18. That is clearly a concrete, particularized economic injury. By contrast, in the Vioxx case, the plaintiff "thought he was purchasing a medication that would relieve his pain without causing him personal injury (other than that warned of in the FDA-approved label), and that is what he received. There is no obvious, quantifiable pecuniary loss that Plaintiff incurred from purchasing a drug that worked for him and did not cause him any harm" Id. Talk about abcedarian! Judge Fallon found more useful authority in Rivera v. Wyeth-Ayerst Laboratories, 283 F.3d 315 (5th Cir. 2002), "at least with respect to the question of whether he has alleged a concrete and particularized economic injury; '[m]erely asking for money does not establish an injury or fact.' Id. quoting Rivera, 283 F.2d at 310. Consequently, the Vioxx court concludes "that merely purchasing a drug-which in fact helped Plaintiff-does not generate an economic injury giving rise to Article III standing and Plaintiff has no alleged a concrete particularized injury in fact to his economic interests." Id. at *20.
Without any economic injury, the plaintiff falls back on arguing that he suffered some sort of statutory injury. Here, the plaintiff argued "that Merck's violation of 'his statutory right to 'the disclosure of information regarding Defendant's dangerous misrepresentations' suffices to establish a statutory injury that creates Article III standing." Id. at *20-21. Once again, the plaintiff relied on the Shaw case. Once again, the court analyzed the Shaw case carefully and distinguished it effectively. Under the Shaw statutory injury analysis, the plaintiff must be "in the class of individuals protected by the CPPA." Id. at *21, quoting Shaw, 605 F.3d at 1042. This analysis turns on the substantive law of the CPPA and whether the factual allegations in the Second Amended Complaint, taken as true, state a claim for violation of Plaintiff's individual rights under the CPPA by Merck.
It turns out that Merck had a few cases to cite in support of its position, including the recent Third Circuit opinion in In re Schering Plough Corp. Intron/Temodar Consumer Class Action, F.3d, 2012 U.S. App. LEXIS 9832, 2012 Wt. 1700836 (3rd Cir. May 16, 2012). We discussed that case here. The Third Circuit dismissed that consumer fraud action because the plaintiff failed to "present a plausible allegation actually linking [plaintiff's] injuries to any type of miscommunication or false claim about the drugs that were actually prescribed to her." In re Schering Plough, 2012 U.S. App. LEXIS 9832 [WI] at 16. Similarly, in the Vioxx case, "when it comes to connecting that conduct to himself, Plaintiff only alleges in general terms that those communications were directed towards consumers in the District of Columbia and that he was a resident of the District of Columbia." In re Vioxx, 2012 U.S. Dist. LEXIS 81637 at *25. And now, fellow soccer fans, we are in TwIqbal country. All that the plaintiff supplies are generalized and conclusory allegations, none of which suffices to show any plausible nexus or causation between Merck's conduct and the plaintiff as an individual. For example, the Second Amended Complaint "is devoid of any allegation that Plaintiff or his doctor personally received any misleading communications regarding Vioxx." Id. at *26.
The plaintiff grudgingly offers "one concrete fact regarding the Vioxx he personally took." Id. The plaintiff alleged that his "initial Vioxx pills came as sample packages he received from his doctor, which he alleges "demonstrates that Merck representative had visited" his doctor. Id. But, according to Judge Fallon, "this piles speculation upon speculation; not only does it require an inference that the samples were delivered directly from a Merck representative to Plaintiff's doctor, it requires the additional conjectural leap that such a meeting included some of the allegedly violative misrepresentations." Id. Thus, "[w]hether the deficiency is characterized as missing 'causal connection between the injury and the conduct complained of,' or a failure to allege that Merck's conduct had an effect on Plaintiff such the Plaintiff's personal rights under the CPPA were invaded, the pleading fails. Amendment would be futile. " Id. at 27 (citations omitted).
Maybe this is an obvious, even abcedarian thing to say, but we love it when a 50-50 ball goes the right way.
Labels: Consumer Fraud