Justia Class Action Opinion SummariesArticles Posted in Drugs & Biotech
Calloway v. Caraco Pharma. Lab., Ltd.
In 2000 and 2002 the FDA issued warnings to Caraco, a Michigan pharmaceutical manufacturer, stating that failure to correct violations promptly could result in enforcement action without further notice. After follow-ups in 2005, the FDA sought a definitive timeline for corrective actions. The FDA issued notices of objectionable conditions in 2006, 2007, and 2008. A consultant audited Caraco’s facilities and stated that it was “likely that FDA will initiate some form of seizure action.” Caraco executives thought the consultant “alarmist.” Later, the FDA issued a formal warning, determining that Caraco products were adulterated and that its manufacturing, processing, and holding policies did not conform to regulations and noting its poor compliance history. The letter stated that failure to promptly correct the violations could result in legal action without further notice, including seizure. A new consultant warned of likely enforcement action. Caraco followed some of its suggestions. In 2009, Caraco issued a nationwide drug recall, constituting “a situation in which there is a reasonable probability that the use of, or exposure to, a violative product will cause serious adverse health consequences or death.” The FDA filed a complaint, served Caraco, and seized products. Days later, Caraco began a mass layoff, indicating that it did not “reasonably foresee" the FDA action. A certified class of former Caraco employees alleged that Caraco violated the Worker Adjustment and Retraining Notification (WARN) Act, 29 U.S.C. 2101, by failing to provide 60 days notice. The Sixth Circuit affirmed that the FDA action was not an unforeseeable business circumstance that would excuse WARN Act compliance. View "Calloway v. Caraco Pharma. Lab., Ltd." on Justia Law
Sidney Hillman Health Ctr. of Rochester v. Abbott Labs., Inc.
From 1998 to 2012 Abbott marketed the anticonvulsant medication Depakote for applications that had not been FDA-approved (off-label uses). Physicians may prescribe drugs for off-label uses, but pharmaceutical companies are generally prohibited from marketing drugs for those same applications. Qui tam actions were filed under the False Claims Act. In 2009, Abbott disclosed in an SEC filing that the Department of Justice was investigating its marketing. Abbott pleaded guilty to illegally promoting Depakote from 2001 through 2006 and agreed to pay $1.6 billion to settle the criminal and qui tam actions. Employee benefits funds filed suit 15 months later, alleging that Abbott misrepresented Depakote’s safety and efficacy for off-label uses, paid kickbacks to physicians, established and funded intermediary entities to promote the drug for off-label uses, and concealed its role in these activities, in violation of the Racketeer Influenced and Corrupt Organizations Act. The district court dismissed, finding that the statute of limitations for the RICO claim began to run in 1998, when the funds initially reimbursed a prescription for off-label use. The court refused to toll the limitations period until the guilty plea, finding that Abbott’s concealment efforts were not designed to hinder potential lawsuits. The Seventh Circuit reversed, finding that dismissal was premature without an opportunity for discovery into when a reasonable fund should have known about its injuries from off-label marketing. View "Sidney Hillman Health Ctr. of Rochester v. Abbott Labs., Inc." on Justia Law
Decker v. GE Healthcare Inc.
In 2005, in connection with a magnetic resonance imaging procedure (MRI), Decker received a dose of Omniscan, a gadoliniumbased contrast agent manufactured by GEHC. After taking Omniscan, Decker developed Nephrogenic Systemic Fibrosis (NSF). In 2012, the Deckers sued GEHC, as part of a multidistrict litigation (MDL). Before the Deckers’ case, hundreds of similar cases in the MDL involving GEHC had been settled. The Decker case was the first case in the MDL to go to trial. The jury returned a verdict in favor of the Deckers on a failure-to-warn claim, awarding $5 million in damages. The Sixth Circuit affirmed, rejecting claims that the district court judge should have recused himself from the trial and a motion for a new trial; made several erroneous evidentiary rulings, which were applicable to all MDL cases; erroneously denied GEHC’s motion for a new trial because insufficient evidence supported the jury’s verdict regarding the causation element of the Deckers’ failure-to-warn claim; and erroneously failed to issue two proposed jury instructions. View "Decker v. GE Healthcare Inc." on Justia Law
A.S. v. SmithKline Beecham Corp
A.S., who suffers from a congenital birth defect, and his mother, Miller, who ingested Paxil while pregnant, sued GSK in the Philadelphia County Court, alleging that all parties were citizens of Pennsylvania. GSK removed the case based upon diversity. On plaintiffs’ motion, the case was consolidated with other Paxil cases before a district court judge who had previously held that GSK was a citizen of Pennsylvania and who remanded A.S.’s case and the other consolidated cases to state court. The case returned to state court on January 4, 2012. On June 7, 2013, the Third Circuit issued its opinion in Johnson, which held that GSK was a citizen of Delaware. Less than 30 days after the Johnson decision, GSK filed a second notice of removal in A.S.’s case and in eight other cases with the same procedural posture. The district court denied the motion and certified its order for interlocutory review. The Third Circuit directed remand to state court, holding that the second removal request was untimely under 28 U.S.C. 1446(b) because there had been a final order. View "A.S. v. SmithKline Beecham Corp" on Justia Law
Carrera v. Bayer Corp.
Carrera sued Bayer, claiming that Bayer falsely advertised its product One-A-Day WeightSmart as a multivitamin and dietary supplement that had metabolism-enhancing effects due to its ingredient, epigallocatechin gallate, a green tea extract. The daily dose was one tablet and the price was about $8.99 for 50 tablets. Bayer sold WeightSmart through retail stores until 2007 and did not sell directly to consumers. Carrera initially sought to certify a nationwide class under Fed. R. Civ. P. 23(b)(3), bringing a claim under the New Jersey Consumer Fraud Act. The court denied certification because New Jersey law did not apply to out-of-state customers. Carrera then moved to certify a Rule 23(b)(3) class of Florida consumers under the Florida Deceptive and Unfair Trade Practices Act. Bayer challenged certification, reasoning that class members are unlikely to have documentary proof of purchase and Bayer has no list of purchasers. The Third Circuit vacated class certification. If class members are impossible to identify without extensive and individualized fact-finding or mini-trials, a class action is inappropriate. If class members cannot be ascertained from a defendant’s records, there must be “a reliable, administratively feasible alternative,” not a method that would amount to no more than ascertaining by potential class members‟ say so.”View "Carrera v. Bayer Corp." on Justia Law
Raskas, et al. v. Johnson & Johnson, et al.
Plaintiffs filed three separate class action suits alleging that defendants violated Missouri law and conspired with unknown third parties to deceive customers into throwing away medications after their expiration dates, knowing that the medications were safe and effective beyond the expiration date. Defendants appealed the district court's remand order holding that defendants failed to establish the amount in controversy requirement under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d)(2). The court concluded that each defendant's affidavit detailing the total sales of their respective medications in Missouri met the amount in controversy requirement; even if it was highly improbable that plaintiffs would recover the amounts defendants have put into controversy, this did not meet the legally impossible standard; defendants were not required to provide a formula or methodology for calculating the potential damages more accurately, as the district court held; and defendants' affidavits were not inadmissible hearsay. Therefore, the court reversed the district court's finding that it lacked subject matter jurisdiction and remanded for further proceedings. View "Raskas, et al. v. Johnson & Johnson, et al." on Justia Law
Unspam Technologies v. Chernuk
Plaintiffs commenced this putative class action alleging that defendants participated in a global Internet conspiracy to sell illegal prescription drugs, in violation of the laws of the United States and Virginia. At issue on appeal was whether the district court erred in dismissing the complaint against four foreign banks for lack of personal jurisdiction. The court concluded that Rule 4(k)(2) did not justify the exercise of personal jurisdiction over the banks because exercising jurisdiction over them would not, in the circumstances here, be consistent with the United States Constitution and laws. Subjecting the banks to the coercive power of the court in the United States, in the absence of minimum contacts, would constitute a violation of the Due Process Clause. Accordingly, the court affirmed the district court's orders dismissing the complaint against the banks. View "Unspam Technologies v. Chernuk" on Justia Law
In Re: Diet Drugs Prod. Liab. Litig.
Between 1994 and 1997 Wyeth’s predecessor sold fenfluramine and dexfenfluramine, prescription weight loss drugs. After the drugs were linked to valvular heart disease and an FDA public health advisory, Wyeth withdrew the drugs from the market in 1997. Thousands of individuals filed suit; the cases were consolidated. In 1999, Wyeth entered into a Settlement Agreement; in 2000, the court certified the class, approved the Agreement, and retained jurisdiction. The Agreement enjoins class members from suing Wyeth for diet drug-related injuries, but allows class members to sue Wyeth if they can demonstrate that they developed PPH (a condition that deprives the lungs of oxygen) at a specified level through the use of the diet drugs. In 2011, Cauthen sued, alleging that she developed PPH. She produced a pulmonary consultation prepared by Fortin, a cardiologist. Because Cauthen’s report showed that lung capacity of less than 60 percent of predicted at rest, Wyeth sought to enjoin the state court lawsuit for failing to satisfy the precondition provided by the Agreement. Dr. Fortin asserted that comparing individual lung capacity with average capacity of persons having a similar demographic profile is not determinative in diagnosing PPH. The district court enjoined the suit. The Third Circuit affirmed. View "In Re: Diet Drugs Prod. Liab. Litig." on Justia Law
Purdue Pharma, L. P. v. Commonwealth of Kentucky
Kentucky commenced this action in Kentucky state court against Purdue, alleging that Purdue violated Kentucky law by misleading health care providers, consumers, and government officials regarding the risks of addiction associated with the prescription drug OxyContin, which Purdue manufactures, markets, and sells. Following transfer from the Eastern District of Kentucky to the Southern District of New York, the district court granted Kentucky's motion to remand, concluding that it lacked subject-matter jurisdiction because the suit did not meet the Class Action Fairness Act of 2005's (CAFA), Pub. L. No. 109-2, 119 Stat. 4, requirements. Purdue appealed the remand order under 28 U.S.C. 1453(c)(1). The court held that the district court correctly determined that Kentucky's action was not a class action as defined in CAFA, and therefore the case was properly remanded. Accordingly, the petition for leave to appeal was denied. View "Purdue Pharma, L. P. v. Commonwealth of Kentucky" on Justia Law
In Re: Pharmacy Benefit Mgrs. Antitrust Litig.
AdvancePCS is a prescription benefits manager for plans sponsored by employers, unions, and others and is retained to achieve savings by negotiating discounts from drug manufacturers, providing mail order service, contracting with retail pharmacies, and electronic processing and paying of claims. Plaintiffs are retail pharmacies that entered into agreements with AdvancePCS that include an agreed reimbursement rate and an arbitration clause. In 2003, plaintiffs filed suit, asserting that AdvancePCS engaged in an unlawful conspiracy with plan sponsors to restrain competition in violation of the Sherman Act, 15 U.S.C. 1; that AdvancePCS used the economic power of its sponsors to reduce the contractual amount it pays below levels prevailing in a competitive marketplace; and that the agreements impose other limitations. For almost a year, AdvancePCS litigated without mentioning arbitration. After denial of a motion to dismiss and reconsideration, AdvancePCS filed an answer with affirmative defenses, then sought to compel arbitration. The court granted the motion. Plaintiffs did not initiate arbitration, but sought dismiss pending appeal. A different judge vacated the order compelling arbitration. The Third Circuit remanded with directions to reinstate the order compelling arbitration. On remand, a third judge granted dismissal. The Third Circuit ruled in favor of plaintiffs, holding that AdvancePCS waived its right to arbitrate. View "In Re: Pharmacy Benefit Mgrs. Antitrust Litig." on Justia Law