Thursday, September 24, 2015

omission from "comprehensive" database wasn't actionable misrepresentation

Alexso, Inc. v. First Databank, Inc., 2015 WL 5554005, No. CV 15-01893 (C.D. Cal. Sept. 21, 2015)
Alexso makes kits that pharmacies use to compound prescription drugs.  FDB publishes databases that provide information about drug products to the healthcare industry. Alexso requested inclusion of eight of its kits in FDB’s database; FDB requested additional information, including whether the kits were FDA approved.  Alexso responded that the kits didn’t require additional FDA approval because they were already FDA approved for marketing in the United States as a “Bulk Ingredient for Human Prescription Compounding.” FDB refused to list the kits unless and until Alexso received notice from the FDA that the kits could be marketed without approval. FDB did at some point list kits manufactured by Alexso’s competitors.
Alexso argued that the exclusion of the kits from FDB’s database violated the Lanham Act and California’s UCL, intentionally and negligently interfered with Plaintiff’s prospective economic advantage, and committed a prima facie tort. Because FDB provides information for hospitals, physicians, pharmacies, and other health care providers, Alexso alleged that its exclusion put at a “fatal competitive disadvantage,” and that consumers interpret the exclusion of the kits as a representation that the products weren’t approved for sale by the FDA.
The court held that the complaint failed to allege that FDB made any representation about Alexo’s products. The database just doesn’t mention Alexso’s compounding kits. Although FDB advertising touts the databases as “more comprehensive” and providing “comprehensive drug knowledge,” the complaint didn’t allege that FDB ever purported to offer an exhaustive listing of FDA-approved products or suggested that products not listed in the database weren’t FDA-approved. “Absent any such statements, and given the myriad reasons why a for-profit informational database or catalogue might list certain products and not others, FDB’s exclusion of Alexso products cannot plausibly be read as an affirmative representation of any kind regarding those products, let alone a representation that would lead database subscribers to wrongly believe that Alexso’s kits are not approved by the FDA.” Alexso alleged that California’s Medicaid program relies exclusively on FDB’s database, and wouldn’t reimburse providers for products not listed in the database. That might be a problem, but the Lanham Act wasn’t the appropriate vehicle for relief.  With the Lanham Act claim gone, the court declined to consider the state-law claims (or the anti-SLAPP defense thereto, which sidesteps an interesting question about whether the speech challenged is commercial).

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