Monday, June 18, 2012

No standing for consumer not exposed to misrepresentations

In re Vioxx Products Liability Litigation, 2012 WL 2153960 (E.D. La.)

This opinion related to a suit brought by a DC resident under the D.C. Consumer Protection Procedures Act and transferred under MDL procedures.  The court granted Merck’s motion to dismiss for lack of Article III standing. Merck argued that there was no injury in fact: an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical.  Injury to pecuniary or economic interests, as well as invasion of statutorily created rights, can constitute injury in fact.

Merck relied on Rivera v. Wyeth-Ayerst Laboratories, 283 F.3d 315 (5th Cir. 2002), and  Williams v. Purdue Pharma Co., 297 F. Supp. 2d 171 (D.D.C. 2003). Rivera involved a drug that risked liver damage and a plaintiff who didn’t sustain any physical injury; the Fifth Circuit held that she didn’t have Article III standing to assert a claim based on the contention that she wouldn’t have bought the drug if it had been properly labeled.  Williams similarly involved plaintiffs who didn’t allege that they suffered harm related to the allegedly inadequate warnings about Oxycontin’s duration and addictiveness; the court held that they received the benefit of their bargain.  The invasion of a purely legal right against false advertising, without any harm, didn’t create Article III standing, where plaintiffs failed to allege that they were deceived by, or even saw, the allegedly deceptive ads.

By contrast, the plaintiff relied on Grayson v. AT & T Corp., 15 A.3d 219 (D.C. 2011) and  Shaw v. Mariott International, 605 F.3d 1039 (D.C.Cir. 2010).  Grayson found standing when a plaintiff who’d purchased prepaid calling cards alleged that sellers of those cards improperly kept unspent balances as profits instead of turning those amounts over to the District of Columbia as unclaimed property.  The court found this to sufficiently allege a concrete injury to the plaintiff's statutory right under the CPPA to disclosure of information regarding defendant's practices.  Shaw involved allegations that a hotel chain violated the CPPA by misrepresenting prices at its Russian hotels, and found that a think tank that had paid for its employees to stay at the hotels had standing.  Another case, Silvious v. Snapple Beverage Corp., 793 F. Supp. 2d 414 (D.D.C. 2011), found CPPA standing when the plaintiff alleged that he’d purchased a product that wasn’t as it was represented to be.  

Merck argued that simply buying a product isn’t economic injury.  Without alleging a failure of performance, a plaintiff has received the benefit of his/her bargain.  Here, the plaintiff alleged that he took Vioxx for over 2 years, until it was withdrawn from the market, without experiencing side effects; Merck argued that he paid for and received an effective drug.  The plaintiff argued that his injury was overpayment for a drug he wouldn’t have bought in the absence of Merck’s safety misrepresntations.  The court sided with Merck, finding no economic injury.  “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.”  (Doesn’t it matter if there are alternatives to Vioxx with better safety profiles?  At least if they’re cheaper?)

The court then turned to whether the plaintiff alleged statutory injury.  Merck argued that he failed to allege distinct injury to himself, or that his CPPA rights were violated by anything Merck did.  The plaintiff rejoined that he had a right to disclosure of information that Merck violated.  The court again agreed with Merck.  The complaint only alleged in general terms that Merck’s communications were directed towards DC consumers.  “This generalized and conclusory allegation does not suffice to show any plausible nexus or causation between Merck's conduct and Plaintiff as an individual,” such as that he or his doctor received any information from Vioxx. 

The plaintiff did allege that his initial pills came in sample packages from his doctor, which he alleged showed that a Merck rep had visited his doctor.  But this ws “speculation upon speculation,” since one had to infer that the samples were delivered directly from the rep to the doctor (I don’t know if there are regs about this, but I imagine there’s some control of samples) and then infer that the meeting included misrepresentations. The court didn’t reach Merck’s alternative argument that the plaintiff failed to allege a consumer-merchant transaction as required by the CPPA, since Merck sold through intermediary pharmacies, but expressed some sympathy for Merck’s position, which confuses me a bit since the plaintiff clearly alleged that Merck ended up with his money, like any other manufacturer whose products are available in the drugstore.   


Paul Alan Levy said...

This is very odd. If the district court lacked Article III standing, then wasn't the removal improvident? Isn't the proper judgment one of remand to DC Superior Court, not dismissal?

Rebecca Tushnet said...

Paul, as I understand it, DC courts are also governed by Article III, since it's a federal district. I don't know whether the courts have determined that's constitutionally required or not.