Friday, August 13, 2021

Illinois unfairness claims against opioid marketers continue

City of Chicago v. Purdue Pharma L.P., No. 14 CV 4361, 2021 WL 1208971 (N.D. Ill. Mar. 31, 2021)

Chicago alleged unfair and deceptive misconduct in multiple defendants’ marketing, commercializing, and promoting their opioid products. (Perdue is first in the list but it’s a bunch of them, so parts of this case will survive the bankruptcy whatever happens there.) There were a bunch of kinds of allegedly deceptive marketing related to misrepresentations and failures to disclose. There were also alleged unfair practices related to diversion of opioids into illicit channels. Defendants allegedly didn’t comply with their statutory duties to maintain suspicious-order-monitoring systems (“SOMS”), and concealed their failure from the public, misrepresenting that they were in compliance with their obligations under the law. This led to the rise of “pill mills” and an increasing number of deaths and hospitalizations.

Among other things, the court addressed whether the City adequately pled unfairness under the Illinois Consumer Fraud Act. Courts look to the FTCA for guidance on ICFA, and thus consider: “(1) whether the practice offends public policy; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers.”

The parties focused on the public policy element; the City argued that defendants violated their duties to monitor and prevent diversion under the CSA (Controlled Substances Act). Defendants rejoined neither the CSA nor its implementing regulations impose any duties owed to consumers that might reveal a relevant public policy; it just guided the DEA in enforcement. But, as the MDL court earlier in this case held, the CSA and its implementing regulations impose an ongoing duty on DEA registrants. “Given that, as the Court has explained, defendants were under legal duties, imposed under the CSA, to monitor for suspicious orders and halt shipments of them, the Court has little doubt that their alleged failure to do so offends public policy, particularly under circumstances in which consumers of their products and the consumers’ communities were likely to be injured by addiction and its consequences.”

However, public policy wasn’t dispositive, “because plaintiff’s allegations of immoral, unethical, oppressive, or unscrupulous conduct causing substantial injury to consumers are sufficient to state a claim on their own.” In particular, this was “oppressive” conduct because it deprived consumers of choice:

By promoting the use of their products for chronic or long-term pain while concealing the risks, including the risk of addiction, they not only caused consumers with chronic pain to use their product, but also, a reasonable factfinder could conclude, they put these consumers in a position in which they were compelled by their addiction to continue buying defendants’ product, whether via legal or illicit channels. In other words, the consumers, having been tricked into buying defendants’ products, had little alternative but to submit to defendants’ alleged misconduct and continue to buy the products, even in illicit channels, if necessary. This is enough to state a claim by itself.

There was also no preemption by the CSA.

Defendants contested harm causation because the City alleged oversupply in the aggregate without identifying specific orders that should have been refused, but the court agreed with others that the “very existence of the duties to maintain effective controls supports the notion that opioid misuse is foreseeable.” Any intervening acts, “including decisions by prescribers, patients, distributors, pharmacies, and third-party criminals,” were “reasonably foreseeable, and thus not superseding acts” that broke the chain of proximate causation.


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