State High Court Issues Consumer Fraud Act Decision

One of the dangers for defendants of claims based on state consumer fraud acts is the reluctance of some state courts to recognize the reliance and causation elements inherent in most such statutes.  The absence of a reliance element allows plaintiffs to argue that such claims are more amenable to class treatment, removing a significant individual element.  West Virginia's high court recently confirmed, however, that plaintiffs alleging affirmative misrepresentation claims under West Virginia's consumer protection law must show actual reliance on the allegedly misleading statement. White v. Wyeth, No. 35296 (W. Va., 12/17/10).
 

The underlying consumer fraud suit was filed pursuant to the WV Consumer Protection Act by purchasers of prescription hormone replacement therapy (“HRT”) drugs.  Plaintiffs alleged that the defendants used unfair and deceptive practices in promoting HRT prescription drug products to doctors and patients for treatment of serious menopausal disorders by allegedly using misleading statements in advertising, marketing and labeling.  Following completion of class certification discovery, defendant Wyeth filed alternative motions for dismissal or summary judgment, arguing that plaintiffs could not establish that they had standing to sue because they failed to meet their burden of showing a causal connection between their individual claims of injury and any alleged unfair or deceptive conduct attributed to Wyeth.

Defendant Wyeth particularly noted the lack of evidence demonstrating that plaintiffs decided to purchase HRT drugs because of anything they learned from Wyeth, or that their treating physicians considered information from Wyeth when they issued the prescriptions for HRT drugs. Plaintiffs responded that the statutory language only requires that they prove causation by alleging that Wyeth engaged in deceptive practices and that Respondents were harmed. They maintained that reliance on deceptive statements or practices need not be demonstrated.  In essence, plaintiffs read out of the WVCCPA the requirement that they “suffered ascertainable loss”  as a "result of” various unfair and deceptive acts of Wyeth. W. Va. Code § 46A-6-106(a).  Wyeth argued that the “as a result of” language contained in the statute requires plaintiffs to allege that they relied, or their doctors relied, on Wyeth’s allegedly deceptive actions when they made the decision to purchase hormone replacement therapy -- the phrase “as of result of” has to be read to mean that a plaintiff relied on the improper act or practice alleged in order to satisfy standing requirements.  Plaintiffs, in turn, argued that if the plaintiffs received drugs that were different from or inferior to that which they were entitled to receive, they did not receive the benefit of their bargain, and they therefore suffered an ascertainable loss.

The court noted that the private cause of action provisions of twenty-eight states' consumer fraud acts contain the “as a result of” language.  Many of the decisions addressing the issue of reliance in the context of private consumer protection causes of action show courts struggling to arrive at a way to be faithful to the purposes of consumer protection statutes – promoting fair and honest business practices and protecting consumers – without inviting nuisance lawsuits which impede commerce. In determining the meaning of the phrase “as a result of” in the WVCCPA, the court agreed with those decisions requiring proof of a causal nexus between the deceptive conduct giving rise to the private cause of action and the ascertainable loss, and the conclusion that this may require proof of reliance in some but not all instances.  The court found that reliance and causation are twin concepts, "often intertwined, but not identical."

Following this reasoning, when consumers allege that a purchase was made because of an express or affirmative misrepresentation, the causal connection between the deceptive conduct and the loss would necessarily include proof of reliance on those overt representations. Where concealment or omission is alleged, and proving reliance is an impossibility, the causal connection between the deceptive act and the ascertainable loss is established by presentation of facts showing that the deceptive conduct was the proximate cause of the loss. In other words, the facts have to establish that “but for” the deceptive conduct or practice a reasonable consumer would not have purchased the product and incurred the ascertainable loss. 

The court determined that this approach best serves the WVCCPA’s dual purpose of protecting the consumer while promoting “fair and honest competition.” W. Va. Code § 46A-6-101. Thus, a private cause of action under the provisions of West Virginia Code § 46A-6-106(a) of the West Virginia Consumer Credit and Protection Act must allege: (1) unlawful conduct by a seller; (2) an ascertainable loss on the part of the consumer; and (3) proof of a causal connection between the alleged unlawful conduct and the consumer’s ascertainable loss. Where the deceptive conduct or practice alleged involves affirmative misrepresentations, reliance on such misrepresentations must be proven in order to satisfy the requisite causal connection

The court went on to address an important second issue, finding that prescription drug cases are not the type of private causes of action contemplated under the terms and purposes of the WVCCPA.  The consumer cannot and does not decide what product to purchase. The intervention by a physician in the decision-making process necessitated by his or her exercise of judgment whether or not to prescribe a particular medication protects consumers in ways respecting efficacy that are lacking in advertising campaigns for other products. Accordingly, the court found that the private cause of action afforded consumers under West Virginia Code § 46A-6-106(a) does not extend to prescription drug purchases. See also New Jersey Citizen Action v. Schering-Plough Corp., 842 A.2d 174 (N.J. Super. 2003). , in which a New Jersey appeals court emphasized the difference between the pharmaceutical industry and other companies. According to the West Virginia court, the New Jersey court noted that physician intervention in prescribing decisions protects consumers and observed that the high degree of federal regulation of prescription drug products “attenuates the effect product marketing has on a consumer's prescriptive drug purchasing decision.”
The court remanded for dismissal.
 

Causation Proof Still Insufficient In Drug Case

A while back we posted about an interesting toxic tort case involving important causation issues. See Zandi v. Wyeth, 2009 WL 2151141 (Minn.App.).  A Minnesota appeals court recently refused to rehear its prior affirmance of summary judgment for defendants in a suit by a woman who alleged hormone replacement drugs caused her breast cancer.  2009 Minn. LEXIS 648. 

Plaintiff alleged that between approximately 1981 and 2001, she ingested hormone replacement therapy (HRT) drugs manufactured, designed, packaged, marketed, and distributed by defendants. In November 2001, Zandi alleges she was diagnosed with "hormone-dependent breast cancer." She contended that the HRT drugs caused her cancer. 

The trial court found that plaintiff's specific causation evidence did not satisfy Minnesota's standard for admissibility of expert testimony. Zandi offered testimony from Dr. Lester Layfield and Dr. Gail Bender to try to prove that HRT drugs caused her cancer. Minnesota courts use the Frye standard to determine the admissibility of novel scientific evidence. Zandi's claims were based on the following propositions: 1) it is supposedly generally accepted that HRT causes hormone-dependent breast cancer, and 2) there is a generally accepted method of diagnosing the cause of hormone-dependent breast cancer in an individual. The appellate issues revolved around the second.

Plaintiff's experts based their specific causation opinions in part on "differential diagnosis."  As readers of MassTortDefense know,  differential diagnosis, sometimes called “differential etiology”  is a process through which all the scientifically plausible causes of an injury are “ruled in,” and the expert then “rules out” the less plausible causes until reaching the one that theoretically cannot be ruled out.  If you've watched "House" on TV, you have seen the use of differential diagnosis to discover what disease a patient is suffering from.  Less traditional, and more questionable, is the use of the technique to discover what is the cause of the disease in the patient.  Most doctors don't care as much about the cause of the disease as getting the right disease and treating it.  As used by toxic tort plaintiffs, differential diagnosis adopts a process of elimination to identify not just the injury (which may be debated) but also the cause; in theory, it seeks to eliminate the possibility of competing causes or confounding factors. 

Again, in performing a differential diagnosis, a physician begins by ruling in all scientifically plausible causes of the patient's injury. The physician then rules out the least plausible causes of injury until the most likely cause remains. Yet, breast cancer does not lend itself to such a differential diagnosis because the scientific community has not accepted that breast cancer has a limited number of discrete and recognized possible causes such that ruling out one or a few causes would necessarily implicate another. For differential diagnosis to be sufficiently reliable to even come close to proving causation, even assuming one accepts the method in this context, the diagnostician should rule out all other hypotheses, or at least explain why the other conceivable causes are excludable. But additional risk factors that plaintiff failed to adequately account for here in this case included family history. When faced with this dilemma, as is common when a disease has many idiopathic cases, plaintiff's experts simply suggest that it is possible to conduct a reliable differential diagnosis without ruling out other hypotheses, as long as "major" or "most" explanations are ruled out.  Courts should be wary of this.

Courts generally recognize that the proffered expert must have a sufficient basis to “rule in” the drug or toxic substance at issue as a plausible cause of plaintiff’s injury. E.g., Jazairi v. Royal Oaks Apts., 217 Fed. Appx. 895 (8th Cir. 2007).  But this case is a good reminder that the plaintiff's expert testimony must also reliably “rule out” the other plausible causes of the injury--  again, especially difficult when its causes are largely unknown.  On this record, the court said, “We conclude that there is not a method of diagnosing the specific cause of a particular woman's breast cancer that is generally accepted in the relevant scientific community. This reality leaves Zandi without a legally sufficient ability to prove specific causation.”  See also Perry v. Novartis, 564 F. Supp.2d 452 (E.D. Pa. 2008).

This clear reasoning can be contrasted with the inexplicable finding of the 8th Circuit in Scroggin v. Wyeth, 2009 WL 3518245 (8th Cir. Nov. 2, 2009), which accepted plaintiff's carefully constructed circular reasoning.  Unable to prove that the breast cancer was caused by hormone therapy drugs, plaintiff's expert simply re-diagnosed the disease as hormone-induced breast cancer.  This allowed the expert to engage in a so-called differential diagnosis to determine the cause of the breast cancer simply by ruling out the two possible sources of these hormones: (1) plaintiff produced the hormones herself, or (2) they came from the hormone replacement therapy she had allegedly taken for the past eleven years.  Under this circular reasoning, any form of cancer can easily be linked to the defendant's product because it will be re-characterized as the sub-type of disease caused by the substance at issue. 
 

 

State Court Excludes Plaintiff's Causation Expert Under Frye Test

A Minnesota appeals court recently affirmed summary judgment for defendants in a suit by a woman who alleged hormone replacement drugs caused her breast cancer. Zandi v. Wyeth, 2009 WL 2151141 (Minn.App.)

Plaintiff alleged that between approximately 1981 and 2001, she ingested hormone-replacement-therapy (HRT) drugs manufactured, designed, packaged, marketed, and distributed by defendants.   In November 2001, Zandi was diagnosed with "hormone-dependent breast cancer."  She contended that the HRT drugs caused her cancer.  She brought claims for negligence, strict liability, breach of implied warranty, breach of ex-press warranty, fraud, misrepresentation, and violation of the Minnesota fraudulent advertising act, the Minnesota Prevention of Consumer Fraud Act, and the Minnesota Uniform Deceptive Trade Practices Act.


The trial court  found that plaintiff's specific causation evidence did not satisfy Minnesota's standard for admissibility of expert testimony.  Zandi offered testimony from Dr. Lester Layfield and Dr. Gail Bender to prove that HRT drugs caused her cancer. Minnesota courts use the Frye standard to determine the admissibility of novel scientific evidence. Goeb v. Tharaldson, 615 N.W.2d 800, 814 (Minn.2000). Under Minnesota's version of this standard, the proponent of scientific evidence must establish that the scientific theory is generally accepted in the relevant medical or scientific community and that the principles and methodology used are reliable.  McDonough v. Allina Health Sys., 685 N.W.2d 688, 694 (Minn.App.2004). When novel scientific evidence is offered, (1) the trial court must determine whether it is generally accepted in the relevant scientific community; (2) the particular scientific evidence in each case must be shown to have foundational reliability.

Zandi's claims were based on the following propositions: 1) it is generally accepted that HRT causes hormone-dependent breast cancer, and 2) there is a generally accepted method of diagnosing the cause of hormone-dependent breast cancer in an individual.  The appellate issues revolved around the second.  Defendants alleged that even if one assumes the relevant scientific community generally accepts that HRT causes hormone-dependent breast cancer, Zandi had failed to establish that the relevant scientific community generally agrees that there is a method of diagnosing the cause of breast cancer in a particular person.

Plaintiff's experts based their specific causation opinions on epidemiological studies and differential diagnosis. But  the science of epidemiology does not address the cause of an individual's disease. Epidemiology is concerned with the incidence of disease in populations and does not address the question of cause of an individual's disease. Epidemiology has its limits at the point where an inference is made that the relationship between an agent and a disease is causal (general causation) and where magnitude of excess risk attributed to the agent has been determined; that is, epidemiology addresses whether an agent can cause disease, not whether an agent did cause a specific plaintiff's disease. See Green et al., Reference Guide on Epidemiology, in Reference Manual on Scientific Evidence 333, 381-82 (Fed.Jud.Ctr.2d ed.2000).

Plaintiff's experts also relied on differential diagnosis. As used by plaintiffs, differential diagnosis adopts a process of elimination to identify cause; it  seeks to eliminates the possibility of competing causes or confounding factors. Goeb, 615 N.W.2d at 815.  In performing a differential diagnosis, a physician begins by ruling in all scientifically plausible causes of the patient's injury. The physician then rules out the least plausible causes of injury until the most likely cause remains.  Yet, breast cancer does not lend itself to such a differential diagnosis because the scientific community has not accepted that breast cancer has a limited number of discrete and recognized possible causes such that ruling out one cause would implicate another. For differential diagnosis to be sufficiently reliable to prove causation, the diagnostician should rule out all other hypotheses, or at least explain why the other conceivable causes are excludable.

Additional risk factors that plaintiff failed to adequately account for here included family history. Indeed, plaintiff's experts suggested that it is possible to conduct a reliable differential diagnosis without ruling out other hypotheses.

On this record, the court said, “We conclude that there is not a method of diagnosing the specific cause of a particular woman's breast cancer that is generally accepted in the relevant scientific community. This reality leaves Zandi without a legally sufficient ability to prove specific causation.”
 

Sanctions Against Plaintiffs in HRT Litigation

The judge in charge of multidistrict litigation involving Wyeth Pharmaceuticals' hormone replacement pill, Prempro, has decided to sanction a law firm representing hundreds of plaintiffs, for its failure to timely produce completed client fact sheets. In re: Prempro Products et al., No. 4:03-cv-01507 (E.D. Ark.). 

Judge Wilson of the U.S. District Court for the Eastern District of Arkansas recently granted Wyeth's motion for sanctions against a Texas-based firm, although he declined to dismiss the plaintiffs.

Readers of MassTortDefense know the role plaintiff fact sheets (PFT) play in mass tort litigation, replacing some aspects of basic fact discovery; allowing defendants to gather information for early case assessment; beginning the process that winnows the number of cases that will be subjected to fuller case-specific fact discovery and expert discovery; and eventually informing the pool of cases available for initial trials if the case management process includes bellwether trials. 

The information requested on the PFT is often a negotiated topic, but typically includes information that any plaintiff's attorney who has done a good faith, Rule 11 assessment of the claim should have, or could readily access. The Manual for Complex Litigation notes that in lieu of interrogatories, questionnaires directed to individual plaintiffs in standard, agreed-on forms were used successfully in the breast implant and diet drug litigation.  It also includes sample case management orders regarding, inter alia, plaintiff fact sheets. (For other examples of plaintiff fact sheets, see In re Baycol Products Litigation, MDL 1431, Pretrial Order No. 10 (D. Minn. Mar. 18, 2002) and In re Phenylpropanolamine (PPA) Products Liability Litigation, MDL No. 1407, Case Management Order No. 6 (W.D. Wash. Mar. 21, 2002)).

Wyeth showed the court that the plaintiff firm missed several court deadlines to serve completed fact sheets for each of its clients. Wyeth first argued in 2008 that plaintiffs represented by the firm had repeatedly submitted incomplete fact sheets in which they provided merely a “will supplement” answer to several questions. Judge Wilson agreed and issued an order on Dec. 17, 2008,
directing the firm to produce completed fact sheets by Feb. 2, 2009.  In February, defendant again complained to the court that hundreds of fact sheets had not been served by the deadline and that many of those that had been produced remained incomplete, with plaintiffs replacing “will supplement” with the vague language that plaintiffs do "not recall and do not have reasonable access to the information that would be responsive to this question without undue burden or cost.”
Plaintiffs were then given until April 13 to resubmit the fact sheets in accordance with the order, and the responses led Wyeth to renew its bid for sanctions including dismissal.

The judge directed the firm to pay $5,000 to Wyeth to partially compensate it for the time and effort involved in seeking adequate fact sheets.  The firm must also assign an associate or paralegal to immediately contact all plaintiffs identified by Wyeth as still having insufficient fact sheets and to have the documents filled out by August 5th.

The court warned that it was likely that additional sanctions — and perhaps considerably more severe sanctions — will be imposed if substantial effort is required to review the adequacy of fact sheets filed by Aug. 5, 2009. 

The court indicated it had seriously considered dismissing all the affected cases without prejudice, and with the proviso that if a case was refiled it must have a reasonably accurate fact sheet attached and that sanctions against counsel would likely be imposed if additional fact sheets were attached with non-answers.  Only the administrative burden of dealing with amended complaint filings prevented this.

Federal Court Tosses Punitive Damages Award in HRT Case

A federal district court has thrown out a jury award of more than $27 million in punitive damages awarded to a Little Rock, Ark. woman who developed breast cancer allegedly as a result of taking hormone replacement therapy. In re: Prempro Products Liability Litig. (Scroggin v. Wyeth, et. al.), MDL No. 1507-WRW, 4:04CV01169.  Plaintiff Donna Scroggin developed breast cancer and had a double mastectomy, and blamed the hormone drugs she allegedly took for 11 years to combat menopausal symptoms. Defendants noted their products have carried a label warning of a heightened risk of breast cancer at all relevant times. In February, a federal jury returned a verdict in favor of Scroggin in her lawsuit against drug makers Wyeth and Upjohn, awarding her $2.75 million in compensatory damages and $27 million in punitive damages.

In an opinion July 8th on post-trial motions, Judge Wilson, of the E.D. of Arkansas, threw out the punitive damages award, finding he should not have permitted certain key testimony from a former Food and Drug Administration official, Dr. Suzanne Parisian. She had testified as the plaintiff's regulatory expert. The Court concluded, as defendants had asserted, that Dr. Parisian testified to a bottom line conclusion without sufficient explanation, failed to provide expert analysis, testified beyond limitations established by pretrial orders, testified in areas beyond her expertise, and invaded areas that required no expert testimony. Specifically, the expert failed to provide convincing testimony that Wyeth's actions had violated FDA regulations in any way that would warrant a punitive award.

In a part of the ruling particularly useful for readers of MassTortDefense, the judge said the expert did little more than read select portions of exhibits without providing further comment. Contrary to plaintiff’s position during the Daubert hearing, and during the punitive damages stage, Dr. Parisian, generally, did not give the jury the tools they need to look at those documents, or to understand them in the context of a regulatory background -- she simply read the documents to the jury. He hadn’t admitted such “so that [the expert] could simply engage in recitation of those exhibits; jurors are capable of reading documents.” Ironically, on cross-examination, Dr. Parisian, on at least one occasion, took the position that the document “speaks for itself.”

If an expert does nothing more than read exhibits, is there really any point in her testifying as an expert? The Court said “no.” As was seen during the punitive damages stage, the use of the “regulatory expert” to deal with large volumes of conduct documents is subject to abuse. MassTortDefense has seen this same technique in asbestos, in tobacco, in other pharma cases. The expert here did not explain the documents, provide summaries, or tie them in to her proposed regulatory testimony. Dr. Parisian did not provide analysis or expertise. Instead, improperly, she was a mere document delivery device.

The promised expert testimony simply was not delivered, said the Court, “so I should have struck this testimony at the time.”  Without Parisian's testimony, plaintiff had not presented sufficient other evidence to meet the clear and convincing standard required for punitive damages. The Court said plaintiff tried to present evidence of what, out of context and at first blush, might be considered questionable practices (e.g., alleged ghostwriting, countering negative press, etc.), but all this fell far short of establishing a submissible jury issue on punitives.

Summary Judgment Ruling In New Jersey HRT Litigation

On July 11, 2008, the mass tort judge handling hormone replacement cases in New Jersey granted summary judgment dismissing Bailey v. Wyeth, No. L-999-06 MT (N.J. Super.), ruling that the labels used by defendants Wyeth and Upjohn were adequate as a matter of law. The failure to warn claims were dismissed because the plaintiffs could not overcome the presumption of adequacy of FDA-approved labels created by the New Jersey Products Liability Act (NJ PLA). The claims for fraud, negligent misrepresentation, and consumer fraud likewise failed because they are subsumed by the NJ PLA and could not be asserted as independent causes of action.

Because our firm is involved in HRT litigation, and because of past and current client relationships, MassTortDefense policy is to not offer extensive commentary on such decisions.  Here, however, for interested readers is the actual opinion.

Summary Judgment Ruling In New Jersey HRT Litigation

On July 11, 2008, the mass tort judge handling hormone replacement cases in New Jersey granted summary judgment dismissing Bailey v. Wyeth, No. L-999-06 MT (N.J. Super.), ruling that the labels used by defendants Wyeth and Upjohn were adequate as a matter of law. The failure to warn claims were dismissed because the plaintiffs could not overcome the presumption of adequacy of FDA-approved labels created by the New Jersey Products Liability Act (NJ PLA). The claims for fraud, negligent misrepresentation, and consumer fraud likewise failed because they are subsumed by the NJ PLA and could not be asserted as independent causes of action.

Because our firm is involved in HRT litigation, and because of past and current client relationships, MassTortDefense policy is to not offer extensive commentary on such decisions.  Here, however, for interested readers is the actual opinion.