Law

Each defeat drives the class action purveyors further towards the margins, and recently, in In re Avandia Marketing, Sales Practices & Products Liability Litigation, 2015 WL 1736976 (E.D. Pa. April 16, 2015), one of the more marginal class action damages theories we’ve seen was swept away.

In Avandia, the would-be class representative did not claim to be injured in the slightest – either by the drug’s risks or by deprivation of the drug’s benefits.  As stated in the opinion, “Plaintiff received the drug she was prescribed, took the drug, and alleges neither that the drug failed to do its job (controlling Plaintiff's blood sugar levels) nor that she was injured by taking the drug.”  Id. at *3.  The only damages that the plaintiff (and supposed class) sought were of the existential variety – some difference in subjective “worth” beyond what was reflected in the purchase price of the drug, purchase price being how value is necessarily determined in a free-market economy.  The complaint itself, doubtless to suppress the numerous individualized issues bubbling below the surface, was appallingly generalized and superficial.  The court observed:

Unsurprisingly, the court dismissed the case for failure to plead any legally cognizable damages.  We were pleased that Avandia did not couch that conclusion as a failure of constitutional standing, as some courts have done.  We recently discussed those concerns, that dismissal for want of standing is without prejudice, and if it occurs in a CAFA-removed case, can land the defendant right back in state court where it didn’t want to be in the first place.  Failure to allege cognizable injury, on the other hand, yields a much more satisfying dismissal with prejudice.

That’s what happened in Avandia.  The court held that even the attenuated and inchoate “economic loss” alleged in the complaint satisfied the “very generous” standing requirement of “injury in fact,” id. at *1, relying on a prior Avandia decision involving a different state’s (California’s rather than Missouri’s) consumer protection statute:

The existential nature of the damages, though, could not support a cause of action.  The Missouri consumer protection statute (like many of its ilk) requires an “ascertainable loss.”  Avandia, 2015 WL 1736976, at *2 (quoting Vernon’s Ann. Mo. Stat. §407.025.1).  Plaintiff claimed that an unrealized increased risk, not affecting either the user’s actual safety or the efficacy of the drug, was a deprivation of some unknown portion of her “benefit of the bargain.”  Id.  The only case plaintiff advanced was a case decided under looser Missouri state class certification standards, under which “whether a plaintiff is able to prove a theory is irrelevant because the sole issue is whether the certification requirements were met.”  Id. at *3 (quoting Plubell v. Merck & Co., 289 S.W.3d 707, 715 (Mo. App. 2009)).  As the court observed, id., that isn’t the federal certification standard – which is why CAFA matters.

Since Plubell “did not rule on whether the plaintiffs could prove such loss,” id., it did not bear on whether the Avandia plaintiff had stated the damages element of her cause of action.  Several other courts had already concluded that the existential lost “value” theory didn’t allege the statutorily-required ascertainable loss.  See Thompson v. Allergan USA, Inc., 993 F. Supp.2d 1007, 1012 (E.D. Mo. 2014) (“Plaintiff has thus not alleged that the [product] was anything other than what it has always purported to be. . . .  Accordingly, Plaintiff has failed to allege that she did not receive the benefit of the medication”); Mikhlin v. Johnson & Johnson, 2014 WL 6084004, at *3 (E.D. Mo. Nov. 13, 2014) (“[a]lthough Plaintiffs contend that they would not have purchased [the product] if they had known the ‘true facts,’ they obtained the ‘full value’ of the product before learning the truth so they have not suffered any economic damage from their purchase”); Carter v. Alcon Labs., Inc., 2014 WL 989002, at *4 (E.D. Mo. March 13, 2014) (“Plaintiff has not suffered an ascertainable loss.  Plaintiff does not allege that the medication she purchased was anything other than represented or that it did not perform as intended.”); In re Bisphenol-A (BPA) Polycarbonate Plastic Products Liability Litigation, 2011 WL 6740338, *3 (W.D. Mo. Dec. 22, 2011) (“Plaintiffs essentially are claiming that their purchases, ipso facto, caused an economic loss.  There is “no authority, in Missouri or otherwise, for this proposition.”); Polk v. KV Pharmaceutical Co., 2011 WL 6257466, at *5 (E.D. Mo. Dec. 15, 2011) (“Plaintiff has not alleged the [product] was anything other than what it has always purported to be” and “failed to allege he did not receive the benefit from the [product] for which he bargained; i.e., the [product] did not perform as intended”); In re Bisphenol-A (BPA) Polycarbonate Plastic Products Liability Litigation, 687 F. Supp.2d 897, 913 (W.D. Mo. 2009) (plaintiffs who “obtained full use of those products before learning the truth . . . obtained full value from their purchase and have not suffered any damage”).

The Avandia court agreed with this precedent.  “While [plaintiff] may contend she would not have purchased the goods had she known about the alleged risks of use, Plaintiff  received 100% use (and benefit) from the product and has no quantifiable damages.”  2015 WL 1736976, at *3 (citations and quotation marks omitted).  The Avandia plaintiff’s position was worse than wrong – it was “absurd”: