Angell v. Allergan Sales, LLC

• Decision Date: 22 August 2019
• Docket Number: Case No. 3:18-cv-283-J-34JBT,Case No. 3:18-cv-282-J-34JBT
• Parties: ELIZABETH MICHELLE ANGELL, and BRETT ANGELL, her husband, Plaintiffs, v. ALLERGAN SALES, LLC, a foreign limited liability company, Defendant. ASHLEY J. HICKS, Plaintiff, v. ALLERGAN SALES, LLC, a foreign limited liability company, Defendant.
• Court: U.S. District Court — Middle District of Florida

ELIZABETH MICHELLE ANGELL, and BRETT ANGELL, her husband, Plaintiffs, v. ALLERGAN SALES, LLC, a foreign limited liability company, Defendant.

ASHLEY J. HICKS, Plaintiff, v. ALLERGAN SALES, LLC, a foreign limited liability company, Defendant.

Case No. 3:18-cv-282-J-34JBT

Case No. 3:18-cv-283-J-34JBT

UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA JACKSONVILLE DIVISION

August 22, 2019

ORDER

THIS CAUSE is before the Court on motions to dismiss in two related cases. Plaintiffs Elizabeth and Brett Angell, as well as Plaintiff Ashley J. Hicks bring related lawsuits against Defendant Allergan Sales, LLC (Allergan), stemming from Allergan's warranty program for its saline-filled breast implants. See Angell v. Allergan Sales, LLC, Case No. 3:18-cv-283-J-34JBT (Angell Action); Hicks v. Allergan Sales, LLC, Case No. 3:18-cv-283-J-34JBT (Hicks Action).¹ In both cases, Plaintiffs allege that plastic surgeonsLoren Z. Clayman and Mark A. Clayman misused Allergan's warranty program to the detriment of their patients. Plaintiffs contend that Allergan knew of, agreed with, and participated in the Claymans' scheme. As such, Elizabeth Angell and Ashley Hicks (the Patients) assert claims against Allergan for aiding and abetting the Claymans' fraud/breach of fiduciary duty, and conspiracy.² See generally Second Amended Complaint (Hicks Action, Doc. 45; Hicks Complaint) (Angell Action, Doc. 44; Angell Complaint), both filed on September 20, 2018.³ On October 4, 2018, Allergan filed a motion to dismiss in both cases. See Defendant Allergan Sales, LLC's Motion to Dismiss Plaintiff's Second Amended Complaint (Hicks & Angell Actions, Doc. 46; Motions). Plaintiffs filed responses in opposition to the Motions on October 25, 2018. See Amended Response to Motion to Dismiss Second Amended Complaint (Hicks & Angell Actions, Doc. 51; Responses). With leave of Court, Allergan filed replies in support of its Motions on November 16, 2018. See Allergan Sales, LLC's Reply in Support of its Motion to Dismiss Plaintiff's Second Amended Complaint (Hicks & Angell Actions, Doc. 54; Replies). Additionally, on June 20, 2019, the Court held oral argument on the Motions to Dismiss. See Minute Entry (Hicks & Angell Actions, Doc. 58; the Hearing), filed June 20, 2019; see also Transcript of Motion Hearing (Hicks & Angell Actions, Doc. 60; Tr.), filed June 25, 2019.

Following oral argument, with leave of Court, the parties submitted supplemental briefing. See Plaintiffs' Supplemental Memorandum on Actual Knowledge (Hicks & Angell Actions, Doc. 59; Plaintiffs' Supplements), filed June 25, 2019; Allergan Sales, LLC's Response in Opposition to Plaintiffs' Supplemental Memorandum on Actual Knowledge (Hicks & Angell Actions, Doc. 63; Allergan's Supplements), filed June 28, 2019. In addition, Plaintiffs filed a motion for leave to file a third amended complaint. See Plaintiffs' Opposed Alternative Motion and Memorandum of Law for Leave to File Third Amended Complaint (Hicks & Angell Actions, Doc. 62; Motions to Amend), filed June 26, 2019. Allergan filed a response in opposition to the Motion to Amend on July 10, 2019. See Defendant Allergan Sales, LLC's Opposition to Plaintiffs' Opposed Alternative Motion for Leave to File Third Amended Complaint (Hicks & Angell Actions, Doc. 64; Responses on Amendment). Last, on July 25, 2019, Plaintiffs filed a notice of supplemental authority. See Plaintiff's Notice of Supplemental Authority (Hicks & Angell Actions, Doc. 65). Accordingly, these matters are ripe for review.

I. Background⁴

A. The Warranty

This case arises out of Allergan's warranty program for Natrelle saline-filled breast implants manufactured by Allergan, Inc.⁵ The standard version of the "ConfidencePlusWarranty" is included with all of Allergan's Natrelle saline-filled breast implants and covers "loss of shell integrity, resulting in implant rupture or deflation that requires surgical intervention," and "capsular contracture (Baker Grade III/IV) with Natrelle Gel implants that requires surgical intervention." Second Amended Complaint ¶¶ 13-14. It includes lifetime coverage for the replacement of a ruptured implant and ten years of coverage for the replacement of a contralateral implant. Id. ¶ 14. Under the warranty, Allergan provides not only a replacement implant, but also $1,200 toward the cost of the surgery to remove and replace the defective implant. Id. ¶ 15. For an additional $100, a patient can obtain the Premier Warranty, which provides lifetime coverage for both ruptured and contralateral implants. Id. ¶ 14. Under the Premier Warranty, Allergan provides the replacement implant and $2,400 "for the cost of replacement/revision surgery." Id. According to Plaintiffs, plastic surgeons Loren Z. Clayman, M.D. (Clayman Senior) and Mark A. Clayman, M.D. (Clayman Junior), through their medical practice, Loren Z. Clayman, M.D., P.A. (Clayman Practice), used this warranty program to defraud their patients and in doing so, breached their fiduciary duty to their patients. Plaintiffs bring the instant action against Allergan based on Allergan's purported knowledge, agreement, and assistance with the Claymans' fraud/breach of fiduciary duty. The details of the alleged scheme are as follows.

B. The Clayman Practice

According to the Second Amended Complaint, in the early 2000s, the Clayman Practice began marketing its breast augmentation services to patients of modest means. See Second Amended Complaint ¶ 19. The Clayman Practice attracts these patients by "charging less than any other plastic surgeons for augmentation mammoplastyprocedures." Id. ¶ 20. According to Plaintiffs, the Clayman Practice is able to charge these low rates by egregiously cutting corners in their surgical procedures. See Second Amended Complaint ¶ 21.⁶ In addition, Plaintiffs allege that "[n]o later than the mid-2000s," Clayman Senior began falsely telling his breast augmentation patients that they had defective saline-filled breast implants and recommending unnecessary removal and replacement surgery. Id. ¶ 22. According to Plaintiffs, "Clayman Senior lied to his patients because he knew that most of them could not afford to pay for additional surgeries, but that by claiming that saline breast implants were ruptured, deflated, or leaking, he could seek to have the breast implant manufacturers pay for additional surgeries through their Warranties." Id. When Clayman Junior joined the Clayman Practice in mid-2008, he adopted this practice as well and began making "an excessive or unusually high number of warranty claims for saline breast implants." Id. Notably, by blaming the Patients' dissatisfaction with the results of their augmentation surgery on a defective implant, the Claymans induced the Patients to have additional surgeries with the Clayman Practice, covered by the warranty, rather than seek out a different plastic surgeon or pursue a medical negligence claim. See Hicks Complaint ¶ 54; Angell Complaint ¶ 55.

Initially, the Clayman Practice purchased saline-filled breast implants from both Allergan (or its predecessor, Inamed),⁷ and Mentor, Allergan's primary American competitor for breast implants. See Second Amended Complaint ¶ 26. However, Mentor discontinued sales of its breast implants to the Clayman Practice after receiving a disproportionately high number of warranty claims from the Claymans, which Mentor viewed as indicative of fraud. Id. ¶¶ 26-27. Specifically, Mentor became suspicious when the Clayman Practice "made approximately 40 warranty claims in the preceding year, which amounted to 30% of all saline breast implants the Clayman Practice purchased from Mentor." Id. ¶ 26. Since this incident, the date of which is not alleged, Allergan "has been the exclusive supplier of breast implants to the Clayman Practice." Id. ¶ 27.

C. Ashley J. Hicks

In March of 2014, Plaintiff Ashley J. Hicks underwent breast augmentation surgery with the Clayman Practice utilizing Allergan's Natrelle saline-filled breast implants. See Hicks Complaint ¶ 42. In the months that followed, Hicks twice returned to the Clayman Practice with concerns about her breasts, and on November 14, 2014, she underwent a second breast surgery with the Clayman Practice. Id. ¶¶ 43-45. When Hicks arrived for this second surgery, the Claymans had Hicks sign an informed consent form stating that she had a "'Right Implant Deflation'" and would need to have both implants removed and replaced. Id. ¶ 45. The Claymans also had Hicks execute an Allergan warranty claim form which stated that "she had a deflation at her right breast implant, with 'tissue @ valve.'" Id. ¶ 45. However, according to Hicks, "a preoperative photograph taken that day by theClaymans demonstrates that she did not have a rupture, deflation, or leak at either of her breast implants." Id.⁸ Nonetheless, in the November 14, 2014 operative report, Clayman Junior documented that the right implant was "'found to have a leak at the valve with tissue and what appeared to be partial delamination of the valve," and the left implant was "found to be intact." Id. ¶ 46. Both implants were removed and replaced with saline-filled Allergan implants. Id. Clayman Junior sent the warranty paperwork and two removed implants to Allergan, and Allergan later sent the Claymans a check for $2,400 in response to the warranty claim. Id. ¶ 47. Notably, Allergan's laboratory analysis of the returned implants found "no evidence of a 'loss of shell integrity, resulting in implant rupture or deflation that requires surgical intervention.'" Id. The Second Amended Complaint does not specify the date of the laboratory analysis such that it is unclear whether Allergan performed the laboratory analysis on the returned implants before or after it paid the warranty claim. Id.

Due to a "substantial difference in size between her breasts," Hicks returned to the Clayman Practice on December 5, 2016. Id. ¶ 48. "Clayman Junior recommended another removal and replacement surgery due to...