Consumer Federation of America v. Upjohn Company

• Decision Date: 07 October 1975
• Docket Number: No. 8171.,8171.
• Citation: 346 A.2d 725
• Parties: CONSUMER FEDERATION OF AMERICA v. UPJOHN COMPANY et al., Appellees.
• Court: D.C. Court of Appeals

Page 725

346 A.2d 725

CONSUMER FEDERATION OF AMERICA v. UPJOHN COMPANY et al., Appellees.

No. 8171.

District of Columbia Court of Appeals

Argued February 26, 1975.

Decided October 7, 1975.

Bruce J. Terris, Washington, D. C., with whom Helen Cohn Needham, Washington, D. C., was on the brief, for appellants.

Max 0. Truitt, Jr., Washington, D. C., counsel for Eli Lilly & Co., and Herbert Dym, Washington, D. C., counsel for Upjohn Company, argued on behalf of all appellees. With them on the brief on behalf of the appellee Eli Lilly & Co. was Douglas G. Thompson, Jr., Washington, D. C. Also on the brief were E. Edward Bruce and Richard F. Kingham, Washington, D. C., on behalf of appellee Upjohn Company, and Andrew J. Kilcarr and Donald J. Frickel, Washington, D. C., on behalf of appellees Wyeth Laboratories and American Home Products Corporation. Peter A. Bell, Washington, D. C., also entered an appearance for Eli Lilly & Co.

Before NEBEKER, YEAGLEY and HARRIS, Associate Judges.

YEAGLEY, Associate Judge:

Appellants, the Consumer Federation of America and the National Council of Senior Citizens, filed a similar cause of action against each of three different drug companies on behalf of themselves, their members and all other purchasers of certain allegedly ineffective drugs to recover the money spent by purchasers of such drugs and to obtain punitive damages.¹ The appellants assert that the subject drugs were sold by the defendant companies after the defendants knew or should have known that the drugs were ineffective. An individual plaintiff, an appellant here, joined the organizational plaintiffs in the case against the Upjohn Company and seeks similar relief.

In 1962, the Federal Food, Drug, and Cosmetic Act was amended² to require that manufacturers demonstrate by substantial evidence the effectiveness, as well as the safety, of drugs before obtaining marketing approval from the Food and Drug Administration (FDA). Drug manufacturers were given two years to comply with the new statutory requirements but this deadline was extended several times until, in 1967, the FDA began the process of removing from the market drugs which had not been established as effective. Appellants assert that, as a result of these procedures, the FDA found that the manufacturers had failed to prove by substantial evidence the effectiveness of any of the drugs involved in this case.³

The suits were originally filed in the United States District Court for the District of Columbia, where appellants contended that the sales of the specified drugs violated the Federal Food, Drug, and Cosmetic Act, in that the drugs' labels asserted that they would have certain beneficial effects when, in fact, they did not; that the drug mislabelling violated the Federal Trademark Act;⁴ and that the misrepresentations which the drug companies had made in connection with the sales of these drugs entitled the purchasers to recover damages under federal and local common law products liability, warranty, negligence and fraud causes of actions.⁵ The District Court dismissed the complaints insofar as they arose under the two federal statutes and accordingly transferred the cases to the Superior Court of the District of Columbia. The Superior Court subsequently dismissed the transferred complaints as to the plaintiff organizations for failure to state a claim upon which relief could be granted on the ground that the organizations lacked standing to sue and dismissed as to the individual plaintiff on the ground of forum non conveniens. We affirm both rulings of the Superior Court.

I

The trial court held that the plaintiff organizations, not having purchased any of the drugs involved, were not themselves injured and that the organizations did not fall under any of the exceptional situations in which organizations are allowed to sue on behalf of their members. The trial court also felt that prosecution of this suit would be further complicated by the necessity of interpreting and applying various state laws to the common law causes of action of the numerous purchasers of such drugs.

Appellants attack the basic premise of the trial court ruling by asserting that it is the rule rather than the exception that organizations can represent their members in bringing civil suits. They cite in support of this assertion statements in such cases as Sierra Club v. Morton, 405 U.S. 727, 739, 92 S.Ct. 1361, 31 L.Ed.2d 636 (1972), and Arkansas Education Association v. Board of Education, 446 F.2d 763, 766 (8th Cir. 1971), that organizations may sue on behalf of their injured members, arguing that these statements of standing are made without qualification and are not limited by the type of relief sought.

However, we find that the trial court's ruling that the appellant organizations do not have standing to sue for damages on behalf of their members is strongly supported by the Supreme Court's recent opinion in Warth v. Selden, 422 U.S. 490, 95 S.Ct. 2197, 45 L.Ed.2d 343 (1975).⁶ There the Court observed that the standing doctrine has two distinct dimensions: first is the constitutional limitation on federal jurisdiction of justiciability, that is, "whether the plaintiff has made out a `case or controversy' between himself and the defendant within the meaning of Article III", and second is a prudential limitation on the exercise of jurisdiction as a matter of judicial self-governance, that is, a limitation on the "class of persons who may invoke the courts' decisional and remedial powers." Id. at 2205. Under the judicial prudence arm of the standing doctrine, courts have generally limited the cases which they will hear to those in which the plaintiff is the real party in interest. In the words of the Warth Court

the plaintiff generally must assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties.

In considering in Warth the standing of the intervenor Rochester Home Builders Association, Inc. (Home Builders),⁷ an association of firms engaged in residential construction, the Court held that Home Builders did not have standing to sue the town of Penfield to recover the lost potential profits⁸ of some of its members who had been deprived of the opportunity to build low- and moderate-cost housing in the area as a result of Penfield's exclusionary zoning law and the arbitrary refusal of Penfield officials to grant appropriate zoning variances. The Court's analysis of this issue merits quotation in full:

[T]o justify any relief the association must show that it has suffered harm, or that one or more of its members are injured. E. g., Sierra Club v. Morton, supra. But apart from this, whether an association has standing to invoke the court's remedial powers on behalf of its members depends in substantial measure on the nature of the relief sought. If in a proper case the association seeks a declaration, injunction or some other form of prospective relief, it can reasonably be supposed that the remedy, if granted, will inure to the benefit of those members of the association actually injured. Indeed, in all cases in which we have expressly recognized standing in associations to represent their members, the relief sought has been of this kind. E. g., National Motor Freight Traffic Assn. [v. United States, 372 U.S. 246 [83 S.Ct. 688, 9 L.Ed.2d 709] (1963)]. See Association of Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 90 S.Ct. 827, 25 L.Ed.2d 184 (1970). Cf. Fed.Rule Civ.Proc. 23(b) (2).

The present case, however, differs significantly as here an association seeks relief in damages for alleged injuries to its members. Home Builders alleges no monetary injury to itself, nor any assignment of the damages claims of its members. No award therefore can be made to the association as such Moreover, in the circumstances of this case, the damages claims are not common to the entire membership, nor shared by all in equal degree. To the contrary, whatever injury may have been suffered is peculiar to the individual member concerned, and both the fact and extent of injury would require individualized proof. Thus, to obtain relief in damages, each member of Home Builders who claims injury as a result of respondents' practices must be a party to the suit, and Home Builders has no standing to claim damages on his behalf.

We see no reason why the foregoing principles enunciated in Warth should not be made equally applicable to the courts of the District of Columbia which were established pursuant to Article I of the Constitution.

The appellant organizations have expressly recognized that they have not purchased any of the drugs involved and have not been injured in fact. As was the case with Home Builders in Warth, the monetary damages incurred by the members of the appellant organizations are individualized and vary in amount. Individualized proof would be necessary to establish each particular purchase and the resulting damages incurred by each member, the claims of whom the appellant organizations attempt to lump into one cause of action. A further complication present in the instant case is that the drug sales took place throughout the country and therefore the individual damage claims would be governed by the common law of each respective jurisdiction.⁹ The elements of each cause of action would have to be established separately.

In light of the difficulties presented by such a representative action for damages, the Supreme Court soundly recognized in Warth, as did the lower court in the instant case, that representative suits by organizational plaintiffs are more appropriate and feasible when equitable and prospective relief is sought. An award of damages, on the other hand, is based on the rights of the individual in accordance with his proof. Lumping such claims together in a representative action would complicate, rather than simplify, litigation. While there may be cases in...