Hochendoner v. Genzyme Corp.

• Decision Date: 23 May 2016
• Docket Number: 15–1447.,Nos. 15–1446,s. 15–1446
• Citation: 823 F.3d 724
• Parties: Anita HOCHENDONER et al., Plaintiffs, Appellants, v. GENZYME CORPORATION, Defendant, Appellee. Philip Adamo et al., Plaintiffs, Appellants, v. Genzyme Corporation, Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

823 F.3d 724

Anita HOCHENDONER et al., Plaintiffs, Appellants

v.GENZYME CORPORATION, Defendant, Appellee.

Philip Adamo et al., Plaintiffs, Appellants

v.Genzyme Corporation, Defendant, Appellee.

Nos. 15–1446

15–1447.

United States Court of Appeals, First Circuit.

May 23, 2016.

Matthew L. Kurzweg, with whom Kurzweg Law Offices was on brief, for appellants.

Robert G. Jones, with whom Justin Florence, Mark S. Gaioni, Cassandra Bolaños, and Ropes & Gray LLP were on brief, for appellee.

Before HOWARD, Chief Judge, SELYA and LIPEZ, Circuit Judges.

SELYA

, Circuit Judge.

These consolidated actions stand on the cutting edge of modern medicine. In the end, however, they reduce mainly to a question of standing. Though we affirm the order of dismissal (with one small exception), our reasoning differs from that of the district court: we dismiss for lack of Article III standing. Because a dismissal for lack of standing is functionally equivalent to a dismissal for lack of jurisdiction, the resulting judgment will (unlike a judgment on the merits) operate without prejudice. The tale follows.

I. BACKGROUND

Because these appeals follow the granting of a motion to dismiss, we rehearse the facts as they appear in the plaintiffs' complaints (including documents incorporated by reference therein). See Katz v. Pershing, LLC, 672 F.3d 64, 69 (1st Cir.2012)

.

Fabry Disease

(Fabry) is a rare genetic disorder that leaves afflicted persons unable to synthesize a key enzyme that helps the body break down fats. Left untreated, Fabry patients will suffer a variety of progressively more severe symptoms, including pain in their extremities, gastrointestinal issues, vision and hearing losses, stroke, and heart and kidney failure, eventually leading to premature death. Researchers at the Mt. Sinai School of Medicine (Mt. Sinai) developed a method for producing a replacement enzyme, which effectively treats (but does not cure) Fabry. After patenting this method, Mt. Sinai granted an exclusive license to defendant-appellee Genzyme Corporation (Genzyme). Genzyme thus became the sole producer of the replacement enzyme. Dubbed “Fabrazyme,” it is the only enzyme replacement therapy approved by the federal Food and Drug Administration (FDA) for the treatment of Fabry.

Fabrazyme

received FDA approval in April of 2003. That approval was based on a dose of one milligram of Fabrazyme for each kilogram of body weight taken intravenously every two weeks. Genzyme provided the drug steadily to Fabry patients until June of 2009, after a virus was discovered in improperly cleaned equipment at the company's Allston, Massachusetts manufacturing facility. This discovery compelled Genzyme to reduce production, leading to a shortage of Fabrazyme.

In response, the company initiated a rationing plan, providing Fabry patients with a reduced dose of Fabrazyme

in order to stretch the available supply during the shortage. It also organized a group of doctors and other stakeholders to work on supply management guidance.

In November of 2009, Genzyme's efforts to restore a full supply of Fabrazyme

met a roadblock in the form of the discovery of particulate steel, glass, and rubber in a recently produced batch of Fabrazyme. Later, another adulterated lot of Fabrazyme was spotted and destroyed prior to any distribution. A bad situation grew worse: shortages in the United States were exacerbated in 2011 when Genzyme diverted some Fabrazyme to the European market. The complaints aver that this diversion was part of a pattern of favoring European patients due to competition Genzyme faced from an alternative enzyme replacement therapy approved only in Europe.

Although the company had been able, beginning in January of 2010, to provide Fabry patients with 50% of their FDA-approved doses, even this reduced supply was subject to intermittent interruptions. The supply dried up entirely in August of 2011, leaving Fabry patients in the United States unable to obtain Fabrazyme at all for a brief period. It was not until some time in 2012 that Genzyme succeeded in restoring fully supplies of Fabrazyme

.

This sustained shortage sparked a proliferation of lawsuits, including the two actions that are before us. The first of these actions (Hochendoner ) was filed in the United States District Court for the Western District of Pennsylvania in March of 2011 on behalf of the named plaintiffs and a putative class comprising all Fabry patients in the United States. The Hochendoner complaint was amended the following month and, shortly thereafter, the district court transferred the case to the District of Massachusetts. After the defendants moved to dismiss, the Hochendoner plaintiffs obtained leave of court and filed a second amended complaint (the operative pleading for present purposes).

The second of the two actions (Adamo ) was brought directly in the District of Massachusetts. That action was filed in June of 2013 by another group of Fabry patients on behalf of themselves and a putative class. After motions to dismiss were served, the Adamo complaint was amended as of right in September of 2013. That amended complaint is the operative pleading for present purposes. The district court thereafter consolidated the two cases.

Each complaint named Genzyme and Mt. Sinai as defendants and laid out a laundry list of claims. Those claims rest on a variety of theories, implicating alleged statutory violations (federal and state), torts, breaches of warranty, breaches of contract, and losses of consortium (brought by spouses of Fabry patients). By stipulation, Mt. Sinai has been dropped as a party, and the cases are proceeding against Genzyme alone.

After a hearing on Genzyme's motions to dismiss for failure to state any actionable claims, see Fed.R.Civ.P. 12(b)(6)

, the court below dismissed both actions, see

Hochendoner v. Genzyme Corp., 95 F.Supp.3d 15, 35 (D.Mass.2015). The court's reasoning warrants some elaboration.

Faced with a matched set of rambling complaints, the court identified three potential injuries, bound up with three potential causal chains. The first such cause and effect pairing involved the return of Fabry symptoms and the progression of the disease previously prevented by full doses of Fabrazyme

. See

id. at 24. The second pairing drew upon assertions in the complaints that patients “not only had a return of life threatening symptoms but also an accelerated course of deterioration on the lowered dose” (emphasis in original). On this second theory, the reduced Fabrazyme doses caused affirmative harm rather than merely permitting the return of the normal progression of Fabry symptoms. See

id. at 24–25. The final pairing involved the plaintiffs' claims of harm attributable to the receipt of Fabrazyme tainted with particulate matter. See

id. at 25–26.

After titrating the complaints into these three types of claims—the progression claims, the acceleration claims, and the contaminant claims—the court rejected them all. See id. at 35

. The court concluded that the acceleration and contaminant claims did not comport with the requirements of Federal Rule of Civil Procedure 8(a) because they did not provide sufficient notice to Genzyme of which plaintiffs, if any, suffered the harms alleged under those theories. See

id. at 25–26. While the court found that the progression claims did provide sufficient notice—after all, the complaints alleged that every plaintiff had suffered disease progression as a result of the Fabrazyme

shortage—it nonetheless found the panorama of common-law and statutory causes of action underlying the progression claims to be impuissant. Many of them were ineffective due to reliance on the notion, debunked by the district court, that Genzyme had a duty to supply the market with Fabrazyme. See, e.g.,

id. at 30–31.

On appeal, the parties embrace the district court's tripartite taxonomy as a means of channeling the plaintiffs' claims. The progression claims need not concern us: the plaintiffs do not challenge the district court's thorough evaluation and ultimate dismissal of those claims. Nor do they challenge the court's conclusion that Genzyme had no free-standing duty to supply the market with Fabrazyme

. Their appeals challenge only the district court's disposition of the acceleration and contaminant claims.

II. ANALYSIS

Federal courts are courts of limited jurisdiction and, thus, we must begin by ensuring that we have jurisdiction to reach the questions presented by these appeals. This brings front and center Genzyme's asseveration that the plaintiffs lack standing to advance claims based on either the acceleration or contaminant theories. Though Genzyme did not challenge the plaintiffs' standing below, we nonetheless must address its asseveration here: because standing is a prerequisite to a federal court's subject matter jurisdiction, the absence of standing may be raised at any stage of a case. See P.R. Tel. Co. v. T–Mobile P.R. LLC, 678 F.3d 49, 57 (1st Cir.2012)

. Since no class was certified below, we focus on the standing vel non of the named plaintiffs, individually. See

Katz, 672 F.3d at 71.

Although review of a Rule 12(b)(6)

dismissal for failure to state a claim and review to ensure the existence of standing are conceptually distinct, the same basic principles apply in both situations. See

id. at 70–71. Appellate review is de novo, see

P.R. Tel., 678 F.3d at 57, and the court of appeals must take the complaint's well-pleaded facts as true and indulge all reasonable inferences in the pleader's favor, see

Kerin v. Titeflex Corp., 770 F.3d 978, 981 (1st Cir.2014). We are not wedded to the district court's reasoning but, rather, may affirm the order of dismissal on any basis that is apparent from the record. See id.

The parallelism between the threshold requirements needed to satisfy Rule 12(b)(6)

and the threshold showing necessary for standing extends beyond the standard of review. Just as the plaintiff bears the burden of plausibly alleging a viable cause of action, ...