In re Metformin Mktg. & Sales Practices Litig.
| Decision Date | 30 March 2022 |
| Docket Number | Civil Action 20-2324 |
| Parties | IN RE METFORMIN MARKETING AND SALES PRACTICE LITIGATION |
| Court | U.S. District Court — District of New Jersey |
THIS MATTER comes before the Court on Motions to Dismiss the First Amended Complaint (“FAC”), ECF No. 128 brought by: (1) the Manufacturer Defendants, [1] ECF No. 132; and (2) the Pharmacy Defendants[2] and AvKare, ECF No. 133. Plaintiffs[3] oppose both Motions. ECF Nos. 134, 135. For the reasons explained below, each Motion to Dismiss is GRANTED IN PART and DENIED IN PART.
This putative class action arises out of the allegedly adulterated, misbranded, and/or unapproved manufacturing, sale, and distribution of MCDs. See generally FAC.[4] MCDs are commonly used in the treatment and management of type 2 diabetes. Id. ¶ 2. Defendants allegedly manufactured, distributed, and sold MCDs that were contaminated with a probable human carcinogen known as N-nitrosodimethylamine (“NDMA”), id. ¶¶ 8, 27. Plaintiffs are consumers who purchased MCDs and MSPRC, an LLC that has been assigned the rights and power to sue Defendants on behalf of the TPPs. Id. ¶¶ 12-18, 19-27. The TPPs allege that they have made payments for contaminated MCDs in all fifty states. Id. ¶ 27.
On March 3, 2020, Plaintiffs filed their initial Complaint, ECF No. 1, which they subsequently amended on July 6, 2020, ECF No. 58. On May 20, 2021, the Court dismissed the Amended Complaint for lack of standing, and Plaintiffs filed the operative FAC on June 21, 2021. The FAC asserts eleven causes of action against Defendants: (1) breach of express warranty (Counts One and Two); (2) breach of implied warranty of merchantability (Counts Three and Four); (3) breach of warranty under the Magnuson-Moss Warranty Act, 15 U.S.C. § 2301, et seq. (the “MMWA”) (Counts Five and Six); (4) fraud (Counts Seven and Eight); (5) negligent misrepresentation and omission (Counts Nine and Ten); (6) violation of state consumer protection laws (Counts Eleven and Twelve); (7) unjust enrichment (Counts Thirteen and Fourteen); (8) negligence (Counts Fifteen and Sixteen); (9) negligence per se (Counts Seventeen and Eighteen); (10) violation of California's Consumer Legal Remedies Act, Cal. Civ. Code §§ 1750, et seq. (Counts Nineteen and Twenty); and (11) violation of New York General Business Law § 349.[5] FAC ¶¶ 342-570 (Counts Twenty One and Twenty Two). The instant Motions to dismiss the FAC pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(2), and 12(b)(6) followed.
A motion to dismiss for lack of standing is properly brought pursuant to Rule 12(b)(1). See Bellentine v. United States, 486 F.3d 806, 810 (3d Cir. 2007). Under Rule 12(b)(1), a plaintiff bears the burden of persuading the Court that subject matter jurisdiction exists. See Kehr Packages, Inc. v. Fidelcor, Inc., 926 F.2d 1406, 1409 (3d Cir. 1991). In resolving a Rule 12(b)(1) motion, a court first determines whether the motion presents a “facial” or “factual” attack. See Constitution Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014). A facial attack argues that a claim on its face “is insufficient to invoke the subject matter jurisdiction of the court, ” id. at 358, and “does not dispute the facts alleged in the complaint, ” Davis v. Wells Fargo, 824 F.3d 333, 346 (3d Cir. 2016). A court reviewing a facial attack must “consider the allegations of the complaint and documents referenced therein and attached thereto, in the light most favorable to the plaintiff.” Constitution Party of Pa., 757 F.3d at 358. Here, Defendants' motions to dismiss for lack of standing present facial attacks because they challenge Plaintiffs' standing to bring this lawsuit according to the pleaded facts. See Mfr. Def. Mem. at 13-22, ECF No. 132.1; Pharmacy Def. Mem. at 4-9, ECF No. 133.1. The Court thus accepts the pleaded facts as they relate to Plaintiffs' standing as true and draws all reasonable inferences in Plaintiffs' favor. See Constitution Party of Pa., 757 F.3d at 358.
In considering a Rule 12(b)(6) motion to dismiss, the Court accepts all pleaded facts as true, construes the complaint in the plaintiff's favor, and determines “whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.” Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008) (internal quotation marks and citation omitted). To survive a motion to dismiss, the claims must be facially plausible, meaning that the pleaded facts “allow[] the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). The allegations must be “more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
To survive a Rule 12(b)(2) motion to dismiss for lack of personal jurisdiction, Plaintiffs bear the burden of proving that personal jurisdiction is proper. IMO Indus., Inc. v. Kiekert AG, 155 F.3d 254, 257 (3d Cir. 1998). In establishing a prima facie case of personal jurisdiction, a plaintiff is “entitled to have [his] allegations taken as true and all factual disputes drawn in [his] favor.” O'Connor v. Sandy Lane Hotel Co., 496 F.3d 312, 316 (3d Cir. 2007) (citation and quotations omitted). However, where a Rule 12(b)(2) motion challenges a plaintiff's allegations with “affidavits or other evidence, ” the “plaintiff must respond with actual proofs, not mere allegations.” UniMaven, Inc. v. Texas TR, LLC, No. 17-12008, 2018 WL 2244695, at *2 (D.N.J. Apr. 25, 2018) (quoting Patterson v. FBI, 893 F.2d 595, 604 (3d Cir. 1990)).
Defendants argue that the Court should dismiss the FAC because Plaintiffs failed to correct the deficiencies the Court identified in its May 2021 Order with respect to their lack of Article III standing to bring this action. See Mfr. Def. Mem. at 13-22, Pharmacy Def. Mem. at 4-9. The Court agrees as to the Consumer Plaintiffs but finds that MSPRC has sufficiently alleged its standing to bring claims against the Manufacturer Defendants.
Litigants seeking to invoke federal jurisdiction must establish that they have standing to sue. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). To do so, a plaintiff must allege three essential elements: (1) a “concrete and particularized” injury-in-fact; (2) a “causal connection between the injury and the conduct complained of”; and (3) “a likelihood that the injury will be redressed by a favorable decision.” In re Horizon Healthcare Servs. Inc. Data Breach Litig., 846 F.3d 625, 633 (3d Cir. 2017) (citing Lujan, 504 U.S. at 560-61). To establish an injury in fact, a plaintiff “must show that he or she suffered ‘an invasion of a legally protected interest' that is ‘concrete and particularized' and ‘actual or imminent,' not conjectural or hypothetical.” Ellison v. Am. Bd. of Orthopaedic Surgery, 11 F.4th 200, 205 (3d Cir. 2021) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 339 (2016)). The causation element requires a plaintiff to establish that the alleged injury “is fairly traceable to the challenged conduct of the defendant.” Mielo v. Steak ‘N Shake Operations, Inc., 897 F.3d 467, 480-81 (3d Cir. 2018) (quoting Spokeo, 578 U.S. at 338).
The Court previously found that Plaintiffs lacked standing because (1) the Consumer Plaintiffs failed to demonstrate that they suffered an injury, as they did not allege that they purchased or ingested any MCDs containing NDMA[6] and (2) both the Consumer Plaintiffs and MSPRC did not show causation because they failed to connect each Defendants' actions to at least one injured Plaintiff. May 2021 Order at 3-4. While the FAC contains new allegations specifying which Defendants manufactured and sold MCDs to each Consumer Plaintiff, see FAC ¶¶ 12-18, the FAC still lacks any allegations that the MCDs the Consumer Plaintiffs purchased were contaminated by NDMA.
Specifically, the Consumer Plaintiffs allege only that they purchased “a product that was not the same as the RLD [(reference listed drug)], ” which is the same language the Court previously rejected as insufficient. May 2021 Order at 3. The Consumer Plaintiffs are seeking to represent a class of consumers who paid for “Defendants' MCDs [that] were adulterated and/or misbranded . . . through contamination with [NDMA].” FAC ¶ 8. However, without any allegations that the Consumer Plaintiffs actually purchased MCDs that were contaminated with NDMA, they lack standing to bring such a class action. See Lujan, 504 U.S. at 563 (quoting Sierra Club v. Morton, 405 U.S. 727, 734-35 (1972)) ( ). The Court therefore dismisses the FAC as to the Consumer Plaintiffs and grants Defendant's motions as to Counts One, Three, Five, Seven, Nine, Eleven, Thirteen, Fifteen, Seventeen, Nineteen, and Twenty-One.
As for MSPRC, the Court is satisfied that MSPRC has now sufficiently alleged which Manufacturer Defendant caused each of its injuries. The FAC contains a chart of sample payments that MSPRC's assignors made for Defendants' MCDs including the name of each assignor, the unique National Drug Code (NDC) associated with the purchase, and the Defendant who manufactured the MCD. FAC ¶ 27. Bearing in mind the reduced burden of proof required at the pleadings stage, these allegations suffice to trace MSPRC's alleged injuries to specific defendants. Mielo, 897 F.3d at 481 (...
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