In re Valsartan, Losartan, & Irbesartan Prods. Liab. Litig.

Decision Date12 March 2021
Docket NumberMDL No. 2875 (RBK-KMW)
PartiesIN RE VALSARTAN, LOSARTAN, AND IRBESARTAN PRODUCTS LIABILITY LITIGATION This Document Relates To All Actions.
CourtU.S. District Court — District of New Jersey

MTD OPINION 6: Liability of FDA Liaisons, Wrongful Death, Survival Actions, Loss of Consortium, Punitive Punitive Damages, Unjust Enrichment

KUGLER, United States District Judge:

Before the Court in this Multi-District Litigation ["MDL"] that concerns the sale in the U.S. of prescription generic drugs containing Valsartan ["VCDs"]1 and which were found to contain cancer-causing contaminants ["VCDs at issue"] are three Motions to Dismiss ["MTDs"] .

Since these MTDs seek dismissal of several claims for each set of plaintiffs, the Court is issuing a series of opinions to resolve the MTDs. Each opinion is numbered in the series, this opinion being the third in the series. This OPINION 6, which is LAST in the series resolves the arguments relating to claims for FDA Liaisons, Wrongful Death, Survival Actions, Loss of Consortium, Punitive Damages, and Unjust Enrichment.

An ORDER 6 of this date accompanies this OPINION 6.

Each MTD was brought by a different category of defendant, which is at a separate level in the drug supply chain. The defendant categories2 are:

1) The manufacturers ["Mfrs"], which include manufacturers of the Active Pharmaceutical Ingredient ["API"] ["API Mfrs"] and manufacturers that make the finished Valsartan drug product ["Finished Mfrs"];

2) the business entities in the U.S. that obtain the finished drug product from the Mfrs ["Wholesalers"]; and distribute it to retail businesses in the U.S.; and

3) the retail businesses in the U.S. from which individuals can obtain the finished drug ["Pharmacies"].

Each MTD seeks dismissal of claims in all three Master Complaints. These include:

1) Economic Loss Master Complaint ["ELMC"] (ECF Doc. 121) filed 17 June 2019 by individual plaintiffs and plaintiff business entities that paid for and/or insured the VCDs at issue taken by individual plaintiffs and alleges economic damages;

2) Amended Personal Injury Master Complaint ["PIMC"] (ECF Doc. 122) filed 17 Jun 2019 by those individual plaintiffs who ingested the VCDs at issue and who were personally injured, including those who developed cancers or had cellular or bodily injury as a result; and

3) Medical Monitoring Master Complaint ["MMMC"] (ECF Doc. 123) filed 17 Jun 2019 by those individual plaintiffs who ingested the VCDs at issue and therefore bear an increased risk of developing cancer and consequently seek a fund to finance continued medical monitoring of that risk.

The previous five opinions have resolved issues relating to:

Lack of Standing;
Preemption by federal law and specifically by the Food Drug and Cosmetic Act Primary Jurisdiction by the FDA;

Subsumption:

Deficiencies In Specific Claims, including fraud, unjust enrichment, negligence, negligence per se, strict liability, and breach of express and of implied warranty.

The COURT HAVING REVIEWED the parties' submissions (without a hearing in accordance with Rule 78.1 (b)) relating to, and for the reasons stated below, and for good cause shown:

The Court DENIES the defendants' motions to dismiss any claim in any Master Complaint against Prinston, Aurobindo Pharma USA, and Hetero USA on the ground plaintiffs have alleged properly these entities do not function exclusively as FDA Liaisons;

To the extent plaintiffs' tort, strict liability, warranty, and/or fraud cause(s) of action underlying their wrongful death, survivor, or consortium claims has(ve) been dismissed WITH PREJUDICE in this Court's previous motion to dismiss opinions, the Court GRANTS in part defendants' motion to dismiss the plaintiffs' wrongful death, survivor, and/or consortium claims in the PIMC ;

To the extent, plaintiffs' tort, strict liability, warranty, and/or fraud cause(s) of action underlying their wrongful death, survivor, or consortium claims has(ve) NOT been dismissed WITH PREJUDICE in this Court's previous motion to dismiss opinions, then the Court DENIES in part defendants' motion to dismiss plaintiffs' wrongful death, survivor claim, and/or consortium claims in the PIMC;.

The Court recognizes that if plaintiffs' underlying tort, strict liability, warranty, and/or fraud cause(s) of action has(ve) been dismissed WITHOUT PREJUDICE in this Court's previous motion to dismiss opinions, then Plaintiffs may amend those underlying cause(s) of action to support their derivative claims within the period set forth in the accompanying Order;

The Court DENIES defendants' motions to dismiss the claim in the PIMC for a punitive damages remedy. Nevertheless, the Court appreciates that the law of each state varies as to the availability of a punitive damages remedy, which may be limited by, among other things, the state law applicable to the decedent plaintiff's claims requiring a showing of willful disregard; The Court GRANTS without prejudice defendants' motions to dismiss those unjust enrichment claims in the ELMC arising under the laws of Florida, Iowa, Kansas, and Louisiana because these states require pleading no adequate remedy at law exists. To the extent plaintiffs are able to plead no adequate remedy at law exists in these states, the Court GRANTS plaintiffs leave to amend the unjust enrichment claims in these states within the period set forth in the accompanying Order;

The Court GRANTS without prejudice defendants' motions to dismiss those unjust enrichment claims in the ELMC arising under the laws of Alabama, Florida, Hawaii, Idaho, Illinois, Louisiana, Massachusetts, Mississippi, Oklahoma, South Carolina, and West Virginia because these states prohibit the pleading an unjust enrichment claim when an adequate remedy at law exists. To the extent, plaintiffs must plead and are able to plead in these states that no adequate remedy at law exists in order to advance the unjust enrichment claims in those states, the Court GRANTS plaintiffs the right to amend the claims in these states within the period set forth in the accompanying Order;

The Court DENIES defendants' motion to dismiss the unjust enrichment claims in the ELMC on the basis that plaintiffs need not plead they conferred a direct benefit to defendants in order to have pleaded properly an unjust enrichment claim.

The Court DENIES defendants' motions to dismiss the unjust enrichment claims in the ELMC on the basis that the partial benefit plaintiffs received impairs neither unjust enrichment claim nor the demand for restitution or disgorgement;

The Court DENIES defendants', and in particular the Pharmacies', motions to dismiss the unjust enrichment claims in the ELMC on the specific basis of argued innocent seller status.

FACTS AND BACKGROUND

As this Opinion is written primarily for the parties, the Court refers the parties to the other five Opinions in this series for the facts and background of this matter.

1.0 MOTION TO DISMISS STANDARD

Other than for standing, defendants' motions rely on Fed.R.Civ.Proc. ["FRCP" or "Rule"] 12(b)(6), which governs a court's dismissal of an action for failure to state a claim upon which relief can be granted. In evaluating a motion to dismiss, "courts accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Fowler v. UPMC Shadyside, 578 F.3d 203, 210 (3d Cir.2009) [(quoting Phillips v. Cnty. of Allegheny, 515 F.3d 224, 233 (3d Cir.2008)]. Put simply, a complaint must "state a claim to relief that is plausible on its face." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

The general inquiry in determining the plausibility of a claim on its face focuses not on the possible success of its merits, but "whether [plaintiffs] should be afforded an opportunity to offer evidence in support of their claims." In re Rockefeller Ctr. Prop., Inc., 311 F.3d 198, 215 (3d Cir.2002). The specific inquiry (Santiago v. Warminster Twp., 629 F.3d 121, 130 (3d Cir.2010)) involves the court's completing these three steps:

1) stating "the elements a plaintiff must plead to state a claim." Ibid. [quoting Iqbal, 556 U.S. at 675];

2) identifying the allegations that, "because they are no more than conclusions, are not entitled to the assumption of truth." Id. at 131 [quoting Iqbal, 556 U.S. at 680]; and

3) assuming the veracity of well-pleaded factual allegations, "determine[s] whether they plausibly give rise to an entitlement for relief." Ibid.

Practically speaking, the third-step, plausibility analysis is a "context-specific task requiring the reviewing court to draw on its judicial experience and common sense." Iqbal, 556 U.S. at 679. A claim fails when a court can infer only that it is merely possible rather than plausible. Ibid. Plausibility cannot lie upon legal conclusions or "[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements". Id. at 678. The specific information a court reviews in deciding a motion to dismiss is limited to the allegations contained in the complaint, exhibits attached to the complaint and matters of public record." Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir.1993).

2.0 WHETHER PLAINTIFFS FAILED TO STATE CLAIMS AGAINST FDA LIAISONS

In their MTD (ECF 520-3), the Manufacturer ["mfr"] defendants contend that each of the following subsidiaries, namely, Prinston, Aurobindo Pharma USA ["APUSA"], and Hetero USA ["HUSA"], of these respective manufacturers Zhejiang Huahai Pharmaceuticals, Ltd., Aurobindo India Ltd., and Hetero India, is an agent under 21 C.F.R. § 207.69(b)3 by which the FDA can always have a U.S. "communications" contact between it and the foreign manufacturers. ECF Doc. 520-3: 57-58. The mfr defend...

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