In re Zyprexa Products Liability Litigation
| Decision Date | 28 June 2007 |
| Docket Number | No. 06-CV-0021.,No. 05-CV-2948.,No. 06-CV-6322.,No. 04-MD-1596.,No. 05-CV-4115.,06-CV-0021.,05-CV-4115.,06-CV-6322.,05-CV-2948.,04-MD-1596. |
| Parties | In re ZYPREXA PRODUCTS LIABILITY LITIGATION UFCW Local 1776 and Participating Employers Health and Welfare Fund, Eric Tayag, and Mid-West National Life Insurance Company of Tennessee, on behalf of themselves and others similarly situated, Plaintiffs, v. Eli Lilly and Company, Defendant. Local 28 Sheet Metal Workers, on behalf of themselves and others similarly situated, Plaintiffs, v. Eli Lilly and Company, Defendant. Sergeants Benevolent Association Health and Welfare Fund, on behalf of themselves and others similarly situated, Plaintiffs, v. Eli Lilly and Company, Defendant. |
| Court | U.S. District Court — Eastern District of New York |
David S. Nalven, Thomas M. Sobol, Hagens Berman Sobol Shapiro LLP, Cambridge, MA, Ann K. Mandt, Charfoos & Christensen, P.C., Detroit, MI, Jason J. Thompson, J. Thompson & Associates PLC, Southfield, MI, Brian P. Kenney, Kenney Lennon & Egan, Plymouth Meeting, PA, Mark D. Fisher, Rawlins & Associates, PLLC, Louisville, KY, Richard Cohen, Lowey, Dannenber, Bemporad & Selinger, White Plains, NY, Steve W. Berman, Hagens & Berman, Seattle, WA, Douglas R. Plymale, James R. Dugan, Dugan & Browne PLC, Lewis Kahn, Kahn Gauther Law Group, LLC, New Orleans, LA, Art Sadin, Sadin Law Firm, P.C., Friendswood, TX, Christopher A. Neal, Christopher A. Neal & Associates, P.C., Bedford, TX, Eric O'Bell, Kahn Gauthier Law Group, Metairie, LA, for Plaintiffs.
Nina M. Gussack, Andrew R. Rogoff, Anthony Vale, Pepper Hamilton LLP, Philadelphia, PA, Samuel J. Abate, Jr., Pepper Hamilton LLP, New York, NY, Nancy K. Juren, Assistant Attorney General of Texas, Capitol Station, Austin, TX, for Defendant.
MEMORANDUM & ORDER MOTIONS FOR SUMMARY JUDGMENT
TABLE OF CONTENTS
I. Introduction ..............................................................574
II. Summary Judgment Law ......................................................575
III. Plaintiffs' Motion for Partial Summary Judgment ...........................576
IV. Conclusion as to Plaintiffs' Motion for Partial Summary Judgment ......... 576
V. Defendant's Motion for Summary Judgment ...................................576
A. Injury and Causation ...................................................576
B. Reliance ...............................................................578
C. Consumer Protection Statutes ...........................................579
VI. Conclusion as to Defendant's Motion for Summary Judgment ..................579
VII. Daubert Motions ...........................................................580
VIII. Interlocutory Appeal ......................................................580
These are part of a series of cases based on injuries allegedly resulting from sale of the drug Zyprexa, manufactured by Eli Lilly & Company ("Lilly"). See, e.g., In re Zyprexa Prods. Liab. Litig., 489 F.Supp.2d 230 (E.D.N.Y.2007) ().
In June of 2005, Mid-West National Life Insurance Company of Tennessee filed a class action suit against Lilly seeking economic damages. Similar suits were initiated by UFCW Local 1776 and Participating Employers Health and Welfare Fund, and Eric Tayag, in August of 2005 (Michael Pronto and Michael Vanello were later added as co-lead plaintiffs); Local 28 Sheet Metal Workers in January of 2006; and Sergeants Benevolent Association Health and Welfare Fund in November of 2006. Institutional plaintiffs in the instant cases are pension funds, labor unions, and insurance companies who cover members' health benefits and have paid for the drug Zyprexa when it was prescribed by physicians for their individual members or clients. An individual Zyprexa user who made co-payments is also named as a plaintiff.
Plaintiffs claim overpayment through direct purchase of Zyprexa. They allege that over an eleven-year period continuing to today Lilly withheld information, and disseminated misinformation, about the safety and efficacy of Zyprexa, and promoted and marketed it for uses for which it was not indicated, and for patients who would have been better served by less expensive medications. The consequence, it is contended, was pricing of the drug at more than it would have sold for had the truth been known. The resulting excess payments are claimed as damages.
Five causes of action are asserted: violation of 18 U.S.C.1962(c) (Racketeer Influenced and Corrupt Organization Act (RICO)); 18 U.S.C.1962(d) (RICO); various state consumer protection statutes; common law fraud; and unjust enrichment.
Class certification is sought on the ground that anyone who paid for Zyprexa was charged more than they would have been in the absence of Lilly's fraud. The proposed class is defined as follows:
All individuals and entities in the United States and its territories who, for purposes other than resale, purchased, reimbursed, and/or paid for Zyprexa during the period from September 1996 " through the present. For purposes of the class definition, individuals and entities purchased Zyprexa if they paid all or some of the purchase price.
Subject matter jurisdiction is based upon 28 U.S.C. § 1331 () and 18 U.S.C. §§ 1962 and 1964(c) (RICO). Plaintiffs also invoke jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) (Class Action Fairness Act). Venue is placed in the Eastern District of New York pursuant to 28 U.S.C. § 1391(b) and (c) () and 18 U.S.C. § 1965 (RICO).
Under the present organization of the pharmaceutical industry, the official federal Food and Drug Administration (FDA), and the plaintiffs' bar, the courts are arguably in the strongest position to effectively enforce appropriate standards protecting the public from fraudulent merchandising of drugs. See, e.g., James Surowiecki, A Drug on the Market, The New Yorker, June 25, 2007, at 40 ( ). As Drs. Kesselheim and Avorn put it:
[C]ase studies [of major pharmaceutical litigations, including Zyprexa] indicate that clinical trials and routine regulatory oversight as currently practiced often fail to uncover important adverse effects for widely marketed products. In each instance, the litigation process revealed new data on the incidence of adverse events, enabled reassessments of drug risks through better evaluation of data, and influenced corporate and regulatory behavior. In performing these tasks, lawyers and their clients often find themselves serving as drug safety researchers of last resort.
Aaron S. Kesselheim & Jerry Avorn; The Role of Litigation in Defining Drug Risks, Journal of the American Medical Association, January 17, 2007, at 308; see also, e.g., Janet L. Dolgin & Joel Weintraub, Biomedical Research and the Law: The Pharmaceutical Industry and its Relationship with Government, Academia, Physicians, and Consumers, 35 Hofstra L.Rev. 681 (2006).
There is little doubt about the usefulness of Zyprexa for both on-label and some off-label purposes. It assists many people with serious debilitating diseases. It has substantially increased the quality of life of many thousands of people. Its salutary effect is evidenced by the fact that there have been no changes in plaintiffs' formularies which continue to include Zyprexa without restrictions. Many treating physicians continue to rely on it after what is by now extensive revelation of information about Zyprexa's risks and benefits. Nevertheless, the utility of Zyprexa does not trump plaintiffs' legal claims for fraud and overpricing.
Summary judgment is appropriate only if "there is no genuine issue as to any material fact ... [in which case] the moving party is entitled to a judgment as a matter of law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); see also Mitchell v, Washingtonville Central School District, 190 F.3d 1, 5 (2d Cir.1999). Anderson, 477 U.S. at 248, 106 S.Ct. 2505.
"In considering the motion, the court's responsibility is not to resolve disputed issues of fact but to assess whether there are factual issues to be tried." Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.1986). Critical is recognition of the jury's fact-finding primacy:
It is well established that credibility assessments, choices between conflicting versions of the events, and the weighing of evidence are matters for the jury, not for the court on a motion for summary judgment. If, as to the issue on which summary judgment is sought, there is any evidence in the record from which a reasonable inference could be drawn in favor of the opposing party, summary judgment is improper.
Curry v. City of Syracuse, 316 F.3d 324, 333 (2d Cir.2003) (quotation marks omitted).
Plaintiffs' motion for partial summary judgment is based upon the following proposed findings: (1) third party payers ("TPPs") are purchasers of prescription drugs, and pharmaceutical benefit managers ("PBMs") act as agents for TPPs; (2) PBMs exercise no effective influence on the prescribing habits...
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