Rheinecker v. Forest Laboratories, Inc.

• Decision Date: 27 January 1993
• Docket Number: No. C-191-543.,C-191-543.
• Citation: 813 F. Supp. 1307
• Parties: Tom C. RHEINECKER, Plaintiff, v. FOREST LABORATORIES, INC., and Forest Pharmaceuticals, Inc., Defendants.
• Court: U.S. District Court — Southern District of Ohio

813 F. Supp. 1307

Tom C. RHEINECKER, Plaintiff, v. FOREST LABORATORIES, INC., and Forest Pharmaceuticals, Inc., Defendants.

No. C-191-543.

United States District Court, S.D. Ohio, W.D.

January 27, 1993.

COPYRIGHT MATERIAL OMITTED

Theodore Newton Berry, Stanley Morris Chesley, Waite, Schneider, Bayless & Chesley, Cincinnati, OH, for plaintiff.

Paul Brent Calico, Strauss & Troy, Cincinnati, OH, Richard J. Schaeffer, Dornsbush, Mandelstam & Silverman, New York City, for defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT

SPIEGEL, District Judge.

This matter is before the Court on the Defendants' Motion for Summary Judgment (doc. 43), the Plaintiff's Response to the Defendants' Motion for Summary Judgment (doc. 49), the Defendants' Reply Memorandum (doc. 52), the Defendants' Memorandum of Law on the Jury Trial Issue (doc. 48), the Plaintiff's Memorandum in Support of Trial by Jury (doc. 51), the Defendants' Reply Memorandum (doc. 53), the Defendants' Notice of Filing of Copy of Cited Authority (doc. 54), and the Plaintiff's Supplemental Submission of Authority (doc. 55).

BACKGROUND

The Defendants, Forest Laboratories, Inc., and Forest Pharmaceuticals, Inc., are engaged in the business of manufacturing and distributing a variety of pharmaceuticals including controlled substances. Among the controlled substances the Defendants manufacture are the drugs Paraldehyde ("PARAL") and Phendimetrazine Bitartrate ("METRA"). The Plaintiff was employed on an at-will basis by the Defendants as Director of Quality Assurance and Quality Control in Cincinnati. The Plaintiff's employment with the Defendants lasted from 1985 until his termination on March 1, 1991.

The Plaintiff claims that he became aware of two lots of PARAL which had failed a stability test. He claims that because the drug failed the stability test, the lots, which had been distributed in commerce, were "misbranded" and "adulterated" in violation of the Federal Food, Drug and Cosmetic Act ("FFDCA"), 21 U.S.C. §§ 351, 352. The Plaintiff asserts that he was terminated in retaliation for his insistence that the Defendants recall the defective lots of PARAL which had been distributed. The Plaintiff also claims that he was terminated due to his persistence that a missing quantity of METRA be reported as "diverted" or stolen, as opposed to lost due to spillage, as the Defendants insisted. Termination under such circumstances, the Plaintiff maintains, is a violation of Ohio Rev.Code § 4113.52 ("Whistleblower Act" or "Act"), Cincinnati Municipal Code Section 308-79, and a violation of the public policy exception to the employment-at-will doctrine.

The Defendants claim that this was an employment-at-will situation and that the Plaintiff was fired due to poor evaluations and poor performance. Furthermore, according to the Defendants, the Plaintiff is neither protected by the Whistleblower Act, nor Cincinnati Municipal Code Section 308-79. The Defendants also contend that the Whistleblower Act preempts the Plaintiff's public policy violation claim. The Defendants claim, therefore, that there are no material issues of fact in dispute, and thus, they are entitled to summary judgment as a matter of law. Finally, the Defendants assert that if summary judgment is not granted in their favor, the Plaintiff in this case is not entitled to a trial by jury.

STANDARD OF REVIEW

The narrow question that we must decide on a motion for summary judgment is whether there exists a "... genuine issue as to any material fact and whether the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). The Court cannot try issues of fact on a Rule 56 motion, but is empowered to determine only whether issues exist that should be tried. In re Atlas Concrete Pipe, Inc., 668 F.2d 905, 908 (6th Cir.1982).

The moving party "has the burden of showing conclusively that there exists no genuine issues as to a material fact and the evidence together with all inferences to be drawn therefrom must be read in the light most favorable to the party opposing the motion." Smith v. Hudson, 600 F.2d 60, 63 (6th Cir.) (emphasis in original), cert. dismissed, 444 U.S. 986, 100 S.Ct. 495, 62 L.Ed.2d 415 (1979). Moreover, "while the movant's papers are to be closely scrutinized, those of the opponent are to be viewed indulgently." Id. at 63. "The District Court is obligated to consider not only the materials specifically offered in support of the motion, but also all `pleadings, depositions, answers to interrogatories, and admissions' properly on file and thus properly before the court." Id. (quoting Rule 56(c), Fed.R.Civ.P.).

Summary judgment "must be used only with extreme caution for it operates to deny a litigant his day in court." Id. The Supreme Court elaborated upon this standard, in Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986), as follows:

The plain language of Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case and on which that party will bear the burden of proof at trial....

Id. at 322, 106 S.Ct. at 2552. Summary judgment is not appropriate if a dispute about a material fact is "genuine," that is, if the evidence is such that a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). Nevertheless, conclusory allegations are not sufficient to defeat a motion for summary judgment. McDonald v. Union Camp Corp., 898 F.2d 1155, 1162 (6th Cir.1990).

THE PLAINTIFF'S WHISTLEBLOWER ACT CLAIMS

a) PARAL

The Defendants assert that the Plaintiff has failed to comply with the requirements of the Whistleblower Act with respect to the PARAL and METRA incidents, and therefore is not protected by the Whistleblower Act. In order to trigger the protection of subsection (A)(1)(a) of the Whistleblower Act, the employee asserting the Act's protection must 1) become aware of a violation of any state or federal statute or any ordinance that his employer has the authority to correct; 2) orally notify the responsible officer of his employer; 3) file a written report which supplies sufficient detail to identify and describe the violation; and 4) give the employer 24 hours to address the violation before notifying the appropriate authorities. The Defendants claim that the Plaintiff failed to meet these requirements, and therefore does not qualify for protection under the Act.

According to the Defendants, the failure of the stability test of two lots of PARAL did not render the distributed quantity "mislabeled" or "adulterated" within the meaning of the FFDCA, as the Plaintiff contends. We disagree. A drug is "adulterated" in violation of the FFDCA if "its strength differs from, or its purity or quality fell below, that which it purports to represent or possess." 21 U.S.C. § 351(c). Under the FFDCA a drug is adulterated when 1) there is a representation made in any manner, including written expressions and labeling, that a drug meets a given quality standard, and 2) the drug fails to meet that quality. United States v. Torigian Laboratories, Inc., 577 F.Supp. 1514, 1524 (E.D.N.Y.), aff'd 751 F.2d 373 (2d Cir.1984); see Dean Rubber Manufacturing Company v. United States, 356 F.2d 161, 163 (8th Cir.1966).

The label "PARALDEHYDE U.S.P." indicates that the drug meets the standards established for PARAL by the United States Pharmacopeia ("U.S.P.").¹ Because the failure of the stability test demonstrated that the quality, strength and purity of the drug fell below the U.S.P. standards it purportedly met, the PARAL in question was "adulterated" as defined by the FFDCA. See 21 U.S.C. § 351(c); Torigian, 577 F.Supp. at 1524; Dean Rubber, 356 F.2d at 163; United States v. Lanpar Company, 293 F.Supp. 147, 154 (N.D.Texas 1968); United States v. Articles of Food and Drug, 444 F.Supp. 266, 274 (E.D.Wisc.1977).

Furthermore, a drug is "misbranded" "if its labeling is false or misleading in any particular." 21 U.S.C. § 352(a). Thus, as the quality, strength and purity of the drug fell below U.S.P. standards, its labeling—"PARALDEHYDE U.S.P."—was false or misleading under the FFDCA. See Torigian, 577 F.Supp. at 1524; Dean Rubber, 356 F.2d at 163; Lanpar, 293 F.Supp. at 154; Articles of Food and Drug, 444 F.Supp. at 274. The PARAL in question was, therefore, "misbranded." See 21 U.S.C. § 352(a); Torigian, 577 F.Supp. at 1524; Dean Rubber, 356 F.2d at 163; Lanpar, 293 F.Supp. at 154; Articles of Food and Drug, 444 F.Supp. at 274.

Additionally, a violation of the FFDCA attaches without any proof of intent, knowledge or awareness of wrongdoing. United States v. Park, 421 U.S. 658, 672-73, 95 S.Ct. 1903, 1911, 44 L.Ed.2d 489 (1975); United States v. Articles of Drug, 825 F.2d 1238, 1246 (8th Cir.1987); Torigian Laboratories, 577 F.Supp. at 1526. Stated most succinctly, the FFDCA "imposes strict liability for misbranding...." Articles of Drug, 825 F.2d at 1246. We therefore conclude that the distribution in commerce of a quantity of PARAL, a sample of which would subsequently fail a stability test, was a "violation" within the meaning of the Whistleblower Act.

Finally, the Defendants claim that the Plaintiff failed to adhere to the "written notification" requirement of the Whistleblower Act. The Plaintiff, however, sent a four page facsimile to his superiors in New York. The facsimile included a two page "Stability Assay Report" and a page from a lab notebook reporting the results of the failed stability test. The Defendants assert that this did not "provide sufficient detail to describe and identify ... a violation" as the Act requires. Ohio Rev. Code § 4113.52(A)(1)(a). The Plaintiff on the other hand, claims that the "New York executives who received and reviewed...