Watts v. Medicis Pharm. Corp.

• Decision Date: 21 January 2016
• Docket Number: No. CV–15–0065–PR.,CV–15–0065–PR.
• Citation: 365 P.3d 944
• Parties: Amanda WATTS, An Adult Individual, Plaintiff/Appellant, v. MEDICIS PHARMACEUTICAL CORPORATION, An Arizona Corporation, Defendant/Appellee.
• Court: Arizona Supreme Court

365 P.3d 944

Amanda WATTS, An Adult Individual, Plaintiff/Appellant,

v.MEDICIS PHARMACEUTICAL CORPORATION, An Arizona Corporation, Defendant/Appellee.

No. CV–15–0065–PR.

Supreme Court of Arizona.

Jan. 21, 2016.

Mick Levin (argued), Michael D. Malin, Mick Levin, P.L.C., Phoenix, Attorneys for Amanda Watts.

Donald L. Myles, Jr., Lori L. Voepel (argued), Joshua M. Snell, Jones, Skelton & Hochuli, P.L.C., Phoenix, Attorneys for Medicis Pharmaceutical Corporation.

Mark Brnovich, Arizona Attorney General, John R. Lopez IV, Solicitor General, David W. Garbarino, Stephen J. Emedi, Assistant

Attorneys General, Phoenix, Attorneys for Amicus Curiae State of Arizona.

Stanley G. Feldman, Haralson, Miller, Pitt, Feldman & McAnally, P.L.C., Tucson; and David L. Abney, Dana R. Roberts, Knapp & Roberts, P.C., Scottsdale, Attorneys for Amicus Curiae Arizona Association for Justice/Arizona Trial Lawyers Association.

Wayne D. Struble, Bowman and Brooke LLP, Phoenix, Attorney for Amicus Curiae The Product Liability Advisory Council, Inc.

Alan Blankenheimer, Covington & Burling LLP, Los Angeles, CA; Michael X. Imbroscio (argued), Paul W. Schmidt, Covington & Burling LLP, Washington, D.C., Attorneys for Amicus Curiae The Pharmaceutical Research and Manufacturers of America, the U.S. Chamber of Commerce, the U.S. Chamber Litigation Center, the Arizona Chamber of Commerce & Industry, and the Arizona Manufacturers Council.

Vice Chief Justice PELANDER authored the opinion of the Court, in which Chief Justice BALES and Justices BRUTINEL, TIMMER, and BERCH (Retired) joined.

Vice Chief Justice PELANDER, opinion of the Court.

¶ 1 Under the learned intermediary doctrine ("LID"), a manufacturer satisfies its duty to warn end users by giving appropriate warnings to the specialized class of persons who may prescribe or administer the product. We hold today that the LID generally applies to a prescription drug manufacturer. We further conclude that the LID is not displaced by the Uniform Contribution Among Tortfeasors Act ("UCATA"), A.R.S. §§ 12–2501 through –2509. Finally, we hold that prescription drugs are "merchandise" for purposes of the Consumer Fraud Act ("CFA"), A.R.S. §§ 44–1521 through –1534, and the CFA does not require a direct merchant-consumer transaction to support a patient's statutory claim against a drug manufacturer.

I.

¶ 2 Because the superior court dismissed the plaintiff's complaint under Arizona Rule of Civil Procedure 12(b)(6), we "look only to the pleading itself" and consider its well-pleaded factual allegations, reasonable inferences from the alleged facts, and the complaint's exhibits. Cullen v. Auto–Owners Ins. Co., 218 Ariz. 417, 419 ¶ 7, 189 P.3d 344, 346 (2008) ; see Coleman v. City of Mesa, 230 Ariz. 352, 356 ¶ 9, 284 P.3d 863, 867 (2012).

¶ 3 Medicis Pharmaceutical Corporation manufactures and distributes Solodyn, which contains minocycline. In its full prescribing informational materials for Solodyn, Medicis warns: "The long-term use of minocycline in the treatment of acne has been associated with drug-induced lupus-like syndrome, autoimmune hepatitis and vasculitis." Those materials also state: "Autoimmune syndromes, including drug-induced lupus-like syndrome, autoimmune hepatitis, vasculitis and serum sickness have been observed with tetracycline-class drugs, including minocycline. Symptoms may be manifested by arthralgia, fever, rash and malaise. Patients who experience such symptoms should be cautioned to stop the drug immediately and seek medical help."

¶ 4 In April 2008, Amanda Watts, then a minor, sought medical treatment for acne and received a prescription for Solodyn from her medical provider. Watts apparently did not receive the full prescribing information noted above, but did receive two other publications about the drug. The first was a "MediSAVE" card, which her medical provider gave to her, that outlined a discount-purchasing program for Solodyn. The MediSAVE card and its accompanying information stated that "[t]he safety of using [Solodyn ] longer than 12 weeks has not been studied and is not known." Second, Watts received an informational insert about Solodyn from her pharmacist. The insert warned that patients should consult a doctor if symptoms did not improve within twelve weeks. Watts used Solodyn as prescribed for twenty weeks.

¶ 5 About two years later, Watts received another prescription for Solodyn and took it as directed for another twenty weeks. In October 2010, Watts was hospitalized and diagnosed with drug-induced lupus and hepatitis , both allegedly side effects from using Solodyn. Although she has recovered from the hepatitis, doctors expect her to have lupus for the rest of her life.

¶ 6 Watts sued Medicis alleging consumer fraud and product liability, seeking both compensatory and punitive damages. In her statutory CFA claim, Watts alleged that in connection with the sale or advertisement of Solodyn, Medicis knowingly misrepresented and omitted material facts on the MediSAVE card she received and on which she relied. She also alleged that the drug was defective and unreasonably dangerous because Medicis failed to adequately warn her of the consequences of its long-term use. The superior court granted Medicis's motion to dismiss.

¶ 7 The court of appeals vacated the judgment of dismissal and remanded the case for further proceedings. Watts v. Medicis Pharm. Corp., 236 Ariz. 511, 513 ¶ 1, 342 P.3d 847, 849 (App.2015). The court concluded that the LID "is inconsistent with UCATA" and "cannot coexist with" that Act. Id. at 518 ¶ 35, 519 ¶ 38, 342 P.3d at 854, 855. Noting "the realities of modern-day pharmaceutical marketing," the court of appeals also found the policy rationale for the LID is "not persuasive now." Id. at 519 ¶ 37, 520 ¶ 41, 342 P.3d at 855, 856.

¶ 8 We granted review because the legal issues are of statewide importance and likely to recur. We have jurisdiction under article 6, section 5(3) of the Arizona Constitution and A.R.S. § 12–120.24.

II.

¶ 9 We review dismissal of claims under Rule 12(b)(6) de novo. Coleman, 230 Ariz. at 355–56 ¶¶ 7–8, 284 P.3d at 866–67. We also review the interpretation of a statute de novo. See Zamora v. Reinstein, 185 Ariz. 272, 275, 915 P.2d 1227, 1230 (1996).

A.

¶ 10 Generally, a claim of strict products liability may be based on "informational defects encompassing instructions and warnings" that render a product defective and unreasonably dangerous. Gosewisch v. Am. Honda Motor Co., 153 Ariz. 400, 403, 737 P.2d 376, 379 (1987). To establish such a claim, the plaintiff must prove, among other things, that the manufacturer had a duty to warn of the product's dangerous propensities and that the lack of an adequate warning made the product defective and unreasonably dangerous. Id. "In certain contexts, however, the manufacturer's or supplier's duty to warn end users of the dangerous propensities of its product is limited to providing an adequate warning to an intermediary, who then assumes the duty to pass the necessary warnings on to the end users." Centocor, Inc. v. Hamilton, 372 S.W.3d 140, 154 (Tex.2012). This legal doctrine is known as the LID.

¶ 11 In 1978, our court of appeals adopted the LID in a product liability case against pharmaceutical companies that manufactured a drug that allegedly was unsafe due to informational defects. Dyer v. Best Pharmacal, 118 Ariz. 465, 577 P.2d 1084 (App.1978). In affirming summary judgment in favor of the drug companies, the court applied the LID, finding that the doctrine was supported by principles of both duty and causation. Id. at 467–69, 577 P.2d at 1086–88. Regarding duty, "[a] drug manufacturer has discharged his duty to the public if he has properly warned the administering physician of the contraindications and possible side effects of the drug." Id. at 468, 577 P.2d at 1087. Regarding causation, a learned intermediary (the prescribing physician) who received an adequate warning regarding a drug's side effects or proper use but unforeseeably disregarded the warning constituted an intervening, superseding event that broke the chain of causation between the manufacturer and the patient. Id. at 467–69, 577 P.2d at 1086–88.

¶ 12 As subsequent Arizona cases have recognized, the LID is based on principles of duty, not causation. See, e.g., Dole Food Co. v. N.C. Foam Indus., Inc., 188 Ariz. 298, 302–03, 935 P.2d 876, 880–81 (App.1996) (assessing factors to determine when, under the LID, the "manufacturer's duty to warn is ordinarily satisfied"); Davis v. Cessna Aircraft Corp., 182 Ariz. 26, 38, 893 P.2d 26, 38 (App.1994) (applying the LID "to determine whether [a manufacturer] satisfied its duty to warn"); see also Restatement (Third) of Torts: Prod. Liab. § 6 cmt. b (Am. Law Inst. 1998) ("Third Restatement") ("The rationale supporting this ‘learned intermediary’ rule is that only health-care professionals are in a position to understand the significance of the risks involved and to assess the relative advantages and disadvantages of a given form of prescription-based therapy. The duty then devolves on the health-care provider to supply to the patient such information as is deemed appropriate under the circumstances so that the patient can make an informed choice as to therapy."). Thus, the court of appeals here correctly remarked that, "[i]n its application, the [LID] appears to be less a rule of causation and more a standard for determining when a drug manufacturer has satisfied its duty to warn." Watts, 236 Ariz. at 517 ¶ 31, 342 P.3d at 853.

¶ 13 Manufacturers generally have a duty to warn consumers of foreseeable risks of harm from using their products. See Third Restatement at § 2. But under the LID, if the manufacturer provides complete, accurate, and appropriate warnings about the product to the learned intermediary, it fulfills its duty to warn the consumer. See id. at § 6 ; Centocor, 372 S.W.3d at 142. The premise for the LID is that certain types of goods (such as prescription drugs) are complex and...