Williams v. Purdue Pharma Co.

• Decision Date: 31 December 2003
• Docket Number: No. CIV.A.02-0556(RMC).,CIV.A.02-0556(RMC).
• Citation: 297 F.Supp.2d 171
• Parties: Robert WILLIAMS, et al., Plaintiffs, v. THE PURDUE PHARMA CO., et al. Defendants.
• Court: U.S. District Court — District of Columbia

297 F.Supp.2d 171

Robert WILLIAMS, et al., Plaintiffs, v. THE PURDUE PHARMA CO., et al. Defendants.

No. CIV.A.02-0556(RMC).

United States District Court, District of Columbia.

December 31, 2003.

Eric Lee Siegel, Neil L. Henrichsen, Henrichsen Siegel, PLLC, Washington, DC, Richard S. Lewis, Cohen, Milstein, Hausfeld & Toll, PLLC, Washington, DC, for Plaintiffs.

Eric H. Holder, Mark H. Lynch, Patrick S. Davies, Covington & Burling, Washington, DC, Kathleen Frances Sullivan, Paul F. Strain, Venable, Baetjer and Howard, LLP, Baltimore, MD, for Defendants.

MEMORANDUM OPINION

COLLYER, District Judge.

The question raised by this lawsuit is whether patients who were prescribed a drug for pain, and who personally suffered no ill effects or lack of efficacy, can sue for money damages under D.C. law as consumers injured by the drug manufacturers' allegedly-fraudulent advertising claims. Finding that the answer is no, the Court will grant the defendants' motion to dismiss.

This is a class action based on the District of Columbia Consumer Protection Procedures Act ("CPPA"), D.C.Code §§ 28-3901 et seq., to obtain a refund of all monies paid by plaintiffs and class members for OxyContin® ("OxyContin"), a pain medication for chronic pain relief, plus statutory penalties, treble damages and punitive damages. The class specifically excludes "any persons seeking to assert a personal injury claim against Defendants." Compl. ¶ 47. It is alleged that the defendants engaged in deceptive advertising and that their over-promotion of OxyContin inflated the price of the drug so that all class members "paid a higher price for OxyContin than if Defendants had not engaged in falsely advertising and promoting OxyContin." Compl. ¶ 42.

The courts in the District of Columbia have not had occasion to determine whether a consumer who purchased a product that acted as advertised for him but not for others, and who, in that sense, has suffered no injury, can nonetheless maintain a CPPA action. They have, however, agreed uniformly that an injury-in-fact must underlie legal suits. Because the plaintiffs have suffered no injury-in-fact, the complaint will be dismissed.

BACKGROUND FACTS

Plaintiffs Robert Williams and Clifford Perry brought a two-count complaint on behalf of themselves and others similarly situated to recover injunctive relief, refunds, and damages under the CPPA and common law civil conspiracy against defendants The Purdue Pharma Company, Purdue Pharma, L.P., Purdue Pharma Inc., The P.F. Laboratories, Inc., The Purdue Frederick Company (collectively, "Purdue"), Abbott Laboratories and Abbott Laboratories, Inc. (collectively "Abbott"), for damages allegedly caused by the defendants' deceptive, misleading and fraudulent advertising and over-promotion of OxyContin. Plaintiffs allege that the advertising campaign was false and misleading within the meaning of the CPPA in two respects: (i) that OxyContin would provide "smooth and sustained" pain relief for twelve hours through a controlled-release formulation, Compl. ¶¶ 14, 18, 55; and (ii) that OxyContin posed little risk of addiction when taken as prescribed. Id. ¶¶18, 28, 56. Neither plaintiff complains, however, that OxyContin did not provide 12-hour relieve to him or that he became addicted to the medication.

Messrs. Williams and Perry were prescribed OxyContin in the District of Columbia for chronic pain and purchased and received OxyContin from pharmacies located in the District of Columbia. Id. ¶¶ 2, 3. Purdue owns the patent for OxyContin tablets and is engaged, inter alia, in its manufacture, advertising, promotion, sale and/or distribution, including in the District of Columbia. Id. ¶¶ 4-8. Abbott is allegedly in the same business, under agreement with Purdue, and also in the District of Columbia. ¶¶ 9, 10. The complaint alleges that the defendants engaged in a false and misleading advertising campaign directed to doctors, and through newspaper articles and patient brochure and videotape, directly to patients. Id. ¶¶ 18-43. Plaintiffs seek to represent a class described as "[a]ll persons who purchased or received OxyContin in the District of Columbia by prescription from 1995 to the present" with the exception of "any persons seeking to assert a personal injury claim against Defendants." Id. ¶ 47. Those who would be excluded would be all patients who failed to receive 12-hour relief from OxyContin and/or who had problems with its alleged addictive qualities.

The complaint was initially filed in the Superior Court of the District of Columbia. It was removed to federal court by the defendants on March 21, 2002. Thereafter, the Court denied the plaintiffs' motion to remand. Defendants have now filed a motion to dismiss, which the plaintiffs vigorously oppose.

STANDARD OF REVIEW

A Rule 12(b)(6) motion "tests the legal sufficiency of the complaint." ACLU Found. of S. Cal. v. Barr, 952 F.2d 457, 472 (D.C.Cir.1991). Under 12(b)(6), a court "does not test whether the plaintiff will prevail on the merits, but instead whether the claimant has properly stated a claim." Price v. Crestar Secs. Corp., 44 F.Supp.2d 351, 353 (D.D.C.1999). In reviewing such a motion, the Court accepts the allegations in the non-movant's pleading as true and draws all reasonable inferences in the non-movant's favor. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Sinclair v. Kleindienst, 711 F.2d 291, 293 (D.C.Cir.1983). However, the Court need not accept as true plaintiff's legal conclusions. See Papasan v. Allain, 478 U.S. 265, 286, 106 S.Ct. 2932, 92 L.Ed.2d 209 (1986). A complaint may not be dismissed on a Rule 12(b)(6) motion "unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Conley, 355 U.S. at 45-46, 78 S.Ct. 99.

STATUTORY PROVISIONS

"[T]he CPPA evidently was intended to be a far-reaching consumer protection law." Howard v. Riggs Nat'l Bank, 432 A.2d 701, 710 (D.C.1981). It was amended effective October 19, 2000, to expand its reach even further. Prior to that date, the private right of action section of the CPPA provided that:

Any consumer who suffers any damages as a result of the use or employment by any person of a trade practice in violation of a law of the District of Columbia within the jurisdiction of the Department may bring an action in the Superior or Court of the District of Columbia to recover or obtain any of the following ....

D.C.Code § 28-3905(k)(1) (1998). After October 19, 2000, this provision now reads:

A person, whether acting for the interests of itself, its members, or the general public, may bring an action under this chapter in the Superior Court of the District of Columbia seeking relief from the use by any person of a trade practice in violation of a law of the District of Columbia and may recover or obtain the following remedies ....

D.C.Code § 28-3905(k)(1). The October 2000 amendment is not applied retroactively to conduct occurring before its effective date. Athridge v. Aetna Cas. and Sur. Co., 163 F.Supp.2d 38, 56 (D.D.C.2001) (applying 1997 version to conduct occurring in 1997); Family Fed. Sav. & Loan v. Davis (In re Davis), 172 B.R. 437, 466 (Bankr. D.C.1994) (refusing to apply 1991 amendments to pre-1991 conduct).

ANALYSIS

Defendants raise two major arguments for dismissal of the complaint at this early stage of the litigation. First they argue that the complaint fails to allege a proper "consumer transaction" under the CPPA. Second, they argue that the plaintiffs fail to allege any actionable injury.¹ These arguments will be addressed in turn.

A. Have Plaintiffs Alleged a "Consumer Transaction"?

The CPPA was adopted by the D.C. Council to protect local consumers from improper and fraudulent trade practices. Athridge, 163 F.Supp.2d at 55 (CPPA "supplies consumers with a cause of action against merchants selling them goods or services."). Purdue and Abbott argue that plaintiffs have failed to allege, and cannot allege, a consumer-merchant relationship between themselves and the defendants: plaintiffs specify that they purchased OxyContin from pharmacies in the District of Columbia and not from the defendants. Since Purdue and Abbott only sold OxyContin to wholesalers or pharmacies that were "regularly buying the goods for later resale to another," the defendants argue that they are not "merchants" and the CPPA does not apply. See Adam A. Weschler & Son, Inc. v. Klank, 561 A.2d 1003, 1005 (D.C.1989); see also Indep. Communications Network, Inc. v. MCI Telecomm. Corp., Inc., 657 F.Supp. 785, 788 (D.D.C.1987) ("[T]he Act was meant to embrace consumer-merchant interactions exclusively.").

Plaintiffs counter that the CPPA expressly defines a merchant as "a person who does or would sell ... either directly or indirectly, consumer goods or services, or a person who does or would supply the goods or services which are or would be the subject matter of a trade practice." D.C.Code § 28-3901(a)(3). They also argue that the D.C. Court of Appeals has already held that the term "merchant" is "not limited to the actual seller of the goods or services complained of," but also includes "a `person' connected with the `supply' side of a consumer transaction." Howard, 432 A.2d at 709.

Neither Adam A. Weschler & Son nor Howard fully answers the question of whether the relationship between defendants —manufacturers who sell through intermediary pharmacies—and plaintiffs— acknowledged consumers—constitutes a consumer-merchant relationship within coverage of the CPPA. The former case determined that the CPPA "is not intended to supply merchants with a private cause of action against other merchants" because the statute covers only consumer and merchant relationships. Adam A. Weschler & Son, 561 A.2d at 1005. The latter case found that a merchant does not become a "guarantor," liable under the CPPA, for the work product of a second merchant just by...