77 Cal.App.5th 295
Cal. Ct. App.2022Background
- Ethicon (Johnson & Johnson, Ethicon, Inc., Ethicon US, LLC) manufactured and marketed transvaginal pelvic mesh (SUI and POP devices) from the 1990s; FDA issued safety communications in 2008 and 2011 and later limited sales.
- The California Attorney General sued in 2016 alleging Ethicon’s Instructions for Use (IFUs) and printed and oral marketing to doctors and patients contained misstatements, half-truths, and omissions about risks, comparing mesh to non-mesh alternatives, and overstating benefits.
- After a nine-week bench trial the trial court found widespread deceptive conduct: 153,351 UCL violations and 121,844 FAL violations, and imposed $1,250 per violation for a total of $343,993,750 in civil penalties.
- The trial court relied on expert testimony (plaintiff’s and Ethicon’s), internal Ethicon documents, and a violations appendix cataloguing deceptive written materials; it found Ethicon knowingly concealed and downplayed serious, sometimes permanent complications.
- On appeal the court affirmed liability generally but held there was insufficient evidence about the content of thousands of oral communications; it struck penalties tied to oral marketing and reduced the award to $302,037,500. The court also rejected defendant’s safe-harbor, First Amendment, due-process, and excessive-fines challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper legal standard for UCL/FAL (target audience, omissions, materiality) | Court should assess likelihood of deception from the target audience (doctors/patients), include omissions rules and materiality | Ethicon: court misapplied standards (didn't consider doctors' knowledge, omissions doctrine, materiality) | Court applied correct standards, considered doctors' knowledge, omissions (LiMandri factors), and implicitly materiality; no reversible error |
| Sufficiency of evidence that communications were likely to deceive (written vs oral) | IFUs and written marketing were misleading and likely to deceive doctors and patients | Ethicon: doctors knew risks; insufficient evidence, especially for oral statements | Substantial evidence supports findings as to IFUs and written marketing; insufficient evidence about content of oral communications—penalties for oral marketing vacated |
| Safe-harbor (FDA) defense | FDA clearance/review creates a safe harbor shielding Ethicon’s labeling and marketing | AG: FDA 510(k) process does not sanction or authorize labeling for all purposes | No safe harbor—510(k) is about substantial equivalence, not a blanket endorsement of labeling; FDA inaction doesn’t establish lawful conduct |
| Constitutional challenges (free speech, due process, excessive fines) | Ethicon: penalties punish protected scientific speech; penalties are unforeseeable/excessive and violate Due Process/Excessive Fines Clauses | AG: speech was commercial and misleading (some literally false); statutes set per-violation max; penalties tailored by statutory factors | Court: misleading or false commercial speech is not constitutionally protected; Ethicon waived Central Hudson analysis; defendant had notice and ability to pay; amended penalty not excessive and did not violate due process |
Key Cases Cited
- Abbott Laboratories v. Superior Court, 9 Cal.5th 642 (Cal. 2020) (UCL’s purpose and scope in consumer protection enforcement)
- Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163 (Cal. 1999) (limits on UCL and safe-harbor concept)
- Nationwide Biweekly Administration, Inc. v. Superior Court, 9 Cal.5th 279 (Cal. 2020) (FAL scope and likelihood-of-deception standard)
- Tobacco II Cases, In re, 46 Cal.4th 298 (Cal. 2009) (UCL/FAL reliance and injunctive relief principles)
- LiMandri v. Judkins, 52 Cal.App.4th 326 (Cal. Ct. App. 1997) (four circumstances when nondisclosure is actionable)
- Kasky v. Nike, Inc., 27 Cal.4th 939 (Cal. 2002) (commercial speech, falsity, and First Amendment limits)
- Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (U.S. 1980) (test for permissible regulation of commercial speech)
- Olson (People v. Superior Court (Olson)), 96 Cal.App.3d 181 (Cal. Ct. App. 1979) (methodologies for counting violations)
- JTH Tax, Inc. v. People, 212 Cal.App.4th 1219 (Cal. Ct. App. 2013) (per-circulation methodology for counting violations upheld)
- Overstock.com, Inc. v. People, 12 Cal.App.5th 1064 (Cal. Ct. App. 2017) (substantial-evidence review of likelihood-of-deception findings)