Sergeants Benevolent Ass'n Health & Welfare Fund v. Sanofi-Aventis U.S. LLP
20 F. Supp. 3d 305
E.D.N.Y2014Background
- HBPs SBA, NEC, ASD and others sue Sanofi entities alleging RICO and state-law misrepresentations re Ketek safety/efficacy.
- FDA declined some Ketek indications; study 3014 allegedly misrepresented; defendants allegedly hid problems and overstated Ketek’s profile.
- Ketek approved for ABS, AECB, CAP; marketing pushed for off-label uses; later safety warnings reduced use.
- Formulary and PBM dynamics affected Ketek coverage; some plaintiffs’ plans used tiered formularies with varying co-pays.
- Plaintiffs sought class certification; district court denied; magistrate recommended dismissal of RICO claims for lack of causation.
- Court adopts R&R on causation issues, allows limited state-law analysis, and sets path for amended counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| RICO causation via generalized proof viable? | Plaintiffs argue foreseeability permits proximate causation despite third-party intervening actions. | Defendants contend but-for and proximate causation require direct link; physicians’ independent choices break the chain. | RICO claims fail; proximate causation requires individualized proof; generalized proof insufficient. |
| Scope of state-law Count III (consumer protection) claims? | Claims should apply across states where Ketek prescribed; cure broad consumer impact and healthcare communications. | Rezulin-like approach limits to home-state laws; misrepresentations to PBMs insufficient for broad state reach. | Court limits consideration to home-state laws for Count III, with leave to amend for other states. |
| Unjust enrichment (Count IV) viability under home-state law? | Unjust enrichment can arise where defendants profited from deceptive Ketek sales to plaintiffs’ beneficiaries. | Illinois law requires tying unjust enrichment to related action; others require actual injury and causal link. | New York and Massachusetts standalone claims viable; Illinois claim dismissed if ICFA claim is dismissed. |
| New York § 349 consumer-oriented requirement viability? | Misrepresentations broadly targeted healthcare community, not just PBMs; §349 protects consumer-oriented acts. | Claims directed at sophisticated parties; injury not shown directly; consumer-oriented test not met for all. | Because injury proven or provable remains insufficient, §349 claim fails for lack of actual injury under the statute. |
Key Cases Cited
- In re Zyprexa Prods. Liab. Litig., 620 F.3d 121 (2d Cir. 2010) (class-causation proof not generalized; distant causal chain)
- Hemi Group LLC v. City of New York, 559 U.S. 1 (Supreme Court, 2010) (direct relationship required; multiple steps attenuate causation)
- Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639 (Supreme Court, 2008) (direct relation; zero-sum context; foreseeability insufficient where intervening factors)
- Anza v. Ideal Steel Supply Corp., 547 U.S. 451 (Supreme Court, 2006) (attenuated link between fraud and injury; direct causation required)
- Securitron Magnalock Corp. v. Schnabolk, 65 F.3d 256 (2d Cir. 1995) (consumer-oriented conduct and regulatory agency impact can support §349)
- Rule v. Fort Dodge Animal Health, Inc., 604 F. Supp. 2d 288 (D. Mass. 2009) (massachusetts 93A injury requirement analysis and consumer-protection implications)
- Avery v. State Farm Mut. Auto. Ins. Co., 216 Ill.2d 100 (Ill. 2005) (Illinois ICFA proximate causation elements for private action)
- Esq. v. Rezulin, 392 F. Supp. 2d 597 (S.D.N.Y. 2005) (consumer-protection claims directed at PBMs; limitations on claims)
- In re U.S. Foodservice Inc. Pricing Litig., 729 F.3d 108 (2d Cir. 2013) (class-wide proof and causation limited by individualized factors)
- Gaidon v. Guardian Life Ins. Co., 94 N.Y.2d 330 (N.Y. 1999) (extensive marketing scheme with broad consumer impact)