564 F.Supp.3d 302
S.D.N.Y.2021Background
- Eisai and Arena manufactured Belviq/Belviq XR (active: lorcaserin); FDA requested market withdrawal in Feb. 2020 because of an increased cancer risk identified in clinical data.
- Plaintiff purchased Belviq (including at a CVS in Warwick, NY) and alleges Defendants knew as early as a 2007 rat study that lorcaserin caused tumors but concealed that risk during approval.
- Plaintiff sued Eisai, Arena, and CVS claiming violations of NYGBL §§ 349 & 350, breach of implied warranty, fraud, fraudulent concealment, unjust enrichment, and conversion, seeking class certification.
- Defendants moved to dismiss under Rules 12(b)(6) and 9(b); briefing and supplemental briefing were filed.
- The court concluded Plaintiff failed to plead a cognizable injury, consumer-directed deception, materially misleading acts, or the particularized facts required for fraud and fraudulent concealment, and dismissed all claims with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Plaintiff alleged a cognizable injury under NYGBL §§ 349/350 | Zottola paid full purchase price and would not have bought Belviq if cancer risk disclosed | Economic loss (purchase price) alone is insufficient; injury must be cognizable (e.g., price premium or personal injury) | Dismissed: mere allegation that plaintiff "would not have purchased" is inadequate (Small) |
| Whether alleged conduct was "consumer-oriented" under NYGBL | Defendants failed to disclose risks to consumers; omissions impacted purchasers | Duty to warn runs to prescribing physicians (informed intermediary); concealment to FDA is not consumer-directed | Dismissed: informed-intermediary doctrine bars finding consumer-oriented conduct |
| Whether omissions/representations were materially misleading/sufficiently pleaded | Omissions about cancer risk rendered labels misleading; claims may be omission-based | Plaintiff fails to identify specific misleading statements or particularized omissions to consumers; allegations are general and "on information and belief" | Dismissed: no specific materially misleading representations pleaded; omission theory foreclosed by informed intermediary and by pleading defects |
| Breach of implied warranty against manufacturers and CVS | Plaintiff purchased at CVS and alleges product unfit; seeks recovery of purchase price | For manufacturers, privity required for purely economic loss; for pharmacies, courts decline to impose warranty liability for prescription fills (Rezulin) | Dismissed: lack of privity as to manufacturers; warranty claim dismissed as to CVS under controlling precedent |
| Fraud / fraudulent concealment (Rule 9(b) issues) | Defendants hid knowledge and intended to deceive consumers; plaintiff relied on labels | Fraud claims require particularity (who/what/when/where/how) and a strong inference of scienter; plaintiff fails to plead reliance, specific misrepresentations, or intent; fraud-on-FDA claims preempted | Dismissed with prejudice: failure to satisfy Rule 9(b), no cognizable injury, scienter undermined by allegations of disclosure to FDA; Buckman bars fraud-on-FDA variant |
| Conversion and unjust enrichment | Plaintiff conferred benefit (monies) and Defendants wrongfully retained it | Conversion requires an identifiable fund and unauthorized dominion; unjust enrichment is duplicative of tort claims | Dismissed: conversion not pleaded with an identifiable fund; unjust enrichment duplicative and cannot rescue defective tort claims |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim; courts accept well-pleaded facts but not legal conclusions)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility and the requirement to plead sufficient factual matter)
- Small v. Lorillard Tobacco Co., 720 N.E.2d 892 (N.Y. 1999) (purchasing a product one "would not have bought" absent misrepresentation is not a cognizable NYGBL injury)
- Orlander v. Staples, Inc., 802 F.3d 289 (2d Cir. 2015) (elements of NYGBL § 349/§ 350 claims framed for consumer-oriented, materially misleading conduct causing injury)
- Lindsay v. Ortho Pharm. Corp., 637 F.2d 87 (2d Cir. 1980) (informed-intermediary doctrine: duty to warn runs to prescribing physician, not directly to patient)
- Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001) (fraud-on-the-FDA theories are preempted by the FDCA)
- Koch v. Acker, Merrall & Condit Co., 967 N.E.2d 675 (N.Y. 2012) (interpretation regarding NYGBL § 350 and reliance issues)
- In re Rezulin Prods. Liab. Litig., 133 F. Supp. 2d 272 (S.D.N.Y. 2001) (pharmacists generally not liable for breach of implied or express warranty for prescription drugs)