Estelle BOBER, Executor of the Estate of Mortimer Bober, on behalf of Mortimer Bober and all others similarly situated, Plaintiff-Appellant, v. GLAXO WELLCOME PLC, Warner Lambert Corporation, and Warner Wellcome Consumer Healthcare Incorporated, Defendants-Appellees.
No. 99-3440.
United States Court of Appeals, Seventh Circuit.
Decided April 5, 2001.
246 F.3d 934
John R. Myers and Thomas J. Muldoon, Bell, Boyd & Lloyd, LLC, Chicago, IL, for GlaxcoWellcome Inc.
Constantine Trela, Jr. (argued), John W. Treece and Eric S. Mattson, Sidley & Austin, Chicago, IL, for Warner-Lambert Co. and Warner-Lambert Consumer Healthcare.
Before POSNER, DIANE P. WOOD, and WILLIAMS, Circuit Judges.
Mortimer Bober brought a class action lawsuit against the firms that manufacture and market Zantac 75 and Zantac 150, the over-the-counter and prescription strength forms of the stomach acid reliever ranitidine, on the ground that the firms provide consumers with false and misleading information about the substitutability of the two drugs, in violation of Illinois law. The district court dismissed Bober‘s claims under
I
Zantac 150 is manufactured and sold by British drug company Glaxo Wellcome PLC and its American subsidiary Glaxo Wellcome, Inc. The Food and Drug Administration (“FDA“) has approved it for use in the treatment of various digestive tract conditions, including certain kinds of ulcers and certain esophageal conditions. As its name suggests, it contains 150 milligrams of ranitidine. And, it is available only with a prescription.
Zantac 75 is manufactured by Glaxo Wellcome, Inc. and is sold by Warner-Lambert Consumer Healthcare, a joint venture formed by Glaxo Wellcome, Inc. and Warner-Lambert Company, another American drug company. According to its FDA-approved packaging, it is to be used for the relief and prevention of heartburn associated with acid indigestion and sour stomach. As its name too suggests, it contains 75 milligrams of ranitidine. But, it may be purchased without a prescription.
Bober‘s complaint alleges that Glaxo Wellcome PLC and the other three defendants (“Glaxo“) provide false and misleading information regarding whether Zantac 75 can be substituted for Zantac 150. The answer to that question was important to Bober because, at the time he filed this lawsuit, he was paying $1.47 per tablet for the Zantac 150 his doctor had prescribed for him, while an equivalent dose of Zantac 75 (two tablets) cost $.80. In an effort to obtain information on the substitutability of Zantac 75 and Zantac 150, Bober twice called a consumer hotline for Zantac 75 users set up by Warner-Lambert. When Bober first called the Zantac 75 consumer hotline, the hotline operator “told Mr. Bober that Zantac 75 and Zantac 150 were not the same medications, and that Mr. Bober could not substitute two Zantac 75 tablets for one Zantac 150 tablet.” When Bober called the hotline a second time, a recorded message advised Bober, “If your doctor has directed you to take prescription Zantac, you should not substitute Zantac 75 for your prescription.”
Bober‘s complaint also notes that Warner-Lambert maintains a web site providing information about Zantac 75, although the complaint does not say whether Bober ever visited the web site. At the time Bober filed his complaint, a page on that web site answering frequently asked questions about Zantac 75 responded to a question about whether Zantac 75 could be substituted for Zantac 150 by informing visitors, “If your physician has prescribed a medicine, you should not substitute any other medicine for your prescription. You should always ask your physician any questions you may have about changing your medication.”
In his complaint, Bober claims that the three quoted statements are false and misleading because, contrary to what the three statements imply, Zantac 75 and Zantac 150 contain the same medicine (ranitidine) and are therefore readily substitutable. On that basis, Bober‘s complaint alleges that the three statements violate the Illinois Consumer Fraud and Deceptive Business Practices Act (“CFA“) and the similar laws of other states.1 Bober‘s complaint also alleges that the defendants illegally conspired to violate the CFA and that the defendants were unjustly enriched by their illegal practices. The
II
A
In relevant part, the CFA provides:
Unfair methods of competition and unfair or deceptive acts or practices, including but not limited to the use or employment of any deception, fraud, false pretense, false promise, misrepresentation or the concealment, suppression or omission of any material fact, with intent that others rely upon the concealment, suppression or omission of such material fact, or the use or employment of any practice described in Section 2 of the “Uniform Deceptive Trade Practices Act“, approved August 5, 1965, in the conduct of any trade or commerce are hereby declared unlawful whether any person has in fact been misled, deceived or damaged thereby.
In particular, Glaxo argues that the statements Bober‘s complaint identifies as the deceptive acts or practices supporting his CFA claim are, as a matter of law, not deceptive. Under the CFA, a statement is deceptive if it creates a likelihood of deception or has the capacity to deceive. People ex rel. Hartigan v. Knecht Servs., Inc., 216 Ill.App.3d 843, 159 Ill.Dec. 318, 575 N.E.2d 1378, 1387 (1991); see also Graphic Sales, Inc. v. Sperry Univac Div., Sperry Corp., 824 F.2d 576, 580 (7th Cir.1987). Thus, in determining whether the allegations in Bober‘s complaint state a claim for relief that satisfies the requirements of
Bober‘s estate contends that the three statements at issue are deceptive in essentially three ways. First, Bober‘s estate asserts that the statements falsely claim that Zantac 75 and Zantac 150 do not contain the same medicine. None of the statements, however, expressly makes such a claim. The statements do claim that the two drugs are different medications, but that claim is completely true. The drugs are approved for very different maladies, went through different approval processes, and are sold in different ways. Moreover, to the extent that anyone could imply from the statements at issue that the drugs contain different medicine, information available to Zantac users, and in Bober‘s possession, would dispel any such implication. Cf. Tudor v. Jewel FoodStores, Inc., 288 Ill.App.3d 207, 224 Ill.Dec. 24, 681 N.E.2d 6, 8 (1997) (dismissing a CFA claim on the ground that the allegedly deceptive act was not deceptive in light of all the information available to the plaintiff); Saunders v. Michigan Ave. Nat‘l Bank, 278 Ill.App.3d 307, 214 Ill.Dec. 1036, 662 N.E.2d 602, 607-08 (1996) (same). The web page that answers frequently asked questions about Zantac 75 (a printout of which is attached to Bober‘s complaint) expressly states that Zantac 75 and Zantac 150 contain the same medicine. Likewise, the packaging information for Zantac 75 (which is also attached to Bober‘s complaint) strongly suggests the same fact when it explains that the active ingredient in Zantac 75 is ranitidine and promotes Zantac 75‘s safety by noting that prescription strength Zantac has an excellent safety record. Put simply, none of the three statements at issue can reasonably be read as falsely claiming or implying that Zantac 75 and Zantac 150 do not contain the same medicine.
Second, Bober‘s estate asserts that, in describing Zantac 75 and Zantac 150 as different medications and discouraging substitution of the former for the latter, the three statements at issue misrepresent the therapeutic equivalence of equal doses of the two drugs (an equivalence we assume exists in reviewing the sufficiency of Bober‘s complaint) by implying that Zantac 150 is more effective than Zantac 75 in treating the conditions for which Zantac 150 is prescribed.2 While it is clear that the statements at issue go out of their way to avoid any implication that equal doses of the drugs are therapeutically equivalent,3 we think that the statements also avoid any implication that the drugs are not therapeutically equivalent. In the context of all the information available to Bober and other Zantac users, including the three statements at issue, the packaging information for Zantac 75, and the Zantac 75 frequently asked question web page, it should have been clear to Bober and other Zantac users both that Zantac 75 and Zantac 150 contain the same active ingredient and that inquiries about substituting the former for the latter are properly directed to a user‘s treating physician. The available information, in our view, dispels any tendency to deceive that the statements at issue might otherwise have had. Cf. Tudor, 224 Ill.Dec. 24, 681 N.E.2d at 8; Saunders, 214 Ill.Dec. 1036, 662 N.E.2d at 607-08. Accordingly, none of the three statements at issue can reasonably be read as misrepresenting the therapeutic equivalence of equal doses of Zantac 150 and Zantac 75.
Finally, Bober‘s estate asserts that the statements at issue both claim and imply that Zantac 75 simply cannot be substituted for Zantac 150, despite the fact that it would be perfectly appropriate for a
B
Alternatively, Glaxo argues that all three of the statements are protected by section 10b(1) of the CFA, which excludes from liability “actions ... specifically authorized by laws administered by any regulatory body or offices acting under statutory authority of this State or the United States.”
The case law interpreting the relevant portion of the CFA‘s exemption provision is not entirely clear on the question of what is meant by “specifically authorized.” Contrast Weatherman v. Gary-Wheaton Bank of Fox Valley, N.A., 186 Ill.2d 472, 239 Ill.Dec. 12, 713 N.E.2d 543, 547-51 (1999); Lanier v. Assocs. Fin., Inc., 114 Ill.2d 1, 101 Ill.Dec. 852, 499 N.E.2d 440, 447 (1986); Jackson v. South Holland Dodge, Inc., 312 Ill.App.3d 158, 244 Ill.Dec. 835, 726 N.E.2d 1146, 1151-55 (2000); Mario‘s Butcher Shop & Food Ctr., Inc. v. Armour & Co., 574 F.Supp. 653, 655-56 (N.D.Ill.1983), with Martin v. Heinold Commodities, Inc., 163 Ill.2d 33, 205 Ill.Dec. 443, 643 N.E.2d 734, 742-43 (1994); Pawlikowski v. Toyota Motor Credit Corp., 309 Ill.App.3d 550, 243 Ill.Dec. 1, 722 N.E.2d 767, 770-75 (Ill.App.Ct.1999), appeal denied, 188 Ill.2d 567, 246 Ill.Dec. 125, 729 N.E.2d 498 (2000); Heastie v. Cmty. Bank of Greater Peoria, 690 F.Supp. 716, 720-21 (N.D.Ill.1988). See also Robinson v. Toyota Motor Credit Corp., 315 Ill.App.3d 1086, 249 Ill.Dec. 120, 735 N.E.2d 724, 733-34 (2000), appeal allowed, 192 Ill.2d 708, 252 Ill.Dec. 85, 742 N.E.2d 335 (2000); Aurora Firefighter‘s Credit Union v. Harvey, 163 Ill.App.3d 915, 114 Ill.Dec. 873, 516 N.E.2d 1028, 1032-34 (1987).
However, we think that the Illinois cases can be reconciled. The two key decisions from the Illinois Supreme Court are Weatherman and Martin. In Weatherman, the court found that a disclosure of certain real estate closing fees presented in a summary form complied with specific federal regulatory requirements. In so ruling, it found that the summary did not violate the CFA, because it was “specifically authorized” by the federal Real Estate Settlement Procedures Act, or RESPA. This was enough to entitle the summary to an exemption under section 10b(1). 239 Ill.Dec. 12, 713 N.E.2d at 550. The court was aware of, and distinguished, its earlier opinion in Martin. There it had found that the exemption was not available for a document that only facially or technically complied with a disclosure requirement imposed by the Commodities Futures Trading Commission. In spite of this technical compliance, the document in fact misrepresented the nature of a particular fee. The court also pointed out that the CFTC itself had issued an opinion holding that language in technical compliance with the regulations may nev-
Taken together, the cases stand for the proposition that the state CFA will not impose higher disclosure requirements on parties than those that are sufficient to satisfy federal regulations. If the parties are doing something specifically authorized by federal law, section 10b(1) will protect them from liability under the CFA. On the other hand, the CFA exemption is not available for statements that manage to be in technical compliance with federal regulations, but which are so misleading or deceptive in context that federal law itself might not regard them as adequate.
The question is thus whether the statements Bober complains of are sufficiently within what is authorized by federal law that Glaxo is entitled to section 10b(1) protection. On this question, we limit our examination to the operator‘s statement—the only one that is even potentially misleading.4 The regulations implementing the FDCA are extensive and extremely detailed. Of particular relevance to the “different medications” part of the operator‘s statement are the regulations defining what constitutes a “new drug.” A drug may be considered new based on “[t]he newness of use of such drug in diagnosing, curing, mitigating, treating, or preventing a disease ... even though such drug is not a new drug when used in another disease or to affect another structure or function of the body.”
(i) the following terms may be used interchangeably in the labeling of OTC drug products, provided such use does not alter the labeling of OTC drug products ...
(52) “medication(s)” or “medicine(s)” or “drug(s)”
The second half of the operator statement is not so easily dealt with, but ultimately we believe that the Illinois courts would find that it too was specifically authorized. The situation here is not a common one. When Mr. Bober asked whether he could substitute Zantac 75 for Zantac 150, the operator said he “could not.” In assessing whether this was a specifically authorized response, it is significant that the federal regulations governing drug labeling and advertising imposed competing constraints on Glaxo, such that Mr. Bober‘s question was particularly tricky to answer. The manufacturer of a drug may not recommend or even suggest uses for a drug that are not approved by the FDA or supported by sufficient medical evidence.
Glaxo chose to reconcile its competing obligations by answering Bober‘s question with the statement “you cannot substitute” Zantac 75 for Zantac 150. This statement was technically accurate, because only Bober‘s doctor could approve an “off-label” use for Zantac 75 and the substitution of one drug for the other. The statement was also consistent with those federal regulations requiring Glaxo to refrain from suggesting “off-label” uses for Zantac 75. In protecting itself on that side, however, Glaxo predictably opened itself up to the claim Mr. Bober is now making, namely that the statement improperly suggested that Zantac 150 was superior to Zantac 75. While Glaxo could have added “ask your doctor” without being accused of suggesting an “off-label” use and thus perhaps struck a more perfect balance between its competing regulatory obligations, under the circumstances what it chose to say and not to say was a sufficiently careful compromise to fall within what is specifically authorized by federal law.
The pharmaceutical industry is highly regulated, both at the federal level and internationally. Technical requirements abound, and it is not only possible but likely that ordinary consumers will find some of them confusing, or possibly misleading as the term is used in statutes like Illinois‘s CFA. But, recognizing the primacy of federal law in this field, the Illinois statute itself protects companies from liability if their actions are authorized by federal law. (Such protection would amount to nothing if it applied only to statements that were not susceptible to misunderstanding; those statements would
C
Bober‘s complaint does not state a claim for relief under the CFA, and the district court properly dismissed Bober‘s CFA claim. Because Bober‘s civil conspiracy claim depends on his establishing that the defendant drug companies violated the CFA, the district court also properly dismissed that claim. See Adcock v. Brakegate, Ltd., 164 Ill.2d 54, 206 Ill.Dec. 636, 645 N.E.2d 888, 894 (1994). Our conclusion is the same with respect to Bober‘s unjust enrichment claim, as, in the absence of any deception on the part of the defendants, the requisite violation of “fundamental principles of justice, equity, and good conscience” is not present. See Alliance Acceptance Co. v. Yale Ins. Agency, Inc., 271 Ill.App.3d 483, 208 Ill.Dec. 49, 648 N.E.2d 971, 976-77 (1995) (quoting HPI Health Care Servs., Inc. v. Mt. Vernon Hosp., Inc., 131 Ill.2d 145, 137 Ill.Dec. 19, 545 N.E.2d 672, 678-79 (1989)).
III
For the foregoing reasons, Bober‘s complaint fails to state a claim for relief. Accordingly, we AFFIRM the judgment of the district court.
DIANE P. WOOD, Circuit Judge, concurring.
Although I agree with the majority‘s ultimate disposition of this case, my reasons differ in one significant respect from theirs. The majority finds that none of the three statements on which Bober based his claim under the Illinois Consumer Fraud and Deceptive Business Practices Act (CFA),
As the majority initially acknowledges, we are dealing with three separate statements that the plaintiffs claim were deceptive or misleading for purposes of the Illinois CFA. These statements were made at different times, and in one instance through an entirely different medium. The first statement was made by the hotline operator to whom Mr. Bober first spoke. The operator, according to the complaint (which we do not second-guess at this stage), told Mr. Bober two things: that Zantac 75 and Zantac 150 were not “the same medications,” and that Mr. Bober could not substitute two Zantac 75 tablets for one Zantac 150 tablet. I refer to this as the “operator” statement. The second statement was contained in a recorded message that Mr. Bober reached when he made a second telephone call (“the recorded statement“). That one said nothing about the comparison between Zantac 75 and Zantac 150, but it advised him that if his doctor “ha[d] directed [him]
Although the majority acknowledges that these were three representations made at three different times, it analyzes the Bober claim as if he either heard everything at once or as if no individual statement could be deceptive for CFA purposes if the aggregate of everything the defendants said about Zantac would ultimately have given an accurate picture. Indeed, at page 938, ante, the majority squarely states that “to the extent that anyone could imply from the statements at issue that the drugs contain different medicine, information available to Zantac users, and in Bober‘s possession, would dispel any such implication.” In apparent support of that point, it then cites two Illinois cases for the broad proposition that the claim of deception had to be assessed in light of all available information, even information that Mr. Bober might not have seen personally. See Tudor v. Jewel Food Stores, 288 Ill.App.3d 207, 224 Ill.Dec. 24, 681 N.E.2d 6 (1997); Saunders v. Michigan Ave. Nat‘l Bank, 278 Ill.App.3d 307, 214 Ill.Dec. 1036, 662 N.E.2d 602 (1996).
But neither Tudor nor Saunders stands for such a sweeping rule. In both these cases, all of the relevant information that the court thought should be taken into account when assessing deceptiveness was given to the plaintiff at the time of the disputed transaction. Even if we can assume that consumers will assimilate all the information they are given on a given occasion, I find no Illinois case holding that a company can avoid potential liability for deceptive statements if it has buried further explanatory material on a web site or in a brochure that some consumers may never see. It is even worse if, as here, the absent information would only potentially save an otherwise misleading statement. I am quite troubled by the implication one could draw from the majority‘s opinion that consumers have such an unbounded duty of inquiry. Such a holding would be inconsistent with Illinois‘s understanding of its own law, which requires that the statute be interpreted in a way consistent with its strong consumer protection purpose. What if Mr. Bober had stopped with the first telephone call, and never heard the recorded message? What if he had no access to a computer, or was not comfortable using one, and thus never visited the web site? The only answer that I can give to these questions is that Illinois law recognizes these risks and that is why it requires each separate statement to be assessed on its own. As was the case in Saunders and Tudor, relevant context is limited to particular occasions.
Looking at each of the statements individually, I agree with the majority that the recorded statement and the web site statement were not misleading. The recorded message merely advised callers to consult with their physicians if the doctor had prescribed Zantac 150, before going ahead and using Zantac 75 as a substitute. This is precisely what counsel for the Bober group insisted at oral argument was necessary and sufficient as a matter of law, and I agree with my two colleagues that there is nothing misleading in such a statement. Even if we approach this case as one in which two Zantac 75 tablets and one Zantac 150 tablet both deliver the same amount of ranitidine in the same way (which is a contested fact at this
The same analysis applies to the statement on the web site. Once again, it cautions the reader to check with the physician before making any changes in medication. And once again, apart from matching what we understand plaintiffs now to be arguing, this advice reflects the accurate fact that the physician may have had good and sufficient reasons to prefer the prescription form of the drug. (Perhaps the physician does not care; but the web site leaves open the possibility that the physician may authorize substitution of the non-prescription form. It in no way hints that this would be out of the question.)
The operator, however, gave Mr. Bober a different message. That message had two parts, both of which I find problematic. First, the operator said that Zantac 75 and Zantac 150 were not the “same medications“; second, he or she said that Mr. Bober “could not” substitute one for the other. From the layperson‘s point of view, which Illinois law requires us to use, see, e.g. Daley v. Datacom Sys., Corp., 146 Ill.2d 1, 165 Ill.Dec. 655, 585 N.E.2d 51, 66 (1991) (affirming appeals court ruling that demand letters could have misled the parking violators who received them), both of these representations might be shown to be misleading. Even if someone who had spent a career in the pharmaceutical industry would recognize that as a matter of federal regulation the two forms of Zantac are different “medications,” see the majority‘s discussion at page 941, ante, a trier of fact might well conclude that an average consumer, asking whether she could substitute the products, would be misled by the statement “they are different medications” into believing that Zantac 75 could in no circumstances be used to treat the illness for which she was taking Zantac 150. Webster‘s Third New International Dictionary defines the term “medication” to mean, among other things, “a medicinal substance: medicament.” Webster‘s Third New International Dictionary of the English Language Unabridged 1402 (1993). The word “medicament” in turn is defined as “a substance (as a chemical, a medicine, or an ointment) used in therapy.” Id. And finally, the first definition of the word “medicine” is “a substance or
The average consumer could also be misled by the flat statement that one “could not” substitute Zantac 75 for Zantac 150. Understood literally, this is simply not true. With the doctor‘s authorization, substitution certainly is possible, as both the recorded message and the web site conceded. But that qualification was not given by the operator. A more trusting caller might simply give up the quest and never even think to raise the subject with her doctor.
As an initial matter, therefore, I would find that the Bober plaintiffs raised a genuine issue of fact about the deceptive nature of the operator statement and therefore stated a claim under the CFA. This statement was not a mere statement of opinion for CFA purposes, because (a trier of fact could find) it was made in such a way that the consumer could reasonably treat it as a statement of fact. See Totz v. Continental DuPage Acura, 236 Ill.App.3d 891, 177 Ill.Dec. 202, 602 N.E.2d 1374, 1383 (1992); Duhl v. Nash Realty Inc., 102 Ill.App.3d 483, 57 Ill.Dec. 904, 429 N.E.2d 1267, 1277 (1982).
It is important that we do not, in our zeal to respect the limits federal law places on the pharmaceutical industry, adopt an impermissibly narrow interpretation of a general state law like the CFA that protects consumers in every market from acupunctures to zippers. In my opinion, the majority has made just such a misstep, and I therefore respectfully register my disagreement with that part of its opinion.