ROSLYN HARRIS and MARY ALLEN, Plaintiffs, v. PFIZER INC., Defendant.
21cv6789 (DLC)
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK
February 16, 2022
DENISE COTE, District Judge
APPEARANCES:
Andrew Obergfell
Bursor & Fisher, P.A.
888 Seventh Avenue
New York, NY 10019
For defendant:
Colleen Gulliver
Loren H. Brown
Jessica Carol Wilson
DLA Piper US LLP (NY)
1251 Avenue of the Americas
27th Floor
New York, NY 10020
OPINION AND ORDER
DENISE COTE, District Judge:
Roslyn Harris and Mary Allen bring this putative class action against Pfizer Inc. (“Pfizer“) after its voluntary recall of the drug Chantix, which was found to be contaminated with excess levels of a N-nitroso-varenicline. Pfizer has moved to dismiss the complaint. For the following reasons, the motion is granted.
Background
The following facts are derived from the first amended complaint (“FAC“), unless otherwise noted, and are assumed to be true for the purposes of this motion. Pfizer is a New York corporation, with its principal place of business in New York. Pfizer manufaсtures and distributes Chantix, a prescription drug used to help consumers quit smoking. Chantix‘s medication guide recommends that most people take the medication for up to 12 weeks, with the possibility of another 12-week course afterward if necessary.1 The active ingredient in Chantix is varenicline.
Plaintiff Roslyn Harris is a citizen of New Jersey. She purchased four one-month boxes of Chantix in New Jersey between 2019 and 2021, each of which was subject to recall. Plaintiff Mary Allen is a citizen of New York. She purchased three one-month boxes of Chantix in New York between 2020 and 2021, each of which was subject to recall.
Both plaintiffs paid a co-pay for Chantix, and consumed at least some of the medication they purchased. Neither plaintiff, however, alleges that they have suffered аny detriment to their health as a result. Instead, the plaintiffs allege that they did not know that Chantix contained N-nitroso-varenicline, that they did not see it listed as an ingredient on the medication‘s box or labeling, and that they would not have purchased the medication if they had known it was contaminated. The plaintiffs complain that the presence of N-nitroso-varenicline rendered the product they paid for worthless. They seek damages solely for their economic injury.2
Plaintiff Rosalyn Harris brought this action against Pfizer on August 12, 2021. Pfizer moved to dismiss thе complaint on October 21. The complaint was then amended on November 10, adding Mary Allen as a plaintiff. Pfizer moved to dismiss the amended complaint on December 1, and the plaintiffs opposed the motion on December 22. The motion became fully submitted on January 12, 2022.
This Court has jurisdiction pursuant to the Class Action Fairness Act of 2005 (“CAFA“). CAFA confers federal jurisdiction over “certain class actions where: (1) the proposed class contains at least 100 members; (2) minimal diversity exists between the parties; and (3) the aggregate amount in сontroversy exceeds $5,000,000.” Purdue Pharma L.P. v. Kentucky, 704 F.3d 208, 213 (2d Cir. 2013) (citation omitted). The FAC alleges that there are over 100 class members, and that the aggregate amount of the class members’ claims exceeds $5,000,000. Additionally, Harris is a resident of New Jersey, while Pfizer is a New York corporation headquartered in New York. CAFA‘s diversity, numerosity, and amount-in-controversy requirements have therefore been satisfied.
Discussion
The FAC brings causes of action against Pfizer for breach of express warranty, breach of the implied warranty of merchantability, violation of Nеw Jersey‘s Consumer Fraud Act, unjust enrichment, fraud, negligent misrepresentation, and violation of
It is worth noting at the outset what claims the plaintiffs do not bring. The plaintiffs’ claims arise out of Pfizer‘s recall of Chantix due to contamination from N-nitroso-varenicline exceeding the legal limit. But the Food, Drug, and Cosmetic Act does not create a private cause of action. PDK Labs, Inc. v. Friedlander, 103 F.3d 1105, 1113 (2d Cir. 1997). The plaintiffs therefore disclaim any attempt to privately enforce the FDA‘s limits on nitrosamine contamination. Instead, when a consumer is injured by a defective pharmaceutical, the consumer typically brings a state-based tort action for products liability. See Desiano v. Warner-Lambert & Co., 467 F.3d 85, 87 (2d Cir. 2006). But the plaintiffs do not bring a products liability claim either; they do not allege that they have suffered any emotional or physical injury from taking Chantix.
The plaintiffs instead bring claims grounded in contract and fraud. Such claims have the advantage (for the plaintiffs) that they do not require a showing of personal injury. See Bellevue S. Assoc. v. HRH Constr. Corp., 78 N.Y.2d 282, 294 (1991) (distinguishing betweеn contract and product liability claims). They do, however, require the plaintiffs to plausibly allege that Pfizer represented or warranted that their product was free of nitrosamines -- or at least that Pfizer had a duty to disclose any nitrosamine contamination. As discussed below, the plaintiffs have failed to allege sufficient facts to meet this requirement. Accordingly, their claims are dismissed.
I. Standing
To meet Article III‘s standing requirements, a plaintiff “must have (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Melito v. Experian Marketing Solutions, Inc., 923 F.3d 85, 92 (2d Cir. 2019) (quoting Spokeo, Inc. v. Robins, 578 U.S. 330, 338 (2016)). The injury-in-fact requirement may be satisfied by “traditional tangible harms” such as physical and monetary harms.” Maddox v. Bank of N.Y. Mellon Tr. Co., N.A., 19 F.4th 58, 63 (2d Cir. 2021).
The FAC plausibly alleges that the plaintiffs have suffered an economic injury sufficient to confer standing. The FAC alleges that the plaintiffs purchased medication with a serious defect that Pfizer did not disclose, and that as a result, they paid more for the medication than it was worth. In other words, the plaintiffs’ economic injury is “the difference in price between what they would have paid for the [medication] with full information and what they in fact paid.” Dubuisson v. Stonebridge Life Ins. Co., 887 F.3d 567, 575 (2d Cir. 2018). Such an injury is sufficient to confer standing. See id.
Pfizer argues that the plaintiffs did not in fact overpay for Chantix, and insists that the plaintiffs received the full benefit of their bargain. This argument, however, goes to the merits of the plaintiffs’ claims, not their standing to bring them. Whether the plaintiffs have alleged sufficient facts to recover damages is a distinct question from whether they have standing to seek those damages in the first instance. See Elk Grоve Unified School Dist. v. Newdow, 542 U.S. 1, 11 (2004). A court must therefore assume the merit of a claim when deciding whether a plaintiff has standing. Dubuisson, 887 F.3d at 574.
Pfizer moves to dismiss each of the FAC‘s causes of action for failure to state a claim pursuant to
A. Fraud
Pfizer moves to dismiss the plaintiffs’ claims for fraud, which are brought under New York and New Jersey law. A fraud claim under New York law consists of five elements: “(1) a material misrepresentation or omission of a fact, (2) knowledge of that fact‘s falsity, (3) an intent to induce reliance, (4) justifiable reliance by the plaintiff, and (5) damages.” Loreley Fin. (Jersey) No. 3 Ltd. v. Wells Fargo Sec., LLC, 797 F.3d 160, 170 (2d Cir. 2015). The elements of fraud are similar under New Jersey law. See Gennari v. Weichert co. Realtors, 148 N.J. 582, 610 (1997) (listing the elements of fraud). A cause of action for fraud may bе based on an omission rather than affirmative statement, but “only if the non-disclosing party has a duty to disclose.” Remington Rand Corp. v. Amsterdam-Rotterdam Bank, N.V., 68 F.3d 1478, 1483 (2d Cir. 1995) (New York law); see also Rosenblit v. Zimmerman, 166 N.J. 391, 406 (2001) (a fraudulent concealment claim requires that the defendant have “a legal obligation to disclose.” (citation omitted)).
A party alleging fraud must “state with particularity the circumstances constituting fraud.”
1. Misrepresentation
The FAC fails to allege that Pfizer made any fraudulent statement. The plaintiffs allege that Pfizer made two misrepresentations: first, that the product they purchased was “Chantix“, as approved by the FDA; and second, that the product contained only thе active ingredient varenicline. The plaintiffs argue that these representations were false or misleading because the medication was contaminated
The plaintiffs nevertheless insist that the contamination meant that the medication they bought is distinct from the “Chantix” approved by the FDA. But the FAC alleges no facts to suggest that the Chantix they purchased differs in any way from the drug approved by the FDA, much less that it differs so much as to no longer be Chantix.
The FAC also fails to allege that Pfizer had knowledge that their drug was contaminated by N-nitroso-varenicline at the time the plaintiffs purchased it. The FAC alleges that nitrosamine had been detected in other drugs by 2018, and that one of Pfizer‘s distributors was warned in October of 2020 that its supply of varenicline was at risk of contamination as well. These allegations, however, at most only show that Pfizer may have known that its medication was at risk of contamination by late 2020. They do not show that Pfizer knew or believed that Chantix was actually contaminated, particularly when the plaintiffs purchased Chantix in 2019 and the spring of 2020. These allegations are therefore insufficient to give rise to a “strong inference” that the Pfizer had “knowledge of their misstatements’ falsity and an intent to induce reliance.” Loreley Fin. (Jersey) No. 3 Ltd., 797 F.3d at 176; see also Banco Popular N.A. v. Gandi, 184 N.J. 161, 174 (2005).
2. Omission
At its core, the issue giving rise to the plaintiffs’ claims is not that Pfizer inaccurately labeled its drug as Chantix or varenicline, but that Pfizer failed to disclose any nitrosamine contamination. A plaintiff may bring a fraud claim based on an omission rather than an affirmative misrepresentation only “if the non-disclosing party has a duty to disclose.” Remington Rand Corp., 68 F.3d at 1483. Unless the parties have a fiduciary relationship, a duty to disclose will generally arise under New York law only when “(1) one party makes a partial or ambiguous statement that requires additional disclosure to avoid misleading the other party, or (2) one party possesses superior knowledge, not readily available to the оther, and knows that the other is acting on the basis of mistaken knowledge.” Id. at 1484 (citation omitted). Similarly, under New Jersey law, there is no duty to disclose “unless such disclosure is necessary to make a previous statement true or the parties share a special relationship.” Lightning Lube, Inc. v. Witco Corp., 4 F.3d 1153, 1185 (3d Cir. 1993) (citation omitted). A claim for fraudulent omission requires that it be “apparent to the non-disclosing party that another party is operating under a mistaken perception of a material fact.” Remington Rand Corp., 68 F.3d at 1484 (citation omitted).
The plaintiffs have not plausibly alleged a duty to disclose. The plaintiffs do not contend that they are in a special or fiduciary relationship with Pfizer. And, as discussed above, the FAC has not plausibly alleged that Pfizer had knowledge that their medication was contaminated. Finally, the FAC does not allege that Pfizer understood that its concealment of the contamination was material to the plaintiffs.
Nor does the FAC identify a partial statement by Pfizer that was rendered false or misleading by any omission. The plaintiffs suggest that Chantix‘s product and active ingredient labels are misleading because they do not disclose the presence
B. New Jersey Consumer Fraud Act
Harris brings a claim for violation of New Jersey‘s Consumer Fraud Act (“NJCFA“). The NJCFA prohibits “any unconscionable commercial practice, deception, fraud, falsе pretense, false promise, misrepresentation, or the knowing, concealment, suppression, or omission of any material fact with intent that others rely upon [it] in connection with the sale or advertisement of any merchandise or real estate.”
Harris’ NJCFA claim fails for largely the same reasons as her fraud claim. The FAC does not plausibly allege that Pfizer made any misrepresentation, as it pleads no facts to show that the brand name or active ingredient listed on the product label were inaccurate. And to the extent that the NJCFA claim is premised on Pfizer‘s failure to disclose the presence of N-nitroso-varenicline, the plaintiffs have not plausibly alleged that Pfizer knew that its medication was contaminated by а nitrosamine when the plaintiffs purchased it, or that Pfizer intended to defraud them. See Dugan, 231 N.J. at 51; Gennari, 148 N.J. at 605 (“For liability to attach to an omission or failure to disclose the plaintiff must show that the defendant acted with knowledge.“). Accordingly, Harris’ NJCFA claim must be dismissed.
C. Negligent Misrepresentation
Pfizer moves to dismiss the plaintiffs’ claims for negligent misrepresentation. Under New Jersey law, a plaintiff states a claim for negligent misrepresentation when the plaintiff plausibly alleges that the defendant owed a duty of care to the plaintiff and negligently provided the plaintiff with false information, and that the plaintiff “incurred damages proximately caused by its reliance on that information.” Highland Ins. Co. v. Hobbs Group, LLC, 373 F.3d 347, 351 (3d Cir. 2004). New York law has somewhat stricter requirements. Under New York law, the plaintiff must also allege that the defendant knew that the plaintiff desired the information for a “serious purpose,” and that the plaintiff and the defendant had a “special relationship” conferring a duty “to give correct information.” Anschutz Corp v. Merrill Lynch & Co., Inc., 690 F.3d 98, 114 (2d Cir. 2012) (citation omitted); cf. Highland Ins. Co., 373 F.3d at 355 (no “special relationship” requirement under New Jersey law).
Additionally, a plaintiff cannot ordinarily recover in negligence against a manufacturer when the plaintiff has only suffered an economic loss. See Bellevue S. Assocs. v. HRH Constr. Corp., 78 N.Y.2d 282, 294 (1991); Alloway v. Gen. Marine Indus., L.P., 149 N.J. 620, 641 (1997). Such claims are instead better
The Second Circuit has not determined whether claims for negligent misrepresentation are subject to the heightened pleading standard under
Because the plaintiffs claim only economic harm, rather than personal injury, the economic loss doctrine bars their negligent misrepresentation claim. The plaintiffs argue that the economic loss doctrine does not apply, because their claim is not merely that Pfizer failed to fulfill the plaintiffs’ economic expectation under a contract, but that Pfizer‘s misrepresentations induced the plaintiffs to enter into thе contract in the first instance. This argument fails, however, for two reasons. First, a claim for negligent misrepresentation cannot be raised unless it arises from a duty independent of a contractual relationship between the parties. Saltiel v. GSI Consultants, Inc., 170 N.J. 297, 280 (2002); see also Bellevue S. Assocs., 78 N.Y.2d at 295. But the alleged misrepresentation here -- that the drug the plaintiffs purchased was Chantix with the active ingredient varenicline -- is not a separate statement that induced the plaintiffs to enter into a contract with Pfizer; it is the statement that the plaintiffs allege actually constituted the contract that Pfizer breached. And second, the FAC again fails to plausibly allege that Pfizer made any misrepresentation. The product label stating that the drug the plaintiffs purchased was Chantix, with the active ingredient varenicline, was not a misrepresentation when it accurately described was what the plaintiffs received. The FAC has therefore failed to plausibly allege that Pfizer breached any duty to disclose.
D. False Advertising and Deceptive Business Practices
Pfizer moves to dismiss plaintiff Mary Allen‘s claims under the
The FAC does not identify any misleading statement. The FAC again refers to Chantix‘s packaging and label, which refer to the drug as “Chantix” and list its active ingredient as varenicline. But the plaintiffs do not explain how these statements are false or misleading. It is not enough to allege that the plaintiffs inferred from this label that the product did not contain N-nitroso-varenicline. A plaintiff does not have a claim under the
The GBL claims are no more successful if based on an omission rather than an affirmative misrepresentation.
The FAC alleges that one of Pfizer‘s distributors was informed that its supply of varenicline was at risk of being contaminated several months before it began to recall Chantix. But neither this allegation, nor рlaintiffs’ conclusory assertions, are sufficient to plausibly establish that Pfizer knew about any nitrosamine contamination in the medication that the plaintiffs purchased at the time they purchased it. Accordingly, the GBL claims are dismissed.
E. Breach of Express Warranty
Pfizer moves to dismiss the plaintiffs’ claims for breach of express warranty. Both New York and New Jersey have adopted the Uniform Commercial Code‘s definition of express warranty. See
The FAC does not plausibly allege that Pfizer breached any express warranty. The plaintiffs argue that nitrosamine contamination breached Pfizer‘s promise that the medication sold was Chantix, with the active ingredient varenicline. But again, the presence of a nitrosamine does not mean that the medication they received was not Chantix, or that it did not contain the active ingredient varеnicline. The FAC has not alleged that Pfizer issued any express warranty that their medication was completely safe or free from nitrosamines. Accordingly, the presence of nitrosamines does not provide a basis for a breach of express warranty claim. See Basko v. Sterling Drug, Inc., 416 F.2d 417, 428 (2d Cir. 1969) (dismissing a claim for breach of express warranty when a drug did not warrant that it was completely harmless or free from all side effects).
The plaintiffs attempt to rely on In re Valsartan, Losartan, & Irbesartan Prods. Liability Litig., MDL No. 2875, 2021 WL 222776 (D.N.J. Jan. 22, 2021), to establish the existence of a warranty that Chantix was not contaminated. In that case, the District Court found that a generic drug‘s label conveyed an express warranty that the generic was chemically equivalent to the brand name drug. Id. at *11. It is unnecessary to consider whether Valsartan was correctly decided. Chantix is itself a brand name drug. Its name therefore confers no warranty that it is identical to anything except itself. The plaintiffs therefore
F. Breach of the Implied Warranty of Merchantability
Under the Uniform Commercial Code, a sale of goods by default comes with an implied warranty “that the goods shall be merchantable . . . if the seller is a merchant with respect to goods of that kind.”
The FAC alleges that Allen purchased Chantix from a pharmacy rather than from Pfizer. And it does not allege that Allen was personally injured by taking the drug. Accordingly, New York law precludes Allen‘s claim for breach of the implied warranty of merchantability for lack of privity.
Additionally, both plaintiffs’ claims for implied warranty of merchantability fail because the FAC does not plausibly allege that the warranty was breached. The FAC does not allege that Chantix failed to fulfill its purpose of helping its users to quit smoking. Instead, the plaintiffs argue that the warranty was breached because Chantix could not be safely used. But, even though the FAC alleges that the plaintiffs consumed Chantix, it does not allege that the contamination harmed the plaintiffs, or even put them at significant risk.
The plaintiffs nevertheless argue that the medication was unmerchantable because it contained N-nitroso-varenicline in excess of the legal limit. But this does not establish that the Chantix was unfit for its ordinary purpose. On the contrary, in announcing the recall, the FDA stated that there was “no immediate risk” to patients taking Chantix, and urged patients to continue taking the drug even after the recall. FDA Updates and Press Announcements on Nitrosamine in Varenicline (Chantix), FDA (Sept. 17, 2021), https://www.fda.gov/drugs/drug-safety-and-availability/fda-updates-and-press-announcements-nitrosamine-varenicline-chantix.3 The plaintiffs have therefore failed to plausibly allege that Chantix was unfit to help consumers quit smoking.
G. Unjust Enrichment
Finally, Pfizer moves to dismiss the claim for unjust enrichment. To
The only allegations in the FAC specific to the unjust enrichment claim state that Pfizer accepted and kept the plaintiffs’ mоney obtained from selling Chantix. The plaintiffs argue that dismissal of the unjust enrichment claim is premature. But the plaintiffs do not explain why their unjust enrichment claim is distinct from their other claims, or distinct from a conventional tort or contract action. Accordingly, the unjust enrichment claim is dismissed.
Conclusion
Pfizer‘s December 1 motion to dismiss is granted. The Clerk of Court shall enter judgment for the defendants and close the case.
Dated: New York, New York
February 16, 2022
DENISE COTE
United States District Judge