United States District Court for the District of Columbia
December 31, 2003.
ROBERT WILLIAMS, et al., Plaintiffs,
THE PURDUE PHARMA CO., et al. Defendants
The opinion of the court was delivered by: ROSEMARY COLLYER, District Judge
The question raised by this lawsuit is whether patients who were
prescribed a drug for pain, and who personally suffered no ill effects or
lack of efficacy, can sue for money damages under D.C. law as consumers
injured by the drug manufacturers' allegedly-fraudulent advertising
claims. Finding that the answer is no, the Court will grant the
defendants' motion to dismiss.
This is a class action based on the District of Columbia Consumer
Protection Procedures Act ("CPPA"), D.C. Code §§ 28-3901 et
seq., to obtain a refund of all monies paid by plaintiffs and class
members for OxyContin ® ("OxyContin"), a pain medication for chronic
pain relief, plus statutory penalties, treble damages and punitive
damages. The class specifically excludes "any persons seeking to
assert a personal injury claim against Defendants." Compl. ¶ 47. It
is alleged that the defendants engaged in deceptive advertising and that
their over-promotion of OxyContin inflated the price of the drug so that
all class members "paid a higher price for OxyContin than if Defendants
had not engaged in falsely advertising and promoting OxyContin." Compl.
The courts in the District of Columbia have not had occasion to
determine whether a consumer who purchased a product that acted as
advertised for him but not for others, and who, in that sense, has suffered no injury, can nonetheless maintain a CPPA
action. They have, however, agreed uniformly that an injury-in-fact must
underlie legal suits. Because the plaintiffs have suffered no
injury-in-fact, the complaint will be dismissed.
Plaintiffs Robert Williams and Clifford Perry brought a two-count
complaint on behalf of themselves and others similarly situated to
recover injunctive relief, refunds, and damages under the CPPA and common
law civil conspiracy against defendants The Purdue Pharma Company, Purdue
Pharma, L.P., Purdue Pharma Inc., The P.F. Laboratories, Inc., The Purdue
Frederick Company (collectively, "Purdue"), Abbott Laboratories and
Abbott Laboratories, Inc. (collectively "Abbott"), for damages allegedly
caused by the defendants' deceptive, misleading and fraudulent
advertising and over-promotion of OxyContin. Plaintiffs allege that the
advertising campaign was false and misleading within the meaning of the
CPPA in two respects: (i) that OxyContin would provide "smooth and
sustained" pain relief for twelve hours through a controlled-release
formulation, Compl. ¶¶ 14, 18, 55; and (ii) that OxyContin posed
little risk of addiction when taken as prescribed. Id. ¶¶ 18,
28, 56. Neither plaintiff complains, however, that OxyContin did not
provide 12-hour relieve to him or that he became addicted to the
Messrs. Williams and Perry were prescribed OxyContin in the District of
Columbia for chronic pain and purchased and received OxyContin from
pharmacies located in the District of Columbia. Id. ¶¶ 2, 3.
Purdue owns the patent for OxyContin tablets and is engaged, inter
alia, in its manufacture, advertising, promotion, sale and/or
distribution, including in the District of Columbia. Id. ¶¶
4-8. Abbott is allegedly in the same business, under agreement with
Purdue, and also in the District of Columbia, ¶¶ 9, 10. The complaint
alleges that the defendants engaged in a false and misleading advertising campaign directed to doctors, and
through newspaper articles and patient brochure and videotape, directly
to patients. Id. ¶¶ 18-43. Plaintiffs seek to represent a
class described as "[a]ll persons who purchased or received OxyContin in
the District of Columbia by prescription from 1995 to the present"
with the exception of "any persons seeking to assert a personal
injury claim against Defendants." Id. ¶ 47. Those who would
be excluded would be all patients who failed to receive 12-hour relief
from OxyContin and/or who had problems with its alleged addictive
The complaint was initially filed in the Superior Court of the District
of Columbia. It was removed to federal court by the defendants on March
21, 2002. Thereafter, the Court denied the plaintiffs' motion to remand.
Defendants have now filed a motion to dismiss, which the plaintiffs
STANDARD OF REVIEW
A Rule 12(b)(6) motion "tests the legal sufficiency of the complaint."
ACLU Found. of S. Cal. v. Barr, 952 F.2d 457, 472 (D.C. Cir.
1991). Under 12(b)(6), a court "does not test whether the plaintiff will
prevail on the merits, but instead whether the claimant has properly
stated a claim." Price v. Crestar Secs. Corp., 44 F. Supp.2d 351,
353 (D.D.C. 1999). In reviewing such a motion, the Court accepts the
allegations in the non-movant's pleading as true and draws all reasonable
inferences in the non-movant's favor. See Conley v. Gibson,
355 U.S. 41, 45-46 (1957); Sinclair v. Kleindienst, 711 F.2d 291,
293 (D.C. Cir. 1983). However, the Court need not accept as true
plaintiff's legal conclusions. See Papasan v. Allain,
478 U.S. 265, 286 (1986). A complaint may not be dismissed on
a Rule 12(b)(6) motion "unless it appears beyond doubt that the plaintiff
can prove no set of facts in support of his claim which would entitle
him to relief." Conley, 355 U.S. at 45-46.
"[T]he CPPA evidently was intended to be a far-reaching consumer
protection law." Howard v. Riggs Nat'l Bank, 432 A.2d 701, 710
(D.C. 1981). It was amended effective October 19, 2000, to expand its
reach even further. Prior to that date, the private right of action
section of the CPPA provided that:
Any consumer who suffers any damages as a result
of the use or employment by any person of a trade
practice in violation of a law of the District of
Columbia within the jurisdiction of the Department
may bring an action in the Superior Court of the
District of Columbia to recover or obtain any of
the following. . . .
D.C. Code § 28-3905(k)(1) (1998). After October 19, 2000, this
provision now reads:
A person, whether acting for the interests of
itself, its members, or the general public, may
bring an action under this chapter in the Superior
Court of the District of Columbia seeking relief
from the use by any person of a trade practice in
violation of a law of the District of Columbia and
may recover or obtain the following
remedies. . . .
D.C. Code § 28-3905(k)(1). The October 2000 amendment is not
applied retroactively to conduct occurring before its effective date.
Arthridge v. Aetna Cas. and Sur. Co., 163 F. Supp.2d 38, 56
(D.D.C. 2001) (applying 1997 version to conduct occurring in 1997);
Family Fed. Sav. & Loan v. Davis (In re Davis), 172 B.R. 437,
466 (Bankr. D.C. 1994) (refusing to apply 1991 amendments to
pre-1991 conduct). ANALYSIS
Defendants raise two major arguments for dismissal of the complaint at
this early stage of the litigation. First they argue that the complaint
fails to allege a proper "consumer transaction" under the CPPA. Second,
they argue that the plaintiffs fail to allege any actionable injury.*fn1
These arguments will be addressed in turn.
A. Have Plaintiffs Alleged a "Consumer Transaction"?
The CPPA was adopted by the D.C. Council to protect local consumers
from improper and fraudulent trade practices. Athridge,
163 F. Supp.2d at 55 (CPPA "supplies consumers with a cause of action
against merchants selling them goods or services."). Purdue and Abbott
argue that plaintiffs have failed to allege, and cannot allege, a
consumer-merchant relationship between themselves and the defendants:
plaintiffs specify that they purchased OxyContin from pharmacies in the
District of Columbia and not from the defendants. Since Purdue and Abbott
only sold OxyContin to wholesalers or pharmacies that were "regularly
buying the goods for later resale to another," the defendants argue that
they are not "merchants" and the CPPA does not apply. See Adam A. Weschler
& Son, Inc. v. Klank, 561 A.2d 1003, 1005 (D.C. 1989); see
also Indep. Communications Network, Inc. v. MCI Telecomm. Corp., Inc.,
657 F. Supp. 785, 788 (D.D.C. 1987) ("[T]he Act was meant to embrace
consumer-merchant interactions exclusively.").
Plaintiffs counter that the CPPA expressly defines a merchant as "a
person who does or would sell . . . either directly or indirectly,
consumer goods or services, or a person who does or would supply the
goods or services which are or would be the subject matter of a trade
practice." D.C. Code § 28-3901(a)(3). They also argue that the D.C. Court of
Appeals has already held that the term "merchant" is "not limited to the
actual seller of the goods or services complained of," but also includes"
a `person' connected with the `supply' side of a consumer transaction."
Howard, 432 A.2d at 709.
Neither Adam A. Wechsler & Son nor Howard fully
answers the question of whether the relationship between defendants
manufacturers who sell through intermediary pharmacies
and plaintiffs acknowledged consumers constitutes a
consumer-merchant relationship within coverage of the CPPA. The former
case determined that the CPPA "is not intended to supply merchants with a
private cause of action against other merchants" because the statute
covers only consumer and merchant relationships. Adam A. Wechsler
& Son, 657 F. Supp. at 787. The latter case found that a
merchant does not become a "guarantor," liable under the CPPA, for the
work product of a second merchant just by recommending the goods or
services of the second merchant to a consumer. Howard, 432 A.2d
at 710. The circumstances of this case differ markedly from those fact
patterns. Defendants here are up-stream drug manufacturers who promote
their products to physicians and patients but who actually sell only to
wholesalers or large pharmacies for re-sale.
On a defense motion to dismiss, the Court must construe the facts of
the complaint favorably to the plaintiffs and give all reasonable
inferences in their favor. If Purdue and Abbott promoted OxyContin only
to physicians and other non-patients, it might be more difficult to
discern a consumer-merchant relationship. The plaintiffs have alleged,
however, that Purdue and Abbott issued brochures and a videotape directed
to consumer-patients.*fn2 These materials extended beyond the warnings and labels on OxyContin required by the Food and Drug
Administration, and are allegedly insufficient and misleading. More
affirmatively, Defendants are alleged to have engaged in persuasive sales
activities vis-a-vis individual consumers. See Howard, 432 A.2d
at 709 (citing D.C. Council Committee Report, explaining a "`respondent'
is the merchant, or another merchant further along the supply chain who
is deemed legally responsible under relevant substantive law. . . .")
The Court concludes that the activities alleged in the complaint may have
created a consumer-merchant relationship between Purdue and Abbott and
the plaintiffs sufficient for CPPA coverage and that the complaint is not
subject to a motion to dismiss on this basis.
B. Have Plaintiffs Alleged An Actionable Injury?
Disposition of this case depends on understanding plaintiffs' complaint
despite some confusion that its terms have caused.
Plaintiffs state that their action arises under the CPPA for alleged
economic losses. See Plaintiffs' Opposition to the Defendants'
Motion to Dismiss at 2 ("Opp."). Plaintiffs argue that they "have been
economically injured because they purchased an expensive name-brand drug
that did not possess the characteristics represented by Defendants,"
i.e., "smooth and sustained analgesia for twelve-hours per dose"
and "a lower abuse potential." Opp. at 6; see also id. at 7
("Plaintiffs have been deprived of the benefit of their bargain. . . .
[They] have also suffered economic damages because they purchased a
product whose price was unjustifiably inflated due to Defendants'
misrepresentations. . . . Defendants could not have charged such a
high price for OxyContin had it been known that it actually, routinely
failed to provide effective pain relief for twelve hours, and that it
presented the same abuse and addiction risks as morphine and other
opioids despite its controlled-release formulation."). The complaint details at length alleged failures of OxyContin to live
up to its advertising, most especially in not providing 12-hour pain
relief and in being more addictive than forecast. This undoubtedly
explains defendants' argument that "[t]his is a product liability suit in
which the plaintiffs fail to allege any physical injury." Memorandum of
Points and Authorities in Support of The Purdue Defendants' Motion to
Dismiss the Complaint at 1 ("Purdue Motion"). The class these plaintiffs
seek to represent, however, has not had those problems and this
is not a product liability suit. See Compl. ¶ 47
(excluding "any persons seeking to assert a personal injury claim against
Defendants"); Joint Report Pursuant to LCvR 16 at 2 ("Plaintiffs
specifically do not seek damages for personal injuries caused by their
use of OxyContin."); Opp. at 1. The legitimacy of the complaint must be
determined by reference to the CPPA and relevant law in that arena.
As the parties' arguments recognize, this case turns on the nature of
the injury or damages claimed by plaintiffs. Although the plaintiffs
allege a "benefit of the bargain" theory of injury, Opp. at 7, they do
not allege that OxyContin failed to provide them effective pain relief or
that they suffered any adverse consequences from their use of OxyContin.
Defendants argue that, absent such allegations, "it must be assumed that
OxyContin worked for plaintiffs and that consequently they got what they
paid for." Purdue Motion at 4. The Court agrees. Without alleging that a
product failed to perform as advertised, a plaintiff has received the
benefit of his bargain and has no basis to recover purchase costs.
See Barbarin v. Gen. Motors Corp., Civ. No. 84-0888 (TPJ), 1993
WL 765821, at *2 (D.D.C. Sept. 22, 1993) ("[O]wners whose [product]
performed to their entire satisfaction cannot demonstrate, as a matter of
law, the `fact of damage' necessary to state a claim under
Magnuson-Moss."). Although Barbarin involved the Magnuson-Moss
Act and an allegedly defective automobile, the same analysis applies here
to claims that pre-date the October 19, 2000, amendment to the CPPA in that both statues had almost identical damages
requirements. Compare Magnuson-Moss, 15 U.S.C. § 2310(d)(1)
(limiting suit to a "consumer who is damaged by the failure of a
supplier . . . to comply with any obligation under this title")
with CPPA, D.C. Code § 28-3805(k)(1) (1998) (limiting suit
to a "consumer who suffers any damages as a result of the use . . . of a
trade practice in violation of a law of the District of Columbia");
see also Briehl v. Gen. Motors Corp., 172 F.3d 623, 628
(8th Cir. 1999) (dismissing claims for, inter alia, violations
of Illinois, Florida, Mississippi, Missouri, New York, and Texas consumer
protection laws). Indeed, this court has previously held that "a damage
action under this [pre-2000] Act requires a showing that the consumer
suffered actual damages because of the misrepresentation or omission
claimed to violate the Act." Athridge, 163 F. Supp.2d at 56.
Plaintiffs argue that the CPPA states that it is violated by any
illegal trade practice "whether or not any consumer is in fact misled,
deceived or damaged thereby." D.C. Code § 28-3904. This provision has
been in the law through numerous amendments and was part of the statute
at the time of Athridge. The Court is not persuaded that it
should rely on this generalized introductory language to the exclusion of
the more specific language in Section 28-3905(k)(1) that only a "consumer
who suffers any damages" could bring suit under the CPPA before October
2000. See Howard, 432 A.2d at 708-09 (applying the specific and
not general provisions of CPPA). Those patients who purchased OxyContin
before October 19, 2000, and who obtained effective pain relief without
addiction received the "benefit of their bargain." Those who did not, as
plaintiffs concede, can be compensated through tort law. "If tort law
fully compensates those who are physically injured, then any recoveries
by those whose products function properly mean excess compensation."
In re Bridgestone/Firestone, Inc. Tires Product Liab. Litig., 288 F.3d 1012, 1016-17
(7th Cir. 2002), cert. denied sub. nom. Gustafson v.
Bridgestone/Firestone, Inc., 537 U.S. 1105 (2003).
The more difficult question is whether plaintiffs can bring a pure CPPA
action for alleged illegal trade practices when their alleged injury is a
higher price for OxyContin because of defendants' promotional tactics.
Can this "fraud on the market" theory suffice for this purpose? In the
District of Columbia, and under D.C. law, the answer is "no."
"Standing to assert a claim or counter-claim, when challenged, requires
a showing of actual or threatened injury redressable by the court."
Laufer v. Westminster Brokers, Ltd., 532 A.2d 130, 135 (D.C.
App. 1987) citing Valley Forge Christian Coll. v. Ams. United for
Separation of Church and State, Inc., 454 U.S. 464, 472 (1982).
Standing requires "individualized proof" of both the fact and the extent
of the injury. Consumer Fed'n of Am. v. Upjohn Co.,
346 A.2d 725, 728 (D.C. 1975). The amendment to the CPPA in 2000 did
not change the requirements for standing under D.C. law, despite its
Congress did not establish this court under
Article III of the Constitution, but we
nonetheless apply in every case "the
`constitutional' requirement of a `case or
controversy' and the `prudential' prerequisites of
standing. In enforcing these requirements, we
"`look to' federal standing jurisprudence, [both]
constitutional and prudential." The sine qua
non of constitutional standing to sue is an
actual or imminently threatened injury that is
attributable to the defendant and capable of
redress by the court. The plaintiff, or those whom
the plaintiff properly represents, "must have
suffered an injury in fact an invasion of
a legally protected interest which is (a) concrete
and particularized, . . . and (b) actual or
imminent, not conjectural or hypothetical."
Friends of Tilden Park, Inc. v. District of Columbia,
806 A.2d 1201
, 1206 (D.C. 2002) (alteration in original) (internal citations
omitted); see also Lujan v. Defenders of Wildlife, 504 U.S. 555
560-61 (1992); D.C. Code § 11-705(b) (limiting jurisdiction in D.C.
Court of Appeals to "[c]ases and controversies").
The complaint before the Court fails in two respects. While it asserts
that defendants engaged in false and misleading advertising, it does not
plead that these defendants were in any way deceived or even saw
any of that advertising. It also fails to allege any
particularized and specific injury-in-fact suffered by these plaintiffs.
In this respect, the Court finds Rivera v. Wyeth-Ayerst
Laboratories, 283 F.3d 315 (5th Cir. 2002), both instructive and
Rivera concerned a case similar to the one here. Ms. Rivera
sued Wyeth-Ayerst, a drug manufacturer, under the Texas Deceptive Trade
Practices Act, Tex. Bus. & Com. Code §§ 17.50, 17.46 (Vernon Supp.
1998), after she was prescribed and used one of its drugs; she alleged a
failure to list warnings of possible liver damage and/or that the drug
was defective; other patients were injured by the drug but not Ms.
Rivera; and Ms. Rivera wanted a refund. Rivera, 283 F.3d at 319.
The Fifth Circuit found that the alleged violation of Texas law, when Ms.
Rivera and her putative class were "not among the injured," "cannot
constitute an injury in fact." Id. at 320.
"[T]he `injury in fact' test requires more than an
injury to a cognizable interest. It requires that
the party seeking review be himself among the
injured." Sierra Club v. Morton,
405 U.S. 727, 734-35 (1972); accord Defenders of
Wildlife, 540 U.S. at 563. It is not enough
that Wyeth may have violated a legal duty owed to
some other patients; the plaintiffs must show that
Wyeth violated a legal duty owed to them. "What
courts require . . . is that injury be
personal." Bertulli" v. Indep. Ass'n of Cont'l
Pilots, 242 F.3d 290, 294 (5th Cir. 2001). Rivera, 283 F.3d at 320; see also Barbarin, 1993
WL 765821, at *2. Other courts agree.*fn3 The cases cited by the
plaintiffs involve products with a defect that is reasonably certain to
appear in the future;*fn4 since these plaintiffs do not allege any
future harm that is expected from their past ingestion of OxyContin, this
precedent is inapposite.
The invasion of a purely legal right without harm to the consumer
in this case, to freedom from alleged false and misleading
advertising can be addressed through the administrative process
of the Government of the District of Columbia. Osborne v. Capital
City Mortgage Corp., 667 A.2d 1321, 1330 (D.C. 1995) (distinguishing
court standing and administrative standing). Should they wish to pursue
this matter, plaintiffs should avail themselves of that forum. Without a
particularized injury, absent in this case, they do not have standing to
proceed in court. The complaint will be dismissed. A separate Order accompanies this