Plumlee v. Pfizer, Inc
Filing
199
ORDER by Judge Lucy H. Koh granting 130 Motion to Dismiss First Amended Complaint With Prejudice. The Clerk shall close the file. (lhklc1, COURT STAFF) (Filed on 8/29/2014)
1
2
3
4
5
6
7
UNITED STATES DISTRICT COURT
9
NORTHERN DISTRICT OF CALIFORNIA
10
United States District Court
8
SAN JOSE DIVISION
11
12
13
LAURA A. PLUMLEE, an individual,
on behalf of herself and all other persons
similarly situated,
14
15
16
Plaintiff,
v.
PFIZER, INC., a New York Corporation,
17
Defendant.
)
)
)
)
)
)
)
)
)
)
)
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S
MOTION TO DISMISS WITH
PREJUDICE
18
19
20
21
22
23
24
Plaintiff Laura Plumlee (“Plaintiff”) brings this putative class action against Pfizer, Inc.
(“Defendant” or “Pfizer”), alleging that Defendant mislabeled its product Zoloft in violation of
California law. Defendant moves to dismiss the First Amended Complaint, ECF No. 130, which
Plaintiff opposed, ECF No. 137. Having considered the submissions of the parties and the relevant
law, the Court hereby GRANTS Defendant’s motion to dismiss the First Amended Complaint with
prejudice.
25
26
27
28
1
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
I.
BACKGROUND
2
A.
Factual Allegations
3
Defendant Pfizer, Inc., a New York corporation headquartered in New York, New York, is
4
a “pharmaceutical company involved in the research, development, testing, manufacture,
5
production, distribution, marketing, and sale of numerous pharmaceutical products.” First Am.
6
Compl. (“FAC”) ¶ 11, ECF No. 116. Pfizer manufactures and sells Zoloft, known generically as
7
sertraline, which the Food and Drug Administration (“FDA”) approved in 1991 for the treatment of
8
major depressive disorder.1 Id. ¶ 22. Plaintiff Laura A. Plumlee is a resident of California. Id. ¶ 10.
9
On or about March 18, 2005, Plaintiff was prescribed Zoloft to treat her ongoing depression, and
United States District Court
10
she continued to purchase and ingest Zoloft until August 11, 2006, when she switched to a generic
11
formulation of sertraline. Id. ¶¶ 98, 99.
12
Plaintiff alleges that Pfizer has made and continues to make a variety of unlawful, false, and
13
misleading statements, and has concealed and continues to conceal material information, about the
14
efficacy of Zoloft in treating depression. Id. ¶¶ 62–99. Plaintiff alleges that Pfizer made such
15
misrepresentations and omissions both in marketing and advertising Zoloft and on its drug labeling,
16
and that Plaintiff purchased Zoloft on the basis of these misrepresentations and omissions. Id.
17
¶¶ 98, 103.
18
1.
19
Zoloft
Zoloft, known generically as sertraline, is a “selective serotonin reuptake inhibitor (“SSRI”).”
20
Id. ¶ 17. SSRIs like Zoloft are antidepressants that counteract what is theorized to be the “primary
21
physiological cause of depression”: deficient levels of serotonin in the brain. Id. SSRIs inhibit the
22
brain’s reuptake of serotonin, increasing otherwise deficient levels of serotonin in the brain, in
23
effect treating depression by “balanc[ing] the brain’s chemistry.” Id. Plaintiff alleges that
24
“scientists have never found evidence to prove the ‘balancing brain chemistry’ theory.” Id.
25
The antidepressant industry is immense, generating revenue of approximately $11 billion per
26
1
27
28
Although originally approved by the FDA for treatment of major depressive disorder, the FDA
later approved Zoloft for the treatment of “obsessive-compulsive disorder, panic disorder, posttraumatic stress disorder, premenstrual dysphoric disorder, and social anxiety disorder.” FAC ¶ 22.
2
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
year. Id. ¶ 15. Before its patent expired in 2007, Pfizer’s annual sales of Zoloft were in excess of $3
2
billion. Id. ¶ 23. Over 20 million prescriptions of Zoloft or its generic sertraline are filled each year,
3
and Plaintiff estimates Pfizer’s total revenue from Zoloft since its launch at over $30 billion. Id.
4
Plaintiff alleges that despite Zoloft’s commercial success, the majority of the studies
5
demonstrated “there was no clinically or statistically significant difference between Zoloft and
6
placebo in relieving depression.” Id. ¶¶ 32–33. According to the FAC, Zoloft’s efficacy as an
7
antidepressant is due primarily to the placebo effect. Id. ¶ 22. That is, the reason Zoloft may be
8
effective in treating depression is the patient’s belief that the drug is effective, rather than the
9
drug’s pharmacological effects. Id. Plaintiff cites several studies that show antidepressants are
United States District Court
10
particularly susceptible to the placebo effect. Id. ¶ 26. Because there is no “physiological test for
11
determining the extent of a person’s depression,” researchers must rely on a patient’s subjective
12
evaluations to evaluate an antidepressant’s effectiveness. Id.
13
According to Plaintiff, Pfizer knew before Zoloft was approved by the FDA in 1991 that it
14
“had an efficacy problem.” Id. ¶ 32. When Pfizer submitted its new drug application (“NDA”) to
15
the FDA in 1990, it included five placebo-controlled clinical trials that were designed to test
16
Zoloft’s efficacy in treating depression. Id. ¶¶ 36, 90. Of the five, two demonstrated a statistically
17
significant effect over placebo, and three showed none. Id. ¶ 37.
18
The FDA Psychopharmacological Drugs Advisory Committee (“PDAC”) found Zoloft met
19
the statutory requirements for approval of an NDA: that the drug be safe, and that there be
20
“substantial evidence” of the drug’s efficacy. Id. ¶¶ 46, 58; see also 21 C.F.R. § 314.126. Plaintiff
21
quotes several statements from the PDAC meeting discussing Pfizer’s NDA for Zoloft, which
22
suggest that the evidentiary support for Zoloft’s efficacy “is not as consistent or robust as one
23
might prefer it to be.” FAC ¶ 60; see generally id. ¶¶ 53–57. Nevertheless, the PDAC
24
recommended Zoloft for approval, and in 1991 the FDA approved it for the treatment of
25
depression. Id. ¶¶ 58, 22.
26
27
28
3
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
2
2.
Alleged Misrepresentations and Omissions
Plaintiff alleges that, in connection with marketing and labeling Zoloft, Pfizer made various
3
misrepresentations and omissions which Plaintiff contends violate several California consumer
4
protection laws. Id. ¶¶ 127, 136–151, 123.
5
First, Plaintiff alleges that “Zoloft’s drug label has never properly disclosed the clinical trial
data required to properly understand Zoloft’s efficacy” or given consumers or prescribing
7
healthcare professionals “significant clinical trial information . . . to determine . . . if purchasing or
8
prescribing Zoloft is worth the risks.” Id. ¶ 63. Plaintiff challenges Zoloft’s drug label as
9
misleading because it: (1) “suggests that all clinical trials performed on Zoloft supported efficacy
10
United States District Court
6
when, in fact, there were at least three negative or failed efficacy trials that indicated Zoloft could
11
not outperform placebo,” (2) suggests that “numerous clinical trials” support efficacy, and (3)
12
“fails to disclose that the two clinical trials that supposedly demonstrated Zoloft’s efficacy were
13
clinically insignificant.” Id. ¶¶ 64–66, 70. Plaintiff contends that “[b]ecause the drug label contains
14
material omissions of fact, Pfizer prevented consumers and prescribing healthcare professionals
15
from having enough information to make an informed decision about whether to purchase or
16
prescribe Zoloft.” Id. ¶ 5.
17
Second, the FAC alleges that “Pfizer has engaged in selective and biased publication of
18
Zoloft’s clinical trials with the aim of promoting favorable studies and suppressing negative ones.”
19
Id. ¶ 74. Plaintiff alleges Pfizer was able to prevent disclosure of unfavorable clinical results by
20
having outwardly unbiased researchers sign non-disclosure agreements, mandating that researchers
21
obtain Pfizer’s permission before publishing any clinical data, limiting researchers’ access to the
22
raw clinical data, and placing researchers whose trials demonstrated a lack of efficacy on a “do-
23
not-use-in-the-future” list. Id. ¶ 75. These practices, according to the FAC, are “just one component
24
of a larger marketing scheme designed to mislead consumers and healthcare professionals about
25
Zoloft’s likelihood of efficacy.” Id. ¶ 74.
26
27
Third, Plaintiff alleges that Pfizer engaged in an extensive ghostwriting campaign to
improve perceptions of Zoloft’s efficacy in the scientific and medical communities. Id. ¶ 79. This
28
4
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
program involved paying “key opinion leaders” to put their names on articles authored by Pfizer or
2
its agents, articles which would then be published in targeted medical journals. Id. According to
3
Plaintiff, the purpose of this program was to “promote efficacy, highlight [the] drug’s superiority to
4
a competitor(s), leverage good will with academic investigators, increase media and public
5
perception of the drug and Pfizer, and provide tools for sales force to drive prescriptions based on
6
data.” Id. ¶ 83 (internal quotation marks omitted).
7
Fourth, Plaintiff alleges that Pfizer directly paid “key opinion leaders” and distinguished
8
scientists to support Zoloft, while concealing these financial relationships from the larger scientific
9
community. Id. ¶ 85.
United States District Court
10
Finally, the FAC alleges that after Pfizer obtained FDA approval of Zoloft, it embarked on
11
a “massive [marketing] campaign to promote Zoloft as an effective and reliable treatment for
12
depression.” Id. ¶ 87. Plaintiff alleges that Pfizer encouraged healthcare professionals to prescribe
13
Zoloft by providing them tickets to various theater and sporting events, and paying for ski trips,
14
stays at luxury hotels, and meals at “fancy” restaurants. Id. ¶ 88. Plaintiff also alleges that Pfizer
15
sent sales representatives—“typically young attractive people”—to visit healthcare professionals
16
and “brief” them on Zoloft’s efficacy, again with the purpose of giving healthcare professionals the
17
impression that Zoloft was a reliable and effective medication for depression. Id. ¶ 89. In addition
18
to these “direct-to-prescriber” efforts, Plaintiff alleges that Pfizer created numerous print and video
19
advertisements to promote Zoloft, all of which “gave the false and misleading impression that
20
Zoloft was a tremendously effective drug for the treatment of depression.” Id. ¶ 90.
21
22
3.
Plaintiff’s Experiences
Plaintiff alleges that on or about March 18, 2005, she was prescribed a 50 mg daily dose of
23
Zoloft by her psychiatrist to treat her ongoing depression. Id. ¶ 98. As her treatment progressed
24
over the next four years, Plaintiff’s dosage was increased to 100, 200, and 400 mg per day. Id.
25
Plaintiff continued to purchase and ingest Zoloft until August 11, 2006. Id. Between March 18,
26
2005 and August 11, 2006, Plaintiff spent a total of approximately $171 to purchase Zoloft. Id.
27
¶ 100. Including both payments from Plaintiff and her insurance company, Pfizer received a total
28
5
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
of approximately $3,727 over the same period. Id. After August 11, 2006 Plaintiff switched to the
2
generic formulation of Zoloft, sertraline, which she took until June 2008. Id. ¶ 99.
3
Plaintiff alleges that before her doctor prescribed her Zoloft to treat her depression, she saw
an advertisement touting Zoloft’s efficacy, and that after she had been prescribed Zoloft, she read
5
its drug label. Id. ¶ 98. Plaintiff contends that it was on the basis of these misrepresentations and
6
omissions about Zoloft’s efficacy that she was induced into purchasing and ingesting Zoloft. Id.
7
¶ 154. Plaintiff further alleges she “did not believe Zoloft was helping her depression,” but that she
8
“continued to purchase and ingest Zoloft . . . always hoping that the drug would eventually take
9
root and manage her depression.” Id. ¶ 103. When Plaintiff “gave up” taking Zoloft in 2008, she
10
United States District Court
4
“believed that Zoloft simply did not work for her because ‘sometimes drugs just do not work for
11
some people.’” Id.
12
Plaintiff did not discover Pfizer’s alleged misrepresentations and omissions regarding
13
Zoloft’s efficacy until on or about May 22, 2012, when she watched a 60 Minutes segment
14
regarding the placebo effect and depression. Id. ¶ 108. During the entire period in which Plaintiff
15
purchased and ingested Zoloft, she was unaware that “Zoloft’s drug label and advertising were
16
deceptive or that they lacked material information about the drug’s efficacy.” Id. ¶ 101. Plaintiff
17
alleges that she “did not see any media, journal articles, press releases, websites, letters, or
18
statements concerning Zoloft and its ability to outperform placebo in treating depression” between
19
March 2008 and May 2012. Id. ¶ 104. “Given the risk of the serious and well-documented side
20
effects associated with Zoloft,” had Plaintiff known “that the majority of clinical trials related to
21
Zoloft’s efficacy had shown it is no better than placebo,” she would never have purchased or
22
ingested Zoloft. Id. ¶ 109. In other words, “Plaintiff had relied on the sufficiency and accuracy of
23
Pfizer’s advertisements and Zoloft’s drug label in making her decision to purchase and ingest
24
Zoloft to treat her depression.” Id.
25
B.
26
Plaintiff filed the original Complaint on January 30, 2013. ECF No. 1. Defendant moved for
27
Procedural History
judgment on the pleadings on August 5, 2013. ECF No. 39. The Court granted Defendant’s motion
28
6
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
for judgment on the pleadings and granted leave to amend on February 21, 2014. ECF No. 105.
2
Plaintiff filed the FAC on March 13, 2014. ECF No. 116. On March 31, 2014, Defendant moved to
3
dismiss the FAC, ECF No. 130 (“MTD”). Plaintiff filed an opposition to the motion to dismiss on
4
May 1, 2014 (“Opp’n”), ECF No. 137, and Defendant replied on May 19, 2014 (“Reply”), ECF
5
No. 92. Defendant accompanied its motion to dismiss with a request that the Court take judicial
6
notice of various publications regarding the placebo effect and antidepressants available to the
7
public before May 2012, as well as several FDA Labeling Change letters and the latest Zoloft label
8
approved by the FDA on February 1, 2013. ECF No. 40. Plaintiff did not oppose this request.2
9
II.
LEGAL STANDARDS
United States District Court
10
A.
Rule 12(b)(6)
11
Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint
12
for failure to state a claim upon which relief can be granted. Such a motion tests the legal
13
sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In considering
14
whether the complaint is sufficient, the Court must accept as true all of the factual allegations
15
contained in the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). However, the Court need
16
not accept as true “allegations that contradict matters properly subject to judicial notice or by
17
exhibit” or “allegations that are merely conclusory, unwarranted deductions of fact, or
18
unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008)
19
(citation omitted). While a complaint need not allege detailed factual allegations, it “must contain
20
21
22
23
24
25
26
27
28
2
The Court GRANTS Defendant’s unopposed request for judicial notice as to Exhibits 1–22 and
25-27, and has taken notice of the adjudicative facts contained therein. See Von Saher v. Norton
Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010) (holding a court may take
judicial notice of publications to show what was in the public realm at the time); MGIC Indem. Co.
v. Weisman, 803 F.2d 500, 505 (9th Cir. 1986) (holding a court may take judicial notice of court
records); In re Epogen & Aranesp Off-Label Mktg. & Sales Practices Litig., 590 F. Supp. 2d 1282,
1286 (C.D. Cal. 2008) (taking judicial notice of FDA-approved drug labels); see also Fed. R. Evid.
201(d). The Court DENIES Defendant’s request for judicial notice as to Exhibits 23 and 24, the
“Amazon.com Book Search Results.” Unlike the publications, it is not evident to the Court that
these search results do not vary by user or change over time based on new inventory. See Dorner v.
Comm. Trade Bureau of Cal., No. CIV-F-09-0083 AWI SMS, 2008 WL 1704137, at *4 (E.D. Cal.
Apr. 10, 2008) (declining to judicially notice internet search results because “results for an
identical search can vary from day to day”).
7
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’”
2
Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim
3
has facial plausibility when the plaintiff pleads factual content that allows the court to draw the
4
reasonable inference that the defendant is liable for the misconduct alleged. The plausibility
5
standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that
6
a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (internal citation omitted).
7
B.
Rule 9(b)
8
Claims sounding in fraud or mistake are subject to the heightened pleading requirements of
Federal Rule of Civil Procedure 9(b), which require that a plaintiff alleging fraud “must state with
10
United States District Court
9
particularity the circumstances constituting fraud.” Fed. R. Civ. P. 9(b); see Kearns v. Ford Motor
11
Co., 567 F.3d 1120, 1124 (9th Cir. 2009). To satisfy the heightened standard under Rule 9(b), the
12
allegations must be “specific enough to give defendants notice of the particular misconduct which
13
is alleged to constitute the fraud charged so that they can defend against the charge and not just
14
deny that they have done anything wrong.” Semegen v. Weidner, 780 F.2d 727, 731 (9th Cir.
15
1985). Thus, claims sounding in fraud must allege “an account of the time, place, and specific
16
content of the false representations as well as the identities of the parties to the misrepresentations.”
17
Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (per curiam) (internal quotation marks
18
and citation omitted). A plaintiff must set forth what is false or misleading about a statement, and
19
why it is false.” In re GlenFed, Inc. Secs. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994) (en banc),
20
superseded by statute on other grounds as stated in Marksman Partners, L.P. v. Chantal Pharm.
21
Corp., 927 F. Supp. 1297, 1309 (C.D. Cal. 1996). However, “intent, knowledge, and other
22
conditions of a person’s mind” need not be stated with particularity, and “may be alleged
23
generally.” Fed. R. Civ. P. 9(b).
24
C.
Leave to Amend
25
If the court concludes that the complaint should be dismissed, it must then decide whether
26
to grant leave to amend. Under Rule 15(a) of the Federal Rules of Civil Procedure, leave to amend
27
“shall be freely given when justice so requires,” bearing in mind “the underlying purpose of Rule
28
8
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
15 . . . [is] to facilitate decision on the merits, rather than on the pleadings or technicalities.” Lopez
2
v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (internal quotation marks and citation
3
omitted). Nonetheless, a district court may deny leave to amend a complaint due to “undue delay,
4
bad faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies by
5
amendments previously allowed, undue prejudice to the opposing party by virtue of allowance of
6
the amendment, [and] futility of amendment.” See Leadsinger, Inc. v. BMG Music Publ’g, 512
7
F.3d 522, 532 (9th Cir. 2008).
8
III.
DISCUSSION
The FAC alleges that Pfizer violated several California consumer protection statutes by
10
United States District Court
9
marketing and selling Zoloft as an effective treatment for depression while concealing that the
11
majority of clinical studies show that it is no better than a placebo. FAC ¶¶ 1, 3–5. Specifically,
12
Plaintiff alleges violations of: (1) the Consumers Legal Remedies Act (“CLRA”), California Civil
13
Code §§ 1750, et seq.; (2) California’s Unfair Competition Law (“UCL”), California Business and
14
Professions Code §§ 17200, et seq.; and (3) California’s False Advertising Law (“FAL”),
15
California Business and Professions Code §§ 17500, et seq. See FAC ¶¶ 125–31, 133–45, 147–59.
16
Defendant seeks to dismiss Plaintiff’s FAC on a number of grounds, including that each of
17
Plaintiff’s claims is time-barred, barred by the safe harbor doctrine, preempted by federal law,
18
barred by the doctrine of primary jurisdiction, and that Plaintiff lacks standing to seek injunctive
19
relief. See MTD at 1–3. Defendant also contends that because Plaintiff failed to satisfy the CLRA’s
20
pre-suit notice requirement, she may not bring a claim for damages under that statute. Id. at 3. The
21
Court will not address every one of Defendant’s arguments, however, because, as discussed below,
22
the Court finds that each of Plaintiff’s claims is time-barred and that despite being granted an
23
opportunity to amend her complaint, Plaintiff has still not met her burden of showing that the
24
statutes of limitations have been tolled by the delayed discovery rule. Below, the Court first
25
describes Plaintiff’s causes of action under the CLRA, UCL, and the FAL, and then turns to the
26
question of whether Plaintiff’s claims are barred by the relevant statutes of limitations, and whether
27
those statutes have been tolled by the delayed discovery rule.
28
9
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
A.
The CLRA, UCL, and FAL
2
The CLRA prohibits “‘unfair methods of competition and unfair or deceptive acts or
3
practices’ in transactions for the sale or lease of goods to consumers.” Daugherty v. Am. Honda
4
Motor Co., Inc., 144 Cal. App. 4th 824, 833 (2006) (citing Cal. Civ. Code § 1770(a)). Under the
5
CLRA, sellers can be liable for “making affirmative misrepresentations as well as for failing to
6
disclose defects in a product.” Baba v. Hewlett–Packard Co., No. 09-5946 RS, 2010 WL 2486353,
7
at *3 (N.D. Cal. June 16, 2010). “Conduct that is ‘likely to mislead a reasonable consumer’ . . .
8
violates the CLRA.” Colgan v. Leatherman Tool Grp., Inc., 135 Cal. App. 4th 663, 680 (2006)
9
(quoting Nagel v. Twin Labs., Inc., 109 Cal. App. 4th 39, 54 (2003)). The statute of limitations for
United States District Court
10
actions under the CLRA is three years. Cal. Civ. Code § 1783.
11
California’s UCL provides a cause of action for business practices that are (1) unlawful, (2)
12
unfair, or (3) fraudulent. Cal. Bus. & Prof. Code § 17200. The UCL’s coverage is “sweeping,” and
13
its standard for wrongful business conduct “intentionally broad.” In re First Alliance Mortg. Co.,
14
471 F.3d 977, 995 (9th Cir. 2006) (citing Cel-Tech Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20
15
Cal. 4th 163 (1999)). The unlawful prong of the UCL “borrows violations of other laws and treats
16
them as unlawful practices,” which the UCL then “makes independently actionable.” Cel-Tech
17
Commc’ns, Inc., 20 Cal. 4th at 180 (internal quotation marks and citations omitted). To support her
18
theory of liability under the UCL’s unlawful prong, Plaintiff relies upon Defendant’s alleged
19
violations of the following California laws: Cal. Civ. Code §§ 1709, et seq. (fraudulent deceit); Cal.
20
Civ. Code §§ 1571, et seq. (fraud); Cal. U. Com. Code §§ 2313-15 (breach of express and implied
21
warranty); Cal. Bus. & Prof. Code §§ 17500, et seq. (FAL); and Cal. Civ. Code §§ 1750, et seq.
22
(CLRA). FAC ¶ 136. A business practice violates the unfair prong of the UCL if it is contrary to
23
“established public policy or if it is immoral, unethical, oppressive or unscrupulous and causes
24
injury to consumers which outweighs its benefits.” McKell v. Wash. Mut., Inc., 142 Cal. App. 4th
25
1457, 1473 (2006). In determining whether a business practice is unfair under this approach,
26
California courts balance the “impact on its alleged victim” against “the reasons, justifications, and
27
28
10
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
motives of the alleged wrongdoer.” Id.3 Finally, to state a cause of action under the fraud prong of
2
the UCL, “a plaintiff need not show that he or others were actually deceived or confused by the
3
conduct or business practice in question.” Schnall v. Hertz Corp., 78 Cal. App. 4th 1144, 1167
4
(2000). “Instead, it is only necessary to show that members of the public are likely to be deceived.”
5
Podolsky v. First Healthcare Corp., 50 Cal. App. 4th 632, 647–48 (1996). The statute of
6
limitations for actions under the UCL is four years. Cal. Bus. & Prof. Code § 17208.
7
California’s FAL makes it unlawful for a business to disseminate any statement “which is
8
untrue or misleading, and which is known, or which by the exercise of reasonable care should be
9
known, to be untrue or misleading.” Cal. Bus. & Prof. Code § 17500. Whether an advertisement is
United States District Court
10
“misleading” must be judged by the effect it would have on a reasonable consumer. Williams v.
11
Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008). The statute of limitations for actions under
12
the FAL is three years. Cal. Code Civ. Proc. § 338(a).4
13
B.
14
The Court previously concluded that Plaintiff’s claims are barred by the relevant statutes of
Statute of Limitations
15
limitations. See MJOP Order at 11–13. Plaintiff alleges she suffered an economic injury when she
16
purchased Zoloft based on Pfizer’s misleading advertising and labeling of Zoloft. See id. Plaintiff
17
last purchased Zoloft or its generic equivalent in June 2008, and the Court found that her claims
18
accrued on that date. MJOP Order at 12–13. Plaintiff initiated this action on January 30, 2013, four
19
years and seven months after her claims accrued. As such, all of the corresponding statutes of
20
limitations have run by at least seven months, and her claims are time barred.
21
22
23
3
24
25
26
27
28
The “proper definition of ‘unfair’ conduct against consumers is ‘currently in flux’ among
California courts,” and some appellate opinions have applied a more stringent test, particularly for
conduct that threatens an incipient violation of antitrust law. Davis v. HSBC Bank Nevada, N.A.,
691 F.3d 1152, 1169 (9th Cir. 2012).
4
Plaintiff’s causes of action under the CLRA, the fraud prong of the UCL, and the FAL all sound
in fraud and are therefore all subject to the heightened pleading requirement of Rule 9(b) of the
Federal Rules of Civil Procedure. See Kearns, 567 F.3d at 1125 (“[W]e have specifically ruled that
Rule 9(b)’s heightened pleading standards apply to claims for violations of the CLRA and UCL.”).
11
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
C.
2
The “delayed discovery” rule only benefits plaintiffs who can show that they acted
3
reasonably and diligently in preserving their rights. In granting Defendant’s motion for judgment
4
on the pleadings with leave to amend, the Court specifically directed Plaintiff to plead facts
5
“show[ing] her diligence.” MJOP Order at 14–15. The Court observed that Plaintiff had failed to
6
allege “that she took any steps toward discovery.” Id. at 15. While Plaintiff’s FAC addresses some
7
of the pleading problems the Court identified in its prior order, Plaintiff has once again failed to
8
plead any facts showing reasonable diligence. The Court concludes that because Plaintiff’s FAC
9
pleads insufficient facts to invoke the delayed discovery rule, despite clear direction in the Court’s
10
United States District Court
1
Delayed Discovery Rule
previous order, Plaintiff’s claims under the CLRA, UCL, and FAL are time-barred, and the FAC is
11
dismissed with prejudice.
12
“In California, the discovery rule postpones accrual of a claim until ‘the plaintiff discovers,
13
or has reason to discover, the cause of action.’” Clemens v. DaimlerChrysler Corp., 534 F.3d 1017,
14
1024 (9th Cir. 2008) (quoting Norgart v. Upjohn Co., 981 P.2d 79, 88 (Cal. 1999)). “A plaintiff
15
whose complaint shows on its face that [her] claim would be barred without the benefit of the
16
discovery rule must specifically plead facts to show (1) the time and manner of discovery and (2)
17
the inability to have made earlier discovery despite reasonable diligence. The burden is on the
18
plaintiff to show diligence, and conclusory allegations will not withstand” a motion to dismiss. E–
19
Fab, Inc. v. Accountants, Inc. Servs., 64 Cal. Rptr. 3d 9, 17 (Cal. Ct. App. 2007) (internal
20
quotations and citation omitted). “[P]laintiffs are charged with presumptive knowledge of an injury
21
if they have information of circumstances to put [them] on inquiry or if they have the opportunity
22
to obtain knowledge from sources open to [their] supervision.” Fox v. Ethicon Endo-Surgery, Inc.,
23
110 P.3d 914, 920 (Cal. 2005) (internal quotation marks omitted). The delayed discovery rule is
24
available to rebut the presumption and to toll the statute of limitations under the CLRA, UCL, and
25
FAL. See Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1117, 1131 (C.D. Cal. 2010) (delayed
26
27
28
12
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
discovery rule applies to CLRA and FAL claims); Aryeh v. Canon Bus. Solutions, Inc., 292 P.3d
2
871, 878 (Cal. 2013) (delayed discovery rule applies to UCL claims).5
3
Here, Plaintiff does not plead facts satisfying the element of reasonable diligence. The FAC
4
fails to identify any actions Plaintiff took to investigate the alleged wrongful conduct by Pfizer at
5
the time a reasonable person should have suspected wrongdoing. As explained below, while
6
Plaintiff sufficiently pleads the time and manner of her discovery, her failure to adequately plead
7
diligence precludes application of the delayed discovery rule. Regarding the delayed discovery
8
rule, Plaintiff raises four arguments: (1) that there is no affirmative duty to investigate under the
9
delayed discovery rule; (2) that she had no obligation to seek out publicly available information
United States District Court
10
regarding Zoloft’s effectiveness; (3) that such information was unavailable at the time; and (4) that
11
her subjective belief excuses her lack of diligence . The Court address each one below, and finds
12
each one unpersuasive.
13
First, Plaintiff’s initial argument is incorrect as a matter of law. “In order to employ the
14
discovery rule to delay accrual of a cause of action, a plaintiff must demonstrate that he or she
15
conducted a reasonable investigation of all potential causes of her injury.” Fox, 110 P.3d at 922.
16
Prior to taking Zoloft, Plaintiff saw an advertisement touting Zoloft’s effectiveness, on which she
17
relied when her doctor prescribed Zoloft on March 15, 2005. FAC ¶ 98. After three years, Plaintiff
18
“gave up” taking Zoloft and its generic equivalent in June 2008 because she “did not believe Zoloft
19
was helping her depression.” FAC ¶ 103. Thus, her claims accrued in June 2008,6 and the statutes
20
5
21
22
23
24
25
26
27
28
The Ninth Circuit has held that claims under the UCL begin to run on the date of the defendant’s
violation and not the date of discovery. See Karl Storz Endoscopy–Am., Inc. v. Surgical Tech., Inc.,
285 F.3d 848, 857 (9th Cir. 2002). However, the California Supreme Court clarified recently that
claims under the UCL are “governed by common law accrual rules,” including delayed discovery.
Aryeh, 292 P.3d at 878. The Ninth Circuit’s interpretation of California law is “‘binding in the
absence of any subsequent indication from the California courts that our interpretation was
incorrect,’” Jones–Hamilton Co. v. Beazer Materials & Servs., Inc., 973 F.2d 688, 696 n.4 (9th Cir.
1992) (quoting Owen v. United States, 713 F.2d 1461, 1464 (9th Cir. 1983)). The Aryeh decision is
a clear indication that Karl Storz Endoscopy incorrectly held that the delayed discovery rule is not
available to toll the statute of limitations for claims under the UCL.
6
Plaintiff alleges she ceased taking Zoloft on or about August 6, 2006, and used the generic
equivalent until June 2008. FAC at ¶ 99–100. It is not evident that Defendant was the cause of her
economic injury from August 2006 to June 2008, because Plaintiff does not allege that Defendant
manufactures or sells the generic equivalent. Even giving Plaintiff the benefit of the doubt that
13
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
of limitations barred the last of her claims in June 2012. Plaintiff alleges that on or about May 22,
2
2012, she happened to see a 60 Minutes segment regarding the placebo effect and antidepressants.
3
FAC ¶ 108. What is noticeably absent from the FAC is any allegation that Plaintiff took any steps
4
to discover why Zoloft was ineffective in treating her depression between June 2008 and when she
5
saw the 60 Minutes segment in May 2012. Plaintiff does not allege that between June 2008 and
6
May 2012 she consulted her physician or psychiatrist, or that she looked for any information
7
regarding Zoloft’s effectiveness. Plaintiff does allege that between March 2008 and May 2012, she
8
saw no information criticizing Zoloft’s efficacy, and that “[u]pon information and belief, no media
9
or information criticizing Zoloft’s efficacy existed during this time period to which a reasonably
10
United States District Court
1
diligent consumer would have been exposed.” Id. ¶ 104. However, whether a reasonably diligent
11
consumer “would have been exposed” to information regarding Zoloft’s efficacy does not address
12
the threshold issue of whether Plaintiff acted diligently to investigate whatever information was
13
available to her when she suffered her injury. Plaintiff was not required to actually discover all the
14
facts underlying her specific legal theories, but once she knew Zoloft was ineffective for her, she
15
could not “wait for [the facts] to find [her] and sit on [her] rights,” rather she had to “go find” the
16
available facts. Norgart, 981 P.2d at 88–89 (internal quotation marks omitted).
17
Second, Plaintiff claims that Defendant’s alleged misrepresentations and concealment of
18
negative clinical trial data excuse her lack of diligence. See Opp’n at 8 (citing Tavares v. Capital
19
Records, LLC, No. 12-CV-3059 YGR, 2013 WL 968272 (N.D. Cal. Mar. 12, 2013). However,
20
“[m]isrepresentations are a part of every fraud cause of action; nonetheless, the duty to investigate
21
arises if the circumstances indicate that the defendant’s representations may have been false.” Doe
22
v. Roman Catholic Bishop of Sacramento, 117 Cal. Rptr. 3d 597, 604 (Cal. Ct. App. 2010). Unlike
23
in Tavares, where the plaintiffs were unaware of any facts that would have put them on notice of
24
their injuries, Plaintiff had actual notice of Zoloft’s ineffectiveness, at least with regards to her own
25
depression as of June 2008, which triggered inquiry notice that Zoloft’s claims of effectiveness
26
27
28
Defendant was the cause of her injury through June 2008, her claims are barred by the statutes of
limitations.
14
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
were misleading.7 See Tavares, 2013 WL 2968272, at *3. Having detrimentally relied on Pfizer’s
2
alleged misrepresentations regarding Zoloft’s effectiveness, Plaintiff had a factual basis to suspect
3
that Zoloft’s advertisements and drug label were misleading.8 Plaintiff is correct that the mere
4
availability of public facts about Zoloft’s ineffectiveness is insufficient to trigger a duty to
5
investigate. See, e.g., Nelson v. Indevus Pharms., Inc.,48 Cal. Rptr. 3d 668, 670–73 (Cal. Ct. App.
6
2006). However, Plaintiff pleads that she knew Zoloft was not working for her, despite the claims
7
of effectiveness Plaintiff had read, seen, and relied on for three years. FAC ¶¶ 98, 108, 154. The
8
combination of these facts, as pled in the FAC, was reason for Plaintiff to suspect that Defendant
9
had done something wrong.9 Having alleged those facts, Plaintiff bears the burden of showing she
10
United States District Court
1
was reasonably diligent in investigating the cause of her injuries. See Fox, 110 P.3d at 922; Jolly,
11
751 P.2d at 928.
12
Plaintiff cites Nelson v. Indevus Pharmaceuticals, Inc., 48 Cal. Rptr. 3d at 671, in support
13
of her contention that her failure to investigate does not preclude application of the delayed
14
discovery rule. Opp’n at 6–7. Plaintiff’s reliance on Nelson fails. The Nelson plaintiff’s duty to
15
investigate was not triggered because she had no actual, presumptive, or inquiry notice that her
16
injury was related to her use of Redux, a prescription diet drug. Nelson, 48 Cal. Rptr. 3d at 675.
17
The plaintiff suffered heart palpitations and fatigue before, during, and after taking Redux. Id.
18
These “common and non-specific” symptoms did not start or even intensify when she started
19
taking Redux, “which would normally suggest that they were caused by the drugs.” Id. The
20
21
22
23
24
25
26
27
7
Plaintiff relies on “information and belief” to assert she would not have been able to access
information regarding Zoloft’s effectiveness even if she had bothered to look. FAC ¶ 104.
However, she fails to provide any factual basis for this assertion and Defendant’s submissions of
numerous articles, excerpts from books, websites, and other publications contradict her allegation.
See Pfizer Inc.’s Request for Judicial Notice in Support of Motion to Dismiss (“Pfizer’s RJN”),
Exhs. 1–24, ECF. No. 131.
8
Arroyo v. Plosay, 170 Cal. Rptr. 3d 125 (Cal. Ct. App. 2014), is inapposite. In Arroyo, plaintiffs
had notice of the defendant’s mishandling of the decedent’s body, causing facial disfigurement.
The Arroyo plaintiffs had no reason to suspect the defendant had also prematurely declared
decedent dead and placed her in the morgue while still alive. In contrast, Plaintiff should have
suspected that Defendant’s claims regarding Zoloft’s efficacy were misleading since she relied on
those claims only to experience Zoloft’s ineffectiveness.
28
15
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
plaintiff had no reason to suspect a connection between Redux and her symptoms, and though she
2
sought out medical advice, two doctors failed to diagnose her. Id. In light of these facts, the
3
plaintiff was not charged with “constructive suspicion” merely because some members of the
4
public were aware of Redux’s side effects. Id. In contrast, Plaintiff pleads that she detrimentally
5
relied on Zoloft’s advertised effectiveness and was fully aware that Zoloft failed to treat her
6
depression. FAC ¶¶ 98–100, 109. With actual knowledge of Zoloft’s advertisements, drug label,
7
and ineffectiveness in treating her depression after three years, Plaintiff had “reason at least to
8
suspect a factual basis” for her claims that the Zoloft advertising and label were misleading. See
9
Nelson, 48 Cal. Rptr. 3d at 671.
United States District Court
10
Third, Plaintiff claims that “no media or information criticizing Zoloft’s efficacy existed
11
during this time period to which a reasonably diligent consumer would have been exposed.” FAC
12
¶ 104. However, the dozens of exhibits submitted by Defendant, and judicially noticed by the
13
Court, directly contradict Plaintiff’s claim. These exhibits clearly show that a reasonably diligent
14
consumer could have discovered information regarding the placebo effect, Zoloft’s effectiveness,
15
and unpublished clinical trials. See, e.g., Pfizer’s RJN, ECF No. 131, Exh. 1 (2002 USA Today
16
article identifying Zoloft as no more effective than placebo), Exh. 7 (2008 San Jose Mercury News
17
article discussing unpublished negative clinical trials); Exh. 8 (2008 Wall Street Journal article
18
discussing Zoloft, selective publication, the five clinical trials submitted to the FDA, and placebo
19
effect).10 Moreover, even evidence Plaintiff cites in the FAC directly contradicts her claim. For
20
example, Plaintiff cites a January 2009 article from the New York Review of Books that mentions
21
Zoloft by name for the proposition that “[m]any drugs that are assumed to be effective are probably
22
little better than placebos, but there is no way to know because negative results are hidden.”11 FAC
23
10
24
25
26
27
28
These are just a few of the publications that were available to the public before, during, and
immediately after Plaintiff’s use of Zoloft. The Court notes that many of these sources are geared
towards the lay public, and discuss many of the allegations made in the FAC concerning selective
publication, misleading labels, and suppression of negative clinical trial results.
11
This article discusses drug companies’ payments to doctors, the placebo effect, the FDA’s
allegedly lax standards for approval of antidepressants, bias in clinical trials, and fraudulent
marketing. See Marcia Angell, Drug Companies & Doctors: A Story of Corruption, N.Y. Rev. of
Books, (Jan. 15, 2009), available at http://www.nybooks.com/articles/archives/2009/jan/15/drugcompanies-doctorsa-story-of-corruption/.
16
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
¶ 74. Accordingly, the Court rejects Plaintiff’s claim. See Sprewell v. Golden State Warriors, 266
2
F.3d 979, 988 (9th Cir. 2001) (“The court need not, however, accept as true allegations that
3
contradict matters properly subject to judicial notice or by exhibit. Nor is the court required to
4
accept as true allegations that are merely conclusory, unwarranted deductions of fact, or
5
unreasonable inferences.” (internal citation omitted)).
6
Plaintiff further claims that a reasonably diligent consumer could not have discovered
7
Zoloft’s negative clinical trial data because such information could only be found in scientific
8
journals, for which “[a] subscription to a single journal can cost thousands of dollars.” FAC ¶ 107.
9
However, as demonstrated above, lay publications such as the USA Today, Wall Street Journal,
United States District Court
10
and New York Review of Books discussed Zoloft’s placebo effect and unpublished negative
11
clinical trial data. Moreover, Pfizer contends that eight of the scientific articles regarding the
12
placebo effect of antidepressants, including Zoloft, that Plaintiff references in the FAC are
13
available free of charge on the Internet. See Declaration of Leeron Morad in support of Pfizer Inc.’s
14
Motion to Dismiss First Amended Complaint, ECF No. 132, at ¶ 3. Thus, although Plaintiff can
15
and does plead she was ignorant of any information, she cannot plead that such information was
16
unavailable to a reasonably diligent consumer.
17
Fourth, Plaintiff alleges the time and manner of her discovery, but that alone is insufficient
18
to rebut the “presumption that she knew of the cause of her injuries when it occurred.” Doe, 117
19
Cal. Rptr. 3d at 604. Plaintiff contends she thought Zoloft was only ineffective for her. FAC ¶ 103.
20
But her “[s]ubjective suspicion [w]as not required. If a person becomes aware of facts which would
21
make a reasonably prudent person suspicious, he or she has a duty to investigate further and is
22
charged with knowledge of matters which would have been revealed by such an investigation.”
23
Mangini v. Aerojet-Gen. Corp., 281 Cal. Rptr. 827, 843 (Cal. Ct. App. 1991). Plaintiff had a factual
24
basis to suspect her injury, and a corresponding duty to investigate. Had Plaintiff taken any
25
minimal step toward investigating her injury, she would have discovered the abundant publicly
26
available information set forth above. Plaintiff’s decision to rely on her own subjective belief and
27
28
17
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
forego taking any minimal step toward investigating her injury places her beyond the reach of the
2
delayed discovery rule.
3
Invocation of the discovery rule requires more than simply alleging that discovery was
4
delayed. See Fox, 110 P.3d at 921. It protects only a plaintiff who, “despite diligent
5
investigation . . . is blamelessly ignorant of the cause of [her] injuries.” E-Fab, 64 Cal. Rptr. 3d at
6
16 (internal quotation marks omitted). Plaintiff has now had two opportunities to plead the delayed
7
discovery rule. The FAC is still missing an essential allegation: that Plaintiff took any step
8
whatsoever to investigate her injury at the time it occurred. Plaintiff has failed to adequately plead
9
that a reasonable investigation could not have resulted in the discovery of her claims against Pfizer.
United States District Court
10
To the contrary, the FAC itself and Defendant’s submitted Exhibits 1–23 show that the relevant
11
information could have been available to Plaintiff, had she looked. Because Plaintiff also pleads
12
that “[b]etween March 2008 and May 2012” she saw no information concerning Zoloft’s efficacy
13
problems, Plaintiff cannot plead a set of facts showing diligence. As such, the Court finds that
14
Plaintiff’s claims under the CLRA, UCL, and FAL are time-barred. Plaintiff’s assertions in the
15
FAC preclude her from proving that the delayed discovery rule tolled the statutes of limitations.
16
Accordingly, the Court GRANTS Defendant’s motion to dismiss. See Jablon v. Dean Witter &
17
Co., 614 F.2d 677, 682 (9th Cir. 1980).
18
The Court previously cautioned Plaintiff that failure to cure the deficiencies identified in
19
Defendant’s motion for judgment on the pleadings would result in a dismissal with prejudice.
20
MJOP Order at 17. While Plaintiff’s amendments addressed some of those deficiencies, Plaintiff’s
21
inability to plead any facts showing diligence makes any further amendment futile. See Leadsinger,
22
512 F.3d at 532; Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 892–93 (9th Cir. 2010).
23
Accordingly, this dismissal is with prejudice.
24
IV.
25
26
CONCLUSION
For the foregoing reasons, the Court GRANTS Defendant’s motion to dismiss with
prejudice. The Clerk shall close the file.
27
28
18
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
1
IT IS SO ORDERED.
2
Dated: August 29, 2014
_________________________________
LUCY H. KOH
United States District Judge
3
4
5
6
7
8
9
United States District Court
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
19
Case No.: 13-CV-00414-LHK
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS WITH PREJUDICE
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?