House v. Janssen Pharmaceuticals, Inc. et al

Filing 44

MEMORANDUM OPINION AND ORDER Signed by Chief Judge Joseph H. McKinley, Jr. on 12/29/2016 granting 15 Motion to Dismiss for Failure to State a Claim: If Plaintiff House wants the Court to entertain a motion to amend the complaint, IT IS HEREBY ORDERED that she shall submit her motion and amended complaint no later than twenty-one (21) days from the entry of this Memorandum Opinion and Order. cc: Counsel(JBM)

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF KENTUCKY
LOUISVILLE DIVISION
CIVIL ACTION NO. 3:15-CV-00894-JHM
ANNA HOUSE

PLAINTIFF

V.
BRISTOL-MYERS SQUIBB COMPANY,
ASTRAZENECA PLC, ASTRAZENECA LP,
ASTRAZENECA PHARMACEUTICALS LP,
and ASTRAZENECA AB

DEFENDANTS

MEMORANDUM OPINION & ORDER
This matter is before the Court on a motion to dismiss pursuant to Fed. R. Civ. P.
12(b)(6) by Defendants Bristol-Myers Squibb Company and AstraZeneca Pharmaceuticals LP1
[DN 15].

Fully briefed, this matter is ripe for decision. For the reasons set forth below, the

motion to dismiss is GRANTED.
I.

BACKGROUND

This case is a personal injury action concerning Invokana, Invokamet, and Farxiga, which
are prescription medications approved by the Food and Drug Administration (“FDA”) for the
treatment of type 2 diabetes.

Plaintiff Anna House, a Kentucky resident, alleges that she

developed diabetic ketoacidosis and kidney failure as a result of using these medications. (See
Compl. [DN 1] ¶¶ 4, 8.) House asserts twelve claims against Defendants Bristol-Myers Squibb
Company, a Delaware corporation; AstraZeneca PLC, a United Kingdom corporation;
AstraZeneca LP, a Delaware corporation; AstraZeneca Pharmaceuticals LP, a Delaware
corporation; and AstraZeneca AB, a Swedish corporation (collectively, the “Farxiga Defendants”)
1

The motion is brought by Defendants Bristol-Myers Squibb Company and AstraZeneca Pharmaceuticals LP, which
have been served with the Complaint, though these Defendants note that the arguments in the motion would apply
equally to the unserved Defendants AstraZeneca PLC, AstraZeneca LP, and AstraZeneca AB. (See [DN 15-1] 3 &
n.1.)

based on her alleged use of and injuries caused by Farxiga. (Id. ¶¶ 6, 12‒16.) House alleges that
the Farxiga Defendants designed, developed, manufactured, marketed, distributed, and sold
Farxiga into the stream of commerce. (Id. ¶ 34.)
In January 2014, Farxiga was approved by the FDA as a sodium-glucose cotransporter 2
(“SGLT2”) inhibitor for the treatment of type 2 diabetes.

(Id. ¶ 34.)

SGLT2 inhibitors,

including Invokana, Invokamet, and Farxiga, are designed to help diabetics reduce excess blood
sugar. (Id. ¶ 29.) They work by blocking reabsorption of glucose in the kidneys, and, instead,
they increase glucose secretion through urination. (Id. ¶ 30.) The FDA has since received a
significant number of reports of diabetic ketoacidosis and severe kidney damage from Invokana,
Invokamet, and Farxiga users. (Id. ¶ 36.)

On May 15, 2015, the FDA issued a safety

announcement regarding a risk of ketoacidosis associated with the SGLT2 inhibitor class of
diabetes medications. (Id. ¶ 61.) House alleges that, despite the reported adverse events, the
Farxiga Defendants failed and refused to conduct proper safety studies, failed to properly assess
and publicize alarming safety signals, suppressed information revealing serious and lifethreatening risks, willfully and wantonly failed to provide adequate instructions, and made
willful misrepresentations regarding the nature and safety of their respective medications. (Id. ¶
62.)
House began taking Farxiga on or about June 2014 (id. ¶ 48) and subsequently suffered
diabetic ketoacidosis (id. ¶ 53.) Plaintiff filed her Complaint on December 22, 2015 [DN 1].
She asserts claims for strict liability design defect (Count I); strict liability failure to warn (Count
II); gross negligence (Count III); negligence (Count IV); breach of express warranty (Count V);
breach of implied warranty (Count VI); fraudulent misrepresentation (Count VII); negligent
misrepresentation (Count VIII); negligent design (Count IX); fraudulent concealment (Count X);

2

fraud (Count XI); and violation of the Kentucky Consumer Protection Act (Count XII). Plaintiff
asserts each of these twelve claims against the Farxiga Defendants based on their alleged role in
the design, manufacture, marketing, and sale of Farxiga. (See Compl. [DN 1] ¶ 1.) Plaintiff also
filed identical claims against Janssen Pharmaceuticals, Inc. (“Janssen”), Johnson & Johnson, and
Mitsubishi Tanabe Pharma Corporation (“Mitsubishi”), based on her alleged use of and injuries
caused by Invokana and Invokamet. After all properly-served Defendants moved to dismiss the
claims against them, the claims against Janssen, Johnson & Johnson, and Mitsubishi were
transferred to the District of New Jersey pursuant to an order by the United States Judicial Panel
on Multidistrict Litigation. (See In re: Invokana (Canagliflozin) Products Liability Litigation,
MDL No. 2750 (Dec. 7, 2016) [DN 43].) Thus, the only remaining claims before this Court are
those asserted against the Farxiga Defendants.
II.

DISCUSSION

A. Standard of Review
Upon a motion to dismiss for failure to state a claim pursuant to Federal Rule of Civil
Procedure 12(b)(6), a court “must construe the complaint in the light most favorable to
plaintiff[],” League of United Latin Am. Citizens v. Bredesen, 500 F.3d 523, 527 (6th Cir. 2007),
“accept all well-pled factual allegations as true,” id., and determine whether the “complaint states
a plausible claim for relief,” Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009). Under this standard,
the plaintiff must provide the grounds for his or her entitlement to relief, which “requires more
than labels and conclusions, and a formulaic recitation of the elements of a cause of action will
not do.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007).
A plaintiff satisfies this standard only when he or she “pleads factual content that allows
the court to draw the reasonable inference that the defendant is liable for the misconduct

3

alleged.” Iqbal, 556 U.S. at 678. A complaint falls short if it pleads facts “‘merely consistent
with’ a defendant’s liability,” id. at 678 (quoting Twombly, 550 U.S. at 557), or if the alleged
facts do not “permit the court to infer more than the mere possibility of misconduct,” id. at 679.
Instead, the allegations must “‘show[] that the pleader is entitled to relief.’” Id. at 679 (quoting
Fed. R. Civ. P. 8(a)(2)).
When a plaintiff pleads claims which sound in fraud, those claims are subject to the
heightened pleading standard of Federal Rule of Civil Procedure 9(b), which provides that “[i]n
alleging fraud or mistake, a party must state with particularity the circumstances constituting
fraud or mistake.”

Fed. R. Civ. P. 9(b).

“At a minimum, the Sixth Circuit requires the

allegations to contain the ‘time, place, and content of the alleged misrepresentation on which he
or she relied; the fraudulent scheme; the fraudulent intent of the defendants; and the injury
resulting from the fraud.’” Our Lady of Bellefonte Hosp., Inc. v. Tri-State Physicians Network,
Inc., 2007 WL 2903231, at *6 (E.D. Ky. Sept. 27, 2007) (quoting Coffey v. Foamex L.P., 2 F.3d
157, 161–62 (6th Cir. 1993)). “Generalized and conclusory allegations that the Defendant[’s]
conduct was fraudulent do not satisfy Rule 9(b).” Bovee v. Coopers & Lybrand C.P.A., 272
F.3d 356, 361 (6th Cir. 2001).
B. Analysis
1. Strict Liability Claims (Counts I & II)
House has asserted two strict liability claims based on the theory that Farxiga was
defective, both in their design (Count I) and because the Defendants failed to warn of the risk of
injury caused by the medications (Count II).

4

a. Strict Liability Design Defect Claim
Under Kentucky law, to prevail in a strict products liability action, a plaintiff must
establish: “(1) that there is a product, which is (2) in a defective condition unreasonably
dangerous to the user or consumer or his property, and (3) which reaches the user or consumer
without substantial change in the condition in which it is sold; (4) that the product is sold by one
who is engaged in the business of selling such a product which (5) results in physical harm to the
ultimate user or consumer or his property.” Bosch v. Bayer Healthcare Pharms., Inc., 13 F.
Supp. 3d 730, 742 (W.D. Ky. 2014) (citations omitted). A plaintiff also must establish that there
was “an alternative, safer design that is practicable under the circumstances.” Id.
Defendants first argue that, because of comment k to section 402A of the Restatement
(Second) of Torts, they are not subject to design defect liability, and therefore the Court should
dismiss Count I of House’s Complaint. Kentucky follows the Restatement (Second) of Torts,
including comment k to section 402A. Prather v. Abbott Labs., 960 F. Supp. 2d 700, 706 (W.D.
Ky. 2013) (citing McMichael v. Am. Red Cross, 532 S.W.2d 7, 9‒11 (Ky. 1975)). Comment k
“provides an exception to the general rule of strict liability for ‘apparently useful and desirable
product[s], attended with a known but apparently reasonable risk.’” Id. (quoting Restatement
(Second) of Torts § 402A cmt. k). Where comment k applies, a prescription drug manufacturer
“is not subject to strict liability for design defects. Instead, the manufacturer’s liability is limited
to manufacturing defects, for those cases in which the [drug] given had been improperly
prepared, and warning defects, where a manufacturer’s failure to market a drug . . . without
adequate warnings of its dangers renders the product defective.” Snawder v. Cohen, 749 F.
Supp. 1473, 1476 (W.D. Ky. 1990); see Foister v. Purdue Pharma, L.P., 295 F. Supp. 2d 693,
705 (E.D. Ky. 2003).

5

In Kentucky, the scope of comment k is determined on a case-by-case basis. Prather, 960
F. Supp. 2d at 707; see Weiss v. Fujisawa Pharm. Co., No. CIV.A. 5:05-527-JMH, 2006 WL
3533072, at *1, *3‒4 (E.D. Ky. Dec. 7, 2006). However, as the analysis under comment k is
highly fact dependent, see Weiss, 2006 WL 3533072, at *4, and the cases relied on by
Defendants were addressing comment k in the context of motions for summary judgment, the
Court declines at this stage to dismiss House’s strict liability design defect claim based on
comment k. See id.
Defendants also argue that House’s strict liability defective design allegations are
deficient. According to Defendants, House has not identified what aspect of the drugs’ design
was allegedly defective, instead simply parroting the elements of a defective design claim by
utilizing words such as “unsafe, defective, and inherently dangerous,” “not reasonably safe as
intended to be used,” and “unreasonably dangerous when used by ordinary consumers, including
Plaintiff, as intended.” (Compl. [DN 1] ¶¶ 73‒75.) Further, Defendants contend that House fails
to allege how any defect in the drugs’ design caused her injuries. Defendants note that though
House alleges that SGLT2 inhibitors “are designed to inhibit renal glucose reabsorption with the
goal of lowering blood glucose” and that as a result, “excess glucose is not metabolized, but
instead is excreted through the kidneys in a population of consumers already at risk for kidney
disease,” (id. ¶ 30), House does not allege how this or any other aspect of the drugs’ design
supposedly increases the risk of diabetic ketoacidosis or kidney failure. Defendants also argue
that House fails to identify a specific feasible design alternative, instead making bare, conclusory
allegations that such an alternative exists. (See id. ¶¶ 34, 74.)
House responds that the allegations in the Complaint state a plausible claim for relief for
a strict liability design defect claim. House highlights a variety of allegations—including her

6

allegations that the drugs “contained unreasonably dangerous design defects and were not
reasonably safe as intended to be used,” (Compl. [DN 1] ¶ 74(a)), that the drugs “were defective
in design and formulation, making use of the drugs more dangerous than an ordinary consumer
would expect and more dangerous than other risks associated with the treatment of diabetes” (id.
¶ 74(b)), that Defendants “could have designed their respective [drugs] to make them less
dangerous,” (id. ¶ 83), and that there “was a practical, technically feasible safer alternative
design that would have prevented the harm Plaintiff suffered without substantially impairing” the
function of the drugs, (id. ¶ 84)—and contends that they are not merely formulaic recitation of
elements.
In Fleming v. Janssen Pharmaceuticals, Inc., --- F. Supp. 3d ----, 2016 WL 3180299
(W.D. Tenn. 2016), the court found that a complaint’s conclusory allegations of defectiveness
were insufficient to state a defective design claim.

The plaintiff in Fleming alleged that

Invokana’s design causes excess glucose excretion by the kidneys and that his injury was caused
by the drug’s “unreasonably dangerous and defective characteristics.” Id. at *6‒7. The Fleming
court rejected the allegations as insufficient to state a plausible design defect claim, stating that
“[t]he Court cannot reasonably infer from the generic description of SGLT2 inhibitors’
mechanism of action that Invokana was defective or unreasonably dangerous.” Id. at *7.
Just as in Fleming, the only assertion in the instant case as to how the product design was
defective is a description of how the class of products works. (Compare Compl. [DN 1] ¶ 30
(“SGLT2 inhibitors, including INVOKANA, INVOKAMET and FARXIGA, are designed to
inhibit renal glucose reabsorption with the goal of lowering blood glucose. As a result, excess
glucose is not metabolized, but instead is excreted through the kidneys of a population of
consumers already at risk for kidney disease.”), with Fleming, 2016 WL 3180299, at *7 (quoting

7

Compl. ¶ 24 (identical except for the reference to Invokamet and Farxiga)).) The Court here
“cannot reasonably infer from the generic description of SGLT2 inhibitors’ mechanism of action
that [Farxiga] was defective or unreasonably dangerous.” Fleming, 2016 WL 3180299, at *7;
see also Brazil, 2016 WL 4844442, at *9 (dismissing strict liability defect design claims where
the plaintiff, who had pleaded facts that Invokana may cause diabetic ketoacidosis, had not
alleged any specific design or manufacturing defect or tied diabetic ketoacidosis to any design or
manufacturing defect). The rest of House’s allegations are largely legal conclusions that are
insufficient to meet the Twombly-Iqbal standard. Accordingly, House has failed to allege facts
sufficient to state a strict liability design defect claim. Therefore, the Court dismisses without
prejudice House’s Count I as to all remaining Defendants.
b. Strict Liability Failure to Warn Claim
House’s claims for failure to warn also fail for similar reasons. To plead a failure to warn
claim in a prescription drug case, a plaintiff must allege facts for the Court to infer that (1) the
manufacturer failed to provide her prescribing physician with adequate warnings about risks of
which it knew or should have known and (2) the inadequate warnings proximately caused her
injuries. Prather, 960 F. Supp. 2d at 708‒09 (citations omitted). House contends that the
Complaint adequately alleges how the warnings provided were defective and how they caused
her injury. In Fleming, the court dismissed the plaintiff’s almost identical failure-to-warn claim
as insufficiently pled, as the “[p]laintiff has made only conclusory statements as to the failure of
Defendants to warn about the dangers of Invokana.” 2016 WL 3180299, at *7. So too, here.2
Accordingly, Count II of the Complaint is dismissed without prejudice against all remaining
Defendants.
2

Of the paragraphs in the Complaint cited by House as evidence of her sufficient pleading, only paragraph 30,
which is the generic description of SGLT2 inhibitors’ mechanism of action, is a specific factual allegation. But this
allegation, without further factual allegations, does not support a failure-to-warn claim.

8

2. Negligence-based Claims (Counts III, IV, & IX)
Under Kentucky law, to succeed on a negligence claim, House must establish that: (1)
Defendants owed a duty of care to House; (2) Defendants breached its duty; and (3) the breach
proximately caused House’s damages.

Bosch, 13 F. Supp. 3d at 741 (citing Mullins v.

Commonwealth Life Ins. Co., 839 S.W.2d 245, 247 (Ky. 1992)). Count III of the Complaint
asserts a claim for gross negligence, Count IV asserts a claim for negligence, and Count IX
asserts a clam for negligent design.3 The parties appear to agree that these claims are based on
the same foundation as House’s strict liability design defect and failure-to-warn claims. As the
Court has found that House has failed to allege sufficient facts in support of her design defect
and failure-to-warn claims, see supra Section II.B.1, the Court concludes that House’s
negligence-based claims likewise fail to the extent House alleges negligence in the designing
and failing to warn. Accordingly, Count IV is dismissed without prejudice to that extent.
House’s claim for gross negligence (Count III) is premised on the same insufficient
allegations that underpin her strict liability design defect and failure-to-warn claims. Count III
therefore fails for the same reasons that mandate dismissal of the strict liability claims.
Accordingly, Count III of the Complaint is dismissed without prejudice.
Defendants also challenge House’s negligence-based claims to the extent they allege
negligence in the manufacturing or testing of Farxiga. Defendants contend that House “has not
included any factual allegations as to how Defendants breached any such duty or how any such
breach caused her purported injuries” and therefore that such a claim is insufficiently pled. See
Bosch, 13 F. Supp. 3d at 741–42 (dismissing negligent manufacture claim because plaintiffs
failed to “allege how their specific [intrauterine contraceptive] devices were defective due to

3

The Court will address House’s negligent misrepresentation claim (Count VIII) in its own section. See infra
Section II.B.6.

9

manufacturing” and otherwise failed to assert “any facts to support” their conclusory
allegations); see also Guidry v. Janssen Pharmaceuticals, Inc., 2016 WL 633673, at *4 (E.D. La.
Feb1 17, 2016) (dismissing manufacturing defect claim where plaintiff failed to allege any facts
as how the Invokana she ingested deviated from the intended design). In her brief, House does
not address how Defendants breached a duty in the manufacture of the drugs, nor does she
dispute that her negligence claim cannot be premised on a failure to properly test the drugs. See
Allstate Ins. Co. v. Glob. Med. Billing, Inc., 520 F. App’x 409, 412 (6th Cir. 2013) (a party’s
failure to respond to or oppose an issue raised in a Rule 12(b)(6) motion may result in waiver of
the issue). Further, Kentucky courts have treated failure to properly test pharmaceutical drugs as
subsumed by a failure to warn claim. See Baird v. Bayer Healthcare Pharmaceuticals, Inc., No.
CIV.A. 6:13-077-DCR, 2013 WL 5890253, at *2 (E.D. Ky. Oct. 31, 2013); Bosch, 13 F. Supp.
3d at 747. Accordingly, House’s Count IV is dismissed without prejudice to the extent it is a
negligent manufacture or testing claim.
“In Kentucky, a plaintiff can bring a defective design claim under a theory of strict
liability or negligence, the foundation of both theories being that the product is ‘unreasonably
dangerous.’” Prather, 960 F. Supp. 2d at 712. House’s negligent design claim (Count IX) is
premised on the same insufficient allegations that underpin her strict liability design defect
claim—that the drugs are unreasonably dangerous and should have been designed differently.
(Compare Compl. [DN 1] ¶¶ 217, 222–223, with id. ¶¶ 71, 73, 83–84, 79, 89.) Count IX
therefore fails for the same reasons that mandate dismissal of the strict liability design defect
claim, as House has not alleged how the drugs were defectively designed. See Bosch, 13 F.
Supp. 3d at 741–43 (dismissing negligent design and strict liability design defect claims because
plaintiff failed to allege how intrauterine contraceptive device was “defectively designed” or how

10

they were “defective”). Accordingly, House’s negligent design defect claim (Count IX) is
dismissed without prejudice.4
3. Breach of Warranty Claims (Counts V & VI)
Count V of the Complaint asserts a claim for breach of express warranty, and Count VI
asserts a claim for breach of implied warranty.
a. Breach of Express Warranty
Express warranties in Kentucky are governed by KRS 355.2‒313, which states that an
express warranty is created where: (1) the seller makes an affirmation of fact or promise; (2) that
relates to the goods; and (3) becomes part of the basis of the bargain between the parties. KRS
355.2‒313(1)(a). House asserts that Defendants “expressly represented” that the drugs were
“safe and fit for their intended purposes,” were of “merchantable quality,” “did not produce any
dangerous side effects,” were “found to be safe and effective for the treatment of diabetes,” and
“include incomplete prescribing information that purports, but fails, to include the true risks
associated with use” of the drugs. (Compl. [DN 1] ¶¶ 152–156.) House further alleges that these
representations by Defendants constituted “affirmations of fact or promises made by the seller to
the buyer which related to the goods and became part of the basis of the bargain.” (Id. ¶ 157.)
According to House, Defendants breached these express warranties because the drugs are not
safe, have numerous and serious side effects, and cause severe and permanent injuries, House
and her physicians relied on such express warranties, and she suffered damages as a result. (Id.
¶¶ 158–165.)
The Court concludes these allegations are insufficient because they offer nothing more
than “a formulaic recitation” of the elements of a claim for breach of express warranty,

4

Because the strict liability and negligent design defect claims are dismissed under Rule 12(b)(6), the Court need
not address Defendants’ assertion that House’s defective design claims are preempted by federal law.

11

Twombly, 550 U.S. at 555. Although House refers to an “express warranty,” she has not
detailed any particular affirmation or promise that formed part of the basis of the bargain with
Defendants.5 See Corwin v. Conn. Valley Arms, Inc., 74 F. Supp. 3d 883, 892 (N.D. Ill. 2014)
(allegations that bullets “were reasonably fit for their intended uses without endangering human
safety . . . are insufficient because they offer nothing more than ‘a formulaic recitation’ of the
elements” of an express warranty claim); cf. Naiser v. Unilever U.S., Inc., 975 F. Supp. 2d 727,
733–36, 741 (W.D. Ky. 2013) (finding complaint alleged express warranty where it identified
specific factual misrepresentations, such as representations that “the product’s effects would last
no longer than 30 days,” when it “could be expected to last for months,” and that “the product
contained no formaldehyde,” when it actually “contained a chemical known to release
formaldehyde upon its use”). Further, a determination that a drug is safe and effective—a
determination which is made by the FDA as part of its new drug approval process—is not, on its
own, sufficient to create an express warranty. See, e.g., In re Meridia Prods. Liab. Litig., 328 F.
Supp. 2d 791, 818 (N.D. Ohio 2004) (finding that assurances that a prescription drug was “safe
and effective” was not sufficiently clear to create an express warranty), aff’d sub nom. Meridia
Prods. Liab. Litig. v. Abbott Labs., 447 F.3d 861 (6th Cir. 2006); In re Avandia Mktg. Sales
Practices & Prods. Liab. Litig., 588 F. App’x 171, 175–78 (3d Cir. 2014) (same). And House
cannot base her express warranty claim on allegations that the Prescribing Information fails to
include the “true risks” of the drugs and does not contain “adequate information,” (Compl. [DN
1] ¶¶ 153, 155.) An express warranty is created by an “affirmation of fact or promise,” not an
5

Defendants also contend that House’s breach of express warranty claim fails because House cannot establish that
she is in privity with Defendants. See, e.g., Bland v. Abbott Labs., Inc., No. 3:11-CV-430-H, 2012 WL 524473, at
*1 & n.1 (W.D. Ky. Feb. 16, 2012) (dismissing breach of express warranty claim in prescription drug case for lack
of privity and confirming that “Kentucky courts have consistently affirmed Kentucky’s [Uniform Commercial Code]
requires privity”). This Court in Bosch denied a motion to dismiss an express warranty claim based on lack of
privity. In so doing, the Court relies on its previous decision in Naiser v. Unilever U.S., Inc., 975 F. Supp. 2d 727
(W.D. Ky. 2013), for the proposition that “a manufacturer could nonetheless create privity in favor of an ultimate
consumer who was the intended beneficiary of the manufacturer’s express warranties.” 13 F. Supp. 3d at 748.

12

omission. See KRS 355.2–313. Because House has not made allegations sufficient to describe
an express warranty, the Court dismisses without prejudice her express warranty claim (Count
V). The Court does not address at this point the other arguments made by Defendants in support
of dismissal of this claim.
b. Breach of Implied Warranty
Defendants argue that House’s claim for breach of implied warranty (Count VI) must be
dismissed because there is no privity of contract between the parties. Under Kentucky law,
privity of contract is an essential element of a claim for breach of an implied warranty. Baird,
2013 WL 5890253, at *3; Brown Sprinkler Corp. v. Plumbers Supply Co., 265 S.W.3d 237, 240
(Ky. Ct. App. 2007). “As a rule, privity of contract does not extend beyond the buyer-seller
setting, and an intervening purchaser destroys privity.” Gaunce v. CL Med. Inc., No. 5: 14-346DCR, 2015 WL 893569, at *2 (E.D. Ky. Mar. 2, 2015) (citing Compex Int’l Co. v. Taylor, 209
S.W.3d 462, 465 (Ky. 2006)).
House argues that her implied warranty claim survives because she alleges in the
Complaint that privity exists between her and Defendants. (See Compl. [DN 1] ¶ 173 (“Upon
information and belief, Plaintiff and/or her health care professionals were at all relevant times in
privity with the Invokana and the Farxiga Defendants.”).) Defendants counter that the allegation
in paragraph 173 is a non-binding, conclusory allegation and that House has alleged no facts to
support the conclusion that privity existed. The Court agrees. In Bosch, the defendant argued
that the plaintiffs’ claims failed because the plaintiffs were not in privity of contract with the
defendant. 13 F. Supp. 3d at 750. The plaintiffs “respond[ed] with one sentence, noting that
Paragraph 242 of their Amended Complaint alleges that they ‘are in the required privity with

13

Defendant.’” Id. The court found, however, “that this allegation in Paragraph 242 contradicts
the factual allegations in the Amended Complaint.” Id. The court stated:
Plaintiffs have alleged that their Mirena® devices were inserted by
healthcare providers during office visits. They have not alleged
facts indicating that they purchased the Mirena® devices from
Bayer. Therefore, Plaintiffs’ legal conclusion regarding privity is
not entitled to a presumption of truth, see Espinosa[ v. Louisville
Metro Gov’t, No. CIV.A. 10-354-JBC], 2011 WL 2295055, at *1
[(E.D. Ky. June 10, 2011)]; Iqbal, 556 U.S. at 681, and the Court
holds that Plaintiffs are not in a direct buyer-seller relationship
with Bayer.
Id. (citations omitted).
Similarly, here, the Court finds that House’s legal conclusion regarding privity is not
entitled to a presumption of truth. See Iqbal, 556 U.S. at 678 (“[T]he tenet that a court must
accept as true all of the allegations contained in a complaint is inapplicable to legal
conclusions.”). House alleges that the drugs are prescription drugs that were prescribed to her by
her doctors. (Compl. [DN 1] ¶¶ 42, 48, 54.) She does not allege facts indicating that she
purchased Farxiga from Farxiga Defendants. Because the Complaint fails to show that House
and Defendants were in a buyer-seller relationship, House is not in privity with Defendants. See
Bosch, 13 F. Supp. 3d at 749–50. Accordingly, House’s breach of implied warranty claim
(Count VI) is dismissed without prejudice.
4. Violation of KCPA (Count XII)
Count XII of the Complaint alleges a claim for violation of the Kentucky Consumer
Protection Act. The KCPA declares unlawful “[u]nfair, false, misleading, or deceptive acts or
practices in the conduct of any trade or commerce.” KRS 367.170(1). Here, House asserts that
Defendants “falsely represented” that the drugs “are approved for use to assist diabetes patients
with weight loss,” that the drugs “are approved for treating cardiovascular conditions, such as

14

high blood pressure,” and that the drugs “were safe for treating type 2 diabetes without warning
consumers of serious side effects, including diabetic ketoacidosis, kidney failure, kidney
damage, and kidney infection.” (Compl. [DN 1] ¶ 267(a)–(c).) Further, House alleges that
Defendants “misled consumers” into believing that the drugs “had been adequately developed,
researched, designed, tested, manufactured, distributed[,] and sold so as to not produce serious
injuries, such as those suffered by Plaintiff, which are not warned of.” (Id. ¶ 267(d).)
The KCPA provides a private right of action for “[a]ny person who purchases or leases
goods or services primarily for personal, family or household purposes and thereby suffers any
ascertainable loss of money or property, real or personal” as a result of a violation of KRS
367.170. KRS 367.220(1). Accordingly, the KCPA requires that privity of contract exist
between the parties. See Skilcraft Sheetmetal, Inc. v. Ky. Mach., Inc., 836 S.W.2d 907, 909 (Ky.
Ct. App. 1992). Defendants urge the Court to dismiss House’s KCPA claims because there is no
privity of contract between the parties. House responds by referencing her breach of implied
warranty argument.

The Court dismissed the implied warranty claim because the Complaint

fails to show that House was in privity with Defendants. See supra Section II.B.3.b. As the
Complaint fails to show that House was in privity with Defendants, the KCPA provides no
recovery. Accordingly, the Court dismisses without prejudice House’s claim under the KCPA
(Count XII).
5. Fraud-based Claims (Counts VI, X, & XI)
Count VI of the Complaint alleges a claim for fraudulent misrepresentation, Count X
alleges a claim for fraudulent concealment, and Count XI alleges a claim for fraud. Each of
these Counts makes similar accusations that Defendants knowingly hid the dangers of Farxiga
from the health care community and the public at large. A plaintiff asserting a fraudulent

15

misrepresentation claim under Kentucky law must establish six elements: “(1) the defendant
made a material representation to the plaintiff; (2) the representation was false; (3) the defendant
knew the representation to be false or made it with reckless disregard for its truth or falsity; (4)
the defendant intended to induce the plaintiff to act upon the misrepresentation; (5) the plaintiff
reasonably relied upon the misrepresentation; and (6) the misrepresentation caused injury to the
plaintiff.” Giddings & Lewis, Inc. v. Indus. Risk Insurers, 348 S.W.3d 729, 747 (Ky. 2011)
(citing Flegles, Inc. v. TruServ Corp., 289 S.W.3d 544, 549 (Ky. 2009)). To satisfy Rule 9(b),
the complaint must: “(1) point to a particular allegedly fraudulent statement; (2) identify who
made the statement; (3) plead when and where the statement was made; and (4) explain what
made the statement fraudulent.” Republic Bank & Trust Co. v. Bear Stearns & Co., 683 F.3d
239, 253 (6th Cir. 2012).
Reviewing House’s fraudulent misrepresentation claim, the Court finds that House fails
to allege sufficient facts for the claim to survive. House contends that the allegations in her
Complaint meet the requirements of Rule 9(b). She does not state what specific statements are
allegedly fraudulent, though she does string cite multiple paragraphs in the Complaint as her
“pleading the content of Defendants' misrepresentations.” A thorough review of the Complaint,
however, reveals only vague representations, such as that the drugs “had been tested and found
to be safe and effective for the treatment of diabetes,” (id. ¶ 188(a)), and “were safer than other
alternative medications,” (id. ¶ 188(b)). This is not enough under Rule 9(b). See Gaunce, 2015
WL 893569, at *2.

House does not specify the time, nature, and place of the alleged

misrepresentation, and no fraudulent communication or its source is identified. Nor does the
Complaint identify who made the allegedly fraudulent statements, beyond the logical inference
that the Farxiga Defendants made the allegedly fraudulent statements about Farxiga.

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The

Complaint does not allege when or where the alleged statements were made, beyond highly
generalized allegations. See Republic Bank, 683 F.3d at 245 (“Nowhere does it indicate when,
where, or to whom the alleged misstatement was made. This defect is fatal. The claim may not
proceed because Republic’s complaint does not pass muster under Rule 9(b).”). Further, as it
fails to allege what statement is at issue, the Complaint does not explain, with supporting factual
detail, how and why it was fraudulent. Accordingly, House’s allegations are insufficient under
Rule 9(b) and the Court dismisses House’s fraudulent misrepresentation claim in Count VII
without prejudice.
“Fraud by omission is not the same, at law, as fraud by misrepresentation, and has
substantially different elements.” Republic Bank, 683 F.3d at 254–55 (quoting Rivermont Inn,
Inc. v. Bass Hotels & Resorts, Inc., 113 S.W.3d 636, 641 (Ky. Ct. App. 2003)). “Unlike fraud by
misrepresentation, which hinges on an affirmative misstatement, ‘a fraud by omission claim is
grounded in a duty to disclose.’” Id. at 255 (quoting Giddings & Lewis, 348 S.W.3d at 747). A
plaintiff asserting a fraudulent concealment (or fraud by omission) claim under Kentucky law
must establish four elements: “(1) the defendant had a duty to disclose the material fact at issue;
(2) the defendant failed to disclose the fact; (3) the defendant’s failure to disclose the material
fact induced the plaintiff to act; and (4) the plaintiff suffered actual damages as a consequence.”
Giddings & Lewis, 348 S.W.3d at 747. “[A] party asserting a fraudulent concealment (or fraud
by omission) claim must specify ‘the who, what, when, where, and how’ of the alleged
omission.” Gaunce, 2015 WL 893569, at *2 (quoting Republic Bank, 683 F.3d at 255–56).
Therefore, to satisfy Rule 9(b), the complaint “must plead: (1) precisely what was omitted; (2)
who should have made a representation; (3) the content of the alleged omission and the manner

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in which the omission was misleading; and (4) what [Defendants] obtained as a consequence of
the alleged fraud.” Republic Bank, 683 F.3d at 255–56.
Like her fraudulent misrepresentation claim, House also fails to allege sufficient facts
regarding her fraudulent concealment claim to satisfy Rule 9(b). Though House alleges that
Defendants concealed “information about the severity of the substantial risks of using such
drugs” and “information which demonstrated that [the drugs] were not safer than alternatives
available on the market,” (Compl. [DN 1] ¶ 231; see id. ¶ 249 (fraud claim)), she does not allege
which Defendants concealed this information or when this alleged omission occurred. She
alleges that Defendants committed fraud in unspecified “labeling, advertising, marketing
materials, detail persons, seminar presentations, publications, notice letters, and regulatory
submissions,” without identifying or referencing a single particular document or statement. (Id.
¶ 231.) As in Republic Bank, the Complaint’s “vague allegations simply do not suffice under
Rule 9(b)” because they discuss the alleged practices “only at a high level of generality.” 683
F.3d at 256 (affirming dismissal of fraud by omission claim). Accordingly, the Court dismisses
without prejudice House’s fraudulent concealment claim (Count X) and fraud claim (Count XI)
under Rule 9(b).
6. Negligent Misrepresentation (Count VIII)
Under Kentucky law, a plaintiff must identify the false or misleading information
provided by the specific defendant. See Gaunce, 2015 WL 893569, at *2–3; Giddings & Lewis,
348 S.W.3d at 746. Additionally, a plaintiff must demonstrate: (1) the subject plaintiff was a
reasonably foreseeable recipient of the information; (2) she justifiably relief on the information;
(3) she exercised reasonable care in relying on the information; and (4) the false statements

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allegedly made by the defendant were a proximate cause of the plaintiff’s damage. Presnell
Constr. Managers, Inc. v. EH Constr., LLC, 134 S.W.3d 575, 580 (Ky. 2004).
A plaintiff alleging a negligent misrepresentation claim under Kentucky law must meet
the heightened pleading requirements of Rule 9(b). Republic Bank, 683 F.3d at 247‒48. Like
her fraudulent concealment and fraudulent misrepresentation claims, House’s allegations fail to
state a claim for negligent misrepresentation under Rule 9(b). The Complaint does not specify
the statements in question, identify the speaker, or allege, beyond highly generalized allegations,
when or where the alleged statements were made.

It therefore fails to meet Rule 9(b)’s

particularity requirements. See, e.g., Gaunce, 2015 WL 893569, at *2–3 (dismissing fraud,
fraudulent concealment, and negligent misrepresentation claims where plaintiffs failed to
“specify the time, nature, and place of the communications or omission” and the complaint
discussed fraudulent actions at a “high level of generality, insufficient to sustain claims of fraud
and fraudulent concealment under Rule 9(b)’s heightened pleading standard”). Accordingly,
House’s negligent misrepresentation claim (Count VIII) is dismissed without prejudice.
7. Leave to Amend Complaint
Finally, in her response to the motion to dismiss, Plaintiff requests in the alternative that,
if the Court finds the complaint defective in any way, she be granted leave to amend the
complaint. (Pl.’s Response [DN 26] at 16.) The Court does not consider this request an
appropriate motion to amend. If Plaintiff wants the Court to consider such a request, she should
submit a properly supported motion, with a copy of her amended complaint attached, no later
than twenty-one (21) days from the entry of this Memorandum Opinion and Order. Thereafter,
Defendants may file their responses, and the Court will address the merits of Plaintiff’s motion.

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III. CONCLUSION
For the reasons set forth above, IT IS HEREBY ORDERED that Defendants BristolMyers Squibb Co. and AstraZeneca Pharmaceuticals LP’s Motion to Dismiss [DN 15] is
GRANTED. If Plaintiff House wants the Court to entertain a motion to amend the complaint,
IT IS HEREBY ORDERED that she shall submit her motion and amended complaint no later
than twenty-one (21) days from the entry of this Memorandum Opinion and Order.

December 29, 2016

cc:

Counsel of Record

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