Thompson v. Allergan USA, Inc. et al

Filing 54

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that Defendants' motion to dismiss Plaintiff's first amended complaint is GRANTED. (Doc. No. 15.) A separate Judgment shall accompany this Memorandum and Order. Signed by District Judge Audrey G. Fleissig on 1/28/2014. (NCL)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
FANCINE THOMPSON, on behalf of herself
and all others similarly situated,

)
)
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Plaintiff,
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v.
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ALLERGAN USA, INC., ALLERGAN INC., )
and ALLERGAN SALES, LLC,
)
)
Defendants.
)

Case No. 4:13CV00030 AGF

MEMORANDUM AND ORDER
This putative class action is before the Court on Defendants’ motion (Doc. No. 15)
to dismiss Plaintiff’s first amended complaint pursuant to Federal Rule of Civil Procedure
12(b)(6) for failure to state a claim upon which relief can be granted, and alternatively, on
federal preemption grounds. The Court heard oral argument on the motion on December
3, 2013, and thereafter received supplemental briefing by the parties. For the reasons set
forth below, the Court concludes that Plaintiff has failed to state a claim under Missouri
law. The Court concludes, alternatively, that Plaintiff’s claims, which are all state law
claims, are preempted by federal law.
BACKGROUND
Restasis is a prescription ophthalmic medication manufactured and sold by
Defendants for the treatment of chronic dry eye. The medication is supplied in
preservative-free vials that also serve as dispensers. Each vial of Restasis contains
approximately 14 drops (400 microliters) of medicine, while the recommended dosage for
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Restasis is one drop (28 microliters) twice a day. Restasis is packaged with an insert that
states: “the emulsion from one individual single-use vial is to be used immediately after
opening for administration to one or both eyes, and the remaining contents should be
discarded after administration.”
Plaintiff Francine Thompson brings this class action individually and on behalf of a
class of Missouri consumers who purchased Restasis. Plaintiff’s complaint is based on
Defendants’ alleged practice of “overfilling” Restasis dispensers so that consumers are
forced to purchase more Restasis than they can use. Plaintiff alleges that Defendants set
the price of the Restasis vials based upon the amount of medication in each vial and that if
Defendants included smaller quantities of medication in the vials, the prescriptions would
be less expensive and consumers would not have to spend so much on the medication.
According to Plaintiff, Defendants increase profits by filling vials of Restasis with more
medication than they knew consumers could use. These alleged profits, Plaintiff
contends, constitute an economic harm to Plaintiff because there is no valid reason for
Defendants to excessively overfill Restasis vials.
Count I of Plaintiff’s first amended complaint alleges violation of the Missouri
Merchandising Practices Act (“MMPA”), which provides that “[t]he act, use or
employment by any person of any deception, fraud, false pretense, false promise,
misrepresentation, unfair practice or the concealment, suppression, or omission of any
material fact in connection with the sale or advertisement of any merchandise in trade or
commerce . . . is declared to be an unlawful practice.” Mo. Rev. Stat. § 407.020. Count
II claims that Defendants were unjustly enriched by their practice of overfilling Restasis
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dispensers, and Count III, for money had and received, asserts that Defendants have
received money from “deceptive and unfair practices.” For relief, Plaintiff seeks actual
damages to herself and class members, punitive damages, and declaratory and injunctive
relief enjoining Defendants from continuing their practice of overfilling Restasis
dispensers.
In support of their motion to dismiss the complaint, Defendants submit a
Memorandum from the Federal Drug Administration (“FDA”), dated December 11, 2002
(Doc. No. 16-1), available at the FDA’s public website. The Memorandum was related to
the New Drug Application (“NDA”) for Restasis. It addresses the FDA’s concern that
due to the overfill in each vial, patients may save the vial after a single dose, and use the
remaining drug in the interest of saving money. The Medical Officer commented that the
“additional volume” in each vial of Restasis “assists the patient in administering the correct
amount of drug product” and “is also required for product stability”; and that the risk of
using a vial beyond a single dose was “adequately communicated to practitioners, patients
and caregivers within the Restasis package insert.” (Doc. No. 16-1 at 4.)
Plaintiff also submits FDA Guidelines from January 2001, also publically available
online, in which the FDA states that a “decrease in the fill volume” of a drug product
“involves a change to the specifications and must be submitted in a prior approval
supplement” for FDA approval. (Doc. No. 39-1 at 12.)

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ARGUMENTS OF THE PARTIES
Failure to State a Claim
Defendants first argue that Plaintiff’s claims, which are based on the assertion that
there is no valid reason for the overfill, do not satisfy the plausibility standard of Bell
Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), in light of the FDA’s opinion that the
overfill assists patients in administering the correct dosage and is required for product
stability. Defendants next argue that Plaintiff has not met the heightened pleading
requirement of Federal Rule of Civil Procedure 9(b) for claims involving fraud.
Defendants also argue that Plaintiff’s complaint fails to allege an ascertainable loss, as
required for a claim under the MMPA. Finally, Defendants argue that Plaintiff’s equitable
claims for unjust enrichment and money had and received fail because they are based on
the same nonactionable conduct, Defendants were not unjustly enriched by Plaintiff’s
purchase of Restasis, and Plaintiff has an adequate remedy at law.
In response, Plaintiff argues that the FDA Memorandum, and Defendants’
interpretation of it, are beyond the pleadings and therefore have no bearing on whether the
complaint satisfies federal pleading requirements. Further, Plaintiff argues that Rule
9(b)’s heightened pleading requirements do not apply because the complaint does not
allege fraud. Plaintiff contends that she states a cause of action under the MMPA because
she sufficiently pled that Defendants’ conduct was unfair, that the conduct caused an
ascertainable loss, and that there was a causal connection between the conduct and the
alleged loss. Plaintiff further argues that Defendants’ profits and benefits were to
Plaintiff’s detriment and Defendants were thereby unjustly enriched. Finally, Plaintiff
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argues that she states a claim for money had and received based on Defendants’ deceptive
and unfair practices, which money in equity and good conscience ought to be returned to
consumers.
Federal Preemption
Defendants further argue that Plaintiff’s claims are preempted by federal law
because Defendants are unable to reduce the amount of medicine in each Restasis vial
without prior FDA approval. Plaintiff argues that Defendants have not met their burden
of establishing the affirmative defense of federal preemption. This issue has been the
subject of supplemental memoranda by the parties in light of the United States Supreme
Court’s recent decision in Mutual Pharmaceutical Co. v. Barlett, 133 S. Ct. 2466 (2013).
Plaintiff argues that whether or not the FDA would have approved a reduction in drops per
vial is a factual issue that Defendants have not established. Furthermore, according to
Plaintiff, it is unclear whether any reduction would be a “major change” requiring prior
FDA approval.
DISCUSSION
Failure to State a Claim
To survive a motion to dismiss, a complaint must contain sufficient factual matter,
which, if accepted as true, states “‘a claim to relief that is plausible on its face.’” Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). Although a
complaint need not contain “detailed factual allegations,” it must contain facts with enough
specificity “to raise a right to relief above the speculative level.” Twombly, 550 U.S. at
555. “Threadbare recitals of the elements of a cause of action, supported by mere
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conclusory statements,” will not pass muster. Iqbal, 556 U.S. at 678. In sum, this
standard “calls for enough facts to raise a reasonable expectation that discovery will reveal
evidence of [the claim].” Twombly, 550 U.S. at 556.
The reviewing court must accept the plaintiff’s factual allegations as true and
construe them in the plaintiff’s favor, but is not required to accept the legal conclusions
the plaintiff draws from the facts alleged. Iqbal, 556 U.S. at 678; see also Retro
Television Network, Inc. v. Luken Comm’cns, LLC, 696 F.3d 766, 768-69 (8th Cir. 2012).
The Court must ‘“draw on its judicial experience and common sense,’” and consider the
plausibility of the plaintiff’s claim as a whole, not the plausibility of each individual
allegation. See Zoltek Corp. v. Structural Polymer Grp., 592 F.3d 893, 896 n.4 (8th Cir.
2010) (citation omitted)).
When ruling on a motion to dismiss under Rule 12(b)(6), the Court generally may
not consider materials outside the pleadings. Noble Sys. Corp. v. Alorica Cent., LLC, 543
F.3d 978, 982 (8th Cir. 2008). It may, however, consider public records or materials that
are necessarily embraced by the pleadings. Id; Stahl v. U.S. Dep’t of Agric., 327 F.3d 697,
700 (8th Cir. 2003). The Court concludes that it may consider the publically-available
FDA Memoranda submitted by the parties.
The FDA Memorandum by Defendants, however, does not necessarily render
implausible the basis for Plaintiff’s claim. The memorandum speaks only to why some
additional volume is necessary beyond the volume needed for two drops. It remains
plausible that some volume beyond the volume needed for two drops, but less than 14
drops, may assist patients in administering the correct amount of the drug and maintain
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product stability. The FDA memorandum, therefore, in and of itself, does not render
Plaintiff’s claim implausible.
To state a claim under the MMPA, Plaintiff must show that (1) she purchased the
merchandise in question; (2) she purchased the merchandise for personal, family, or
household use; (3) she suffered an ascertainable loss; and (4) the ascertainable loss was the
result of an unfair practice. Mo. Rev. Stat. § 407.025(1); Polk v. KV Pharm. Co., No.
4:09cv00588 SNLJ, 2011WL 6257466, at *4 (E.D. Mo. Dec. 15, 2011). It is undisputed
that Plaintiff purchased Restasis for personal, family, or household use. The Court must
therefore determine whether or not Plaintiff suffered an ascertainable loss.
An ascertainable loss of money or property is an essential element of a cause of
action brought under the MMPA. Grawitch v. Charter Commc’ns, Inc., No.
4:12CV01990 AGF, 2013 WL 253534, at *3 (E.D. Mo. Jan. 23, 2013). Missouri courts
apply the “benefit of the bargain” rule when determining if a plaintiff has suffered an
ascertainable loss under the MMPA. Polk, 2011 WL 6257466, at *5 (citing Sunset Pools
of St. Louis, Inc. v. Schaefer, 869 S.W.2d 883, 886 (Mo. Ct. App. 1994)). The “benefit of
the bargain” rule awards a prevailing party the difference between the value of the product
as represented and the actual value of the product as received. Id.
The Court concludes that Plaintiff received the “benefit of the bargain” and has thus
failed to claim an “ascertainable loss” under the MMPA. Plaintiff concedes that,
according to the label, the dosage for Restasis is two drops, and that patients are instructed
to discard the vial immediately after use. Plaintiff has thus not alleged that the Restasis
was anything other than what it has always purported to be — a single-use vial.
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Accordingly, Plaintiff has failed to allege that she did not receive the benefit of the
medication for which she bargained. In short, Plaintiff bargained for a single dosage of
Restasis, she received what was always purported to be a single dosage, and the medication
performed as a single dosage.
Plaintiff cites Plubell v. Merck & Co., 289 S.W.3d 707 (Mo. Ct. App. 2009), in
arguing that the benefit-of-the-bargain rule only applies in misrepresentation cases.
While Plubell was a misrepresentation case, Polk specifically discussed Plubell in
applying the rule to a non-misrepresentation case under the MMPA. Polk, 2011 WL
6257466, at *5. The Court finds nothing in Plubell that limits the benefit-of-the-bargain
test to a subset of MMPA claims that involve misrepresentation. Indeed, the fact that
Plaintiff does not claim that Defendants made any type of misrepresentation supports the
Court’s conclusion that Plaintiff suffered no ascertainable loss.
Even if the benefit-of-the-bargain rule were inapplicable, Plaintiff has failed
plausibly to claim an ascertainable loss under the MMPA. Plaintiff’s claimed loss is
based on the allegation “upon information and belief” that Defendants “set the price of the
Restasis vials based upon the amount of medication in each vial.” And “[i]f . . .
Defendants included smaller quantities of medication in the Restasis vials, the
prescriptions would be less expensive and consumers would not have to spend so much on
the medication.” But Plaintiff fails to set forth a plausible case to support this theory.
Even assuming that less medication would produce a less expensive product for the
consumer, the courts are not regulators of the fair market price of products.

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Plaintiff’s reliance on Goldsmith v. Allergan, Inc., CV 09-7088 PSG EX, 2011 WL
2909313 (C.D. Cal. May 25, 2011), is not only unavailing, but also illustrates the flaw in
Plaintiff’s theory of recovery. In that case the court held that the plaintiff stated a claim
against a drug manufacturer under a similar state statute where the defendant marketed
single-use Botox vials as a “multi-use” product. Here, there is no allegation that
Defendants in any way misrepresented what it was selling.
In sum, the allegation that including smaller quantities of medication in the Restasis
vials would make it less expensive to consumers is without sufficient logical or factual
foundation. Plaintiff has therefore failed to meet the ascertainable loss requirement for
stating a claim under the MMPA. Similarly, her claims for unjust enrichment and money
had and received also fail. See Miller v. Horn, 254 S.W.3d 920, 924 (Mo. Ct. App. 2008)
(stating that an element of unjust enrichment is “that the enrichment was at the expense of
the plaintiff”); Springfield Land & Dev. Co. v. Bass, 48 S.W.3d 620, 631 (Mo. Ct. App.
2001) (stating that an action for money had and received seeks to reach monies which
ought to be paid to plaintiff).
Federal Preemption
The Supremacy Clause establishes that federal law “shall be the supreme Law of the
Land . . . any Thing in the Constitution or Laws of any State to the Contrary
notwithstanding.” U.S. Const., Art. VI, cl. 2. “Where state and federal law directly
conflict, state law must give way. . . . [S]tate and federal law conflict where it is impossible
for a private party to comply with both state and federal requirements.” PLIVA, Inc. v.
Mensing, 131 S. Ct. 2567, 2577 (2011) (citations omitted); accord Freightliner Corp. v.
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Myrick, 514 U.S. 280, 287 (1995) (cited with approval in PLIVA, 131 S. Ct. at 2577).
“The question for ‘impossibility’ is whether the private party could independently do under
federal law what state law requires of it.” PLIVA, 131 S. Ct. at 2579. “[W]hen a party
cannot satisfy its state duties without the Federal Government’s special permission and
assistance, which is dependent on the exercise of judgment by a federal agency, that party
cannot independently satisfy those state duties for pre-emption purposes.” Id. at 2581.
In PLIVA, the plaintiff contended that a generic drug manufacturer had breached a
state tort-law duty to provide an adequate warning label. Federal law demanded that
generic drug labels be the same at all times as the corresponding brand-name drug labels.
The Supreme Court held that because federal drug regulations, as interpreted by the FDA,
prevented the manufacturer from independently changing its generic drugs’ safety labels, it
was impossible for the manufacturer to comply with both its state-law duty to change the
label and its federal law duty to keep the label the same. Id. at 2577. Thus, the Court
held, the plaintiff’s state law claim was preempted. Id. at 2578. This was so even
assuming that the generic manufacturer had a federal duty to ask the FDA for help in
strengthening the corresponding brand-name label. Id.
Bartlett extended the holding of PLIVA to cover not just failure-to-warn claims, but
also those claims that would require a redesign of a drug. Bartlett, 133 S. Ct. at 2476-77.
The Supreme Court noted in Bartlett that “[o]nce a drug — whether generic or brand-name
— is approved, the manufacturer is prohibited from making any major changes to the
‘qualitative or quantitative formulation of the drug product, including active ingredients, or

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in the specifications provided in the approved application.’” Id. at 2471 (citing 21 C.F.R.
§ 314.70(b)(2)(i)).
Thus, if Defendants were unable, under federal law, to independently lower the
volume in each vial of Restasis to be in compliance with the state duties alleged by
Plaintiff, Plaintiff’s state claims would be prempted. FDA regulations provide that once a
drug, whether generic or brand-name, is approved, the manufacturer is prohibited from
making any major changes to the “qualitative or quantitative formulation of the drug
product, including active ingredients, or in the specifications provided in the approved
application.” 21 C.F.R. § 314.70(b)(2)(i)).
The Court concludes that reducing the amount of medicine in each Restasis vial is a
major change requiring prior FDA approval. As noted above, FDA Guidelines from 2001
state that a “decrease in the fill volume” of a drug product “involves a change to the
specifications and must be submitted in a prior approval supplement” for FDA approval.
Even if FDA guidelines do not establish legally enforceable responsibilities, the Court
agrees that a decrease in the fill volume of a drug product such as Restasis involves a
change to the specifications under the plain meaning of the statute.
The Court does not find persuasive Plaintiff’s argument that even if Defendants
required FDA approval to change the volume in each vial, Plaintiff’s claims are not
preempted unless Defendants show by clear and convincing evidence that the FDA would
have rejected such a change. This Court must follow the Supreme Court in rejecting the
notion that “[m]anufacturers cannot bear their burden of proving impossibility because
they did not even try to start the process that might ultimately have allowed them to
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[comply with state law].” PLIVA, 131 S. Ct. at 2579. Applying this standard “would
render conflict pre-emption largely meaningless because . . . [w]e can often imagine that a
third party or the Federal Government might do something that makes it lawful for a private
party to accomplish under federal law what state law requires of it.” Id. at 2579.
In sum, the Court finds that 21 C.F.R. § 314.70(b)(2)(i) made it impossible for
Defendants independently to comply with the state law duty alleged in Plaintiff’s
complaint.

Plaintiff’s claims are therefore preempted under the Supremacy Clause.
CONCLUSION

Accordingly,
IT IS HEREBY ORDERED that Defendants’ motion to dismiss Plaintiff’s first
amended complaint is GRANTED. (Doc. No. 15.)
A separate Judgment shall accompany this Memorandum and Order.

AUDREY G. FLEISSIG
UNITED STATES DISTRICT JUDGE
Dated this 28th day of January, 2014.

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