YINGST v. NOVARTIS AG et al
Filing
28
OPINION AND ORDER granting deft's 13 Motion to Dismiss the complt.; granting pltf. 30 days to file an amended complt.. Signed by Judge Claire C. Cecchi on 11/24/2014. (nr, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
KERRI YINGST, on behalf of herself and all other
similarly situated individuals,
Plaintiff,
Civil Action No.: 13-7919
OPINION & ORDER
v.
NOVARTIS AG, NOVARTIS CORPORATION,
NOVARTIS CONSUMER HEALTH, INC.,
Defendants.
CECCHI, District Judge.
I.
INTRODUCTION
This matter comes before the Court upon motion of Defendant Novartis Consumer
Health, Inc. (“Defendant”) to dismiss Plaintiff Kern Yingst’ s (“Plaintiff’) complaint pursuant to
Fed. R. Civ. P. 12(b)(6). [ECF No. 13.] Plaintiff opposes the motion. [ECF No. 25.] The
motion is decided without oral argument pursuant to Fed. R. Civ. P. 78. For the reasons set forth
below, Defendant’s motion is granted.
II.
BACKGROUND
In October 2013, Plaintiff purchased Excedrin Migraine in Cherry Hill, New Jersey in
order to relieve her migraines. (Compi.
¶
20.) Around the time of purchase, “Plaintiff noticed
that Excedrin Migraine and Excedrin Extra Strength seemed to consist of identical ingredients in
identical quantities but believed that because Excedrin Migraine was sold at a higher price, it was
a more effective product for migraine relief than Excedrin Extra Strength.”
(Id. at
¶
21.)
Plaintiff brings this lawsuit under the New Jersey Consumer Fraud Act (the “NJCFA” or the
“Act”) and New Jersey common law on behalf of “{a]ll persons who purchased Excedrin
lvi igraine at a higher price than Excedrin Extra Strength on or after August 1. 2005”.
( at ¶
22.)
Excedrin Extra Strength is an over-the-counter combination pain reliever that was first
approved in the 1 960s by the Food and Drug Administration (the “FDA”) for the temporary
relief of minor aches and pains due to headache, (Id. at ¶l 10-11.) Each unit of Excedrin Extra
Strength contains active ingredients of 250 milligrams of acetaminophen, 250 milligrams of
aspirin, and 65 milligrams of caffeine. (Id. at
¶ 11.) The FDA approved Excedrin Migraine in
January 1998 for the temporary relief of mild to moderate migraine headache pain with the same
formulation and dosage as Excedrin Extra Strength.
(Id. at
¶ 13.)
As Plaintiff notes,
“[n]ewspaper ads published in February 1998 emphasized the identical formulation of Excedrin
Migraine and Excedrin Extra Strength.” (Id. at
¶ 14.) These ads stated: “Clinical research has
just proven that the formula in Excedrin actually relieves migraine pain. And because of the
distinct nature of migraines, the FDA worked with Excedrin to develop a different package with
specific information for migraine sufferers. So now next to Excedrin, there’s a new package—
same medicine—called Excedrin Migraine.” (Id.)
Briston-Myers Squibb, Co.. Defendant’s predecessor in interest, sold both Excedrin Extra
Strength and Excedrin Migraine “at the same wholesale price and provided the same suggested
retail price for both products.” (j at
¶ 16.) Currently, Defendant sells 24-count packages
of
Excedrin Migraine at a wholesale price of S360 and Excedrin Extra Strength at a wholesale price of
S320. (Id. at ‘117.) Defendant sells 100-count packages of Excedrin Migraine at S 10.25 wholesale.
and Excedrin Extra Strength at $9.05 wholesale,
U)
Defendant also sells 200-count packages of
Excedrin Migraine at $13.50 wholesale, compared to the $12.00 wholesale price for Excedrin Extra
Strength. (Id.) These wholesale prices, Plaintiff alleges, are reflected in the higher retail prices
paid by customers at stores like Walmart, Amazon.com, Rite-Aid, and Waigreens. (Id. at
¶
18.)
Arnazon.com is home to the highest retail price differential alleged by Plaintiff: a $1.05 variance
between the 300-count packages of Excedrin Extra Strength and Excedrin Migraine. (Id.)
III.
LEGAL STANDARD
For a complaint to survive dismissal pursuant to Federal Rule of Civil Procedure
I 2(b)(6). it “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that
is plausible on its face.” Ashcroft v. lqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v.
Twombly. 550 U.S. 544, 570 (2007)). In evaluating the sufficiency of a complaint, the Court
must accept all well-pleaded factual allegations in the complaint as true and draw all reasonable
inferences in favor of the non-moving party. See Phillips v. Cnty. of Allegheny, 515 F.3d 224.
23 1 (3d Cir. 2008). “Factual allegations must be enough to raise a right to relief above the
speculative level.” Twombly, 550 U.S. at 555. Furthermore, “[a) pleading that offers ‘labels and
conclusions’ or ‘a formulaic recitation of the elements of a cause of action will not do.’ Nor
does a complaint suffice if it tenders ‘naked assertion[sj’ devoid of ‘further factual
enhancement.” Igbal, U.S. at 678.
IV.
DISCUSSION
Plaintiff asserts a violation of the NJCFA and a common law claim for unjust enrichment,
(Cornpl.
28-39), based on the pricing of Defendant’s product. Excedrin Migraine. Defendant
argues that neither of these theories entitle Plaintiff to monetary damages and therefore her
complaint should be dismissed. As set forth below, the Court agrees with Defendant that the
complaint does not contain sufficient factual matter, accepted as true, to state a claim to relief.
A.
New Jersey Consumer Fraud Act
The NJCFA—lauded as “one of the strongest consumer protection laws in the nation”,
‘1
Bosland v. Warnock Dodge.
Inc..
964 A.2d 741. 748 (N.J. 2009)—provides relief to consumers
who suffer “fraudulent practices in the market place.” Lee v. Carter-Reed Co.. 4 A.3d 561. 576
(N.J. 2010); Furst v. Einstein Moomjy, Inc., 860 A.2d 435 (N.J. 2004). Enacted in 1960. the
NJCFA “was passed in response to widespread complaints about selling practices which
victimized consumers.” Sickles v. Cabot Corp., 877 A.2d 267, 276 (N.J. Super. Ct. App. Div.
2005) (citing Fenwick v. Kay Am. Jeep, Inc., 371 A.2d 13, 16 (N.J. 1977)).
The Act was
intended to “root out consumer fraud” and “protect consumers” by eliminating “sharp practices
and dealings in the marketing of merchandise” in which a consumer could be “lured into a
purchase through fraudulent, deceptive or other similar kind of selling or advertising practices.”
Id. (citing Lemelledo v. Beneficial Mgmt. Corp. of Am., 696 A.2d 546, 551 (N.J. 1997)). In
light of its legislative history, courts have consistently noted that the NJCFA should be
“construed liberally to accomplish its broad purpose of safeguarding the public.” Lee, 4 A.3d at
577 (citing Furst, 860 A.2d at 440).
The Act provides that, in addition to legal or equitable relief, a plaintiff is entitled to
treble damages, reasonable attorneys’ fees, and reasonable costs, N.J.S.A. 56:8—19, if she proves
“that the defendant engaged in an unlawful practice that caused an ascertainable loss to the
plaintiff” Frederico v. Home Depot, 507 F.3d 188, 202 (3d Cir. 2007); Lee, 4 A.3d at 576.
Under the NJCFA. an “unlawful practice” is “[t]he act, use or employment by any person of any
unconscionable
commercial
practice.
deception.
fraud,
false
pretense.
false
promise,
misrepresentation. or the knowing, concealment. suppression, or omission of any material fact
with intent that others rely upon such concealment, suppression or omission, in connection with
the sale or advertisement of any merchandise or real estate.” N,J.S.A.
§ 56:8-2.
Plaintiff does not appear to argue that Defendant committed any affirmative act of
4
deception. fraud, false pretense. false promise. or misrepresentation: nor does Plaintiff argue that
Defendant knowingly concealed, suppressed. or omitted any material fact with intent to induce
reliance. (Compi. ¶ 32; Pl.’s Opp’n p. 4.) Instead. Plaintiff strenuously argues that Defendant
engaged in an “unconscionable commercial practice” within the meaning of the NJCFA by
“us[ing] the FDA’s requirement that Excedrin Migraine and Excedrin Extra Strength have separate
packaging as a means to extract additional payments from consumers [by charging a higher price for
Excedrin Migraine] while providing them with no additional benefits.”
(Pl.’s Opp’n p. 4.)
Defendant contends that the price differential between Excedrin Migraine and Excedrin Extra
Strength is not enough, by itself, to constitute an “unconscionable commercial practice” and that
the Court would be “undu[ly] interfer[ingj with free market forces” if it were to find that such
pricing tactics triggered NJCFA liability.
(Def.’s Mot. pp. 6-9.) The Court must therefore
determine whether Defendant’s pricing of Excedrin Migraine—S 1.50 higher, at most, than
Excedrin Extra Strength, (Comp.
¶ 17)—is an “unconscionable commercial practice” within the
meaning of the NJCFA.
The phrase “unconscionable commercial practice” is not defined in the Act. However,
this locution was added to the definition of “unlawful practice” in 1971, N.J.S.A. 56:8-2. L.
1971. c. 247.
§ l (June 29, 1971); Sickies, 379 877 A.2d at 276. evidencing a more expansive
reach than deception alone, see In re OBrien, 423 B.R. 477. 488 (Bankr. D.N.J. 2010) aff’d sub
nom.. Cleveland v. O’Brien. 2010 WL 4703781 (D.N.J. Nov. 12. 2010).
Indeed, while
recognizing that “unconscionabiiitv” is an “amorphous concept”. Cox v. Sears Roebuck & Co..
647 A.2d 454, 462 (N.J. 1994). the New Jerse Supreme Court has described “unconscionable
commercial practice” as an act lacking “good faith, honesty in fact and observance of fair
dealing.” Turf Lawnmower Repair, Inc. v. Bergen Record Corp.. 655 A.2d 417, 429 (N.J. 1995)
(citing Meshinsky v. Nichols Yacht Sales, Inc.. 541 A.2d 1063, 1066 (N.J. 1988)); see also
Black’s Law Dictionary 1561
thl
8
(
ed. 2004) (defining an “unconscionable act” as one “affronting
the sense of justice. decency. or reasonableness”): Travelodge Hotels. Inc. v. Honeysuckle
Enterprises, Inc.. 357 F. Supp. 2d 788, 801 (D.N.J. 2005) (describing the unconscionability
standard in New Jersey contract law as whether there is “an exchange of promises that is so onesided as to ‘shock the conscience’ of the court”).
Like the NJCFA itself, “[t]he word
‘unconscionable’ must be interpreted liberally so as to effectuate the public purpose of the
[NJJCFA.” Associates Home Equity Servs., Inc. v. Troup, 778 A.2d 529, 543 (N.J. Super. Ct.
App. Div. 2001).
Here, there is no dispute that both Excedrin Migraine and Excedrin Extra Strength were
properly labeled and contained no misinformation regarding the properties of their respective
medications.
(Pl.’s Opp’n p. 6 (“Plaintiff, however, does not challenge the labeling of
[Defendantj’s Excedrin products.”).) Indeed, Plaintiff admits that “[n]ewspaper ads published in
February 1998 emphasized the identical formulation of Excedrin Migraine and Excedrin Extra
Strength”, (Compl.
¶ 14), and that she noticed “Excedrin Migraine and Excedrin Extra Strength
seemed to consist of identical ingredients in identical quantities”, (Compl.
¶ 21).
The only
contention is that Defendant engaged in an “unconscionable commercial practice” by charging a
higher price for Excedrin Migraine than for Excedrin Extra Strength, despite the fact that they
are pharmacologically identical products,
(Compi.
¶ 32.)
Accordingly. because Plaintiff
concedes there was no dishonest by Defendant. its pricing of Excedrin Migraine is not an act
that lacks “good faith [or] honesty in fact”. See Turf Lawrnnower Repair. Inc.. 655 A.2d at 429:
see also Cox. 647 A.2d at 463 (noting that the court could “not detect any bad faith” under the
unconscionability prong of the NJCFA despite a finding that the defendant breached a contract):
6
Seidenberg v. Summit Bank. 348 N.J. Super. 243, 262, 791 A.2d 1068, 1079 (App. Div. 2002)
(Noting that, under New Jersey contract law, that “[am allegation of bad faith.
.
.
should not be
permitted to be advanced in the abstract and absent improper motive.”); Black’s Law Dictionary
149 (8t1 ed. 2004) (defining “bad faith” as “[d]ishonesty of belief or purpose”).
Nor can Plaintiff establish that Defendant’s pricing of Excedrin Migraine lacks “fair
dealing” under the unconscionability prong of the NJCFA.
id. Plaintiff does not cite any
case, and the Court is aware of none, in which an “unconscionable commercial practice” was
found under the NJCFA based solely upon the disparate pricing of substantively identical
products manufactured by the same defendant. However, while such a dearth of case law, by
itself, is not fatal to Plaintiffs claim, appropriate circumstances have not been adequately
demonstrated in this case to establish a plausible violation of the NJCFA. According to her
complaint, Plaintiff paid, at most, $1.05 more for the 300-count package of Excedrin Migraine
than the 300-count package of Excedrin Extra Strength. (Id. at
¶ 18.) Such a minor detriment
does not rise to the level of unfair dealing: Defendant utilized the market forces present in our
capitalist society in order to charge a higher price for Excedrin Migraine. This slight price
differential is within the bounds of reasonableness and concomitantly outside the ambit of the
NJCFA.
Moreover, cases in which an “unconscionable commercial practice was found involve
circumstances much more distinct from those here. See. e.g.. Dewey v. Volkswaen AG. 558 F.
Supp. 2d 505. 525 (D.N.J. 2008) (denying defendant’s motion to dismiss on “unconscionability”
grounds when the defendant sold defective automobiles and was allegedly aware of “defective
pollen filters, pollen filter housing seals. plenum drains, powertrains. transmissions and
transmission control modules”); Real v. Radir Wheels, Inc.. 969 A.2d 1069 (N.J. 2009)
7
(concluding defendant “intentionally had engaged in unconscionable commercial practices in
connection with the advertisement and sale of merchandise” by falsely representing condition of
car); Troup, 778 A.2d
at
543 (concluding that a reasonable jury could find plaintiff and third-
party defendants engaged in unconscionable business practice by imposing unfavorable credit
terms on loan).
To be sure, Defendant created a pricing regime in which migraine sufferers must pay a
higher price for Excedrin Migraine pills that are pharmacologically identical to Excedrin Extra
Strength in order to obtain the proper directions and warnings. However, while this conduct may
be strategic, not all such behavior is proscribed by law, as is the case here. For the reasons set
forth above, the Court finds that Defendant’s conduct was not an unconscionable commercial
practice” and therefore grants Defendant’s motion to dismiss with respect to the NJCFA.
B.
Unjust Enrichment
Under New Jersey law, a “constructive or quasi-contract” is the vehicle by which a
plaintiff may enforce a “public duty” to “prevent unjust enrichment or unconscionable benefit or
advantage.” Suburban Transfer Serv., Inc. v. Beech Holdings, Inc., 716 F.2d 220, 226 (3d Cir.
1983). “[I]n order to state a claim for unjust enrichment, a plaintiff must allege (1) at plaintiffs
expense (2) defendant received benefit (3) under circumstances that would make it unjust for
defendant to retain benefit without paving for it.” In re K-Dur Antitrust Litig.. 338 F. Supp. 2d
51’
544 (D \ J 2004)
(cIting
Restatement (First) of Restitution
I (193Th)
The unjust
enrichment doctrine requires that “a plaintiff show that it ‘expected remuneration from defendant
at the time it performed or conferred a benefit on defendant’ and that the ‘failure of remuneration
enriched defendant beyond its contractual rights.” Adamson v. Ortho- cNeil Pharm,, Inc., 463
F. Supp. 2d 496. 505 (D.N.J. 2006)
(citing
VRG Cop. v. GKN Realty Cop.. 1 35 N.J. 539. 554.
8
641 A.2d 519. 526 (1994)).
Plaintiff does not allege a cognizable claim of unjust enrichment. As discussed above,
Plaintiff does not allege any misrepresentation or misinformation on Defendant’s part. (çç Pl.’s
Opp’n p. 6 (“Plaintiff however, does not challenge the labeling of [Defendant]’s Excedrin
products.”).) There is also no contention that Excedrin Migraine did not relieve Plaintiffs illness
or that Excedrin Extra Strength relieved Plaintiffs migraines better than Excedrin Migraine. As
this Court stated in Adamson, “{t]o recover on the theory of quasi-contract the plaintifih] must
prove that defendant was enriched
.
.
.
payment therefor would be unjust.”
received a benefit, and that retention of the benefit without
Adamson, 463 F. Supp. 2d at 505 (citing Callano v.
Oakwood Park Homes Corp., 219 A.2d 332 (N.J. Super. Ct. App. Div. 1966)). Plaintiff paid for
Excedrin Migraine and presumably obtained relief from her migraine; as Defendant puts it:
“[P]laintiff deliberately purchased the higher-priced product and received exactly what she paid
for.” (Def. ‘s Reply p. 6.) While Defendant indeed charged a higher price for Excedrin Migraine
than for the pharmacologically identical Excedrin Extra Strength, the Court cannot say that there
was anything “unjust” about Plaintiffs particular transaction. Accordingly, the Court grants
Defendant’s motion to dismiss with respect to Plaintiffs unjust enrichment claim.
9
V.
CONCLUSION
For the reasons set forth above, IT IS on this 24th day of November 2014,
ORDERED that Defendant’s motion to dismiss pursuant to Rule 12(b)(6) [ECF No. 44]
is GRANTED without prejudice; and it is further
ORDERED that Plaintiff is granted thirty days to file an amended complaint, which
cures the pleading deficiencies as set forth by the Court.
CLAIRE C. CECCHI, U.S.D.J.
10
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?