When we think of prescription medical devices, we usually think of the sorts of devices that are implanted during surgery and tend to end up in litigation—artificial joints, pacemakers, surgical meshes, and bone cements, to name a few. Devices according to the FDCA also include “in vitro reagent[s] . . . intended for use in the diagnosis of disease or other conditions.” There are a whole slew of diagnostic devices that are used to test blood, tissue, or other stuff from the body to provide useful health information. Some of them get used directly by health care professionals, some can be purchased over-the-counter, and some need a prescription for the patient to use it at home. We know that plaintiffs sue over just about every kind of device under a range of theories, but we do not recall seeing consumer fraud claims over prescription diagnostic devices. That is what we have in Andren v. Alere, Inc., No. 16cv1255-GPC(NLS), 2016 U.S. Dist. LEXIS 124252 (S.D. Cal. Sept. 13, 2016), and we thought the issues were interesting enough to spend a little time sharing them with devoted readers.
Andren is a decision on a motion to dismiss a purported class action complaint brought by two plaintiffs, each of whom claimed to have suffered thrombotic events from inadequate anticoagulation as a consequence of inaccurate readings on a defendant’s test kit, which checks blood clotting times for people on anticoagulation therapy. We have some guesses about why they did not just pursue product liability claims for personal injury and some of the hurdles that they would stumble over on the way to class certification. None of that really mattered yet, because they tried to assert claims sounding in fraud and Fed. R. Civ. P. 9(b) requires heightened pleading for such claims. Some background on the device is in order first. Unlike the court, which had a discussion of what beyond the complaint it could consider—which we will omit here—we can say that the defendant recently elected to discontinue and withdraw the device that plaintiffs claim to have used, which followed the earlier recall of lots of the product made since 2008 because of issues with accuracy in certain patient populations or settings. Plaintiffs’ allegations were not limited to the particular device they used and were predictably broad. They alleged that the defendant and its predecessors received thousands of complaints of “malfunctions,” including some number that results with their devices differed significantly from what independent laboratories found on the same samples. Id. at **3-4. They alleged that FDA issued warning letters about adverse event reporting and other issues after 2005 and 2006 inspections of defendant’s predecessor in 2005 and 2006—well before the device at issue was cleared or sold. Id. at **4-5. In April 2014, the test strips portion of the test kit were recalled. In December 2014, the monitor portion and other products in the line were recalled. The recalls were because readings with the kits were sometimes significantly lower than they would have been if tested by laboratories. Id. at **5-6.
They way that these readings (of the International Normalized Ratio or “INR”) work is numbers that are lower than the expected range for someone on anticoagulation therapy (with the range depending on the underlying condition and other factors) should result in increased anticoagulation therapy. Having too much anticoagulation therapy can put a patient at risk for undesired bleeding. Each plaintiff claimed that their readings from the defendant’s test kits were incorrectly high, so they either failed to take a dose of anticoagulation on a certain day or reduced his regular dosage of anticoagulation over time—with each plaintiff apparently taking these actions without consulting health care providers. Id. at **7-9. So, the alleged product issues here were the opposite of the reason for the recalls. And then the plaintiffs claimed to have suffered a stroke (not specified as ischemic or hemorrhagic, but the former is about seven times more common and this one was apparently followed by transient ischemic attacks) or a transient ischemic attacks. Id. Based on the recounting of the medical allegations, then, the plaintiffs claimed the sort of injuries that were also the opposite of the risk implicit in the recall.
Setting that aside—for purposes of their claims, the injuries at issue were economic, not physical harm anyway—the plaintiffs did make allegations that they bought and used the products in reliance on defendant’s “representations that the products were accurate, convenient, effective, reliable, optimal and safe” and would not have purchased or used them if they had known of a risk of erroneous results. Id. They did not specify how they were exposed to any such representations, but the timing of the purported reliance was entirely after the recalls for one plaintiff and both before and after the recalls for the other plaintiff (with his alleged injury occurring in 2016). They did not make any allegations about their prescribing physicians’ respective exposure to or reliance on any representations. One plaintiff alleged that she did not know of the recall until 2016, after her TIA after her stroke. Id. at *8. The other plaintiff did not allege anything about his knowledge of the recall.
In this setting, the Andren court evaluated whether had properly plead any cause of action. The first step was to determine that the heightened pleading standard of Rule 9(b) applied to the counts asserted under the California Consumers Legal Remedies Act, the California Unfair Competition Law, common law fraud, and common law unjust enrichment. These all explicitly alleged fraud or “sound in fraud where Plaintiffs’ allegations are premised on a uniform course of fraudulent contact,” so 9(b) standards apply to all of them. Id. at **15-16. Given how often the California statutes are used for similar fraud-sounding allegations, applying heightened pleading standards—at least when the cases are in federal court—is a good thing.
The unjust enrichment count did not require separate analysis because unjust enrichment is not a separate cause of action under California law. The remaining counts were analyzed under the two basic claims they asserted: 1) that the defendant had materially misrepresented its products and 2) that the defendant had fraudulently concealed facts about its products.
As for misrepresentation, plaintiffs first claimed that reliance could be presumed based on federal security fraud cases, but that argument had already been rejected by the California Supreme Court. Reliance on specific misrepresentations had to be pled, but the misrepresentations did not have to be the “sole or even decisive cause of the injury-producing conduct.” Id. at *17. Plaintiffs did not get that far, as they did not alleged the standard “time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation.” Id. at **18-19. Plaintiffs never alleged a single representation they saw or heard. Mentioning the content of defendant’s website does not matter without alleging that the plaintiffs saw and relied on it. Without such allegations, there is no claim for misrepresentation.
As for concealment, the plaintiffs had to allege a duty to disclose what was allegedly concealed, which had to be contrary to whatever representation was actually made. Absent a fiduciary relationship, a duty to disclose comes from 1) the defendant’s exclusive knowledge of material facts, 2) active concealment of material facts from plaintiff, or 3) partial representations with material facts suppressed. Id. at *21. Plaintiffs went with the first two options, claiming that the material facts all related to the risk of erroneous results—not specifically high or low results. As you might expect from the time sequence mentioned above, the warning letters and recall announcements discussed in the complaint were among the publically available sources of information about the risk of erroneous readings by the time the plaintiffs claimed to have been owed a disclosure. That meant plaintiffs had not alleged that defendant had exclusive knowledge of a material fact to create a duty. Id. at **23-24. Active concealment also went nowhere because plaintiffs did not allege any facts about concealing anything from them. So, there was no claim for fraudulent concealment.
This was plaintiffs’ first complaint, so the court sua sponte granted leave to amend. In so doing, it directed plaintiffs to “clarify whether the [device] was prescribed by Andren’s doctor” and, if it was, “properly alleged a failure to warn Plaintiffs’ prescribing physician in an amended complaint.” Id. at *28. (The other plaintiff apparently conceded that his device was prescribed, which makes sense for a prescription device. If plaintiffs obtained their prescription devices without a prescription, then they might have had a hard time pursuing any claim.) This direction flowed from the court’s analysis, relying largely on the well-known Motus, Norplant and Saavedra decisions, that consumer protection claims for prescription medical products are subject to the learned intermediary doctrine if the “claims are predicated on a failure to warn.” Here, “it appears that the misrepresentations and omissions claims are based on a failure to warn of the [device’s] discrepant results.” Id. at *28. This actually has potentially broad implications, particularly given the California statutes at issue. Even for a diagnostic device that a patient uses at home, consumer fraud allegations have to be based on the prescribing physician’s knowledge and decision making as long as there is a prescribing physician. Just as with product liability claims, the plaintiff may be able to make the right allegations up front about the relevant doctor having been misled by a representation or omission, but proving that is much harder than when the plaintiff’s own memory and speculation about taking a different action are the focus of inquiry. Properly focusing on prescribing physicians also means that class certification, if they ever get that far, should be a pipe dream.