Case Briefing

Les Servier, a French company, manufactured the bulk powdered ingredient in two drugs that were used in the production of Fen-Phen, Pondimin and Redux. The powdered product was licensed and sold to AHP, which converted it into Fen-Phen. The FDA approved the final product for sale.

Les Servier argued AHP was the sole manufacturer, distributor, marketer and promoter of Pondimin and Redux. In accepting this argument, the court adopted several facts asserted by the plaintiffs when they were attempting to certify the class, including that 'the instant class involves a single manufacturer defendant ' AHP.' Therefore, the court reasoned, because the plaintiffs seeking class certification had argued that AHP was the only manufacturer, distributor and promoter of Pondimin and Redux and the trial court entered that argument as a conclusion of law, the doctrine of judicial estoppel came into play. Therefore, the court granted the motion for summary judgment, finding that plaintiffs could not now argue that they should be entitled to proceed against Les Servier, a different and additional defendant.

Although the doctrine of judicial estoppel applied, the court also addressed other rationales for the grant of summary judgment.

One of the plaintiffs' claims against Les Servier was for negligence. However, as the plaintiffs had not proved Les Servier was involved in the manufacturing, distribution or selling of the diet drugs in question, it followed that Les Servier owed them no duty. 'It is clear that a determination of manufacturers, distributors or sellers status is critical under the FDA regulatory scheme, not just for the initial approval of the drug, but also for the continuing monitoring of the safety and efficaciousness of the drug,' the court wrote.

Inherent to the negligence claim was a claim for failure to warn, but the court found the responsibility for labeling a drug fell exclusively to the manufacturer, distributor or packer of the drug. Les Servier, as merely the supplier of a bulk ingredient used in the final product, could not be held liable for the negligent design of the drug.

Client Brings Legal Malpractice Suit over Handling of Implant Case

Massachusetts resident Karen Kovacs has sued Cincinnati attorney Stanley Chesley for legal malpractice. Kovacs alleges that Chesley represented her in a class action relating to injuries she suffered from defective breast implants, and that although she was diagnosed by a physician as meeting the required criteria for inclusion in the class, Chesley failed to review her medical records properly and to submit her for inclusion. Kovacs alleges that she received $9180 from the settlement on Jan. 21, far less than she would have received had she been included in the proper class. Kovacs v. Chesley, No. 1:03cv20 (S.D. Ohio, 1/ 8/03).

Failure to Plead Fraud with Particularity Not Fatal

The US District Court for the Southern District of California erred in summarily dismissing plaintiffs' complaint against a drug manufacturer for failure to state a claim, as certain of plaintiffs' claims did not sound in fraud and thus need not meet the enhanced pleading requirements of Fed. R. Civ. P. 9(b). Vess v. Ciba-Geigy Corp. USA, No. 01-55834, U.S. App. LEXIS 1678 (9th Cir., 1/31/03).

Plaintiffs, a minor and his guardian, brought suit against three entities ' Novartis Pharmaceutical; the American Psychiatric Association, which publishes the Diagnostic and Statistical Manual of Mental Disorders (DSM); and the nonprofit group, Children and Adults with Attention Deficit/Hyperactivity Disorder (CHADD) ' alleging conspiracy to increase sales of prescription drug Ritalin in violation of California state law. Defendants, who argued that all the allegations against them sounded in fraud, moved to dismiss under Rule 9(b), which requires plaintiffs who plead fraud to do so with particularity. The court granted the motions, finding that plaintiffs' three state law allegations were based on claims of fraud but that the pleadings failed to state the specific fraudulent acts complained of.

On appeal, the U.S. Court of Appeals for the Ninth Circuit noted that Rule 9(b)'s heightened pleading requirements are in place because it can be detrimental to a party's reputation if bald accusations of fraud are made without a statement of what the alleged fraud entails.

But Rule 9(b)'s requirements apply only to averments of fraud supporting the claim, not to the claim itself. Therefore, if, as here, fraud is not an essential element of the claim and allegations of both fraudulent and nonfraudulent conduct are contained in the complaint, only allegations of fraudulent conduct need satisfy the heightened pleading requirements of Rule 9(b): Allegations of nonfraudulent conduct need only satisfy the ordinary notice pleading standards of Fed. R. Civ. P. 8(a).

Consequently, the district court had erred in dismissing certain claims against Novartis that did not rely on allegations of fraud. As all claims against the other two defendants sounded solely in fraud, the district court did not err in dismissing those claims for failure to comply with the pleading requirements of Rule 9(b).

Maker of Ingredient for Fen-Phen Not Liable

The maker of a component ingredient of the diet drug Fen-Phen cannot be sued over the drug, a Philadelphia Common Pleas Court judge has ruled, because the trial court found that the defendant in the mass tort litigation that resulted in a $4 billion settlement was solely responsible. Sokoloski v. American Home Products Corp., PICS NO. 03-0073. In addition, as the producer of only a component ingredient of Fen-Phen, Les Servier owed no duty to the plaintiffs.

The named plaintiffs, Judith and Joseph Sokoloski, led 22 other plaintiffs in the appeal. The action was part of the Fen-Phen mass tort litigation in Philadelphia against American Home Products Corp. When that litigation settled, Les Servier was left as the only open defendant. Les Servier's motion for summary judgment was subsequently granted.

Les Servier, a French company, manufactured the bulk powdered ingredient in two drugs that were used in the production of Fen-Phen, Pondimin and Redux. The powdered product was licensed and sold to AHP, which converted it into Fen-Phen. The FDA approved the final product for sale.

Les Servier argued AHP was the sole manufacturer, distributor, marketer and promoter of Pondimin and Redux. In accepting this argument, the court adopted several facts asserted by the plaintiffs when they were attempting to certify the class, including that 'the instant class involves a single manufacturer defendant ' AHP.' Therefore, the court reasoned, because the plaintiffs seeking class certification had argued that AHP was the only manufacturer, distributor and promoter of Pondimin and Redux and the trial court entered that argument as a conclusion of law, the doctrine of judicial estoppel came into play. Therefore, the court granted the motion for summary judgment, finding that plaintiffs could not now argue that they should be entitled to proceed against Les Servier, a different and additional defendant.

Although the doctrine of judicial estoppel applied, the court also addressed other rationales for the grant of summary judgment.

One of the plaintiffs' claims against Les Servier was for negligence. However, as the plaintiffs had not proved Les Servier was involved in the manufacturing, distribution or selling of the diet drugs in question, it followed that Les Servier owed them no duty. 'It is clear that a determination of manufacturers, distributors or sellers status is critical under the FDA regulatory scheme, not just for the initial approval of the drug, but also for the continuing monitoring of the safety and efficaciousness of the drug,' the court wrote.

Inherent to the negligence claim was a claim for failure to warn, but the court found the responsibility for labeling a drug fell exclusively to the manufacturer, distributor or packer of the drug. Les Servier, as merely the supplier of a bulk ingredient used in the final product, could not be held liable for the negligent design of the drug.

Client Brings Legal Malpractice Suit over Handling of Implant Case

Massachusetts resident Karen Kovacs has sued Cincinnati attorney Stanley Chesley for legal malpractice. Kovacs alleges that Chesley represented her in a class action relating to injuries she suffered from defective breast implants, and that although she was diagnosed by a physician as meeting the required criteria for inclusion in the class, Chesley failed to review her medical records properly and to submit her for inclusion. Kovacs alleges that she received $9180 from the settlement on Jan. 21, far less than she would have received had she been included in the proper class. Kovacs v. Chesley, No. 1:03cv20 (S.D. Ohio, 1/ 8/03).

Failure to Plead Fraud with Particularity Not Fatal

The US District Court for the Southern District of California erred in summarily dismissing plaintiffs' complaint against a drug manufacturer for failure to state a claim, as certain of plaintiffs' claims did not sound in fraud and thus need not meet the enhanced pleading requirements of Fed. R. Civ. P. 9(b). Vess v. Ciba-Geigy Corp. USA, No. 01-55834, U.S. App. LEXIS 1678 (9th Cir., 1/31/03).

Plaintiffs, a minor and his guardian, brought suit against three entities ' Novartis Pharmaceutical; the American Psychiatric Association, which publishes the Diagnostic and Statistical Manual of Mental Disorders (DSM); and the nonprofit group, Children and Adults with Attention Deficit/Hyperactivity Disorder (CHADD) ' alleging conspiracy to increase sales of prescription drug Ritalin in violation of California state law. Defendants, who argued that all the allegations against them sounded in fraud, moved to dismiss under Rule 9(b), which requires plaintiffs who plead fraud to do so with particularity. The court granted the motions, finding that plaintiffs' three state law allegations were based on claims of fraud but that the pleadings failed to state the specific fraudulent acts complained of.

On appeal, the U.S. Court of Appeals for the Ninth Circuit noted that Rule 9(b)'s heightened pleading requirements are in place because it can be detrimental to a party's reputation if bald accusations of fraud are made without a statement of what the alleged fraud entails.

But Rule 9(b)'s requirements apply only to averments of fraud supporting the claim, not to the claim itself. Therefore, if, as here, fraud is not an essential element of the claim and allegations of both fraudulent and nonfraudulent conduct are contained in the complaint, only allegations of fraudulent conduct need satisfy the heightened pleading requirements of Rule 9(b): Allegations of nonfraudulent conduct need only satisfy the ordinary notice pleading standards of Fed. R. Civ. P. 8(a).

Consequently, the district court had erred in dismissing certain claims against Novartis that did not rely on allegations of fraud. As all claims against the other two defendants sounded solely in fraud, the district court did not err in dismissing those claims for failure to comply with the pleading requirements of Rule 9(b).