Antitrust Law Daily Wrap Up, ADVERTISING—S.D. Cal.: Class modified in hormone replacement therapy deceptive marketing suit, (Oct 9, 2015)

By Greg Hammond, J.D.

A consumer was granted modification of class definition in a suit alleging that hormone replacement therapy (HRT) drug manufacturers falsely advertised and deceptively marketed the HRT drugs. The federal district court in San Diego determined that modification was appropriate in light of new evidence, pleadings, and arguments submitted by the parties (Krueger v. Wyeth, Inc., October 7, 2015, Houston, J.).

Wyeth, Inc. and Wyeth Pharmaceuticals, Inc. manufacture the HRT drugs Premarin, Prempro, and Premphase. The consumer alleges that Wyeth used unbranded campaigns to market the drugs for non-approved, off-label uses, including the prevention of Alzheimer’s disease, cardiovascular disease, and dementia. The U.S. Food and Drug Administration, however, revised the labeling of the HRT drugs after a study reported that Prempro increased a woman’s risk of stroke, heart attack, cardiovascular disease, breast cancer, dementia, and Alzheimer’s. The consumer filed suit against Wyeth for falsely advertising and deceptively marketing the HRT drugs in violation of California’s Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL).

A class was previously certified to include: All California consumers who purchased Wyeth’s HRT products for personal consumption between January 1995 and January 2003, and were exposed to a representation from Wyeth, or health care providers, or read in literature in which Wyeth advertised or provided to third parties to be disseminated under its brand or the third parties’ brand, that the HRT products lowered cardiovascular, Alzheimer’s and/or dementia risk, or did not increase breast cancer risk, and do not seek personal injury damages resulting therefrom.

After discovery raised various disputed issues, the court invited the parties to submit supplemental briefs concerning modification of the class definition. Wyeth claimed that the class was not ascertainable and no common issues of fact or law predominated, requiring decertification. Conversely, the named plaintiffs asked the court to modify the current class definition due to recent developments.

Ascertainability. The court first concluded that the current class is sufficiently ascertainable because the consumer alleged, and the court has already found, that Wyeth’s widespread advertising campaign promoted the alleged representations. In addition, the consumer claimed that there are only three products at issue, all of which were advertised to treat the same symptoms and offer the same health benefits, with the product’s packaging containing Wyeth’s representations. It is enough that the class definition describes the allegedly offending product and eligible dates of purchase, according to the court.

Predominance. The consumer’s proposed modified class definition includes: All California consumers who purchased Wyeth’s HRT products for personal consumption between January 1995 and January 2003, and who do not seek personal injury damages therefrom.

Despite Wyeth’s arguments to the contrary, the court concluded that the consumer made a sufficient showing that the issues of whether Wyeth’s representation was material and would have deceived reasonable consumers can be litigated on a class-wide basis because: (1) the central issue raised in the suit is the allegedly overriding, material misrepresentation that Wyeth’s HRT products lower a woman’s risk of cardiovascular disease, dementia, and Alzheimer’s disease, without increasing breast cancer risk; (2) the consumer alleged and submitted evidence showing that the misrepresentation was communicated through the drugs’ packaging and by doctors under the influence of Wyeth’s letters and sales representatives; and (3) the consumer claimed and provided evidence demonstrating that, as part of Wyeth’s marketing campaign, Wyeth hired physicians to author or sign off on articles dispelling negative perceptions about the HRT drugs and refuting medical studies finding increased health risks associated with HRT use.

The court also determined that the issue of false advertising and deceptive marketing of the HRT drugs and their alleged health benefits is a common issue particularly well-suited to class-wide resolution. It reasoned that the issue turns on complex evidence and expensive expert testimony, and that litigating the CLRA and UCL claims as individual cases would be extraordinarily duplicative, wasteful, and would increase the likelihood of inconsistent decisions. The predominance requirement was therefore satisfied; Wyeth’s request to decertify the class was denied; and the consumer’s request to modify the class definition was granted.

The case number is 3:03-cv-02496-JAH-MDD.

Attorneys: Anthony D. Birchfield , Jr. (Beasley, Allen, Crow, Methvin, Portis & Miles, PC) for April Krueger. Bert L. Slonim (Kaye Scholer LLP), Bert L. Wolff (Skadden Arps Slate Meagher & Flom LLP) and Beth A. Wilkinson (Paul, Weiss, Rifkind, Wharton & Garrison LLP ) for Wyeth Inc. and Wyeth Pharmaceuticals, Inc.

Companies: Wyeth Inc.; Wyeth Pharmaceuticals, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews