Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—E.D. Cal.: Paxil® consumer states adequate unfair competition, false advertising claims, (Aug 11, 2014)

By Greg Hammond, J.D.

A mother who took the antidepressant drug Paxil® has stated sufficient unfair competition and false advertising claims against the drug’s distributor, McKesson Corporation, after her child suffered birth defects, including ventricular hypertrophy and pulmonary stenosis. In remanding the case to the Superior Court of the County of Sacramento, the federal district court in Sacramento determined that McKesson was a proper defendant, and diversity of citizenship did not exist (J.P. v. McKesson Corp., August 6, 2014, Nunley, T.).

Background. Paxil is manufactured by GlaxoSmithKline LLC (GSK) and allegedly packaged, marketed, distributed, promoted, and sold by McKesson. Alice Plummer consumed the prescription drug during her pregnancy with J.P., who allegedly suffered birth defects and injury from the drug. Plummer, on behalf of J.P., seeks past and future economic damages, comprised of medical expenses, loss of earnings, impaired earning capacity, and mental and emotional distress. Plummer filed suit, alleging—in part—violations of California’s Unfair Competition law, False Advertising Law, and Consumer Legal Remedies Act. GSK removed the case to the federal district court based on diversity jurisdiction. Plummer moved to remand.

Factually adequate complaint. In opposition to the motion to remand, GSK argued that there was no factual basis for Plummer’s claims against McKesson, as (1) she directed the allegations at “Defendants” in general, and consequently did not adequately plead McKesson was involved in the distribution of the drug, and (2) the allegations were improperly based on information and belief. The parties agreed that if McKesson was a proper party, diversity of citizenship would not exist.

The court disagreed with GSK’s arguments opposing the motion to remand. First, it was determined that there was a possibility that Plummer could prevail on a claim against McKesson based on the facts currently alleged: (1) McKesson distributed the Paxil ingested by Plummer; (2) defendants knew or should have known the drug could be dangerous and unsafe for pregnant women and developing fetuses; and (3) defendants failed to adequately warn doctors. Because there were sufficient facts to allege adequate claims under California law, the court concluded that McKesson was a proper defendant.

Second, the court determined that GSK applied the incorrect standard to the complaint, noting that the Conley “no set of facts” standard was applicable. It concluded that pleading “based on information and belief” does not prove a complaint fails to state a claim under Conley. Further, because GSK did not make any argument demonstrating how the Conley standard was not met, it failed to present a valid argument against Plummer’s pleading. Plummer’s complaint was therefore factually adequate, McKesson was a proper defendant, and diversity jurisdiction did not exist, the court determined. The case was thus remanded to the Superior Court in Sacramento County.

The case number is 2:13-cv-02207-TLN-DAD.

Attorneys: James Paul Sizemore for J.P. Peter A. Strotz (King & Spalding LLP) for McKesson Corp. and GlaxoSmithKline LLC

Companies: McKesson Corp.; GlaxoSmithKline LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews