Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Blood monitoring device misrepresentation claims blocked, (Nov 19, 2015)

By Greg Hammond, J.D.

A consumer lacked standing and failed to state a claim that a company engaged in fraudulent and unfair business practices by misrepresenting the accuracy and reliability of its medical device, which monitors the anticoagulation effects of blood thinning medications. The federal district court in San Francisco consequently dismissed the California Consumer Legal Remedies Act (CLRA) and Unfair Competition Law (UCL) claims (Shields v. Alere Home Monitoring, Inc., November 17, 2015, Breyer, C.).

Alere Home Monitoring, Inc. and Alere San Diego, Inc. sell INRatio PT/INR Monitoring Systems, a device that monitors the anticoagulation effects of blood thinning medications. Alere released a correction letter in December 2014, and the FDA issued a Class I recall of the devices and test strips, both informing consumers that the device could provide incorrect results if a user has certain medical conditions. The consumer filed a class action alleging violations of the CLRA and the UCL. Alere moved to dismiss.

Article III standing. The court first determined that the consumer lacks standing because he failed to allege a sufficient injury to himself and failed to establish an injury in fact as required by Article III. In particular, the consumer failed to claim he suffered or will imminently suffer from relying on an inaccurate test result. Allegations of suffering a “purely economic” injury rested entirely on a risk of harm to other consumers, a harm that might occur only if those consumers fall within the at-risk category and ignore Alere’s correction letter, the court noted.

Lack of particularity. The complaint additionally failed for lack of particularity, as required by Federal Rule of Civil Procedure 9(b). Specifically, the court determined that the consumer failed to indicate what particular statement he relied upon when purchasing the device, who specifically stated the device was “accurate and reliable,” and where or when he saw or heard that representation.

Deceptive acts, practices. Next, the court rejected the CLRA claim because the consumer: (1) failed to adequately plead he suffered damages as a result of any representation made by Alere, or that Alere’s conduct was deceptive and (2) failed to adequately plead that Alere misrepresented the reliability and accuracy of the INRatio device.

Unfair competition. Lastly, the consumer failed to state a claim under the unlawful, unfair, and fraudulent prongs of the UCL. In particular, (1) the unlawful practices claim failed because the consumer never mentioned a violation of the Food, Drug, and Cosmetic Act and otherwise failed to state a CLRA claim; (2) the unfair prong failed because the consumer could not adequately plead injury from using his INRatio device; and (3) the fraudulent prong failed because the consumer could not identify with particularity any false or deceptive statements he personally saw or relied upon, the alleged fraudulent statement amounted to nothing more than non-actionable puffery, and the consumer could not demonstrate how any alleged omission of relevant information harmed him.

The case is No. C15-2580 CRB.

Attorneys: Stuart C. Talley (Kershaw Cutter & Ratinoff LLP) for Steve Shields. Stephanie Anne Sheridan (Sedgwick LLP) for Alere Home Monitoring, Inc. and Alere San Diego, Inc.

Companies: Alere Home Monitoring, Inc.; Alere San Diego, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews