U.S. Court of Appeals for the Seventh Circuit
The U.S. Court of Appeals for the Seventh Circuit decertified and dismissed with prejudice a class action alleging the packaging of prescription eye drops produced by several pharmaceutical companies dispensed too much product at once, causing users to waste the excess in each dose. Shook Partners Lori McGroder and Jim Muehlberger represented Allergan and Bausch & Lomb Incorporated in the case. Judge Richard Posner's decision, later named as one of the Ten Best Prescription Drug/Medical Device Decisions of 2017 by the Drug and Device Law Blog, determines that the plaintiffs had no cause of action.
"You cannot sue a company and argue only—'it could do better by us'—which is all they are arguing," the court held. "The fact that a seller does not sell the product that you want, or at the price you’d like to pay, is not an actionable injury; it is just a regret or disappointment—which is all we have here, the class having failed to allege 'an invasion of a legally protected interest.'"
The court also noted a lack of evidence supporting the plaintiffs' claims. The plaintiffs argued that packaging producing a smaller drop could reduce the cost of the eye drops to the consumers, decreasing the manufacturers' profits. "This assumes that profits would decline if the defendants switched to selling the smaller, cheaper-to-produce eye drops," the court stated. "But that's far from certain; lower prices might result in greater sales and as a result higher rather than lower profits." Further, the plaintiffs did not support their claim that the larger eye drops have a higher risk of side effects with details identifying the side effects or any class member who suffered from them.
Finding that the eye drops have been approved by the U.S. Food and Drug Administration (FDA), the court stated that it "cannot bypass the agency and make its own evaluation of the safety and efficacy of an unconventionally sized eye drop for treatment of glaucoma. Not that the class members are likely to get far with the FDA. They don’t want the agency to rescind its approval of the large drops—they don’t argue that the large drops are unsafe or ineffective. They just want the defendant companies to start manufacturing smaller drops. But the agency can’t force a private company to manufacture a product the company doesn’t want to make—all it can do is approve or disapprove drugs that a company does make."
The court also likened the plaintiffs’ complaint to the purchase of a cat. "Suppose the class members all happened to own pedigreed cats, and the breeders who had sold the cats to the class members had told them that as responsible cat owners they would have to feed the cats kibbles during the day and Fancy Feast at night and buy a fountain for each cat because cats prefer to drink out of a fountain (where gravity works for them) rather than out of a bowl (where gravity works against them) and they don’t like to share a fountain with another cat." If the cat owners then purchased the products as advised, they might be dissatisfied to learn how much each recommendation cost. "They think—maybe correctly—that the cat food is needlessly expensive and the fountain a fragile luxury. Yet would anyone think they could successfully sue the breeders? For what? The breeders had made no misrepresentations. Had a prospective buyer asked one of the breeders what the annual cost of maintaining the cat would be, the breeder would, let’s assume, have given him a realistic estimate. There would be disappointment in the example given, but no cause of action."
Accordingly, the Seventh Circuit vacated the lower court’s grant of class certification and remanded the case with an order to dismiss the suit with prejudice. Had the court upheld class certification, manufacturers may have been faced with a wave of class actions in federal court alleging no actual injury but simply disappointment with products the plaintiffs believe could have been designed more to their satisfaction or priced more favorably.
Shook attorneys obtained dismissal of similar claims in New Jersey in 2016, representing Allergan and Valeant. The court in that case dismissed the complaint and, later, the amended complaint, holding, "In sum, absent sufficient allegations as to injury, Plaintiffs are left with their bald assertion that they overpaid for effective eye medications that would have been less expensive if they were designed according to Plaintiffs’ specifications. Such a conclusory theory is simply too remote and abstract to qualify as a concrete and particularized injury under Article III standing."
Eike v. Allergan, Inc., No. 16-3334 (7th Cir. 2017).
This summary first appeared in an issue of the Drug & Device Bulletin.