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Gredell v. Wyeth Laboratories

January 14, 2004

[5] GORDON GREDELL, PLAINTIFF-APPELLANT AND CROSS-APPELLEE,
v.
WYETH LABORATORIES, INC., AND AMERICAN HOME PRODUCTS COMPANY, DEFENDANTS-APPELLEES AND CROSS-APPELLANTS.



[6] Appeal from the Circuit Court of Cook County Honorable Dorothy Kirie Kinnaird, Judge Presiding.

[7] The opinion of the court was delivered by: Justice Karnezis

[8]  Plaintiff Gordon Gredell appeals from an order of the trial court dismissing his class action consumer fraud suit against defendants Wyeth Industries, Inc., and American Home Products Company and from the court's denial of his motion to reconsider that order. Plaintiff alleged that defendants fraudulently marketed and sold five prescription drug products, known as Phenergan Expectorants, as cough and cold remedies providing expectoration and anesthetic relief of sore throat knowing that they had no scientific support for making either representation. The court dismissed plaintiff's and the class's claims with prejudice, finding that the claims were time barred pursuant to the statute of limitations for the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2002) (formerly Ill. Rev. Stat. 1991, ch. 1211/2, par. 261 et seq.) (the Consumer Fraud Act) and because they were preempted by the Federal Food, Drug and Cosmetic Act of 1938 (21 U.S.C. § 301 et seq.) (the FDCA). On appeal, plaintiff raises 15 issues and 16 subissues and requests that we reinstate the action. In the event that we reinstate the action, defendants cross-appeal and request that we decertify the class. We will confine ourselves to the question of whether the court erred in dismissing plaintiff's and the class's cause of action because plaintiff failed to prove fraudulent concealment tolled the statute of limitations and because plaintiff had no cause of action under the Consumer Fraud Act and his claim was, therefore, preempted by the FDCA. We reverse and remand.

[9]  Background

[10]   Defendants *fn1 manufactured and marketed the five Phenergan Expectorant prescription drug products following approval of the products by the Food and Drug Administration (the FDA) in the 1950s. Defendants marketed the products as being effective for the control of cough due to colds or minor upper-respiratory infections. Package inserts accompanying the drugs also represented that the drugs provided soothing antiseptic relief of throat irritation and promoted expectoration.

[11]   Prior to 1962, in order to obtain FDA approval for the sale of a new drug, the FDCA required manufacturers to show that a proposed drug was safe. In 1962, the legislature amended the FDCA to require that manufacturers show safety and "substantial evidence" of effectiveness prior to obtaining FDA approval for sale of the drug. Some prescription drugs already on the market, including the Phenergan Expectorants, were allowed to remain on the market while the FDA conducted a review of the drugs' efficacy claims. On August 30, 1972, the FDA sent defendants the report of its investigation of the Phenergan Expectorants. Phenergan Expectorant Plain and Phenergan VC Expectorant Plain were determined to be ineffective for cough while the other three products were found "effective but." All five products were found "possibly effective" for expectoration. The FDA's determinations were based largely on the fact that the investigating panel was unaware of any evidence regarding the drugs' effectiveness for the particular indications, defendants having performed no clinical studies for the drugs' effectiveness for expectoration or soothing anaesthetic relief.

[12]   On February 9, 1973, the FDA published its proposal to withdraw approval for the Phenergan Expectorants in the Federal Register. Defendants submitted a "supplemental new drug application" for a proposed reformulation of the five Phenergan Expectorants. The FDA was in the process of reviewing the efficacy of active ingredients found in most cough and cold remedies and would not consider defendants' supplemental new drug application until after it received the results of that review. The review panel found that many of the ingredients found in cough and cold remedies, including the Phenergan Expectorants, were ineffective for the claims made. Therefore, on May 25, 1982, the FDA published its proposal to withdraw approval for the Phenergan Expectorants' original formulations. On February 2, 1984, it published its approval of defendants' reformulations. Defendants withdrew the original Phenergan products from the market on August 15, 1984.

[13]   Plaintiff, individually and on behalf of all others similarly situated, filed a five count complaint against defendants on September 1, 1987. Plaintiff alleged that defendants misrepresented the effectiveness of the five drugs, thereby violating the Consumer Fraud Act, the implied and express warranty provisions of the Uniform Commercial Code (810 ILCS 5/2-313, 5-314 (West 2002)) (the UCC), the Magnuson-Moss Warranty Federal Trade Commission Improvement Act (15 U.S.C. §2301 et seq. (1994)) (the Magnuson-Moss Act) and committing common law fraud. The court granted plaintiff's motion for class certification in February 1990, denied two motions by defendants to decertify the class in 1993 and 1994, entered a class certification order on July 7, 1994, and denied a third motion by defendants to decertify the class in 1995. The 1994 class certification order provides:

[14]   "[T]he following class be certified to proceed as a class action, pursuant to 735 ILCS 5/2-1801, under Count III of plaintiff's Second Amended Complaint, on behalf of:

[15]   All consumers within the United States of America (excluding governmental entities and insurance companies) who, during the period February 9, 1973 until on or about August 15, 1984, purchased any of the following Phenergan Expectorant drug products:

[16]   1. Phenergan Expectorant Plain;

[17]   2. Phenergan VC Expectorant Plain;

[18]   3. Phenergan Expectorant with Codeine;

[19]   4. Phenergan VC Expectorant with Codeine;

[20]   5. Phenergan Expectorant Pediatric with Dextromethorphan."

[21]   Plaintiff filed the third amended complaint at issue here on July 12, 1994, asserting only a violation of the Consumer Fraud Act. *fn2

[22]   Plaintiff brings the action as a class action pursuant to section 2-801 of the Illinois Code of Civil Procedure (735 ILCS 5/2-801 (West 2002) (formerly Ill. Rev. Stat. 1991, ch. 110, par. 2-801)). The third amended complaint alleged that defendants engaged in false and deceptive conduct in their marketing of the above products in violation of section 2 of the Consumer Fraud Act and similar statutes existing in every other state which prohibit unfair and deceptive acts or practices in trade or commerce.

[23]   Plaintiff asserted that the package inserts, labels and other marketing materials uniformly represented that each of the products was an effective expectorant and also effective in the treatment of other cough symptoms due to colds. Plaintiff alleged that such representations were false and misleading because defendants had no reasonable basis for making the effectiveness claims nor scientific evidence to support them. Plaintiff also alleged that defendants' conduct was unfair and deceptive because they failed to disclose that the FDA had determined that defendants had no substantial evidence for the efficacy claims. Plaintiff stated that, as a result of defendants' unfair and deceptive practices, drugs were prescribed for and bought by plaintiff and the class members and that they were damaged as a result. In their answer, defendants raised several affirmative defenses to plaintiff's claim, including the assertion that plaintiff failed to file his action within the applicable statute of limitations.

[24]   The court bifurcated the trial, holding a hearing to determine whether defendants fraudulently concealed plaintiff's cause of action from him such that the applicable statute of limitations for his claim was tolled. After a four-month trial on that issue and a five-year consideration period, the court dismissed plaintiff's case with prejudice, finding that the case was barred by the statute of limitations because plaintiff failed to prove fraudulent concealment of his cause of action and because it was preempted by federal law. The court denied plaintiff's motion to reconsider and plaintiff timely appeals.

[25]   Analysis

[26]   Standard of Review

[27]   Defendants raised two affirmative defenses based on the Consumer Fraud Act statute of limitations, arguing that both plaintiff's and the class members' suits were barred as untimely. Plaintiff responded that the discovery rule applied to the cause of action and defeated defendants' statute of limitations defense. In the alternative, he argued that defendants fraudulently concealed the cause of action from him, thereby extending the statute of limitations to five years from the date of discovery. In order to address the statute of limitations defenses, the court held a hearing on the issue of fraudulent concealment. After a four-month hearing, the court found that plaintiff failed to prove that defendants fraudulently concealed the causes of action and that, therefore, the actions were time barred. We review the court's findings of fact regarding fraudulent concealment under a manifest weight of the evidence standard (Sandy Creek Condominium Ass'n v. Stolt & Egner, ...


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