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Allen v. Crystal Coast

May 11, 2007

JEANETTE ALLEN, AS MOTHER AND NEXT FRIEND OF WILLIE ALLEN, A MINOR, PLAINTIFFS,
v.
CRYSTAL COAST, INC., DEFENDANT.



The opinion of the court was delivered by: Herndon, District Judge

MEMORANDUM & ORDER

I. INTRODUCTION

On March 29, 2007, the Court issued an Order (Doc. 185) acknowledging Plaintiff's voluntary dismissal without prejudice of defendants Arnesto Segredo and Lifextension Institute, Inc., pursuant to Plaintiff's Motion (Doc. 182).*fn1 Previously, Plaintiff filed a Motion for Entry of Default as to defendant Crystal Coast, Inc. (Doc. 174), for its failure to answer or otherwise respond to Plaintiff's Second Amended Complaint (Doc. 152). Crystal Coast was the only Defendant of the three Plaintiff had been able to locate and serve. Plaintiff's request for entry of default was granted (Doc. 175), whereby the Clerk made an entry of default for Crystal Coast, pursuant to FEDERAL RULE OF CIVIL PROCEDURE 55(a), on September 7, 2006 (Doc. 177). Plaintiff then properly moved for a hearing to establish Crystal Coast's damages, pursuant to Rule 55(b)(2) (Doc. 183), so that a default judgment against Crystal Coast could be issued by the Court. The damages hearing was held on April 19, 2007 (Doc. 187). Plaintiff was present and represented by counsel. Although proper notice was served upon Crystal Coast (see Doc. 186), neither Crystal Coast nor its counsel attended. After hearing evidence regarding Plaintiff's claims against Crystal Coast and the resultant injuries, the Court took the matter under advisement to access the amount of damages, if any, Plaintiff should be awarded as part of a default judgment against Crystal Coast.

II. FACTUAL BACKGROUND

The following factual summary is comprised of information documented on the record as well as testimony given during the damages hearing on April 19, 2007. When he was one-year old, Willie Allen, born August 5, 1992, was diagnosed with brainstem ependynoma. As part of his medical treatment, Willie underwent resection, chemotherapy and cranial radiotherapy. Later, it was discovered that Willie's pituitary gland had been effected, and as a result, Willie suffered from a growth hormone deficiency. In order to treat his growth hormone deficiency, in March, 1999, Willie's physicians prescribed a growth hormone called Nutropin AQ ("Nutropin"). Nutropin is manufactured by Genentech (former defendant).

In 2000, Willie's parents received Nutropin first from Coram Prescription Services, Inc., and then from Curascript (former defendant). The Nutropin was delivered to Willie's parents by FedEx and the drug administered to Willie via injection. In June, 2001, his parents were informed by Curascript that the Nutropin they had been receiving for Willie was counterfeit. The counterfeit drug was allegedly supplied to Curascript by Mediq (former defendant), via Diversified (former defendant), via Crystal Coast (current defendant in default), originating through Lifextension and Arnesto Segredo*fn2 (former defendants, remaining unserved and dismissed without prejudice).

While taking the authentic Nutropin, Willie showed dramatic improvement in his height. Plaintiff (Willie's mother) alleges that while taking the counterfeit Nutropin, however, Willie did not grow taller; Willie seemed to become lethargic and socially withdrawn, causing him to falter in his studies at school. Additionally, according to Plaintiff, the counterfeit Nutropin caused Willie to become very distrustful of her in administering his shots. After being notified that Willie had been receiving counterfeit Nutropin, Plaintiff ceased administering any Nutropin treatment to Willie for approximately 14 months. Once Willie stopped receiving injections of the counterfeit Nutropin, his parents state that Willie's energy level and attention span returned, he became more social and his studies greatly improved. Although extremely fearful from the experience, in May, 2002, Willie's parents agreed to once again start Willie on a different growth hormone replacement therapy treatment. Willie is now experiencing further linear growth, yet Plaintiff claims Willie's overall height will be reduced by the period of time in which he was not receiving authentic Nutropin, due to the counterfeit Nutropin supplied via Crystal Coast.

Crystal Coast, owned by William and Elenore Walker, was a wholesale distributor of prescription drugs based in Florida. William Walker is the alias for a man by the name of "Per Oddmund Bjorn Loyning," a Norwegian citizen who had been deported after a 1990 conviction for dealing cocaine in Florida. William Walker was actually the name of Elenore Walker's ex-husband, likely assumed by Loyning in order to operate as Crystal Coast in the United States. The Florida Department of Health launched a full-blown investigation of Crystal Coast, suspending and ultimately revoking Crystal Coast's drug wholesale permit due to its repeated purchases of prescription drugs from unlicensed/unauthorized sources, such as Lifextension and Segredo.

III. PROCEDURAL HISTORY

This case was removed from Madison County circuit court on the basis of diversity on March 27, 2003 (original complaint filed on February 18, 2003). Initially, Plaintiff filed suit against Curascript and Genentech. There were third party complaints and cross claims filed amongst the various defendants. Plaintiff amended the Complaint on October 23, 2003 (Doc. 39) to add Mediq, Diversified, Crystal Coast, Lifextension and Arnesto Segredo. Plaintiff again amended the Complaint on March 3, 2004 (Doc. 71), pursuant to Court Order (Doc. 69), which dismissed Counts V and VI without prejudice (consumer deceptive practices act and fraud) of the initial amended complaint, allowing leave to amend.*fn3 Upon a stipulation of dismissal, the Court ordered a dismissal with prejudice of Genentech, Curascript, Mediq and Diversified, including all the third party and cross claims, on November 8, 2004 (Doc. 149). The Court previously approved the settlement of a minor's claim and found the settlement regarding the above-referenced parties to be in good faith (Docs. 145 & 146).

Thereafter, Plaintiffs filed their six-count, Second Amended Complaint on November 8, 2004 (Doc. 152) against defendants Crystal Coast, Lifextension Institute, Inc. and Arnesto Segredo. Count I of Plaintiff's Second Amended Complaint against Crystal Coast states a claim of negligence. Count II states a claim of Strict Products liability. Count III states a claim for breach of implied warranty. Count IV states a claim of Res Ipsa Loquitor of Crystal Coast's negligence. Count V states a claim for violation of the Consumer Fraud and Deceptive Business Practices Act, 815 ILL.COMP.STAT. 505/2. Count VI states a claim for fraud (there is no Count VII in the Second Amended Complaint). Finally, Count VIII states a claim for willful and wanton conduct. Plaintiff seeks damages against Crystal Coast in excess of $75,000, including punitive, compensatory and exemplary, plus costs.

Plaintiff effectuated service upon a registered corporate agent of Crystal Coast (see Doc. 161 - return of service), but has not been able to locate the remaining two defendants. Plaintiff believes defendant Segredo is no longer in the country, but may reside in Curacao. As previously explained, defendant Lifextension is owed by Segredo (see Doc. 173). Therefore, Plaintiff moved to voluntarily dismiss Lifextension and Segredo without prejudice pursuant to FEDERAL RULE OF CIVIL PROCEDURE 41 (Doc. 185). Defendant Crystal Coast, on the other hand, never responded or entered its appearance, so Plaintiff moved for an entry of default, which the clerk entered on September 7, 2006 (Doc. 177). Plaintiff now seeks a default judgment be entered by the Court against Crystal Coast, pursuant to FEDERAL RULE OF CIVIL PROCEDURE 55(b)(2), requesting the Court determine the amount of damages owed by Crystal Coast for its liability(Doc. 183).

IV. ...


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