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Stacel v. Teva Pharmaceuticals

March 16, 2009

MELANIE STACEL PLAINTIFF,
v.
TEVA PHARMACEUTICALS, USA, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Judge Joan B. Gottschall

MEMORANDUM OPINION AND ORDER

BACKGROUND

Plaintiff Melanie Stacel brought suit in the Circuit Court of Cook County against Defendant Teva Pharmaceuticals, USA ("Teva"), which Teva removed to this court on the basis of diversity jurisdiction. The suit involves Stacel's allegation that she was afflicted with drug-induced lupus as a result of consuming the drug minocycline, which is a generic of the brand-name, FDA reference-listed drug Minocin(r). Minocycline is manufactured by Teva. Stacel presents four counts, including a products liability claim on the theory of negligent failure to warn (Count I); a common-law fraud and misrepresentation claim (Count II); a claim based on the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFA") (Count III), and a claim for punitive damages (Count IV).

Teva has moved to dismiss, arguing that Counts II and III should be dismissed because they do not satisfy the heightened pleading standard of Rule 9(b) of the Federal Rules of Civil Procedure.

Teva also argues that the entire complaint should be dismissed because Stacel's state-law causes of action are preempted by the federal Food, Drug and Cosmetic Act ("FDCA"). For purposes of this motion, all allegations in Stacel's complaint are accepted as true, and all reasonable inferences are drawn in favor of the plaintiff. INEOS Polymers Inc. v. BASF Catalysts, 553 F.3d 491, 497 (7th Cir. 2009). A motion to dismiss will be denied so long as the complaint states a legal claim upon which relief can be granted. Id.

ANALYSIS

I. Heightened Pleading

Rule 9 states that "[i]n alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). To comply, the plaintiff must (1) state the identity of the person or entity who made the misrepresentation, (2) state the time, place and content of the misrepresentation, and (3) state the method by which the misrepresentation was communicated to the plaintiff. Vicom, Inc. v. Harbridge Merchant Serv. Inc., 20 F.3d 771, 777 (7th Cir. 1994). Put more succinctly, the plaintiff must plead the who, what, when, where, and how of the fraud. Siegel v. Shell Oil Co., 480 F. Supp. 2d 1034, 1043 (N.D. Ill. 2007).

Teva contends that Counts II and III "do[] not even come close to pleading these claims with sufficient particularity." Mem. in Supp. of Mot. to Dismiss 2 (Doc. No. 23) ("Mot. to Dismiss"). Teva does not take issue with the identity requirement, but does take issue with the amount of specificity needed regarding the alleged misrepresentation. Stacel alleges that Teva concealed its full knowledge that minocycline may cause lupus, but Teva argues that Stacel has not provided any specific showing that Teva in fact had such a knowledge. Mot. to Dismiss 4. Teva also argues that the time, place, content, and method requirements are not satisfied. Teva concedes that Stacel has alleged that the misrepresentation regards a lack of notice of the risk of drug-induced lupus in the drug's labeling, but faults Stacel for failing to "attach a copy" of the faulty labeling, or to specifically identify "the purported 'fraudulent' language." Id.

Teva demands more than Rule 9 requires. Rule 9 does not require Stacel to attach a physical specimen of the allegedly faulty labeling. Rather, she must provide the who, what, when, where, and how of her fraud claim. This she has done. Stacel is alleging that Teva ("who") has misrepresented the risk that minocycline poses for drug-induced lupus ("what") by failing to include a warning about this risk in its package labeling ("how"). She has alleged "when"-during the period that she allegedly consumed minocycline-and "where"-in the drug's labeling. This is all that Stacel is obligated to do at this stage of the litigation.*fn1

Teva also challenges Stacel's compliance with the particular pleading requirements of the ICFA in Stacel's third count. To state an ICFA claim, Stacel must allege (1) a deceptive act or practice by Teva, (2) Teva's intent that Stacel rely on the deception, (3) that the deception occurred in the course of conduct involving trade and commerce, and (4) that the deceptive act proximately caused Stacel's injury. See Cozzi Iron & Metal, Inc. v. U.S. Office Equip. Inc., 250 F.3d 570, 575--76 (7th Cir. 2001). Teva's arguments here repeat those raised regarding the requirements of Rule 9(b). Stacel's complaint alleges that Teva deceptively withheld information that minocycline might cause drug-induced lupus, that Teva did so with the intent that consumers like Stacel would rely on this deception, that the deception occurred in the course of commerce, and that the deception was the proximate cause of Stacel's injury. Stacel has satisfied these requirements.*fn2

II. Preemption

Teva alternatively argues that Stacel's state-law claims are preempted by the labeling requirements of the FDCA. Federal preemption comes in three forms. The first is explicit preemption stated in the federal statute. English v. Gen. Elec. Co., 496 U.S. 72, 78 (1990) ("First, Congress can define explicitly the extent to which its enactments pre-empt state law.") (citations omitted). The second is implied field preemption, which can "be inferred from a 'scheme of federal regulation . . . so pervasive as to make reasonable the inference that Congress left no room for the States to supplement it,' or where an Act of Congress 'touches a field in which the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.'" Id. at 79 (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)) (alterations in original). The third is implied conflict preemption, where "state law is pre-empted to the extent that it actually conflicts with federal law." Id. "Thus, the Court has found preemption where it is impossible for a private party to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Id. (citations omitted). However, "the purpose of Congress is the ultimate touchstone in every preemption case," Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996) (internal quotation marks omitted), and the court must "start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Wyeth v. Levine, No. 06-1249, 2009 WL 529172, at *5 (U.S. Mar. 4, 2009) (citations omitted). Teva argues that conflict preemption is appropriate here, because Teva cannot comply with both the FDCA's labeling requirements and the labeling requirements of Illinois state law, or that Illinois' torts law would frustrate the purpose and intent of Congress.*fn3

The merits of Teva's argument requires a review of the regulatory scheme that drug manufacturers must navigate in order to obtain FDA approval, which is required before the drugs can be brought to market. See Weinberger v. Hynson, Westcott & Dunning, Inc., 412 U.S. 609, 612--13 (1973). Two schemes are relevant. The first relates to "new" or "reference-listed" drugs. The second is an abbreviated scheme that relates to "generic" drugs that are pharmaceutically equivalent to ...


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