Monday, December 21, 2009

Early Christmas Present in Illinois

The Illinois Supreme Court reversed the unusual class Baycol class certification in the De Bouse case late last week.  Here's a link to the opinion (also at 2009 WL 4843362).  It's yet another of those class actions that we call "strike suits" because (1) there's no personal injury at all - only a risk that didn't befall the particular class, and (2) the drug apparently worked just fine.  She claimed "economic damages" from the drug being recalled.  Almost all courts have rejected them - with the notable exception of the intermediate appellate court in De Bouse.

That's why we were quite pleased early this year when the Illinois Supreme Court agreed to review that decision.  We're even more pleased now.

Here are the three certified questions that the court agreed to hear:  First, does the Illinois Consumer Fraud Act ("ICFA"), permit a clain even where defendant "did not engage in direct communication" with the plaintiff consumer?  Second, is the mere "offer for sale of a product . . . a representation" of "reasonable safety" so that any allegation of failure to disclose safety risks an automatic violation of the ICFA?  Third, fraudulent statements/omissions to third persons (here prescribing physicians) are actionable under the ICFA when it is intended that reach and be relied upon by the plaintiff.  Slip op. at 2-3.

The Illinois Supreme Court recognized that questions 1 and 3 could be read as being the same thing, but chose to treat them separately.  As to the third question, the court held that the ICFA does not require privity.  In some circumstances fraud can "pass through" a third party to the plaintiff.  Slip op. at 9.

But the really important point was that the court once again reaffirmed a "basic principle" of fraud/consumer fraud - you aren't defrauded by something you never knew about:
The basic principle in each of the foregoing cases is that to maintain an action under the Act, the plaintiff must actually be deceived by a statement or omission that is made by the defendant. If a consumer has neither seen nor heard any such statement, then she cannot have relied on the statement and, consequently, cannot prove proximate cause.

Slip op. at 7-8.  In short there's no "market theory" of causation under the ICFA.  Id. at 8.

As we all know, reliance kills class actions - that's why we care so much about it.  If we can keep class actions out of our sandbox, then the litigation that's left is rarely "bet your company" (with the possible exception of a multiple punitive damages situation).

On to question 2.  Initially, the court limited it - rather than discuss all products, the court restricted its discussion to prescription drugs.  Slip op. at 10 ("we limit our consideration of the question to whether offering prescription drugs for sale in Illinois is a representation that the drug is safe for its intended use").

Fine with us.  Heck, here at the Druganddevicelaw Blog we usually do the same thing.

The minute we thought of that question, we thought of the old adage "prescription drugs are unavoidably unsafe, that's why they require a prescription."  Well, so did the Illinois Supreme Court - it looked to our old friend, comment k to Restatement (second) of Torts §402A.

The risks associated with pharmaceuticals are a large part of the reason why a doctor’s prescription is required for these medications.  A drug often can affect different patients differently, causing adverse side effects in one but not another. The Restatement approach reflects the reality that even in their intended and ordinary use, prescription drugs may nonetheless cause harmful side effects in some patients. A drug manufacturer cannot say with complete certainty that its product, when used as intended, will be reasonably safe for all patients.  As a result, the mere sale of a prescription medication cannot be a representation which serves as the basis for a consumer fraud claim.  Consequently, we answer the second certified question in the negative.
Slip op. at 10-11 (emphasis added).  Defense counsel should save that quote, frame it, stick it on the wall somewhere - Bexis plans to put it in the next edition of his book.  It's as good a statement as you're likely to find of the essential nature of a prescription product and why what we do is different from litigation involving office chairs or power tools, which any person off the street can buy with no questions asked.
 
Because of its answers to questions 1 and 3, the court held that summary judgment should have been granted against the class representative's claim.  Slip op. at 12.
 
There was a new number one here in Philly over the weekend - more snow than any December storm in history.  Might there also be a new number one on our "Best Decisions" list for 2009?
 
Stay tuned.

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