J&J Avoids Class Action Suit on Recalls
July 23rd, 2012 // 2:36 pm @ jmpickett
http://www.pharmalot.com/
A group of consumers who claimed they suffered an economic loss by purchasing defective Johnson & Johnson medicines had their lawsuit thrown out of court by a federal judge. The consumers argued that the existence and concealment of a host of quality control problems at different J&J plants led them to pay inflated prices due, in part, to the reputation of the health care giant for selling safe and effective medications.
In making their case, the consumers argued J&J execs repeatedly ignored a series of so-called red flags that resulted in quality control gaffes at various plants. These included FDA warning letters; government subpoenas; a criminal plea to kickback charges; whistleblower lawsuits; product recalls and off-label marketing. These same issues recently led to a settlement of a derivative shareholder lawsuit (back story).
The consumers who bought the recalled drugs were offered coupons or cash refunds, but maintained the compensation did not make them whole, because the refund applied only to the average retail price and excluded sales tax. They also wanted J&J to cover their costs disposing of the med, any travel to buy replacement meds and medical treatments for side effects, according to their lawsuit (read it here).
But US District Judge Mary McLaughlin refused to buy their argument. Why? She determined that none of the consumers who brought the lawsuit had actually been refused a refund or suffered an economic loss. Instead, she noted they relied on reports that others suffered harm or losses. “The fact that other persons suffered adverse effects, or that the defendants recalled some products that were manufactured in the same facility as the drugs they purchased, does not suffice to establish injury in fact as to this group,†she wrote (read here).
“No named plaintiff either has been refused a refund for a product that was recalled or alleged that a non-recalled product is defective as to them,†she continued. “As a result, no named plaintiff has suffered an injury, in fact, traceable to the conduct of the defendants sufficient to confer standing on the plaintiffs and subject matter jurisdiction on the Court.. Critically, no plaintiff has alleged that he or she sought a refund for recalled products and was denied one, or that any refund actually received did not fully cover the price paid for a recalled product
Of course, this does not close the door on attempts that others may want to make, but if this ruling is used as a guide, consumers would have to prove they actually suffered some economic loss beyond what a coupon or refund may provide. For those who may not recall, J&J recalled lots of such popular over-the-counter meds as Motrin, Tylenol, Benadryl, Rolaids, Pepcid and Mylanta, among other products since early 2010.
