County of Santa Clara v. Merck & Co.

861 F. Supp. 2d 756, 2012 U.S. Dist. LEXIS 37233
CourtDistrict Court, E.D. Louisiana
DecidedMarch 20, 2012
DocketMDL No. 1657
StatusPublished
Cited by1 cases

This text of 861 F. Supp. 2d 756 (County of Santa Clara v. Merck & Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Louisiana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
County of Santa Clara v. Merck & Co., 861 F. Supp. 2d 756, 2012 U.S. Dist. LEXIS 37233 (E.D. La. 2012).

Opinion

ORDER & REASONS

ELDON E. FALLON, District Judge.

Currently pending before the Court is Merck’s Motion for Judgment on the Pleadings with respect to the claims of the County of Santa Clara (Rec. Doc. 63425). The Court has reviewed the briefs and the applicable law and heard oral argument on the motion and is now prepared to rule.

I. FACTUAL BACKGROUND AND PROCEDURAL HISTORY

To put this matter in perspective, a brief review of this litigation is appropriate. This multidistrict products liability litigation involves the prescription drug Vioxx, known generically as Rofecoxib. Merck, a New Jersey corporation, researched, designed, manufactured, marketed and distributed Vioxx to relieve pain and inflammation resulting from osteoarthritis, rheumatoid arthritis, menstrual pain, and migraine headaches. On May 20, 1999, the Food and Drug Administration approved Vioxx for sale in the United States. Vioxx remained publicly available until September 20, 2004, when Merck withdrew it from the market after data from a clinical trial known as APPROVe indicated that the use of Vioxx increased the risk of cardiovascular thrombotic events such as myocardial infarction (heart attack) and ischemic stroke. Thereafter, thousands of individual suits and numerous class actions were filed against Merck in state and federal courts throughout the country alleging various products liability, tort, fraud, and warranty claims. It is estimated that 105 million prescriptions for Vioxx were written in the United States between May 20, 1999 and September 30, 2004. Based on this estimate, it is thought that approximately 20 million patients have taken Vioxx in the United States.1

California was the first state to institute a consolidated state court proceeding on October 30, 2002. New Jersey and Texas soon followed suit, on May 20, 2003 and September 6, 2005, respectively. On February 16, 2005, the Judicial Panel on Multidistrict Litigation (“MDL”) conferred MDL status on Vioxx lawsuits filed in various federal courts throughout the country and transferred all such cases to this Court to coordinate discovery and to consolidate pretrial matters pursuant to 28 U.S.C. § 1407. See In re Vioxx Prods. Liab. Litig., 360 F.Supp.2d 1352 (J.P.M.L.2005). Additionally, a number of state and local governments filed suits against Merck seeking to recover amounts paid for Vioxx prescriptions on behalf of their citi[759]*759zens or civil penalties pursuant to state consumer protection statutes.

The County of Santa Clara, California, filed one such Complaint against Merck in the Superior Court of New Jersey on July 21, 2006. The case was removed to federal court and transferred to this MDL by the JPML. The County filed the Complaint on behalf of itself and “all other similarly situated California Counties” seeking to recover funds spent pursuant to the Public Health Service Act of 1992 for Vioxx provided to the homeless, disabled, children, and the poor. Pursuant to that Act, the County is required under California law to provide health services, including prescription medication, to the indigent and disadvantaged in Santa Clara County. The Complaint contains lengthy factual allegations regarding Merck’s conduct in misrepresenting and concealing Vioxx’s health risks and marketing it extensively. The Complaint alleges that Merck marketed Vioxx to doctors, who in turn requested that the County add Vioxx to its pharmaceutical formulary so that it could be prescribed to patients. The County contends that if Merck had not misrepresented Vioxx’s safety, it would not have added Vioxx to its formulary and would not have paid for Vioxx. Two causes of action are asserted: violations of the New Jersey Consumer Fraud Act (NJCFA) and unjust enrichment.

II. LAW AND ANALYSIS

Merck moves for judgment on the pleadings on both causes of action. First, Merck argues that the County does not have an NJCFA claim because California’s consumer fraud law applies rather than New Jersey’s. In the alternative, Merck argues that even if New Jersey law does apply, the County’s NJCFA claim fails for lack of standing, lack of a viable causation theory, or as subsumed by the New Jersey Products Liability Act. With respect to the unjust enrichment claim, Merck argues that the claim fails as a matter of law under either California or New Jersey law.

The County opposes Merck’s motion. It contends that the choice-of-law analysis directs application of New Jersey law to its claims, and also opposes Merck’s arguments in the alternative. With respect to the unjust enrichment claim, the County argues that it states a claim under New Jersey law.

A. Standard on Motions for Judgment on the Pleadings

A motion for judgment on the pleadings pursuant to Federal Rule of Civil Procedure 12(c) is subject to the same standard as a motion pursuant to Rule 12(b)(6). Doe v. MySpace, Inc., 528 F.3d 413, 418 (5th Cir.2008). “[A]ll well-pleaded facts are viewed in the light most favorable to the plaintiff, but plaintiffs must allege facts that support the elements of the cause of action in order to make out a valid claim.” City of Clinton v. Pilgrim’s Pride Corp., 632 F.3d 148, 152-53 (5th Cir.2010). “To avoid dismissal, a plaintiff must plead sufficient facts to ‘state a claim to relief that is plausible on its face.’ ” Gentilello v. Rege, 627 F.3d 540, 544 (5th Cir.2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (quoting Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009)). The court “do[es] not accept as true conclusory allegations, unwarranted factual inferences, or legal conclusions.” Plotkin v. IP Axess Inc., 407 F.3d 690, 696 (5th Cir.2005).

B. Choice of Law

The parties agree that this MDL court exercising diversity jurisdiction over [760]*760a transferred case must apply the choice-of-law provisions of the transferor state. New Jersey applies a two-step conflict-of-law analysis. In the first step, the Court must determine if there is an actual conflict between the laws of two states regarding a particular claim. The parties agree that there is an actual conflict between New Jersey and California law in light of the different requirements and remedies available under each state’s consumer protection statutes.

In the second step, the Court applies the Second Restatement’s “most significant relationship” test for tort claims. P.V. ex rel. T.V. v. Camp Jaycee, 197 N.J. 132, 962 A.2d 453, 460 (2008).

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861 F. Supp. 2d 756, 2012 U.S. Dist. LEXIS 37233, Counsel Stack Legal Research, https://law.counselstack.com/opinion/county-of-santa-clara-v-merck-co-laed-2012.