Kamlade v. LEO Pharma Inc.

• Court: District Court, E.D. California
• Decided: February 7, 2022
• Docket: 1:21-cv-00522
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 BRIAN KAMLADE, No. 1:21-cv-00522-DAD-EPG 12 Plaintiff, 13 v. ORDER GRANTING DEFENDANT LEO PHARMA INC.’S MOTION TO DISMISS 14 LEO PHARMA INC., et al., (Doc. No. 15) 15 Defendants.

16 17 This matter is before the court on defendant LEO Pharma Inc.’s motion to dismiss filed 18 pursuant to Federal Rule of Civil Procedure 12(b)(6).1 (Doc. No. 15.) Pursuant to General Order 19 No. 617 addressing the public health emergency posed by the COVID-19 pandemic, defendant’s 20 motion was taken under submission on the papers. (Doc. No. 16.) For the reasons explained 21 below, the court will grant defendant’s motion to dismiss.2

22 1 Pursuant to stipulation, the parties agreed that the deadline for defendant LEO Pharma A/S to 23 file its response to the complaint shall be extended until the date that is twenty-one (21) days after the court’s ruling on this motion. (Doc. No. 25 at 3.) 24 2 The undersigned apologizes for the excessive delay in the issuance of this order. This court’s 25 overwhelming caseload has been well publicized and the long-standing lack of judicial resources in this district long-ago reached crisis proportion. That situation has now been partially addressed 26 by the U.S. Senate’s confirmation of a new district judge for this court on December 17, 2021, but 27 for over twenty-two months before the undersigned was left presiding over approximately 1,300 civil cases and criminal matters involving 735 defendants. Unfortunately, that situation 28 sometimes results in the court not being able to issue orders in submitted civil matters within an 1 BACKGROUND 2 On March 29, 2021, plaintiff Brian Kamlade filed his complaint initiating this putative 3 class action lawsuit against defendants LEO Pharma Inc. and LEO Pharma A/S (collectively 4 “defendants”), alleging violations of California’s consumer protection laws. (Doc. No. 1.) 5 Plaintiff alleges as follows in his complaint. Defendants manufactured and distributed a 6 prescription Picato gel, also known as ingenol mebutate (“Picato”). (Compl. at ¶ 1.) Picato was 7 indicated to treat precancerous Actinic Keratosis. (Id.) Actinic Keratosis is a scaly, crusty lesion 8 on the skin caused by excessive sunlight exposure. (Id. at ¶ 3.) In September 2019, following 9 reports of Picato-related skin cancer incidents, the European Commission requested a safety 10 review of the drug. (Id. at ¶ 5.) In January 2020, the European Medicines Agency (“EMA”) 11 suspended the sale of Picato while EMA’s Pharmacovigilance Risk Assessment Committee 12 (“PRAC”) conducted a review. (Id. at ¶ 6.) The January 2020 EMA suspension announcement 13 cited several studies and clinical trials that allegedly suggest Picato increases one’s risk of cancer. 14 (Id. at ¶ 7.) In April 2020, PRAC issued a report confirming that Picato “may increase the risk of 15 skin cancer” and concluded “that the risks of the medicine outweigh its benefits.” (Id. at ¶ 9.) In 16 July 2020, Health Canada, the department of the Canadian Government responsible for national 17 health policy, issued a report stating that it had reviewed 29 case reports of skin cancer in patients 18 treated with Picato, and that “26 cases were found to be possibly linked.” (Id. at ¶ 12.) Based in 19 part on this evidence, Health Canada concluded “that there may be a link between Picato and the 20 risk of skin cancer.” (Id. at ¶ 14.) In October 2020, at Health Canada’s request, defendants 21 initiated a recall of Picato from the Canadian market. (Id. at ¶ 15.) Health Canada advised 22 patients being treated with Picato to “stop their treatment” and to “contact their healthcare 23 professional to discuss other treatment options.” (Id. at ¶ 17.) Also, in October 2020, LEO 24 Pharma announced that it would permanently discontinue the manufacture of Picato. (Id. at ¶ 18.) 25 Plaintiff Brian Kamlade is a citizen of California who resides in Sanger, California. (Id. at 26 ¶ 19.) In or about July 2018, plaintiff’s doctor diagnosed him with Actinic Keratosis and 27 acceptable period of time. This situation has been frustrating to the court, which fully realizes 28 how incredibly frustrating it is to the parties and their counsel. 1 prescribed Picato for his use. (Id.) Thereafter, plaintiff filled his prescription for Picato at the 2 Cedar Pharmacy & Medical Supplies (“CPMC”) located in Fresno, California and subsequently 3 used the Picato as directed by his doctor. (Id.) Plaintiff paid a total of $20 out of pocket in 4 copayment for the Picato, which was manufactured by defendant LEO Pharma A/S, distributed by 5 LEO Pharma Inc., and sold by CPMC. (Id.) After using the Picato gel as directed, plaintiff 6 developed skin cancer in the area where he had applied the Picato. (Id.) Plaintiff relied on the 7 labels and disclosures that accompanied the Picato in making his decision to purchase the 8 medication. (Id.) Plaintiff understood the labels and disclosures as representations and 9 warranties by the manufacturer, distributor, and pharmacy that the medication was properly 10 designed, effective, free from defects, and safe. (Id.) 11 Defendants, as the designers, manufacturers, and marketers of Picato, impliedly warranted 12 that Picato was (1) fit for use as a medication to treat precancerous actinic keratosis, and (2) 13 generally recognized as safe for human consumption. (Id. at ¶ 35.) Defendants breached the 14 warranty implied in the contract for the sale of the Picato medication because Picato was unfit for 15 its intended and ordinary purpose given that it was defective, carcinogenic, and not fit for use. 16 (Id. at ¶ 36.) As a result, plaintiff and the class members allegedly did not receive the goods as 17 impliedly warranted by defendants to be merchantable. (Id.) 18 Plaintiff seeks to represent a class defined as all persons in the United States who 19 purchased Picato. (Id. at ¶ 24.) Plaintiff also seeks to represent a subclass of all class members 20 who purchased Picato in California. (Id. at ¶ 25.) Plaintiff alleges that the common legal and 21 factual questions among the proposed class include: 22 • Whether the Picato manufactured, distributed, and sold by defendants poses an 23 unreasonably high risk of causing cancer in users; 24 • Whether defendants breached implied warranties to plaintiff and the class and California 25 subclass; and 26 • Whether plaintiff and the class and California subclass have sustained monetary loss and 27 the proper measure of damages. 28 (Id. at ¶ 28.) 1 Based on the foregoing, plaintiff asserts in the complaint a single count of breach of the 2 implied warranty of merchantability against defendants. (Doc. No. 1 at 8.) 3 On June 1, 2021, defendant LEO Pharma Inc. filed a motion to dismiss plaintiff’s 4 complaint. (Doc. No. 15.) On June 22, 2021, plaintiff filed its opposition to that motion, and on 5 June 29, 2021, defendant filed its reply thereto. (Doc. Nos. 19, 20.) 6 LEGAL STANDARD 7 The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal 8 sufficiency of the complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 9 1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of 10 sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901 11 F.2d 696, 699 (9th Cir. 1990). A claim for relief must contain “a short and plain statement of the 12 claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Though Rule 8(a) 13 does not require detailed factual allegations, a plaintiff is required to allege “enough facts to state 14 a claim for relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 15 (2007); Ashcroft v. Iqbal, 556 U.S. 662, 677–78 (2009). “A claim has facial plausibility when the 16 plaintiff pleads factual content that allows the court to draw the reasonable inference that the 17 defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. In determining whether a 18 complaint states a claim on which relief may be granted, the court accepts as true the allegations 19 in the complaint and construes the allegations in the light most favorable to the plaintiff. Hishon 20 v. King & Spalding, 467 U.S. 69, 73 (1984); Love v. United States, 915 F.2d 1242, 1245 (9th Cir. 21 1989). It is inappropriate to assume that the plaintiff “can prove facts that it has not alleged or 22 that the defendants have violated the . . . laws in ways that have not been alleged.” Associated 23 Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). 24 DISCUSSION 25 A. Implied Warranty of Merchantability 26 Under California consumer protection law, the implied warranty of merchantability does 27 not “impose a general requirement that goods precisely fulfill the expectation of the buyer. 28 Instead, it provides for a minimum level of quality.” Am. Suzuki Motor Corp. v. Sup. Ct., 37 Cal. 1 App. 4th 1291, 1296 (1995) (internal quotation marks and citation omitted). To state a claim for 2 breach of the implied warranty of merchantability, a plaintiff must allege a “fundamental defect 3 that renders the product unfit for its ordinary purpose.” Tietsworth v. Sears, 720 F. Supp. 2d 4 1123, 1142 (N.D. Cal. 2010); see also Mexia v. Rinker Boat Co., 174 Cal. App. 4th 1297, 1303 5 (2009) (“The core test of merchantability is fitness for the ordinary purpose for which such goods 6 are used.”) (citation omitted)). “Such fitness is shown if the product is in safe condition and 7 substantially free of defects . . . .” Mexia., 174 Cal. App. at 1303 (internal quotation marks and 8 citation omitted). In other words, a plaintiff claiming breach of an implied warranty of 9 merchantability must allege and ultimately show that the product “did not possess even the most 10 basic degree of fitness for ordinary use . . ..” Mocek v. Alfa Leisure, Inc., 114 Cal. App. 4th 402, 11 406 (2003). 12 In moving to dismiss the complaint, defendant LEO Pharma Inc. argues that plaintiff fails 13 to state a claim for a breach of an implied warranty. (Doc. No. 15 at 8.) Specifically, defendant 14 argues for dismissal of plaintiff’s complaint for three reasons. (Id.) First, defendant contends that 15 plaintiff’s claims are subject to the learned intermediary doctrine. (Id.) Second, defendant 16 contends that plaintiff fails to plead a viable damages theory. (Id.) Third, defendant contends 17 that plaintiff has failed to plead that any breach of the implied warranty caused his harm. (Id. at 18 9.) The court finds defendant’s argument with respect to the learned intermediary doctrine to be 19 persuasive and will accordingly address only that argument below. 20 1. The Learned Intermediary Doctrine 21 California’s learned intermediary doctrine holds that “a manufacturer of prescription 22 drugs or medical devices satisfies its duty to warn when it provides adequate warnings to the 23 prescribing physician, as opposed to the patient.” Zetz v. Boston Scientific Corp., 398 F. Supp. 3d 24 700, 706 (E.D. Cal. 2019) (citing Carling v. Sup. Ct., 13 Cal. 4th 1104, 1116 (1996)). 25 Given that this case concerns a prescription medication, defendant LEO Pharma Inc. 26 argues that the learned intermediary doctrine applies to plaintiff’s implied warranty claim brought 27 under California law. (Doc. No. 15 at 15) (citing Buckley v. DJO Surgical, No. 3:11-cv-02804-L- 28 MDD, 2012 WL 4849368, at *4 (S.D. Cal. Oct. 11, 2012)). Defendant asserts that “[t]here are no 1 factual allegations concerning why Plaintiff’s physician prescribed Picato for Plaintiff, what 2 information Plaintiff’s physician considered when he or she decided to prescribe Picato for 3 Plaintiff, or whether the information provided by LEO Pharma to Plaintiff’s physician was 4 somehow inadequate.” (Doc. No. 15 at 15.) Defendant concludes that absent allegations 5 addressing these points, plaintiff has not adequately alleged an implied warranty of 6 merchantability claim. (Id.) 7 In his opposition to defendant’s motion to dismiss, plaintiff argues that the learned 8 intermediary doctrine only applies to “failure to warn” product liability cases. (Doc. No. 19 at 7.) 9 Plaintiff contends that he is bringing a “design defect claim” and not a failure to warn claim. (Id.) 10 (“Plaintiff is not alleging that Defendant failed to warn him of the dangers of the Product, but that 11 the Product, as designed, was a carcinogen and ineffective such that the risks of the medication 12 outweighed its benefit.”).3 13 In reply, defendant LEO Pharma Inc. counters that nothing in plaintiff’s complaint nor in 14 the scientific studies referenced therein suggests that plaintiff is asserting a design defect claim in 15 this action. (Doc. No. 20 at 7.) Instead, defendant argues that plaintiff “now attempts to equate 16 ‘ineffectiveness’ with Picato being an alleged carcinogen, and therefore ‘defective.’” (Id. at 6.) 17 Moreover, defendant contends that even if plaintiff had pled a design defect claim (as opposed to 18 the actual warranty claim he has asserted), “such a claim would still implicate the learned 19 intermediary doctrine.” (Id. at 11.) 20 The court finds defendant’s arguments to be persuasive. As an initial matter, in his 21 complaint plaintiff unmistakably alleges a breach of the implied warranty of merchantability. 22 (Doc. No. 1 at 8) (listing count one as “Breach Of The Implied Warranty Of Merchantability”). 23 As a matter of law, the learned intermediary doctrine extends to claims for breach of implied 24 warranty. See Buckley, 2012 WL 4849368, at *4 (citing Carlin v. Sup. Ct., 13 Cal. 4th 1104,

25 3 Plaintiff also argues that the learned intermediary doctrine is an affirmative defense, making its application at the motion to dismiss stage of this litigation inappropriate. (Doc. No. 19 at 9) 26 (citing Saavedra v. Eli Lily & Co., 2013 WL 6345442, at *3 (C.D. Cal. Feb. 26, 2013)). 27 However, as defendant points out, federal courts in California routinely apply the learned intermediary doctrine in dismissing complaints upon motion of defendants. See, e.g., Marroquin 28 v. Pfizer, Inc., 367 F. Supp. 3d 1152, 1163 (E.D. Cal 2019). 1 1118 (1996)). Accordingly, warnings concerning Picato’s properties are properly directed to 2 plaintiff’s physician rather than to plaintiff. See Carlin, 13 Cal. 4th at 1118; see also Brown, 44 3 Cal. 3d at 1061–62 (“[A] patient’s expectations regarding the effects of [a prescription] drug are 4 those related to him by his physician, to whom the manufacturer directs the warnings regarding 5 the drug’s properties.”). “Thus, for purposes of liability for breach of warranty, ordinarily it is the 6 prescribing doctor who in reality stands in the shoes of ‘the ordinary consumer.’” Carlin, 13 Cal. 7 4th at 1118 (quoting Carmichael v. Reitz, 17 Cal. App. 3d 958, 989 (1971)). As defendant points 8 out, here plaintiff “does not allege that the information provided to his physician was inadequate.” 9 (Doc. No. 20 at 6–7.) Accordingly, the court concludes that plaintiff has not sufficiently alleged a 10 breach of the implied warranty of merchantability because to adequately assert such a claim 11 would require allegations as to what defendants did or did not tell plaintiff’s prescribing 12 physician. No such allegations are set forth in plaintiff’s complaint. 13 To the extent plaintiff argues that he is actually bringing a design defect claim instead of a 14 failure to warn implied warranty claim, plaintiff’s complaint also fails to sufficiently state the 15 basis for such a claim.4 Notably, strict liability design-defect claims are firmly barred in the 16 context of prescription drugs under California law. See Brown v. Sup. Ct., 44 Cal. 3d 1049, 1069 17 (1988). In Brown the California Supreme Court held that “a manufacturer is not strictly liable for 18 injuries caused by a prescription drug so long as the drug was properly prepared and accompanied 19 by warnings of its dangerous propensities that were either known or reasonably scientifically 20 knowable at the time of distribution.” Id. Thus, plaintiff’s claim in this action could not be based

21 4 Indeed, some of the cases relied upon by plaintiff in arguing that his claim sounds in “design defect,” appear to in fact support defendant’s arguments. For example, plaintiff cites the decision 22 in Saavedra v. Eli Lilly & Co., No. 2:12-cv-9366-SVW-MAN, 2013 WL 3148923, at *3 (C.D. 23 Cal. June 13, 2013), but in that decision the district court warned that “‘[i]f the [learned intermediary] doctrine could be avoided by casting what is essentially a failure to warn claim 24 under a different cause of action such as violation of the [state law consumer protection act] . . ., then the doctrine would be rendered meaningless.’” Id. (citations omitted). Plaintiff also relies 25 on the decision in Kaspers v. Howmedica Osteonics Corp., No. 15-cv-0053-JLR, 2015 WL 12085853, at *7 (W.D. Wash. Oct. 23, 2015) for the proposition that the learned intermediary 26 doctrine does not apply to manufacturing defect claims. (Doc. No. 19 at 10.) But plaintiff is 27 attempting to allege a design defect claim, not a manufacturing defect claim, and the district court in Kaspers plainly stated that the learned intermediary doctrine does apply to design defect 28 claims. See Kaspers, 2015 WL 12085853, at *8. 1 on a strict liability design defect theory. Nevertheless, “despite the exception for prescription 2 drugs set forth in Brown, drug manufacturers remain subject to liability for manufacturing 3 defects, negligence, and for failure to warn of known or reasonably knowable side effects.” 4 Tucker v. Wright Med. Tech., Inc., No. 11-cv-03086-YGR, 2013 WL 1149717, at *5 (N.D. Cal. 5 Mar. 19, 2013) (citing Brown, 44 Cal. 3d at 1169 n.12). Indeed, manufacturer liability for a 6 design defect may rely only on a negligence theory. See Waldo v. Eli Lilly & Co., No. 13-cv- 7 0789-LKK-EFB, 2013 WL 5554623, at *2 (E.D. Cal. Oct. 8, 2013) (citing Brown, 44 Cal. 3d at 8 1065). Yet, plaintiff has not alleged any claim based upon a negligence theory of liability on the 9 part of defendant. 10 Here, plaintiff’s complaint asserts only an implied warranty of merchantability claim 11 rooted in a failure to warn. If plaintiff is attempting to allege a design-defect negligence claim or 12 a manufacturing defect claim, such allegations are simply not evident on the face of the 13 complaint. A plaintiff alleging a design defect claim under a negligence theory must allege and 14 prove “that the defect in the product was due to negligence of the defendant.” Chavez v. Glock, 15 Inc., 207 Cal. App. 4th 1283, 1305 (2012) (quoting Merrill v. Navegar, Inc., 26 Cal. 4th 465, 479 16 (2001)). “As with a general negligence claim, the plaintiff must show breach of duty, causation, 17 and damages.” Tucker, 2013 WL 1149717, at *7 (citing Howard v. Omni Hotels Mgmt. Corp., 18 203 Cal. App. 4th 403, 428 (2013)). As to the standard of care for negligence, a 19 “[designer/manufacturer] is negligent if [it] fails to use the amount of care in [designing] the 20 product that a reasonably careful [designer/manufacturer] would use in similar circumstances to 21 avoid exposing others to a foreseeable risk of harm.” Howard, 203 Cal. App. 4th at 428. A 22 plaintiff may allege that “[e]ven if a manufacturer has done all it reasonably could have done to 23 warn about a risk or hazard related to a product’s design, a reasonable person could conclude that 24 the magnitude of the reasonably foreseeable harm as designed outweighed the utility of the 25 product as designed.” Tucker, 2013 WL 1149717, at *7. This is akin to a risk-benefit test. Id. at 26 *8. 27 In his opposition to the pending motion, plaintiff repeatedly asserts that he is entitled to an 28 award of damages in this case because “the risk of the medication outweighed its benefit.” (See, 1 e.g., Doc. No. 19 at 7.) Such arguments allude to a potential design-defect claim under a 2 negligence theory, but nowhere does plaintiff clearly state that this is the claim he is attempting to 3 bring. Neither party has addressed a potential negligence claim, and the court declines to dig 4 through plaintiff’s complaint to craft a potential claim from thin air. Given that plaintiff’s factual 5 allegations and the title of his singular claim as it appears in his complaint spell out only an 6 implied warranty of merchantability claim and no other, defendants and the court are left to guess 7 as to whether plaintiff is actually attempting to bring some other claim. That is not “fair notice of 8 what the . . . claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (ellipsis in 9 original) (citation omitted). 10 Finally, even if a design defect claim was asserted, plaintiff has cited no cases holding that 11 the learned intermediary doctrine does not apply to such claims. Similarly, plaintiff fails to 12 present any legal authority suggesting that the learned intermediary doctrine only applies to 13 physical injuries, as opposed to the economic injuries plaintiff seeks here. In contrast, at least one 14 other district court in California has determined that the doctrine does in fact apply in situations 15 such as the one alleged here by plaintiff. See Andren v. Alere, Inc., No. 16-cv-1255-GPC (AGS), 16 2018 WL 1920179, at *5 (S.D. Cal. Apr. 24, 2018) (applying learned intermediary doctrine to a 17 design defect claim seeking only economic damages). Simply put, plaintiff has not put forth 18 sufficient factual allegations in his complaint to support a design defect claim nor an implied 19 warranty failure to warn claim. Moreover, to the extent plaintiff attempts to bolster his complaint 20 through his opposition brief, the court notes that “it is axiomatic that the complaint may not be 21 amended by the briefs in opposition to a motion to dismiss.” Frenzel v. AliphCom, 76 F. Supp. 22 3d 999, 1009 (N.D. Cal. 2014) (quoting Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 23 1107 (7th Cir. 1984)). 24 The court will therefore grant defendant LEO Pharma Inc.’s motion to dismiss. 25 B. Leave to Amend 26 Plaintiff requests leave to file a first amended complaint. (Doc. No. 19 at 15.) Generally, 27 “[c]ourts are free to grant a party leave to amend whenever ‘justice so requires,’ and requests for 28 leave should be granted with ‘extreme liberality.’” Moss v. U.S. Secret Serv., 572 F.3d 962, 972 1 | (9th Cir. 2009). There are several factors a district court considers in whether to grant leave to 2 | amend, including undue delay, the movant’s bad faith or dilatory motive, repeated failure to cure 3 | deficiencies by amendments previously allowed, undue prejudice to the opposing party, and 4 | futility. Brown v. Stored Value Cards, Inc., 953 F.3d 567, 574 (9th Cir. 2020) (citing Foman v. 5 | Davis, 371 U.S. 178, 182 (1962)). Of the Foman factors, the court should particularly consider 6 | prejudice to the opposing party. Id.; Eminence Cap., LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 7 | (9th Cir. 2003). 8 There is no indication here that granting plaintiff leave to amend would be prejudicial to 9 | defendant, and defendant makes no argument to that effect. There is also no indication that 10 | plaintiff has acted in bad faith and the court notes that there have been no other attempts to cure 11 || deficiencies in the complaint by previously allowed amendments. Plaintiff will therefore be 12 | granted leave to amend. 13 CONCLUSION 14 For the reasons stated above, defendant LEO Pharma Inc.’s motion to dismiss (Doc. No. 15 | 15) is granted and plaintiff will be granted leave to file an amended complaint in an attempt to cure 16 | the pleading deficiencies noted above. Any amended complaint plaintiff may elect to file shall be 17 | filed no later than twenty-one (21) days from the service of this order. 18 | IT IS SO ORDERED. me □ | Dated: _February 6, 2022 Yola A Lange 20 UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 28 10