NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 3 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
PAINTERS AND ALLIED TRADES No. 18-55588 DISTRICT COUNCIL 82 HEALTH CARE FUND, third-party healthcare payor fund; et D.C. No. al., 2:17-cv-07223-SVW-AS
Plaintiffs-Appellants, MEMORANDUM* v.
TAKEDA PHARMACEUTICALS COMPANY LIMITED, a Japanese Corporation; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California Stephen V. Wilson, District Judge, Presiding
Argued and Submitted June 6, 2019 Seattle, Washington
Before: BEA, NGUYEN, and WATFORD **, Circuit Judges.
Plaintiffs, individual patients and third-party payor Painters and Allied
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** Judge Watford was drawn to replace Judge Rawlinson. Judge Watford has read the briefs, reviewed the record, and watched the recording of oral argument held on June 6, 2019. Trades District Council 82 Health Care Fund, appeal the district court’s orders
dismissing their civil claims under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”) for failure to allege sufficiently proximate cause and
their state-law consumer protection claims for related reasons.
1. We address Plaintiffs’ civil RICO proximate cause arguments in a separate
opinion filed simultaneously with this memorandum disposition, and we reverse
the district court’s holding that Plaintiffs failed sufficiently to allege Defendants’
actions and omissions were the proximate cause of their damages under RICO.1
2. California Claims: Plaintiff Snyder alleges that Defendants—Takeda
Pharmaceuticals Co., Takeda Pharmaceuticals USA, and Eli Lilly & Co.—violated
the California Consumer Legal Remedies Act, California’s Unfair Competition
Law, and California’s False Advertising Law. See Cal. Civ. Code § 1750; Cal.
1 We reject Defendants’ argument that Plaintiffs lack Article III standing for failure to allege an injury in fact. We have held in the consumer fraud context that where plaintiffs contend that they bought a product “when they otherwise would not have done so, because [Defendants] made deceptive claims and failed to disclose [known risks] . . . they have suffered an ‘injury in fact’” sufficient to support Article III standing. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 595 (9th Cir. 2012). Here, Plaintiffs alleged that they purchased Actos, which they would not have done absent Defendants’ fraudulent scheme to conceal Actos’s risk of bladder cancer. Thus, Plaintiffs have alleged an injury in fact sufficient to support Article III standing. The district court did not address Defendants’ other alternative arguments applicable to Plaintiffs’ RICO claims or the separate arguments that Defendant Eli Lilly raises in its answering brief regarding Plaintiffs’ RICO and state law claims. We decline to address them in the first instance on appeal; the district court may address those issues on remand.
2 Bus. & Prof. Code §§ 17200, 17500. Each of these claims requires Snyder to plead
economic injury, causation, and reliance. Veera v. Banana Republic, LLC, 211
Cal. Rptr. 3d 769, 776 (Ct. App. 2016). The district court held that Snyder failed
to meet the pleading standard under Federal Rule of Civil Procedure 8 for reliance.
But the district court ignored Snyder’s specific allegations in the complaint: that
(1) she was prescribed a 15 mg daily dose of Actos, (2) that prior to taking her
prescription, she “read and relied upon the Actos label,” (3) that information about
Actos’s risk of causing bladder cancer “is information that a reasonable consumer
and prescriber would consider important in making a purchasing and prescribing
decision,” and (4) that had she known that Actos increased the risk of developing
bladder cancer, “she would never have purchased and ingested the drug.” These
allegations, if true, plausibly state a claim that Snyder relied on Defendants’
misrepresentation, which caused her to purchase a drug that she otherwise would
not have bought. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Therefore, we
reverse the district court’s holding that Snyder failed to allege reliance properly.
3. New Jersey Claim: Plaintiff Cardarelli alleges that Defendants violated the
New Jersey Consumer Fraud Act (“NJCFA”). 2 See N.J. Stat. Ann. § 56:8-1. The
2 We reject Defendants’ argument that Plaintiffs waived their New Jersey, Florida, Missouri, and Minnesota claims for failure to raise them in district court. Plaintiffs raised their state law claims in their complaint and responded to Defendants’ arguments about their state law claims in their opposition to Defendants’ motion to dismiss.
3 NJCFA has a similar proximate cause requirement to that required for civil RICO
claims. See Dist. 1199P Health & Welfare Plan v. Janssen, L.P., 784 F. Supp. 2d
508, 530–31 (D.N.J. 2011); In re Schering-Plough Corp. Intron/Temodar
Consumer Class Action, No. 2:06-CV-5774 (SRC), 2009 WL 2043604, at *31
(D.N.J. July 10, 2009). Because we conclude in the simultaneously filed opinion
that Plaintiffs have adequately alleged their damages were proximately caused for
their civil RICO claims, we likewise hold that Cardarelli has adequately alleged
proximate cause for his New Jersey claim. Therefore, we reverse the district
court’s dismissal of Cardarelli’s New Jersey claim for failure to allege proximate
cause.
4. Florida Claim: The district court dismissed Plaintiff Buckner’s claim under
the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) for failure to
plead damages.3 See Fla. Stat. § 501.201. But an allegation that the plaintiff
“would not have bought” a product “if he had known the product was not safe for
human consumption . . . satisfies the damages element of a FDUTPA claim.”
3 In dismissing Buckner’s Florida claim, the district court cited a Florida case that held that damages based on “price inflation” are “too speculative.” See Prohias v. Pfizer, Inc., 485 F. Supp. 2d 1329, 1336 (S.D. Fla. 2007). But Plaintiffs have abandoned their excess price damages theory that Florida has rejected on appeal. Instead, Plaintiffs pursue their quantity effect damages theory, that they “pa[id] for more prescriptions for Actos than would have otherwise occurred absent the RICO violations.” As explained above, Florida law supports Plaintiffs’ second theory of damages.
4 Jovine v. Abbott Labs., Inc., 795 F. Supp. 2d 1331, 1344 (S.D. Fla. 2011). Here,
Buckner alleges that Defendants fraudulently concealed Actos’s risk of causing
bladder cancer, and that Buckner would not have purchased Actos if she had
known about Actos’s risk of causing bladder cancer. Accordingly, we reverse the
district court’s holding that Buckner failed to plead damages in her FDUTPA
claim. 4
5.
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NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS DEC 3 2019 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT
PAINTERS AND ALLIED TRADES No. 18-55588 DISTRICT COUNCIL 82 HEALTH CARE FUND, third-party healthcare payor fund; et D.C. No. al., 2:17-cv-07223-SVW-AS
Plaintiffs-Appellants, MEMORANDUM* v.
TAKEDA PHARMACEUTICALS COMPANY LIMITED, a Japanese Corporation; et al.,
Defendants-Appellees.
Appeal from the United States District Court for the Central District of California Stephen V. Wilson, District Judge, Presiding
Argued and Submitted June 6, 2019 Seattle, Washington
Before: BEA, NGUYEN, and WATFORD **, Circuit Judges.
Plaintiffs, individual patients and third-party payor Painters and Allied
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** Judge Watford was drawn to replace Judge Rawlinson. Judge Watford has read the briefs, reviewed the record, and watched the recording of oral argument held on June 6, 2019. Trades District Council 82 Health Care Fund, appeal the district court’s orders
dismissing their civil claims under the Racketeer Influenced and Corrupt
Organizations Act (“RICO”) for failure to allege sufficiently proximate cause and
their state-law consumer protection claims for related reasons.
1. We address Plaintiffs’ civil RICO proximate cause arguments in a separate
opinion filed simultaneously with this memorandum disposition, and we reverse
the district court’s holding that Plaintiffs failed sufficiently to allege Defendants’
actions and omissions were the proximate cause of their damages under RICO.1
2. California Claims: Plaintiff Snyder alleges that Defendants—Takeda
Pharmaceuticals Co., Takeda Pharmaceuticals USA, and Eli Lilly & Co.—violated
the California Consumer Legal Remedies Act, California’s Unfair Competition
Law, and California’s False Advertising Law. See Cal. Civ. Code § 1750; Cal.
1 We reject Defendants’ argument that Plaintiffs lack Article III standing for failure to allege an injury in fact. We have held in the consumer fraud context that where plaintiffs contend that they bought a product “when they otherwise would not have done so, because [Defendants] made deceptive claims and failed to disclose [known risks] . . . they have suffered an ‘injury in fact’” sufficient to support Article III standing. Mazza v. Am. Honda Motor Co., 666 F.3d 581, 595 (9th Cir. 2012). Here, Plaintiffs alleged that they purchased Actos, which they would not have done absent Defendants’ fraudulent scheme to conceal Actos’s risk of bladder cancer. Thus, Plaintiffs have alleged an injury in fact sufficient to support Article III standing. The district court did not address Defendants’ other alternative arguments applicable to Plaintiffs’ RICO claims or the separate arguments that Defendant Eli Lilly raises in its answering brief regarding Plaintiffs’ RICO and state law claims. We decline to address them in the first instance on appeal; the district court may address those issues on remand.
2 Bus. & Prof. Code §§ 17200, 17500. Each of these claims requires Snyder to plead
economic injury, causation, and reliance. Veera v. Banana Republic, LLC, 211
Cal. Rptr. 3d 769, 776 (Ct. App. 2016). The district court held that Snyder failed
to meet the pleading standard under Federal Rule of Civil Procedure 8 for reliance.
But the district court ignored Snyder’s specific allegations in the complaint: that
(1) she was prescribed a 15 mg daily dose of Actos, (2) that prior to taking her
prescription, she “read and relied upon the Actos label,” (3) that information about
Actos’s risk of causing bladder cancer “is information that a reasonable consumer
and prescriber would consider important in making a purchasing and prescribing
decision,” and (4) that had she known that Actos increased the risk of developing
bladder cancer, “she would never have purchased and ingested the drug.” These
allegations, if true, plausibly state a claim that Snyder relied on Defendants’
misrepresentation, which caused her to purchase a drug that she otherwise would
not have bought. See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Therefore, we
reverse the district court’s holding that Snyder failed to allege reliance properly.
3. New Jersey Claim: Plaintiff Cardarelli alleges that Defendants violated the
New Jersey Consumer Fraud Act (“NJCFA”). 2 See N.J. Stat. Ann. § 56:8-1. The
2 We reject Defendants’ argument that Plaintiffs waived their New Jersey, Florida, Missouri, and Minnesota claims for failure to raise them in district court. Plaintiffs raised their state law claims in their complaint and responded to Defendants’ arguments about their state law claims in their opposition to Defendants’ motion to dismiss.
3 NJCFA has a similar proximate cause requirement to that required for civil RICO
claims. See Dist. 1199P Health & Welfare Plan v. Janssen, L.P., 784 F. Supp. 2d
508, 530–31 (D.N.J. 2011); In re Schering-Plough Corp. Intron/Temodar
Consumer Class Action, No. 2:06-CV-5774 (SRC), 2009 WL 2043604, at *31
(D.N.J. July 10, 2009). Because we conclude in the simultaneously filed opinion
that Plaintiffs have adequately alleged their damages were proximately caused for
their civil RICO claims, we likewise hold that Cardarelli has adequately alleged
proximate cause for his New Jersey claim. Therefore, we reverse the district
court’s dismissal of Cardarelli’s New Jersey claim for failure to allege proximate
cause.
4. Florida Claim: The district court dismissed Plaintiff Buckner’s claim under
the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) for failure to
plead damages.3 See Fla. Stat. § 501.201. But an allegation that the plaintiff
“would not have bought” a product “if he had known the product was not safe for
human consumption . . . satisfies the damages element of a FDUTPA claim.”
3 In dismissing Buckner’s Florida claim, the district court cited a Florida case that held that damages based on “price inflation” are “too speculative.” See Prohias v. Pfizer, Inc., 485 F. Supp. 2d 1329, 1336 (S.D. Fla. 2007). But Plaintiffs have abandoned their excess price damages theory that Florida has rejected on appeal. Instead, Plaintiffs pursue their quantity effect damages theory, that they “pa[id] for more prescriptions for Actos than would have otherwise occurred absent the RICO violations.” As explained above, Florida law supports Plaintiffs’ second theory of damages.
4 Jovine v. Abbott Labs., Inc., 795 F. Supp. 2d 1331, 1344 (S.D. Fla. 2011). Here,
Buckner alleges that Defendants fraudulently concealed Actos’s risk of causing
bladder cancer, and that Buckner would not have purchased Actos if she had
known about Actos’s risk of causing bladder cancer. Accordingly, we reverse the
district court’s holding that Buckner failed to plead damages in her FDUTPA
claim. 4
5. Missouri Claim: Plaintiff Rose alleges that Defendants violated the Missouri
Merchandising Practices Act (“MMPA”). See Mo. Rev. Stat. § 407.010. Under
the MMPA, plaintiffs must plead an “ascertainable loss” that “was the result of an
unfair practice.” Thompson v. Allergan USA, Inc., 993 F. Supp. 2d 1007, 1011–12
(E.D. Mo. 2014). Missouri courts measure an “ascertainable loss” under the
“benefit-of-the-bargain” rule, which “awards a prevailing party the difference
between the value of the product as represented and the actual value of the product
as received.” Id. at 1012; see also Plubell v. Merck & Co., 289 S.W.3d 707, 715
(Mo. Ct. App. 2009). This is similar to Plaintiffs’ excess price damages theory,
which they expressly abandoned on appeal. Thus, we affirm the district court’s
4 Defendants also argue that Buckner’s FDUTPA claim fails under Florida’s “safe harbor” provision, which provides that the FDUTPA “does not apply to . . . [a]n act or practice . . . specifically permitted by federal or state law.” Fla. Stat. § 501.212(1). But Plaintiffs allege that Defendants’ actions violated federal civil RICO and drug labeling laws. Because we must assume Plaintiffs’ allegations are true, Bain v. California Teachers Association, 891 F.3d 1206, 1211 (9th Cir. 2018), Defendants are not covered by Florida’s “safe harbor” provision.
5 dismissal of Plaintiff Rose’s MMPA claim.
6. Minnesota Claim: Plaintiffs argue that Takeda violated Minnesota Statutes
§§ 325F.69(1), 325D.13, which address consumer fraud. Plaintiffs may assert
violations of these statutes only if they seek a “public benefit.” Minn. Stat.
§ 8.31(1); Ill. Farmers Ins. Co. v. Guthman, No. CV 17-270(RHK/SER), 2017 WL
3971867, at *3 (D. Minn. Sept. 7, 2017).
Plaintiffs do not seek a public benefit, as they ask only for damages (rather
than injunctive relief), and they seek to remedy a past harm (rather than an ongoing
harm). Buetow v. A.L.S. Enters. Inc., 888 F. Supp. 2d 956, 961 (D. Minn. 2012);
Select Comfort Corp. v. Sleep Better Store, LLC, 796 F. Supp. 2d 981, 986 (D.
Minn. 2011). We affirm the district court’s dismissal of Plaintiffs’ Minnesota
claim.
In sum, we REVERSE the district court’s dismissal of Plaintiffs’ RICO
claims for lack of proximate cause. And we REVERSE the district court’s
dismissal of Plaintiffs’ California, New Jersey, and Florida claims. But we
AFFIRM the district court’s dismissal of Plaintiffs’ Missouri and Minnesota
claims. We remand to the district court for further proceedings consistent with this
disposition. Each party shall bear its own costs on appeal.