WOLFSON, District Judge.
Presently before the Court is a motion filed by Defendants, Janssen, L.P. and Johnson & Johnson (collectively, "Defendants"),
Since Defendants have moved to dismiss Plaintiff's claims pursuant to Fed.R.Civ.P. 12(b)(6), the following relevant facts assume the allegations in the Complaint to be true. Plaintiffs initially filed a complaint in 2008 ("2008 Complaint"), which was dismissed without prejudice by this Court. See Dist. 1199P Health & Plan v. Janssen, L.P., No. 06-3044, 2008 WL 5413105, 2008 U.S. Dist. LEXIS 103526 (D.N.J. Dec. 23, 2008) (hereinafter "District 1199P I"). The 2008 Complaint alleged that Defendants violated: (1) the RICO Act; (2) RICO conspiracy; and (3) the New Jersey RICO Act. Among other deficiencies, this Court explained that the 2008 Complaint failed to sufficiently allege a cognizable RICO injury under federal or New Jersey law. The Complaint in the instant matter attempts to cure the defects of the 2008 Complaint, and asserts new claims under state law.
The Complaint alleges that Defendants illegally promoted Risperdal for off-label purposes through a comprehensive and carefully orchestrated scheme. (See Compl. ¶ 2). The Complaint avers in detail that the scheme involved a fraudulent and deceptive marketing program that led Plaintiffs and other third party payors ("TPPs") to suffer direct economic harm. Id. at ¶¶ 2, 5. Specifically, Plaintiffs alleged that they were paying approximately 80% of the purchase price of Risperdal — a drug nearly ten times as expensive as other, more effective, safer and more tolerable drugs — for their insureds. Id.
Risperdal is currently sold and marketed by Defendants, see Id. at ¶¶ 14, 15, to patients suffering from schizophrenia, bipolar mania, and autistic disorder under strict regulation by the Food and Drug Administration ("FDA"). See Id. at 31-33. For off-label purposes,
Plaintiffs assert that Risperdal, as well as other second-generation antipsychotics ("SGAs") are neither more effective nor safer than older, cheaper antipsychotics.
To support their assertion that Risperdal is harmful for its off-label uses, Plaintiffs aver that in 2003, a researcher at the FDA identified 131 cases of risperdone-associated diabetes or hyperglycemia in an FDA reporting database. Id. at ¶ 160. Of the 131 cases, 78 were newly diagnosed hyperglycemia, 46 were exacerbations of a preexisting disease, and 7 were unclassifiable.
Plaintiffs also allege that Defendants "caused" Plaintiffs and other TPPs to list Risperdal on their formularies — a list of approved drugs for which payment will be made — as part of their scheme to make Plaintiffs pay for expensive Risperdal prescriptions.
Regarding Defendants' marketing tactics, Plaintiffs allege that Defendants employed the services of a network of third-party marketing firms to effectuate their scheme to market Risperdal for off-label uses. Id. at ¶ 204. Indeed, Defendants allegedly controlled the marketing firms' activities, which consisted of physicians disseminating information about off-label
During these programs, the "thought leaders" would provide allegedly false information regarding Risperdal's safety, efficacy, and widespread use and popularity. Id. Plaintiffs assert that the planning and coordination of the CMEs by the marketing firms required extensive use of the wires and mails, including the mailing of invitations to physicians, the mailing of proposals to the accrediting institutions, booking of hotels and airplane tickets, the arrangement of meals, the scheduling of telephone conference calls, the development and modification of tactical plans, and the coordination of Risperdal presentation content for the events.
In sum, Plaintiffs claim that as a result of Defendants' fraudulent scheme, "the medical literature and usage practices relating to Risperdal have been severely contaminated by years of false and misleading information regarding the scientific, medical and clinical data relating to the safety, medical efficacy, effectiveness and usefulness of Risperdal for off-label conditions." Id. at ¶ 289. In turn, because "studies have illustrated that physicians can prescribe lower-cost and equally effective alternatives to Risperdal for both FDA-approved conditions and conditions for which Defendants have promoted the off-label use of Risperdal," Defendants' wrongful marketing, advertising and promotion of Risperdal caused Plaintiffs to pay Defendants for Risperdal that they would not have otherwise purchased. Id. at ¶ 116-19, 265.
The Federal Rules of Civil Procedure provide that a complaint "shall contain (1) a short and plain statement of the grounds upon which the court's jurisdiction depends... (2) a short and plain statement of the claim showing that the pleader is entitled to relief, and (3) a demand for judgment for the relief the pleader seeks." Fed.R.Civ.P. 8(a). The purpose of a complaint is "to inform the opposing party and the court of the nature of the claims and defenses being asserted by the pleader and, in the case of an affirmative pleading, the relief being demanded." 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1182 (3d ed.2004).
In reviewing a motion to dismiss for failure to state a claim under 12(b)(6), a Court must take all allegations in the complaint as true, viewed in the light most favorable to the plaintiff "and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief." Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir.2008) (citation and quotations omitted). In Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955,
Phillips, 515 F.3d at 234 (quoting Twombly, 550 U.S. at 556, 127 S.Ct. 1955).
In affirming that the Twombly standard applies to all motions to dismiss, the Supreme Court recently further clarified the 12(b) (6) standard. "First, the tenet that a court must accept as true all of the allegations contained in a complaint is inapplicable to legal conclusions." Ashcroft v. Iqbal, ___ U.S. ____, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009). "Second, only a complaint that states a plausible claim for relief survives a motion to dismiss." Iqbal, 129 S.Ct. at 1950. Accordingly, "a court considering a motion to dismiss can choose to begin by identifying pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth." Id. In short, "a complaint must do more than allege the plaintiffs entitlement to relief. A complaint has to `show' such an entitlement with its facts." Fowler v. UPMC Shadyside, 578 F.3d 203, 211 (3d Cir.2009).
The Third Circuit recently reiterated that "judging the sufficiency of a pleading is a context-dependent exercise" and "[s]ome claims require more factual explication than others to state a plausible claim for relief." West Penn Allegheny Health System, Inc. v. UPMC, 627 F.3d 85, 98 (3d Cir.2010). This means that, "[f]or example, it generally takes fewer factual allegations to state a claim for simple battery than to state a claim for antitrust conspiracy." Id. That said, the Rule 8 pleading standard is to be applied "with the same level of rigor in all civil actions." Id. (quoting Iqbal, 129 S.Ct. at 1953).
Plaintiffs argue that Defendants' alleged conduct violated the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. § 1962(c), which "makes it unlawful `for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity.'" In re Ins. Brokerage Antitrust Litig., 618 F.3d 300, 362 (3d Cir.2010) (citing 18 U.S.C. § 1962(c)). For Plaintiffs
Defendants submit that Plaintiffs can never establish standing under RICO because their alleged injury — excessive payment for Risperdal prescriptions as TPPs — is not cognizable under the statute. Defendants maintain that Plaintiffs have not suffered a "concrete financial loss" as required by the case law because Plaintiffs fail to allege that Risperdal caused any of their participants to suffer physical harm, and that Risperdal was ineffective for any participant. See Maio, 221 F.3d at 483 (quoting Steele v. Hospital Corp. of Am., 36 F.3d 69, 70 (9th Cir.1994) ("`[A] showing of injury requires proof of a concrete financial loss and not mere injury to a valuable intangible property interest.'").) To rebut, Plaintiffs argue that they have alleged injury by asserting that because Risperdal is ineffective, or has not been proven effective in treating off-label conditions, Plaintiffs paid too much for Risperdal when cheaper alternatives were available. (Compl. ¶¶ 50, 169). In addition, Plaintiffs claim that "but for" Defendants' fraud, they would not have purchased Risperdal, or they would have taken action against utilization anomalies where Risperdal was predominately being prescribed for unsafe and/or ineffective off-label uses. Id. at ¶¶ 114, 115, 285.
In this connection, this Court made clear in District 1199P I that "Plaintiffs' injury theory based on financial losses of overpayment that Plaintiffs purportedly sustained by paying for this `inferior' drug is inadequate for sustaining a RICO injury, absent allegations that Defendants' drug was on some level `inferior and therefore `worth less' than what [Plaintiffs] paid for it." District 1199P I, 2008 WL 5413105, at *7, 2008 U.S. Dist. LEXIS 103526, at *29 (emphasis added) (citing Maio, 221 F.3d at 486). This Court relied on the Third Circuit's decision in Maio. In that case, the Third Circuit elaborated on the theory of injury proposed here by Plaintiffs:
Maio, 221 F.3d at 488 (emphasis added). As recently as last year, Judge Chelser in this district dismissed a complaint by TTPs alleging substantially similar claims against another drug manufacturer by explaining that "the TPPs' asserted `overpayment' for the Subject Drugs based on the existence of cheaper alternative medications or treatments that were available to a beneficiary's prescribing doctor does not make the product received inferior or worth less and therefore does not constitute RICO injury." In re Schering-Plough Corp. Intron/Temodar Consumer Class Action, No. 06-5774, 2010 WL 2346624, at *4, 2010 U.S. Dist. LEXIS 56621, at *18 (D.N.J. Jun. 9, 2010).
While Plaintiffs attempt to cure the defects in their 2008 Complaint by peppering the Complaint with language that suggests alternative medications were "more effective" or "safer than Risperdal," these allegations are simply conclusory in nature and as the Court noted supra, the Court need not accept as true unsupported conclusions and unwarranted inferences. Baraka v. McGreevey, 481 F.3d 187, 195 (3d Cir.2007); see, e.g., Compl. ¶¶ 5, 115, 153, 180, 256. Indeed, nowhere in the Complaint do Plaintiffs allege sufficiently that Risperdal was an inferior drug over other drugs. Instead, Plaintiffs cite studies indicating that Risperdal had a greater association with adverse effects, such as new onset diabetes, prolactin side effects, hyperglycemia and weight gain. See, e.g., Compl. at ¶ 143 (the results of one study revealed that the incidence rate of new onset diabetes per 100,000 individuals was 2,724.34 for Risperdal, 1,961.94 for Olanzapine, 3,560.00 for Clozapine, 0.00 for Quetiapine, and 3.905.73[sic] for Haloperidol); Id. at ¶ 154 (the results of a 2002 report revealed that Risperdal has proven less effective than Clozapine for psychotic symptoms, and Risperdal had a high incidence of prolactin side effects); Id. at ¶ 160 (the FDA found 131 cases of risperdone-associated diabetes or hyperglycemia in a reporting database); Id. at ¶ 194 (studies in children and adolescents showed risperidone treatment was associated with a 2- to 4-fold increase in mean measures in serum prolactin in children with autism). However, Plaintiffs fail to allege whether these studies were conducted to discover side effects for on- or off-label uses of Risperdal. This is significant because Plaintiffs' claim is entirely based on Defendants' alleged fraudulent marketing which induced patients to purchase Risperdal for off-label purposes.
Plaintiffs additionally note a study that indicates Risperdal was more likely to cause hyperglycemia in patients with dementia than either a placebo or another drug, Haloperidol. These allegations do not suggest or necessarily imply that Risperdal is inferior because they simply point to greater incidences of a certain side-effect. Moreover, Risperdal and Haloperidol are in different drug classifications (atypical antipsychotic and typical antipsychotic, respectively, see Id. at ¶¶ 37, 41), and therefore produce different side effects on individual patients. See Id. at ¶ 39. This is supported by Plaintiffs' Complaint, which asserts that Haloperidol is associated with a greater number of new onset diabetes in patients than Risperdal. See Id. at ¶ 143. Thus, Plaintiffs essentially complain that they paid too much for a medicine that they have not sufficiently alleged to be inferior or worth less. See Maio, 221 F.3d at 488 (holding that generalized assertions of "overpayment" for "inadequate" health case did not constitute RICO injury).
Even more problematic, Plaintiffs do not identify any participant in their health plans who received an ineffective or unsafe off-label Risperdal prescription, or any participant who allegedly would have been treated with a less expensive and more effective medicine if that participant had not received Risperdal. In re Schering-Plough I, 2009 WL 2043604, at *15, 2009 U.S. Dist. LEXIS 58900, at *14-15 ("Plaintiffs nowhere allege facts to support the theory that the named [plaintiffs] actually paid for one or more of the Subject Drugs to treat an off-label indication for which the drug was ineffective.").
For legal support, Plaintiffs again rely on In re Warfarin Sodium Antitrust Litig., 391 F.3d 516, 531 (3d Cir.2004), and Desiano v. Warner-Lambert Co., 326 F.3d 339, 349-50 (2d Cir.2003), for the proposition that TPPs suffer direct economic harm when, as a result of the pharmaceutical companies' alleged misrepresentations, they pay "supracompetitive" prices for the brand drug instead of purchasing a lower-priced generic drug. However, Plaintiffs' reliance on these cases is misplaced. As this Court previously explained, no RICO claims were alleged in Warfarin or Desiano; rather, these cases involved claims arising out of federal anti-trust laws and consumer fraud. See District 1199P I, 2008 WL 5413105, at *6, 2008 U.S. Dist. LEXIS 103526, at *21. As such, these cases are not helpful to
determining whether there is a cognizable RICO injury.
Plaintiffs also attempt to assert a RICO injury by alleging that absent Defendants' fraud, Plaintiffs would have reconsidered Risperdal's placement on its formulary list, or otherwise taken action against utilization anomalies where Risperdal was predominately being prescribed for unsafe and ineffective off-label uses. (See Compl. ¶ 114, 115, 285; see also Memorandum of Law in Opposition to Defendants' Motion to Dismiss p. 15) ("Opposition Memo"). However, Plaintiffs' Complaint merely alleges that Defendants' products are not conclusively effective for off-label uses, rather than alleging that the product is unsafe or ineffective for off-label uses.
Defendants argue that Plaintiffs' Complaint does not allege a direct relationship between Defendants' marketing activities and Plaintiff's injury. Defendants further claim that Plaintiffs' theory of causation 1) improperly rests on a series of sweeping and conclusory statements, 2) involves multiple steps, innumerable factors, and the independent decisions of unnamed intermediaries, and 3) is too indirect and speculative to satisfy RICO's proximate cause requirement. Plaintiffs counter that proximate cause is a flexible concept, and they have satisfied this requirement by alleging that the chain of causation directly links Plaintiffs, the parties who pay, to Defendants, the parties who benefitted from the alleged fraud. Specifically, physicians and PBMs received the allegedly misleading and fraudulent information disseminated by Defendants; in turn, the recipients of the fraudulent misrepresentations then performed their necessary, intended and foreseeable act: prescribing the drug.
The Supreme Court has held that "a plaintiff may sue under § 1964(c) only if the alleged RICO violation was the proximate cause of the plaintiff's injury." Anza v. Ideal Steel Supply Corp., 547 U.S. 451, 453, 126 S.Ct. 1991, 164 L.Ed.2d 720 (2006) (citing Holmes v. Securities Investor Protection Corp., 503 U.S. 258, 268, 112 S.Ct. 1311, 117 L.Ed.2d 532 (1992)). "When a court evaluates a RICO claim for proximate causation, the central question it must ask is whether the alleged violation led directly to the plaintiffs injuries." Anza, 547 U.S. at 461, 126 S.Ct. 1991 (2006). In determining proximate cause, courts consider: (1) the directness of the injury; (2) any difficulties in apportioning damages; (3) whether the law can be vindicated by another, more directly injured party. Holmes, 503 U.S. at 269-70, 112 S.Ct. 1311. In other words, the proximate cause requirement ensures that 1) there are no independent variables that could account for a plaintiff's injuries, 2) there is no risk of duplicative recoveries by plaintiffs, and 3) there are no more immediate victims better situated to sue for the injuries alleged. Bridge v. Phoenix Bond & Indem. Co., 553 U.S. 639, 658, 128 S.Ct. 2131, 170 L.Ed.2d 1012 (2008). Importantly, while first-party reliance is not a required element of a civil RICO claim (independently, or as a part of the proximate cause analysis), "the complete absence of reliance may prevent the plaintiff from
Plaintiffs argue that by alleging in detail Defendants' deliberate action to "unlawfully" promote Risperdal for off-label uses and that Plaintiffs were directly targeted by Defendants' scheme, Plaintiffs have sufficiently alleged causation. For example, Plaintiff alleges that "Defendants embarked on a comprehensive and carefully-orchestrated scheme to promote Risperdal for `off-label use' ... through a fraudulent and deceptive marketing program"; Defendants' "promotional scheme corrupted the information process relied upon by physicians in their medical decision-making" and thereby caused physicians to "wr[i]te off-label prescriptions for Risperdal for use by their patients"; and Plaintiffs have suffered injury because "physicians continue to prescribe, and Plaintiffs and the Class continue to pay for, Risperdal to treat off-label uses." (Compl. ¶¶ 2, 107-10, 256, 282, 289). While Plaintiffs have gone to great lengths to chronicle Defendants' alleged conduct, they fail to allege the connection between Defendants' misrepresentation and Plaintiffs' injuries. See Steamfitters Local Union No. 420 Welfare Fund v. Philip Morris Inc., 171 F.3d 912, 935 (3d Cir.1999) (holding that proximate cause was lacking where "the link between defendants' alleged fraud — providing false information regarding the safety of their products — and plaintiffs' injuries [was] too attenuated ..."). Indeed, Plaintiffs' allegations are too remote to satisfy the causation prong because they noticeably fail to allege that physicians or PBMs relied on any specific misrepresentation made by Defendants. In fact,
Ironworkers Local Union No. 68 v. AstraZeneca Pharms., L.P., 585 F.Supp.2d 1339, 1344 (M.D.Fla.2008). Simply put, such an individualized inquiry would require allegations that off-label prescriptions were written by doctors (and ultimately paid for by Plaintiffs) as a direct result of Defendants' alleged misconduct.
Here, Plaintiffs allege in a conclusory fashion that physicians relied on Defendants' misrepresentations regarding Risperdal. But, Plaintiffs may not aver "causation by way of generalized allegations and aggregate proof," see In re Schering-Plough I, 2009 WL 2043604, at *25, 2009 U.S. Dist. LEXIS 58900, at *89, because there are numerous factors that could influence a physician when deciding to prescribe a certain drug. See UFCW Local 1776 v. Eli Lilly & Co., 620 F.3d 121, 135 (2d Cir.2010) ("An individual patient's diagnosis, past and current medications being taken by the patient, the physician's own experience with prescribing [the drug], and the physician's knowledge regarding the side effects of [the drug] are all considerations that would have been taken into account in addition to the alleged misrepresentations distributed by [the defendant]."); Heindel v. Pfizer, Inc., 381 F.Supp.2d 364, 382 (D.N.J.2004) (quoting Leibowitz v. Ortho Pharmaceutical Corp., 224 Pa.Super. 418, 431, 307 A.2d 449 (Pa.Super.1973)) ("`[It] is for the prescribing physician to use his own independent medical judgment, taking into account the data supplied to him from the drug manufacturer, other medical literature, and any other source available to him, and weighing that knowledge against the personal medical history of his patient, whether to prescribe a given drug.'"). Absent any
Accordingly, without sufficient allegations of direct reliance, Plaintiffs have not properly alleged that Defendants' misrepresentations were the "but for" cause of their injuries. See Southeast Laborers Health & Welfare Fund v. Bayer Corp., 655 F.Supp.2d 1270, 1280-81 (S.D.Fla. 2009) ("Calculation of Plaintiff's losses would be purely speculative.... [It] necessarily would require an analysis of whether or not a particular physician ever received or relied on Bayer's allegedly fraudulent statements, and whether or not a physician, knowing the risk vs. benefit of Trasylol, would still have used it during an operation").
Equally unpersuasive is Plaintiffs' argument that they are the intended, foreseeable victim of Defendants' conduct. See Hemi Group, LLC v. City of N.Y., ___ U.S. ____, 130 S.Ct. 983, 992, 175 L.Ed.2d 943 (2010) (proximate cause inquiry is focused "on the directness of the relationship between the conduct and the harm" and does not turn on whether harm to plaintiff was "foreseeable," "intended" or "desired"); Allegheny, 228 F.3d at 439, 441 (no direct injury even in instances where defendants had "specific intent to harm" plaintiffs).
Moreover, Plaintiffs fail to allege sufficiently that the PBMs relied on Defendants' misrepresentations when making formulary recommendations to Plaintiffs. In fact, not only do Plaintiffs have to allege that the PBMs relied on, or were influenced by Defendants' fraudulent marketing, they also have to allege that Plaintiffs solely relied on the PBMs' recommendations to put Risperdal on their formularies in order to satisfy the proximate cause element of RICO.
As in District 1199P I, Defendants have not briefed the issue or disputed
District 1199P I, 2008 WL 5413105, at *9, 2008 U.S. Dist. LEXIS 103526, at *36-37.
Here, Plaintiffs allege that the enterprise at issue included "Defendants, the network of marketing firms employing physicians and research organizations, contracting with third-party advertisers, proliferation firms and outside consultants, and was used to promote the off-label use of Risperdal to accomplish the common goal of increasing profits by increasing the use and off-label use of Risperdal." This Court finds that Plaintiffs have sufficiently pled the existence of an enterprise.
Defendants argue that Plaintiffs have failed to allege at least two predicate acts of mail fraud, wire fraud, or bribery under the applicable pleading requirements. In response, Plaintiffs argue that they properly allege that Defendants used thousands of mail and interstate wire communications to create and manage their fraudulent scheme to market the off-label uses of Risperdal, which have not been proven safe or effective for these uses. Specifically, Plaintiffs point to Defendants' 1) fraudulent "Dear Doctor" letters, 2) fraudulent CME presentations, and 3) general publication strategy.
This Court previously explained that
To satisfy the pleading requirements for racketeering activity, Plaintiffs first allege that the predicate acts are mail and wire fraud.
Plaintiffs fail to meet the Rule 9(b) pleading standard. As this Court previously held, even "[u]pon a liberal construction of Plaintiff's Complaint, this Court cannot discern a communication that arguably rises to the level of specificity needed to satisfy 9(b)'s heightened pleading requirement." Id. (citing Bonavitacola, 87 Fed.Appx. at 231). Indeed, while Plaintiffs claim that the "Complaint goes well beyond what this Court required in District 1199P I to identify the `date, time and place of the alleged fraud or otherwise inject precision or some measure of substantiation into' their allegation of mail and wire fraud," Plaintiffs fail to provide the necessary specificity under 9(b). (Opposition Memo p 24).
Plaintiffs first point to Defendants' "Dear Doctor" letters. See Id. at p. 24. In the Complaint, Plaintiffs allege that pursuant to the FDA's request, Defendants sent letters to health care professionals to add certain language to Risperdal's warnings. These letters, Plaintiffs allege, continued to misrepresent Risperdal's risks and "deliberately minimiz[ed] the risk with Risperdal and omit[ed] the warning to monitor certain patients on Risperdal." (Compl. ¶¶ 162-66). While Plaintiffs provide detailed information with regard to the content of the letters, Plaintiffs fail to allege with particularity how these letters directly impacted Plaintiffs, or how they have been made in furtherance
Next, Plaintiffs point to Defendants' allegedly fraudulent CME presentations. Plaintiffs allege that because Defendants knew that FDA regulations prohibited them from pro-actively disseminating information regarding the off-label uses of Risperdal, Defendants encouraged affiliated CME provider physicians to "plant" persons in the audience to make such requests so that false information could be conveyed. Id. at ¶¶ 28-29, 82. To that end, Plaintiffs allege that Defendant planned and coordinated the CMEs by "extensive use of the wires and mails, including the mailing of invitations to physicians, the mailing of proposals to the accrediting institutions, booking of hotels and airplane tickets, the arrangement of meals, the scheduling of telephone conference calls, the development and modification of tactical plans, and the coordination of Risperdal presentation content to be present at the event." Id. at ¶ 215. However, the Court finds that these generalized allegations do not provide the requisite particularity on how these seminars purportedly affected or influenced Plaintiffs in any manner. In particular, Plaintiffs never once allege that any of Defendants communicated with any of the individual consumers or third-party payor plaintiffs. There are no allegations that any Plaintiff or representative, or agent, of Plaintiffs received information from Defendants regarding these CMEs. Indeed, the only allegations regarding these CMEs refer to those made by Defendants to other third parties. Hence, there are no particularized allegations of mail or wire fraud involving any of the named Plaintiffs with respect to the fraudulent CMEs.
Finally, Plaintiffs' argument regarding Defendants' publication strategy is similarly unconvincing. The Complaint generally asserts that Defendants "implemented a national uniform marketing, advertising and promotion campaign" in their efforts to promote, advertise, and sell Risperdal for off-label uses. Compl., ¶ 202; see also ¶¶ 203-06. In furtherance of this scheme, Plaintiffs allege that Defendants paid key opinion leaders and influential local physicians to disseminate false and misleading information to physicians prescribing Risperdal. However, Plaintiffs fail to specifically allege how Defendants used the Federal Mail System to further their scheme in this respect. Also, for substantially the same reasons as stated above, Plaintiffs fail to allege how the publication strategy affected or influenced Plaintiffs in any manner. Accordingly, these allegations also fall short of Rule 9(b) pleading requirements. See Compl. ¶¶ 224-262 (making general assertions such as: "[c]onducting marketing and promotion of Risperdal under the guise of continuing medical education;" "Defendants
Plaintiffs also allege that they satisfy the predicate act requirement because Defendants engaged in bribery. In the Complaint, Plaintiffs allege that Defendants engaged in "[m]ultiple instances of bribery in violation of state statutes" by providing physicians with financial incentives, such as expensive dinners and lavish vacations. Compl. ¶¶ 244, 323. "While bribery does not invoke the heightened pleading requirements of Rule 9(b), Plaintiffs must satisfy the more liberal pleading requirements of Rule 8(a) to adequately plead bribery as a predicate act." District 1199P I, 2008 WL 5413105, at *13, 2008 U.S. Dist. LEXIS 103526, at *47. As this Court previously held and applies with equal force here: "Plaintiffs make no effort to delineate the elements of bribery nor do they cite to any statute which does so, and thus, Plaintiffs have failed to put Defendants on notice as to what laws they are alleged to have violated." Id. (citing Lockheed Martin Corp. v. Boeing Co., 357 F.Supp.2d 1350, 1374-75 (M.D.Fla.2005)). Indeed, the Complaint does not assert any instances where Defendants provided remuneration to a physician and thereby caused the physician to prescribe Risperdal when it was not in the patient's best interests. Nor do Plaintiffs allege that any "bribes" to physicians resulted in prescriptions for which Plaintiffs should not have paid. Instead, Plaintiffs simply allege that Defendants committed "[m]ultiple instances of bribery in violation of state statutes." (Compl., ¶ 323).
In sum, because Plaintiffs have not sufficiently alleged any of the elements, except for enterprise, as required under RICO and NJRICO, they have not sufficiently plead their RICO claims under federal or New Jersey law, and the Court grants Defendants' motion to dismiss Counts I and III of the Complaint.
Defendants assert that Plaintiffs RICO conspiracy claim fails because it is premised on Plaintiffs' deficient federal RICO claim. Relying on this Court's prior decision, Defendants state that a conspiracy claim under 18 U.S.C. § 1962(d) must be dismissed where the underlying substantive RICO cause of action is legally insufficient. See District 1199P I, 2008 WL 5413105, at *15-16, 2008 U.S. Dist. LEXIS 103526, at *60. Plaintiffs do not counter the accuracy of this Court's conclusion of the law, but simply state that because they have satisfied the elements of the RICO claim, it follows that they also satisfy the RICO conspiracy claim.
As previously held, "Plaintiffs' allegations that Defendants violated § 1962(d) by conspiring to violate § 1962(c) in this case fail as a matter of law because Plaintiffs have not sufficiently plead a federal RICO claim under § 1962(c)." Indeed, "`[a]ny claim under section 1962(d) based on conspiracy to violate the other subsections of section 1962 necessarily must fail if the substantive claims are themselves deficient.'"
Defendants argue that Plaintiffs' claim under the NJCFA fails because Plaintiffs do not plead causation with the particularity required by Rule 9(b). In addition, Defendants claim that Plaintiffs lack standing to sue under the NJCFA, since TPP's are not considered "consumers" within the meaning of the statute to bring suit. Plaintiffs counter that they have adequately pled the causation requirement because it is more relaxed than the stringent RICO standard. In addition, Plaintiffs contend that while the law regarding standing is not settled, there is ample authority to support their standing in this case as "consumers."
To properly allege a NJCFA claim, a plaintiff has to adequately aver the following elements: "`(1) unlawful conduct by the defendants; (2) an ascertainable loss on the part of the plaintiff; and (3) a causal relationship between the defendants' unlawful conduct and the plaintiff's ascertainable loss.'" Indian Brand Farms, Inc. v. Novartis Crop Prot., Inc., 617 F.3d 207, 218 (3d Cir.2010) (quoting N.J. Citizen Action v. Schering-Plough Corp., 367 N.J.Super. 8, 842 A.2d 174 (App.Div.2003)). "Under the first element, a plaintiff must [allege] that the `defendant engaged in deception, fraud, false pretense, false promise, or misrepresentation,' but need not establish either intent or detrimental reliance on the misrepresentation." Marcus v. BMW of N. Am., LLC, No. 08-5859, 2010 WL 4853308, 2010 U.S. Dist. LEXIS 122908 (D.N.J. Nov. 19, 2010) (citing Gennari v. Weichert Co. Realtors, 148 N.J. 582, 605-08, 691 A.2d 350 (1997)). To allege an ascertainable loss, Plaintiffs must aver that they "suffer[ed] ... `either an out-of-pocket loss or a demonstration of loss in value' that is `quantifiable or measurable.'" Id. (citing Thiedemann v. Mercedes-Benz U.S.A., LLC, 183 N.J. 234, 248, 872 A.2d 783 (2005)). In fact, the ascertainable loss requirement is met when a consumer receives less than what was promised. Zebersky v. Bed Bath & Beyond, Inc., No. 06-cv-1735, 2006 WL 3454993, at *2, 2006 U.S. Dist. LEXIS 86451 (D.N.J. Nov. 28, 2006), at *5 (citing Union Ink Co. v. AT & T Corp., 352 N.J.Super. 617, 646, 801 A.2d 361 (App. Div.2002)). Indeed, "in order to recover damages under NJCFA, a plaintiff must `[allege] that the unlawful consumer fraud caused [its] loss.'" Cannon v. Cherry Hill Toyota, Inc., 161 F.Supp.2d 362, 374 (D.N.J.2001) (citing Cox v. Sears Roebuck & Co., 138 N.J. 2, 23, 647 A.2d 454 (1994)).
Moreover, the pleading requirements of Rule 9(b), which require information such as the date, time, place of the alleged fraud, or some other "measure of substantiation" into the fraud allegation, apply to a NJCFA claim. Slim CD, Inc. v. Heartland Payment Sys., No. 06-2256, 2007 WL 2459349, at *10, *11, 2007 U.S. Dist. LEXIS 62536 (D.N.J. Aug. 22, 2007), at *28, *32 (citing F.D.I.C. v. Bathgate, 27 F.3d 850, 876 (3d Cir.1994) and Lum, 361 F.3d at 223-24).
Plaintiffs' consumer fraud claim fails to meet the threshold Rule 9(b) pleading requirement for causation. As discussed supra, Plaintiffs' theory of causation in this action is too speculative and attenuated to be cognizable. Indeed, Plaintiffs do not allege sufficiently how Defendants' allegedly fraudulent promotion of Risperdal for off-label uses caused Plaintiffs to suffer injury. As such, this failure is fatal to Plaintiffs'
Regarding Plaintiffs' claim under New Jersey's Unfair and Deceptive Acts and Practices, this Court notes that Plaintiffs cite to N.J.S.A. § 56:8-1, et seq., as the statutory basis. However, § 56:8-1 is New Jersey's Consumer Fraud Act. Indeed, there is no New Jersey statute entitled "Unfair and Deceptive Acts and Practices."
In Count VI, Plaintiffs allege that Defendants violated 49 other states' consumer protection and unfair and deceptive acts or practices statutes (not including New Jersey). This Court finds, however, that every state's consumer fraud statutes may not have the same elements as the NJCFA. Indeed, as this Court previously held, "there is no basis for this Court to conclude that all the elements of consumer fraud statutes in other states mirror the statute in New Jersey." Kalow & Springnut, LLP v. Commence Corp., No. 07-3447, 2009 WL 44748, at *5, 2009 U.S. Dist. LEXIS 320, at *13 (D.N.J. Jan. 5, 2009). "[T]his sort of `catch-all' listing of statutes does not meet the most basic pleading requirements." In re Toshiba Am. HP DVD Mktg. & Sales Practices Litig., No. 08-939, 2009 WL 2940081, at *14, 2009 U.S. Dist. LEXIS 82833, at *41 (D.N.J. Sept. 10, 2009) (citation omitted). Accordingly, Count VI of Plaintiffs' Complaint is dismissed.
Defendants argue that Plaintiffs' negligent misrepresentation and fraud claims should be dismissed because of Plaintiffs' failure to adequately allege causation and the required reliance element.
As this Court stated supra, Plaintiffs have not alleged that physicians relied on Defendants' misrepresentations about Risperdal. Without these allegations that Plaintiffs, physicians, or PBMs relied on Defendants' information, Plaintiffs cannot properly allege the reliance element of both negligent misrepresentation and fraud. Indeed,
Id. at *33, 2009 U.S. Dist. LEXIS 58900 at *117.
In addition, "proximate cause is an essential element of both fraudulent misrepresentation and negligent misrepresentation claims." Bouriez v. Carnegie Mellon Univ., 585 F.3d 765, 771 (3d Cir. 2009) (citing Allegheny, 228 F.3d at 445). Since this Court held, supra, that Plaintiffs failed to meet the proximate cause requirement under RICO and NJRICO, Plaintiffs fail to meet the proximate cause requirement under both negligent misrepresentation and fraud. Therefore, Counts VII and X are dismissed.
Defendants argue that New Jersey law only recognizes unjust enrichment as a quasi-contractual doctrine, and accordingly, a claim of unjust enrichment fails where, as here, it sounds exclusively in tort. Plaintiffs assert that their unjust enrichment claim does not sound in tort, but rather, in quantum meruit based on an implied contract. For an unjust enrichment claim, "New Jersey law requires a plaintiff to `show both that defendant received a benefit and that retention of that benefit without payment would be unjust.'" In re Ford Motor Co. E-350 Van Prods. Liab. Litig., 2011 WL 601279, at *8, 2011 U.S. Dist. LEXIS 16504, at *29-30 (D.N.J. Feb. 16, 2011) (citing Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 110, 922 A.2d 710 (2007) (quotation omitted)).
Plaintiffs claim that Defendants received monies, a benefit, from Plaintiffs — overpayments and Defendants' increased profits — which were excessive and unreasonable for the purchase of Risperdal. Regardless of whether Plaintiffs' claim in this context sounds in tort, this
Under New Jersey law, a claim for civil conspiracy cannot survive without a viable underlying tort, and because all of Plaintiffs' tort claims fail as a matter of law, Plaintiffs' civil conspiracy claim must be dismissed. See Allegheny, 228 F.3d at 446 (citation omitted) (stating that a civil conspiracy claim requires an underlying cause of action); see also King's Choice Neckwear, Inc. v. FedEx Corp., No. 07-CV-0275, 2007 WL 4554220, at *3, 2007 U.S. Dist. LEXIS 93843, at *10 (D.N.J. Dec. 20, 2007) (citation omitted) (stating that "[a] civil conspiracy claim requires an underlying cause of action apart from the conspiracy itself"). Since this Court has dismissed Counts I-VIII and X, and there is no underlying tort claim, Plaintiffs' civil conspiracy claim fails.