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Fenwick v. Ranbaxy Pharmaceuticals, Inc.

United States District Court, D. New Jersey

November 13, 2018

FRANCIS FENWICK, EDWARD SAFRAN, STEVE HARDING, MARY WARDRETT, and LINDA YOUNG, Individually and on behalf of all others similarly situated, Plaintiffs,
v.
RANBAXY PHARMACEUTICALS, INC, RANBAXY LABORATORIES, LTD., RANBAXY LABORATORIES, INC, RANBAXY USA, OHM LABORATORIES, ABC CORPORATIONS 1-10, and JOHN DOES 1-10, Defendants.

          MEMORANDUM AND ORDER

          PETER G. SHERIDAN, U.S.D.J.

         This matter is before the Court on a Motion for Class Certification by Plaintiffs Francis Fenwick et al. (ECF No. 138), and a motion to dismiss for lack of standing.

         I

         This is a class action matter brought by individuals who seek refund of the money paid for certain prescription pills of the drug Atorvastatin, manufactured and sold by the defendants.[1] (Third Amended Compl, ECF No. 47, at ¶ 1, 21). The product is the generic version of Lipitor, and is used to reduce cholesterol. (Id. at ¶ 21). On September 5, 2012, Ranbaxy employees noticed blue particles in the raw materials used to manufacture Atorvastatin. (Ranbaxy Docs, ECF No. 124-6, at 2). On October 22, 2012, the particles were identified as glass from glass liners for the reactors used during the manufacturing process for the active pharmaceutical ingredient ("API"), and at that time, Ranbaxy ceased further manufacture and distribution of that API. (Id.) The API observed to be containing glass was not distributed to consumers. (Id.) Thereafter, Ranbaxy manufactured another batch of the API, in the same facility where it had first noticed the glass in the API. (Id.) This batch of API was shipped to a Ranbaxy manufacturing facility in Mohali, India, where it was used in the manufacturing of the Atorvastatin, and was then distributed to the distribution centers of thirty-five different companies. (Id.) A total of 41 batches were manufactured and distributed using the API that may have, but was never observed to, contain glass. (Id.)

         On November 9, 2012, Ranbaxy initiated a voluntary recall at the retail level of 41 lots of Atorvastatin. (Id.) Specifically, Ranbaxy recalled lots containing l0mg, 20mg, and 40mg of the product, which were packaged in 90 or 500 count pill bottles. (Ranbaxy Recall Notice, ECF No. 124-7, at 2). Ranbaxy explained it was taking this action "as a precautionary measure due to the fact that we cannot exclude the possibility that the affected lots may contain very small glass particles resembling a fine grain of sand (less than 1 mm in size)." (Ranbaxy Doc, ECF No. 134-4, at 2).

         On November 28, 2012, Ranbaxy issued a press release announcing the recall. (Id.) Ranbaxy informed consumers that "[b]ased on the current evaluation, the probability of an adverse effect due to consumption of this product is remote" and that consumers "should NOT discontinue taking . . . [the product] without direct guidance from your doctor." (Ranbaxy Helpful Info., ECF No. 134-7, at 2). The recall was classified as a Class II recall by the FDA, meaning "a situation in which use of, or exposure to, a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote." (FDA Correspondence, ECF No. 135-6, at 2). On November 29 and 30, 2012, the FDA issued a statement, notifying the public of the recall. (FDA Statement, ECF No. 136-2, at 2). The FDA advised that the "possibility of advised health problems related to the recalled [product] is extremely low . . . [and] patients who have the recalled medicine can continue taking it unless directed otherwise by their physician or health care provider." (Id.)

         The 41 recalled lots amounted to 480, 425 bottles containing the recalled Atorvastatin pills. (Pis. Ex. 9, ECF No. 124-12, at 9). Of that amount, 400, 201 bottles were returned during the recall. (Final Recall Status Report, ECF No. 136-3, at 18). Nine of the thirty-five companies that received the recalled Atorvastatin pills sold the pills to Class Members. (Pis. Ex. 9, ECF No. 124-12). Plaintiffs allege that from the 90 or 500 count pill bottles, the recalled pills were repackaged and disbursed in smaller bottles, often into 30 count pill bottles, and then sold to consumers through pharmacies. The parties agree that companies do not track the lot numbers when buying or selling drugs to consumers, and thus the parties are unable to determine which consumers received pills from the recalled lots through information provided by the companies. (See PL Br., ECF No. 124, at 10; Def. Br., ECF No. 133, at 5). Plaintiffs define a lot number as a number assigned to specific batches of pills, that "identifies exactly when and where a batch of pills was manufactured. Prescription pills of the same type will have different lot numbers if they come from different manufacturing batches." (PI. Br., ECF No. 124, at 8 n.7). However, plaintiffs state that companies keep record of National Drug Code ("NDC") numbers, which it explains is a product identifier that is "unique, 10 digit, 3 segment number which identifies the manufacturer, the drug type, the dosage, and the number of pills in the bottle [that] the pills are originally shipped in." (Id.) Plaintiffs explain that while there were 41 lot numbers identified in the recall, there were only 4 NDC numbers, and consumers can be identified by the NDC numbers. (Id.)

         Plaintiffs asserts that before Ranbaxy initiated the recall, the recalled pills were received by various distribution centers and "mixed into the inventory pools of pharmacies along with other pills [not subject to the recall] identified by the 4 NDC numbers." (Pis. Br., ECF No. 124, at 10). Thus, plaintiffs contend that the:

prescriptions filled for Class Members could have included recalled pills ... or could have been pills of the exact same type that were not part of the recall . . . The uncertainty about whether the pills dispensed to consumers from those tainted inventory pools makes all of the pills dispersed substandard.

(Id.) Accordingly, plaintiffs allege that once the recalled pills were mixed into inventory pools containing non-recalled pills, every pill within that inventory pool became substandard. (Id.)[2]

         Because the recall was at the retail level, and not at the consumer level, only retailers were required to return the product and, as plaintiff alleges, received a refund. Thus, because consumers were instructed to continue taking the recalled pills, consumers who purchased the recalled pills did not receive a refund. Plaintiffs now seek to certify a class representing consumers who purchased pills that may have contained glass particles. Plaintiffs brought the present action on November 29, 2012, alleging: (1) breach of implied warranty of merchantability; (2) breach of implied warranty of merchantability; (3) breach of express warranty; and (4) unjust enrichment. (See Third Amended Compl., ECF No. 47).

         II

         Class representatives

         a. Fenwick

         Francis Fenwick is a New Jersey resident who purchased the product through a CVS Pharmacy in Montvale, New Jersey. When he learned that the product could have been adulterated, he spoke to CVS and was informed that the Defendants conducted a recall on a retail level only. He did not receive a replacement product, and was not refunded the value of the prescription pills. (Id. at ¶8).

         b. Safran

         Edward Safran is a Massachusetts resident who purchased Atorvastatin pills through Express Scripts. He reached out to Express Scripts, and he was informed that the product he purchased would not be replaced or refunded. He also did not receive a refund or replacement from Ranbaxy. (Id. at ¶9).

         c. Harding

         Steve Harding is a New York resident who purchased Atorvastatin manufactured by Ranbaxy through Express Scripts. Express Scripts informed him that the product he purchased would not be replaced or refunded. Additionally, Ranbaxy did not refund his money, replace the product, or pay him the value of the prescription pills. (Id. at ¶10).

         d. Warden

         Mary Wardett resides in Washington D.C. She purchased Atorvastatin through CVS. Ranbaxy did not refund her money, replace the pills, or pay her the value of the prescription pills. (Mat¶11).

         e. Young

         Linda Young resides in Texas. She purchased the product through CVS. Ranbaxy did not refund her money, replace the product, or pay her the value ...


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