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In re Celexa and Lexapro Marketing and Sales Practices Litigation

United States Court of Appeals, First Circuit

January 30, 2019

FOREST PHARMACEUTICALS, INC.; FOREST LABORATORIES, INC.; FOREST LABORATORIES, LLC, successor in interest to Forest Laboratories, Inc., Defendants, Appellees, PAINTERS AND ALLIED TRADES DISTRICT COUNCIL 82 HEALTH CARE FUND; DELANA S. KIOSSOVSKI; RENEE RAMIREZ, on behalf of herself and all others similarly situated; MARLENE T. LOCONTE, Plaintiffs, Appellants, MARTHA PALUMBO, individually and on behalf of all other persons similarly situated; PETER PALUMBO, individually and on behalf of all other persons similarly situated; JAYNE EHRLICH, individually and on behalf of all other persons similarly situated; ANNA MURRET, individually and on behalf of all other persons similarly situated; UNIVERSAL CARE, INC.; ANGELA JAECKEL; MELVIN M. FULLMER, on behalf of himself and all others similarly situated; NEW MEXICO UFCW UNION'S AND EMPLOYER'S HEALTH AND WELFARE TRUST FUND, on behalf of itself and all others similarly situated; ALLIED SERVICES DIVISION WELFARE FUND, on behalf of itself and all others similarly situated; TARA JOHNDROW, individually and on behalf of all others similarly situated; BRIAN ANSON, individually and on behalf of all others similarly situated; SCOTT A. WILCOX, on behalf of himself and all others similarly situated; MUNICIPAL REINSURANCE HEALTH INSURANCE FUND; RANDY MARCUS; BONNIE MARCUS; RUTH DUNHAM; TANYA SHIPPY; JILL POWELL, Plaintiffs, PFIZER, INC.; WARNER LAMBERT COMPANY, Defendants.


          R. Brent Wisner, with whom Michael L. Baum, Baum, Hedlund, Aristei & Goldman, P.C., Christopher L. Coffin, and Pendley, Baudin & Coffin, LLP were on brief, for appellants.

          Andrew J. Ceresney, with whom Edwin G. Shallert, Kristin D. Kiehn, J. Robert Abraham, Debevoise & Plimpton LLP, John G. O'Neill, and Sugarman, Rogers, Barshak & Cohen, P.C. were on brief, for appellees.

          Before Howard, Chief Judge, Torruella and Kayatta, Circuit Judges.


         These consolidated appeals arise out of two so-called "off-label" prescription-drug-marketing cases aggregated for pretrial proceedings in the District of Massachusetts by order of the multidistrict litigation panel. Plaintiffs claim that the defendants, Forest Pharmaceuticals, Inc. and Forest Laboratories, Inc. (collectively "Forest"), engaged in fraud to push their antidepressant drugs on unsuspecting minors for whom the FDA had not approved the use of these medications. As we will explain, we reverse the dismissal of the claims brought by two of the four plaintiffs, and we vacate the denial of plaintiffs' motion to compel the production of additional documents by Forest. We otherwise affirm the challenged district-court rulings, including the denial of class certification.


         We begin by summarizing the relevant statutory and regulatory framework and by reciting the facts relevant to the plaintiffs' summary-judgment appeal in the light most favorable to the plaintiffs. See Boudreau v. Lussier, 901 F.3d 65, 71 (1st Cir. 2018).


         The Federal Food, Drug, and Cosmetic Act ("FDCA") requires drug manufacturers to obtain approval from the U.S. Food and Drug Administration ("FDA") before marketing a drug for a particular medical use. 21 U.S.C. § 355(a); see also Mut. Pharm. Co., Inc. v. Bartlett, 570 U.S. 472, 476 (2013). To secure that approval, the drug manufacturer must submit to the FDA either a new-drug application ("NDA") or a supplemental new-drug application ("sNDA"), and the manufacturer must demonstrate the drug's efficacy for the indicated use in at least two double-blind, randomized-controlled trials ("DBRCTs"). See In re Neurontin Mktg. & Sales Practices Litig. (Kaiser), No. 04-cv-10739-PBS, 2011 WL 3852254, at *5 (D. Mass. Aug. 31, 2011), aff'd, 712 F.3d 21 (1st. Cir. 2013); see generally 21 C.F.R. § 314.105. The FDCA creates both civil and criminal penalties for drug manufacturers that promote the use of approved drugs for unapproved uses (referred to here as "off-label" uses). See 21 U.S.C. §§ 331(d), 333(a), 355(a); Lawton ex rel. United States v. Takeda Pharm. Co., 842 F.3d 125, 128 n.4 (1st Cir. 2016). The FDCA, however, does not prohibit doctors from prescribing drugs for off-label uses. Lawton ex rel. United States, 842 F.3d at 128 n.4.


         Forest manufactures and markets prescription drugs, including the antidepressant medications Celexa and Lexapro. Celexa and Lexapro are chemically similar selective serotonin reuptake inhibitors ("SSRIs"), a class of antidepressants that affect a patient's mood by blocking the reabsorption of the neurotransmitter serotonin in the brain, Eli Lilly & Co. v. Teva Pharm. USA, Inc., No. 05-1044, 2005 WL 1635262, at *1 (Fed. Cir. July 13, 2005). The FDA approved Celexa and Lexapro for the treatment of major depressive disorder ("MDD") in adults (i.e., individuals aged eighteen or over) in 1998 and 2002, respectively. Drug manufacturers, including Forest, had difficulty demonstrating that SSRIs were also effective in treating depression in children and adolescents. As of 2005, only Fluoxetine -- commercially known as Prozac -- had gained FDA approval for the treatment of pediatric depression. In 2009, the FDA approved Lexapro for the treatment of depression in adolescents (i.e., individuals of ages twelve through seventeen). The FDA has never approved Celexa for any pediatric use nor has it approved Lexapro as a treatment for depression in children (i.e., individuals under the age of twelve). The record in this case nevertheless strongly suggests that Forest engaged in a comprehensive off-label marketing scheme from 1998 through 2009 aimed at fraudulently inducing doctors to write pediatric prescriptions of Celexa and Lexapro when Forest had insufficient reason to think that these drugs were effective for the treatment of depression in children and adolescents. Plaintiffs have pointed to substantial evidence that Forest sought to achieve this illicit aim by: (1) promoting Celexa's efficacy for the treatment of pediatric depression at medical conferences, at continuing-medical-education programs, and in press releases; (2) concealing negative clinical studies concerning Celexa's efficacy and safety; and (3) directly encouraging physicians to prescribe Celexa and Lexapro for the treatment of pediatric depression.

         For years, Forest nevertheless denied that it was engaged in the off-label promotion of these drugs. Forest Laboratories' Executive Vice President, Dr. Lawrence Olanoff, testified before Congress in 2004 that "because the FDA has not approved pediatric labeling for our products, Forest has always been scrupulous about not promoting the pediatric use of our antidepressant drugs, Celexa and Lexapro. That is the law, and we follow it." Publication and Disclosure Issues in Antidepressant Pediatric Clinical Trials: Hearing Before the Subcomm. on Oversight & Investigations of the Comm. on Energy & Commerce, 108th Cong. 82 (2004) (statement of Dr. Lawrence Olanoff).

         Even before Dr. Olanoff assured Congress of Forest's scrupulousness, a whistleblower had commenced a qui tam action, alleging that Forest had violated the False Claims Act ("FCA"), 31 U.S.C. § 3729(a), by fraudulently marketing and promoting Celexa and Lexapro for the off-label treatment of depression in pediatric patients. Complaint, Gobble v. Forest Labs., Inc., No. 03-10395-NMG (D. Mass. Mar. 4, 2003), ECF No. 1. The United States later intervened in that suit, and, in February 2009, the district court unsealed the United States' complaint. Order Granting Motion to Unseal, United States ex rel. Gobble, No. 03-10395-NMG (D. Mass. Feb. 24, 2009), ECF No. 64. The evidence belying Dr. Olanoff's assurances to Congress turned out to be quite substantial. Ultimately, in September 2010, Forest paid a $39 million fine in connection with pleading guilty to criminal violations of the FDCA for its off-label promotion of Celexa between 1998 and 2002 and an additional $149 million to the United States to settle civil claims that Forest illegally promoted Celexa and Lexapro for pediatric use in 2002 through 2005.


         Within the following four years, over a dozen consumers and entities who paid for prescription drugs filed the lawsuits that led to this appeal. Initially, four plaintiffs joined in the notice of appeal. Only two, Renee Ramirez and the Painters and Allied Trades District Council 82 Health Care Fund ("Painters") have presented any argument on appeal. We refer to these two collectively as "plaintiffs."[1] Ramirez purchased Celexa and Lexapro for her young son from February 2003 through March 2010 on the recommendation of her son's neurologist. Painters has reimbursed its pediatric insureds for off-label prescriptions of Celexa and Lexapro since early 1999. Plaintiffs together seek recovery under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1962(c)-(d), the Minnesota Consumer Fraud Act, Minn. Stat. § 325F.69, and the Minnesota Unfair Trade Practices Act, Minn. Stat. § 325D.13, and for unjust enrichment.

         In June 2016, the district court denied Painters' motion to certify two nationwide classes of similarly situated health-insurance companies and health plans that had paid for or reimbursed off-label pediatric prescriptions of Celexa or Lexapro. In re Celexa & Lexapro Mktg. & Sales Practices Litig. (Painters I), 315 F.R.D. 116, 131 (D. Mass. 2016).[2] In rejecting class certification, the court reasoned that while Painters had satisfied the Rule 23(a) numerosity, commonality, typicality, and adequacy requirements, Painters had failed to establish that common questions of fact or law predominated over individual issues as required by Rule 23(b)(3). Id. at 123-31.

         Subsequently, in March 2017, a dispute arose as a result of Forest's apparently belated production of two internal memoranda in advance of a deposition conducted by agreement after discovery had otherwise closed. The two documents contained details regarding a study of Celexa's effectiveness. Forest revealed that it had not sought any responsive documents from its Clinical Supply Group in responding to Painters' discovery requests. The district court nevertheless denied Painters' motion to compel Forest's supplemental production of documents from this group, concluding that any such production would be cumulative. In re Celexa & Lexapro Mktg. & Sales Practices Litig. (Painters II), 288 F.Supp.3d 483, 486-87 (D. Mass. 2018).

         In due course, after deeming discovery complete and ruling on various interim motions, the district court entered summary judgment for Forest on plaintiffs' RICO claims, holding that neither Painters nor Ramirez could demonstrate injury. In re Celexa & Lexapro Mktg. & Sales Practices Litig. (Painters III), 289 F.Supp.3d 247, 253-56 (D. Mass. 2018). The court then proceeded to dismiss plaintiffs' state-based allegations as deriving from their noncognizable RICO claims. Id. at 258-59. This appeal by Painters and Ramirez followed.


         Summary judgment is appropriate "if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a). In granting summary judgment dismissing all of plaintiffs' claims, the district court concluded that plaintiffs had no competent proof that either Celexa or Lexapro was ineffective for treating depression in children or adolescents. We review this conclusion de novo. Martinez v. Petrenko, 792 F.3d 173, 179 (1st Cir. 2015).


         Prevailing on a RICO claim requires proof of an economic injury. See 18 U.S.C. § 1964(c) ("Any person injured in his business or property by reason of a violation of section 1962 of this chapter may sue therefor."). Plaintiffs allege injury in the form of payments made for ineffective drugs.[3] The district court therefore turned its attention to determining whether plaintiffs had enough evidence to allow a jury to find Celexa and/or Lexapro ineffective for treating pediatric depression. See Painters III, 289 ...

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