Justia U.S. 9th Circuit Court of Appeals Opinion Summaries

Plaintiff filed a putative securities class action against defendants in connection with public statements made about Arena’s weight-loss drug, lorcaserin. When Arena filed its application with the FDA, the FDA’s advisory panel published a briefing document that disclosed, for the first time, that Arena had been in a “highly unusual” back-and-forth with the FDA regarding the results of cancer studies on rats (the “Rat Study”). Plaintiff filed suit after news of the Rat Study broke. The district court dismissed the First, Second, and Proposed Third Amended Complaints. The court agreed that once defendants touted the safety and likely approval of the drug based on animal studies, defendants were obligated to disclose the Rat Study's existence to the market. The court concluded that plaintiff has alleged scienter with sufficient particularity to survive a motion to dismiss. In this case, there is no question that plaintiff has alleged that defendants knew that the Rat Study existed, that defendants knew that the FDA’s request for bi-monthly reports and follow-up studies was highly unusual and out-of-process, and defendants went ahead and told investors about their confidence in lorcaserin’s approval based on preclinical animal studies. Therefore, the court concluded that plaintiff has properly pleaded scienter under Federal Rule of Civil Procedure 9(b) and the Private Securities Litigation Reform Act (PSLRA), 15 U.S.C. 78u-4. The court reversed and remanded. View "Schwartz v. Arena Pharmaceuticals, Inc." on Justia Law

The FDA opened an investigation and sent warning letters to 1-800-GET-THIN and a few surgery centers in California, stating that the FDA believed 1-800-GET-THIN’s LapBand advertising violated the Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301 et seq., by not providing relevant risk information regarding the LapBand procedure. The district court subsequently granted the government’s ex parte motion to compel production of attorney-client documents. The court agreed with the Sixth Circuit and concluded that, while in camera review is not necessary to establish a prima facie case that the client was engaged in or planning a criminal or fraudulent scheme when it sought the advice of counsel to further the scheme, a district court must examine the individual documents themselves to determine that the specific attorney-client communications for which production is sought are sufficiently related to and were made in furtherance of the intended, or present, continuing illegality. Accordingly, the court vacated the order compelling production of all subpoenaed documents so the district court may examine the documents in camera to determine which specific documents contain communications in furtherance of the crime fraud exception to the attorney client privilege. View "United States v. Omidi" on Justia Law

Plaintiffs, non-profit organizations representing the manufacturers and distributors of pharmaceutical products, filed suit challenging the Alameda County Safe Drug Disposal Ordinance, which requires that prescription drug manufacturers, who either sell, offer for sale, or distribute "Covered Drugs" in Alameda, operate and finance a "Product Stewardship Program." The court concluded that the Ordinance, both on its face and in effect, does not discriminate because it applies to all manufacturers that make their drugs available in Alameda County - without respect to the geographic location of the manufacturer; the Ordinance does not directly regulate interstate commerce where it does not control conduct beyond the boundaries of the county; under the balancing test in Pike v. Bruce Church, Inc., the court concluded that, without any evidence that the Ordinance will affect the interstate flow of goods, the Ordinance does not substantially burden interstate commerce; and therefore, the Ordinance does not violate the dormant Commerce Clause. Accordingly, the court affirmed the district court's grant of summary judgment to defendants.View "PRMA v. County of Alameda" on Justia Law

Plaintiff filed suit against Novartis, manufacturer of Zometa, alleging products liability, negligent manufacture, negligent failure to warn, breach of express and implied warranty, and loss of consortium. On appeal, plaintiff contended that the district court erred by excluding the causation testimony offered by her expert when it found the testimony to be irrelevant and unreliable. The court concluded that the expert's testimony was relevant because it indicated that plaintiff's bisphosphonate use was a substantial factor in her development of bisphosphonate-related osteonecrosis of the jaw. The court also concluded that the expert's testimony was reliable where he used a differential diagnosis grounded in significant clinical experience and examination of medical records and literature. Accordingly, the court concluded that the expert's testimony created a genuine issue of material fact regarding the specific causal link between plaintiff's bisphosphonates treatment and her development of osteonecrosis of the jaw. The court reversed the district court's summary judgment in favor of Novartis and remanded. View "Messick v. Novartis Pharmaceuticals Corp." on Justia Law

GSK filed suit against Abbott over a dispute related to a licensing agreement and the pricing of HIV medications. The central issue on appeal was whether equal protection prohibited discrimination based on sexual orientation in jury selection. GSK contended that a new trial was warranted because Abbott unconstitutionally used a peremptory strike to exclude a juror on the basis of his sexual orientation. The court concluded that GSK had established a prima facie case of intentional discrimination where the juror at issue was the only juror to have identified himself as gay on the record and the subject of the litigation presented an issue of consequence to the gay community. The court held that classifications based on sexual orientation were subject to a heightened scrutiny under United States v. Windsor. The court also held that equal protection prohibits peremptory strikes based on sexual orientation. The history of exclusion of gays and lesbians from democratic institutions and the pervasiveness of stereotypes about the group leads the court to conclude that Batson v. Kentucky applied to peremptory strikes based on sexual orientation. The court also concluded that a Batson challenge would be cognizable only once a prospective juror's sexual orientation was established, voluntarily and on the record. The court rejected Abbott's harmless error argument. Accordingly, the court reversed and remanded. View "SmithKline Beecham Corp. v. Abbott Laboratories" on Justia Law

Plaintiff and others sought and received LASIK eye surgery with a Nidek EC-5000 Excimer Laser System ("Laser") to correct farsightedness. Plaintiff, on behalf of himself and a class of similarly situated individuals, claimed that, had they known that the FDA had not approved the Laser for this use, they would not have consented to the surgeries. The court held that the complaint did not state a claim under the California Protection of Human Subjects in Medical Experimentation Act, Cal. Health & Saf. Code 24171 et seq., because the surgeries were not "medical experiments" subject to the protection of the Act. Plaintiff did not have standing to sue for injunctive relief under the California Consumers Legal Remedies Act (CLRA), Cal. Civ. Code 1750 et seq., and his other substantive claim was preempted by the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. 301 et seq. Plaintiff's common-law fraud by omission claim was expressly preempted by the preemption provision in the Medical Device Amendments. Even if it were not, it was impliedly preempted because it amounted to an attempt to privately enforce the FDCA. Accordingly, the court affirmed the dismissal of the complaint. View "Perez, et al v. Nidek Co., Ltd., et al" on Justia Law

Plaintiffs appealed the district court's grant of summary judgment in favor of Merck in their diversity action alleging wrongful death. Plaintiffs' son died after being administered a Measles, Mumps, and Rubella vaccine manufactured by Merck. On appeal, plaintiffs contended that the district court erred in applying the standards of the National Childhood Vaccine Injury Act, 42 U.S.C. 300aa-22, to their individual claims for damages. Having concluded that Section 22 of the Act generally applied to limit tort liability in a parent's claim for individual injuries, the court determined that plaintiffs' suit was a "civil action for damages arising from a vaccine-related injury or death associated with the administration of a vaccine" and thus limited by the Act. Accordingly, the court affirmed the judgment. View "Holmes, et al. v. Merck & Co., Inc." on Justia Law

Plaintiff brought this securities fraud action against defendant, a biotechnology company and several of its officers, alleging that, by misstating and failing to disclose safety information about two of the company's products used to treat anemia, they violated the Securities and Exchange Act of 1934, 15 U.S.C. 78j(b), 78t(a), and Rule 10b-5, 17 C.F.R. 240.10b-5. At issue was what a plaintiff must do to invoke a fraud-on-the-market presumption in aid of class certification. The court joined the Third and Seventh Circuits in holding that plaintiff must (1) show that the security in question was traded in an efficient market, and (2) show that the alleged misrepresentation were public. As for the element of materiality, plaintiff must plausibly allege that the claimed misrepresentations were material. In this case, plaintiff plausibly alleged that several of defendants' public statements about its pharmaceutical products were false and material. Coupled with the concession that the company's stock traded in an efficient market, this was sufficient to invoke the fraud-on-the-market presumption of reliance. Therefore, the district court did not abuse its discretion in certifying the class.