United States District Court, S.D. California
APRIL KRUEGER, individually and on behalf of all others similarly situated, Plaintiff,
WYETH, INC. f/k/a AMERICAN HOME PRODUCTS, a Pennsylvania corporation; WYETH PHARMACEUTICALS f/k/a WYETH-AYERST PHARMACEUTICALS, a Pennsylvania corporation; and DOES 1 through 100 Inclusive, Defendants.
ORDER: (1) DENYING DEFENDANTS' MOTION TO EXCLUDE
EXPERT TESTIMONY [DOC. NO. 317]; (2) GRANTING IN PART AND
DENYING IN PART DEFENDANTS' MOTION FOR SUMMARY JUDGMENT
[DOC. NO. 341]
JOHN A. HOUSTON UNITED STATES DISTRICT JUDGE
matter comes before the Court on Defendants Wyeth, Inc. and
Wyeth Pharmaceuticals, Inc.'s (collectively
“Wyeth” or “Defendants”) motion to
exclude expert testimony and motion for summary judgment, or
in the alternative, partial summary judgment pursuant to Rule
56(a) of the Federal Rules of Civil Procedure (“Fed. R.
Civ. P.”) See Doc. Nos. 317, 341. Both motions
have been fully briefed by the parties. See Doc.
Nos. 326, 340, 342, 350, 351, 353, 359, 360. After
careful consideration of the record, pleadings and exhibits
submitted by the parties, oral argument from counsel, and for
the reasons set forth below, the Court
DENIES Wyeth's motion to exclude
Professor Rosenthal's testimony (doc. no. 317),
DENIES Wyeth's motion for summary
judgment and GRANTS Wyeth's motion for
partial summary judgment. Doc. No. 341.
manufacture a variety of hormone replacement therapy
(“HRT”) products, including the drugs known as
Prempro, Premarin and Premphase. Between 1995 and 2002, Wyeth
employed a standardized pervasive marketing campaign in
California, and throughout the United States, aimed at
“rebalancing” consumer and prescriber perceptions
about the risks and benefits of Wyeth's HRT drugs.
Defendants positioned themselves as the authoritative source
on HRT and developed strategies, campaigns, education
materials, and presentations to neutralize the global fear of
breast cancer. Doc. Nos. 351- 24, 32, 35, 36.
Defendants created articles discussing the myths and
mis-perceptions relating to breast cancer and HRT with
suggestive readings authored by hired consultants to refute
negative HRT information. Doc. No. 351-62. These
materials and guides were created by Defendants' home
office and the information was uniformly distributed to their
sales force nationwide. Doc. Nos. 351-4, 6. It was
also disseminated in advertisements using celebrities,
publications targeting women, and in “Dear
Doctor” letters aimed at reaching those physicians
treating women with menopausal symptoms. Doc. Nos.
351-34, 351-35 at 28, 351-48, 50-52; 351-28, 29. Wyeth
promoted that its HRT drugs protected women from
cardiovascular disease, and had other cognitive benefits,
despite the Food and Drug Administration (“FDA”)
prohibiting “off-label” promotion prior to
standardized verification. Doc. No. 351-17 at 10
(Parisian, M.D. Decl., at 10). Although Wyeth warned of a
moderate risk of breast cancer on its Prempro label, it
qualified the risk as being associated with higher
doses and prolonged use, in excess of 10 years.
Id. at 13. These representations were made despite
clinical data showing an increased risk of breast cancer at
any dose and several studies reporting an increased risk of
breast cancer following usage significantly less than ten
years. Id. (citing to various studies published
before and during the relevant time frame indicating
increased risk after only a short exposure) (i.e.
Bergkvist, 1989: 2 years; Wyeth's Pivotal Trial, 1994:
One year; Schairer, 1994: 2 years; Gapstur, 1999: Less than 5
years; Schairer, 2000: 4 years). Nonetheless, between 1995
and 2002, Defendants' label remained unchanged.
Id. at 13.
women were prescribed HRT by their physicians for the
“treatment of moderate to severe vasomotor symptoms
associated with menopause (hot flashes, night sweats), vulvar
and vaginal atrophy, and the prevention of
osteoporosis.” See Doc. No. 317-3 at 5. Just
under 47, 000 HRT drug prescriptions were purchased by
Californians during the class period at a cost of
approximately $1.3 billion. Doc. No. 351-7 at 2
(Rosenthal, Ph.D. Decl. at 2). By 1997, Wyeth's
HRT drugs were the most prescribed drugs in the United
States, used by over 9 million women. Doc. Nos.
351-9, 351-35 at 3. However, in 2002, the National Health
Institute removed Prempro from the Women's Health
Initiative (“WHI”) clinical trial due to the
increased rate of disease present among participants,
including breast cancer and cardiovascular complications.
Doc. Nos. 351-11, 351-12, 351-15. In 2004, Premarin
was also removed based on study participants experiencing a
39 % increased risk of stroke and a 47% increased risk of
blood clots. Doc. No. 351-12. Subsequent reports
issued by investigators showed that HRT increased risks of
breast cancer, strokes, venous thromboembolic disease, heart
attacks, cardiovascular disease, Alzheimer's disease, and
time the study was terminated, 53.8% of women had already
stopped taking the HRT. Doc. No. 351-12 at 6.
Although some women began hormone therapy use outside of the
study through their own health clinicians, many women stopped
taking hormone therapy altogether. Id.; 351-15 at 2.
Prescriptions of Prempro declined by 66% and Premarin 33%
from the first half of 2002 to the first half of 2003.
Doc. No. 351-15 at 2; see also Doc. Nos.
351-13 at 3, 351-14.
representative action arises from Plaintiff April
Krueger's (“Plaintiff” or
“Krueger”) allegation that, between January of
1995 and January of 2003 (“class period”),
Defendants violated California consumer protection laws. The
gravamen of Plaintiff's claims is that Defendants
misrepresented the health risks associated with their HRT
drugs during a long term, nationwide, marketing campaign,
conducted in violation of (1) California's Unfair
Competition Laws, Cal. Bus. & Prof. Code
§§ 17200-17210 (“UCL”); and (2) the
California Consumer Legal Remedies Act, Cal. Civ.
Code §§ 1750-1784 (“CLRA”).
See Doc. No. 1. Plaintiff, on behalf of herself and
others similarly situated (“Class” or
“class members”), seek both damages and
restitution. Pursuant to the CLRA, Plaintiff seeks actual
damages as a result of purchasing Defendants' HRT
products during the class period (doc. no. 326 at
8). Plaintiff also seeks restitution of the full purchase
price or restitutionary disgorgement of the net profits
Defendants earned from class members as result of the
allegedly unfair practices. Id. at 10.
retained the services of Professor Meredith Rosenthal, Ph.D.
(“Dr. Rosenthal”) to establish the damage of the
alleged misconduct on the Class. See Doc. No. 326-2
at 2-9. Dr. Rosenthal was directed to utilize the class
definition certified by this Court on March 29, 2011
(doc. nos. 108, 326-2 at 4-5) and “assume that
all California consumers who purchased Premarin, Prempro,
and/or Premphase” would constitute members of the Class
unless they had a personal injury claim. Id. at 5.
She “calculated damages incurred by  end-payer
purchasers of Wyeth's [HRT] products[.]”
Id. at 2. As a result, she provided the following
opinions: (1) total dollar amount spent on prescriptions
($1.3 billion); (2) total out-of-pocket cost paid by class
members ($590.2 million); and (3) profit earned by Wyeth as a
result of sales to members of the class ($771.6 million), all
of which were limited to the class period. Id. at 6.
The Full Prescription Price scenario calculates the
retail cost of Defendants' HRTs, as to all California
consumers (excluding personal injury claimants), by
multiplying “the total number of prescriptions sold in
California” by “the full retail prescription
price.” Id. at 7. The Out-of-Pocket
Payments scenario was calculated by taking the total
amount paid for non-Medi-Cal prescriptions and excluding
insurance payments from the total purchase price. Both the
full prescription price and the out-of-pocket costs are
referred to in the report as “refund” damages.
Id. Last, the Wyeth Profit (i.e.
Restitutionary Disgorgement) scenario, based on
profit and loss statements produced by Defendants, offers the
“total net profits earned as a result of sales of
Premarin, Premphase and Prempro to California consumers
during the class period.” Id. at 9.
March 28, 2016, Defendants filed the instant motion to
exclude the opinions of Dr. Rosenthal on the grounds that her
calculations fail to account for the value or benefit class
members received from use of Defendants' HRT products.
See Doc. No. 317. Defendants later filed the instant
motion for summary judgment, arguing no genuine dispute of
material fact exists as to certain elements of the alleged
violations: (1) damages and (2) injury and reliance of absent
class members. See Doc. No. 341. Both motions have
been fully briefed and argued by the parties. See Doc.
Nos. 350, 353. Wyeth filed a notice of supplemental
authority in support of its pending motions and Plaintiff
filed a response. Doc. Nos. 359, 360. The motions
are now before the Court.
Summary Judgment Summary judgment is appropriate
under Rule 56(c) of the Federal Rules of Civil Procedure
where the moving party demonstrates the absence of a genuine
issue of material fact and entitlement to judgment as a
matter of law. Fed. R. Civ. P. 56(c); Celotex
Corp. v. Catrett, 477 U.S. 317, 322 (1986). A fact is
material when, under the governing substantive law, it could
affect the outcome of the case. See Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986); Freeman v.
Arpaio, 125 F.3d 732, 735 (9th Cir. 1997). A dispute
about a material fact is genuine if “the evidence is
such that a reasonable jury could return a verdict for the
nonmoving party.” Anderson, 477 U.S. at 248.
seeking summary judgment always bears the initial burden of
establishing the absence of a genuine issue of material fact.
See Celotex, 477 U.S. at 323. The moving party may
satisfy this burden in two ways: (1) by presenting evidence
that negates an essential element of the nonmoving
party's case or (2) by demonstrating that the nonmoving
party failed to make a showing sufficient to establish an
element essential to that party's case on which that
party will bear the burden of proof at trial. Id. at
322-23. Where the party moving for summary judgment does not
bear the burden of proof at trial, it may show that no
genuine issue of material fact exists by demonstrating that
“there is an absence of evidence to support the
non-moving party's case.” Id. at 325. The
moving party is not required to produce evidence showing the
absence of a genuine issue of material fact, nor is it
required to offer evidence negating the nonmoving party's
claim. Lujan v. National Wildlife Fed'n, 497
U.S. 871, 885 (1990). “Rather, the motion may, and
should, be granted so long as whatever is before the District
Court demonstrates that the standard for the entry of
judgment, as set forth in Rule 56(c), is satisfied.”
Id. (quoting Celotex, 477 U.S. at 323). If
the moving party fails to discharge this initial burden,
summary judgment must be denied, and the court need not
consider the nonmoving party's evidence. See Adickes
v. S.H. Kress & Co., 398 U.S. 144, 159-60 (1970).
moving party meets the initial burden, the nonmoving party
cannot defeat summary judgment merely by demonstrating
“that there is some metaphysical doubt as to the
material facts.” Matsushita Elec. Indus. Co., Ltd.
v. Zenith Radio Corp., 475 U.S. 574, 586 (1986); see
also Anderson, 477 U.S. at 252 (“[t]he mere
existence of a scintilla of evidence in support of the
nonmoving party's position is not sufficient.”).
Rather, the nonmoving party must “go beyond the
pleadings and by her own affidavits, or by the depositions,
answers to interrogatories, and admissions on file, designate
specific facts showing that there is a genuine issue for
trial.” Celotex, 477 U.S. at 324 (quoting
Fed.R.Civ.P. 56(e) (internal quotations omitted)). The court
may not make credibility determinations, and inferences to be
drawn from the facts must be viewed in the light most
favorable to the party opposing the motion. See Masson v.
New Yorker Magazine, 501 U.S. 496, 520 (1991);
Anderson, 477 U.S. at 255; Matsushita, 475
U.S. at 587.
Expert Witness Qualification
Rule of Evidence 702 governs the admissibility of expert
witnesses. Expert witnesses can testify to “scientific,
technical, or other specialized knowledge” that will
assist the “trier of the fact [in] understand[ing] the
evidence or to determine a fact in issue.” Fed. R.
Evid. 702. Proponents of the expert witness have the
burden of demonstrating the admissibility of the testimony.
See Lust ex rel. Lust v. Merrell Dow Pharms., 89
F.3d 594, 598 (9th Cir. 1996). The offering party must prove
by preponderance of evidence that its expert witness'
testimony is admissible. See Stambolian v. Novartis
Pharm. Corp., No. CV 12-0437, 2013 WL 6345566, at *3
(C.D. Cal. Dec. 6, 2013) (citing Lust ex rel. Lust,
89 F.3d at 598). Failure to show admissibility of an expert
witness will result in the exclusion of the witness. See
Mesfun v. Hagos, No. CV 03-02182, 2005 WL 5956612, at *2
(C.D. Cal. Feb. 16, 2005) (holding expert witness is excluded
because offering party failed to show how opinion was more
than “rank speculation”).
testimony is admissible pursuant to Rule 702 if it is both
relevant and reliable. Daubert v. Merrell Dow Pharm.,
Inc., 509 U.S. 579, 589 (1993). Reliability requires
that an expert's testimony “have a reliable basis
in the knowledge and experience of his discipline.”
Estate of Barabin v. AstenJohnson, Inc., 740 F.3d
457, 462 (9th Cir. 2014) (quoting Kumho Tire Co., Ltd. v.
Carmichael, 526 U.S. 137, 141 (1999)). A trial court
will not weigh the accuracy of the testimony of an expert
witness, rather the court must determine if the expert's
testimony is grounded in principals and methodology employed
in a particular field of study. Advisory Committee Notes to
Rule 702, 2000 Amendments (proponents are not required to
show by a “preponderance of the evidence that the
assessments of their experts are correct, they only have to
demonstrate by a preponderance of evidence that their
opinions are reliable . . . the requirement of reliability is
lower than the merits standard of correctness”)
(quoting In re Paoli R.R. Yard PCB Litig., 35 F.3d
717, 744 (3d Cir. 1994)).
expert testimony may still be inadmissible if it is
irrelevant. Evidence is relevant when it has “any
tendency to make the existence of any fact that is of
consequence to the determination of the action more probable
or less probable than it would be without the
evidence.” Fed. R. Evid. 401. If expert
opinion does not assist the trier of fact with deciding a
pertinent factual issue, the testimony is irrelevant and
therefore inadmissible. When considering the admissibility of
an expert witness, the court acts as a
“gatekeeper” rather than a fact finder.
Primiano v. Cook, 598 F.3d 558, 564 (9th Cir. 2010)
(citing Daubert, 509 U.S. at 594, 596). As the
gatekeeper, the Court makes a “‘preliminary
assessment of whether the reasoning or methodology underlying
the testimony is scientifically valid and whether that
reasoning or methodology properly can be applied to the facts
in issue.'” Daubert, 509 U.S. at 592-93
(citation omitted). Where the expert witness meets the
criteria of Rule 702, the trial court has broad discretion
whether to admit the evidence. Id. (finding juries
should be given leave to act as a fact-finder on the
conclusions of an expert witness).
moves for summary judgment challenging the sufficiency of
Plaintiff's evidence: first as to damages after moving to
exclude Plaintiff's expert opinion; and second as to
injury and reliance on the alleged misrepresentations and
omissions by absent class members. Because the latter raises
an issue as to Article III standing and the jurisdiction of
this Court over unnamed class members, the Court addresses
these issues in reverse order.
Evidence of Injury and Reliance
contends it is entitled to summary judgment against absent
class members because Plaintiff has not produced evidence of
injury or reliance by class members on the alleged
misrepresentations and omissions. Defendants emphasize that
at the summary judgment phase, it is not enough to allege
that class members were likely to be deceived and injured by
Defendants' actions. Instead, Defendants argue that
Plaintiff must produce competent evidence that class members
actually relied on the alleged misrepresentations and were
injured as a result.
the March 30, 2011 order granting in part and denying in part
class certification, Plaintiff relies on this Court's
ruling that under the UCL, the injury in fact requirement is
limited to the named representative, not the putative class
as a whole. Krueger v. Wyeth, Inc., No. 03CV2496 JAH
AJB, 2011 WL 8971449, at *10 (S.D. Cal. Mar. 30, 2011.
Plaintiff highlights this Court's prior ruling, citing
McAdams v. Monier, Inc., 182 Cal.App.4th at 192,
that “individualized proof of deception, reliance, and
injury is not necessary under California law for class
members to prevail on class claims.” Krueger,
WL 8971449, at *12. Under both the UCL and CLRA reliance may
be inferred when the facts show that material
misrepresentations were made to the entire class. In re
Vioxx, 180 Cal.App.4th 116, 129(2009).
as the Ninth Circuit has explained:
Unlike common-law fraud claims that focus on the victim's
reliance or damages, the UCL focuses on the perpetrator's
behavior: “to state a claim under either the UCL or the
false advertising law ... it is necessary only to show that
members of the public are likely to be deceived.”
In re Tobacco II Cases, 46 Cal.4th 298, 312, 569-70
(2009). Actual falsehood, the perpetrator's knowledge of
falsity, and perhaps most importantly, the victim's
reliance on the false statements-each of which are elements
of common-law fraud claims-are not required to show a
violation of California's UCL. (citations omitted).
Berger v. Home Depot USA, Inc., 741 F.3d 1061, 1068
(9th Cir. 2014), abrogated by Microsoft Corp. v.
Baker, 137 S.Ct. 1702 (2017); see also Waller v.
Hewlett-Packard Co., 295 F.R.D. 472, 476 (S.D. Cal.
2013) (elements of common law fraud aren't incorporated
into a UCL claim).
Article III standing requires the injury-in-fact to be
“fairly traceable” to defendant's misconduct.
In re Deepwater Horizon, 739 F.3d 790, 799 (5th Cir.
2014) (citing Lujan v. Defenders of Wildlife, 504
U.S. 555 (1992) (listing the elements of Article III
standing: injury in fact, the injury's traceability to
the defendant's conduct, and the potential for the injury
to be redressed by the relief requested).
Article III Standing
the issuance of this Court's 2011 order certifying the
class, various courts have discussed how to evaluate Article
III standing for the purposes of class certification. In
In re Deepwater Horizon, the Fifth Circuit discusses
in moderate detail the two different approaches courts have
followed: (1) focusing exclusively on individual standing of
the “named plaintiffs” or “class
representatives” and ignoring absent class members
entirely, and (2) examining the class definition to ensure
absent class members possess Article III standing. 739 F.3d
790, 800-01 (5th Cir. 2014).
to the Ninth Circuit decision in Mazza, district
courts were heavily split on this issue. See Webb v.
Carter's Inc., 272 F.R.D. 489
(C.D.Cal.2011)(analyzing standing of proposed class members);
O'Shea v. Epson America, Inc., 2011 WL 4352458
(C.D.Cal. Sept. 19, 2011) (examining the class definition to
ensure standing); Gonzales v. Comcast Corp., 2012 WL
10621 (E.D.Cal. Jan. 3, 2012)(same); Cf. Bruno
v. Quten Research Inst., LLC, 280 F.R.D. 524
(C.D.Cal.2011) (focusing only on named plaintiff); In re
Google AdWords Litig., 2012 WL 28068 at *10 (N.D.Cal.
Jan. 5, 2012) (same); Agne v. Papa John's Int'l,
Inc., 286 F.R.D. 559, 565 (W.D.Wash.2012) (acknowledging
the split, but taking no position). However, neither approach
requires Plaintiff to submit evidence of each class
member's standing as Defendants suggest. “The core
function of class actions, wherein named plaintiffs represent
a passive group of class members, would be significantly
compromised” if class members were required to submit
evidence of their standing. Newberg on Class Actions
§ 2:3 (5th ed.).
Notably, the Ninth Circuit has employed both approaches. In
Stearns v. Ticketmaster Corp., the court held that
“our law keys on the representative party, not all of
the class members.” 655 F.3d 1013, 1021 (9th Cir.
2011). However, this conclusion followed recognition that
“each alleged class member was relieved of money in the
transactions” and that the loss, presumably of each
class member, was “fairly traceable to the action of
the Appellees.” Id. In Mazza, the
Ninth Circuit followed the test set forth in Denney v.
Deutsche Bank AG:
We do not require that each member of a class submit evidence
of personal standing. At the same time, no class may be
certified that contains members lacking Article III standing.
The class must therefore be defined in such a way that anyone
within it would have standing.
443 F.3d 253, 263-64 (2d Cir.2006)(citations omitted);
see Mazza v. Am. Honda Motor Co., 666 F.3d 581, 596
(9th Cir. 2012)(examining the class definition).
Mazza, the court found the named plaintiff's
allegations sufficient to withstand the standing
challenge at the class certification stage, but that the
district court erred in finding that a class-wide inference
of reliance on the misrepresentations was appropriate. In
Mazza, the Ninth Circuit vacated the class
certification order, holding that the class definition
certified by the district court was overboard because it was
not defined in such a way as to include only members who were
exposed to advertising that is alleged to be materially
misleading. Although this Court has already explained that
the exposure issue is not present here due to the massive
advertising campaign employed by Defendants (see Krueger
v. Wyeth, Inc., 310 F.R.D. 468, 479-82 (S.D. Cal. 2015);
see also Torres v. Mercer Canyons Inc., 835 F.3d
1125, 1137 (9th Cir. 2016)), the Court must assure itself
that there is “a causal connection between the injury
and the conduct complained of…” Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560 (1992).
Court joins the multiple others in our circuit that have
followed Mazza. See, e.g., Walker v. Life Ins.
Co. of the Sw., 2012 WL 7170602 (C.D.Cal. Nov. 9, 2012);
Guido v. L'Oreal, USA, Inc., 284 F.R.D. 468,
474-75 (C.D.Cal.2012); Tietsworth v. Sears, Roebuck and
Co., 2012 WL 1595112 at *14 (N.D.Cal. May 4, 2012);
Baxter v. Rodale, 2012 WL 1267880 at *2 (Apr. 12,
2012); In re TFT-LCD (Flat Panel Antitrust Litig.),
2012 WL 253298 at *1 n. 2 (N.D.Cal. Jan. 26, 2012). Defining
the class in such a way as to ensure the standing of the
class is necessary to avoid inconsistencies and inequities
that would inevitably occur if plaintiffs were allowed to sue
as class members, but not as individuals. From an evidentiary
standpoint at summary judgment, only the named plaintiff or
class representative must produce evidence to support Article
III standing. Id. (plaintiff, as the party invoking
federal jurisdiction, bears the burden of establishing these
elements). However, that does not alleviate the Court's
obligation to confirm standing as to the Class. See Ortiz
v. Fibreboard Corp., 527 U.S. 815, 831 (1999)(finding
that Article III standing of class members may be resolved
after class certification issues, which themselves pertain to
statutory standing). The traditional doctrine of standing
“ensures that federal courts do not exceed their
authority and imposes limitations on the category of
litigants empowered to maintain a lawsuit in federal court to
seek redress for a legal wrong. Spokeo, Inc. v.
Robins, 136 S.Ct. 1540, 1547. Such litigants include
passive class members. Thus, the Court must engage in a
two-step analysis: (1) ensuring that individual standing of
the named plaintiff is supported by competent evidence and
(2) examining the class definition to ensure that anyone
within it would have standing.
Evidence of Named Plaintiff's Individual Standing
contends that she would not have purchased Defendants'
HRT products “but for” Defendants'
minimization and omission of information regarding serious
health risks and misrepresentation of health benefits.
Plaintiff must therefore produce evidence that she was
relieved of each dollar she spent because of Wyeth's
deceptive conduct. See Mazza, 666 F.3d 581, 595.
Plaintiff provided the following testimony:
Q. And what prompted you to decide to stop?
A. That, um, I discussed it with my doctor at the time, and
she wanted -- she really ...