In an unusual ruling in a closely-watched case, the First Circuit Court of Appeals has affirmed a District Court’s dismissal of most of the plaintiffs’ claims, but on new grounds which will potentially allow the plaintiffs another bite at the product liability apple. Hochendoner v. Genzyme Corp., Nos. 15-1446, 15-1447( May 23, 2016).
The cases before the First Circuit were two putative class actions seeking damages against a Massachusetts manufacturer based on a variety of tort theories, all stemming from the production (and mis-production) of a life-saving drug.
Fabry Disease is a rare genetic disorder which, left untreated, will cause progressively more severe symptoms, eventually leading to premature death. A replacement enzyme (named “Fabrazyme”) that treats (but does not cure) Fabry was brought to market by the defendant Genzyme Corporation. Fabrazyme is the only FDA-approved enzyme replacement therapy for the treatment of Fabry.
Genzyme provided the drug to Fabry patients until 2009 when serious contamination issues were discovered in its manufacturing facility. In addition to the distribution of contaminated product, a Fabrazyme shortage resulted which caused rationing of the product in the United States; even this reduced supply was subject to intermittent interruptions. Despite setbacks in reestablishing American production levels, in 2011 Genzyme diverted some Fabrazyme to the European market, allegedly to respond to market competition there. A proliferation of litigation followed, including the two putative class actions at issue here.
After consolidation, the defendant moved the District Court (Woodlock, J.) to dismiss the complaints on the ground that they failed to state an actionable claim (Fed. R. Civ. P. 12(b)(6)). The problem was that the complaints did not adequately connect the tort theories alleged with clear causal chains leading to cognizable harms. The District Court distilled the theories into three categories (the Fabrazyme shortage caused a progression of the disease, the shortage caused the disease to accelerate, and tainted supply), but held that, in the end, the complaints either failed to link particular plaintiffs with particular harms, or impermissibly relied on the underlying theory that Genzyme had a duty to supply the market with Fabrazyme.
The First Circuit did not expressly disagree with the District Court’s approach, but held that the issue presented a question of Article III standing, not adequate pleading under Rule 12(b)(6). Holding that “[a]t the pleading stage, the plaintiff bears the burden of establishing sufficient factual matter to plausibly demonstrate his standing to bring the action,” the Court held that – with one exception – the complaints before it failed this standard:
Tellingly, no specific information is provided regarding the harm, if any, that has befallen each individual plaintiff. Instead, the complaints offer only scattered descriptions of generalized harms.
One plaintiff – James Mooney – escaped the Court’s scythe. He claimed that ingestion of diluted doses of Fabrazyme during the shortage caused him to suffer a life-threatening allergic reaction when he was finally able to resume a full dose of the drug. The Court held that these allegations were sufficiently particular to give Mooney standing to sue.
The rose in the thorns for the plaintiffs is that, by dismissing the actions on Article III standing grounds, the First Circuit has breathed new life into the litigation. Whereas the District Court’s dismissal for a failure to comply with Rule 12(b)(6) had sounded the death knell for these cases, a dismissal for lack of standing is remediable, operating as it does without prejudice. These plaintiffs may very well get another chance to make their case.