Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.


August 1, 1986

ROCCO SAVASTANO, individually and on behalf of all others similarly situated, Plaintiff,

The opinion of the court was delivered by: SAND


Plaintiff Rocco Savastano originally commenced this action on March 24, 1986, by filing a complaint against defendant Thompson Medical Company, Inc. ("Thompson"), a pharmaceutical manufacturer, alleging that the latter had violated the Rackeetering Influenced and Corrupt Organization Act, 18 U.S.C. §§ 1961-1968 ("RICO") and the New York General Business Law, § 349 et seq. (McKinney Supp. 1986). Plaintiff sought to maintain the suit as a class action, pursuant to F.R.Civ.P. 23(b)(3), on behalf of himself and all others who had purchased one of defendant's products, Dexatrim-15, between February, 1984, and November 1, 1985.

 On May 22, 1986, Thompson moved for an order, pursuant to F.R.Civ.P. 12(b)(1), 12(b))6) and 9(b). dismissing plaintiff's complaint. At oral argument, plaintiff's counsel represented to the Court that plaintiff was currently in a position to amend his complaint and to plead fraud with greater particularity. Tr. 4. Rather than "deal with academic issues that w[ould] be mooted by an amended complaint," (Tr. 5), defendant's motion was withdrawn without prejudice to refiling after plaintiff filed his amended complaint.

 Plaintiff filed an amended complaint on May 27, 1986, alleging the same violations pled in his earlier complaint, and on July 10, 1986, defendant once again moved for an order, pursuant to F.R.Civ.P. 12(b)(1), 12(b)(6), and 9(b), dismissing plaintiff's amended complaint. For the foregoing reasons, defendant's motion is granted.


 Thompson, a foreign corporation duly qualified to conduct business in the State of New York, markets and sells nonprescription, over-the-counter appetite suppressants. Thompson apparently has 55% of the market in such products and has achieved this rate of success predominantly through the product principally involved in this litigation - Dexatrim.

 Dexatrim also has been the subject of prior litigation. One of defendant's competitors, Ciba Geigy Corp. ("Ciba"), brought suit against Thompson in 1983 (Ciga Geigy Corp. v. Thompson Medical Co., Inc., No. 83 Civ. 8924 (VLB)) alleging that the latter had violated the Lanham Act (15 U.S.C. § 1125(a)) by falsely representing that its new product, "Extra Strength Dexatrim 18-Hour" ("Dex 18"), was effective for eighteen hours. On January 30, 1984, Judge Broderick indicated after trial that he would enjoin the marketing of Dex 18 because Thompson could not claim it lasted 18 hours. This was due to the fact that the blood level of Phenolpropanolamine HCl ("PPA"), a synthetic drug compound that is Dexatrim's active ingredient, dropped below 60 nanograms per Ml/blood level before the eighteen hour mark. See Thompson Medical Co. v. Ciba-Geigy, Inc., No. 85 Civ. 4928, (S.D.N.Y. April 6, 1985) (available on Lexis, Genfed Library, Dist. file). *fn1"

 Before the exact contours of the injunction were decided, the parties agreed to a settlement. Id.; see also Thompson Medical Co. v. Ciba-Geigy, Inc., No. 85 Civ. 4928 (S.D.N.Y. Nov. 21, 1985) (available on Lexis, Genfed Library, Dist. File). The parties' agreement, dated February 7, 1984, apparently barred shipment of Dex 18 and had it recalled by mailgram from retailers' shelves; it "also provided that the concoction then labeled Dex 18 could be introduced as a 15-hour duration product," "Dexatrim-15" ("Dex 15"). Plaintiff's Memorandum of Law in Opposition to Defendant's Motion to Dismiss of July 2, 1986 ("Plaintiff's Memo.") at 2-3.

 Thompson then instituted an action before Judge Lowe alleging that Ciba's claims in regard to its product, Acutrim, were false. Thompson Medical Co. v. Ciba-Geiqy, Inc., supra, No. 85 Civ. 4928 (MJL). According to plaintiff, it was during discovery related to this action that Ciba came across two reports related to Dex 18, Harris II and Harris III. Harris II allegedly had been received by Thompson in February, 1984, when it was negotiating the settlement with Ciba; it concluded that Dex 18 was at best effective for approximately 12 hours. Harris III, issued in or about April, 1984, allegedly "confirmed Harris II and more conclusively established that Dex 15 [formerly marketed as Dex 18] had a duration of no more than 12 hours." Plaintiff's Memo. at 3. Subsequent to obtaining this information, Ciba filed a new complaint seeking, inter alia, to permanently enjoin Thompson from claiming in labeling, advertising or promotional materials that Dex 15 provided effective appetite suppression for 15 hours or contained 75 milligrams of PBA. Ciba Geiqy Corp. v. Thompson Medical Co., No. 85 Civ. 7070 (VLB) ("Ciba II"). Thompson asserted three counter-claims alleging, in substance, that Ciba had made certain misrepresentations to television networks regarding Judge Broderick's earlier decision that prompted these networks to "improperly agree[] to televise Ciba's ... advertisements." Thompson also alleged that Ciba had made claims of its product's superior duration that were based upon false premises and that Ciba had never conducted any comparative weight loss studies to substantiate its superior weight loss claims. Id.

 Judge Broderick rendered a decision in Ciba II on January 2, 1986 enjoining Thompson from marketing Dex 15 until it had conducted tests that could appropriately support a 15 hour duration claim. As to Thompson's counterclaims, Judge Broderick found that Ciba's statements to the networks were not false or misleading but that its advertisements did make therapeutic superiority claims without the necessary clinical support. Ciba was thus enjoined from marketing its Acutrim II as a 17 hour product until it had conducted the appropriate tests to justify such a claim. Ciba-Geigy, Corp. v. Thompson Medical Co., 85 Civ. 7070 (S.D.N.Y. Dec. 19, 1985).

 Judge Lowe subsequently rendered a decision in Thompson Medical Co. v. Ciba-Geigy Corp., No. 85 Civ. 4928 (S.D.N.Y. April 16, 1986) (available on Lexis, Genfed Library, Dist. file), addressing only those claims that Judge Broderick had not addressed in Ciba II. Judge Lowe's decision denied Thompson's claims for relief. However, it enjoined Thompson's use of specific weight loss claims (i.e., that "people who added Dexatrim to their diets lose 50% more weight") until the appropriate clinical evidence to establish such claims had been developed; the court declined to enjoin Thompson's use of the statement "Lose Weight Fast" provided this was accompanied by an appropriate disclaimer. Id.

 This brings us to the present Dexatrim controversy. According to plaintiff, defendant's conduct relating to Dex 18 and, later Dex 15 (the same product marketed under a different name), constitutes a "pattern of racketeering activity" that caused injury to plaintiff's as well as other putative class members' business or property in violation of RICO. Plaintiff also alleges that defendant's "Dex 15 scheme which is the predicate for this action, and the Dex 18 scheme which preceded the Dex 15 scheme, involved thousands of separate instances of mail and wire fraud." Amended Complaint P 50; see also id. at PP 44-50.

 Besides defendant's "concealment" of the Harris II report during the Ciba I litigation, plaintiff contends that after Harris II was confirmed by Harris III, defendant willfully concealed both Harris II and Harris III and "continued to represent to the public, like plaintiff, [in television commercials and on the product's packaging] that Dex 15 was effective for 15 hours." Amended Complaint P 28. Even after Ciba allegedly complained to the television networks, defendant responded with an analysis ("Dr. Silverman's analysis") it knew was based mostly upon inadequate studies to substantiate the claims made by its product. Id. at PP 30-33. Three of the studies from which this analysis was derived - - Harris I, Harris II, and the Pfeiffer study -- allegedly "were improperly conducted and inadequate to establish a duration claim." Id. at PP 32-33. The ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.