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BHANDARI v. BITTNER

United States District Court, W.D. New York


October 5, 2004.

VIJAY S. BHANDARI, Individually and as Executor of the Estate of Trinidad Garcia-Bhandari, Plaintiff,
v.
RICHARD C. BITTNER, AVENTIS HOLDINGS, INC., AVENTIS, INC., HOECHST MARION ROUSSEL, INC., AVENTIS PHARMACEUTICALS, INC., HMR PHARMA, INC., QUINTILES TRANSNATIONAL CORP., QUINTILES LABORATORIES LIMITED, QUINTILES, INC., LABORATORY CORPORATION OF AMERICA HOLDINGS, LABORATORY CORPORATION OF AMERICA and JOHN DOE, Defendants.

The opinion of the court was delivered by: JOHN T. ELFVIN, Senior District Judge

MEMORANDUM and ORDER*fn1

Plaintiff commenced this action on November 7, 2002 in the Supreme Court of the State of New York, County of Erie, asserting claims against the defendants for negligence, strict products liability, breach of warranty, fraudulent misrepresentation and fraudulent concealment. The action was removed to this Court on January 9, 2003. On January 6, 2004 this Court dismissed plaintiff's fraudulent misrepresentation and fraudulent concealment claims without prejudice and granted plaintiff leave to file an amended complaint to cure the noted deficiencies. Presently before this Court are motions by defendants Quintiles Transnational Corp., Quintiles, Inc. and Quintiles Laboratories Limited and by defendants Richard C. Bittner, Aventis Holdings, Inc., Aventis, Inc., Hoechst Marion Roussel, Inc., Aventis Pharmaceuticals, Inc. and HMR Pharma, Inc. (collectively "defendants") to dismiss for failure to plead the fraud claims with particularity pursuant to Rule 9(b) of the Federal Rules of Civil Procedure ("FRCvP") and for failure to state a claim pursuant to FRCvP 12(b)(6). For the reasons set forth below, the defendants' motions to dismiss will be denied.

The following factual allegations are taken from the Amended Complaint. On or about August 4, 2000 Trinidad Garcia-Bhandari began to take the prescription drug Arava. Plaintiff, as the husband and Executrix of the Estate of Trinidad Garcia-Bhandari, alleges that as a result of taking Arava, his wife sustained grievous injuries which led to her death on November 10, 2000. Plaintiff's causes of action against all of the defendants are premised on the same factual allegations — to wit, that they designed, researched, manufactured, assembled, advertised, tested, inspected, marketed, supplied, promoted, packaged, distributed, selected warnings and specifications of components of and/or sold Arava. The Amended Complaint does not make any factual distinctions among the eleven defendants and all of the averments of liability are identical as to each such defendant.

  On February 18, 2003 the Quintiles defendants filed a motion to dismiss plaintiff's Complaint pursuant to FRCvP 12(b)(6), arguing that it fails to comply with FRCvP 8(a)*fn2 and that plaintiff's fraudulent misrepresentation and concealment claims should be dismissed because they are not pled with the particularity as required by FRCvP 9(b).*fn3 This Court held that, although plaintiff's Complaint "is broad and arguably over-inclusive — it comprises 59 pages, including 424 paragraphs —, it cannot be said either that it does not provide defendants with fair notice of the claims asserted against them or that it fails to state a claim for which relief may be granted." This Court also noted that "the fact that plaintiff has aggregated his claims against all of the defendants does not serve as a basis for dismissing his Complaint for failure to comply with FRCvP 8(a)." December 31, 2003 Memorandum & Order of this Court, at 5. Therefore, this Court did not dismiss plaintiff's Complaint for failing to comply with FRCvP 8(a).

  With regards to defendants' FRCvP 9(b) claims, this Court found that Plaintiff did "not allege specific statements or misrepresentations, * * * fail[ed] to identify which defendant, or defendants, made the alleged misrepresentations[,] * * * fail[ed] to indicate when such misrepresentations were made and the circumstances in which the decedent relied upon such statements[.]" December 31, 2003 Memorandum & Order of this Court, at 9. Therefore, the Court dismissed plaintiff's fraudulent misrepresentation and fraudulent concealment claims without prejudice and granted him leave to file an amended complaint. Id. On January 30, 2004 plaintiff filed an Amended Complaint, in response to which defendants filed motions to dismiss plaintiff's fraudulent misrepresentation and fraudulent concealment claims for failure to plead with particularity pursuant to FRCvP 9(b) and for failure to plead sufficient facts pursuant to FRCvP 12(b)(6), both of which are currently before this Court.

  When ruling on a motion to dismiss for failure to state a claim pursuant to FRCvP 12(b)(6), the Court must take "as true the facts alleged in the complaint and [draw] all reasonable inferences in the plaintiff's favor." Jackson Nat'l Life Ins. Co. v. Merrill Lynch & Co., Inc., 32 F.3d 697, 699-700 (2d Cir. 1994). This Court may dismiss plaintiff's action pursuant to FRCvP 12(b)(6) if "it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief." Cohen v. Koenig, 25 F.3d 1168, 1172 (2d Cir. 1994) (quoting Conley v. Gibson, 355 U.S. 41, 45-46 (1957)). Accordingly, this Court must not consider whether the claims will ultimately be successful, but merely "assess the legal feasibility of the complaint." Cooper v. Parsky, 140 F.3d 433, 440 (2d Cir. 1998).

  FRCvP 9(b) provides that, "in all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity." To satisfy FRCvP 9(b), the Amended Complaint must "(1) specify the statements that the plaintiff contends were fraudulent, (2) identify the speaker, (3) state where and when the statements were made, and (4) explain why the statements were fraudulent." United States of Am. v. Erie County Med. Ctr., 2002 WL 31655004, *7 (W.D.N.Y. Oct. 30, 2002) (quotations and citations omitted). FRCvP 9(b) is based on a need to provide a defendant with fair notice of the basis of a plaintiff's claim so as to protect a defendant's reputation from groundless accusations of fraud and to prevent strike suits brought for settlement value; therefore, plaintiff is required to reveal the specified information within his control. Corcoran v. Am. Plan Corp., 1987 WL 4448, *4 (E.D.N.Y. Feb. 6, 1987); Nugent v. Searle Pharm., Inc., 1987 WL 15328, *1 (W.D.N.Y. Aug. 5, 1987). On the other hand, FRCvP 9(b) is relaxed when the plaintiff is not likely to have access to more specific information until after discovery because the information is exclusively within defendant's knowledge. Nugent, 1987 WL 15328, *1. See also Corley v. Rosewood Care Ctr., Inc. of Peoria, 142 F.3d 1041, 1050-51 (7th Cir. 1998) (finding plaintiff's amended complaint satisfied the particularity requirements of FRCvP 9(b) although he could not identify the particular defendant because such specific information was in the hands of defendants and FRCvP 9(b) must be relaxed where the plaintiff lacks the access to all facts necessary to detail his claim, which is most likely to be the case where a plaintiff alleges a fraud against one or more parties); Michaels Bldg. Co. v. Ameritrust Co., N.A., 848 F.2d 674, 680 (6th Cir. 1988) (holding that it "is a principle of basic fairness that a plaintiff should have an opportunity to flesh out her claim through evidence unturned in discovery. Rule 9(b) does not require omniscience; rather, the Rule requires that the circumstances of the fraud be pled with enough specificity to put defendants on notice as to the nature of the claim."). In this case, plaintiff has alleged circumstances of fraud with particularity as to information within his control and the rule is relaxed as to matters exclusively within defendants' knowledge. See Segal v. Gordon, 467 F.2d 602, 608 (2d Cir. 1972). First, plaintiff has specified the statements that he contends were fraudulent. Plaintiff alleges that the "package insert provides that the liver toxicity effects of the drug were generally reversible, when, in fact, the effects were known [by defendants] not to be reversible" (Am. Compl., ¶ 403) and "[d]efendants knew at the time the package insert was prepared that [the required] loading dose [initiated upon commencement of the taking of the drug] could and would, in patients such as * * * [decedent] cause severe and permanent liver damage[.]" (Id. at ¶ 404.) These are the statements plaintiff alleges to be fraudulent, which gives defendants fair notice of the basis of plaintiff's claim.

  Second, plaintiff still has not identified which defendant, or defendants, made the alleged misrepresentations. However, this is an instance where FRCvP 9(b) must be relaxed because plaintiff does not have access to all the facts necessary to identify which defendants are responsible for which misrepresentation. In Corcoran, the plaintiff alleged that the fraudulent schemes were the collective product of the defendants and alleged a conspiracy among all defendants. 1987 WL 4448, *4-*5. The Court held that to dismiss the complaint because of plaintiff's inability to specify further the individual involvement of each defendant before discovery had been had and when the information is exclusively within defendants' knowledge "would be to use Rule 9(b) as a shield protecting members whose organizations commit fraud from ever being sued for that fraud." Id. at *5. Similarly plaintiff does not know which defendant or defendants helped in the writing of the package insert and alleges that all defendants were in some way involved with or responsible for the claimed misrepresentation. Although plaintiff acknowledges that it was probably the Aventis defendants who were thus responsible, he does not know which other defendants, if any, were involved in the writing and does not know who caused the false or misleading statements to appear on the package insert.*fn4 This information is within the exclusive knowledge of the defendants and plaintiff will be able to obtain this information only through discovery which has not yet commenced.

  Third, plaintiff has indicated where and when such misrepresentations were made and, specifically, the circumstances in which the decedent relied upon such statements. Plaintiff alleges that decedent was prescribed the drug Arava on or about August 4, 2000 (Pl.'s Am. Compl. ¶ 403) and continued to take the drug until her death on November 10, 2000. (Id. at ¶¶ 400-424.) Plaintiff alleges that "accompanying the prescription drug was a package insert that contained fraudulent misrepresentations" (Id. at ¶ 403) relating to the liver toxicity and the loading dose of the drug. (Id. at ¶¶ 403-404.) Plaintiff also alleges that decedent and her physician relied upon the statements contained in the package insert with respect to the loading dose and "ingested the prescribed loading dose in conformity with the package insert accompanying" Arava. (Id. at ¶ 405). The Court's Order of December 31, 2003 found that plaintiff's "Complaint does not specify if the decedent read such statements, or heard them directly from a defendant, or whether she solely relied upon alleged misrepresentations that were made to her doctor." December 31, 2003 Memorandum & Order of this Court, at 9. Plaintiff's Amended Complaint, however, does specify that decedent relied on the materials contained in the package insert. To have relied on such materials, decedent had to have read them. Also, plaintiff's Amended Complaint states that the decedent's physician relied on the materials contained in the package insert, which were intended by the defendants to induce the physician "to recommend" Arava. (Id. at ¶¶ 406, 404.) Therefore, the Amended Complaint shows that decedent also relied upon the alleged misrepresentations that were made to decedent's physician.

  Finally, the plaintiff explained in his Amended Complaint why the statements were fraudulent. Specifically, plaintiff alleges the defendants "knew that the effects of ARAVA, in certain persons, were not generally reversible and would result in permanent, and/or progressive liver damage. The Defendants also knew that the loading dose, when prescribed, could and would cause permanent and/or liver damage." (Am. Compl. ¶ 405.) Moreover, the Amended Complaint states, inter alia, that defendants represented that Arava was safe for its intended use, but knew that it had not been proven to be safe. (Id. at ¶ 414.) Further, the Court's Order of December 31, 2003 did not find that this prong of the FRCvP 9(b) test had not been met in plaintiff's Complaint and this Court now finds that plaintiff's Amended Complaint also meets the fourth prong of the FRCvP 9(b) test.

  Therefore, plaintiff has met the requirements of FRCvP 9 to the best of his present ability and pled the fraud claims with particularity to the extent the specified information was within his control. Although plaintiff did not plead with particularity those facts that are exclusively within defendants' knowledge, he did so plead those facts that are within his control, which is all that FRCvP 9(b) can require of a plaintiff. Thus, defendants' motions to dismiss for failure to plead the fraud claim with particularity pursuant to FRCvP 9(b) will be denied. Defendants further claim that, even without the additional pleading hurdle of FRCvP 9(b), plaintiff's fraud claims fail to state a claim, thereby justifying dismissal. The necessary elements of a cause of action for fraud are "(1) the defendant's misrepresentation or concealment of material fact, (2) that such representation was false and known to be false, (3) the defendant's intention to deceive and induce the plaintiff to act upon such representation, (4) the plaintiff's reliance upon the representation, and (5) damages." Jeffrey "BB" v. Cardinal McCloskey Sch. & Home for Children, 257 A.D. 2d 21, 23, 689 N.Y.S.2d 721, 723 (3rd Dept. 1999). See also John Paul Mitchell Sys. v. Pete-N-Larry's Inc., 862 F. Supp. 1020, 1030 (W.D.N.Y. 1994). As stated above, plaintiff did allege in his Amended Complaint the misrepresentations and concealments of material fact made by defendants and that such representations were false and known to be false — to wit, defendants stated in the package inserts the loading dose amounts and that the liver toxicity effects of the drug were reversible, both of which are material facts that plaintiff alleges were false and known by defendants to be false. Additionally, the Amended Complaint states that defendants had the intent of defrauding, deceiving and inducing decedent, doctors and the public in general and that decedent was unaware of the falsity of the representations, reasonably believed them to be true and, in reliance upon the representations, was induced to and did take Arava. (Pl.'s Compl. ¶¶ 406-407.) Finally, plaintiff alleges that defendants' misrepresentations and concealments resulted in the painful death of plaintiff's wife which further resulted in financial and emotional damages to her next of kin. Because a motion to dismiss is not grantable unless "no relief could be granted under any set of facts that could be proved consistent with the allegations," all factual allegations in the complaint are deemed true and all reasonable inferences therefrom are construed in favor of the plaintiff. Cicio v. Does, 321 F.3d 83, 89-90 (2d Cir. 2003) (quotations and citations omitted). Here, plaintiff has met his burden in alleging facts in his Amended Complaint that, if accepted as true, could entitle him to relief. Therefore, defendants' motions to dismiss plaintiff's fraud claims for failure to state a claim pursuant to FRCvP 12(b)(6) will be denied.

  Accordingly, it is hereby ORDERED that defendants' motions to dismiss plaintiff's fraudulent misrepresentation and fraudulent concealment claims are denied.


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