United States: New Duty To Supply Decision

Last Updated: June 1 2016
Article by James Beck

Ever since we first waded into the issue of "duty to supply" back in 2007 in connection with the litigation that produced Abigail Alliance for Better Access to Developmental Drugs v. von Eschenbach, 495 F.3d 695 (D.C. Cir. 2007), we've criticized cases that, either actually or potentially, seek to impose liability – not for defective products – but for failure to supply as much of a non-defective drug as has been prescribed for the plaintiff.  Today, we're updating that discussion with a recent development, the affirmance of the decision that rejected the concept of "duty to supply" in 22 states.  We blogged about that decision in the district court  here.  Plaintiffs thereafter appealed, but dropped their claims asserting a "free-standing duty to supply the market."  What's left are described as "acceleration" (that progression of the disease allegedly worsened") and "contaminant" (related to the production difficulties) claims.

This decision is Hochendoner v. Genzyme Corp., Nos. 15-1446, -1447, slip op. (1st Cir. May 23, 2016).  The allegations in Hochendoner were that production difficulties led to a shortage of the only FDA-approved treatment for Fabry Disease, a progressive condition that is eventually fatal if untreated.  Slip op. at 3-5.  The shortage (which lasted several years) led to rationing, and in response to rationing a bunch of Fabre sufferers tried to sue.  For more details, see our prior post.  Except for one plaintiff, none of them alleged that there was anything wrong with the product they actually received – only that they didn't receive enough of it, and as a result their pre-existing Fabre Disease symptoms recurred and/or progressed.

The First Circuit affirmed, albeit on different grounds – standing . Although not addressed in the District Court, standing is a "prerequisite" to subject matter jurisdiction, and cannot be waived.  Slip op. at 8.  An interesting procedural point that the court confirmed is that a "plaintiff bears the burden of establishing sufficient factual matter to plausibly demonstrate his standing to bring the action" under TwIqbalId. at 10.  In Hochendoner all but one of the plaintiffs alleged no particularized injury (no doubt because the litigation was a putative class action, and anything particularized is likely to preclude class certification).  Simply being required to take a reduced dose of a drug didn't come close to actual, particularized injury:

Utterly absent, however, is any allegation linking the alleged acceleration and contaminant injuries to any specific plaintiff. This gap is most apparent with respect to the contaminant theory.  There is simply no assertion at any point in the complaints that any specific plaintiff took or received a dose contaminated with particulate matter.  Rather, the allegation is only that [defendant] produced a batch of [the drug] contaminated with particulate matter − not that contaminated doses were ever shipped or administered to any named Fabry patients.

Hochendoner, slip op. at 14.  Not only hadn't plaintiffs alleged exposure, they hadn't even alleged that a mis-manufactured product ever made it into the stream of commerce.  Shades of Digitek.  The same was true of the claims of "accelerated disease progression. Id. at 14-15.  These were made up theories with no basis in any plaintiff's actual medical history.  Only one plaintiff "is actually alleged to have suffered an adverse reaction as a result of taking a diminished dose."  Id. at 17.  The disconnect between the general allegations and any plaintiff's circumstances was fatal to standing.  "[S]tanding is not dispensed in gross." Id. at 15.

Finally, it appears that the court looked to standing as a means of possibly saving some plaintiffs from the consequences – dismissal with prejudice – that had attended their counsel's poor pleading in the district court. Dismissal for want of standing was without prejudice, should somebody actually have been injured from either accelerated progression of their condition or from actually ingesting contaminated medicine (assuming any ever made it to the market).  Slip op. at 23-24.  That exercise of judicial grace did not extend to the bogus duty to supply theory, however. Id. at 24.  Nor did dismissal without prejudice permit amendment of the woefully deficient claims already pleaded.  Id. at 21-22.  The deficiencies were "apparent from the outset," and plaintiffs had passed up plenty of chances to ask for amendment. Id. at 22-23.

Only one claimed survived – a more or less traditional tort claim alleging, "not [plaintiff's] inability to receive full doses" of the drug, but instead "a severe reaction to the drug." Id. at 19-20.  That claim survived because it "does not depend in any way on a duty to supply the market." Id. at 20.  Thus, what started out as two putative class actions has diminished to a single-plaintiff action raising very a narrow type of claim.  We'll see how long that lasts.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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