Illinois unfairness claims against opioid marketers continue

City of Chicago v. Purdue Pharma L.P., No. 14 CV 4361, 2021
WL 1208971 (N.D. Ill. Mar. 31, 2021)

Chicago alleged unfair and deceptive misconduct in multiple
defendants’ marketing, commercializing, and promoting their opioid products. (Perdue
is first in the list but it’s a bunch of them, so parts of this case will
survive the bankruptcy whatever happens there.) There were a bunch of kinds of
allegedly deceptive marketing related to misrepresentations and failures to
disclose. There were also alleged unfair practices related to diversion of
opioids into illicit channels. Defendants allegedly didn’t comply with their
statutory duties to maintain suspicious-order-monitoring systems (“SOMS”), and
concealed their failure from the public, misrepresenting that they were in
compliance with their obligations under the law. This led to the rise of “pill
mills” and an increasing number of deaths and hospitalizations.

Among other things, the court addressed whether the City
adequately pled unfairness under the Illinois Consumer Fraud Act. Courts look
to the FTCA for guidance on ICFA, and thus consider: “(1) whether the practice
offends public policy; (2) whether it is immoral, unethical, oppressive, or
unscrupulous; (3) whether it causes substantial injury to consumers.”

The parties focused on the public policy element; the City
argued that defendants violated their duties to monitor and prevent diversion
under the CSA (Controlled Substances Act). Defendants rejoined neither the
CSA nor its implementing regulations impose any duties owed to consumers that
might reveal a relevant public policy; it just guided the DEA in enforcement.
But, as the MDL court earlier in this case held, the CSA and its implementing
regulations impose an ongoing duty on DEA registrants. “Given that, as the
Court has explained, defendants were under legal duties, imposed under the CSA,
to monitor for suspicious orders and halt shipments of them, the Court has
little doubt that their alleged failure to do so offends public policy,
particularly under circumstances in which consumers of their products and the
consumers’ communities were likely to be injured by addiction and its
consequences.”

However, public policy wasn’t dispositive, “because
plaintiff’s allegations of immoral, unethical, oppressive, or unscrupulous
conduct causing substantial injury to consumers are sufficient to state a claim
on their own.” In particular, this was “oppressive” conduct because it deprived
consumers of choice:

By promoting the use of their
products for chronic or long-term pain while concealing the risks, including
the risk of addiction, they not only caused consumers with chronic pain to use
their product, but also, a reasonable factfinder could conclude, they put these
consumers in a position in which they were compelled by their addiction to
continue buying defendants’ product, whether via legal or illicit channels. In
other words, the consumers, having been tricked into buying defendants’
products, had little alternative but to submit to defendants’ alleged
misconduct and continue to buy the products, even in illicit channels, if
necessary. This is enough to state a claim by itself.

There was also no preemption by the CSA.

Defendants contested harm causation because the City alleged
oversupply in the aggregate without identifying specific orders that should
have been refused, but the court agreed with others that the “very existence of
the duties to maintain effective controls supports the notion that opioid
misuse is foreseeable.” Any intervening acts, “including decisions by
prescribers, patients, distributors, pharmacies, and third-party criminals,”
were “reasonably foreseeable, and thus not superseding acts” that broke the
chain of proximate causation.

 

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