De Bouse v. Bayer A.G.

SUPREME COURT CASES

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State: Illinois

Court: 5th District Appellate

Docket No: 5-06-0077 Rel

Case Date: 10/09/2008

Preview:NO. 5-06-0077
N O T IC E Decision filed 10/09/08. The text of this dec ision m ay b e changed or corrected prior to the P e t i ti o n for filing of a or the

IN THE APPELLATE COURT OF ILLINOIS

Re hea ring

FIFTH DISTRICT ________________________________________________________________________ TERESA DE BOUSE, Individually and On Behalf of Others Similarly Situated, ) Appeal from the ) Circuit Court of ) St. Clair County. Plaintiff-Appellee, ) ) v. ) No. 04-L-53 ) BAYER AG, BAYER CORPORATION, ) SMITHKLINE BEECHAM CORPORATION, ) d/b/a GLAXOSMITHKLINE, ) GLAXOSMITHKLINE PLC, MARCY GRIM, ) MICHAEL HARVEY DAVIDSON, M .D., ) and MICHAEL LEVER, ) Honorable ) Michael J. O'Malley, Defendants-Appellants. ) Judge, presiding. ________________________________________________________________________ JUSTICE DONOVAN delivered the opinion of the court: A class action complaint sounding in consumer fraud was filed in the circuit court of St. Clair County by the plaintiff, Teresa De Bouse, individually and on behalf of other similarly situated Illinois residents, alleging that the defendants, Bayer AG, Bayer Corp., SmithKline Beecham Corp., doing business as GlaxoSmithKline, GlaxoSmithKline PLC, Marcy Grim, Michael Harvey Davidson, M.D., and Michael Lever, committed common law fraud and violated the Illinois Consumer Fraud and Deceptive Business Practices Act (the Consumer Fraud Act) (815 ILCS 505/1 et seq. (West 2004)), in concealing negative safety and efficacy data on a pharmaceutical product it offered for sale in Illinois. The St. Clair County circuit court granted the plaintiff's motion to certify the case as a class action. The circuit court denied the defendants' motion for a summary judgment, but it certified three questions of law for appellate review pursuant to Supreme Court Rule 308(a) (155 Ill. 2d R.

disposition of the same.

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308(a)). The defendants filed a petition for leave to appeal the class certification order pursuant to Supreme Court Rule 306(a)(8) (210 Ill. 2d R. 306(a)(8)), and leave was initially granted. The defendants filed a separate application, petitioning this court to consider the questions that had been certified by the trial court, and the application was granted. The appeals were consolidated under cause No. 5-06-0077. After reviewing the record, we determined that the defendants' appeal from the class certification order was untimely, and we dismissed the appeal for a lack of jurisdiction. De Bouse v. Bayer AG , 373 Ill. App. 3d 774, 782, 869 N.E.2d 365, 372 (2007). The defendants included a number of arguments in regard to the denial of their summary judgment motion. We declined to specifically address those arguments on grounds that the denial of a summary judgment motion is not a final, appealable order, that this court had limited the interlocutory appeal to the certified questions, and that there appeared to be questions of material fact about which discovery had not been conducted. De Bouse , 373 Ill. App. 3d at 783, 869 N.E.2d at 372. As to the certified questions, we found that in order to establish consumer fraud under a theory of a concealment of a material fact in the conduct of trade or commerce, it is sufficient to show that the facts concealed were known to the defendant at the time of the concealment, that the defendant intended that the plaintiff rely on the deception, that the plaintiff is actually deceived, whether by direct or indirect deception, and that if the plaintiff had known about the concealed facts, she would not have purchased the product. De Bouse , 373 Ill. App. 3d at 784-85, 869 N.E.2d at 373-74. The defendants appealed. The Illinois Supreme Court entered a supervisory order, directing this court to vacate the judgment and to reconsider it in light of Barbara's Sales, Inc. v. Intel Corp., 227 Ill. 2d 45, 879 N.E.2d 910 (2007). De Bouse v. Bayer AG , 226 Ill. 2d 613, 880 N.E.2d 181 (2008). In accordance with the mandate of the supreme court, we vacated our prior opinion, and we ordered supplemental briefing. Upon reconsidering the case in light of Barbara's Sales, Inc., we do

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not find that a different result is warranted. Our reasons are set forth in the following opinion. I. Procedural History This is a class action case involving the prescription drug cerivistatin, which was sold in the United States under the brand name Baycol. Baycol is a member of a class of statin drugs that are prescribed to lower the lipid levels of individuals with high cholesterol. Between 1997 and 2000, the Food and Drug Administration had approved the various doses of Baycol for use in the United States. The plaintiff's personal physician prescribed Baycol for the plaintiff beginning in February 2001. The plaintiff purchased Baycol on February 22, 2001, May 23, 2001, and July 30, 2001. Each prescription contained 30 tablets. The price for 30 tablets was $51.09, but the plaintiff's copay was $25. In August 2001, Baycol was withdrawn from the market because its use was associated with a serious medical condition called rhabdomyolysis. Sometime in August 2001, a pharmacist from the plaintiff's

pharmacy called the plaintiff and directed her to stop taking Baycol and to contact her physician for an alternative drug. The plaintiff did not use the remainder of the Baycol prescription. The plaintiff filed a three-count complaint against the defendants on behalf of herself and a class of Illinois residents who had purchased Baycol. Illinois residents who allege or have alleged personal injuries or death as a result of taking Baycol were excluded from the class. Count I and count III of the first amended complaint are brought under the Consumer Fraud Act (815 ILCS 505/1 et seq. (West 2004)). Count I alleges that the defendants offered Baycol for sale, representing that it was reasonably safe for its intended purpose, that the defendants knowingly and intentionally concealed and suppressed information regarding known risks and dangers of Baycol with the intent that the plaintiff purchase it, that the plaintiff was actually deceived in that she purchased a drug that she would not have

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purchased had she been aware of the information regarding risks and dangers that had been concealed and suppressed, and that she suffered damages in the amount of the purchases. Count III alleges that by concealing the known risks and dangers associated with use of Baycol, the defendants were able to charge prices far in excess of the fair market value of the drug, thereby committing one or more unfair practices under the Consumer Fraud Act. Count II alleges common law civil conspiracy to commit fraud based on the aforementioned violations of the Consumer Fraud Act. In a discovery deposition, the plaintiff testified that she had no independent knowledge of Baycol at the time her physician prescribed it. She had not reviewed medical references on Baycol. She had not done any research on Baycol. The plaintiff stated that she relied on her physician to make medical judgments about proper medications. The plaintiff stated that she understood that some prescription medications have potential side effects. She testified that she would not take a medication if she determined that the risks of harm outweighed the benefits. She stated that she would rely on her physician and on the drug information sheet that was attached to the prescription bag by the pharmacy to make a determination regarding the purchase and use of prescription drugs. The defendants filed a motion for a summary judgment, claiming that the plaintiff's deposition testimony establishes, as a matter of law, that she cannot make a prima facie case under the Consumer Fraud Act. The defendants stated that the plaintiff testified that she had not seen, read, or heard anything about the drug and that she relied on her physician's judgment in purchasing the product. The defendants argued that the plaintiff's own testimony shows that she could not have been actually deceived or damaged by any misrepresentation or concealment by the defendants. The plaintiff responded that actual deception can be established where the defendants, in offering a prescription drug for sale while concealing adverse reactions and known risks, misrepresented that the product was safe for its intended

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uses, that in the absence of published information about the risks and dangers, the plaintiff reasonably relied on the misrepresentations that the product was safe for its intended uses, and that the plaintiff would not have purchased the product had she known about the safety risks. The circuit court denied the defendants' motion for a summary judgment. The court certified three questions of law for review in accordance with Supreme Court Rule 308(a). II. The Rule 308(a) Appeal At the outset, we note that the defendants have devoted a considerable portion of their brief in the Rule 308(a) appeal to arguments claiming that the circuit court erred in denying their motion for a summary judgment. We decline to specifically address those arguments for three reasons. First, the denial of a motion for a summary judgment is interlocutory in nature, and it is not a final, appealable order. See La Salle National Bank v. Little Bill "33" Flavors Stores, Inc., 80 Ill. App. 2d 298, 225 N.E.2d 465 (1967). Second, we limited interlocutory review to the legal questions certified by the trial court. Third, after considering the theory of consumer fraud alleged in the complaint and discussed in the plaintiff's testimony, we find that there appear to be material factual issues about which discovery has not been had. A review of the defendants' motion for a summary judgment would not advance a resolution of the case or serve judicial economy. The circuit court determined that a resolution of the following questions of law could materially advance the disposition of the litigation, and it certified the questions in accordance with Supreme Court Rule 308(a): "I. Whether an Illinois consumer who purchases a pharmaceutical product, later withdrawn from the market because it was deemed unsafe, can maintain an action under the Illinois Consumer Fraud Act [citation], even though the pharmaceutical company did not engage in direct communication or advertising to the

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consumer. II. Whether the Defendants['] offering for sale of a product in Illinois is a representation to prospective customers that the product is reasonably safe for its intended purpose such that proof of a defendants' [ sic ] failure to disclose safety risks associated with the product to consumers is a violation of the Illinois Consumer Fraud Act. III. Whether fraudulent statements or omissions made by a defendant to third[] parties, other than the consumer, with the intent that they (1) reach the plaintiff[] [and] (2) influence plaintiff's action[,] and (3) [when] plaintiff relies upon the statements to his detriment, can support an action under the Illinois Consumer Fraud Act." The elements of a claim under the Consumer Fraud Act are as follows: (1) a deceptive act or practice by the defendant, (2) the defendant's intent that the plaintiff rely on the deception, (3) the occurrence of the deception in a course of conduct involving trade or commerce, and (4) actual damage to the plaintiff (5) proximately caused by the deception. 815 ILCS 505/2 (West 2004); Zekman v. Direct American Marketers, Inc., 182 Ill. 2d 359, 373, 695 N.E.2d 853, 860-61 (1998). The certified questions seem to be directed toward clarifying the factual allegations necessary to satisfy these elements in a case asserting an intentional suppression of material facts and indirect deception. In Shannon v. Boise Cascade Corp., 208 Ill. 2d 517, 805 N.E.2d 213 (2004), the Illinois Supreme Court recognized that though proof of the actual deception of a plaintiff is required to establish the proximate cause requirement, the deception need not always be direct between the defendant and the plaintiff. Shannon , 208 Ill. 2d at 525-26, 805 N.E.2d at 218. It is enough that the defendant's deception, whether made directly or indirectly, be committed with the intention that it influence the plaintiff's action and that the plaintiff relied on the deception to her detriment. Shannon , 208 Ill. 2d at 526, 805 N.E.2d at 218; St. Joseph

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Hospital v. Corbetta Construction Co., 21 Ill. App. 3d 925, 954, 316 N.E.2d 51, 72 (1974). In illustrating the concept of "indirect deception," the supreme court proposed a hypothetical case in which a defendant's product literature had actually deceived a particular builder, architect, or contractor, resulting in the installation of defective siding on a home. Shannon , 208 Ill. 2d at 526, 805 N.E.2d at 218. The supreme court concluded, under those

circumstances, that the purchaser, who may have no independent knowledge of the qualities or expected performance of a siding, is deceived because of the deception of the builder, architect, or contractor, who reasonably should have correct knowledge, and that the damages could have arguably occurred as a result of the indirect deception. Shannon , 208 Ill. 2d at 526, 805 N.E.2d at 218. The Illinois Supreme Court also recognized that the omission or concealment of a material fact in the conduct of trade or commerce constitutes consumer fraud. Connick v. Suzuki Motor Co. , 174 Ill. 2d 482, 504, 675 N.E.2d 584, 595 (1996). A material fact exists where a buyer would have acted differently if he had known of the suppressed information or if the concealed fact concerned the type of information on which a buyer would be expected to rely in making a decision regarding the purchase of the product. Connick, 174 Ill. 2d at 505, 675 N.E.2d at 595. In order to establish consumer fraud under a theory of concealment by silence,1 the
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A similar cause of action was asserted in Jensen v. Bayer AG , 371 Ill. App. 3d 682,

862 N.E.2d 1091 (2007). In Jensen, a summary judgment was granted for the defendant because the plaintiff failed to submit some evidence on two elements that are necessary to prove a violation of the Consumer Fraud Act, i.e., the defendant's intent to conceal or that the plaintiff was actually deceived by any omission made by the defendant. Jensen was decided after the parties had an opportunity for discovery on the merits. Aside from recognizing the existence of a cause of action under similar facts, we do not find Jensen to 7

plaintiff must allege and establish that the defendant concealed material facts regarding its product, that the deception, whether made directly or indirectly, was committed with the intent that it influence the plaintiff's action, that the plaintiff actually relied on the defendant's deception, and that if the plaintiff had known of the facts concealed, she would not have purchased the product. Connick, 174 Ill. 2d at 504-05, 675 N.E.2d at 595; Pappas v. Pella Corp., 363 Ill. App. 3d 795, 804-06, 844 N.E.2d 995, 1003-04 (2006). The defendants submit that this case is governed by a line of decisions in which the Illinois Supreme Court held that deceptive advertising could not be the proximate cause of damages unless the plaintiff was actually deceived by the misrepresentation, and they cite Avery v. State Farm Mutual Auto Insurance Co., 216 Ill. 2d 100, 835 N.E.2d 801 (2005), Price v. Philip Morris, Inc., 219 Ill. 2d 182, 848 N.E.2d 1 (2005), and Zekman , 182 Ill. 2d 359, 695 N.E.2d 853, among others. In those cases, the alleged deceptions arose from affirmative representations, such as specific promises or deceptive advertisements. In those types of cases, the supreme court has said that in order to establish proximate cause, the plaintiff must allege and show that she was actually deceived by a specific promise or representation. Avery , 216 Ill. 2d at 200, 835 N.E.2d at 861; Zekman , 182 Ill. 2d 375-76, 695 N.E.2d at 861-62. In a supplemental brief filed on remand from the supervisory order, the defendants claimed that Barbara's Sales, Inc. v. Intel Corp., 227 Ill. 2d 45, 879 N.E.2d 910 (2007), supports its position. The defendants argued that in Barbara's Sales, Inc., the Illinois Supreme Court emphasized that actual deception must be established and that a deceptive advertising campaign cannot be the proximate cause of damages unless representations made in the campaign actually deceived the plaintiff. The defendants argued that based on the plaintiff's own testimony, the plaintiff cannot meet the threshold requirements set out in be helpful in regard to the issues here. 8

Barbara's Sales, Inc. In Barbara's Sales, Inc. v. Intel Corp., the plaintiff alleged that the defendant made affirmative deceptions in marketing a new generation of microprocessor. Barbara's Sales, Inc., 227 Ill. 2d at 73, 879 N.E.2d at 926. While the primary issue in Barbara's Sales, Inc. concerned a choice-of-law question, the adequacy of the consumer fraud allegations was considered as a part of the class certification issue. In Barbara's Sales, Inc., the Illinois Supreme Court held that the defendant's implicit representations that its Pentium 4 microprocessor was "the best," and that it had a higher overall performance when compared with the Pentium III, amounted to "puffing" and that the representations were not "deceptive acts" within the purview of the Consumer Fraud Act. Barbara's Sales, Inc., 227 Ill. 2d at 73, 879 N.E.2d at 926. The supreme court also found that though the defendant's internal documents revealed that its predecessor product, the Pentium III, was faster in some of the performance testing when compared with the Pentium 4, the documents did not establish deceptive advertising because it was not apparent that the defendant had made any false public claims regarding specific speed benchmarks and the internal documents revealed that the processing speeds varied by application. Barbara's Sales, Inc., 227 Ill. 2d at 76, 879 N.E.2d at 927-28. Unlike Barbara's Sales, Inc., the case at bar does not concern affirmative representations or "puffing" in a marketing campaign. Barbara's Sales, Inc., 227 Ill. 2d at 73, 879 N.E.2d at 926. Unlike Barbara's Sales, Inc., the defendants in this case allegedly suppressed and concealed negative safety and efficacy data associated with the use of Baycol, to influence prescribing physicians and their patients. The act of intentionally suppressing and concealing material information

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