United States Court of Appeals
For the First Circuit
Nos. 18-1146, 18-1147
IN RE: CELEXA AND LEXAPRO MARKETING AND
SALES PRACTICES LITIGATION
PAINTERS AND ALLIED TRADES DISTRICT COUNCIL 82 HEALTH CARE FUND;
DELANA S. KIOSSOVSKI; RENEE RAMIREZ, on behalf of herself and
all others similarly situated; MARLENE T. LOCONTE,
Plaintiffs, Appellants,
MARTHA PALUMBO, individually and on behalf of all other persons
similarly situated; PETER PALUMBO, individually and on behalf of
all other persons similarly situated; JAYNE EHRLICH,
individually and on behalf of all other persons similarly
situated; ANNA MURRET, individually and on behalf of all other
persons similarly situated; UNIVERSAL CARE, INC.; ANGELA
JAECKEL; MELVIN M. FULLMER, on behalf of himself and all others
similarly situated; NEW MEXICO UFCW UNION'S AND EMPLOYER'S
HEALTH AND WELFARE TRUST FUND, on behalf of itself and all
others similarly situated; ALLIED SERVICES DIVISION WELFARE
FUND, on behalf of itself and all others similarly situated;
TARA JOHNDROW, individually and on behalf of all others
similarly situated; BRIAN ANSON, individually and on behalf of
all others similarly situated; SCOTT A. WILCOX, on behalf of
himself and all others similarly situated; MUNICIPAL REINSURANCE
HEALTH INSURANCE FUND; RANDY MARCUS; BONNIE MARCUS; RUTH DUNHAM;
TANYA SHIPPY; JILL POWELL,
Plaintiffs,
v.
FOREST PHARMACEUTICALS, INC.; FOREST LABORATORIES, INC.; FOREST
LABORATORIES, LLC, successor in interest to Forest Laboratories,
Inc.,
Defendants, Appellees,
PFIZER, INC.; WARNER LAMBERT COMPANY,
Defendants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Nathaniel M. Gorton, U.S. District Judge]
Before
Howard, Chief Judge,
Torruella and Kayatta, Circuit Judges.
R. Brent Wisner, with whom Michael L. Baum, Baum, Hedlund,
Aristei & Goldman, P.C., Christopher L. Coffin, and Pendley, Baudin
& Coffin, LLP were on brief, for appellants.
Andrew J. Ceresney, with whom Edwin G. Shallert, Kristin D.
Kiehn, J. Robert Abraham, Debevoise & Plimpton LLP, John G.
O'Neill, and Sugarman, Rogers, Barshak & Cohen, P.C. were on brief,
for appellees.
January 30, 2019
KAYATTA, Circuit Judge. These consolidated appeals
arise out of two so-called "off-label" prescription-drug-marketing
cases aggregated for pretrial proceedings in the District of
Massachusetts by order of the multidistrict litigation panel.
Plaintiffs claim that the defendants, Forest Pharmaceuticals, Inc.
and Forest Laboratories, Inc. (collectively "Forest"), engaged in
fraud to push their antidepressant drugs on unsuspecting minors
for whom the FDA had not approved the use of these medications.
As we will explain, we reverse the dismissal of the claims brought
by two of the four plaintiffs, and we vacate the denial of
plaintiffs' motion to compel the production of additional
documents by Forest. We otherwise affirm the challenged district-
court rulings, including the denial of class certification.
I.
We begin by summarizing the relevant statutory and
regulatory framework and by reciting the facts relevant to the
plaintiffs' summary-judgment appeal in the light most favorable to
the plaintiffs. See Boudreau v. Lussier, 901 F.3d 65, 71 (1st
Cir. 2018).
A.
The Federal Food, Drug, and Cosmetic Act ("FDCA")
requires drug manufacturers to obtain approval from the U.S. Food
and Drug Administration ("FDA") before marketing a drug for a
particular medical use. 21 U.S.C. § 355(a); see also Mut. Pharm.
Co., Inc. v. Bartlett, 570 U.S. 472, 476 (2013). To secure that
approval, the drug manufacturer must submit to the FDA either a
new-drug application ("NDA") or a supplemental new-drug
application ("sNDA"), and the manufacturer must demonstrate the
drug's efficacy for the indicated use in at least two double-
blind, randomized-controlled trials ("DBRCTs"). See In re
Neurontin Mktg. & Sales Practices Litig. (Kaiser), No. 04-cv-
10739-PBS, 2011 WL 3852254, at *5 (D. Mass. Aug. 31, 2011), aff'd,
712 F.3d 21 (1st. Cir. 2013); see generally 21 C.F.R. § 314.105.
The FDCA creates both civil and criminal penalties for drug
manufacturers that promote the use of approved drugs for unapproved
uses (referred to here as "off-label" uses). See 21 U.S.C.
§§ 331(d), 333(a), 355(a); Lawton ex rel. United States v. Takeda
Pharm. Co., 842 F.3d 125, 128 n.4 (1st Cir. 2016). The FDCA,
however, does not prohibit doctors from prescribing drugs for off-
label uses. Lawton ex rel. United States, 842 F.3d at 128 n.4.
B.
Forest manufactures and markets prescription drugs,
including the antidepressant medications Celexa and Lexapro.
Celexa and Lexapro are chemically similar selective serotonin
reuptake inhibitors ("SSRIs"), a class of antidepressants that
affect a patient's mood by blocking the reabsorption of the
neurotransmitter serotonin in the brain, Eli Lilly & Co. v. Teva
Pharm. USA, Inc., No. 05-1044, 2005 WL 1635262, at *1 (Fed. Cir.
July 13, 2005). The FDA approved Celexa and Lexapro for the
treatment of major depressive disorder ("MDD") in adults (i.e.,
individuals aged eighteen or over) in 1998 and 2002, respectively.
Drug manufacturers, including Forest, had difficulty demonstrating
that SSRIs were also effective in treating depression in children
and adolescents. As of 2005, only Fluoxetine -- commercially known
as Prozac -- had gained FDA approval for the treatment of pediatric
depression. In 2009, the FDA approved Lexapro for the treatment
of depression in adolescents (i.e., individuals of ages twelve
through seventeen). The FDA has never approved Celexa for any
pediatric use nor has it approved Lexapro as a treatment for
depression in children (i.e., individuals under the age of twelve).
The record in this case nevertheless strongly suggests
that Forest engaged in a comprehensive off-label marketing scheme
from 1998 through 2009 aimed at fraudulently inducing doctors to
write pediatric prescriptions of Celexa and Lexapro when Forest
had insufficient reason to think that these drugs were effective
for the treatment of depression in children and adolescents.
Plaintiffs have pointed to substantial evidence that Forest sought
to achieve this illicit aim by: (1) promoting Celexa's efficacy
for the treatment of pediatric depression at medical conferences,
at continuing-medical-education programs, and in press releases;
(2) concealing negative clinical studies concerning Celexa's
efficacy and safety; and (3) directly encouraging physicians to
prescribe Celexa and Lexapro for the treatment of pediatric
depression.
For years, Forest nevertheless denied that it was
engaged in the off-label promotion of these drugs. Forest
Laboratories' Executive Vice President, Dr. Lawrence Olanoff,
testified before Congress in 2004 that "because the FDA has not
approved pediatric labeling for our products, Forest has always
been scrupulous about not promoting the pediatric use of our
antidepressant drugs, Celexa and Lexapro. That is the law, and we
follow it." Publication and Disclosure Issues in Antidepressant
Pediatric Clinical Trials: Hearing Before the Subcomm. on
Oversight & Investigations of the Comm. on Energy & Commerce, 108th
Cong. 82 (2004) (statement of Dr. Lawrence Olanoff).
Even before Dr. Olanoff assured Congress of Forest's
scrupulousness, a whistleblower had commenced a qui tam action,
alleging that Forest had violated the False Claims Act ("FCA"), 31
U.S.C. § 3729(a), by fraudulently marketing and promoting Celexa
and Lexapro for the off-label treatment of depression in pediatric
patients. Complaint, Gobble v. Forest Labs., Inc., No. 03-10395-
NMG (D. Mass. Mar. 4, 2003), ECF No. 1. The United States later
intervened in that suit, and, in February 2009, the district court
unsealed the United States' complaint. Order Granting Motion to
Unseal, United States ex rel. Gobble, No. 03-10395-NMG (D. Mass.
Feb. 24, 2009), ECF No. 64. The evidence belying Dr. Olanoff's
assurances to Congress turned out to be quite substantial.
Ultimately, in September 2010, Forest paid a $39 million fine in
connection with pleading guilty to criminal violations of the FDCA
for its off-label promotion of Celexa between 1998 and 2002 and an
additional $149 million to the United States to settle civil claims
that Forest illegally promoted Celexa and Lexapro for pediatric
use in 2002 through 2005.
C.
Within the following four years, over a dozen consumers
and entities who paid for prescription drugs filed the lawsuits
that led to this appeal. Initially, four plaintiffs joined in the
notice of appeal. Only two, Renee Ramirez and the Painters and
Allied Trades District Council 82 Health Care Fund ("Painters")
have presented any argument on appeal. We refer to these two
collectively as "plaintiffs."1 Ramirez purchased Celexa and
Lexapro for her young son from February 2003 through March 2010 on
the recommendation of her son's neurologist. Painters has
reimbursed its pediatric insureds for off-label prescriptions of
Celexa and Lexapro since early 1999. Plaintiffs together seek
1Marlene LoConte and Delena Kiossovski joined in the notice
of appeal but subsequently filed no brief, and the single brief
filed by the other parties contains no argument at all for
questioning the grounds upon which the district court dismissed
the claims of LoConte and Kiossovski. We therefore deem their
appeal of the judgments against them to be waived. See Vázquez-
Rivera v. Figueroa, 759 F.3d 44, 46-47 (1st Cir. 2014).
recovery under the Racketeer Influenced and Corrupt Organizations
Act ("RICO"), 18 U.S.C. § 1962(c)–(d), the Minnesota Consumer
Fraud Act, Minn. Stat. § 325F.69, and the Minnesota Unfair Trade
Practices Act, Minn. Stat. § 325D.13, and for unjust enrichment.
In June 2016, the district court denied Painters' motion
to certify two nationwide classes of similarly situated health-
insurance companies and health plans that had paid for or
reimbursed off-label pediatric prescriptions of Celexa or Lexapro.
In re Celexa & Lexapro Mktg. & Sales Practices Litig. (Painters I),
315 F.R.D. 116, 131 (D. Mass. 2016).2 In rejecting class
certification, the court reasoned that while Painters had
satisfied the Rule 23(a) numerosity, commonality, typicality, and
adequacy requirements, Painters had failed to establish that
common questions of fact or law predominated over individual issues
as required by Rule 23(b)(3). Id. at 123–31.
Subsequently, in March 2017, a dispute arose as a result
of Forest's apparently belated production of two internal
memoranda in advance of a deposition conducted by agreement after
discovery had otherwise closed. The two documents contained
2Painters' motion for class certification provided no time
period for the proposed Celexa class. At oral argument, however,
plaintiffs' counsel clarified that plaintiffs only seek to
challenge manufacturer-induced prescriptions for off-label uses
made prior to the FDA's approval of Lexapro for adolescent use in
March 2009. Thus, we construe Painters' appeal in accordance with
this statement.
details regarding a study of Celexa's effectiveness. Forest
revealed that it had not sought any responsive documents from its
Clinical Supply Group in responding to Painters' discovery
requests. The district court nevertheless denied Painters' motion
to compel Forest's supplemental production of documents from this
group, concluding that any such production would be cumulative.
In re Celexa & Lexapro Mktg. & Sales Practices Litig.
(Painters II), 288 F. Supp. 3d 483, 486–87 (D. Mass. 2018).
In due course, after deeming discovery complete and
ruling on various interim motions, the district court entered
summary judgment for Forest on plaintiffs' RICO claims, holding
that neither Painters nor Ramirez could demonstrate injury. In re
Celexa & Lexapro Mktg. & Sales Practices Litig. (Painters III),
289 F. Supp. 3d 247, 253–56 (D. Mass. 2018). The court then
proceeded to dismiss plaintiffs’ state-based allegations as
deriving from their noncognizable RICO claims. Id. at 258–59.
This appeal by Painters and Ramirez followed.
II.
Summary judgment is appropriate "if the movant shows
that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law." Fed. R. Civ.
P. 56(a). In granting summary judgment dismissing all of
plaintiffs' claims, the district court concluded that plaintiffs
had no competent proof that either Celexa or Lexapro was
ineffective for treating depression in children or adolescents.
We review this conclusion de novo. Martinez v. Petrenko, 792 F.3d
173, 179 (1st Cir. 2015).
A.
Prevailing on a RICO claim requires proof of an economic
injury. See 18 U.S.C. § 1964(c) ("Any person injured in his
business or property by reason of a violation of section 1962 of
this chapter may sue therefor."). Plaintiffs allege injury in the
form of payments made for ineffective drugs.3 The district court
therefore turned its attention to determining whether plaintiffs
had enough evidence to allow a jury to find Celexa and/or Lexapro
ineffective for treating pediatric depression. See Painters III,
289 F. Supp. 3d at 253–56. Four clinical trials and the FDA's
2009 approval of Lexapro for adolescents informed the district
court's decision.
Starting in 1997, Lundbeck -- the developer of Celexa -
- began conducting Study 94404, which focused on Celexa's efficacy
in treating depression in adolescents. The study produced across-
the-board negative results. Forest then conducted Study MD-18 in
an attempt to demonstrate Celexa's effectiveness in both children
3 In its opposition to Forest's motion for summary judgment,
Painters argued that it need not demonstrate that Celexa and
Lexapro are ineffective in treating pediatric depression to
establish RICO injury. The district court rejected this argument
in its order granting Forest's motion, and Painters has not
developed any challenge to that ruling on this appeal.
and adolescents. The efficacy results of MD-18 are difficult to
assess because Forest bungled the study: Some participants
randomized into the active treatment group were dispensed
nongeneric, pink tablets in one portion of the trial, potentially
unblinding both the individuals who received these pills and the
researchers conducting the study. The MD-18 study only
demonstrated statistically positive results when these potentially
unblinded participants were included. Finally, in 2002–2004 and
2005-2007, Forest conducted two additional clinical trials. Study
MD-15 examined Lexapro's efficacy in children and adolescents and
achieved negative results. Study MD-32 set out to test Lexapro's
effectiveness in treating only adolescents and achieved
statistically significant positive results.
Based upon the results of MD-32 and the Celexa MD-18
study, Forest submitted an sNDA to the FDA in 2008. In 2009, the
FDA approved the application, allowing Forest to market Lexapro
for use in adolescents. Forest did not seek such approval for
Celexa.
Plaintiffs' evidence that Celexa and Lexapro were
ineffective for the pertinent indications consisted of the
following: The FDA has neither approved Celexa for treating
depression in children or adolescents nor has it approved Lexapro
for use in children; Study 94404 demonstrated only a detrimental
effect of Celexa in treating depression in adolescents; Study MD-
18 was corrupted and showed no beneficial effect in children and
adolescents unless the potentially unblinded participants are
included in the results; and Study MD-15 produced uniformly
negative results in testing Lexapro's efficacy in children and
adolescents. In addition, plaintiffs produced expert testimony
opining that the positive results in MD-32 were not of clinical
significance and that MD-18 should properly be considered a
negative trial. Plaintiffs also provided the results of a
2016 meta-analysis study that found that neither Celexa nor
Lexapro had any more beneficial effect than a placebo in treating
pediatric depression.
There is also evidence in the record before us, however,
that cuts the other way. In September 2002, the FDA accepted
Study MD-18 as a positive trial that would support a determination
of Celexa's effectiveness for the treatment of MDD in adolescent
patients. And in January 2003, the FDA also stated that MD-18
could be employed to support an application for FDA approval "for
both Celexa and Lexapro, in pediatric patients with [MDD]." The
FDA relied in part on these findings in approving Lexapro for the
treatment of depression in adolescents in March 2009. Further,
Forest points out that neither Painters nor Prime Therapeutics
("Prime"), Painters' pharmacy-benefits manager, has taken any
effort to limit or remove from its formulary pediatric
prescriptions of Celexa and Lexapro.
This record raises two questions. First, do the FDA's
various pronouncements or actions close the door on any effort to
convince a jury that either Celexa or Lexapro was ineffective?
Second, to the extent that the FDA's pronouncements and actions
are not preclusive, is the evidence in this case nevertheless
insufficient to support a jury finding of ineffectiveness?
1.
Forest claims that two of our recent decisions --
D'Agostino v. ev3, Inc., 845 F.3d 1 (1st Cir. 2016), and In re
Celexa & Lexapro Mktg. & Sales Practices Litig. (Marcus), 779 F.3d
34 (1st Cir. 2015) -- answer the first question in the affirmative
by deeming FDA approval dispositive. Even were we to find it
convincing, this argument would not cover all the challenged uses
at issue in this appeal. The FDA has never approved Celexa for
any of the off-label uses for which Forest promoted it. Nor has
it approved Lexapro for the treatment of MDD in children under the
age of twelve. So Forest's reliance on actual FDA approval to
foreclose a jury determination of inefficacy must be limited to
Forest's marketing of Lexapro for adolescent use and, perhaps as
well, to the question of how to construe MD-18.
In any event, even as thus limited, we do not find
Forest's reliance on D'Agostino convincing. The claim in
D'Agostino concerned the sale of medical devices after the FDA had
approved the devices for the uses for which they were sold.
D'Agostino, 845 F.3d at 3, 7–9. In rejecting a challenge to those
post-approval sales under the False Claims Act based on alleged
pre-approval fraud on the FDA, we reasoned that "[t]o rule
otherwise would be to turn the FCA into a tool with which a jury
of six people could retroactively eliminate the value of FDA
approval and effectively require that a product largely be
withdrawn from the market even when the FDA itself sees no reason
to do so." Id. at 8. Here, by contrast, plaintiffs challenge
only the promotion of Celexa and Lexapro for uses that were off-
label (i.e., not FDA-approved) at the time Forest promoted and
sold the drugs.4 When Forest is said to have made those marketing
efforts, it could not have pleaded reliance on FDA approval. If
a jury were to hold Forest liable for such pre-approval marketing,
it would simply be telling Forest that it should not have marketed
that which Congress under the FDCA does not want it to market:
drugs for unapproved uses. We therefore see no reason to accord
to Forest the preclusive protection for pre-approval promotion
that FDA approval provided the medical-device manufacturer for
post-approval conduct in D'Agostino.5
4 Though plaintiffs' complaints do not explicitly limit their
RICO and state-law claims to the period prior to FDA's March 2009
approval of Lexapro, plaintiffs' counsel indicated at oral
argument that plaintiffs do not challenge Forest's post-approval
marketing of Celexa and Lexapro.
5 For similar reasons, Forest's reliance on Buckman Co. v.
Plaintiffs' Legal Comm., 531 U.S. 341, 348 (2001), in which the
Supreme Court rejected as preempted state fraud-on-the-FDA claims,
Nor does our opinion in Marcus aid Forest in this case.
In Marcus, we rejected a challenge to a drug label based on
information that was "plainly known to the FDA prior to approving
the label." 779 F.3d at 43. We made clear in doing so, however,
that we were merely applying the state-law preemption principles
the U.S. Supreme Court laid out in PLIVA, Inc. v. Mensing, 564
U.S. 604 (2011), and Wyeth v. Levine, 555 U.S. 555 (2009). See
Marcus, 779 F.3d at 40–43 (explaining that a drug manufacturer can
only be held liable under state law for inadequate warning in an
FDA-approved label when the drug manufacturer can, "of its own
volition, . . . strengthen its label in compliance with its state
tort duty" (quoting PLIVA, Inc., 564 U.S. at 624)). Marcus,
accordingly, is inapposite.
This is not to say that the FDA's 2009 approval of
Forest's sNDA for Lexapro is irrelevant to this case. Certainly
the approval and the FDA's reliance on MD-18 provide what many
jurors may view as strong evidence confirming that Lexapro, and
perhaps Celexa as well, have always been efficacious in treating
pediatric depression. The common law has long recognized that
agency approval of this type is relevant in tort suits. See
Restatement (Third) of Torts: Prod. Liab. § 4 (Am. Law Inst. 1998)
and its progeny is misplaced. Plaintiffs question the efficacy of
Celexa and Lexapro only for off-label uses; their claims,
accordingly, are not predicated on a fraud-on-the-FDA theory of
liability.
("[C]ompliance with an applicable product safety statute . . . is
properly considered in [a product defect case]."). But the common
law also recognizes that such evidence is not always preclusive.
Id. ("[S]uch compliance does not preclude as a matter of law a
finding of product defect."). And while there are strong reasons
for treating such evidence as preclusive when the challenged sales
are made in reliance on agency approval, those same reasons cut
the other way when the sales are made without approval, and
certainly when made unlawfully, as we must assume they were here.
2.
Having decided that the FDA's subsequent approval of
Lexapro does not preclude proving that pre-approval uses of these
drugs were ineffective, we turn to addressing whether plaintiffs
may proceed with a claim based on product ineffectiveness when the
evidence of efficacy is conflicting. This is more or less the
question we left unanswered in Kaiser. See Kaiser, 712 F.3d at 49
(declining to address what evidentiary standard would be needed to
demonstrate efficacy "if the results of DBRCTs were equivocal" or
"if there were a different mix of DBRCT and non-DBRCT evidence").6
6 To advance its preferred interpretation of the term
"equivocal" in Kaiser, each party dedicates a significant portion
of its brief to sparring over whether the DBRCT evidence in the
Neurontin cases was, in fact, mixed. We need not address this
question because, as we explain, Painters' RICO claim survives
summary judgment even though the evidence of inefficacy is mixed.
We note, however, that the DBRCTs in the Neurontin case were not
uniformly negative as Forest would have us believe. Rather, the
Generally speaking, "conflicting evidence" is the
hallmark of an issue that calls for factfinding, not summary
judgment. See, e.g., Adria Int'l Grp. v. Ferre Dev., Inc., 241
F.3d 103, 111 (1st Cir. 2001) (finding summary judgment
inappropriate when evidence presented was "contested and
contradictory"); see also 10A Charles Alan Wright et al., Federal
Practice and Procedure § 2712 (4th ed. 2018) ("[S]ummary judgment
is not a substitute for the trial of disputed fact issues."). We
see no reason to deviate from that general rule merely because the
product marketed illegally is one that was later approved for
lawful sales.7 In short, why should we forgo customary fact-
finding by the jury so as to reward unlawful conduct aimed at
getting children to consume unapproved drugs?
Forest also argues that plaintiffs' evidence of
ineffectiveness falls short of proving injury because Painters has
not produced "individualized" proof that Celexa or Lexapro was
ineffective for any particular insured. By "individualized"
proof, Forest appears to mean testimony from a patient (or from a
district court noted both positive and negative clinical studies
in reviewing the parties' evidence of Neurontin's efficacy for the
at-issue off-label conditions. See Kaiser, 2011 WL 3852254, at
*34–46 (reviewing mixed DBRCT results).
7
Nor is summary judgment for Forest warranted due to the fact
that Painters has not directed the removal of Celexa and Lexapro
for pediatric uses from its drug formulary. As we held in Kaiser,
it is "within the factfinder's province to weigh this evidence."
Kaiser, 712 F.3d at 41.
doctor concerning that patient) that the patient experienced no
beneficial effects from the drug. While evidence of that type
could be probative, certainly it is not the only way to prove that
a drug is ineffective. Indeed, given that (1) an ineffective drug
may trigger a placebo effect in a given individual and (2) an
effective drug may not benefit all users, individualized proof
might well be less probative than the type of expert, study-based
testimony that plaintiffs have offered. In any event, as we
already held, such individualized proof is certainly not required.
See In re Neurontin Mtkg. & Sales Practices Litig. (Harden), 712
F.3d 60, 69 (1st Cir. 2013) ("[W]e reject Pfizer's position that
these plaintiffs must prove the individual, subjective
ineffectiveness of each off-label prescription in order to
establish injury. . . . The Harden plaintiffs have proffered
clinical trial evidence that Neurontin is ineffective . . ., which
is certainly enough to raise a genuine issue of fact on the
effectiveness issue." (citation omitted)); In re Neurontin Mtkg.
& Sales Practices Litig. (Aetna), 712 F.3d 51, 59–60 (1st Cir.
2013).
In sum, we hold that the FDA's 2009 approval of Lexapro
does not preclude a jury from concluding that the off-label uses
of Celexa and Lexapro at issue in this case were ineffective in
treating pediatric depression. Moreover, plaintiffs have provided
competent and sufficient evidence -- through DBRCTs, expert
testimony, and peer-reviewed literature -- to raise a genuine issue
of material fact as to the efficacy of these drugs for pediatric
use. Accordingly, the district court erred in granting summary
judgment for Forest on plaintiffs' RICO and state-law claims on
this basis.
B.
In addition to demonstrating economic injury, a RICO
plaintiff must prove that the defendant's racketeering conduct
caused her injury. 18 U.S.C. § 1964(c); Holmes v. Sec. Inv'r Prot.
Corp., 503 U.S. 258, 268 (1992) (interpreting section 1964(c)'s
language to mean that a RICO plaintiff must show both but-for and
proximate causation to establish standing). As we have already
noted, physicians can -- and do -- lawfully prescribe prescription
drugs for off-label uses, even though the manufacturer is barred
by law from promoting such prescriptions. See Lawton ex rel.
United States, 842 F.3d at 128 n.4. So for any given prescription
in this case, one would reasonably ask whether Forest's efforts to
profit by illegally marketing drugs for pediatric use caused a
particular prescription to be made, or whether, instead, the doctor
wrote a given prescription based on his or her own professional
medical judgment (perhaps reasoning that what works for an adult
patient might also work for a younger patient).
Forest therefore urges that, even if we disagree with
the district court on the issue of injury/efficacy, we should still
affirm the entry of summary judgment due to Painters' lack of proof
of but-for causation. While the district court did not consider
the issue of causation in its summary-judgment ruling, it did
earlier assay Painters' causation evidence in ruling on Painters'
motion for class certification. The district court labeled the
proof so "insubstantial" and "fundamentally flawed" "as to
preclude class certification." Painters I, 315 F.R.D. at 126–28.
Forest would have us interpret these pronouncements as a finding
that the evidence was insufficient as a matter of law to prove
but-for causation.
We disagree. In the first place, it is unclear why the
district court gauged the substantiality or merit of plaintiffs'
proof in the context of a Rule 23 motion. The central issue in
that context is not whether the method of proof would or could
prevail. Rather, it is whether the method of proof would apply in
common to all class members. See, e.g., Tyson Foods, Inc. v.
Bouaphakeo, 136 S. Ct. 1036, 1047 (2016) ("When . . . 'the concern
about the proposed class is not . . . some fatal dissimilarity
but, rather, a fatal similarity -- [an alleged] failure of proof
as to an element of the plaintiffs' cause of action -- courts
should engage that question as a matter of summary judgment, not
class certification.'" (alteration in original) (quoting Richard
A. Nagareda, Class Certification in the Age of Aggregate Proof, 84
N.Y.U. L. Rev. 97, 107 (2009))).
More substantively, Painters' evidence does not seem
clearly insufficient. There is ample evidence that Forest spent
money inducing doctors to prescribe its drugs to pediatric patients
and that it would not have done so had the effort not been worth
the money. Two experts, Dr. Meredith Rosenthal and
Dr. Christopher Baum, also opined that Forest's spending on
promotions in general correlated positively with sales. As the
district court pointed out, Painters' experts then assumed that
this same approximate correlation applied to off-label promotional
spending and off-label sales. Painters I, 315 F.R.D. at 127. The
district court thought this assumption to be a "fundamental flaw"
in the analysis. Id. Why, exactly, we are not sure. After all,
why would Forest, which knew its markets better than anyone, have
spent money on off-label marketing over the long term if it
generated lower returns than would additional spending on less
risky, lawful marketing? Certainly there is room for reasonable
disagreement on the merits of Dr. Rosenthal and Dr. Baum's
assumption.
If the jury accepts this assumption as reasonable, and
if it finds that the prescriptions that Painters paid for were
typical of those that the experts analyzed, jurors would then have
a fair path to finding that Forest's off-label marketing caused
Painters to pay for ineffective drugs. The experts' interpretation
of the data indicated that Forest's off-label promotions caused
76% and 54% of all pediatric prescriptions of Celexa and Lexapro,
respectively. Dr. Rosenthal estimated that if Painters paid for
as few as five independent prescriptions, there would be a 98%
chance that at least one was the result of off-label marketing.
In fact, Painters likely paid for the Celexa or Lexapro
prescriptions of more than five different patients.8 So the odds
that Painters was not harmed if the drugs were, indeed, ineffective
was likely infinitesimal (assuming the prescriptions were
independent of one another).9
8In its summary judgment order, the district judge observed
that Painters reimbursed sixteen of its pediatric insureds for
seventy-two off-label prescriptions of Celexa from 1999 through
2004, and thirty-one of its pediatric insureds for 234 off-label
prescriptions of Lexapro from 2002 through early 2015. Painters
III, 289 F. Supp. 3d at 251. It is not clear from the record how
many of these Lexapro prescriptions were written prior to March
2009. Viewing this evidence in the light most favorable to
Painters, Ellis v. Fidelity Mgmt. Tr. Co., 883 F.3d 1, 3, (1st
Cir. 2018), and without any counter-argument on this point by
Forest, we assume for purposes of this appeal only that well more
than five of the aforementioned Lexapro prescriptions were filled
prior to the FDA's 2009 approval of Lexapro.
9The statistical proof in this instance is being used only
to prove that a group of prescriptions likely includes at least
one that a certain activity caused, and it is then being utilized
to estimate the percentage of such causally connected
prescriptions in that group. Painters proposes no use of the
statistical data to prove that Forest's off-label marketing caused
any particular prescription to be written. See In re Asacol
Antitrust Litig. (Asacol), 907 F.3d 42, 54 (1st Cir. 2018) (finding
it "far from self-evident" that expert testimony opining that
"ninety percent of class members were injured" would be "sufficient
to prove that any given individual class member was injured").
Nor is Painters' evidence limited to the thrust of its
statistics. Painters also has evidence that Forest sales
representatives called or visited at least two physicians who
subsequently ordered pediatric prescriptions of Celexa and Lexapro
that Painters reimbursed. In addition, Painters produced evidence
suggesting that Forest specifically targeted Painters' pharmacy-
benefits manager, Prime, and that Prime relied upon a misleading
report by Forest of Study MD-18 in managing Painters' formulary.
All together, this is surely enough to raise a triable issue of
fact as to whether Forest's off-label marketing caused Painters to
pay for a prescription for which it would not have otherwise paid.
This is not to say that Painters will ultimately prevail
on the issue of causation. The district court has not conducted
a Daubert analysis. And there may be other potential bones to
pick with the sufficiency of Painters' proof of causation. As the
record now stands, though, we agree with Painters that we cannot
affirm the summary judgment finding that its causation proof is
insufficient as a matter of law.
As for Ramirez, Forest did not challenge her standing on
the basis of causation in its memorandum in support of its motion
for summary judgment. Accordingly, we express no opinion as to
whether Ramirez has raised a triable issue on RICO causation. See
Rosaura Bldg. Corp. v. Municipality of Mayagüez, 778 F.3d 55, 63
(1st Cir. 2015) ("Time and time again we have held that arguments
not advanced before the district court are waived.").
As for proximate causation, it is of no moment that
pediatricians were the immediate target of Forest's fraudulent
marketing. Here, as in Kaiser, a jury could find that Painters
and Ramirez were "the primary and intended victims of [Forest's]
scheme to defraud." Kaiser, 712 F.3d at 37 (quoting Bridge v.
Phx. Bond & Indem. Co., 553 U.S. 639, 650 (2008)). Moreover,
Painters' and Ramirez's alleged harm (i.e., reimbursing or
purchasing more pediatric prescriptions than they otherwise would
have) was a "foreseeable and natural consequence" of Forest's
scheme. Bridge, 553 U.S. at 658. Indeed, it was precisely the
point.
Accordingly, for the foregoing reasons, we reverse the
district court's entry of summary judgment for Forest on Painters'
RICO and state-law claims and on Ramirez's RICO and unjust-
enrichment claims.
III.
Early on in this litigation the district court denied
Painters' motion to certify this case as a class action under
Federal Rule of Civil Procedure 23(b)(3). In so ruling, the
district court reasoned that a variety of important issues,
including causation and injury, would pose individual questions
that would need to be answered for each class member. Painters I,
315 F.R.D. at 123–30. The presence of these individual questions,
reasoned the district court, defeated Painters' effort to satisfy
the requirement of Rule 23(b)(3) that common issues must
predominate. Id. Painters now appeals that ruling as it applies
to classes consisting of third-party payors ("TPP") who paid for
or reimbursed prescriptions of Celexa or Lexapro prior to early
2009. It is not clear why those issues to which the district court
pointed would preclude certification of such a class. As we have
already explained, Painters' clinical and statistical evidence, if
believed, could establish causation and injury at least for any
TPP who paid for more than a handful of different patients'
prescriptions. Nevertheless, as we will explain, it has become
apparent that the proper application of the statute of limitations,
while preserving plaintiffs' individual claims, precludes
Painters' attempt to maintain a class action.
A.
The parties agree that the applicable statutory
limitations period is four years. See Agency Holding Corp. v.
Malley-Duff & Assocs., Inc., 483 U.S. 143, 156 (1987). That four-
year period began to run "at the time [the] plaintiff knew or
should have known of his injury." Lares Grp., II v. Tobin, 221
F.3d 41, 44 (1st Cir. 2000) (citing Rodriguez v. Banco Central,
917 F.2d 664, 665 (1st Cir. 1990)). The injury here is the payment
made on account of off-label prescriptions that Forest induced.
See Kaiser, 712 F.3d at 39 ("[E]conomic injury occur[s] when
[plaintiff] paid for fraudulently induced [drug] prescriptions.").
So, the key question becomes: By what date can we say, as a matter
of law, that Painters knew or should have known that Forest was
promoting the off-label, ineffective use of Celexa or Lexapro?
The district court found that date to be no later than
March of 2009. In re Celexa & Lexapro Mktg. & Sales Practices
Litig., 65 F. Supp. 3d 283, 289 (D. Mass. 2014). In February of
that year, the United States unsealed its complaint against Forest
in United States ex rel. Gobble, which detailed in thirty-three
pages how "Forest engaged in a fraudulent scheme to market and
promote Celexa . . . and Lexapro . . . off-label to treat
depression and other psychiatric conditions in pediatric
patients." Complaint at 2, United States ex rel. Gobble, No. 03-
10395-NMG (D. Mass. Feb. 13, 2009), ECF No. 61 [hereinafter United
States' Complaint]. Within weeks, two private class-action
complaints followed, one in New York and another in Missouri, each
also alleging a fraudulent scheme to market Celexa and Lexapro for
ineffective, off-label uses. See Class Action Complaint,
Universal Care, Inc. v. Forest Pharm., Inc., No. 09-cv-11518-NMG
(D. Mass. Mar. 20, 2009), ECF No. 1; Class Action Complaint, N.M.
UFCW Union's & Emp'rs' Health & Welfare Tr. Fund v. Forest Labs.,
Inc., No. 09-cv-11524-NMG (D. Mass. Mar. 12, 2009), ECF No. 1.
Painters never argued before the district court that it was unaware
of the United States' complaint or the March 2009 lawsuits. Nor
does it so argue on appeal. Rather, it argues that the lawsuits
did not provide enough notice that Forest had been promoting the
off-label use of Celexa and Lexapro. Such notice, Painters says,
was not available until Forest's own public admission to that
effect in November 2010, when it both pleaded guilty to criminal
violations of the FDCA and entered into a civil settlement
agreement with the United States.
Not surprisingly, Painters points to no case law holding
that a statutory limitations period does not start to run until
the potential defendant first delivers a gift-wrapped admission of
its alleged wrongdoing. Were that the rule, very few limitations
periods would ever commence, much less conclude. Instead, as we
have explained in an analogous context, "[w]e look first to whether
sufficient facts were available to provoke a reasonable person in
the plaintiff's circumstances to inquire or investigate
further. . . . Once a duty to inquire is established, the
plaintiff is charged with the knowledge of what he or she would
have uncovered through a reasonably diligent investigation."
McIntyre v. United States, 367 F.3d 38, 52 (1st Cir. 2004); see
also Sanchez v. United States, 740 F.3d 47, 52 (1st Cir. 2014)
("The discovery rule incorporates an objective standard. To delay
commencement of the running of the statute of limitations, 'the
factual basis for the cause of action must have been inherently
unknowable, [that is, not capable of detection through the exercise
of reasonable diligence] at the time of injury.'" (alteration in
original) (quoting Gonzalez v. United States, 284 F.3d 281, 288–
89 (1st Cir. 2002))). The same fundamental principle applies to
RICO suits. See Rotella v. Wood, 528 U.S. 549, 555 (2000)
("Federal courts . . . generally apply a discovery accrual rule
when a statute is silent on the issue, as civil RICO is here. . . .
[D]iscovery of the injury . . . is what starts the clock."
(citations omitted)); Koch v. Christie's Int'l PLC, 699 F.3d 141,
150–51 (2d Cir. 2012) (noting that a RICO claim does not accrue
until a plaintiff has "actual or inquiry notice of the injury"
(quoting In re Merrill Lynch Ltd. P'ships Litig., 154 F.3d 56, 60
(2d Cir. 1998))).
We agree with the district court that the unsealing of
the United States' complaint and the subsequent lawsuits filed in
March 2009 were more than sufficient to put a TPP like Painters on
notice that Forest had likely been inducing off-label
prescriptions of Celexa and Lexapro. The United States' complaint
chronicled how Forest suppressed a negative study on Celexa while
promoting a positive study (which conveniently neglected to
mention the earlier, negative study). United States' Complaint at
3, 14. The complaint quoted internal Forest communications and
recounted the precise details of Forest's unlawful promotional
activities. Id. at 15–22. It quoted Forest's physician-call notes
reporting on the efforts of Forest's sales representatives to
promote the pediatric use of the drugs. E.g., id. at 20 ("[F]ocus
on Lexapro efficacy at just 10 mg., great choice for
child/adolescents."). It also named Forest marketing executives,
e.g., id. at 23, and outside physicians involved in the promotion
campaigns, e.g., id. at 21–22. It is inconceivable that any TPP
like Painters would not have found in the complaint a very strong
probability that Forest had systematically and fraudulently pushed
its drugs on unsuspecting children.
Nevertheless, we also agree with the district court that
Painters survived Forest's statute-of-limitations defense because
the running of the limitations period was stayed for more than
eight months by the filing of the N.M. UFCW class action in March
2009. See In re Celexa & Lexapro Mktg. & Sales Practices Litig.,
65 F. Supp. 3d at 291. Painters was a member of the putative RICO
class action for which the N.M. UFCW complaint sought
certification. Under American Pipe & Construction Co. v. Utah,
414 U.S. 538 (1974), the limitations period during which Painters
might sue on its own behalf was therefore tolled until the N.M.
UFCW class action was dismissed in June 2010. Forest did not cross
appeal the district court's application of American Pipe. Rather,
Forest argues only that the limitations period began running long
before March of 2009 when plaintiffs first should have suspected
that Celexa and Lexapro were ineffective for pediatric use. We
reject that argument because the injury here is paying for
unlawfully induced off-label prescriptions, not merely physician-
directed, off-label prescriptions.
B.
Even though plaintiffs can sue, thanks to American Pipe,
Painters cannot parlay that dispensation into the much-delayed
filing of a class action. See China Agritech, Inc. v. Resh, 138
S. Ct. 1800 (2018). In American Pipe, the Supreme Court held that
the "commencement of [a putative class action] tolls the running
of the statute for all purported members of the class who make
timely motions to intervene after the court has found the suit
inappropriate for class action status." 414 U.S. at 552-53. China
Agritech clarified that this tolling rule has limits: While a
putative class member may join an existing suit or file an
individual action upon denial of class certification, a putative
class member may not commence a class action anew beyond the time
allowed by the untolled statute of limitations. 138 S. Ct. at
1807 ("The 'efficiency and economy of litigation' that support
tolling of individual claims do not support maintenance of untimely
successive class actions; any additional class filings should be
made early on, soon after the commencement of the first action
seeking class certification." (citation omitted) (quoting Am.
Pipe, 414 U.S. at 553)).
Painters argues that China Agritech is distinguishable
from the case at hand because there was no substantive ruling on
class certification in N.M. UFCW; the first time any district court
addressed class certification was in Painters' case. Painters'
position relies on an impermissibly narrow reading of the Court's
decision in China Agritech. Though the Supreme Court granted
certiorari in that case to answer the narrow question of whether
a putative class member may commence a class action beyond the
limitations period upon the district court's denial of a request
for class certification filed within the statute of limitations,
id. at 1804, the Court proceeded to provide a broader answer: Its
precedents do not "so much as hint[] that [American Pipe] tolling
extends to otherwise time-barred class claims," id. at 1806. Thus,
the Court effectively ruled that the tolling effect of a motion to
certify a class applies only to individual claims, no matter how
the motion is ultimately resolved. To hold otherwise would be to
allow a chain of withdrawn class-action suits to extend the
limitations period forever.
For the foregoing reasons, the district court did not
abuse its discretion in declining to certify Painters' proposed
nationwide class of TPPs.
IV.
Finally, Painters also takes issue with the district
court's denial of its motion to compel Forest's supplemental
production of documents related to the MD-18 Study. This court
reviews a district court's discovery decision for abuse of
discretion, intervening "only upon a clear showing of manifest
injustice, that is, where the lower court's discovery order was
plainly wrong and resulted in substantial prejudice to the
aggrieved party." Pina v. Children's Place, 740 F.3d 785, 791
(1st Cir. 2014) (quoting Dennis v. Osram Sylvania, Inc., 549 F.3d
851, 859 (1st Cir. 2008)).
Here, it is undisputed that Forest did not perform an
exhaustive search in response to Painters' requests for documents
related to the MD-18 Study: Indeed, Forest acknowledges
(employing the passive voice) that "files within the custody of
the Clinical Supply Group were not searched." Forest also does
not deny that its own preliminary search within this group -- after
discovery had closed -- produced two responsive memoranda
regarding the packaging error in the MD-18 Study. The only excuse
Forest provides is that "[p]laintiffs were fully apprised of the
scope of document collection and were aware that files within the
custody of the Clinical Supply Group were not searched." Forest,
however, points us to nothing in the record demonstrating that
Painters acquiesced to Forest's limiting the scope of its document
collection in this way. These admissions notwithstanding, the
district court denied Painters' Rule 37 motion to compel the
supplementary production of documents related to the MD-18 Study.
It reasoned that the Rule 26(e)(1) duty to supplement only applies
when "the supplemental material has not been otherwise made known
to the requesting party" and observed that Painters had already
received "substantial production of documents related to the
packaging error" such that any new production would be cumulative.
Painters II, 288 F. Supp. 3d at 487.
Rule 26(e)(1) requires that a party who has responded to
a request for production supplement its response in a timely manner
"if the party learns that in some material respect the . . .
response is incomplete . . . and if the additional . . .
information has not otherwise been made known to the other parties
during the discovery process." Fed. R. Civ. P. 26(e)(1). Whether
or not "information has not otherwise been made known" -- and,
thus, whether or not additional production would be cumulative --
necessarily hinges on the relevance that the additional production
might have for the requesting party's claims and the complexity of
the issue that the factfinder is tasked to resolve; clearly, a
relatively high degree of granularity in document production is to
be expected in technical matters of great significance to a party's
overall claim.
The district court viewed FDA approval as being
preclusive as to the validity of Studies MD-18 and MD-32. See
Painters III, 289 F. Supp. 3d at 255–56. It also viewed the
validity of those two studies as fatal to plaintiffs' attempt to
prove ineffectiveness with the type of evidence used in Neurontin.
See id. Given those views, the district court understandably
decided that further evidence on the question of effectiveness was
cumulative and of no material import. See Painters II, 288 F.
Supp. 3d at 487. Because we have now explained why the FDA's
approval of Lexapro for its use in adolescents is not as preclusive
as the district court might have reasonably thought, and because
Painters and Ramirez have a live claim on the merits, one might
reasonably expect Forest to search for responsive files within the
"Clinical Supply Group." Accordingly, we vacate the district
court's discovery ruling so that on remand it can consider whether
further discovery is called for in view of our decision in this
appeal.
V. Conclusion
For the foregoing reasons, we reverse the district
court's entry of summary judgment for Forest on Painters' and
Ramirez's RICO and state-law claims and vacate the district court's
denial of Painters' Rule 37 motion to compel supplemental
discovery. At the same time, we affirm the district court's denial
of Painters' motion for class certification. We award no costs to
any party.