NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS MAR 18 2022
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RAYMOND N. RAYES, No. 21-55723
Plaintiff-Appellant, D.C. No.
5:21-cv-00201-JGB-KK
v.
NOVARTIS PHARMACEUTICALS MEMORANDUM*
CORPORATION,
Defendant-Appellee,
and
NOVARTIS AG; NOVARTIS PHARMA
AG; NOVARTIS INSTITUTES FOR
BIOMEDICAL RESEARCH, INC.;
NOVARTIS PHARMACEUTICALS UK
LIMITED; ALCON RESEARCH, LLC,
Defendants.
Appeal from the United States District Court
for the Central District of California
Jesus G. Bernal, District Judge, Presiding
Argued and Submitted March 10, 2022
San Francisco, California
Before: WALLACE, S.R. THOMAS, and McKEOWN, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Raymond N. Rayes alleges that he suffered eye injuries after receiving
injections of Beovu, a drug manufactured by Novartis Pharmaceuticals. Rayes sued
Novartis, alleging: strict liability failure to warn (Count I); negligence (Count II);
fraudulent misrepresentation (Count III); and negligent misrepresentation (Count
IV). The district court dismissed the complaint for failure to state a claim and for
failure to plead fraud with particularity. We have jurisdiction under 28 U.S.C.
§ 1291. We review de novo dismissals under Rule 12(b)(6) and under Rule 9(b).
Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1102 (9th Cir. 2003). We affirm in
part, reverse in part, and remand in part.
The district court properly disregarded the complaint’s allegations of post-
marketing adverse event reports that post-dated Rayes’s final injection of Beovu on
January 10, 2020. California recognizes a cause of action in strict liability for the
“failure to warn about the known or reasonably scientifically knowable dangerous
propensities” of prescription drugs. Carlin v. Super. Ct., 920 P.2d 1347, 1348 (Cal.
1996). However, California does not recognize a continuing duty to warn in such
cases. Brown v. Super. Ct., 751 P.2d 470, 482–83 (Cal. 1988). For his negligence
claim, although Rayes argues that additional post-treatment warnings “could have
served to minimize or avoid his ultimate injury,” the complaint makes no such
allegation and thus fails to plead causation. We leave to the district court’s discretion
whether to entertain a motion to amend the complaint.
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We reverse dismissal of Counts I and II, and remand for further proceedings
on these counts. Although the district court properly construed Count II as a
negligent failure-to-warn claim (and not as a failure-to-test claim), neither claim was
preempted. Rayes sufficiently pleaded the existence of “newly acquired
information” in the form of several post-marketing adverse event reports of retinal
vasculitis or retinal vascular occlusion that were reported to Novartis before Rayes’s
final dose of the drug, and multiple cases of retinal vascular occlusion or retinal
vasculitis in the clinical trials. The “changes being effected” (“CBE”) regulation
contemplates not only new warnings, but also strengthened warnings for risks that
already appear on the initial label. 21 C.F.R. § 314.70(c)(6)(iii)(A); see Wyeth v.
Levine, 555 U.S. 555, 569 (2009). Because Rayes has met this standard, Novartis
bears the burden of showing on remand that there was “clear evidence” that the FDA
would reject the change. See Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct.
1668, 1677 (2019); see also id. at 1679 (stating that only “agency actions taken
pursuant to the FDA’s congressionally delegated authority” and “carrying the force
of law” can constitute such clear evidence for preemption purposes).
Counts I and II are not preempted because Rayes does not allege fraud on the
FDA. See Buckman Co. v. Plaintiffs’ Leg. Comm., 531 U.S. 341, 353 (2001). His
strict liability and negligence claims are based on Novartis’s duty to warn consumers
and physicians, not its duty to submit accurate data to the FDA. State-law negligence
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and strict liability claims premised on a duty to warn consumers or their physicians
are not preempted, even when that duty “parallels” federal requirements. Stengel v.
Medtronic Inc., 704 F.3d 1224, 1226 (9th Cir. 2013) (en banc), cert. denied, 573
U.S. 930 (2014); McClellan v. I-Flow Corp., 776 F.3d 1035, 1040–41 (9th Cir.
2015).
We also reverse dismissal of Counts III and IV for failure to plead fraud with
particularity—but only as to fraud claims based on the product label. Fed. R. Civ.
P. 9(b). Rule 9(b) requires that a party alleging fraud “state with particularity the
circumstances constituting fraud.” Fed. R. Civ. P. 9(b). The rule requires that
“[a]verments of fraud . . . be accompanied by ‘the who, what, when, where, and how’
of the misconduct charged.” Vess, 317 F.3d at 1106 (quoting Cooper v. Pickett, 137
F.3d 616, 627 (9th Cir. 1997)). Many of Rayes’s allegations fall short of this
standard. First, the complaint does not plead “how” Rayes was defrauded by
statements that post-date his final dose on January 10, 2020. Second, while the
complaint alleges that “in January 2020” certain scientists affiliated with Novartis
published a report that intentionally misrepresented data from the HAWK and
HARRIER Phase III trials, it does not indicate whether the report pre-dated or post-
dated his final dose on January 10, 2020. Finally, Rayes alleges that Novartis
“encouraged ophthalmologists to switch their patients to Beovu” from safer
alternatives, but does not identify the marketing or promotional materials that he
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believes were false. Rayes’s claims based on these vague allegations fail under Rule
9(b).
However, Rayes’s allegation that Novartis intentionally understated the risks
of Beovu on the product label satisfies Rule 9(b)’s particularity requirement.
Novartis stated that only 1% of patients experienced retinal vasculitis and retinal
vascular occlusion in the clinical trials, but the real number was 3.3%. This
misrepresentation was allegedly directed at “the medical community and the
consuming public,” including Rayes and his doctor. His doctor allegedly relied on
this misrepresentation in deciding to prescribe Beovu, thus causing harm to Rayes.
These allegations specify the fraudulent statement, explain why the statement was
fraudulent, and plausibly state that Rayes’s physician relied on the misreported data.
These allegations should not have been dismissed.
The parties shall bear their own costs on appeal.
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED IN PART.
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