IN THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF PENNSYLVANIA 

IN RE: DIET DRUGS (PHENTERMINE/ 

FENFLURAMINE/DEXFENFLURAMINE) 

PRODUCTS LIABILITY LITIGATION 

THIS DOCUMENT RELATES TO: 

GEOFFREY DREW, M.D., et al. 

v. 

AMERICAN HOME PRODUCTS, INC. 

MDL NO. 1203 

CIVIL ACTION NO. 00-21044 

MEMORANDUM IN SUPPORT OF SEPARATE PRETRIAL ORDER NO. BBlo I 

Bartle, J. April 9 , 2012 

Plaintiffs Richard Powell, Hing Kwee, and George Weiss 1 

bring this action against defendant Wyeth2 for: (1) violation of 

the California Unfair Competition Law, Cal. Bus. & Prof. Code 

§§ 17200 et seq.; (2) negligence; (3) strict liability; (4) 

breach of implied warranty, and (5) fraud. Before the court is 

the motion of defendant for judgment on the pleadings under Rule 

12(c) of the Federal Rules of Civil Procedure. 

Plaintiffs are physicians who operated weight-loss 

clinics or other facilities where they prescribed the diet drugs 

fenfluramine, dexfenfluramine, and phentermine to their patients. 

1. Plaintiffs Geoffrey Drew and Tom Kilmer stipulated to 

voluntary dismissal from this action under Rule 41(a) (1) (A) of 

the Federal Rules of Civil Procedure on August 8, 2011. 

2. Prior to March 11, 2002, Wyeth was known as American Home 

Products Corporation. 

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According to the complaint, Wyeth engaged in a fraudulent scheme 

to conceal the risks associated with these drugs and aggressively 

to market the drugs to healthcare providers. Plaintiffs do not 

assert that they purchased diet drugs directly from Wyeth but 

rather that they acted as "conduits" for the sale of diet drugs 

by prescribing the drugs to patients. Plaintiffs allegedly "had 

their businesses ruined, years of good will undercut, their 

livelihood destroyed, their standing in their respective 

communities impaired, and the[ir] investment rendered 

substantially worthless" when Wyeth withdrew the drugs from the 

market in September, 1997 at the request of the United States 

Food and Drug Administration ("FDA") due to evidence of the 

drugs' adverse effects, including damage to heart valves. 

Plaintiffs raise a claim in Count I under the 

California Unfair Competition Law ("UCL"). That statute creates 

a cause of action for any "person who has suffered injury in fact 

and has lost money or property as a result of the unfair 

competition." Cal. Bus. & Prof. Code§ 17204. Unfair competition 

is defined as "any unlawful, unfair or fraudulent business act or 

practice." Id. at § 17200. 

A plaintiff has suffered an "injury in fact" for 

standing purposes under the UCL if he or she: (1) expended money 

due to the defendant's acts of unfair competition; (2) lost money 

or property; or (3) was denied money to which he or she has a 

cognizable claim. Hall v. Time Inc., 70 Cal. Rptr. 3d 466, 469 

(Cal. Ct. App. 2008). An injury must be "[a]n actual or imminent 

invasion of a legally protected interest, in contrast to an 

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invasion that is conjectural or hypothetical." Id. at 470 

(quoting Black's Law Dictionary 801 (8th ed. 2004)). 

Plaintiffs have not alleged an injury sufficient to 

confer standing under the UCL. Plaintiffs built profitable 

clinics and do not assert that they lost money while the diet 

drugs were o~ the market. Instead, plaintiffs allege that they 

lost future business profits when Wyeth withdrew the drugs from 

the market at the request of the FDA. Plaintiffs simply have no 

legally protected interest in Wyeth's continuing to manufacture 

and sell the drugs in issue. 

Further~ore, plaintiffs have not alleged that they are 

entitled to any remedy available under the UCL. An action under 

the UCL is equitable in nature and therefore damages are not 

recoverable. Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 

937, 943 (Cal. 2003). Instead, a plaintiff's remedies under the 

UCL are limited to restitution and injunctive relief. ~, 

Clark v. Super. Ct., 235 P.3d 171, 174 (Cal. 2010). 

As discussed above, the diet drugs at issue were 

withdrawn from the market in September, 1997. Thus, plaintiffs 

cannot allege any imminent threat of future harm to justify 

injunctive relief. See, e.g., Feitelberg v. Credit Suisse First 

Boston, LLC, 36 Cal. Rptr. 3d 592, 602 (Cal. Ct. App. 2005). 

Similarly, plaintiffs are not entitled to restitution. 

"'The object of restitution is to restore the status quo by 

returning to the plaintiff funds in which he or she has an 

ownership interest.'" Id. (quoting Korea Supply, 63 P.3d at 

947). Plaintiffs do not allege that any of the funds they 

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invested in weight loss clinics were directly paid to or retained 

by Wyeth. Instead, plaintiffs seek "disgorgement of all 

earnings, profits, compensation and benefits (or the reasonable 

value thereof) gained by the Pharmaceutical Defendants as a 

result of such unfair, unlawful and fraudulent business 

practices." These earnings and profits represent money received 

by Wyeth from third parties, in which plaintiffs have no 

ownership interest. The California Supreme Court has 

specifically held that "[c]ompensation for a lost business 

opportunity" and "nonrestitutionary disgorgement of profits" are 

not available as remedies under the UCL. Korea Supply, 63 P.3d 

at 948, 949. On the face of the complaint, plaintiffs are not 

entitled to either of the two remedies available under the UCL. 

For the above reasons, the motion of Wyeth for judgment 

on the pleadings will be granted as to Count I. 

Plaintiffs next assert claims in Counts II, III, and IV 

for negligence and strict liability. According to the complaint, 

Wyeth failed to exercise reasonable care "in the design, 

research, development, manufacture, sale, testing, quality 

assurance, quality control and/or distribution" of the diet 

drugs. Plaintiffs maintain that Wyeth, as a manufacturer of 

pharmaceuticals, should be held strictly liable for failing to 

warn of the risks associated with ingestion of the drugs. 

In actions for negligence and strict liability, "a 

manufacturer's liability is limited to damages for physical 

injuries and there is no recovery for economic loss alone." 

Seely v. White Motor Co., 403 P.2d 145, 151 (Cal. 1965). 

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Accordingly, a plaintiff may not recover "'damages for inadequate 

value, costs of repair and replacement of the defective product 

or consequent loss of profits--without any claim of personal 

injury or damages to other property.'" Jimenez v. Super. Ct., 58 

P.3d 450, 456 (Cal. 2002) (quoting Sacramento Reg'l Transit Dist. 

v. Grumman Flxible, 204 Cal. Rptr. 736, 739 (Cal. Ct. App. 

1984)). Here, the complaint contains no allegations of any 

physical injury to plaintiffs or their property, only allegations 

of investment losses. Thus, their negligence and strict 

liability claims are barred by the economic loss doctrine. 

Robinson Helicopter Co. v. Dana Corp., on which 

plaintiffs rely, is not to the contrary. 102 P.3d 268 (Cal. 

2004). There, the California Supreme Court concluded that the 

economic loss rule did not bar a helicopter manufacturer's fraud 

and intentional misrepresentation claims against the supplier of 

helicopter clutch parts. Id. at 274-75. The court specifically 

noted that its holding was "narrow in scope" and focused on the 

plaintiff's intentional tort claims. Id. at 276. There was no 

indication that the Robinson holding would apply to claims for 

strict liability or negligence. Id.; see also Jackson v. 

Balanced Health Prods., Inc., No. 08-5584, 2009 WL 1625944, at *5 

(N.D. Cal. June 10, 2009). 

Relying on Robinson Helicopter Co., plaintiffs further 

maintain that the economic loss rule does not apply where tort 

claims "are not dependent on any contractual relationship." This 

is not so. In Seely v. White Motor Co., the seminal California 

case dealing with the economic loss rule, the California Supreme 

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Court applied the rule to bar a truck owner obtaining any tort 

recovery from the truck manufacturer where there was no 

contractual relationship between the parties. 403 P.2d at 147, 

151-52. Seely remains good law and was not overruled by Robinson 

Helicopter Co. Accordingly, defendant's motion for judgment on 

the pleadings will be granted as to Counts II, III, and IV. 

We turn now to plaintiffs' claim for breach of implied 

warranty in Count v. The California Commercial Code provides 

that "a warranty that the goods shall be merchantable is implied 

in a contract for their sale if the seller is a merchant with 

respect to goods of that kind." Cal. Com. Code§ 2314(1). 

To state a claim for breach of implied warranty, a 

plaintiff must be in privity of contract with the defendant. 

Burr v. Sherwin Williams Co., 268 P.2d 1041, 1048-49 (Cal. 1954); 

see also Clemens v. DaimlerChrysler Corp., 534 F.3d 1017, 1023 

(9th Cir. 2008). Plaintiffs maintain that an exception to this 

general rule applies to their claim. In actions involving food 

products and pharmaceuticals, "an implied warranty of fitness for 

human consumption runs from the manufacturer to the ultimate 

consumer regardless of privity of contract." Burr, 268 P.2d at 

1048. 

Plaintiffs cannot rely on this exception to the privity 

requirement, because they were not the "ultimate consumer[s]" of 

the diet drugs. Instead, plaintiffs concede that they merely 

acted as "conduits" as physicians prescribing the diet drugs to 

their patients. Under these circumstances, their claim for 

breach of implied warranty must fail. Accordingly, defendant's 

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motion for judgment on the pleadings will be granted as to Count 

v. 

Finally, we address plaintiffs' claim for fraud in 

Count VI. Under California law, the elements of common law fraud 

are: (1) a misrepresentation or omission of a material fact; (2) 

knowledge of falsity; (3) intent to defraud; (4) justifiable 

reliance; and (5) damage. Robinson Helicopter Co., 102 P.3d at 

274. Under Rule 9 of the Federal Rules of Civil Procedure, a 

party alleging fraud "must state with particularity the 

circumstances constituting fraud or mistake." Fed. R. Civ. P. 

9(b). This particularity requirement necessitates the pleading 

of facts which show "the time, place and specific content of the 

false representations as well as the identities of the parties to 

the misrepresentation." Misc. Serv. Workers, Drivers & Helpers 

v. Philco-Ford Corp., 661 F.2d 776, 782 (9th Cir. 1981); see also 

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 

2003) . 

Plaintiffs have not satisfied this particularity 

requirement. The complaint merely offers the general statement 

that Wyeth's "advertising program, by uniform affirmative 

misrepresentations and omissions, falsely and deceptively sought 

to create the image and impression that the use of [diet drugs] 

... was safe for human use; had no, or no unacceptable, side 

effects; had fewer side effects that other methods of weight 

loss; constituted a convenient, safe form of weight loss; would 

result in permanent weight loss; and would not interfere with 

daily life." Plaintiffs offer no particulars regarding Wyeth's 

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fraud, including ''the time, place and specific contentn of 

Wyeth's alleged misrepresentations. Misc. Serv. Workers, 661 

F.2d at 782. 

Even if sufficiently pleaded, plaintiffs' fraud claim 

fails because they have suffered no damage. While the product in 

issue was on the market, plaintiffs made a profit from their 

weight-loss clinics. They have not alleged that Wyeth 

represented to them that the diet drugs would be on the market 

indefinitely or that Wyeth guaranteed the success of their 

investments in weight-loss clinics. 

Accordingly, the motion for judgment on the pleadings 

will be granted as to Count VI. 

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