Court Opinion

ID: 147801
Source: CourtListenerOpinion
Date Created: 2010-06-04 00:02:15+00
Date Added: 2024-06-11T17:24:05.508549
License: Public Domain

FILED
                            NOT FOR PUBLICATION                             JUN 03 2010

                                                                        MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                       U .S. C O U R T OF APPE ALS

                            FOR THE NINTH CIRCUIT

VIOLET R. MYERS-ARMSTRONG,                       No. 09-16055

              Plaintiff - Appellant,             D.C. No. 3:08-cv-04741-WHA

  v.
                                                 MEMORANDUM *
ACTAVIS TOTOWA, LLC, a Delaware
limited liability corporation; et al.,

              Defendants - Appellees.

                    Appeal from the United States District Court
                      for the Northern District of California
                    William H. Alsup, District Judge, Presiding

                        Argued and Submitted May 14, 2010
                             San Francisco, California

Before: W. FLETCHER and N.R. SMITH, Circuit Judges, and PRO, District
Judge.**

       Myers-Armstrong appeals the district court’s dismissal of her case for failure

to state a claim. Myers-Armstrong sued Actavis Totowa, LLC, Actavis Group hf.,

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
       **
             The Honorable Philip M. Pro, United States District Judge for the
District of Nevada, sitting by designation.
Actavis, Inc. (collectively, “Actavis”) and McKesson Corporation regarding the

manufacture and distribution of 107 drugs that were later found not to meet Food

and Drug Administration (“FDA”) standards. In her suit, she sought only

economic loss, bringing the following causes of action: (1) breach of the implied

warranty of merchantability; (2) violation of California’s Unfair Competition Law

(“UCL”); (3) fraudulent concealment; and (4) unjust enrichment. We may affirm

the dismissal on any basis supported in the record. See Diaz v. Gates, 380 F.3d
480, 482 (9th Cir. 2004).

                                          I.

      1. Breach of the Implied Warranty of Merchantability

      Myers-Armstrong concedes that the Sales Division of the California

Commercial Code governs her claim alleging a breach of the implied warranty of

merchantability. Myers-Armstrong admits that the drug she received has an

ordinary purpose of treating certain illnesses, and that the drug she received safely

and effectively treated that illness. Such admissions are fatal to her claim under

the implied warranty of merchantability. Birdsong v. Apple, Inc., 590 F.3d 955,

958 (9th Cir. 2009).

      Further, Myers-Armstrong fails to sufficiently plead damages under the

California Commercial Code. Myers-Armstrong seeks a refund of her money.

                                          2
Under the California Commercial Code, she is only entitled to “the difference at

the time and place of acceptance between the value of the goods accepted and the

value they would have had if they had been as warranted, unless special

circumstances show proximate damages of a different amount.” Cal. Com. Code

§ 2714(2). Myers-Armstrong alleges no such difference.

      2. Violation of California’s Unfair Competition Law

      Myers-Armstrong next alleges that Actavis and McKesson violated

California’s UCL. Myers-Armstrong alleges that Actavis violated the UCL under

all three criteria: “unlawful, unfair or fraudulent business act[s] or practice[s].” Cal.

Bus. & Prof. Code. § 17200; see also McKell v. Wash. Mut., Inc., 49 Cal. Rptr. 3d
227, 239 (Cal. Ct. App. 2006).

      Myers-Armstrong claims Defendants “violate[d], without limitation, The

Food Drug and Cosmetics Act, Food and Drug Administration Regulations, and

other California and Federal laws which regulate the manufacture and sale of

generic pharmaceutical products.” However, Myers-Armstrong’s complaint gives

no notice of the alleged illegal act and, therefore, fails to satisfy Federal Rule of

Civil Procedure 8(a), because it does not set forth “a short plain statement of the

claim showing that the pleader is entitled to relief.”

                                            3
      As to her “unfairness” claim, Myers-Armstrong alleges Defendants violated

the UCL by the “selling of adulterated pharmaceutical products to consumers in

California.” “A business practice is unfair within the meaning of the UCL if it

violates established public policy or if it is immoral, unethical, oppressive or

unscrupulous and causes injury to consumers which outweighs its benefits.”

McKell, 49 Cal. Rptr. 3d at 240. Myers-Armstrong has failed to properly plead

damages; she has not pled that the injury to consumers outweighs the benefits of

the business practice. Furthermore, she has failed to plead that Defendants violated

public policy, or that her injury was substantial.

      Finally, as to fraudulent business practices, Myers-Armstrong claims that the

Defendants distributed the adulterated drugs and that such conduct was “likely to

deceive a reasonable consumer into believing that Defendants’ pharmaceutical

products are standard or otherwise ‘pure’ when, in fact, they are not.” “A

fraudulent business practice is one which is likely to deceive the public.” McKell,
49 Cal. Rptr. 3d at 239. Myers-Armstrong has not sufficiently alleged that

Defendants made a misrepresentation, express or implied, “enough to raise a right

to relief above the speculative level.” Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007). Thus, we cannot find that she relied upon a misrepresentation to

                                           4
her own detriment. See In re Tobacco II Cases, 93 Cal. Rptr. 3d 559, 581 (Cal.

2009).1

      3. Fraudulent Concealment

       Myers-Armstrong fails to plead the fraud “‘specific[ally] enough to give

defendants notice of the particular misconduct so that they can defend against the

charge and not just deny that they have done anything wrong.’” Vess v. Ciba-Geigy

Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Bly-Magee v. California,

236 F.3d 1014, 1019 (9th Cir. 2001)) (alterations omitted). Thus, she has failed to

plead fraud with particularity as required by Federal Rule of Civil Procedure 9(b).

      4. Unjust Enrichment

      In California, “[t]here is no cause of action for unjust enrichment. Rather,

unjust enrichment is a basis for obtaining restitution based on quasi-contract or

imposition of a constructive trust.” McKell, 49 Cal. Rptr. 3d at 254. Again,

because Myers-Armstrong fails to plead that the drugs she received were of any

lesser value than those for which she paid, she fails to sufficiently plead an

entitlement to relief under quasi-contract law.

      1
              We note that even if we were to read an allegation of an implied
misrepresentation into the complaint, Myers-Armstrong’s claim would still be
insufficient for failure to plead the fraudulent conduct with particularity, as
required by Federal Rule of Civil Procedure 9(b).

                                           5
AFFIRMED.

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