Court Opinion

ID: 857138
Source: CourtListenerOpinion
Date Created: 2013-04-03 19:36:41.699259+00
Date Added: 2024-06-11T09:06:34.799170
License: Public Domain

United States Court of Appeals
                        For the First Circuit

No. 11-1806

    IN RE: NEURONTIN MARKETING AND SALES PRACTICES LITIGATION

 HARDEN MANUFACTURING CORPORATION, individually and on behalf of
 itself and all others similarly situated; ASEA/AFSCME LOCAL 52
    HEALTH BENEFITS TRUST; LOUISIANA HEALTH SERVICE INDEMNITY
       COMPANY, d/b/a Blue Cross Blue Shield of Louisiana,

                       Plaintiffs, Appellants,

 INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL NO. 68 WELFARE
    FUND, on behalf of itself and all others similarly situated;
    LORRAINE KOPA, on behalf of herself and all others similarly
     situated; GERALD SMITH, on behalf of himself and all others
  similarly situated; JEANNE RAMSEY, on behalf of herself and all
others similarly situated; CAROLYN HOLLAWAY, on behalf of herself
    and all others similarly situated; GARY VARNAM, on behalf of
  himself and all others similarly situated; JAN FRANK WITYK, on
        behalf of herself and all others similarly situated,

                             Plaintiffs,

                                  v.

              PFIZER, INC.; WARNER-LAMBERT COMPANY LLC,

                        Defendants, Appellees.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                FOR THE DISTRICT OF MASSACHUSETTS

              [Hon. Patti B. Saris, U.S. District Judge]
                             Before

                       Lynch, Chief Judge,
                   Souter,* Associate Justice,
                    and Lipez, Circuit Judge.

     Thomas M. Greene, with whom Michael Tabb, Ilyas J. Rona, Ryan
P. Morrison, and Greene LLP were on brief, for appellants.
     John H. Beisner, with whom Mark S. Cheffo, Katherine A.
Armstrong, and Skadden, Arps, Slate, Meagher & Flom LLP were on
brief, for appellees.

                          April 3, 2013

     *
       Hon. David H. Souter, Associate Justice (Ret.) of the
Supreme Court of the United States, sitting by designation.
           LYNCH, Chief Judge.       This appeal by Harden Manufacturing

Corporation and others (together, "Harden plaintiffs") is one of

three that arose from multidistrict litigation ("MDL") concerning

the   off-label   marketing    of    Neurontin,   an   anticonvulsant     drug

manufactured by Pfizer, Inc.           Today we issue our decisions in

Kaiser Foundation Health Plan, Inc. v. Pfizer, Inc. (Kaiser), Nos.

11-1904, 11-2096 (1st Cir. ______, 2013), and Aetna, Inc. v.

Pfizer, Inc. (Aetna), No. 11-1595 (1st Cir. _____, 2013), which are

relevant to this appeal. We assume familiarity with both opinions,

which   dispose   of   many   of    Pfizer's   arguments,   and   limit   our

discussion here to the issues particular to this appeal.

           The Harden plaintiffs, representing a putative class of

third-party payors ("TPPs"), ask us to reverse both the district

court's grant of summary judgment to Pfizer and the court's denial

of class certification on the plaintiffs' claims under section 1962

of the Racketeer Influenced and Corrupt Organizations Act (RICO),

18 U.S.C. §§ 1961-1968, the New Jersey Consumer Fraud Act (NJCFA),

N.J. Stat. Ann. §§ 56:8-1 to 56:8-195, and state common law claims

of fraud and unjust enrichment.             The core of the plaintiffs'

claims, as in Kaiser and Aetna, is the allegation that Pfizer

engaged in a fraudulent off-label marketing campaign that caused

the TPPs to pay for Neurontin prescriptions that were ineffective

for the off-label conditions at issue, and that the plaintiffs

suffered injury when they paid for those prescriptions.                   The

                                      -3-
details of these allegations are described in the district court's

opinion in In re Neurontin Mktg. & Sales Practices Litig. (Harden

II),   257 F.R.D. 315,    317-18       (D.     Mass.    2009).     The    Harden

plaintiffs' appeal is limited to only the claims regarding the off-

label use of Neurontin for bipolar disorder, as to both the summary

judgment and the class certification issues.

             The plaintiffs argue that the district court erred in

concluding that they failed to present a genuine issue of material

fact as to whether their injuries were caused by Pfizer's conduct.

They also argue that the district court abused its discretion in

denying    class    certification      on     the    basis    of   a   finding   that

individual issues of causation and damages would predominate.

             Based on the same reasoning we set forth in Kaiser and

Aetna, and applying the facts of record here, we reverse the grant

of summary judgment as to the plaintiffs' RICO claim.                   Based on the

record evidence, the Harden plaintiffs are not so differently

situated from Kaiser that they should be precluded from proving

their case to a jury.          The district court considered the Harden

plaintiffs'    failure    to    show    any       direct    reliance    on   Pfizer's

misrepresentations in making decisions about their formularies,

together     with   the   plaintiffs'       use     of     aggregate   evidence    of

causation, to be inadequate to survive summary judgment.                           We

disagree.     We also vacate the grant of summary judgment as to the

state law claims.         In light of our decision regarding summary

                                        -4-
judgment, we vacate the denial of class certification and remand

for further proceedings consistent with this opinion.

                                       I.

             The putative class representatives in this appeal are

Harden      Manufacturing     Corporation,      a     self-insured     employer;

ASEA/AFSCME Local 52 Health Benefits Trust, a public employee union

health benefits trust; and Louisiana Health Service Indemnity

Corporation, d/b/a Blue Cross Blue Shield of Louisiana, a nonprofit

health insurance provider.1           See In re Neurontin Mktg. & Sales

Practices Litig. (Harden III), 754 F. Supp. 2d 293, 307-08 (D.

Mass. 2010).     The Harden plaintiffs are all TPPs; that is, they pay

for   the    costs   of   drugs   prescribed    for    their   members.       They

currently     seek   to   represent    a    nationwide    class   of   TPPs   who

reimbursed for Neurontin prescriptions for the off-label condition

of bipolar disorder between 1994 and 2004.

             We review the record on summary judgment as it stood when

the district court ruled.         Lewis v. City of Boston, 321 F.3d 207,

214 n.7 (1st Cir. 2003).              In this case, the district court

completed the trial that formed the basis of the Kaiser appeal

before rendering summary judgment as to the Harden plaintiffs, and

the court relied on the facts adduced in that trial when granting

      1
       In the district court, the putative class representatives
also included International Union of Operating Engineers Local No.
68 Welfare Fund, another union health provider. This plaintiff has
voluntarily withdrawn from the appeal.

                                       -5-
summary judgment here.2      See Harden III, 754 F. Supp. 2d at 296.

Accordingly,   in   this    decision     we   adopt   the   facts   concerning

Pfizer's development and marketing of Neurontin as we explained

them in Kaiser, slip op. at 7-10, 16-17.

            Harden filed its class action complaint against Pfizer3

in U.S. District Court in Massachusetts on May 14, 2004.             On August

8, 2005, the present named plaintiffs moved to certify a nationwide

class under Fed. R. Civ. P. 23(a) and 23(b)(3).             At that time, the

proposed    class   consisted    of   all     TPPs   that   had   purchased   or

reimbursed for Neurontin for a number of off-label uses between

January 1, 1994 and December 31, 2004.4              In re Neurontin Mktg. &

Sales Practices Litig. (Harden I), 244 F.R.D. 89, 91-92 (D. Mass.

2007).     The district court initially denied the motion without

prejudice   on August      29,   2007,   finding,     inter alia,     that the

commonality requirement was not met.            Id. at 105, 115.

     2
      This situation stands in contrast to the state of the record
in Aetna, where the district court granted summary judgment on
Aetna's claims before proceeding with the Kaiser trial. See Aetna,
slip op. at 5.
     3
       Warner-Lambert Company, a subdivision of Pfizer, was also
named as a defendant. Warner-Lambert developed Neurontin in the
1980s and early 1990s before the company was acquired by Pfizer in
2000.   In re Neurontin Mktg. & Sales Practices Litig. (Kaiser
Findings), No. 04–cv–10739-PBS, 2011 WL 3852254, at *5 (D. Mass.
Aug. 31, 2011).
     4
       The class certification motion also included a class of
individual patient-consumer plaintiffs. Since the consumers have
not appealed, we do not address their claims.

                                      -6-
           Significantly, Pfizer had also argued in response to this

motion that class certification was inappropriate because the

Harden plaintiffs could not prove causation on a class-wide basis,

but rather would have to prove for each class member: (1) that its

physicians were personally exposed to off-label marketing that

contained false statements or material omissions, (2) that such

statements or omissions in the marketing materials caused those

doctors to issue the prescriptions, and (3) that the prescriptions

were ineffective for those doctors' patients.         Id. at 109.    At the

time the district court decided the motion, the plaintiffs had

commissioned, but had not yet received, an expert report from Dr.

Meredith Rosenthal, which the plaintiffs expected to use to prove

causation by aggregate data analysis.5      Id. at 109-110.       While the

district   court   expressed   some    reservations   about   the   Harden

plaintiffs'   proposed   method   of    proof,   it   did   not   make   any

definitive rulings on causation due to the limited record. See id.

at 110-15.

           On December 19, 2007, the Harden plaintiffs renewed their

motion for class certification.         The district court denied the

motion on May 13, 2009.    Harden II, 257 F.R.D. at 333.          The court

found that the plaintiffs had overcome the commonality problem by

splitting the TPP class into multiple subclasses that were specific

     5
       Dr. Rosenthal's qualifications and the details of                 her
completed report are discussed in Kaiser, slip op. at 13-15.

                                  -7-
to   the    off-label        indications          for    which      Neurontin   had     been

prescribed, id. at 319, but that this time, the motion failed on

the basis of predominance, see id. at 317, 331-33.                              The court

concluded that the plaintiffs could not use statistical evidence to

establish class-wide causation in a consumer fraud claim under

either     RICO   or     the      NJCFA.     See        id.   at    323-33.     While    Dr.

Rosenthal's       regression        analysis      showed      that     "essentially     all"

Neurontin prescriptions for bipolar disorder were the result of

Pfizer's off-label marketing, id. at 329, the court found that the

Rosenthal report nonetheless could not provide class-wide evidence

of causation because it did not take account of doctors' individual

prescribing decisions or the possibility that some of Pfizer's

off-label marketing might not have been fraudulent, see id. at

330-31.     The court then reasoned that the TPPs could alternatively

show causation         by    evidence      that     they      had    directly   relied    on

Pfizer's misrepresentations in deciding how to treat Neurontin on

their formularies (the lists of drugs for which TPPs agree to

reimburse).         See      id.     at    333.         But    because    of    the   TPPs'

heterogeneity in their processes of constructing and managing their

formularies, id. at 332, such reliance could not be shown by proof

common to the class, id. at 333.

             On    May      28,    2009,    the     Harden         plaintiffs   moved    for

reconsideration as to the bipolar subclass only. This motion would

not be resolved until after a series of other proceedings.

                                             -8-
          In March 2009, while the second class certification

motion was pending, Pfizer had moved for summary judgment on the

Harden plaintiffs' claims, as well as on the claims of the other

TPP plaintiffs in the MDL, including Kaiser and Aetna.                 Pfizer

argued, as relevant in this appeal, "that [p]laintiffs ha[d] failed

to create a triable issue of fact as to causation."                    In re

Neurontin Mktg. & Sales Practices Litig. (Neurontin Coordinated

SJ), 677 F. Supp. 2d 479, 485 (D. Mass. 2010).              Similar to its

arguments in the class certification context, Pfizer argued that

Dr. Rosenthal's report was inadequate to raise a genuine issue of

fact as   to   causation   because    it   could   not   distinguish    which

prescriptions were actually influenced by the allegedly fraudulent

marketing campaign.   Id. at 493-96.       Without the Rosenthal report,

Pfizer argued, there was no evidence of causation, because the

individual doctors who had provided evidence had not stated that

they relied on any of Pfizer's alleged misrepresentations.             Pfizer

also contended that the TPP plaintiffs had failed to show a

sufficiently direct relationship between Pfizer's alleged conduct

and the plaintiffs' alleged injuries to support a finding of

proximate causation, and that plaintiffs had failed to raise a

genuine issue of fact as to whether Neurontin was ineffective for

the off-label conditions at issue, which would preclude a finding

of compensable injury.

                                     -9-
              The Harden plaintiffs responded that their statistical

and circumstantial evidence sufficed to create a triable issue of

fact as to causation because it demonstrated, as a general matter,

that Pfizer's marketing was what caused doctors to prescribe

Neurontin for off-label conditions, which led directly to the TPPs'

injury of having to pay for prescriptions that were ineffective.

See Harden III, 754 F. Supp. 2d at 310.         They argued that it should

be for a jury to weigh individual doctors' stated reasons for

prescribing Neurontin against the Rosenthal report's data analysis

and the plaintiffs' other evidence of Pfizer's fraudulent marketing

campaign.       Unlike in the Kaiser and Aetna cases, the Harden

plaintiffs did not claim that they had directly relied on any

misrepresentations by Pfizer in making decisions about whether to

include or restrict Neurontin on their formularies. Id. at 307-08,

311.       They also argued that they had introduced "overwhelming"

evidence      that   Neurontin   was     ineffective   for   the   off-label

conditions at issue.6

              On January 8, 2010, the district court granted Pfizer's

summary judgment motion with respect to Aetna and denied it with

respect to Kaiser, holding that "in a misrepresentation action

involving fraudulent marketing of direct claims to doctors, a

       6
       Significantly, neither Pfizer's memoranda in support of
summary judgment nor the Harden plaintiffs' responses explicitly
addressed the elements of the plaintiffs' claims under the NJCFA or
state common law.    The Harden plaintiffs cited only one case
construing NJCFA, in passing, in a footnote.

                                       -10-
plaintiff TPP or class must prove through individualized evidence

that the misrepresentation caused specific physicians, TPPs, or

consumers to rely on the fraud, and cannot rely on aggregate or

statistical proof."          Neurontin Coordinated SJ, 677 F. Supp. 2d at

494.     Kaiser's claims were allowed to continue to trial because

Kaiser had presented sufficient evidence that it had directly

relied    on    Pfizer's     published     materials   in    determining    which

restrictions, if any, to place on Neurontin's formulary status.

See id. at 496-97.

               The district court went on to hold a five-week trial, at

which a jury concluded that Pfizer had fraudulently marketed

Neurontin       for   four     off-label      conditions,    including   bipolar

disorder, and that this conduct had violated RICO. In re Neurontin

Mktg. & Sales Practices Litig. (Kaiser Findings), No. 04-cv-10739-

PBS, 2011 WL 3852254, at *1 (D. Mass. Aug. 31, 2011).              The district

court reached the same conclusion in a bench trial on Kaiser's

state law claim.        See id. at *60.         During the Kaiser trial, the

district court accepted Dr. Rosenthal's report as evidence and

permitted Dr. Rosenthal to testify as an expert witness.                   Id. at

*32-33.    That and other evidence of causation is described in our

Kaiser opinion. See Kaiser, slip op. at 12-19, 36-48.                 We affirmed

the jury's and district court's verdicts.              See id., slip op. at 3.

               On   December    10,   2010,    after   the   Kaiser   trial   had

concluded, the district court returned to Pfizer's summary judgment

                                       -11-
motion respecting the Harden plaintiffs, and it granted summary

judgment to Pfizer.           Harden III, 754 F. Supp. 2d at 296, 311.        The

court reiterated its finding from the earlier summary judgment

decision that the Rosenthal report alone could not support the

TPPs'      causation    argument,     concluding    that   while    the    report

"demonstrates the likelihood of some injury, . . . it does not

suffice to demonstrate the extent of harm caused by the fraud, as

opposed to run-of-the-mill off-label detailing.              Most courts have

rejected such aggregate proof." Id. at 310-11. Because the Harden

plaintiffs "ha[d] not directly relied on misrepresentations by

defendants,"7 and could not use the Rosenthal report to show

reliance by physicians, the court held that the Harden plaintiffs

had failed to present a triable issue of fact as to causation.               Id.

at 311.

                 Then, on May 17, 2011, the district court addressed the

Harden plaintiffs' May 28, 2009 motion for reconsideration of the

denial of class certification as to the subclass of TPPs who had

paid       for    off-label    prescriptions   of   Neurontin      for    bipolar

       7
       On December 20, 2010, one of the Harden plaintiffs -- Blue
Cross Blue Shield of Louisiana -- filed a motion to reconsider the
summary judgment ruling, asserting that it had shown direct
reliance on Pfizer's misrepresentations in the development of its
formulary.   The district court denied this motion on April 20,
2011.   None of the other Harden plaintiffs moved the court to
reconsider the summary judgment ruling on this basis, and none --
including Blue Cross Blue Shield of Louisiana -- challenge on
appeal the finding that they failed to show direct reliance.

                                       -12-
disorder.8    In re Neurontin Mktg. & Sales Practices Litig. (Harden

IV), No. 04-cv-10981-PBS, 2011 WL 1882870, at *1 (D. Mass. May 17,

2011).       Relying   on   evidence    adduced   since   the   prior   class

certification denial, including evidence presented at the Kaiser

trial, the district court determined that "[p]laintiffs have proved

that it is more likely than not likely [sic] that they were harmed

by Pfizer's conduct because many doctors would not have prescribed

Neurontin for bipolar disorder if they had known there was no

reliable scientific evidence supporting its use."               Id. at *5.

However, the court went on to find that the Rosenthal report still

did not satisfy the predominance requirement as to causation or

damages.     Id. at *4-5.    It held that, "in order to differentiate

those prescriptions that were caused by fraud from those that were

attributable     to    non-fraudulent    off-label   marketing    or    other

independent factors, a factfinder would have to perform a granular

doctor-by-doctor analysis."       Id. at *5.      Such an inquiry would be

unmanageable in a class action litigation. Id. Moreover, "complex

issues related to calculating damages" would also make the class

unmanageable, and thus the Harden plaintiffs had failed to satisfy

Fed. R. Civ. P. 23(b)(3)'s superiority requirement.             Id. at *6.

     8
       Pfizer argued that this motion was moot as a result of the
December 2010 summary judgment decision, but the district court did
not rule on this argument. In re Neurontin Mktg. & Sales Practices
Litig. (Harden IV), No. 04-cv-10981-PBS, 2011 WL 1882870, at *1 (D.
Mass. May 17, 2011).

                                   -13-
            On June 28, 2011, the district court entered a separate

judgment in favor of Pfizer on all of the Harden plaintiffs'

claims, and the plaintiffs filed a timely appeal on July 7, 2011.

                                 II.

            On appeal, the Harden plaintiffs argue that the district

court erred in concluding that they did not raise a triable issue

of fact as to but-for or proximate causation.      We review a grant of

summary judgment de novo, drawing all reasonable inferences in

favor of the non-moving party.    Podiatrist Ass'n, Inc. v. La Cruz

Azul de P.R., Inc., 332 F.3d 6, 13 (1st Cir. 2003).             We will

reverse a grant of summary judgment if we find that the nonmovant

has "established a genuine issue of material fact that a reasonable

jury could resolve in [its] favor."     Collins v. Univ. of N.H., 664
F.3d 8, 19 (1st Cir. 2011) (emphasis omitted) (quoting Coffin v.

Bowater, Inc., 501 F.3d 80, 97 (1st Cir.2007)) (internal quotation

mark omitted).

A.          RICO Proximate Causation

            The district court found that the Harden plaintiffs had

presented   adequate evidence   that    Pfizer   fraudulently   promoted

Neurontin for off-label treatment of bipolar disorder; that this

conduct likely caused harm to the plaintiffs; and that such harm

would be the expected consequence of Pfizer's conduct.      See Harden

IV, 2011 WL 1882870, at *5; Harden III, 754 F. Supp. 2d at 310;

Harden I, 244 F.R.D. at 111.    Based on these findings, the Harden

                                 -14-
plaintiffs   argue,   the   court   should   have     determined   that    the

plaintiffs survived summary judgment on the proximate causation

issue.     Pfizer   responds   that   the    causal    chain   here   is   too

attenuated to establish proximate cause because it is based on the

individual prescribing decisions of thousands of physicians who

exercise independent medical judgment.

           As we explained in Kaiser, slip op. at 23, our RICO

analysis is controlled by the Supreme Court's decisions in Holmes

v. Securities Investor Protection Corp., 503 U.S. 258 (1992), and

its progeny.   See Anza v. Ideal Steel Supply Corp., 547 U.S. 451

(2006); Bridge v. Phoenix Bond & Indem. Co., 128 S. Ct. 2131

(2008); Hemi Grp., LLC v. City of New York, 130 S. Ct. 983 (2010).

The proximate causation question in this appeal is essentially

identical to the question presented in Kaiser's appeal, and we

decide here, as we did there, that the causal chain is sufficiently

direct to survive the Court's test at the summary judgment stage.

           First, the Harden plaintiffs need not have demonstrated

that they directly relied on Pfizer's misrepresentations in order

to survive summary judgment.          The Supreme Court has held that

direct reliance is not an element of proximate cause in a civil

RICO cause of action based on mail fraud, as the plaintiffs' case

is here.   See Bridge, 128 S. Ct. at 2134.       It is true that Kaiser,

unlike the Harden plaintiffs, presented evidence that it had

directly relied on Pfizer's misrepresentations in the course of

                                    -15-
managing   its    formulary,      but   that    evidence,     while    helpful   in

Kaiser's presentation to the jury, was not essential to Kaiser's

ability to prove proximate cause.              See Kaiser, slip op. at 30,32-

36.   The absence of direct reliance evidence in this case does not

mean that the Harden plaintiffs' remaining evidence of causation

was insufficient, as a matter of law or fact, to reach a jury.

           RICO's proximate cause inquiry includes both the question

of whether there is "some direct relation between the injury

asserted and the injurious conduct alleged," Holmes, 503 U.S. at

268, and the consideration of three functional factors that reflect

concerns of justice and administrability, id. at 269-70.                   Here, a

reasonable jury could have found that the injury to the Harden

plaintiffs was direct because the plaintiffs have adduced evidence

that they were "the primary and intended victims of [Pfizer's]

scheme to defraud."       Bridge, 128 S. Ct. at 2139.          The causal chain

in this case is not so attenuated as to support summary judgment

for Pfizer because, as we explained in Kaiser, Pfizer knew that the

structure of the American health care system meant that almost all

off-label Neurontin prescriptions written by physicians would be

paid for by TPPs.           See Kaiser, slip op. at 34.                The Harden

plaintiffs'      evidence    showed     that    Pfizer's     marketing   strategy

specifically      aimed     to   increase      Neurontin's    market     share   in

prescriptions for bipolar disorder -- prescriptions for which TPPs

would pay.     See Harden IV, 2011 WL 1882870, at *5 (finding that

                                        -16-
Pfizer "engage[d] in a nationwide fraudulent marketing campaign"

aimed at increasing the number of Neurontin prescriptions for

bipolar disorder even though "there [was] no reliable scientific

evidence   to   support   the   use   of   Neurontin   to   treat   bipolar

disorder").     Under these circumstances, drawing all reasonable

inferences in the plaintiffs' favor, a factfinder could conclude

that the Harden plaintiffs' injury was a "foreseeable and natural

consequence" of Pfizer's scheme.       Bridge, 128 S. Ct. at 2144; see

BCS Servs., Inc. v. Heartwood 88, LLC, 637 F.3d 750, 758 (7th Cir.

2011) ("Once a plaintiff presents evidence that he suffered the

sort of injury that would be the expected consequence of the

defendant's wrongful conduct, he has done enough to withstand

summary judgment on the ground of absence of causation.").

           Pfizer argues that because doctors exercise independent

medical judgment in making decisions about prescriptions, the

actions of these doctors break the causal chain.        But as we held in

Kaiser, slip op. at 35, the fact that some physicians may have

considered factors other than Pfizer's detailing materials does not

add such attenuation to the causal chain as to eliminate proximate

cause.   Rather, this argument presents a question of proof, to be

resolved at trial, regarding the total number of prescriptions (if

any) that were attributable to Pfizer's actions.

           As to the functional factors in the proximate cause

analysis, see Holmes, 503 U.S. at 269-70, Pfizer likewise has not

                                  -17-
shown that there are no genuine issues of material fact.         The

plaintiffs presented evidence at the summary judgment stage that

they would be able to calculate damages attributable to Pfizer's

conduct.9   See Holmes, 503 U.S. at 269.   While the parties dispute

whether there is any risk of duplicative recovery and whether the

Harden plaintiffs are in the best position to bring suit, see id.

at 269-70, the Harden plaintiffs' evidence that they were among the

primary victims of Pfizer's scheme is enough to raise triable

issues on these questions.

B.          RICO But-For Causation

            The Harden plaintiffs argue that the district court erred

in requiring them to provide doctor-by-doctor evidence of reliance

in order to survive summary judgment on but-for causation.       The

but-for causation question here, as in Kaiser, is whether Pfizer's

allegedly fraudulent marketing campaign caused the plaintiffs to

pay for more Neurontin prescriptions for bipolar disorder than they

otherwise would have paid for. The Harden plaintiffs maintain that

the Rosenthal report, along with other circumstantial evidence,

provided strong, admissible evidence of but-for causation, and once

the plaintiffs made that showing, any burden of demonstrating that

physicians actually prescribed Neurontin for non-fraudulent reasons

     9
       The class plaintiffs submitted the report of damages expert
Dr. Raymond Hartman. As with Dr. Rosenthal's report, the district
court accepted Dr. Hartman's report as evidence of damages in the
Kaiser trial. See Kaiser, slip op. at 19-20, 22.

                                 -18-
--   i.e.,    that   a   superseding    cause   interrupted   the   chain    of

causation -- fell upon Pfizer.            Pfizer argues that physicians'

decisions to prescribe Neurontin are not "superseding causes," but

essential links in the Harden plaintiffs' chain of causation, and

that the individualized nature of physicians' prescribing decisions

renders aggregate proof inappropriate.

             These arguments again track the same ground we covered in

Kaiser.      We conclude here, as we did there, that the Rosenthal

report is capable of providing proof of but-for causation.10                The

Harden plaintiffs need not prove causation through the testimony of

individual doctors.       The combination of the aggregate evidence and

the circumstantial evidence was enough for the Harden plaintiffs to

overcome summary judgment.

             As we explained in Kaiser, slip op. at 49-50, Pfizer's

argument misapprehends the nature of the but-for causation inquiry.

A tort plaintiff need not "prove a series of negatives; he doesn't

have to 'offer evidence which positively exclude[s] every other

possible cause of the accident.'"             BCS Servs., 637 F.3d at 757

(alteration in original) (quoting Carlson v. Chisholm-Moore Hoist

      10
       In Kaiser, slip op. at 40-48, we analyzed the admissibility
of Dr. Rosenthal's report and testimony under Fed. R. Evid. 702 and
Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993).
Pfizer will, of course, have an opportunity to argue against its
admissibility at the trial of the Harden plaintiffs' claims, if
Pfizer has objections specific to this case.      However, at this
stage of the litigation, we adopt our conclusions from Kaiser in
determining that the Harden plaintiffs could rely on the report to
defend against summary judgment.

                                       -19-
Corp., 281 F.2d 766, 770 (2d Cir. 1960) (Friendly, J.)).          "Once a

plaintiff presents evidence that he suffered the sort of injury

that would be the expected consequence of the defendant's wrongful

conduct," the burden shifts to the defendant to rebut this causal

inference.    Id. at 758.

           Although Pfizer presented testimony from doctors who

stated that they prescribed Neurontin for off-label uses without

relying on Pfizer's misrepresentations, the existence of these

individual doctors does not defeat the implication -- clearly

presented through Dr. Rosenthal's regression analysis -- that

Pfizer's misinformation had a significant influence on thousands of

other prescribing decisions.         And in addition to the aggregate

statistical    evidence,    the   Harden   plaintiffs   also    presented

circumstantial evidence that supported an inference of causation.

For   instance,   the   plaintiffs    offered   documents    showing   that

psychiatrists had almost never prescribed Neurontin for bipolar

disorder until after Pfizer began its marketing campaign, at which

point prescriptions jumped by 1700% in two years.           Ultimately, it

is a jury's task to weigh the individual testimony presented by

Pfizer against the aggregate and circumstantial evidence presented

by the Harden plaintiffs.

           More generally, Pfizer argues that the Harden plaintiffs'

use of the Rosenthal report to show but-for causation was precluded

by the decisions of other courts in pharmaceutical marketing RICO

                                   -20-
fraud cases.       We reject these arguments here for the same reasons

we did in Kaiser.        First, regression analysis is a widely accepted

method of showing causation under several causes of action, and we

see no reason to reach a different conclusion for a specific subset

of RICO claims based on fraudulent pharmaceutical marketing.                See

Kaiser, slip op. at 41-43.         Second, the other pharmaceutical RICO

cases are largely inapposite to a case such as this, especially

where the plaintiffs allege a "quantity effect" rather than an

"excess price" theory.11       See id. at 50-53; compare UFCW Local 1776

v. Eli Lilly & Co., 620 F.3d 121, 133-36 (2d Cir. 2010).                 To the

extent that       some   district courts    in other      circuits     may have

endorsed Pfizer's position that aggregate evidence is legally

insufficient to prove but-for causation, we disagree, at least on

the facts of this case.

C.             RICO Injury

               Finally, Pfizer argues that the Harden plaintiffs did not

show    that    Neurontin    was   always   ineffective    for   all    bipolar

patients, and hence cannot show that they suffered any injury.

Although the district court did not decide Pfizer's motion for

summary judgment on this basis, Pfizer urges it as an alternate

       11
       In the RICO pharmaceutical marketing context, a "quantity
effect" theory is an allegation that a defendant's fraud caused a
plaintiff to pay for more prescriptions than it would have absent
the fraud, whereas an "excess price" theory is an allegation that
the defendant's fraud caused the plaintiff to pay more for the drug
than it was worth. See UFCW Local 1776 v. Eli Lilly & Co., 620
F.3d 121, 129 (2d Cir. 2010).

                                     -21-
ground for affirmance.      See Hoyos v. Telecorp Commc'ns, Inc., 488
F.3d 1, 5 (1st Cir. 2007) (appellate court may affirm summary

judgment on any basis apparent in the record).

            For the reasons stated in Kaiser, we reject Pfizer's

position    that   these    plaintiffs    must   prove     the   individual,

subjective ineffectiveness of each off-label prescription in order

to establish injury.       See Kaiser, slip op. at 55-58.        Given that

conclusion, Pfizer's argument is premature.          The Harden plaintiffs

have   proffered    clinical    trial     evidence    that   Neurontin    is

ineffective for bipolar disorder, which is certainly enough to

raise a genuine issue of fact on the effectiveness issue.                The

question of whether the Harden plaintiffs suffered injury is for

the jury.

D.          State Law Claims

            The Harden plaintiffs' complaint included a claim under

the NJCFA as well as state common law claims for fraud and unjust

enrichment.   Pfizer's summary judgment motion did not specifically

argue that the plaintiffs had failed to raise a triable issue of

fact as to their state law claims, and the plaintiffs' opposition

to Pfizer's motion likewise did not argue that they had overcome

the summary judgment hurdle on those claims.             The district court

granted summary judgment to Pfizer on the state law claims without

                                   -22-
separate discussion.12   See Harden III, 754 F. Supp. 2d at 311.   In

their opening brief to this court, the Harden plaintiffs did not

explicitly argue that the district court erred in granting summary

judgment on the state law claims, although they argued that the

court erred in denying class certification on those claims.        In

response, Pfizer argued for the first time that the state claims

failed as a matter of law, under a number of theories.

          Under these circumstances -- where both the district

court record and the briefing before us is substantially incomplete

on the state law issues -- we believe the best course of action is

to vacate the district court's grant of summary judgment on the

Harden plaintiffs' NJCFA and state common law claims. We remand so

that the district court may decide any questions of state law in

the first instance.

                                III.

          The Harden plaintiffs also appeal the district court's

denial of class certification, arguing that the district court

erred in concluding that (1) common evidence could not demonstrate

causation and damages, and (2) a class action was not the superior

method of adjudication.      This court reviews denials of class

     12
       The district court had earlier denied class certification
on the NJCFA claim on the basis that, under New Jersey law, the
plaintiffs could not rely on aggregate evidence to prove class-wide
causation, see Harden II, 257 F.R.D. at 332, but the court did not
address this issue on summary judgment, see generally Harden III,
754 F. Supp. 2d 293.

                                -23-
certification for abuse of discretion.         Waste Mgmt. Holdings, Inc.

v. Mowbray, 208 F.3d 288, 295 (1st Cir. 2000).               An abuse of

discretion may occur "when a court . . . relies upon an improper

factor, omits consideration of a factor entitled to substantial

weight, . . . mulls the correct mix of factors but makes a clear

error of judgment in assaying them[,] . . .[or] adopts an incorrect

legal rule."    Id. (citation omitted).

           Importantly, the district court's decisions on class

certification cover very similar issues as those involved in the

summary judgment decision.          In particular, the district court's

denials   of    the    Harden    plaintiffs'   second   motion   for    class

certification    and    motion    for   reconsideration   pivoted      on   the

determination that the Rosenthal report could not provide proof of

causation or damages.           See Harden IV, 2011 WL 1882870, at *4;

Harden II, 257 F.R.D. at 331-32.         This conclusion is what led the

court to decide that a class action would be "unmanageable" due to

the requirement of a "granular doctor-by-doctor analysis."             Harden

IV, 2011 WL 1882870, at *5.         The legal requirements to establish

proximate and but-for causation under RICO were key factors across

both the summary judgment and class certification decisions, and in

both instances the district court relied on many of the same

decisions from other circuits that we have found to be inapposite

for the case at hand.

                                     -24-
          In    light   of   our   holdings   in   Kaiser   regarding   RICO

causation principles, we vacate the district court's denial of

class certification13 and remand for further proceedings.                We

express no view as to whether the plaintiffs can, on remand, meet

the requirements of Rule 23.

                                     IV.

          The district court's grant of summary judgment in favor

of Pfizer is reversed as to the Harden plaintiffs' RICO claims and

vacated as to their NJCFA and state common law claims.                  The

district court's denials of the Harden plaintiffs' renewed motion

for class certification and motion for reconsideration are vacated,

and the case is remanded for further proceedings consistent with

this opinion.    So ordered.

     13
       Because we reverse the district court's grant of summary
judgment on the RICO claim and vacate summary judgment on the state
law claims, we need not consider whether, as Pfizer has alleged,
the summary judgment decision mooted the plaintiffs' motion for
reconsideration. See Harden IV, 2011 WL 1882870, at *1.

                                    -25-