Monday, December 20, 2010

Christmas Comes Early - Great Result in West Virginia

On Friday we supplied you with the key takeaways -- that the West Virginia Supreme Court of Appeals decided: (1) that an action under the West Virginia Consumer Credit and Protection Act alleging affirmative misrepresentation requires proof of reliance, and (2) that a private cause of action under that statute does not extend to prescription drug purchases. White v. Wyeth, No. 35296 (W.V. Dec. 17, 2010). How the court got to that result is sort of interesting, though it also might be an example of not wanting to know how sausages get made.

The plaintiffs brought a class action (never certified) alleging that the defendants used unfair and deceptive practices promoting hormone therapy prescription drugs. Wyeth filed a motion for dismissal or, in the alternative, summary judgment on the grounds that the plaintiffs lacked standing because they couldn't show any causal connection between their claims and any alleged unfair or deceptive practices attributed to Wyeth. The trial court denied Wyeth's motion, but certified the following question to the West Virginia Supreme Court:

Does the 'as a result of' language in Section 46[A]-6-106(a) of the West Virginia Consumer Credit and Protection Act require a plaintiff, in a private cause of action under the Act, to allege and prove that he or she purchased a product because of and in reliance upon an unlawful deceptive act?


The lower court said No. The West Virginia Supreme Court, in an early Christmas present to the defense bar and the forces of common sense, said Yes.

The Product Liability Advisory Council filed an amicus brief to support the defense (the Yes) side, while the West Virginia Association for Justice (guess who they are) and the West Virginia Attorney General (color us unsurprised, though still disappointed) filed amicus briefs supporting the crazy, business-killing (No) side.

Our bias here is extreme (almost as if we were permitted to do replay reviews at an Eagles-Cowboys game), but it just seems obvious that reliance is required. Here is what the West Virginia statute says in pertinent part:

Any person who purchases … goods … and thereby suffers any ascertainable loss of money or property … as a result of the use or employment by another person of a method, act or practice prohibited or declared to be unlawful by the provisions of this article [entitled General Consumer Protection] may bring … [a civil] action … to recover actual damages or two hundred dollars, whichever is greater.


Slip op. at 2, quoting West Virginia Code section 46A-6-106(a).

If the loss must be "a result of the use or employment" of the unfair or deceptive practice, doesn't that mean that the unfair or deceptive practice must have caused the loss? Don't results come from causes? Or have we ceased to understand the English language?

Well, there is one sticking point. When the West Virginia Code defines "unfair or deceptive acts or practices," it includes the following:

(M) The act or employment by any person of any deception, fraud, false pretense, false promise or misrepresentation, or the concealment, suppression or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any goods or services, whether or not any person has in fact been misled, deceived or damaged thereby.


Slip op. at 8-9, quoting West Virginia Code section 46A-6-102(7)M). Ouch - that last clause is ugly. It seems to say that reliance is unnecessary. But the lower court concluded that the more specific "result" language takes precedence over the general definitional provision. Yay. So how does the lower court arrive at the wrong result?


"Based upon the remedial nature" of the statute, the lower court decided that there was no reliance requirement. Slip op. at 6. Huh? One is reminded of Truman Capote's criticism of Jack Kerouac: "That's not writing, that's typing." Lots of statutes have a "remedial purpose." Does that mean that language loses all meaning? Does it mean that plaintiffs must win every argument? Even if you think that "remedial purpose" means that a tie goes to the plaintiff, this isn't a tie. As we said in another context, courts should not disregard the letter of a statute under the pretext of pursuing its spirit. Same here.

The West Virginia Supreme Court of Appeals gets to the right result and overturns the lower court. But it goes through some unnecessary gyrations to get there. Since we've already thrown one literary criticism quote at you, we'll throw another. We reacted to the the court's analysis the way one wag reacted to a Henry James novel: it chewed more than it bit off. A "result" comes from a cause. If somebody would have taken hormone therapy whether or not the allegedly unfair or deceptive act took place, then the usage did not result from the unfair or deceptive act. What's hard about that?

But the court unnecessarily worries about how someone could rely on an omission and ends up deciding that reliance is required only where an "affirmative misrepresentation" is alleged. The court says that when "concealment, suppression or omission is alleged … proving reliance is an impossibility." Slip op. at 17. That's silly. If the plaintiff alleges an omission, then the plaintiff needs to allege -- and eventually prove -- that the plaintiff would have acted differently if the disclosure had been made. That’s standard warning/causation fare. It happens all the time in personal injury cases involving allegedly inadequate warnings. It’s what causation and reliance mean: did the defendant's alleged conduct make any difference? If it didn't, the plaintiff has no business complaining about such conduct.

Let's not look a gift horse in the mouth. The West Virginia Supreme Court of Appeals produces (causes?) the right result in this case and announces an extremely important and useful rule. Affirmative misrepresentations were alleged in the case at hand, so the reliance requirement bites hard on the plaintiffs. And then the West Virginia Supreme Court explains that it does not believe "that a causal connection exists within the context of prescription drug purchases." Slip op. at 18. Why is that? "[B]ecause the consumer can not and does not decide what product to purchase." Id. Prescription drugs are subject to a "high degree of federal regulation" and the physician must "exercises judgment whether or not to prescribe a particular medication." Id. Could it be? Yes, West Virginia, there is a learned intermediary. Those two words do not appear in the opinion, but that's clearly part of what animates the court's opinion. The public policy behind consumer protection acts was to "fill a gap by protecting consumers where product safety was not already closely monitored and regulated by the government." Id. at 19, quoting Victor E. Schwartz, Cary Silverman, Christopher E. Appel, "That's Unfair! Says Who - The Government or the Litigant? Consumer Protection Claims Involving Regulated Conduct, 47 Washburn L.J. 93, 119 (2007).

And so the West Virginia Supreme Court ruled that its consumer protection act "does not extend to prescription drug purchases." Id. at 20. We feel like that kid on YouTube who found exactly the right present under the tree.

1 comment:

Anonymous said...

Maybe I'm naive but I think the WV court is coming around. This is a great decision for the development of the law in WV.