A recent New Jersey federal court decision dealt a major blow to class action litigation that seek economic damages associated with the sale of products withdrawn from the market. 

In Gibriano v. Eisai, Inc., et al., 2024 WL 1831546 (D.N.J. Mar. 31, 2024), the plaintiff sought to represent a nationwide class of consumers who purchased a weight-loss medication that was recently voluntarily withdrawn from the market based on FDA’s concerns about potential cancer risk.  The plaintiff did not claim that she had suffered personal injuries.  Rather, she sought money damages, alleging that she over-paid because the medication “did not meaningfully impact her weight” and because the price she paid was “based on the understanding that it was safe.”  She further alleged that, because of the medication’s potential risks, “no reasonable physician would have prescribed [it] and no reasonable consumer would choose to purchase [it].”  In support of her allegations, the plaintiff attached to her complaint a consumer survey suggesting that knowledge of cancer risk would reduce the amount consumers would pay for a medication. 

The District of New Jersey dismissed the complaint for failure to plead a concrete and particularized injury-in-fact.  The court observed that the Third Circuit requires a plaintiff to allege that a product “failed to work for its intended purpose or was worth objectively less than what one could reasonably expect.”  The plaintiff’s “purely economic injur[ies,]” however, were “subjective” and “mere generalization.”  The attached survey did not save the plaintiff’s claims because the survey involved a generic, un-named weight-loss drug, and thus its relevance depended on “speculative inferences.”  Further, the plaintiff, “d[id] not state that she in fact suffered from a risk of cancer” because of taking the medication.  Rather, she sought reimbursement for a “functional product that she has already consumed without incident.”  The court squarely rejected the plaintiff’s price-premium theory of injury, reasoning that “Plaintiff’s assertion that she . . . would have paid less for an unsafe version of [the medication] does not state an injury-in-fact.”  Instead, the plaintiff needed to allege that the economic benefits she received were less than the price she paid.  Because she had not done so, the plaintiff failed to offer “a non-conjectural basis to show that she did not receive the benefit of her bargain,” and therefore she lacked Article III standing.   

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Photo of Andrew Soukup Andrew Soukup

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which…

Andrew Soukup has a wide-ranging complex litigation practice representing highly regulated businesses in class actions and other high-stakes disputes. He has built a successful record of defending clients from consumer protection claims asserted in class-action lawsuits and other multistate proceedings, many of which were defeated through dispositive pre-trial motions.
Andrew is co-chair of the firm’s Class Action Litigation practice group.

Andrew has helped his clients achieve successful outcomes at all stages of litigation, including through trial and appeal. He has helped his clients prevail in litigation against putative class representatives, government agencies, and commercial entities. Representative victories include:

  • Delivered wins in multiple nationwide class actions on behalf of large financial companies related to fees, disclosures, and other banking practices, including the successful defense of numerous lenders accused of violating the Paycheck Protection Program’s implementing laws, which contributed to Covington’s recent recognition as a “Class Action Group Of The Year.”
  • Successfully defending several of the nation’s leading financial institutions in a wide variety of litigation and arbitration proceedings involving alleged violations of RICO, FCRA, TILA, TCPA, FCBA, ECOA, EFTA, FACTA, and state consumer protection and unfair and deceptive acts or practices statutes, as well as claims involving breach of contract, fraud, unjust enrichment, and other torts.
  • Successfully defended several of the nation’s leading companies and brands from claims that they deceptively marketed their products, including claims brought under state consumer protection and unfair deceptive acts or practices statutes.
  • Obtained favorable outcomes for numerous clients in commercial disputes raising contract, fraud, and other business tort claims.

Because many of Andrew’s clients are subject to extensive federal regulation and oversight, Andrew has significant experience successfully invoking federal preemption to defeat litigation.

Andrew also advises clients on their arbitration agreements. He has successfully helped numerous clients avoid multi-district class-action litigation by successfully enforcing the institutions’ arbitration agreements.

Clients praise Andrew for his personal attention to their matters, his responsiveness, and his creative strategies. Based on his “big wins in his class action practice,” Law360 named Mr. Soukup a “Class Action Rising Star.

Prior to practicing law, Andrew worked as a journalist.

Photo of Ethan Treacy Ethan Treacy

Ethan Treacy is a commercial litigation associate in the Washington, DC office.

Before joining Covington, Ethan served as a Public Affairs Officer in the United States Marine Corps. As a Marine officer, Ethan was stationed in Okinawa, Japan, where he served on high-level…

Ethan Treacy is a commercial litigation associate in the Washington, DC office.

Before joining Covington, Ethan served as a Public Affairs Officer in the United States Marine Corps. As a Marine officer, Ethan was stationed in Okinawa, Japan, where he served on high-level staffs in the Defense and State Departments and deployed to the Republic of Korea, Australia, and the Philippines.