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decision dealt a major blow to class action litigation that seek economic damages associated with the sale of products withdrawn from the market.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to represent a nationwide class of consumers who purchased a weight-loss medication that was recently voluntarily withdrawn from the market based on FDA’s concerns about potential cancer risk.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.