United States District Court for the Northern District of California · 2019-05-03
Case and law context
Role: applied; posture: Motions to dismiss false advertising and related claims; some Lannett/Cody claims survive, First Databank claims dismissed; canonical IR ends during First Databank discussion.; result: mixed; claim:
Instances and excluded annotation blocks
| Case | Element | Holding and scope | Variant | Exact source quotations |
|---|---|---|---|---|
| /f-supp-3d/378/0823-01 — United States District Court for the Northern District of California · 2019 | Commercial advertising or promotion | not Counted merits instance applied / merits basis: pleaded; party: Genus against Lannett; count: Grandfathered and preliminary-NDA statements; subject: party=Genus against Lannett; count=Grandfathered and preliminary-NDA statements Failure concerns purpose and dissemination, not an absolute SEC-filing exemption. The older cited competition formulation is not adopted as a universal post-Lexmark requirement. | audience/investor-filings-and-calls | Nevertheless, Lannett claimed that C-Topical was grandfathered in a number of Securities and Exchange Commission ("SEC") filings and investor calls in between December 2017 and September 2018.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [6179:6371] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.Although the procedural posture in RPost is different, Genus has failed to allege (rather than prove as in RPost ) that the SEC statements and investor calls were made for the purpose of influencing consumers to buy its goods or services, or that they were disseminated sufficiently to pharmacists, doctors, and hospital groups.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [27906:28234] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.But in order to be actionable, the statements must be accompanied by specific allegations that they were made for the purpose of influencing the customers of cocaine hydrochloride solutions to buy C-Topical, or were disseminated sufficiently to the relevant purchasing public (pharmacists, hospitals, and doctors) to constitute "advertising" or "promotion" within the pharmaceutical industry.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [30196:30588] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.I find that the allegations contained in the SEC filings and investor calls stating that C-Topical is "grandfathered" or under a "preliminary new drug application" cannot, without more, state a claim for Lanham Act false advertising because they do not rest on any statements made in advertising or promotion.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [30614:30923] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87. |
| /f-supp-3d/378/0823-01 — United States District Court for the Northern District of California · 2019 | Judicial actual-deception or tendency-to-deceive requirement | satisfied Counted merits instance applied / merits basis: pleaded; party: Genus against Lannett; count: Price lists conveyed to customers; subject: party=Genus against Lannett; count=Price lists conveyed to customers The complaint connects implied approval to consumer beliefs. The court expressly leaves sufficiency at summary judgment unresolved; this is not a finding that the study proved deception. | implied-approval/pharmacist-survey | Genus's complaint contains essentially the same allegations as described in Par. It asserts that Lannett lists C-Topical on price lists and appears to cite to the same studies as in Par.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [24209:24395] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.For example, a nationwide survey of 500 pharmacists found that 91% thought all products pharmacists dispense are FDA approved.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [24650:24776] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.Additionally, allegations about the survey data meet the standard articulated in JHP Pharm., 52 F. Supp. 3d at 1002-03.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [25027:25146] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87. |
| /f-supp-3d/378/0823-01 — United States District Court for the Northern District of California · 2019 | Judicial actual-deception or tendency-to-deceive requirement | not Counted merits instance applied / merits basis: pleaded; party: Genus against Lannett; count: General website compliance statements; subject: party=Genus against Lannett; count=General website compliance statements No plausible allegation of misleading audience takeaway for these general statements; distinct from the price-list survey theory that survived. | implied-approval/general-compliance-website | According to the complaint, Lannett's website states that its "leadership is committed to quality, adherence to FDA standards, and compliance with regulatory requirements to ensure patient safety."Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [40130:40327] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.Genus must plausibly allege that the statements actually conveyed the implied message that C-Topical was grandfathered or sold with FDA approval, and deceived a significant portion of recipients. JHP Pharm. , 52 F. Supp. 3d at 1002-03. It has not done so yet.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [40886:41145] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87. |
| /f-supp-3d/378/0823-01 — United States District Court for the Northern District of California · 2019 | False or misleading factual representation | satisfied Counted merits instance applied / merits basis: pleaded; party: Genus against Lannett; count: Route of administration; subject: party=Genus against Lannett; count=Route of administration A factual labeling comparison survives pleading review; no safety/effectiveness determination or independent enforcement of FDA approval requirements is recorded. | literal-falsity/topical-route-label | Lannett's label states that C-Topical is "indicated for the introduction of local (topical) anesthesia of accessible mucous membranes of the oral, laryngeal and nasal cavities."Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [31994:32171] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.Taking Genus's allegations as true for the purposes of this motion, the inside of the nose, mouth, and larynx are not "particular spots on the outer surface of the body" and C-Topical's route of administration cannot accurately be described as "topical" under the FDA's definitions.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [32537:32819] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.Genus has sufficiently alleged that C-Topical's label route of administration is false.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [33762:33849] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87. |
| /f-supp-3d/378/0823-01 — United States District Court for the Northern District of California · 2019 | False or misleading factual representation | satisfied Counted merits instance applied / merits basis: pleaded; party: Genus against Lannett; count: Website meta description; subject: party=Genus against Lannett; count=Website meta description Falsity/misleadingness is the challenged issue for this statement; survival is not used to deem every advertising element satisfied. | misleading-description/generic-search-summary | Genus points out that Lannett's meta description for its C-Topical webpage is misleading: it states, "Learn more about the facts and characteristics of the generic pharmaceutical C-Topical® Solution CII."Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [6900:7104] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.It is relevant that consumers would have to click on yet another link to be informed that C-Topical has not completed the ANDA approval process required for generic drugs.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [37472:37643] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.Lannett's statement in its website's meta description states a claim for false advertising under the Lanham Act.Source: docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [37644:37756] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87. |
Court interpretations recorded from this case
interpretation
To state a false advertisement claim under the Lanham Act, a plaintiff must allege: "(1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by lessening of the goodwill associated with its products." Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc. , 758 F.3d 1069, 1071-72 (9th Cir. 2014) (citing Southland Sod Farms v. Stover Seed Co. , 108 F.3d 1134, 1139 (9th Cir. 1997) ).
/f-supp-3d/378/0823-01 — United States District Court for the Northern District of California · 2019
To state a false advertisement claim under the Lanham Act, a plaintiff must allege: "(1) a false statement of fact by the defendant in a commercial advertisement about its own or another's product; (2) the statement actually deceived or has the tendency to deceive a substantial segment of its audience; (3) the deception is material, in that it is likely to influence the purchasing decision; (4) the defendant caused its false statement to enter interstate commerce; and (5) the plaintiff has been or is likely to be injured as a result of the false statement, either by direct diversion of sales from itself to defendant or by lessening of the goodwill associated with its products." Wells Fargo & Co. v. ABD Ins. & Fin. Servs., Inc. , 758 F.3d 1069, 1071-72 (9th Cir. 2014) (citing Southland Sod Farms v. Stover Seed Co. , 108 F.3d 1134, 1139 (9th Cir. 1997) ).Source:
docroot/ir/caselaw/f_supp_3d_378.jsonl#/f-supp-3d/378/0823-01; Unicode character offsets [20323:21188] (end exclusive); SHA-256 cecb4fb9356fb3ba0c59f5db0729643e572e7c328d93987db6eb8bd51b3f3a87.The quoted Ninth Circuit test, reproduced in Genus, identifies deception, materiality, commerce and causal injury distinctly. Factual claims are assessed in context; nonverifiable puffery generally cannot be proven false.