Opinion
No. CIV 01-0156-PHX-SRB.
June 2, 2005
ORDER
This case arises out of injuries that Plaintiff Rose Lynn Kobar sustained allegedly as a result of ingesting Tavist-D, a drug manufactured by Defendant Novartis Consumer Health, Inc. ("NCH") containing phenylpropanolamine ("PPA"). At issue is Plaintiff's motion to amend her complaint, or, in the alternative, to dismiss it without prejudice (Doc. 157).
I. PROCEDURAL HISTORY
On December 22, 2000, Plaintiff filed an action in Maricopa County Superior Court in Phoenix, Arizona (" Kobar I"), seeking relief for her personal injuries based on theories of negligence, strict liability and breach of warranty. The complaint demanded punitive damages and named three defendants: Novartis Corporation ("NC"), Novartis Pharmaceutical Corporation ("NPC"), and NCH.
On January 25, 2001, Defendants removed the action to the United States District Court. Shortly thereafter, NC and NPC filed a motion to dismiss the action for, among other things, insufficiency of service of process. On April 30, 2001, before the Court could rule on that motion, Plaintiff voluntarily dismissed those defendants, stating that she would add them at a later date if she discovered facts to so justify.
On January 4, 2002, Plaintiff filed another action in Maricopa County Superior Court, also predicated on injuries she allegedly suffered due to taking Tavist-D (" Kobar II"). The Kobar II complaint, in addition to naming the same defendants as originally included in Kobar I, named the drug store where Plaintiff allegedly purchased Tavist-D, Walgreens Co. and Walgreens Drug of Arizona. The judge in Kobar II dismissed NC for lack of personal jurisdiction, and stayed the action with respect to NPC and NCH pending resolution of Kobar I, finding the claims in Kobar I and Kobar II duplicitous.
On January 22, 2002. Plaintiff filed a motion for leave to dismiss Kobar I without prejudice, a motion that the Court did not rule on, as the Judicial Panel on Multi-District Litigation ("MDL"), on February 14, 2002, ordered the case transferred to the United States District Court in the Western District of Washington, pursuant to 28 U.S.C. § 1407, as part of the "In re Phenylpropanolamine (PPA) Products Liability Litigation." On March 10, 2003, Plaintiff filed another motion to dismiss without prejudice before the MDL Judge, who denied that motion, finding that "[a]llowing a dismissal at this juncture would result in plain legal prejudice to NCH," as it "expended considerable effort and expense litigating this case over the past two years and the case currently exists in an advanced stage of litigation."
After Kobar I returned to this Court from the MDL Panel, Plaintiff filed the instant motion to dismiss the case without prejudice, or, in the alternative, to add NPC as a Defendant and to add two new claims for relief; consumer fraud under A.R.S. § 44-1521 and fraud. Both proposed counts name NPC and NCH as Defendants.
II. LEGAL STANDARDS AND ANALYSIS
A. Motion to Dismiss
The Court denies Plaintiff's motion to dismiss for the reasons set forth in the MDL Judge's order denying essentially the same motion. Those reasons, which relate to the legal prejudice Defendant would suffer if the case was dismissed, are even more compelling now that the case has progressed beyond the MDL and is less than four months from trial.
The fact that Plaintiff even filed another motion to dismiss is an exercise in chutzpah, as only a week before she filed it, her lawyer conceded at a status conference that he "surrendered" to the federal court proceeding, and agreed with the Court's statement that "escape [from federal court] was impossible."
B. Motion to Amend the Complaint
Plaintiff's proposed amendment contains two parts: first, Plaintiff seeks to add NPC as a defendant with respect to each claim for relief contained in the original complaint; second. Plaintiff asks permission to add two new claims for relief, fraud and consumer fraud, and apply those new claims to NCH and NPC. The Court begins with the first request.
1. Addition of NPC
Federal Rule of Civil Procedure 15(a) provides that leave to amend pleadings "shall be freely given when justice so requires." Justice does not, however, require courts to accommodate futile amendments. Newland v. Dalton, 81 F.3d 904, 907 (9th Cir. 1996); Klamath-Lake Pharm. Ass'n v. Klamath Med. Serv. Bureau, 701 F.2d 1276, 1293 (9th Cir. 1983). The addition of a cause of action that is barred by the statute of limitations is an example of a futile amendment.
Arizona's statute of limitations bars any claims Plaintiff may have against NPC. Arizona law provides for a two-year statute of limitations on all actions "[f]or injuries done to the person of another." A.R.S. § 12-542 (Supp. 1989). Without question, the original complaint's causes of action for negligence, strict liability and breach of warranty are premised upon injuries Plaintiff alleges she suffered from consuming Tavist-D. See, e.g., Walk v. Ring, 202 Ariz. 310 (Ariz. 2002) (personal injury action based on dentist's negligence was controlled by two-year personal injury statute of limitations); Hazine v. Montgomery Elevator Co., 176 Ariz. 340 (Ariz. 1993) (two-year statute of limitations applicable in personal injury suit against elevator manufacturer based on theories of strict liability and negligence); Drew v. United Producers and Consumers Coop., 161 Ariz. 331, 334 (Ariz. 1989) (acknowledging that a plaintiff who seeks recovery for personal injury on theories of breach of warranty, strict liability or negligence is bound by Arizona's two-year statute of limitations).
The Court looks to Arizona's statute of limitations, as "[a] federal court exercising diversity jurisdiction over state law claims applies the state's statute of limitations." Nev. Power Co. v. Monsanto Co., 955 F.2d 1304, 1306 (9th Cir. 1992).
Under Arizona law, the personal injury statute of limitations begins to run when "the plaintiff knows or with reasonable diligence should know the facts underlying the cause." Manterola v. Farmers Ins. Exch., 200 Ariz. 572, 576 (Ariz.App. 2001); see Walk, 202 Ariz. at 316 (in order to trigger Arizona's personal injury statute of limitations, the "injured person need not know all the facts underlying a cause of action [but] . . . must at least possess a minimum requisite of knowledge sufficient to identify that a wrong occurred and caused injury"). While the Court cannot pinpoint with precision the exact moment when Plaintiff knew or should have known that NPC's actions played a role in her injuries, such precision is not necessary, for it can be said with certainty that Plaintiff had such knowledge, at the absolute latest, at the time she filed Kobar II, the substantively identical state court action that alleged that NPC had played a role in her injuries. Accordingly, it cannot be disputed that the statute of limitations accrued no later January 4, 2002, the date Kobar II was filed, and expired on January 5, 2004, far before Plaintiff sought to amend her federal court complaint to include NPC.
Plaintiff's reply in support of her motion to amend or dismiss states that she "discovered her claim against NPC when her counsel was able to read the [New Drug Application]. . . . She then promptly brought suit in state court against NPC." (Reply at 6-7.)
As January 4, 2004 was a Sunday, the statute did not expire until January 5, the following Monday. See Fed.R.Civ.P. 6(a).
Plaintiff vehemently disputes that these claims against NPC are time-barred. Plaintiff maintains that as soon as she filed Kobar II on January 4, 2002, she also satisfied the statute of limitations for any future federal court action against NPC based on injuries from Tavist-D. Plaintiff's argument fails, as the filing of an action in state court does not automatically toll the statute of limitations for as-yet unfiled actions in federal court. See generally Ross v. Olivarez, 2004 WL 345783, *1 (9th Cir. Feb. 24, 2004) (affirming district court's dismissal of action due to statute of limitations where the plaintiff argued that the timely filing of a state court action tolled statute of limitations). While in some circumstances, the filing of an action in one court may equitably toll the statute of limitations, none of those circumstances are present in this case, and Plaintiff does not argue otherwise. See, e.g., Ervin v. Los Angeles County, 848 F.2d 1018, 1019 (9th Cir. 1988) (denying request to equitably toll statute of limitations where the plaintiff's "unwarranted delay in filing her federal [action] was neither reasonable nor in good faith."). Ironically, the filing of Kobar II, as discussed above, had the exact opposite effect from that which Plaintiff contends: the filing of Kobar II triggered the statute of limitations with respect to all as-of-then unfiled actions by Plaintiff against NPC predicated on injuries from Tavist-D. Plaintiff's motion to add NPC to the original three counts in the complaint is denied.
2. Fraud
Plaintiff's proposal to add a fraud claim against NPC and NHC also violates the statute of limitations. While Arizona has a three-year statute of limitations for fraud claims under A.R.S. § 12-543(3), a statute which would not be violated by the proposed amendment, a "cause of action [does not] necessarily sound in fraud . . . simply "because [the defendant] has made allegations of fraud and fraudulent concealment." Dunlap v. City of Phoenix, 169 Ariz. 63, 68 (App. 1991) (holding that the plaintiff's claim, while nominally for fraudulent concealment, was, in substance, for personal injury and was therefore governed by personal injury statute of limitations). In deciding which statute of limitations applies, the Court looks to "the essence or gravamen of the cause of action . . ., not the form in which the cause is pleaded." Id.; von Bulow by Auersperg v. von Bulow, 657 F. Supp. 1134, 1140 (S.D.N.Y. 1987) ("courts carefully review the underlying basis of any fraud claim to ensure that it is truly one for fraud"). No Arizona court has ever held that a cause of action arising out of personal injury to the plaintiff should not be controlled by the personal injury statute of limitations.
Plaintiff's fraud claim is, in essence, a claim for personal injury. Plaintiff alleges that she suffered personal injury as a direct and proximate result of Defendants fraudulent withholding of information from the Federal Food and Drug Administration ("FDA") concerning the safety of Tavist-D. The fact that Plaintiff's personal injury occurred allegedly as a result of fraud "does not alter the underlying character of the tort." Dunlap. 169 Ariz. at 69. Because Plaintiff's claim for fraud is, in substance, more akin to a claim for personal injury, it is controlled by Arizona's two-year personal injury statute of limitations, which, as discussed above, began to run, at the latest, on January 4, 2002, and it therefore expired on January 5, 2004, well before Plaintiff's attempt to add this cause of action to the complaint. Plaintiff's motion to amend is therefore denied.
The allegations in Plaintiff's fraud and consumer fraud claims concern one of Defendants' corporate predecessors, Sandoz Pharmaceuticals Inc. ("Sandoz"). In 1997, Sandoz merged with another company, Ciba-Geigy Corporation, forming several Novartis entities, two of which were NCH and NPC. As the Novartis companies allegedly assumed the liabilities of their predecessors, the Court will refer to the actions of Sandoz interchangeably with those of "Defendants."
Defendant also maintains that, in addition to being time-barred, Plaintiff's fraud claim is impliedly preempted by the Federal Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 301, et seq. (1994 ed. and Supp. V). Defendant is partially correct. Plaintiff's fraud claim can be roughly broken down into two parts: allegations that Defendant defrauded the FDA and allegations that Defendant defrauded members of the public, including Plaintiff. As the Court thoroughly discusses in its order addressing NCH's motion for partial summary judgment on the issue of punitive damages, the Court believes that, under Buckman v. Plaintiff's Legal Committee, 531 U.S. 341, 121 S. Ct. 1012 (2001), Plaintiff's claim that Defendants defrauded the FDA is preempted by the FDCA. The same cannot be said, however, for Plaintiff's claim that she, as a member of the public, was defrauded by Defendants. Courts have consistently declined to extend Buckman's holding to state law fraud claims where the alleged victim of the fraud is not the FDA, but the particular plaintiff. See Brasher v. Sandoz Pharm. Corp., 2001 U.S. Dist. LEXIS 18364 (N.D. Ala. Sept. 21, 2001) (holding that the plaintiffs fraud claim was not preempted by the FDCA because "once defendant undertook to misrepresent . . . to plaintiff, or to conceal from plaintiff facts it was bound to disclose, the plaintiff's claim no longer rests simply on the assertion that the agency was defrauded but on the additional fact that she was defrauded") (emphasis in original); see also Globetti v. Sandoz Pharm. Corp., 2001 WL 419160, *1 (N.D. Ala. March 5, 2001) ("[a]lthough Buckman precludes a plaintiff from seeking damages because the defendant lied to the FDA, it is something completely different to contend that plaintiff is precluded from seeking damages for injuries due to lies to her").
The component of Plaintiff's fraud claim that alleges that she, as a member of the public, was defrauded states, for example, "The Defendants knew that consumers, including Plaintiff, would rely upon the representations [that Defendants had made to the FDA] to be truthful and accurate and Plaintiff (through her agent) was entitled to rely upon them and did rely upon them to her detriment as described above." (Proposed Am. Compl. at 7.)
3. Consumer Fraud
Plaintiff's proposal to add a consumer fraud claim based upon A.R.S. § 44-1521 is denied, as that claim is time-barred. Like Plaintiff's fraud claim, her consumer fraud claim represents, in substance, a claim for personal injury, and would therefore be governed by the two-year personal injury statute of limitations, which expired long before Plaintiff filed this motion.
Even assuming that Plaintiff's consumer fraud claim is not controlled by the two-year personal injury statute of limitations, it would be controlled by Arizona's one-year statute of limitations that applies to proper consumer fraud claims. "A consumer fraud claim is created by statute. . . . As a liability created by statute, a consumer fraud action must be initiated within one year after the cause of action accrues." Alface v. National Inv. Co., 181 Ariz. 586, 591 (Ariz.App. 1994). The cause of action accrues "when the defrauded party discovers or with reasonable diligence could have discovered the fraud." Id. As mentioned above, Plaintiff admitted that she had knowledge of NPC's and NCH's alleged involvement in her injuries, at the latest, as of January 4, 2002, when she filed the action in state court against NPC and NPH after learning that Sandoz was a predecessor of NPC and NCH. Therefore, the statute of limitations expired on January 6, 2003. Plaintiff's request to add the consumer fraud claim is denied with respect to both NPC and NHC.
As January 4, 2003 was a Saturday, the statute did not expire until January 6, the following Monday. See Fed.R.Civ.P. 6(a).
IT IS ORDERED denying Plaintiff's motion to amend her complaint (Doc. 157-1).
IT IS FURTHER ORDERED denying Plaintiff's motion to dismiss without prejudice her complaint (Doc. 157).