In re Consolidated Fen-Phen Cases

Full title: IN RE CONSOLIDATED FEN-PHEN CASES

Court: United States District Court, E.D. New York

Date published: Nov 12, 2003

03 CV 3081 (JG), THIS DOCUMENT RELATES TO CV-03-3082, CV-03-3594, CV-03-3595, CV-03-3885, CV-03-3886, CV-03-3887, CV'03-3889, CV-03-3898, CV-03-3899, CV-03-3900, CV-03-3901, CV-03-3902, CV-03-3903, CV-03-3904, CV-03-3905, CV-03-3908, CV-03-3910, CV-03-3912, CV-03-3967, CV-03-3968, CV-03-4122, CV-03-4123, CV-03-4357, CV-03-4869 (E.D.N.Y. Nov. 12, 2003)

Opinion

03 CV 3081 (JG), THIS DOCUMENT RELATES TO CV-03-3082, CV-03-3594, CV-03-3595, CV-03-3885, CV-03-3886, CV-03-3887, CV'03-3889, CV-03-3898, CV-03-3899, CV-03-3900, CV-03-3901, CV-03-3902, CV-03-3903, CV-03-3904, CV-03-3905, CV-03-3908, CV-03-3910, CV-03-3912, CV-03-3967, CV-03-3968, CV-03-4122, CV-03-4123, CV-03-4357, CV-03-4869

November 12, 2003

DENISE RUBIN, Napoli, Kaiser, Bern Associates, LLP, Great River, New York, for Plaintiffs

MARIOD'ANGELO, Hariton D'Angelo, Great River, New York, for Plaintiffs

MICHAEL D. SCHISSEL, PAMELA MILLER, Arnold Porter, New York, NY, for Wyeth Defendants

RAQUEL MILLMAN, Bingham McCutchen, New York, NY, for Defendant Celltech

MEMORANDUM AND ORDER

JOHN GLEESON, District JudgePage 2

In these twenty-five actions, plaintiffs¹ seek recovery under New York law for personal injuries purportedly arising from their use of the drugs Pondimin (fenfluramine) and Redux (dexfenfluramine) and/or phentermine, otherwise known collectively as the diet drug "Fen-Phen." Fen-Phen was manufactured, marketed and sold by Wyeth, formerly known as American Home Products Corp. ("Wyeth"), and other Wyeth affiliates (collectively the "Wyeth defendants").² These actions were commenced in New York state court and removed by the Wyeth defendants on the basis of diversity citizenship. The plaintiffs now move to remand these actions back to state court on the ground that subject matter jurisdiction is lacking. In particular, they maintain that there Is no diversity because one of the Wyeth defendants, Wyeth-Ayerst International, Inc. ("Wyeth International"), is a New York corporation and plaintiffs are citizens of New York. For the reasons set forth below, the motion is denied.

1 This opinion will refer to all plaintiffs collectively, as plaintiffs' counsel has informed me that all of their claims, and the pertinent facts of their cases, are the same, with the exception of those plaintiffs who have spouses that have filed loss of consortium claims. Plaintiffs are Ann Mattarelliano, Lewis and Hadar Barsky, Carla Adiansingh, Michael Edmonds, Nyesha and Aaron F. Hall, Kim M Yanccy, Celine Azoulay and Ross A, Lewin, Jennifer Merritt, Michele Schiavone, Deena M. Schiavone, Rachel R. Mosseri, Doris Weller, Alison Groia-Deangelis, Christine Miceli-Faber and Lance Faber, Michelle Gonzalez, Jennifer A. Broser, Joyce S. Cohen-Flaster, Chanda F. Hopkins, Tara T. Jones, Joseph and Carri L. DeBlasi, Gina Young, Anaflore V. Gourgue, Tonya Johnson, Laurie L. Cohen and Jack Simony.

2 The Wyeth affiliates named in the suit are Wyeth-Ayerst Laboratories; A.H. Robins Company, Inc.; Wyeth Labs, Inc.; Wyeth-Ayerst Pharmaceuticals Inc.; Wyeth-Ayerst Laboratories Company; Ayerst Laboratories, Inc.; Wyeth Pharmaceutical; Wyeth Research and Wyeth-Ayerst International, Inc.

BACKGROUND

Over six years ago, individuals who had allegedly ingested and suffered various heart injuries from Fen-Phen filed a class action in New York Supreme Court against the Wyeth defendants — In Re: New York Diet Drug Litigation (Index No. 700000/98) (the "Diet Drug Litigation"). In the complaint (the "Master Complaint"), various New York causes of action were alleged against, among other entities, the Wyeth defendants that developed, marketed and sold Fen-Phen in New York. Wyeth International, a defendant in the cases before me, was not named in the Master Complaint. These causes of action included negligence, strict product liability, breach of express warranty, breach of implied warranty, fraud and misrepresentation, negligence per se, concert of action, alternative liability, market share liability and enterprise liability. (Master Complaint. Sec. A.) Eventually, the parties in the Diet Drug Litigation reached settlement.

The non-settling plaintiffs exercised their right to file suit against the Wyeth defendants (in New York state court) by filing "opt-out" forms. The plaintiffs in the present case filed such forms in the Diet Drug Litigation. In their amended complaints, these plaintiffs adopted the ten causes of action listed above from the Master Complaint in theDiet Drug Litigation, without any modification. (Amend. Compl. ¶ 15.) Plaintiffs did modify the roster of defendants, however. In addition to the Wyeth entities who were named in the original suit, plaintiffs added Wyeth International, a New York corporation. (Amend Compl. ¶ 14.) Wyeth International is owned by a company that is a wholly-owned subsidiary of Wyeth, As noted earlier, plaintiffs are also citizens of New York.

The Wyeth defendants removed the actions, notwithstanding the absence of complete diversity, and challenge what they perceive to be the "fraudulent joinder" of a diversity-destroying defendant — Wyeth International. Plaintiffs then filed motions to remand to state court.

The Wyeth defendants also notified the Judicial Panel on Multidistrict Litigation (the "MDL Panel") as to the existence of these cases (as well as related cases pending in the Southern District of New York). In so doing, they wish to facilitate the transfer of these cases to the Eastern District of Pennsylvania for consolidation (for pretrial purposes) with MDL No. 1203 (the "MDL Court"). The MDL Court has been handling the federal diet drug litigation since 1998. See In re: Diet Drugs Products Liability Litig., 990 F. Supp. 834 (J.P.M.L. 1998). Thereafter, on August 26, 2003, the MDL Panel issued an order that conditionally transferred these actions (as well as the related actions in the Southern District of New York) to the MDL Court. The plaintiffs here have challenged that order. The MDL Panel has announced that it will hear argument on that challenge on November 20, 2003.

DISCUSSION

A. The Conditional Transfer to the MDL Court

The Wyeth defendants request that I defer consideration of plaintiffs' remand motions until the MDL Panel has made the determination as to final transfer of these actions to the MDL Court. In particular, they believe that by doing so, I will "conserve judicial resources and ensure that similar issues of fraudulent joinder are decided uniformly and consistently by a court with intimate familiarity and experience in the diet drug cases." (Def's Mem. Law Opp. Pls' Mot. Remand at 5.)

I disagree. As plaintiffs point out, district courts retain jurisdiction during the pendency of a conditional transfer to decide remand orders. See Panel Rule 5.1, 199 F.R.D. 425, 427 (2001) ("The pendency of a . . . conditional transfer order . . . before the Panel concerning transfer . . . of an action pursuant to 28 U.S.C § 1407 does not affect or suspend orders and pretrial proceedings in the district court in which the action is pending and does not in any way limit the pretrial jurisdiction of that court."). Moreover, the MDL Panel encouraged me to decide the issue: "If you have a motion pending before you in the action — particularly a motion to remand to state court . . . you are encouraged to rule on the motion unless you conclude that the motion raises issues likely to arise in other actions in the transferee court, should we order transfer, and would best be decided there." (Sept. 24, 2003 Ltr. from MDL Panel,)

While it is true that the MDL Court has previously decided fraudulent joinder issues, it has not determined the exact issue here — the joinder of an entity marketing Fen-Phen in foreign countries. Rather, the MDL Court dealt with the different issue of joinder of pharmacies under the "learned intermediate rule," as well as the joinder of physicians. See, e.g., In re Diet Drugs Prods. Liability Litig., 220 F. Supp.2d 414 (ED. Pa. 2002). Thus, the rationale of institutional competence is not strongly implicated here. As to uniformity, and whether this issue is likely to arise in other actions in the transferee court, I am aware that Judge Denny Chin in the Southern District of New York has heard argument on these cases, and to my knowledge has not decided to defer to the MDL Court.³

3 Judge Chin has not yet published a decision in those cases.

In short, I do not conclude that the remand issue raised here would best be decided by the transferee court. The cases cited by the Wyeth defendants do not counsel otherwise.⁴ Thus, I now proceed to the fraudulent joinder issue.

4 For instance, the Wyeth defendants cite Moore v. Wyeth-Ayest Laboratories, 236 F. Supp.2d 509 (D. Md. 2002), where the court deferred to the MDL Court. That case is inapposite, however, because the MDL Court was familiar with the particular issue on remand — the fraudulent joinder of pharmacies. See Moore, 236 F. Supp.2d at 510-11, The Wyeth defendants also marshal In re Ivy, 901 F.2d 7 (2d Cir. 1990), and Medical Society of the State of New York v. Connecticut General Corp., 187 F. Supp.2d 89 (S.D.N.Y. 2001), to their defense. In Ivy, the issue was whether the MDL Panel properly transferred a particular case to the MDL court when there was a jurisdictional objection pending. Ivy, 901 F.2d at 9. The Second Circuit held that the MDL Panel did have the power to transfer the case in that situation. Id. In so doing, the court noted that because the jurisdictional issue was capable of arising in hundreds of district courts, principles of economy and consistency counseled in favor of transfer. Ivy, 901 F.2d at 9. The court in Medical Society followed this rationale in Ivy to stay proceedings on a remand motion pending a transfer ruling by the MDL Panel See Medical Soc'y, 187 F. Supp. at 90 ("[t]he Second Circuit has . . . intimated that allowing the transferee court to resolve the jurisdictional question may be the preferable practice.") I find that Ivy does not control my decision here because I am dealing with the very different question of whether I should defer to the MDL Court to which these cases may be transferred by the MDL Panel. Thus, I find these cases to be unconvincing.

B. Remand

1. The Standard for Fraudulent Joinder

The Second Circuit set the standard for fraudulent joinder inPampillonia v. RJR Nabisco. Inc., 138 F.3d 459 (2d Cir. 1998):

In order to show that naming a non-diverse defendant is a "fraudulent joinder" effected to defeat diversity, the defendant must demonstrate, by clear and convincing evidence . . . that there is no possibility, based on the pleadings, that a plaintiff can state a cause of action against the non-diverse defendant in state court. The defendant seeking removal bears a heavy burden of proving fraudulent joiner (sic), and all factual and legal issues must be resolved in favor of the plaintiff.

Pampillonia, 138 F.3d at 460-61.

The language "no possibility" has been interpreted as meaning no "reasonable possibility" or "no reasonable basis." See In re Rezulin Prods. Liability Litig., 133 F. Supp.2d 272, 280 n. 4 (SD.N.Y, 2001) (explaining that "no possibility" language cannot be taken literally because then no case would meet the standard for fraudulent joinder). It has also been interpreted more strictly, as literally meaning "no possibility." See Arseneault v. Congoleum Corp., No, 01 Civ. 10657, 2002 WL 472256, at *5 n. 4 (S.D.N.Y. Mar. 26, 2002) (disagreeing with In re Rezulin's interpretation and favoring literal "no possibility" standard); see also Stan Winston features, Inc. v. TOYS "R" US. Inc., No. 02 Civ. 9809, 2003 WL 1907978, at *4 (S.D.N.Y. Apr, 17, 2003) ("legally impossible"); Nemazee v. Premier. Inc., 232 F. Supp.2d 172, 178 (S.D.N.Y. 2002) ("Any possibility of recovery, even if slim, militates against a finding of fraudulent joinder; only where there is `no possibility' of recovery is such a finding warranted.") (citation omitted).

In making this inquiry, courts can look beyond the pleadings to determine if the pleadings can state a cause of action. See Arseneault, 2002 WL 472256, at *6 (in deciding fraudulent joinder issue, looking outside the pleadings to depositions and other evidence in the record because "[t]he Second Circuit . . . has said that, on jurisdictional issues `federal courts may look outside [the] pleadings to other evidence in the record[.]'") (quoting United Food Commercial Workers Union. Local 919. AFL-CIO v. CenterMark Props. Mcriden Square, Inc., 30 F.3d 298, 305 (2d Cir. 1994)); see also, e.g., Pampillonia, 138 F.3d at 461-62 (looking to affidavits to determine if plaintiff's complaint alleged sufficient factual foundation to support his claims); In re Rezulin, 133 F. Supp.2d at 281-82 (same).

2. Claims of Strict Liability. Breaches of Warranty and Negligence Per Se

Plaintiffs allege violations of New York law on the theory that the Wyeth defendants were "product defendants" who, among other things, manufactured, promoted and sold Fen-Phen in New York.⁵ Based on this theory, plaintiffs assert that because Wyeth International marketed Fen-Phen in New York, it is liable based on strict liability, breaches of express and implied warranty, and negligence per se. (Master Compl. ¶¶ 17-26, 34-38); (Amend. Compl, ¶ 15.)⁶

5 This section of the Master Complaint states, in full:

At all times relevant hereto, these products defendants were engaged in the business of supplying, manufacturing, labeling distributing, promoting, developing, testing and selling the drugs Pondimin (flenfluramine), Redux (dexflenfluramine) and/or phentermine. The product defendants do business in New York and, at all times relevant hereto, sold and/or supplied Pondimin (flenfluramine), Redux (dexfenfluramine) and/or phenlermine in interstate commerce in New York.

(Master Compl. ¶ 4.)

6 Plaintiffs also assert claims of alternate, market share, enterprise and concert-of-action liability. (Master Compl. ¶¶ 44-56; Amend Compl. ¶ 15.) These causes of actions are not proper where the plaintiff knows the identity of the manufacturer, however. See. e.g., Hamilton v. Beretta U.S.A. Corp., 96 N.Y.2d 222, 240 (2001) (explaining that market share liability is used where the plaintiff cannot identify the actual manufacturer that caused the injury) (citing Hymowitz v. Eli Lilly Co., 73 N.Y.2d 487 (1989)). These claims are easily dismissed here, as plaintiffs do not allege that they do not know whose products they ingested. Indeed, plaintiffs have not challenged this argument in their papers. (See Pls' Reply Mot Remand.) In any event, plaintiffs appear to have conceded these claims at oral argument,

DEFENDANTS: In response to our argument, the way I read their papers, they've conceded that they can't state a claim as to six of those claims and there are only four left which would be negligence, strict product liability, breach of express warranty and breach of implied warranty.

* * *

THE COURT: Did he accurately describe your four theories? PLAINTIFFS: I believe in rather simplistic fashion. The four theories, however, do remain, as [defendants] concede, even taking away the six that [t]he[y] talked about earlier

(Oct. 24, 2003 Hr'g Tr. at 7, 14-15); (See also Pls' Reply Mem. Law Supp. Mot. Remand at 7-9) (explaining how their claims for negligence, strict product liability, and breaches of warranty meet the Pampillonia standard, but failing to address how they have stated claims for the other six causes of action asserted in their amended complaints). Although plaintiffs appear to have conceded their negligence per se claim, too, I will address the merits of that count in text.

Under those theories, Wyeth International's products must have been the products causing plaintiffs' injuries or they must have been in the direct chain of distribution. See Watson v. Sharp Air Freight Servs., Inc., 788 F. Supp. 722, 725 (E.D.N.Y. 1992) (purported violation of statute not basis for claim of negligence per se where defendant not among class of companies regulated by statute); Joseph v. Yenkin Majestic Paint Corp., 261 A.D.2d 512, 512 (2d Dep't 1999) ("Liability may not be imposed for breach of warranty or strict products liability upon a party that is outside the manufacture, selling, or distribution chain.") (citations omitted); Hymowitz, 73 N.Y.2d at 504-05 ("In a products liability action, identification of the exact defendant whose conduct injured the plaintiff is, of course, generally required.")

Here, there is no possible recovery (reasonable or otherwise)⁷ from Wyeth International because it did not market or sell Fen-Phen in New York. Thus, it could not be a "product defendant" and it could not be liable under theories of strict liability, breaches of express and implied warranty or negligence per se. I find that the evidence offered by the Wyeth defendants in this regard is clear and convincing. They presented affidavits of John M. Alivernini and Michael A, Donnella, assistant secretaries of Wyeth International. The affidavits state that Wyeth International neither marketed nor sold drugs in the United States. (See Alivernini Aff. ¶ 4; Donnella Aff. ¶ 4.) Furthermore, the Wyeth defendants introduced the deposition of Bernard Poussot, the former president of Wyeth International, in which he testified that Wyeth International did not market Redux and marketed only Pondimin in Canada and Mexico. (See Poussot Dep. at 30-31.)

7 Whether I use the "no reasonable possibility" standard favored byIn re Rezulin court or the stricter "no possibility" standard as elucidated in, for example, Arseneault (see supra Part B. 1), the outcome is the same.

Plaintiffs attempt to create an issue of fact on this issue with the so-called "Jenny Craig letter." This letter, from Leslie Koll of the Jenny Craig weight loss center to Robert Essner, dated February 22, 1996, documented a meeting between the two regarding the United States launch of Redux. Underneath Essner's name is Wyeth International. Plaintiffs assert that this letter establishes the possibility that they can state a cause of action against Wyeth International as a "product defendant" I disagree. The Wyeth defendants have clearly demonstrated that this letter was mistakenly addressed to Wyeth International When that letter was written Essner was the president of Wyeth-Ayerst Laboratories ("WALD") (Essner Dep. at 21-23), and the president of Wyeth International was Poussot (Poussot Dep. at 30), Furthermore, as earlier noted, Wyeth International did not market or sell either of the two drugs in question in the United States, and did not sell or market Redux (the drug mentioned in the Jenny Craig letter) anywhere at all. I also note that plaintiffs' counsel conceded their position during oral argument before Judge Chin in Hopping v. American Home Products Corp., Index No. 03 Civ, 3499 (DC) (S.D.N.Y. July 24, 2003).⁸

8 THE COURT: Do you agree that Mr. Essner was the president of Wyeth Ayerst Laboratory?
PLAINTIFFS: Yes, your honor.
THE COURT: And not Wyeth Ayerst International?
PLAINTIFFS: Yes, your honor.
(Hr'g Tr. at 28-29).

Plaintiffs also contend that there is a receipt memorializing a donation by Wyeth International to the American Dietetic Association, and that this shows that they can possibly assert the claims discussed above against Wyeth International. But the Wyeth defendants have clearly shown that the donation came from WALD, by producing the pertinent receipts and letter documentation, (See Schissel Decl., Exs. O, P.) In any event, even assuming that Wyeth International did make such a contribution, it is unclear how that would support a theory that Wyeth International marketed Fen-Phen in New York, and plaintiffs have failed to articulate any such reason.⁹ Accordingly, all of plaintiffs claims that depend on Wyeth International being a product defendant fail. The only remaining claims are negligence, fraud and misrepresentation.

9 Plaintiffs' last ditch effort to resuscitate these "product defendant" claims is also unsuccessful. At the eleventh hour, plaintiffs introduced an entirely new theory of liability — that Wyeth International is the "alter ego" of one of the other Wyeth defendants who marketed and sold drugs in New York. To support that theory, they point to a decision in another litigation where the court held that the relationship between Wyeth International and another Wyeth entity was so close that they should be deemed a "single entity" for conflict of interest purposes regarding attorney representation. See Discotrade, Ltd. v. Wyeth Averst Int'l. Inc., 200 F. Supp.2d 355, 358-59 (S.D.N. Y. 2002), Plaintiffs failed to assert this theory in their complaint, which I find fatal to their claim. See Pullman Co v. Jenkins, 305 U.S. 534, 537-38 (1939) (court should determine validity of removal based on pleadings in original complaint); In re Rezulin, 133 F. Supp.2d at 285 ("Although a defendant bears a heavy burden to establish a fraudulent joinder, it need not negate any possible theory that plaintiffs might allege in the future: Only [the] present allegations count") (quotations omitted, brackets in original). Moreover, plaintiffs did not even raise this theory in their motion for remand, or in their response to the Wyeth defendants' opposition papers. Instead, they have brought this new claim by way of a supplemental submission, (See Pls' Suppl. Reply Mot Remand.) In any event, putting this timing problem aside, the argument has no merit As the court noted in Discotrade, a conflict of interest analysis is "not nearly as rigorous as an `alter ego' or `piercing the corporate veil' analysis." 200 F. Supp.2d at 359 n. 8, Moreover, plaintiffs' counsel seemed to have backed off from this theory of liability at oral argument (See Oct 24, 2003 Hr'g Tr, at 18) ("THE COURT: 1 guess what I'm trying to figure out is if you're depending on [ ] a piercing the veil type of theory. PLAINTIFFS: No, I'm saying that Wyeth-Ayerst International standing alone . . . had certain responsibilities, that their failure to perform those responsibilities was in itself a basis for liability. . . .").

3. Claims of Negligence. Fraud and Misrepresentation

Perhaps in recognition of the frailties of their theory of liability premised on Wyeth International being a product defendant, plaintiffs also assert that Wyeth International is liable based on a strained, indirect theory of liability. Specifically, plaintiffs assert that Wyeth International

was responsible for monitoring, gathering, and reporting on all adverse drug events and reports in foreign medical literature relative to injuries caused by Fen-Phen in markets outside the United Slates . . . that [Wyeth International] had a duty to plaintiff[s] to faithfully perform these safety surveillance activities and that its failure to properly execute its obligations under Wyeth's internal [company] policy delayed Wyeth reporting the harmful effects of and injuries caused by fen-phen to the FDA (Food and Drug Administration). As a result defendants' dangerous and defective diet drugs remained on the market and were ingested by plaintiff[s] who suffered serious fen-phen related heard valve injuries.

(Pls' Reply Mem. Supp. Mot. Remand at 8.) This eleventh hour claim fails to defeat federal jurisdiction.

Plaintiffs have neglected to allege their new theory in the Master Complaint in state court or in their Amended Complaints, before me. Although I believe that this lapse is fatal to their position, see Vera v. Saks Co., 335 F.3d 109, 116 n. 2 (2d Cir. 2003) ("we generally evaluate a defendant's right to remove a case to federal court at the time the removal notice is filed.") (citing Pullman, 305 U.S. at 537)); In re Rezulin, 133 F. Supp.2d at 284-285 n. 35 (rejecting plaintiffs' assertion that they can avoid removal by curing their complaint's deficiencies by amendment and that this possibility requires remand) (citing, e.g., Pullman, 305 U.S. at 537-38)); see also Pampillonia, 138 F.3d at 461 (joinder is to be determined "based on the pleadings"), I nonetheless address the merits of this new theory.

Plaintiffs asserted at oral argument that Wyeth International had independent liability to the New York plaintiffs based on a violation of an internal company reporting policy, pursuant to which it was obligated to report adverse drug events in other countries to Wyeth. (See Oct. 24, 2003 Hr'g Tr. at 17-18.) This is not so.

Under New York law, a defendant must owe a duty to the plaintiff. See, e.g., Espinal v. Melville Snow Contractors, Inc., 98 N.Y.2d 136, 138 (2002). This duty is "not merely a general duty to society but a specific duty to . . . the injured person," Hamilton, 96 N.Y.2d at 232 (2001). "Without a duty running directly to the injured person there can be no liability. . . .". Lauer y. City of New York, 95 N.Y.2d 95, 100 (2000). Here, Wyeth International did not owe the plaintiffs a duty to report or warn.

For example, in Hamilton, victims of gun violence, who could not identify the manufacturer of the gun that injured them, sued several gun makers on the theory that they caused plaintiffs* harm by negligently marketing guns in a way that created a market for criminals. The New York Court of Appeals refused to impose a duly on the gun manufacturers because the connection between the defendants and plaintiffs' injuries was too attenuated, "running through several links in a chain consisting of at least the manufacturer, the federally licensed distributor or wholesaler, and the first retailer." Hamilton, 96 N.Y.2d at 234. Here too, the connection between Wyeth International and the plaintiffs' injury is remote: plaintiffs allege that (a) Wyeth International failed to report adverse drug effects to Wyeth; (b) if it had, Wyeth would have reported those irregularities to the FDA; (c) if the PDA learned of these problems, it would have pulled Fen-Phen from the market sooner, and (d) if the FDA did that, then the plaintiffs would not have ingested the harmful drugs.

Moreover, it is well established that a contractual obligation (let alone an obligation arising from a mere internal company policy) "will generally not give rise to tort liability in favor of a third party."Espinal, 98 N.Y.2d at 138 (citation omitted). The New York Court of Appeals has held that there are only

three situations in which a party who enters into a contract to render services may be said to have assumed a duty of care-and thus be potentially liable in tort-to third persons: (1) where the contracting party, in failing to exercise reasonable care in the performance of his duties, "launche[s] a force or instrument of harm"; (2) where the plaintiff detrimentally relies on the continued performance of the contracting party's duties and (3) where the contracting party has entirely displaced the other patty's duty to maintain the premises safely. These principles are firmly rooted in our case law, and have been generally recognized by other authorities.

Espinal, 98 N.Y.2d at 140 (citations omitted). None of these factors is present here. Indeed, in the present case, there is not even a bond as significant as a contract — there is only an internal company policy.

By way of illustration, in Eaves Brooks Costume Co., Inc. v. Y.B.H Realty Corp., 76 N.Y.2d 220 (1990), the New York Court of Appeals held that a commercial tenant could not recover property damages against a sprinkler system maintenance company and an alarm company (who were both under contract with the building's owner) when the sprinkler and alarm malfunctioned. The court reasoned that the plaintiff had a right to seek damages directly from the building's owner, who was in a much better position than the contractors to insure against loss, and also stressed that the limited scope of the contractors' undertakings were reflected in the low fees they were paid for their maintenance services. Eaves Brooks, 76 N.Y.2d at 227. Similarly, plaintiffs here presumably have a right to seek damages directly from the manufacturer/marketer of the drugs they ingested (i.e., the Wyeth entities who sold Fen-Phen in New York), and indeed, those parties who directly manufactured/marketed the drugs at issue would be in a better position to insure against the harm alleged. In addition, the mere internal reporting policy upon which plaintiffs rely suggests the limited nature of Wyeth International's undertaking.

Even if Wyeth International had been retained by Wyeth for the sole purpose of reporting the adverse drug events in other counties, it would have had no duty to these plaintiffs. The New York Court of Appeals has defined the duty of care to third parties in such situations "narrowly, more narrowly than other jurisdictions." Ossining Union Free School Dist v. Anderson LaRocca Anderson, 73 N.Y.2d 417, 424 (1989), Absent, at the very least, a showing that reliance by the plaintiffs on the data was the "very purpose" of Wyeth International's reporting requirement, there could be no duty. Id. at 424. See generally. General Motors Corp. v. Villa Marin Chevrolet Inc., No. 98-5206, 2000 WL 271965, at *23-26 (E.D.N.Y. Mar. 7, 2000) (canvassing New York cases regarding privity requirement in negligent misrepresentation cases.)¹⁰

10 The fact that the New York courts have not decided this exact issue does not counsel otherwise, as it is clear that there is no chance that plaintiffs could state a claim on such theory. For instance, in In re Rezulin, (a fraudulent joinder case) the court held that pharmaceutical sales representatives do not have a duty to warn the public because, by analogy, under the "learned intermediary rule" the pharmaceutical manufacturer need only warn the prescribing physician. 133 F. Supp.2d at 282. In so holding, the court stated that, "[w]hile no Mississippi state court has resolved this precise issue, it does not follow that a "possibility exists that plaintiff can establish any cause of action against [the] defendant[s];' Id. I find this reasoning persuasive here.

The fraud claim is equally without merit. See Kaufman v. Cohen, 307 A.D.2d 113, 119 (1st Dep't 2003) ("To state a cause of action for fraud, a plaintiff must allege a representation of material fact, the falsity of the representation, knowledge by the party making the representation that it was false when made, justifiable reliance by the plaintiff and resulting injury. . . . [or] a fraud cause of action may be predicated on acts of concealment where the defendant had a duty to disclose material information.") (citations omitted). In any event, at oral argument plaintiffs conceded this claim. (See supra Part B.2, note 6.)

CONCLUSION

For the foregoing reasons, the motion to remand is denied as to all plaintiffs.¹¹

So Ordered.