Consumer protection ruling could have major impact

By Chris Dickerson | Dec 22, 2010

Hall CHARLESTON -- A landmark state Supreme Court ruling could have a dramatic effect on consumer protection lawsuits, according to some in the legal community.




CHARLESTON -- A landmark state Supreme Court ruling could have a dramatic effect on consumer protection lawsuits, according to some in the legal community.

On. Dec. 17, the West Virginia Supreme Court of Appeals issued an opinion in White vs. Wyeth. The opinion says West Virginia consumers looking to sue for misrepresentation under the state's Consumer Credit and Protection Act now must show proof of reliance. Previously, state consumers only had to prove misrepresentation to seek damages.

Following the Court's ruling in White vs. Wyeth, plaintiffs now must show a causal connection between their individual claims of injury and any alleged unfair or deceptive conduct.

For example, someone is looking to buy a used car. The seller says the car never has been wrecked, but the buyer later learns the car has been wrecked. The buyer can sue for misrepresentation because the he relied on the wrong information given by the seller.

Here's another example. The buyer gets the vehicle because it's what he wanted and didn't care if the vehicle had been wrecked or not. If he later finds out the vehicle had been wrecked, he couldn't sue for misrepresentation because he hadn't relied on that information in making the purchase.

The ruling potentially has tremendous implications for consumers, especially those filing lawsuits involving prescription medications. But it also could affect the state Attorney General's office and the number of opportunities for lawsuits it files on behalf of the state.

"The Court's refusal to extend the WVCCPA to prescription drug cases is reassuring," said Lee Murray Hall, president of the Defense Trial Counsel of West Virginia. "The Court recognized that the consumer does not generally decide what prescription drug product are prescribed.

"Thus, the physician provides a level of protection in prescription drug cases that is not present in other cases."

Hall said that decision, along with another reception Court ruling regarding warranties, is "very encouraging."

"Both decisions align West Virginia with a majority of other jurisdictions in Consumer Protection Act cases," she said. "This predictability is particularly important in commercial cases, where the statutes are largely uniform across the country.

"Businesses rely on courts to apply similar statutes in a consistent, predictable manner. Decisions like Wyeth and McMahon (McMahon vs. Advance Stores) bring the state into the mainstream, which is essential to creating a good environment for business development.

"By requiring adherence to the statutory language, which requires causation, the Court takes a strong step toward eliminating nuisance claims where the plaintiff may be able to demonstrate a misrepresentation but has suffered no harm or damage as a result."

Marc Williams, managing partner at Nelson Mullins Riley & Scarborough's West Virginia office in Huntington, praised the Court's decision.

"This brings West Virginia in line with almost every other state and what it holds," he said. "It's a very positive change in our law."

The ruling also, Williams points out, makes it more difficult for plaintiffs lawyers to abuse the state's consumer protection act.

Prior to the Court's decision, he explained, cases brought under the act were "very easy" for plaintiffs to prove and much more difficult to defend.

"This basically takes away one of the hammers plaintiffs lawyers had," he said.

Perhaps even more significant, Williams points out, is the Court's holding that there can be no claim under the act for misrepresentation involving a prescription medication.

Not only is the Court dismissing the claim the plaintiffs in this particular case have made, but they are questioning the similar claims in other cases.

"I would expect motions to dismiss in similar claims will now be filed" he said. "That's huge."

The decision also could have an impact on Attorney General Darrell McGraw's office, Williams said.

"I think it could have a huge effect," he said. "I need to examine it more closely, but it could affect the lawsuits it (McGraw's office) files on behalf of the state. It could affect the opportunities."

In a broader sense, the Court's ruling demonstrates it is more predictable and reasonable in its interpretation of the law, Williams said.

The West Virginia Court is typically viewed as an outlier when compared to other state high courts, and is considered unfavorable in matters of business. But that could be changing, he said.

"I think it's an indication we're coming back in line," he said. "I think this is a good step forward."

The suit at issue, filed in April 2004 by a group of private citizens who purchased prescription hormone replacement therapy drugs, alleges that pharmaceutical company Wyeth used "unfair" and "deceptive" practices in promoting such prescription drug products to doctors and patients for treatment of menopausal disorders by using "misleading" statements in advertising, marketing and labeling of the products.

Wyeth is a subsidiary of Pfizer. A statement from Pfizer also praised the ruling.

"The company is pleased that the Court found that plaintiffs must prove that their hormone therapy purchases were due to the Company's marketing and selling practices in order for the claims to be filed under the West Virginia Consumer Credit and Protection Act," Pfizer's statement said. "In discovery, the plaintiffs and the prescribing doctors testified they did not purchase or prescribe hormone therapy due to any advertising or marketing from Wyeth.

"Hormone therapy remains a very important treatment option for many women with debilitating symptoms of menopause. Wyeth acted responsibly by conducting or supporting more than 180 studies on hormone therapy's benefits and risks, keeping the U.S. Food and Drug Administration (FDA) fully informed, and providing proper, accurate and science-based information to patients and doctors.

"The underlying issue in this case concerns the practices in the marketing and sale of hormone therapy. There are no personal injury claims related to the safety and efficacy of the medicine."

The executive director of a state legal reform group called the ruling "a significant decision."

"Our Supreme Court should be praised for its common-sense interpretation of the state's Consumer Credit & Protection Act," said Richie Heath of West Virginia Citizens Against Lawsuit Abuse. "By ruling as it did, the West Virginia Supreme Court avoided the establishment of a 'no proof' legal standard that would have encouraged a flood of questionable lawsuit filings in our state courts."

Heath said states that have not required proof of reliance for alleged deceptive advertising claims have found themselves a magnet for frivolous lawsuits filed by individuals who never even saw the advertisements listed in the lawsuits.

"In this case, the Supreme Court has struck a proper balance between protecting the rights of consumers while also 'promoting sound and fair business practices,'" Heath said.

A national organization that just named West Virginia among the United States' Judicial Hellholes also praised the ruling, saying it "provides an encouraging sign for further improvement of the state's civil justice climate.

"In White v. Wyeth, the state's highest court recognized the basic principle that an individual who sues under a consumer protection statute must show that he or she actually relied on the allegedly deceptive advertisement or practice to recover damages," the American Tort Reform Association writes on its Judicial Hellholes website. "In cases involving allegations that a business concealed information from consumers, the court ruled that plaintiffs, at minimum, need to show that "but for" the deceptive conduct, a reasonable consumer would not have purchased the product and lost money.

"The court also found that West Virginia's consumer protection statute does not apply to prescription drugs because the federal Food & Drug Administration already tightly regulates medicines to protect consumers, and a patient's individual doctor is responsible for selecting the proper product and conveying its risks and benefits."

ATRA called it "an important, commonsense ruling that sends a positive message to other courts."

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