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Legal Update

West Virginia Supreme Court Limits Reach Of State Consumer Fraud Statute

20 December 2010
Mayer Brown Legal Update

The West Virginia Supreme Court has held that the state’s Consumer Credit and Protection Act (Act) does not apply to prescription drug purchases, and that the Act requires proof of reliance on alleged affirmative misrepresentations. White v. Wyeth, No. 35296, slip op. (W. Va. Dec. 17, 2010).

In White, plaintiffs brought a putative class action on behalf of individuals who had purchased prescription hormone replacement therapy drugs manufactured by Wyeth. Plaintiffs alleged that Wyeth and its advertising agency violated the Act by making “misleading statements in advertising, marketing, and labeling” the drugs.

Wyeth moved alternatively for dismissal or summary judgment, relying on the Act’s requirement that plaintiffs incur injury “as a result of” an unfair or deceptive practice. In doing so, Wyeth cited plaintiffs’ failure to show that they had purchased the drugs in reliance on any statement made by Wyeth. The trial court denied Wyeth’s motion, holding that the Act does not require proof of reliance.

Addressing “a matter of first impression” that has divided other jurisdictions, the West Virginia Supreme Court held that the Act requires proof of reliance “in some but not all instances.” When plaintiffs allege that they purchased a product based on an “affirmative misrepresentation,” they must prove reliance on the purported misrepresentation. However, when plaintiffs allege a failure to disclose “and proving reliance is an impossibility,” they must show only that “the deceptive conduct was the proximate cause of the loss,” i.e., that “‘but for’ the deceptive conduct or practice a reasonable consumer would not have purchased the product and incurred the ascertainable loss.”

Turning to the facts underlying plaintiffs’ claim, the court held that “a causal connection” does not exist “within the context of prescription drug purchases … because the consumer cannot and does not decide what product to purchase.” The court explained that the “intervention by a physician in the decision-making process necessitated by his or her exercise of judgment whether or not to prescribe particular medication protects consumers in ways … that are lacking in advertising campaigns for other products.” Moreover, “the high degree of federal regulation of prescriptive drug products attenuates the effect product marketing has on a consumer’s prescriptive drug purchasing decision.” Consumer fraud statutes such as the Act “were meant to fill a gap by protecting consumers where product safety was not already closely monitored and regulated by the government.” Accordingly, the court held that the private right of action under the Act “does not extend to prescription drug purchases.”

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