State v. Bristol-Myers Squibb Company. ( 2023 )

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Electronically Filed
Supreme Court
SCAP-XX-XXXXXXX
15-MAR-2023
08:05 AM
Dkt. 67 OP
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
---o0o---
STATE OF HAWAIʻI, EX REL. HOLLY T. SHIKADA, ATTORNEY GENERAL,
Plaintiff-Appellee,
vs.
BRISTOL-MYERS SQUIBB COMPANY; SANOFI-AVENTIS U.S. LLC;
SANOFI US SERVICES INC., formerly known as
SANOFI-AVENTIS U.S. INC.; and SANOFI-SYNTHELABO LLC,
Defendants-Appellants,
and
SANOFI S.A., Defendant-Appellee.
SCAP-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS
(CAAP-XX-XXXXXXX; CASE NO. 1CC141000708)
MARCH 15, 2023
RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND EDDINS, JJ.;
AND WILSON, J., DISSENTING 1
OPINION OF THE COURT BY EDDINS, J.
1 At the time of this opinion’s publication, Justice Wilson’s dissent is
forthcoming.
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I. INTRODUCTION
This case is about whether two pharmaceutical companies —
Defendants-Appellants Bristol-Myers Squibb and Sanofi — violated
Hawai‘i’s Unfair or Deceptive Acts or Practices law (UDAP) by
misleading the public about the safety and efficacy of their
antiplatelet drug, Plavix.
The State, in a 2014 complaint, alleged that Plavix was
less effective in patients who had certain liver-enzyme
mutations (poor responders). It said that people with these
mutations had worse outcomes on Plavix than others, and that
Defendants knew this fact years before 2009, when the FDA
updated Plavix’s label with information about the poor responder
issue.
The State alleged Defendants violated Hawaiʻi law in two
ways. First, it asserted that the companies – despite knowing
about the issues with Plavix – failed to update the drug’s
warnings to inform the public. Second, the State claimed the
defendant companies intentionally kept the poor responder issue
under wraps and suppressed research into it in order to protect
their bottom line.
The Circuit Court of the First Circuit agreed with the
State on both points. After a bench trial that spanned more
than a month, the court held that Bristol-Myers Squibb and
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Sanofi had violated UDAP by engaging in deceptive and unfair
acts and practices.
The court said the defendant companies misled Hawai‘i
consumers by failing to warn them that Plavix was less effective
for poor responders. It found that this omission injured
consumers by denying them the drug’s full promised antiplatelet
effect, hindering their ability to give informed consent, and
preventing them from taking an alternative drug or undergoing
genetic testing to determine whether they were poor responders.
The court also faulted Defendants for both refusing to
adequately research variability of response and suppressing
research that might confirm a link between ethnicity or genotype
and Plavix responsiveness.
For these acts, the court imposed an $834 million penalty.
We vacate this penalty.
The court improperly granted the State’s motion for partial
summary judgment on a central trial issue: Did the label matter
to consumers?
The summary judgment ruling on materiality circumscribed
the companies’ ability to present a full defense, marred the
court’s deceptive acts holding, and affected the penalty award.
Bristol-Myers Squibb and Sanofi are entitled to a new trial on
the deceptive acts or practices claim.
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But there will be no second trial on the unfair acts or
practices claim. The court’s holding that the companies
committed unfair acts under UDAP has sufficient, independent
evidentiary support.
We also conclude that Defendants’ procedural arguments
fail. The court correctly determined that the State’s claims
were not barred by UDAP’s safe harbor provision or its statute
of limitations. Nor were they preempted by federal law.
We (1) reverse and remand the court’s deceptive acts UDAP
holding, (2) vacate the court’s grant of partial summary
judgment and the penalty award, (3) affirm the court’s unfair
acts UDAP holding, and (4) remand for a penalty award after the
deceptive-acts claim is resolved.
II. BACKGROUND
A. Factual Background
Defendants-Appellants Bristol-Myers Squibb and Sanofi 2 are
multinational pharmaceutical companies that developed Plavix, an
antiplatelet or “blood thinner” drug.
Platelets, tiny pieces of cells in the bloodstream, can
form clots which create serious health problems like heart
attacks. Doctors often prescribe Plavix along with aspirin
(called dual anti-platelet therapy or DAPT) to patients with
2 The defendant companies are Bristol-Myers Squibb Company (BMS) and
Sanofi-Aventis U.S. LLC, Sanofi US Services Inc., formerly known as Sanofi-
Aventis U.S. Inc., and Sanofi-Synthelabo LLC (Sanofi).
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heart problems or patients who have recently had a procedure
that might put them at risk for platelet clotting, such as
angioplasty 3 or cardiac stenting.
Cardiac stents work by propping and holding open arteries
to improve blood flow. Stents can disturb the plaque naturally
lining our arteries. Platelets in the blood can then accumulate
around the disruption, forming a clot. Patients may take blood
thinners like Plavix to inhibit this clot formation.
Plavix’s chemical name is “clopidogrel.” Clopidogrel is a
“prodrug,” meaning it is only effective once it is changed by
the body. Plavix achieves its antiplatelet effect when it is
metabolized by the liver.
There are a family of enzymes in the liver, called the
“Cytochromes P450” (CYP) that are commonly involved in
metabolizing prodrugs.
Several CYP450 liver enzymes are involved in metabolizing
Plavix. The liver enzyme CYP2C19 is one of them.
Different factors affect how well someone can metabolize
Plavix. “Variability of Response” is “a blanket term that
basically reflects that no one person responds the same to any
pharmaceutical agent.” There will be variability of response to
3 Angioplasty is a medical procedure for opening clogged or narrow
arteries. It involves inserting a small catheter with a balloon tip into a
blood vessel, and it can also be used to place stents in arteries. Coronary
angioplasty and stents. https://www.mayoclinic.org/tests-
procedures/coronary-angioplasty/about/pac-20384761 [https://perma.cc/B6SX-
NM68].
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all drugs. And it can be caused by intrinsic factors like
height, weight, sex, and genetics, or by extrinsic factors like
smoking, diet, exercise, and other drugs a patient is taking.
If a prodrug is metabolized by CYP2C19, then genetic
variation in the CYP2C19 liver enzyme can cause “poor
responsiveness” to that drug.
Pharmacogeneticists use the star allele system to describe
genetic variation in liver enzymes.
The *1 genetic version of CYP2C19 (CYP2C19*1) confers fully
functional CYP2C19 enzymes. The other versions of CYP2C19
(CYP2C19*2, *3, *4, *5, *6, *7, or *8) confer a reduced ability
to metabolize Plavix. The CYP2C19*2 and CYP2C19*3 genetic types
are the most commonly linked to poor Plavix responsiveness.
Each person has two CYP2C19 alleles.
People with two CYP2C19*1 alleles will have a CYP2C19 liver
enzyme that is very good at metabolizing Plavix; those with one
CYP2C19*1 and one CYP2C19*2 or *3 allele will be “intermediate
metabolizers” and someone with two CYP2C19*2 or CYP2C19*3
alleles (or one *2 and one *3) will be a “poor responder.”
Scientific understandings of CYP2C19’s role in metabolizing
Plavix have evolved over time.
When Plavix launched in the late 1990s, it was known that
the CYP450 enzymes — of which CYP2C19 is one — were involved in
metabolizing Plavix. But the extent of the enzyme’s role in
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metabolizing Plavix and – by extension — the possibility that
poor responders might get less benefit from the drug — were not
generally known at that time.
Terms like “poor responder” or “Plavix resistant” are used
(sometimes interchangeably) to refer to two distinct things: (1)
the genetic makeup of a person’s CYP2C19 enzymes; and (2) the
ability of a person’s liver enzymes (either collectively or
isolated CYP2C19 enzymes alone) to metabolize Plavix in a test
tube (called platelet-function).
There is consensus that a genetic “poor responder” is
someone with two *2 or *3 alleles. But there is less consensus
about what level of response to Plavix (either in a test tube or
in the real world) makes someone a “poor responder” from a
platelet-function perspective. 4
CYP2C19 is not the only enzyme involved in Plavix’s
metabolization. And factors other than CYP2C19 genotype impact
the likelihood of adverse clinical outcomes, including blood
vessel size, family history, and lifestyle factors like diet or
smoking.
4 The trial court collectively called those patients that had less than
20% response to the drug or those with zero response to the drug “poor
responders.” The court’s classification of “poor responders” matched the
companies’ rubric, which used a cut off of 20% for their meta-analysis. But
a pharmacogenetics team leader for BMS pointed out that the 20% response line
was “a somewhat arbitrary distinction,” because it was “not based on clinical
outcomes” of the patients. She added, “what’s the difference between 20
percent from the mean or 25 percent from the mean? It’s an author’s choice.”
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B. Procedural Background
This lawsuit began in March 2014 when the State filed a
complaint alleging Bristol-Myers Squibb and Sanofi violated
Hawaiʻi’s Unfair or Deceptive Acts or Practices law.
Under UDAP, “unfair or deceptive acts or practices in the
conduct of any trade or commerce are unlawful.” HRS § 480-2(a)
(2008). The State’s complaint alleged that between 1998 and
2010 Defendants had violated this law by: (1) failing to
disclose that Plavix has diminished or no effect in poor
metabolizers; and (2) allowing their research decisions to be
driven by profit-seeking. The State claimed the Defendants’
behavior was both deceptive and unfair.
1. Motion for Summary Judgment
The State moved for partial summary judgment on its
deceptive acts or practices UDAP allegation.
The State’s motion focused on one part of its deceptive
acts claim. A deceptive act is defined as: “(1) a
representation, omission, or practice that (2) is likely to
mislead consumers acting reasonably under the circumstances
where (3) the representation, omission, or practice is
material.” Courbat v. Dahana Ranch, Inc., 111 Hawaiʻi 254, 262,
141 P.3d 427, 435 (2006) (cleaned up). The State argued that
the third part – materiality – should not be up for debate.
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The State argued that there was no need for a trial to
determine the materiality of information about Plavix’s lower
efficacy for poor responders. There was “no doubt that the
information contained in Plavix’s federally mandated black box
warning is material as a matter of law.” Thus, the State asked
the court to decide materiality before trial, at summary
judgment – it would “eliminate any unnecessary time at trial.”
The court resolved the materiality element in the State’s
favor. It decided that there was no genuine dispute of material
fact that Defendants’ omission involved “information that is
important to consumers and, hence, likely to affect their choice
of, or conduct regarding, a product.” Courbat, 111 Hawaiʻi at
262, 141 P.3d at 435 (cleaned up).
The court also gave what the companies dubbed an
“alternative holding.” Since it would fact-find and apply those
facts to the law at a bench trial, the court - calling itself
the “Ultimate Trier of Fact” - felt it “need not resolve
inferences in favor of the non-moving party.” It found the
defendant companies’ evidence “weak and unpersuasive.”
Materiality, an elemental fact to a deceptive acts UDAP
violation, would go untested at trial.
The court’s summary judgment ruling precluded Bristol-Myers
Squibb and Sanofi from presenting trial evidence about the
materiality of the warning. This included evidence showing that
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Hawaiʻi doctors and patients hadn’t changed how they prescribed
or consumed Plavix after information about the poor responder
issue was added in 2010 to the black box warning. The court
forbade the defendant companies from introducing evidence about
what any person “did or did not do in response to, or as a
result of, [t]he addition to the Black Box Warning to the Plavix
label in 2010.”
The rest of the State’s case proceeded to trial in October
and November, 2020.
2. Trial 5
The bench trial was a battle royale of testifying
pharmacology experts, regulatory experts, and medical doctors.
The parties presented evidence on everything from the minutiae
of FDA regulations to whether St. John’s Wort could enhance
Plavix’s efficacy.
Much of the trial’s myriad and diverse evidence, however,
speaks to three central issues.
First, did the defendant companies mislead anyone through
omitting the poor responder information from the Plavix label
between 1998 and May 2009? Or were the companies just doing the
best they could with incomplete and conflicting scientific
information about the causes of variability of response to
Plavix?
5 The Honorable Dean E. Ochiai presided.
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Second, did Defendants suppress research into variability
of response for financial reasons? Did greed prevent them from
confirming CYP2C19’s role in metabolizing Plavix sooner?
And third, did the omission of the poor responder
information from Plavix’s label hurt Hawaiʻi consumers? Did this
omission hinder consumers’ ability to give informed consent?
Were patients duped into taking a drug that might harm them - or
at least not help them - because of Defendants’ omissions?
a. Deception through omission?
Regarding the first question of whether Defendants deceived
consumers though omission, the parties introduced three major
categories of evidence at trial: (1) scientific understanding
before Plavix launched in 1998, (2) evidence concerning the
scientific community’s changing perspectives between 1998 and
2010 on which liver enzymes were principally responsible for
metabolizing clopidogrel, and (3) evidence concerning shifts in
scientific thinking about the link between CYP2C19 genotypes and
clinical outcomes after 2010.
i. Pre-approval
Almost four years before the FDA approved Plavix, Dr. Sonia
de Morais identified the genetic mutation that causes poor
responsiveness in CYP2C19. She looked at the metabolization of
S-mephenytoin - a drug that was known to almost exclusively be
metabolized by CYP2C19 – not clopidogrel.
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Dr. de Morais’ 1994 article also introduced the idea of
genetic testing for poor response in CYP2C19. 6 For her work, she
developed a “simple PCR-based genetic test for [identifying] the
defective CYP2C19 allele.” She later clarified that by
“simple,” she meant when “compared to the expensive and
laborious technique of complete gene sequencing.” Her test “was
only focused on the simple small fragment of DNA that had the
mutation”; it was not intended for direct patient use.
In addition to identifying (for the first time) CYP2C19*2
and CYP2C19*3, Dr. de Morais’ 1994 study found that “[t]here are
large interracial differences in the frequency of the poor
metabolizer phenotype with [Asian] populations having a five
fold greater frequency compared to Caucasians.”
Then in 1996, BMS and Sanofi sponsored CAPRIE (Clopidogrel
versus Aspirin in Patients at Risk of Ischemic Events): a
19,000-person clinical trial designed to compare the relative
efficacy of clopidogrel and aspirin in “reducing the risk of a
composite outcome cluster of ischaemic stroke, myocardial
infarction, or vascular death.” CAPRIE showed that, compared to
aspirin, Plavix conferred a “statistically significant
6 At trial, the State argued that Dr. de Morais’ mid-90s genetic test
could have been used to research any correlation between CYP2C19 gene
mutations and poor response to Plavix early in the drug’s development. But
it was also clear that easy access to genetic testing for patients who could
be poor responders has only become available since the boxed warning was
added.
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reduction” in the risk of death for patients who had recently
had a heart attack or stroke or who had peripheral artery
disease.
CAPRIE also found a statistically significant relationship
between race and treatment outcomes when Whites and non-Whites
were compared. The CAPRIE investigators noted, however, that
these results should be interpreted cautiously since only 5% of
the study population was non-White. Also, non-Whites were not
well represented in the peripheral artery disease study group
(the subgroup for which Plavix was most effective).
In 1997, BMS and Sanofi investigated which liver enzymes
were involved in Plavix metabolization. That study showed that
the liver enzymes “CYP2B6, CYP2C19 and CYP3A4 are involved in
clopidogrel metabolism in human liver microsomes.” It also
“suggest[ed] possible involvement of CYP1A2, CYP2C9 and CYP2E1
in clopidogrel metabolism.”
On March 5, 1997 – before Plavix’s approval — the companies
wrote to the FDA proposing a label that stated in relevant part:
“In vitro, the isoenzymes responsible for metabolism of
clopidogrel and the carboxylic acid derivative are CYP2B6,
CYP2C19 and CYP3A4; evidence also suggests possible involvement
of CYP1A2, CYP2C9 and CYP2E1 in clopidogrel metabolism.”
(Emphasis added.)
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The FDA prevented Defendants from including that language
on the label.
The FDA approved Plavix in November 1997. In its approval
letter, the FDA warned Defendants that Plavix’s final printed
label “must be identical to the enclosed draft labeling” because
“[m]arketing the product with [a label] that is not identical to
this draft labeling may render the product misbranded and an
unapproved new drug.”
ii. Post-approval
After Plavix was approved, Defendants conducted a “meta-
analysis” of their internal clinical trial data from Phase I and
Phase II clinical studies in March of 1998. The meta-analysis
was a retrospective review of prior studies that examined
previously available data.
The meta-analysis showed there was a variability of
response to Plavix. From the 469 samples examined, 67.8% of
patients were considered good responders: the drug was at least
20% effective at inhibiting clot formation. Only 3.4% of
patients had no response. The extent of that variability
depended on the test used to measure inhibition: one test showed
that 32.2% of patients had less than 20% platelet inhibition
while other tests showed 8.5% of patients. 7
7 At trial, the companies’ witness explained that the 32.2% value
encompassed the patients who had tested at least once for less than 20%
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Defendants did not submit the 1998 meta-analysis to the FDA
until 2005, seven years after Plavix’s launch. 8 When they
eventually submitted the meta-analysis to the FDA, it was
presented as an appendix to another document.
Just before Plavix reached the market in December, Sanofi
released a study in November 1998 which concluded that 57% of
clopidogrel metabolization was attributable to the liver enzyme
CYP3A4, while 13% was attributable to CYP2C19. 9
The companies theorized that Plavix might principally be
metabolized by CYP3A4. CYP3A4 is “the most abundant” enzyme in
the liver, and it has the ability to metabolize a variety of
structures. It does not have a loss-of-function allele. CYP3A4
variations are caused by non-genetic factors like diet and
interactions with other drugs.
Plavix sales began in December 1998.
(1) 1998-2008
From 1998 to 2008, the defendant companies sponsored
various studies on Plavix. Researchers not affiliated with the
companies also published on clopidogrel.
inhibition of platelet aggregation. Of that 32.2%, though, 23% of patients
still had an overall inhibition of platelet aggregation over 20%.
8 Defendants submitted the meta-analysis to Swiss medical authorities
shortly after its completion in March 1998; the Swiss required the meta-
analysis before they would approve Plavix.
9 The remaining 30% was attributable to CYP1A2 (18%) and CYP2B6 (12%).
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BMS and Sanofi sponsored a large clinical trial, CURE,
beginning in 1998 and ending in 2000. CURE found that Plavix
plus aspirin reduced the risk of cardiovascular death, heart
attack, or stroke by 20% more than aspirin plus a placebo did.
Of the 12,562 patients enrolled in the CURE trial, 82.1%
(10,308) of them were Caucasian and 2% (254) of them were Asian.
A 2003 study published by researchers outside the companies
examined CYP liver enzymes and clopidogrel metabolization. The
results showed that CYP3A4 and CYP3A5 did the best job
metabolizing clopidogrel.
In June 2003, a BMS research group published an article on
clopidogrel. The group was led by Dr. Paul Gurbel - an expert
on platelet variability of response, then a BMS scientist, and
now a qui tam relator suing the companies elsewhere as he
testified for the State at trial. The article described
clopidogrel non-responsiveness in 31% of the patient population
after procedures such as stenting or angioplasty. The study did
not show a correlation between non-responsiveness to Plavix and
adverse clinical outcomes. 10 But it did show that Plavix didn’t
work so well for nearly one in three patients that had stents
placed or underwent angioplasty.
10 Dr. Gurbel’s paper implied a connection between clots blocking stents
(stent thrombosis) and clopidogrel resistance. But because the rate of stent
thrombosis was much lower than the rate of Plavix resistance, the study noted
that the two were possibly unrelated.
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The defendant companies sponsored the COMMIT study after
CURE. COMMIT was a clinical trial in China with more than
45,000 patients; all enrolled patients were Chinese. The
results published in 2005 showed that when patients who’d had a
heart attack were given Plavix and aspirin, their risk of having
an adverse cardiac event dropped by 9%. 11
Next, the defendant companies sponsored the CHARISMA trial.
It was a large scale (15,000-patient) clinical trial comparing
Plavix’s effects to those of a placebo. It found that for high-
risk patients, “clopidogrel plus aspirin was not significantly
more effective than aspirin alone in reducing the rate of
myocardial infarction, stroke, or death from cardiovascular
causes.”
But, data from the CHARISMA study (published in 2006)
showed that Asian patients had the lowest occurrence of death,
heart attack, or stroke while taking Plavix.
The shift in focus to CYP2C19 and clopidogrel came in 2006.
An independent pharmacogenetics researcher, Dr. Jean-Sebastien
Hulot, published a proof-of-concept study which suggested that
11 After the COMMIT study, the FDA approved a new indication for Plavix:
it allowed the drug’s prescription to patients who’d had serious heart
attacks even if they were not going to have stents put in.
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CYP2C19 genetic polymorphism was linked to reduced clopidogrel
responsiveness. 12
Then in October 2008, a study came out examining drug
interactions between Plavix and Omeprazole. Omeprazole is a
proton pump inhibitor – a type of drug known to impede CYP2C19’s
function. The study showed that patients prescribed both Plavix
and Omeprazole were more likely to have diagnostic codes for
things like heart attack and stroke than those who weren’t
prescribed Omeprazole. Defendants submitted this study to the
FDA “outside of the normal annual cycle of reporting.”
Defendants met with the FDA. An undated document titled
“Response to FDA Discussion Held 05 December 2008” prepared by
Sanofi summarized the meeting:
The discussion centered on whether differences in the
formation of the active metabolite could be a primary
source of platelet response variability. It was recognized
that the relationship between the variability in platelet
response and clinical outcome, as well as the intrinsic and
extrinsic factors which modulate the formation of the
active metabolite, are not well understood. A specific
focus of the discussion was the extrinsic [proton pump
inhibitor drugs] and intrinsic (genetic polymorphisms)
factors which impact the formation of the active metabolite
through CYP2C19.
At the December 5, 2008 meeting the FDA asked Defendants to
prepare a written action plan “in response to the issues
raised.” Defendants did. They proposed looking at “drug-drug
12 Dr. Hulot wrote that “The CYP2C19*2 loss-of-function allele is
associated with a marked decrease in platelet responsiveness to clopidogrel
in young, healthy male volunteers and may therefore be an important genetic
contributor to clopidogrel resistance in the clinical setting.”
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interaction with proton pump inhibitors” and “genetic
polymorphisms and of CYP2C19 and its impact.”
(2) 2008-2009
Then on December 22, 2008, Dr. Jessica Mega published the
results of a genetic study she had conducted using data
collected as part of the TRITON trial. It involved “a head-to-
head-comparison” of Plavix and Effient (prasugrel), another
antiplatelet that was then under development by Defendants’
competitor, Eli Lilly. Dr. Mega’s study (the Mega study) showed
that clopidogrel-treated patients who carried a loss-of-function
allele “had a three-fold greater risk of clotting their stent,
and a 50 percent greater risk of having a heart attack, a stroke
or death.”
The Mega study’s results catalyzed discussions between the
FDA and Defendants about revising Plavix’s label to include
information about CYP2C19. The FDA pushed the companies to act.
It welcomed a counterproposal from the companies, with the
understanding it would disregard unsatisfactory suggestions.
In discussing these revisions, a BMS employee wrote
in a March 30, 2009 email to his colleagues: 13
13 The court overruled the defendant companies’ hearsay objection. The
email was not offered for the truth of the matter asserted, the court ruled.
Rather, it was evidence of the companies’ knowledge and how the Defendants
reacted (or not) to the experts’ comments. We agree. The evidence was
admissible for non-hearsay purposes.
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Problem is that I don’t really see a counterproposal but
instead it looks like we are into stalling some more. I
have to tell you that I have had in depth 1:1’s with about
6 senior [key opinion leaders] since I have been at [the
American College of Cardiology] and the mood is very
negative towards us (people like Dr. Topol, Gurbel,
Eikelboom, Fox are all saying that they have been telling
us this for years and we chose to ignore them and bury our
head in the sand and so they feel no sympathy toward our
current situation!)
In May 2009, the FDA amended the “Precautions” section of
Plavix’s label to read:
Based on literature data, patients with genetically reduced
CYP2C19 function have lower systemic exposure to the active
metabolite of clopidogrel and diminished antiplatelet
responses, and generally exhibit higher cardiovascular
event rates following myocardial infarction than do
patients with normal CYP2C19 function (see CLINICAL
PHARMACOLOGY: Pharmacogenetics).[ 14]
(First emphasis added.)
The May 2009 label also stated that “patients with an
impaired metabolizer status (intermediate and poor combined) had
a higher rate of cardiovascular events (death, myocardial
infarction, and stroke) or stent thrombosis compared to
extensive metabolizers.”
Regarding genetic testing, the 2009 label explained that
“[p]harmacogenetic testing can identify genotypes associated
with variability in CYP2C19 activity.”
(3) 2009-2010
Following the May 2009 label update, Defendants and the FDA
discussed whether the information should be put in a black box
14
The May 2009 version of the “Pharmogenetics” section stated:
“diminished antiplatelet responses to clopidogrel have been described . . .
in 21 reported studies,” and that “[t]he relative difference in antiplatelet
response between genotype groups . . . is typically greater than 30%.”
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warning — the most prominent type of warning on a drug label.
The defendant companies told the FDA that Plavix’s
“labeling adequately describes the safety and efficacy of
clopidogrel and that a boxed warning [was] not necessary at this
time.”
Ultimately, the FDA decided to put the CYP2C19 information
in a black box warning in 2010. Like the May 2009 label, the
black box included language stating that poor metabolizers
taking Plavix are more likely to have adverse cardiac events on
the drug than non-poor responders. 15
iii. After the 2010 Black Box Label
In the first half of the 2010s, several research articles
called into question the link between CYP2C19 genotype and
clinical outcomes identified by the December 2008 Mega study. 16,17
15 The 2010 Black Box label:
16 In 2010, Paré et al. published a study that used genomic data collected
in connection with two of Defendants’ big trials. At trial, the companies’
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Others appeared to validate the Mega study’s findings.
One question the research raised was whether CYP2C19 loss-
of-function alleles were related to one particular adverse
outcome: blood clots blocking stents (stent thrombosis).
In a 2015 meta-meta-analysis, Osnabrugge et al. looked at
11 meta-analyses. They found a statistically significant
relationship between CYP2C19 loss-of-function alleles and stent
thrombosis.
But the Osnabrugge study also concluded that the 11
studies’ results and conclusions were “discordant.” It said the
primary culprits of this disagreement were between study
heterogeneity and publication bias. And it concluded
“[c]onfidence in the presence of an association is limited, and
personalized antiplatelet management based on genotyping is not
witness, Dr. Roome, explained that Paré et al.’s article showed that “if you
have genomic polymorphisms with loss of function on the CYP2C19, you do not
have a worse outcome when you are treated by clopidogrel. You have an
outcome that is comparable to those patients with no genomic polymorphisms on
CYP2C19.”
Dr. Gurbel, the State’s witness, faulted Paré et al.’s study for
excluding people with stents.
17 In 2011, Holmes et al. published a meta-analysis that synthesized the
results of 32 original research studies looking at whether CYP2C19 genotype
could predict a person’s response to clopidogrel. Holmes et al.’s meta-
analysis found that there was “no evidence for a significant association
between CYP2C19 genotype and any important cardiovascular outcome.”
Dr. Gurbel criticized Holmes et al.’s work for relying on studies like
CURE and CHARISMA, which had heterogeneous study populations. By casting
such a wide net, he said, the meta-analysis “dilute[d] the signal of the
importance of *2 [carriage].” Dr. Gurbel testified that if you just looked
at people who’d had stents put in their hearts, then “the totality of the
evidence [was] overwhelming” that there was a link between CYP2C19 genotype
and clinical outcomes.
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supported by the currently available evidence.”
Osnabrugge’s analysis suggested a possible correlation
between CYP2C19 and stent thrombosis that was worth further
exploration. Dr. Todd Seto, the medical director of the Center
for Outcomes Research and Evaluation at Queen’s Medical Center,
testified that the “difficulties” in the 11 meta-analyses
prevented Osnabrugge et al. drawing definite conclusions from
the results.
Dr. Gurbel thought differently about Osnabrugge et al.’s
findings. Concerning the link between CYP2C19 genotype and risk
of stent thrombosis, he declared the “totality of the
evidence . . . for stent thrombosis,” was “irrefutable.”
“There’s no argument against it. I mean, you have 11 meta-
analyses reporting the same thing.”
In September 2016, the FDA removed the statement that
CYP2C19 poor metabolizers have worse clinical outcomes on Plavix
from the boxed warning. 18
18 The 2016 Black Box label:
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b. Suppressed research?
The second question the trial focused on was whether
defendant companies suppressed research into Plavix’s poor-
responder issue to protect their profit margins. The State used
internal documents and emails from the companies to support its
allegation.
i. Internal Company Documents
First, the State pointed to the defendant companies’
internal committee documents. They argued these established
that the companies avoided research that could make Plavix look
bad.
BMS and Sanofi have a jointly-staffed Plavix “Life Cycle
Management” committee (LCM). The LCM is tasked with “discussing
all the new data as well as major trials that were ongoing and
sponsored by the companies” and “considering and approving or
rejecting local studies from affiliates around the world.”
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The minutes from LCM meetings in January 2001, June 2001,
and June 2002 reveal that Defendants declined to fund local
studies into variability of response to aspirin.
The minutes from 2001 reflect that the companies were
concerned the studies into variability of response to aspirin
might “lead to a similar trial on clopidogrel resistance.” The
June 2002 meeting minutes reflected that Defendants were
continuing to refuse funding research into this area because it
could lead to a “restrictive positioning of clopidogrel and
could open the door to ‘clopidogrel nonresponders.’”
Another document summarizing the LCM’s activities in 2002
indicated that the committee rejected studies about aspirin
nonresponsiveness because “it could lead to the same questions
about clopidogrel and because the commercial sensitivity and
science of studies in this field is being assessed at a
corporate level first.”
The June 2003 LCM meeting minutes noted the increase in
publications concerning “[v]ariability of response with
clopidogrel.” They identified “[t]hreats for clopidogrel,”
related to variability, including “[p]otential threats for
future sales.”
Then the LCM outlined an “action plan” in 2003 concerning
“clopidogrel response variability.” The first item on the
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action plan was a meta-analysis which would be done exclusively
with already-collected data.
At trial, Dr. Dominique Roome, a Sanofi scientist who
worked on Plavix-related issues from 1999 to 2011, conceded that
their action plan did not include plans to conduct a large-scale
clinical trial on the relationship between CYP2C19 genotype and
clinical outcomes; but she explained this omission by saying
that the issue of CYP2C19 poor metabolizers “wasn’t even a
question that was being discussed or debated in the scientific
literature at that point.”
ii. Internal Emails
The State also presented internal emails from the early and
mid-2000s to demonstrate the companies’ reluctance to engage in
aspirin or clopidogrel-resistance studies.
In May 2000, a BMS researcher wrote his colleagues to
propose a small, clinical trial “comparing the response of
blacks vs. whites on ADP-induced platelet aggregation.” A
colleague recommended holding off on the study to see what
questions the FDA would ask, noting that the “low number of
black people” was not an issue for the FDA in the earlier CAPRIE
study. He added that “[t]he problem is that, given the
variability of the test, we always run the risk to show a
difference in a pharmacology study . . . and then we really are
in trouble.” A counterpart at Sanofi agreed the proposed study
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“could bear a significant risk” and suggested waiting to see if
the FDA would bring it up.
In response to another proposed study on aspirin resistance
in August 2002, a BMS scientist recounted that “Sanofi hs [sic]
generally been ‘down’ on suggestions to study ASA [aspirin]
resistance, because they are afraid that ‘clopidogrel
resistance’ is right behind.” He later wrote in a separate
email:
In my opinion, [Sanofi]’s/our reluctance to go down the
path toward documentation of clopidogrel resistance is
understandable, but it will catch up with us and perhaps be
an unpleasant and costly surprise when others document it
without asking our permission to do so.
In June 2003, BMS employees forwarded and discussed Dr.
Gurbel’s recently-published article on Plavix non-
responsiveness. See supra Section II.B.2.a.ii.(1).
Three emails about Dr. Gurbel’s article were presented at
trial.
In the first, a BMS researcher wrote that he “view[ed] the
paper with mixed feelings.” He thought some of the data
presented were “very positive and encouraging” but also noted
that he had “received zero response internally” when he had
asked for information on Plavix non-responders.
In the second email, the Vice President of U.S. Marketing
for Plavix at the time shared the article and wrote that “BMS
U.S. has had difficulty mobilizing the LCM to address the
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importance of understanding Plavix resistance through our data
and proactive research.”
In the third email, the BMS Vice President for the “Sanofi
Alliance” at the time wrote: “Sanofi had an in-house meeting on
aspirin resistance in January and presented their data at the
January LCM meeting. However, Sanofi remains adverse [sic] to
doing any further work on either aspirin or clopidogrel
resistance because of the potential negative marketing
implications.”
In 2005, the defendant companies determined at a meeting
that “[a]dditional studies” were needed on the variability of
platelet response issue and suggested using “small trials to
help [Defendants] ‘shape the debate.’”
In 2006, the defendant companies discussed variability
of platelet response during an advisory board meeting.
They concluded that while some researchers believed that
variability corresponded with “clinical events,” others
disputed this relationship.
c. Consumer harm?
The last question was whether defendant companies’ acts or
practices harmed consumers. The evidence concerned contemporary
understandings of (1) whether CYP2C19 genotype is linked to
adverse clinical outcomes and (2) whether non-White
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(particularly Asian) patients on Plavix are more likely to
receive little or no benefit from the drug.
i. Clinical Outcomes
The State sought to support its theory that poor responders
taking Plavix were at a higher risk of adverse clinical outcomes
like heart attacks, strokes, or death. But this link is
unclear.
In 2019, the State’s witness, Dr. Gurbel, wrote that the
link between poor responders and “major adverse cardiovascular
events” on Plavix “remains controversial.” 19 At trial, he
emphasized that while the link between major adverse
cardiovascular events is not clear, he was “100 percent certain”
that a link between adverse events and poor response exists.
Dr. Laura Plunkett, the State’s regulatory and pharmacology
expert, agreed with Dr. Gurbel. She testified that “people that
can’t metabolize the drug, poor metabolizers, are at an
increased risk of experiencing heart attacks and strokes.” Dr.
Plunkett elaborated on why poor responders are at an increased
risk:
19 In an April 2010 editorial, Dr. Gurbel also wrote that:
no single study has demonstrated a conclusive link between
the presence of a loss-of function genetic polymorphism,
suboptimal clopidogrel active metabolite generation
(pharmacokinetic measurement), decreased clopidogrel
responsiveness (pharmacodynamic measurement), and adverse
clinical outcomes.
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if [poor responders] don’t activate [Plavix], they can’t
get the benefit. And don’t forget this is a drug that’s
being given to reduce the risk of life-threatening events
-- heart attacks and strokes. So if you don’t activate it
and you’re giving the drug to prevent that -- those events,
then you’re going to be at increased risk, because
obviously without the drug there, you can’t get the
benefit.
Dr. Gurbel and Dr. Plunkett didn’t think that poor
responders were more likely to have adverse outcomes on Plavix
because the drug was actively harming them. They thought,
rather, that for those who didn’t activate the drug at all, it
was effectively a “placebo.”
In response, the defendant companies focused on the
difference between patients unable to metabolize the drug at all
versus those who had a reduced but non-zero response to Plavix.
Dr. Seto testified that even a patient with two CYP2C19
loss-of-function alleles would still get some benefit from
Plavix: “there are papers that have shown benefit in patients,
including those who are poor metabolizers.”
Dr. de Morais, the scientist who in 1994 identified the
genetic mutation that causes poor responsiveness in CYP2C19,
testified. She explained that CYP2C19 poor responders may still
metabolize Plavix because “CYP2C19 is not the only enzyme.
There are other enzymes that form the active metabolite.” These
other enzymes, she said “will pick up the tab [and metabolize]”
Plavix if the CYP2C19 enzyme can’t.
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Adding to this, Dr. de Morais expounded on a “very unique”
active metabolite that’s produced when liver CYPs oxidize
Plavix. Even for poor responders, patients can receive clinical
benefits from Plavix, because the active metabolite forms a
long-lasting, stable bond with blood platelets. This bond makes
the platelets slippery so they cannot easily form a clot and
stays slippery for a “couple of days or [a] week or so” before
it’s excreted from the body.
ii. Ethnicity and poor responsiveness
The State also attempted to show that Asian patients faced
a greater risk of adverse effects on Plavix.
There was no dispute that Asians are more likely to carry
the *2 or *3 CYP2C19 alleles than Whites. Dr. Gurbel elaborated
that Asians have a 15% chance of carrying two loss-of-function
alleles and a 50% chance of carrying one.
But the parties disagreed about whether Asian patients were
likely to have worse outcomes on Plavix than White patients.
The defendant companies maintained that the drug worked
for Asian patients. Dr. Seto testified that a 2005 study
conducted at Queen’s Medical Center found that ethnicity did not
appear to affect the success rate or complication rate of
procedures like stenting or angioplasty. Dr. Seto said the
study confirmed that patients who were getting clopidogrel,
“including Asians and our Pacific Islander patients,” did fine.
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For the State, Dr. Gurbel testified that Plavix was
demonstrably less-effective for Asian patients. He compared the
results of the CURE clinical trial (which had mostly White
patients) with the COMMIT clinical trial (which had exclusively
Chinese patients). He pointed out that Plavix had only a 9%
risk reduction effect for the Chinese participants in the COMMIT
trial, less than half of the 20% risk reduction shown in CURE.
Thus, he reasoned, the COMMIT trial showed that Plavix was less
effective for Chinese patients.
In response, Dr. Seto disagreed that the CURE and COMMIT
studies – which used different methodologies – showed a reduced
effectiveness in one group versus another. He testified that it
was not possible to isolate if race or ethnicity was connected
to any supposed difference in the results. He further noted
that the 2016 American College of Cardiology/American Heart
Association (ACC/AHA) guidelines recommend Plavix as an
antiplatelet without any regard to patients’ race or genetics.
And that the guidelines recommend against routine genetic
testing even for patients of Asian or Pacific Island descent.
3. FOF-COLs
In its Findings of Fact and Conclusions of Law, the court
found that the companies had committed both deceptive and unfair
acts. First, it stated that the companies had misled consumers
by not informing patients about the poor responder issue from
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the beginning. Second, the court determined that the companies
engaged in a pattern and practice of suppressing inquiry into
variability of response for financial reasons. Third, the court
decided that the defendant companies’ actions harmed Hawaiʻi
consumers.
a. Deceptive Acts by Omission
First, the court focused on Plavix’s labeling, stating that
the “facts presented show that Defendants had sufficient
knowledge, technology, and ability to update the Plavix label
from launch and continuing for many years.”
The court listed various facts that Defendants knew at the
time of Plavix’s launch. It highlighted these findings: (1)
Defendants’ internal reports revealing that the Cytochrome P450
enzymes, including CYP2C19, were involved in Plavix’s
metabolization; (2) Defendants’ 1998 meta-analysis finding that
32.2% of patients had a reduced response to Plavix when one test
was used; 20 (3) the CAPRIE clinical trial’s showing of a
statistically significant difference in Plavix’s effectiveness
for White patients as compared to non-White patients; (4) Dr. de
Morais’ work showing that “CYP2C19 polymorphisms were found to
be a 100% predictor of poor metabolizers (for S-
20 In a footnote, the trial court “consider[ed] it significant that
Defendants did not disclose their 1998 Meta-Analysis to the FDA until after
[the] Gurbel study was published.” See supra Section II.B.2.a.ii(1).
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mephenytoin[ 21])”; (5) East Asians were “five-fold” more likely
to have a variant of CYP2C19 that made them Plavix poor
responders; and (6) a genetic test for CYP2C19 variations had
existed for laboratory use since 1994.
The court found that after Dr. Hulot’s 2006 study
supporting the hypothesis that CYP2C19 polymorphisms contribute
to Plavix variability of response “Defendants took no action to
update Plavix’s label to inform prescribing physicians and
patients about Plavix resistance” even though “it was already
established that these CYP2C19 polymorphisms were more prevalent
among certain Asian populations.”
The court concluded the companies failed to use the
information they had about Plavix’s variability of response to
“try to warn the public or the FDA” about the poor responder
issue or pursue information about Plavix’s bioactivation.
b. Suppressed and Avoided Research
Second, the court faulted Defendants for avoiding any
serious examination into CYPC219’s role in driving variability
of response to Plavix. It rejected Defendants’ claim that they
had supported clinical trials looking into variability of
response. 22
21 Unlike Plavix, S-mephenytoin is a drug almost exclusively metabolized
by CYP2C19.
22 In rejecting this argument, the court relied on Dr. Gurbel’s testimony
that Defendants “didn’t . . . I would say broadly, you know, [do] any
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The court found the companies “evidenced a clear intent not
to conduct or sponsor any research that might confirm the
existence of and/or reason for ‘Plavix resistance’ or
‘Variability of Response’ to a patient’s race or other
identifiable genetic factors.”
It further noted that the companies had a duty to
investigate why some patients had a diminished response to
Plavix. The court cited Dr. Plunkett’s testimony that
pharmaceutical companies must continue to investigate potential
issues with the drugs they sell: “under Section 21 CFR [§] 314,
there are specific requirements for companies to perform this
type of surveillance of their drugs and the literature . . . in
order to understand whether or not there are risks out there” 23
and that this affirmative behavior is “part of good
pharmacovigilance practice.”
The court also rejected Defendants’ claim that they “did
not investigate the impact of CYP2C19 polymorphisms on Plavix
meaningful research, no.” The court also cited Dr. Plunkett’s testimony that
“I haven’t seen a large clinical trial that has been done by the company or
anyone else of the power to be able to answer definitively those questions,
and specifically for the individuals that carry two loss-of-function alleles,
we haven’t completely defined that. No study has been done.”
23 More specifically, 21 CFR §§ 314.80 (Postmarketing reporting of adverse
drug experiences) and 314.81 (Other postmarketing reports) impose a broad
duty of surveillance. 21 CFR §§ 314.80(b) requires, for example, “prompt[]
review [of] all adverse drug experience information obtained or otherwise
received by the applicant from any source, foreign or domestic, including
information derived from commercial marketing experience, postmarketing
clinical investigations, postmarketing epidemiological/surveillance studies,
reports in the scientific literature, and unpublished scientific papers.”
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Variability of Response because they believed at the time of
launch and for many years afterward” that CYP3A4 was the
“primary means by which a patient’s body produced Plavix’s
active metabolite.” The court said it found “much more
persuasive the words and actions reflected in Defendants’
corporate records, and testimony consistent with them, which
evidence a clear intent by Defendants to avoid any studies that
might unearth negative information about Plavix.”
The court said Defendants’ records showed that their
aversion to certain variability of response research was “tied
to concerns about the potential impact of adverse clinical trial
results on sales of the drug.”
The court made a series of factual findings concerning
Defendants’ internal records. For example, it referenced emails
from 2000 where Defendants shot down a proposed study comparing
clopidogrel response in Black versus White patients as risky.
It then quoted a 2001 document showing that the LCM had rejected
a proposed study on aspirin resistance because “it could lead to
a similar trial on [Plavix] resistance.” The court also cited
two 2002 LCM documents reflecting the committee’s decision to
reject aspirin studies “because they ‘could lead to the same
questions about [Plavix],’ they ‘could open the door to
“[Plavix] non-responders,”’ and because there was ‘no commercial
interest’ in such studies.”
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The court also emphasized how the companies’ behavior
undermined their claim that they believed CYP3A4 primarily
metabolized Plavix. It pointed to a November 2005 meeting
summary (after the COMMIT study was published) where Defendants
observed that they could support “small trials” on the
variability of platelet response issue that could help them
“shape the debate.”
c. Consumer Harm
Lastly, the court found that the companies’ behavior harmed
consumers.
The court relied on the label’s materiality to reach its
conclusion. It noted that boxed warnings are usually reserved
“for serious warnings, particularly those that may lead to death
or serious injury.” In response to Defendants’ argument at
trial that “the 2016 boxed warning deleted any reference to a
causal relationship between CYP2C19 poor metabolizer status and
clinical outcomes,” the court said that “since the boxed warning
remains on the Plavix label, Defendants’ argument is
unpersuasive.”
The court found that poor responders to the drug “receive
only partial benefit or risk reduction, which may be
insufficient to prevent an adverse event.” It cited to studies
from the later 2000s showing “CYP2C19-based poor responsiveness
to Plavix led to an increased risk of cardiac events . . . when
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compared to patients who were normal or intermediate
responders.” It also found that “the evidence presented at
trial established that Defendants knew . . . at the time of
[Plavix’s] launch . . . that Plavix patients who are poor
metabolizers are likely at higher risk of a recurrent heart
attack or stroke than those who are not poor metabolizers.”
The court’s finding about the increased risk for
cardiovascular events faced by CYP2C19 poor metabolizers
underpinned its conclusions that Defendants’ omission was likely
to mislead consumers. This finding also partly supported the
court’s unfair acts or practices ruling, in particular, that the
defendant companies’ “conduct was substantially injurious to
consumers.” That finding, in turn, informed the court’s
analysis of the “injury to the public” prong of its penalty
calculation.
The court did not explicitly find that Asian patients were
exposed to a high risk of adverse cardiac outcomes while taking
Plavix. But it referenced the notion that Plavix doesn’t work
as well for non-Whites in its analysis of the injuries inflicted
on consumers. For example, the court highlighted Dr. Gurbel’s
testimony comparing the COMMIT and CURE clinical trials. It
detected “a statistically significant disparity in the number of
adverse events suffered by non-[W]hite racial groups.”
The court then linked Defendants’ awareness (from the
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CAPRIE clinical trial) that Plavix was less effective for non-
Whites to their “intent not to conduct or sponsor any research
that might confirm the existence of and/or reason for ‘Plavix
resistance’ or ‘Variability of Response’ to a patient’s race or
other identifiable genetic factors.”
From this, the court concluded that the companies “took no
action to update Plavix’s label to inform prescribing physicians
and patients about Plavix resistance” in spite of the
“established” fact that “CYP2C19 polymorphisms [leading to poor
response] were more prevalent among certain Asian populations.”
4. Appeal
Defendants appealed the circuit court’s judgment to the
Intermediate Court of Appeals. We granted the State’s petition
for transfer to this court.
On appeal, Defendants challenge nearly all the circuit
court’s findings of fact and conclusions of law.
Defendants contend the evidence showed they didn’t know
about the CYP2C19 metabolization issue until the Mega study came
out in December 2008. So, they argue, there is nothing
“deceptive” or “unfair” about their failure to update the Plavix
label with poor responder information before then.
Defendants stress that they investigated Plavix’s safety
and efficacy throughout the 2000s, and they claim that they
decided against funding certain studies into variability of
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response because of those studies’ size and design limitations,
not because they were trying to protect their profits.
Defendants also emphasize the lack of evidence showing the
omission of the poor responder information from Plavix’s label
injured anyone. Even poor responders, Defendants assert, can
benefit from Plavix.
In addition to challenging the substance of the court’s
holding, Defendants also raise procedural defenses.
First, they argue that the State’s claims about Plavix’s
FDA-approved label are barred by UDAP’s “safe harbor” provision,
which exempts from UDAP “[c]onduct in compliance with the orders
or rules of, or a statute administered by, a federal, state, or
local governmental agency.” HRS § 481A-5(a)(1) (2008).
Defendants say that because the FDA approved Plavix’s label they
are “in compliance” with the FDA’s regulations and exempt from
liability under UDAP.
Second, the companies claim that the State’s suit is time-
barred by UDAP’s four-year statute of limitation.
Third, they claim the State’s UDAP claims are preempted by
the Federal Food, Drug, and Cosmetic Act (FDCA) because it would
be “impossible” for the companies to comply with both the
federal law on drug labeling and the duties imposed by Hawaiʻi
law.
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III. DISCUSSION
A. No Procedural Bars to the State’s Claims
First, we address the defendant companies’ procedural
arguments. Neither the UDAP’s safe harbor provision nor its
statute of limitations bar the State’s claims. The claims are
also not preempted by federal law.
1. No Safe harbor
The UDAP’s safe harbor provision does not block the State’s
action.
UDAP’s “safe harbor” exempts “[c]onduct in compliance with
the orders or rules of, or a statute administered by, a federal,
state, or local governmental agency.” HRS § 481A-5(a)(1).
Courts interpreting safe harbor provisions often do so
narrowly, holding they bar only conduct which is not
specifically allowed or required by another authority. See
Showpiece Homes Corp. v. Assurance Co. of Am., 38 P.3d 47, 56
(Colo. 2001) (explaining that “[c]onduct amounting to deceptive
or unfair trade practices . . . would not appear to be ‘in
compliance’ with other laws” where it was not specifically
authorized by those laws).
The FDA did not issue the companies a special dispensation
absolving them of any state-law duties they may have (above and
beyond their obligations under federal law) to update the Plavix
label as the relevant science evolves. The FDA’s approval of
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Plavix’s label does not confer the agency’s imprimatur on the
companies’ decision not to add information about variability of
response to its warnings before 2009. And Defendants have not
pointed to any federal statutes specifically authorizing the
omissions and conduct the State alleges violates the UDAP.
This is not an old-fashioned false advertising consumer
protection case. The State’s allegations and the circuit
court’s FOFs and COLs are concerned with Defendants’ conduct,
not only the contents of the Plavix label. The State’s UDAP
allegations also expressly involve Defendants’ approach to
publicizing and investigating the variability of response issue.
Defendants offer no explanation of why UDAP’s safe harbor should
bar the claims that, for instance, Defendants violated the law
by failing to disclose the results of their 1998 meta-analysis
to the public or by avoiding research on variability of response
to protect their profits.
Because there is no federal or state law, order, or rule
expressly authorizing the omissions the State claims violated
the UDAP, and because of the conduct-centric nature of the
State’s allegations, we hold that the UDAP’s safe harbor
provision does not bar the State’s claims.
2. No Statute of Limitations
The State’s action is not time-barred.
Under HRS § 657-1.5 (1993), the State is not subject to any
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limitations periods unless it is “specifically designated in
such a statute as subject to the limitation period contained
therein.”
Defendants maintain that HRS § 480-24(b) (2008)
“specifically designated” the State as subject to HRS § 480-
24(a)’s four-year limitations period. But it does not.
A statute does not “specifically designate” the State as
subject to its statute of limitations unless it clearly and
unambiguously provides that its limitations period applies to
the State. HRS § 480-24(b) identifies three situations in which
the State is exempted from subsection (a)’s statute of
limitations. 24 But while those exemptions may imply that the
24 HRS § 480-24(b) (2008) provides:
(b) The following shall toll the time for commencement of
actions by the State under this chapter if at any time:
(1) Any cause of action arising under this chapter
accrues against any person, the person is out of the
State, the action may be commenced within the terms
respectively limited, after the return of the person
into the State, and if, after the cause of action has
accrued, the person departs from and resides out of the
State, the time of the person’s absence shall not be
deemed or taken as any part of the time limited for the
commencement of the action.
(2) Any cause of action arising under this chapter
accrues against any person, the person has petitioned
for relief under the bankruptcy code, the time during
which the bankruptcy case is pending shall not be deemed
or taken as any part of the time limited for the
commencement of the action.
(3) Any cause of action arising under this chapter
accrues against any person, there is a criminal action
pending which arises out of the same occurrence, the
time during which the criminal action is pending shall
not be deemed or taken as any part of the time limited
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State is subject to HRS § 480-24(a)’s limitations period, they
do not unambiguously and expressly state that HRS § 480-24(a)’s
limitations period applies to the State.
Under HRS § 657-1.5, then, the State is not subject to the
limitations period contained in HRS § 480-24(a). 25
3. No Preemption
Federal law does not preempt the State’s claims.
The companies assert this case is one of implied conflict
preemption, that is, Hawaiʻi law conflicts with or contradicts
federal law. See Rodrigues v. United Pub. Workers, AFSCME Local
646, AFL-CIO, 135 Hawaiʻi 316, 323, 349 P.3d 1171, 1178 (2015)
(defining “implied conflict preemption” as “when state law is in
actual conflict with federal law.”) (citation omitted). If “it
is impossible for a private party to comply with both state and
federal requirements,” then implied conflict preemption occurs.
for the commencement of the action. As used in this
paragraph, a criminal action is pending until its final
adjudication in the trial court.
25 The legislative history to the 2016 amendment repealing HRS § 480-24(b)
supports this conclusion. The House bill that eventually became that
amendment observed:
In the context of claims brought by the State and its
agencies pursuant to chapter 480 of the Hawaiʻi Revised
Statutes, the Hawaiʻi legislature has never specifically
designated the State or its agencies as being subject to
any limitation period. Consequently, no limitation period
can apply to actions brought by the State under chapter
480, Hawaiʻi Revised Statutes.
House Bill No. 2329, A Bill for an Act Relating to Consumer Protection.
https://www.capitol.hawaii.gov/session2016/bills/HB2329_.pdf
[https://perma.cc/C3FT-AHDF].
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Hawaii Mgmt. All. Ass’n v. Ins. Comm’r, 106 Hawaiʻi 21, 30, 100
P.3d 952, 961 (2004) (cleaned up)).
The companies argue there was no way they could have
updated Plavix’s label to provide the warning the State says
UDAP requires and at the same time comply with federal law.
The Defendants overstate the differences between state and
federal law. The fact that state law imposes a greater duty to
warn on drug makers than the FDA, does not give rise to implied
conflict preemption. 26 On the other hand, if a drug maker cannot
comply with both the labeling duties imposed by the FDA and its
duties under state law, “federal law controls and . . . state-
law tort claims must be dismissed.” Guilbeau v. Pfizer Inc.,
880 F.3d 304, 310 (7th Cir. 2018).
Generally, drug manufacturers only update their products’
labels once the FDA has approved a supplemental application.
But under the agency’s CBE regulation:
if a manufacturer is changing a label to “add or strengthen
a contraindication, warning, precaution, or adverse
reaction” or to “add or strengthen an instruction about
dosage and administration that is intended to increase the
safe use of the drug product,” it may make the labeling
26 See Motus v. Pfizer Inc., 127 F. Supp. 2d 1085, 1092 (C.D. Cal. 2000)
(“[M]ost courts have found that FDA regulations as to design and warning
standards are minimum standards which do not preempt state law . . . failure
to warn claims.”); Wells v. Ortho Pharm. Corp., 788 F.2d 741, 746 (11th Cir.
1986) (“An FDA determination that a warning is not necessary may be
sufficient for federal regulatory purposes but still not be sufficient for
state tort law purposes.”); Hill v. Searle Lab’ys, a Div. of Searle Parms.,
Inc., 884 F.2d 1064, 1068 (8th Cir. 1989) (“FDA approval is not a shield to
liability. . . . FDA regulations are generally minimal standards of conduct
unless Congress intended to preempt common law, which Congress has not done
in this area.”).
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change upon filing its supplemental application with the
FDA; it need not wait for FDA approval.
Wyeth v. Levine, 555 U.S. 555, 568 (2009) (quoting 21 CFR
§§ 314.70(c)(6)(iii)(A), (C)).
In Wyeth, the Supreme Court said that the maker of a
prescription drug could establish that it was impossible for it
to comply with both state law and the FDCA with “clear evidence
that the FDA would not have approved a change to [the brand name
drug’s] label” required by state law. Id. at 571. “Clear
evidence” that the FDA would not have approved a change requires
a showing that the drug maker “fully informed the FDA of the
justifications for the warning required by state law and that
the FDA, in turn, informed the drug manufacturer that the FDA
would not approve changing the drug’s label to include that
warning.” 27 Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct.
1668, 1678 (2019).
Here, Defendants have not provided “clear evidence” that
the FDA would have rejected an earlier label-update proposal.
In fact, as the State points out, the record shows that the FDA
eventually put information about the poor responder issue in a
27 The drug maker need not show that the FDA formally rejected the
proposed label change, just that it would have rejected it had it been
sought. See In re Zofran (Ondansetron) Prod. Liab. Litig., 541 F. Supp. 3d
164, 203 (D. Mass. 2021) (“Multiple courts have found [conflict] preemption
where the manufacturer had not requested the precise warning sought by the
plaintiffs when the FDA had nonetheless made it clear that it would not
accept that label change.”); Seufert v. Merck Sharp & Dohme Corp., 187 F.
Supp. 3d 1163, 1170 (S.D. Cal. 2016) (“[M]anufacturer submission of a
proposed labeling change is relevant, but not dispositive, in determining
whether a defendant can establish conflict preemption.”).
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black box warning on Plavix’s label. It’s conceivable that the
FDA would have rejected any pre-Mega study attempts to update
Plavix’s label on the grounds that the CYP2C19 poor responder
information wasn’t necessarily clinically relevant. But there’s
no “clear evidence” that would have happened.
Defendants’ contention that they could not have used the
CBE regulation to update Plavix’s label before December 2008
because CBE-updates are only allowed when drug makers have “new
information” about a drug is unconvincing. Wyeth considered -
and rejected - the drug maker’s similar argument that it could
not have used the CBE regulation to update its label with a
warning required by state law because it did not have “newly
acquired information” about its product. 28 The FDA’s definition
of “‘newly acquired information’ is not limited to new data, but
also encompasses ‘new analyses of previously submitted data.’”
Wyeth, 555 U.S. at 569 (citation omitted).
The FDA’s expansive definition of “newly acquired
information” 29 drowns Defendants’ preemption claim. If, as the
28 The Court explained that this broad definition of newly acquired
information “accounts for the fact that risk information accumulates over
time and that the same data may take on a different meaning in light of
subsequent developments.” Wyeth, 555 U.S. at 569.
29 The definition of “newly acquired information” provided in 21 CFR
§ 314.3(b) is:
Newly acquired information is data, analyses, or other
information not previously submitted to the Agency, which
may include (but is not limited to) data derived from new
clinical studies, reports of adverse events, or new
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State alleges, Defendants knew enough about the poor responder
issue to trigger a duty under state law to update the Plavix
label, then they would also have enough “newly acquired
information” to effectuate that update through the CBE
regulations.
Defendants have not established it would have been
impossible under federal law for them to add information about
the poor responder issue to the Plavix label.
B. Summary judgment on materiality
We now turn to the circuit court’s summary judgment ruling
on materiality.
The defendant companies argue that the court erred by
granting partial summary judgment to the State on materiality.
They also argue the court made an “alternative” ruling that
ignored the summary judgment framework. We agree.
We review a trial court’s grant of summary judgment de
novo. Umberger v. Dep’t of Land & Nat. Res., 140 Hawaiʻi 500,
512, 403 P.3d 277, 289 (2017). Because materiality is
“ordinarily for the trier of fact,” summary judgment on this
element is “often inappropriate.” Courbat, 111 Hawaiʻi at 263,
141 P.3d at 436 (cleaned up).
analyses of previously submitted data (e.g., meta-analyses)
if the studies, events, or analyses reveal risks of a
different type or greater severity or frequency than
previously included in submissions to FDA.
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Here, the summary judgment grant was inappropriate for two
reasons. First, the circuit court disregarded evidence that
raised genuine factual disputes about the materiality of the
information in the 2010 Black Box Warning. Second, calling
itself the “Ultimate Trier of Fact,” the court made an
alternative ruling and weighed evidence before trial, finding
materiality, and straying from the summary judgment framework.
We vacate both the court’s “traditional” and “alternative”
summary judgment rulings.
1. Disregarded Evidence
Under UDAP, a representation or omission is considered
material if it “involves information that is important to
consumers and, hence, likely to affect their choice of, or
conduct regarding, a product” — in this case, Plavix. Courbat,
111 Hawaiʻi at 262, 141 P.3d at 435 (cleaned up). The test is
objective, not subjective. Id. It considers the viewpoint of
the “reasonable consumer, not the particular consumer.” See
Yokoyama v. Midland Nat’l Life Ins. Co., 594 F.3d 1087, 1092
(9th Cir. 2010).
Urging summary judgment, the State argued that the
information placed in the 2010 boxed warning was material to
consumers. The State stressed that a black box warning is the
most serious warning the FDA can require. Both BMS and the FDA
considered the information on this label “the most important
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information.” It also presented eight survey findings from the
defendant companies’ 40-doctor telephone survey on how the boxed
warning impacted the doctors’ prescribing behavior.
The defendant companies did not deny that black box
warnings are important in the abstract. Rather, they argued
that in this case, no speculation was necessary about whether
the label information relating to poor-responders was “likely”
to affect doctors’ prescribing decisions. There was already a
decade of evidence about what Hawaiʻi doctors actually did in
response to the label change: not much.
Their expert testimony, the companies said, “uniformly
demonstrates that the boxed warning did not affect [doctors’]
prescriptions of Plavix.” The companies stressed that the
Hawaiʻi doctors said that their clinical practices were not
impacted by the disclosure of information about CYP2C19 poor
metabolizers.
Dr. Todd Seto, for example, stated that even though 70
percent of his patients are of Asian or Pacific Island descent,
the black box warning hasn’t affected his practice. He
maintained that “nearly all” the angioplasty patients at Queen’s
Medical Center in Honolulu take Plavix. Dr. Seto also said that
he was “not aware” of any physician at Queen’s who “conducts
routine genetic testing before prescribing Plavix” to determine
if someone is a poor responder.
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The companies also pointed to evidence from the State’s
public health journal: it recommended that Hawaiʻi doctors not
change their prescribing practice based on the boxed warning and
that genetic testing not be done. Adding to that, State public
health agencies reimburse for Plavix without regard to race or
genotype and without requiring genetic testing. Further, the
companies said, Hawaiʻi Medicaid reimbursements of Plavix
increased after the boxed warning, including for patients of
most Asian ethnicities.
Taken in the light most favorable to them, the companies
argued, the black box warning did not change the medical
community’s prescribing practices or genetic testing practices.
They maintained that consumers continued to take Plavix despite
the warning, raising a strong inference that the warning was not
material to consumers.
The circuit court disagreed. It rejected the companies’
materiality evidence, finding that when information relates to
safety and health, there’s a presumption that it’s material.
Since materiality is determined by an objective, patient-
oriented test, evidence about the behavior of doctors could
never create a genuine issue of material fact. The court ruled
that the defendant companies failed to overcome the materiality
presumption.
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The court erred. First, it overstated the presumption of
materiality. Second, in refusing to consider any evidence about
doctors’ prescribing behavior, the court misinterpreted the
objective, patient-centered materiality test.
The presumption of materiality that the court relied on
comes from the deceptive advertising context. See Novartis
Corp. v. F.T.C., 223 F.3d 783 (D.C. Cir. 2000); In re Thompson
Med. Co., Inc., 104 F.T.C. 648 (1984); In re Simeon Mgmt. Corp.,
87 F.T.C. 1184 (1976). 30
A presumption of materiality does not end things. It’s not
“an inflexible rule that eliminates [the] need to look at
materiality on a case-by-case basis.” Thompson Med., 104 F.T.C.
at 648 n.45. Overcoming the presumption of materiality is “not
a high hurdle.” In re Novartis Corp., 127 F.T.C. 580, 686
(1999). Defendants may always counter the presumption with
extrinsic evidence, including “expert testimony, consumer
research, and evidence of how the networks and other expert
bodies interpreted the advertisements.” Thompson Med., 104
F.T.C. at 24.
The State’s materiality argument is ultimately one from
intuition – the intuition that something the FDA considers very
30 The State only cited Novartis Corp. v. F.T.C. for its presumption of
materiality argument. And the court cited only one case that concerned an
omission, rather than affirmative deception. It involved a company that
advertised its product as medical but did not tell consumers the product was
not FDA-approved. In re Simeon Mgmt., 87 F.T.C. 1184. This case did not
mention a presumption of materiality.
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important for consumers to see must be material to those
consumers.
But materiality is about what consumers do, not what the
FDA thinks. See In re ConAgra Foods, Inc., 90 F. Supp. 3d 919,
1020 (C.D. Cal. 2015) (in misleading marketing case the
“relevant question” was not whether the FDA requires that GMO
food be labeled non-natural, but rather, how a “reasonable
consumer” would have understood the term “100% Natural” and
whether it would have been “material to [their] purchasing
decision”). If the companies are able to present evidence that
the information did not, in fact, change consumer behavior, they
are entitled to do so.
Nor are the companies’ statements that they considered the
label information “important” a slam-dunk for the State.
Because the standard is whether the information is material to a
reasonable consumer, not the defendants. See Courbat, 111
Hawaiʻi at 262, 141 P.3d at 435; see also In re McCormick & Co.,
Inc., Pepper Products Mktg. & Sales Practices Litig., 422 F.
Supp. 3d 194, 250 (D.D.C. 2019) (observing that “evidence of a
defendant’s opinion as to materiality is not an adequate
substitute for extrinsic evidence.”).
In short, the circle of what the FDA and the companies
consider “important” may not wholly overlap with the circle of
what consumers consider “material” to their decisions.
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The same can be said for what doctors consider important.
But while the prescribing decisions of doctors are not
synonymous with consumer behavior, they are certainly not
irrelevant to it.
The reality is that patients do not operate in a vacuum
when making decisions about prescription drugs. Objectively
reasonable patients may rely on their doctors to help them make
sense of drug labels. See In re Reglan Litig., 142 A.3d 725,
738 n.8 (N.J. 2016) (“While the drug labels are initially
disseminated to doctors and pharmacists, they, in turn, inform
their patients, passing the warnings on to consumers.”).
So, while patients and doctors cannot be conflated, the
testimony of prescribing doctors also cannot be completely
written off. The fact that cardiologists in Hawaiʻi continued to
prescribe Plavix to patients of all ethnicities even after the
introduction of the black box warning bore on whether a
“reasonable” patient would choose to purchase the drug. The
circuit court erred by shutting out this category of evidence
entirely.
The substantial evidence and testimony the defendant
companies mustered that Hawaiʻi doctors did not change their
Plavix prescribing practices after the placement of the label
and did not recommend genetic testing to patients was enough to
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create a genuine dispute of material fact on materiality. To
hold otherwise was error.
2. Alternative Ruling
The circuit court gave a back-up explanation for granting
the State’s partial summary judgment motion. This alternative
ruling involved the court weighing the evidence as if it were
trying the case. The court felt “confident” it “would reach the
same conclusion” if the materiality issue were presented at
trial. So it ruled on materiality at the summary judgment
stage, disregarding the summary judgment framework: “When ruling
on summary judgment prior to a bench trial — as here — the court
need not resolve inferences in favor of the non-moving party.”
That is not how summary judgment works. A court must
consider the evidence “in the light most favorable to the non-
moving party” at summary judgment. Ralston v. Yim, 129 Hawaiʻi
46, 56, 292 P.3d 1276, 1286 (2013) (cleaned up). The moving
party bears the burden of persuasion. Yoneda v. Tom, 110 Hawaiʻi
367, 384, 133 P.3d 796, 813 (2006). To prevail, the moving
party must demonstrate that there’s no genuine dispute about the
material facts and the “undisputed facts” show the court should
grant summary judgment as a matter of law. Id. (citing Lee v.
Puamana Cmty. Ass’n, 109 Hawaiʻi 561, 567, 128 P.3d 874, 880
(2006)).
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Whether a motion for summary judgment is brought in a jury
trial or a bench trial makes no difference. A judge deciding a
summary judgment motion may not fact-find, even if the matter is
set for a for a bench trial. See Anderson v. Liberty Lobby,
Inc., 477 U.S. 242, 249 (1986) (“[A]t the summary judgment stage
the judge’s function is not himself to weigh the evidence and
determine the truth of the matter but to determine whether there
is a genuine issue for trial.”)
Summary judgment is no substitute for trial. The record is
thinner. There’s no cross-examination. The court has seen only
a small snapshot of the case. An improvident grant of summary
judgment denies a party the chance to fully mount an offense or
defense.
That is why the summary judgment process has a safeguard –
the inference in favor of the non-moving party. Ralston, 129
Hawaiʻi at 56, 292 P.3d at 1286; see also Nolan v. Heald College,
551 F.3d 1148, 1154 (9th Cir. 2009) (trial court that weighed
evidence at the summary judgment stage “ignor[ed] the
protections that summary judgment usually affords the non-moving
party”). Without this safeguard, summary judgment would end-run
the trial right.
The circuit court deviated from the normal summary judgment
framework. The court found a material fact – materiality -
before trial, supporting its “alternative ruling” with a
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citation to TransWorld Airlines, Inc. v. Am. Coupon Exch., Inc.,
913 F.2d 676 (9th Cir. 1990), recommended by the State. Quoting
the Ninth Circuit, the court said: “where the ultimate fact in
dispute is destined for decision by the court rather than by a
jury, there is no reason why the court and the parties should go
through the motions of a trial if the court will eventually end
up deciding on the same record.” TransWorld, 913 F.2d at 684.
TransWorld did not prod trial judges to weigh facts at the
summary judgment stage. Rather, in TransWorld the court scolded
the judge below for skipping to summary judgment on a “wholly
inadequate” factual record. Id. at 683 (“[W]e conclude that the
record is wholly inadequate, and the district court’s own
opinion is the most persuasive testimony to that inadequacy.”).
TransWorld acknowledged that when a question was pure law,
where trial would not alter the factual record, there is no need
to “go through the motions of trial.” Id. at 684. But, the
court stressed, “courts must not rush to dispose summarily of
cases — especially novel, complex, or otherwise difficult cases
of public importance — unless it is clear that more complete
factual development could not possibly alter the outcome and
that the credibility of the witnesses’ statements or testimony
is not at issue.” Id. at 684–85.
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For a case like this one – novel, complex, and of great
public importance – a developed factual record is essential to a
fair trial.
Here, the court found the defendant companies’ evidence
“weak and unpersuasive.” It said that “even” if the Defendants
presented other evidence, “this Court is convinced that if the
issue of materiality were litigated at trial the Court would
ultimately conclude that the information in the Black Box
Warning is material.”
Trial courts have no business factfinding at the summary
judgment stage. We vacate the court’s alternative ruling.
C. UDAP – Deceptive Acts or Practices
The court’s grant of summary judgment on materiality
reverberated throughout the trial. Because the materiality
ruling formed the basis of the court’s holding that the
defendant companies committed deceptive acts or practices, we
vacate this part of the holding.
Materiality is an essential element of a UDAP deceptive
acts violation. See Courbat, 111 Hawaiʻi at 262, 141 P.3d at 435(To prove a deceptive act or practice under UDAP, a plaintiff
must show “(1) a representation, omission, or practice that (2)
is likely to mislead consumers acting reasonably under the
circumstances where (3) the representation, omission, or
practice is material.”) When the court issued its findings of
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fact and conclusions of law, it remarked that it had “already
determined that the information in the 2016 boxed warning was
material.” But we have vacated that determination. Materiality
is now an unproven element. The deceptive acts holding based on
it cannot stand.
For deceptive acts liability, the court must also find that
the omission in question was likely to mislead consumers. In
its decision, the court found that “the omission of this
material information was likely to mislead consumers.”
(Emphasis added.) This phrasing suggests that the court found
the omission likely to mislead consumers in part or in whole
because it was an omission of material information. This throws
the other main element of deceptive acts liability into doubt as
well.
Lack of an essential element (or two) is enough to vacate a
result. But the materiality ruling marred the trial outcomes in
other, more far-reaching ways. In its summary judgment order,
the court ruled that evidence of “what’s happening in Hawaiʻi,”
such as “prescription practices and genetics testing practices”
after the 2010 Black Box Warning could not be introduced at
trial. The court drew a thick line in the sand: it would not
hear medical expert testimony on anything that happened after
2010, when the FDA first placed its boxed warning on Plavix.
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Based on its materiality ruling, the court granted a motion
in limine by the State to substantially limit the testimony of
Defendants’ main expert witnesses, three Hawaiʻi cardiologists.
These doctors were not allowed to testify about “their own
practices regarding use of Plavix” after 2010. Nor could they
provide any opinions based on “medical or scientific literature”
that drew upon post-2010 data.
Defendants had wanted to argue that the Plavix story didn’t
end in 2010. Hawaiʻi doctors continued to treat patients of all
ethnic backgrounds with Plavix, guidelines continued to
recommend Plavix treatment, and in 2016, the FDA walked back
part of its 2010 warning, removing language that warned of worse
clinical outcomes for CYP2C19 poor-responders. But Defendants
could not make this argument; their expert witnesses were not
allowed to discuss any of it.
At the heart of the State’s case is the notion that, for a
large chunk of Hawaiʻi’s population, Plavix is a bad drug, little
better than a placebo. Bristol-Myers Squibb and Sanofi
vehemently disagree. But unlike the State, they did not have
the chance to make their case fully at trial. We therefore
vacate the circuit court’s deceptive acts holding.
D. UDAP – Unfair Acts or Practices
Unfair act UDAP claims are distinct from deceptive act UDAP
claims. To violate HRS § 480-2, a plaintiff may show that an
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act or practice is deceptive or unfair. See Bronster v. U.S.
Steel Corp., 82 Hawaiʻi 32, 50-51, 919 P.2d 294, 312-13 (1996)
(jury instructions wrongly conflated deceptive acts and unfair
acts under UDAP). A practice is unfair if it (1) offended
public policy, (2) was immoral, unethical, oppressive, or
unscrupulous, or (3) substantially injured Hawaiʻi consumers.
See Hungate v. Law Office of David B. Rosen, 139 Hawaiʻi 394,
411, 391 P.3d 1, 18 (2017).
The circuit court found that the defendant companies
violated the UDAP in each unfair acts or practices way.
We conclude that the court’s materiality ruling affected
its unfair acts finding on “substantial injury.” The State,
however, proved separate and independent grounds to find the
defendant companies’ conduct offended public policy and was
immoral under UDAP. These findings support the court’s unfair
acts holding.
1. No Substantial Injury
The Defendants argue that the court’s unfair acts holding
must meet the same fate as its deceptive acts holding. Because
both were impermissibly tainted by the materiality ruling,
neither can stand.
The companies acknowledge, as they must, that materiality
is not an element of unfair act claims. But they maintain that
the court’s premature materiality ruling prevented them from
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mounting a complete defense on their unfair acts or practice
claim. And they point to language in the court’s holding that
assumed the materiality of the black box warning.
We agree – up to a point.
The circuit court found the companies’ conduct unfair by
every possible measure: it was against public policy; it was
immoral, unethical, and unscrupulous; and it was substantially
injurious to consumers.
The court’s misplaced materiality ruling played a part in
some of these findings. Most significantly, it impacted the
court’s finding that the companies’ conduct substantially
injured consumers.
Substantial injury, more so than the other unfair prongs,
focuses on consequences for consumers. Defendants’ most basic
argument against materiality – that in practice, the information
in the black box did not matter and patients were not harmed by
its absence – goes to substantial injury just as much as it goes
to materiality. And the evidence that Defendants wished to but
could not introduce about what actually happened after 2010 is
probative to the question of consumer injury.
The court first found that consumers were injured because
they were denied “the opportunity to consider whether to undergo
genetic testing” to determine their response to Plavix. At
summary judgment, Defendants mustered evidence that Hawaiʻi
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hospitals and doctors do not currently perform genetic testing
before prescribing Plavix. If patients aren’t given genetic
testing before taking Plavix now, Defendants argued, how were
they harmed by not having genetic testing then? This evidence
and this argument were not tested at trial. The court prevented
the companies from introducing any evidence of medical practices
after 2010, including genetic testing practices.
Second, the court found that “patients with CYP2C19 loss-
of-function alleles” were injured because they were deprived of
“the opportunity to make informed decisions” about taking Plavix
versus an alternative treatment. For a lack of information to
harm consumers, that information must be material to them. It
may well have been. But because the court prematurely decided
the materiality issue, findings of harm to consumers that hinge
on that materiality also cannot stand.
The court similarly found that patients were harmed because
they could not “give informed consent to their treatment.” This
more broadly-phrased restatement of the court’s second finding
fails for the same reason.
Lastly, the court found that the defendant companies harmed
“an indeterminate number” of patients who were deprived of the
“intended risk reduction [they] were relying on Plavix to
provide.” This holding also rests on a chain of assumptions
that the materiality ruling prevented the Defendants from
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contesting. Namely, Defendants were foreclosed from arguing
that if doctors do not currently test patients for CYP2C19
alleles before prescribing and still prescribe Plavix regularly
across ethnic groups, it is reasonable to infer that the medical
community thinks Plavix provides adequate risk reduction.
Doctor testimony on their current practice is plainly relevant
to the question of whether a drug substantially injures patients
by providing lower risk reduction, but the court’s materiality
ruling effectively barred that testimony.
Materiality mattered for each of the court’s substantial
injury findings. So we throw out that portion of the court’s
unfair act holding.
2. Hawaiʻi Unfair Acts or Practices Law
Substantial injury is out. Under the Federal Trade
Commission Act – the original inspiration for UDAP - this would
be the end of the matter: no substantial injury, no unfair acts
claim.
But under Hawaiʻi law, the State didn’t need to run the
table on unfair conduct. Our UDAP caselaw does not require a
plaintiff to prove all three prongs of unfair acts. Rather,
“[a] practice may be unfair because of the degree to which it
meets one of the criteria or because to a lesser extent it meets
all three.” Hungate, 139 Hawaiʻi at 411, 391 P.3d at 18 (quoting
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Kapunakea Partners v. Equilon Enters., LLC, 679 F. Supp. 2d
1203, 1210 (D. Haw. 2009)).
This conflicts with the federal approach. Congress amended
the FTC Act in 1994. Now, plaintiffs suing under the FTC Act
must prove substantial injury (and more) for an unfair acts
claim. 31 See LabMD, Inc. v. Fed. Trade Comm’n, 894 F.3d 1221,
1226 n.10 (11th Cir. 2018) (explaining that “for an act or
practice to be unfair, the act or practice [1] causes or is
likely to cause substantial injury to consumers [2] which is not
reasonably avoidable by consumers themselves and [3] not
outweighed by countervailing benefits to consumers or to
competition.”) (quoting 15 U.S.C. § 45(n)) (cleaned up)).
When interpreting the UDAP, we give “due consideration to
the rules, regulations, and decisions of the Federal Trade
Commission and the federal courts interpreting section 5(a)(1)
of the Federal Trade Commission Act (15 U.S.C. [§] 45(a)(1)), as
from time to time amended.” HRS § 480-2(b). But no one – not
31 15 U.S.C. § 45(n) (2006) reads:
The Commission shall have no authority under this section
or section 57a of this title to declare unlawful an act or
practice on the grounds that such act or practice is unfair
unless the act or practice causes or is likely to cause
substantial injury to consumers which is not reasonably
avoidable by consumers themselves and not outweighed by
countervailing benefits to consumers or to competition. In
determining whether an act or practice is unfair, the
Commission may consider established public policies as
evidence to be considered with all other evidence. Such
public policy considerations may not serve as a primary
basis for such determination.
(Emphases added.)
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the State, nor the defendant companies – raised the 1994 FTC Act
amendment. (Nor apparently did the parties in our earlier UDAP
cases.) Everyone operated under the assumption that the federal
changes did not matter, and the State could win without proving
substantial injury. This assumption must remain.
We turn to a separate issue that the circuit court
spotlighted: an incongruity in this court’s treatment of UDAP
unfair acts or practices suits.
The circuit court pointed out that despite Hungate’s “meets
one of the criteria” directive, that case also said “[a]
practice is unfair when it [1] offends established public policy
and [2] when the practice is immoral, unethical, oppressive,
unscrupulous or [3] substantially injurious to consumers.” 139
Hawaiʻi at 411, 391 P.3d at 18 (citation omitted) (emphases
added). This implied that UDAP plaintiffs must demonstrate
public policy plus one of the other elements, while at the same
time allowing any one element, alone, to suffice.
We clarify Hawaiʻi’s unfair acts or practices UDAP test in
one respect: meeting any one of the three criteria supports an
unfair acts or practices UDAP claim.
Our approach to unfair acts or practices traces to F.T.C.
v. Sperry & Hutchinson Co., 405 U.S. 233 (1972). In Sperry, the
Supreme Court ruled that the FTC Act gave the FTC broad powers
to determine practices as unfair or deceptive, despite their
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effect on competition. Sperry adopted factors the FTC had
developed in the cigarette advertising context to determine
whether a practice was unfair:
(1) [W]hether the practice, without necessarily having been
previously considered unlawful, offends public policy as it
has been established by statutes, the common law, or
otherwise—whether, in other words, it is within at least
the penumbra of some common-law, statutory, or other
established concept of unfairness; (2) whether it is
immoral, unethical, oppressive, or unscrupulous; (3)
whether it causes substantial injury to consumers . . .
405 U.S. at 244 n.5. Sperry left open what combination of these
factors would be sufficient to show unfair acts liability.
In Spiegel, Inc. v. F.T.C., 540 F.2d 287 (7th Cir. 1976),
the Seventh Circuit took a “public policy plus” approach to the
Sperry factors. It inserted the disjunctive “or” between
Sperry’s second and third criteria, holding that “A practice is
unfair when it offends established public policy and when the
practice is immoral, unethical, oppressive, unscrupulous or
substantially injurious to consumers.” Id. at 293 (emphases
added).
Then, in Rosa v. Johnston, 3 Haw. App. 420, 427, 651 P.2d
1228, 1234 (1982), the Intermediate Court of Appeals adopted
Spiegel’s rearrangement of Sperry. Later, in the context of
holding that deceptive and unfair are distinct under UDAP, we
mentioned Rosa in passing and said that the ICA “properly”
defined unfair acts. Bronster, 82 Hawaiʻi at 51, 919 P.2d at
313.
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But Spiegel’s interpretation of Sperry was not the only
one. The FTC read Sperry to mean that “[a]ll three criteria do
not need to be satisfied to support a finding of unfairness. A
practice may be unfair because of the degree to which it meets
one of the criteria or because to a lesser extent it meets all
three.” Promulgation of Trade Regulation Rule and Statement of
Basis and Purpose, Disclosure Requirements and Prohibitions
Concerning Franchising and Business Opportunity Ventures, 43
Fed. Reg. 59614, 59635 (1978).
The FTC’s reading worked for the United States District
Court for the District of Hawaiʻi. Kapunakea, 679 F. Supp. 2d at
1210. Weighing in on HRS § 480-2, the district court referred
to Rosa, Bronster, and Spiegel. Id. Then it returned to
Sperry, noting that the Sperry test came straight from the FTC
and that the FTC in 1978 interpreted the three factors to be
disjunctive. The district court followed the FTC’s approach.
When we took up the unfair acts issue once more in Hungate,
we approved Kapunakea’s reasoning: any one of the three criteria
could constitute an unfair practice under HRS § 480-2. 139
Hawaiʻi at 411, 391 P.3d at 18. But Hungate inharmoniously
retained the “and-or” language from Spiegel. Hungate didn’t
clarify whether the appropriate test was fully disjunctive.
We interpret Hawaiʻi’s consumer protection law in a way that
maximizes consumer protection. The UDAP “was constructed in
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broad language in order to constitute a flexible tool to stop
and prevent fraudulent, unfair or deceptive business practices
for the protection of both consumers and honest
business[people].” Zanakis-Pico v. Cutter Dodge, Inc., 98
Hawaiʻi 309, 317, 47 P.3d 1222, 1230 (2002) (citation omitted).
The Spiegel approach does not reflect this breadth. We
conclude that a disjunctive reading of the Sperry factors best
aligns with UDAP’s primary purpose - to protect consumers.
Other states have reached the same conclusion. See
Cheshire Mortg. Serv., Inc. v. Montes, 612 A.2d 1130, 1143–44
(Conn. 1992) (holding that under Sperry, “[a] practice may be
unfair because of the degree to which it meets one of the
criteria or because to a lesser extent it meets all three.”);
see also Robinson v. Toyota Motor Credit Corp., 775 N.E.2d 951,
961 (Ill. 2002) (“[A]ll three of the criteria in Sperry do not
need to be satisfied to support a finding of unfairness.”).
3. Separate, Independent Grounds for UDAP Liability
Having clarified UDAP unfair acts law, all that remains is
to apply it to the present case.
The circuit court determined that the defendant companies’
conduct violated each of the three elements for an unfair acts
or practices claim. Their conduct: (1) offended public policy;
(2) was immoral, unethical, oppressive or unscrupulous; and (3)
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substantially injured Hawaiʻi consumers. See Hungate, 139
Hawaiʻi at 411, 391 P.3d at 18.
The court’s materiality ruling knocked out its
substantially injurious findings. See supra.
That error, however, is not enough for the companies to
avoid liability. The court determined that two separate types
of unfair acts or practices occurred. The first type focused on
the black box label. These findings rely on – and thus were
tainted by - the materiality finding. But the second type of
conduct – suppressing research and inquiry into the drug for
financial reasons – had no connection to the court’s materiality
ruling. The court’s findings about the companies suppressing
inquiry into Plavix poor response have nothing to do with the
black box label. They have nothing to do with doctors’
prescribing habits after 2010. Rather, these findings have
everything to do with defendant companies “burying their heads
in the sand” over potential issues with a drug on the market.
The court’s findings spoke to the other two elements of
UDAP unfair acts claims. The court found sufficient facts to
support the State’s allegation that defendant companies’ conduct
offended public policy 32 and was unethical.
32 Defendant companies argue that materiality impacted the court’s public
policy findings, pointing out that the court said: “Defendants’ failure to
update the Plavix drug warning after learning of the safety risks posed to
poor metabolizers offends this well-established public policy.” We agree
with Defendants: this finding is only relevant if the black box label matters
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First, we turn to the court’s public policy findings.
Public policy covers a broad range, from state and federal law,
to common law, to Hawaiʻi policy. See Hungate, 139 Hawaiʻi at
411, 391 P.3d at 18 (“[a] practice may be unfair if it offends
public policy as it has been established by statutes, the common
law, or otherwise.”) (Cleaned up.)
Pharmaceutical companies have a common law duty to warn
consumers “when the risks of a particular drug become apparent.”
Albrecht, 139 S. Ct. at 1677.
The court-as-factfinder concluded that the companies aimed
to avoid their common law duty by: “suppressing research and
continuously and repeatedly failing to further investigate the
risks of reduced platelet inhibition in poor metabolizers.” In
its findings, the court determined that the companies knew -
from the moment Plavix launched - about the diminished effects
of Plavix in non-White populations. It maintained that the
companies did not volunteer this information to the FDA. The
court further found the companies avoided funding studies which
could draw more attention to the variability of response, for
instance, by rejecting a study on aspirin resistance because “it
could lead to a similar trial on [Plavix] resistance.”
to consumers. The court’s materiality ruling foreclosed that evidentiary
inquiry.
But the court’s reference to the label formed only one part of the
court’s public policy decision. The other public policy findings had no
connection to the black box label or related evidence.
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The companies’ actions, the court found, set back the
research into CYP2C19 by consciously, repeatedly, and actively
avoiding the poor responder problem. All this, according to the
court, was to avoid “negative marketing implications” for
Plavix.
Preventing risks from becoming apparent for financial gain
offends Hawaiʻi public policy. Hawaiʻi law cannot incentivize
drug companies to ignore safety risks in the hope that
everything will turn out all right in the end. Even if the drug
proves to be safe, avoiding investigation into known safety
issues in order to keep profits up offends public policy. See,
e.g., 21 CFR §§ 314.80, 314.81 (requiring a continuing duty of
surveillance and post-marketing reporting to the FDA of adverse
drug experiences).
The court’s findings also animate its determination that
the companies behaved in an “immoral, unethical, oppressive,
unscrupulous” manner. 33 The court determined that the companies
prioritized profits over patients: defendant companies “buried
their heads in the sand” about the problems with Plavix to
protect the corporate bottom line. The court found the
33 There is another difference between Hawaiʻi’s consumer protection law
and federal law. The FTC scrapped Sperry’s second criteria long ago. In its
1980 Unfairness Policy Statement, the FTC called the “immoral, unethical,
oppressive, unscrupulous” features of an unfair act or practice “largely
duplicative.” “Conduct that is truly unethical or unscrupulous,” the FTC
continued, “will almost always injure consumers or violate public policy as
well.” FTC Policy Statement on Unfairness. https://www.ftc.gov/legal-
library/browse/ftc-policy-statement-unfairness [https://perma.cc/3VA6-JMFK].
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companies “continued to deny” the issues surrounding poor
response to the drug despite evidence to the contrary, giving
the impression that no one had any reason to be alarmed. See
Hawaii Cmty. Fed. Credit Union v. Keka, 94 Hawaiʻi 213, 229, 11
P.3d 1, 17 (2000) (describing conduct as unethical and
unscrupulous when defendant attempted to convince a family to
execute loan documents through false assurances about a lower
interest rate).
4. No Clear Error in FOFs
The defendant companies argue the court clearly erred in
most of the elemental unfair acts and practice factual findings.
We disagree.
The trial court fulfilled its duty as fact-finder. See In
re ASK, 152 Hawaiʻi 123, 127, 522 P.3d 270, 274 (2022) (“Our view
reflects a central feature of any trial: the fact-finder – judge
or jury - finds facts, weighs and values those facts, and finds
other facts, the facts of consequence.”). The court weighed the
trial evidence; it drew inferences; it made credibility
determinations; it valued some testimony and evidence over other
testimony and evidence.
Clearly erroneous facts are either (1) not supported by
substantial evidence in the record, Panoke v. Reef Dev. of
Hawaii, Inc., 136 Hawaiʻi 448, 460, 363 P.3d 296, 308 (2015) or
(2) ones where “despite evidence to support the finding, the
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appellate court is left with the definite and firm conviction
that a mistake has been committed.” Chun v. Bd. of Trs. of the
Emps.’ Ret. Sys. of the State of Hawaiʻi, 106 Hawaiʻi 416, 430,
106 P.3d 339, 353 (2005) (cleaned up). The circuit court’s
findings do not leave us with either conviction.
The court made sufficient findings of fact that defendant
companies’ conduct offended public policy and was immoral under
UDAP. The substantial injury findings drop because they were
affected by the materiality ruling. But the court’s findings as
to the other two elements are uncoupled from that error. These
findings support the court’s unfair acts decision. Thus, the
court’s ruling that Defendants committed unfair acts or
practices under UDAP stands.
E. Penalties
Lastly, we turn to the penalties. The defendant companies
maintain that the court’s materiality ruling impaired its
damages calculation. We agree.
We vacate the damage award and remand the penalty issue for
determination after the deceptive acts question has been
settled.
The court based the penalty for violating UDAP on both
deceptive and unfair acts. But now, only the State’s unfair
acts UDAP violation remains. Any penalty for the deceptive acts
claim cannot continue to stand pending a new trial.
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We find that the court’s heavy reliance on its materiality
ruling to reach its penalties determination makes it necessary
to remand the entire question of damages. The court reasoned
that the $834 million penalty was justified because Defendants
had substantially injured the public. Those injuries, the court
explained, flowed from the fact that Defendants had denied
patients material information. The “injury to the public”
paragraph in the court’s penalty award discussion uses the word
“material” no fewer than three times. The court relied on its
materiality findings – and thus the deceptive acts UDAP claim –
to calculate its penalty award.
The per-prescription based penalty also shows the circuit
court’s reliance on the materiality ruling. This type of
penalty only makes sense if the missing black box warning was
material to consumers. To illustrate this point, the court used
the example of hanging an unlawful billboard versus sending
thousands of unlawful mailers. For the billboard, an
appropriate penalty would count every day the billboard hangs;
for the mailers, an appropriate penalty would count every mailer
sent. The circuit court thought this case was more like the
mailer situation. But this only fits if the omitted information
was material to consumers, making it an injury each time they
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received the prescription without that information. That is
what the new trial will consider. 34
The claim that Defendants engaged in unfair practices
better fits the billboard example. Here, the State’s claim
focuses on the idea that Defendants suppressed research or
failed to sufficiently investigate leads. In these
circumstances, an appropriate penalty would correlate more with
the length of time the Defendants “buried their heads in the
sand.”
That the court landed on a per-prescription penalty reveals
how crucial materiality was to the damage calculations.
Because the penalty award relied on the court’s faulty
materiality ruling, it must be vacated. Only the claim that
Defendants committed unfair acts or practices in violation of
UDAP remains. At the new trial, it may be that Defendants will
be found to have committed deceptive acts as well, or found to
have only committed unfair practices. The nature of the UDAP
violation will determine the proper penalty for that violation.
Since the final penalty will be partially contingent on the
result, the penalty determination should take place after the
new trial, by the judge who conducts that trial.
34 We are unpersuaded by the defendant companies’ arguments regarding
“coercive” and “biased” treatment by the trial court. This case, however, is
remanded to a new trial judge.
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IV. CONCLUSION
We vacate the circuit court’s grant of partial summary
judgment on materiality, the court’s deceptive acts holding, and
its penalty award. The court’s unfair acts holding stands. We
remand only as to the deceptive acts and penalty issues.
Neal Kumar Katyal /s/ Mark E. Recktenwald
(Paul Alston, Claire Wong Black,
/s/ Paula A. Nakayama
Anand Agneshwar, Daniel S.
Pariser, Katherine B. Wellington /s/ Sabrina S. McKenna
on the briefs)
/s/ Todd W. Eddins
for appellants
Thomas C. Goldstein
(L. Richard Fried, Jr., Patrick
F. McTernan, Kimberly T. Guidry,
Nicholas M. Mclean, Daniel
Alberstone, Peter Klausner, Evan
Zucker, Elizabeth Smiley,
Catherine H. Dorsey on the
briefs)
for appellees
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