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Pseudoephedrine Nuisance Claims Rejected

By James M. Beck and Mark Herrmann

Roughly a year ago, we published a post about the trial court decision in Independence County v. Pfizer. There, the Eastern District of Arkansas dismissed claims brought by several Arkansas counties against companies that manufactured over-the-counter cold and cough medicines containing ephedrine or pseudoephedrine. The counties sought to hold the drug companies liable because the lawful cold medicines were being converted by criminals into methamphetamine, a highly addictive illegal drug. The counties pleaded theories of unjust enrichment, statutory unfair trade practices, nuisance, and the Arkansas crime victims civil liability statute.

Last year, the trial court granted the defendants' motion for judgment on the pleadings of all claims. Yesterday, the Eighth Circuit affirmed. Ashley County v. Pfizer, No. 08-1491, slip op. (8th Cir. Jan. 5, 2009) (here's a link to the opinion at the Eighth Circuit website).

In a nutshell:

The unjust enrichment claim fails because the cold medicine manufacturers are not the beneficiaries of the services that the counties provided -- law enforcement, inmate housing, social services, and the like. "The circumstances connecting the sales of cold medicine to the provision of these government services are simply too attenuated to give rise to an implied contract between the manufacturers and the county providers to state a cause of action for unjust enrichment." Slip op. at 8.

The remaining nuisance and statutory claims fail for lack of proximate cause. The Eighth Circuit relied on a Third Circuit gun case, City of Philadelphia v. Beretta U.S.A. Corp., 277 F.3d 415 (3d Cir. 2002), to hold that intervening criminal misconduct can break the chain of proximate cause to product manufacturers. "The criminal actions of the methamphetamine cooks and those further down the illegal line of manufacturing and distributing methamphetamine are 'sufficient to stand as the cause of the injury' to the Counties in the form of increased government services, and they are 'totally independent' of the Defendants' actions of selling cold medicine to retail stores . . . . " Id. at 15.

This is the first appellate court to address whether the lawful distribution of an FDA-approved product can be actionable under a nuisance theory, and we're pleased to see the Eighth Circuit reach the right result.

For intelligent discussion of this issue, read the post and comments on the Ashley County decision over at the Volokh Conspiracy.

Full post as published by Drug and Device Law on January 06, 2009 (boomark / email).