Consumer Protection

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Ropes & Gray’s integrated consumer protection team secures winning results for clients in high-stakes disputes.

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Overview

Ropes & Gray is a leading firm handling consumer protection matters, ranging from investigations by one or two state Attorneys General to sprawling investigations involving large multi-state coalitions to related civil class action litigation. Working with clients across industries, our experienced attorneys respond quickly and simultaneously on numerous fronts, providing advice on the high-stakes, ever-changing circumstances that inevitably arise in these matters.

Experienced Advocates

Our integrated consumer protection team is comprised of attorneys with extensive experience in government enforcement, consumer fraud and false claims act litigation, as well as appellate advocacy. We also call upon the significant practice area and industry knowledge of the firm’s 1,100 lawyers.

Diverse Clients

Our clients include biotechnology, pharmaceutical and medical device companies, health care systems, pharmacy benefit managers and consumer product companies.

Experience

We have assisted our clients in successfully resolving numerous complex and multi-faceted investigations that spanned the country. Our civil litigators have also achieved significant victories for our clients in consumer class actions, particularly those involving pricing issues. Recent highlights include:

  • Serving as national counsel for a major pharmaceutical company in litigation related to Average Wholesale Prices (AWP) in four states: Louisiana, Kansas, Mississippi, and Alabama. In each of these multi-defendant actions, the states allege that a number of pharmaceutical manufacturers reported inflated AWP figures to third-party reporting services, leading the states to over-reimburse pharmacies and physicians for drugs covered by the states’ Medicaid programs. The parties have engaged in fact and expert discovery in all four of the cases, most recently in Louisiana. The Company is scheduled for trial in Kansas in September 2014. 
  • Acting as part of a two-firm team representing a major life sciences company in its efforts to respond to investigations initiated by a committee of state attorneys general consumer protection units into whether the marketing and promotion of two of the company’s products violated a number of states’ consumer protection laws. These investigations are in the early stages. 
  • Serving as national counsel for a multinational biopharmaceutical manufacturing company and affiliated entities in litigation related to Average Wholesale Prices (AWP) in both Louisiana and Utah. In these multi-defendant actions, the states allege that a number of pharmaceutical manufacturers reported inflated AWP figures to third-party reporting services, leading the states to over-reimburse pharmacies and physicians for drugs covered by the states’ Medicaid programs. 
  • Achieving a highly favorable settlement for two multinational pharmaceutical companies and their joint venture regarding their joint venture drug. In a widely publicized investigation, 36 state attorneys general, including an Executive Committee of 11 states (Arizona, California, Florida, Illinois, New Jersey, Ohio, Oregon, Pennsylvania, South Carolina, Texas, and Washington, D.C.), inquired into whether the companies had intentionally delayed the release of clinical trial results and whether product promotional and other consumer claims were, as a consequence, deceptive or misleading. After thorough investigation of our clients, a settlement was reached in August of 2009. Our clients agreed to reimburse the 35 states and Washington, D.C. for costs associated with the investigation with no additional penalty and without admitting wrongdoing. We also succeeded in closing a parallel investigation with the federal government concerning the drug. 
  • Representing a pharmacy benefit manager (PBM) in an investigation that spanned approximately four years. Pursuant to state consumer protection statutes, Attorneys General from 28 states and the District of Columbia requested information and documents responsive to Civil Investigative Demands. The investigation concerned rebates, drug interchange or “switching” programs, and non-PBM sources of revenue. The PBM entered into an Assurance of Voluntary Compliance and Discontinuance (AVC) with the Attorneys General of the states of Arizona, Arkansas, California, Connecticut, Delaware, District of Columbia, Florida, Illinois, Iowa, Louisiana, Maryland, Massachusetts, Michigan, Mississippi, Missouri, Montana, Nevada, New Mexico, North Carolina, Ohio, Oregon, South Carolina, South Dakota, Tennessee, and Virginia, as well as the states on the Executive Committee, which included Pennsylvania, Texas, Vermont, and Washington, to successfully resolve this investigation. 
  • Defending a major medical device company in investigations by the Attorneys General for California, Illinois, Massachusetts, and Oregon into alleged violations of the states’ consumer protection laws in connection with the company’s promotion of a medical device as well as the relationships the company maintained with physicians. These investigations began in earnest in the fall of 2011, in the midst of an investigation by the DOJ focused on the same device. While the federal investigation was closed in May 2012 without any adverse action against the company, the state consumer protection investigations have continued. We continue to assist the company in developing both factual and legal defenses to these investigations, including federal preemption and First Amendment defenses. 
  • Representing a health care system in connection with investigations conducted by the Attorneys General of Massachusetts and New Hampshire concerning certain marketing practices related to a bone marrow registry. The activities of the Registry were the subject of extensive publicity in regional and national media, which described the Registry’s use of fashion models to solicit donors in non-traditional locations such as shopping malls, festivals, fairs and professional sporting events of all kinds. We assisted our client in resolving these consumer protection investigations in 2012 via civil settlements in Massachusetts and New Hampshire. 
  • Serving as lead national counsel for a large pharmaceutical company and its generic subsidiary on Department of Justice and state investigations and litigation involving allegations of fraudulent and deceptive pricing and marketing practices, primarily concerning the reporting of Average Wholesale Price (AWP) for the Company and its subsidiary’s drugs. Our lawyers defended actions brought in federal and state courts around the country by 25 state Attorneys General and several private plaintiffs’ lawyers. Each of the actions related to the use of AWP or Wholesale Acquisition Cost (WAC) as a basis for reimbursement of drugs under Medicaid, Medicare and other government programs. The investigations and litigations presented numerous cutting-edge issues relating to government knowledge, pharmaceutical pricing, and consumer protection. The claims involved several single-source, multiple-source, and generic drugs, and the periods at issue stretched back to the early 1990s. We were able to negotiate a first-of-its-kind national settlement with the federal government, leverage that settlement to resolve certain state AG cases on favorable terms, and have tried other state AG cases as described more fully below. 
  • Representing the same large pharmaceutical company and two of its subsidiaries as trial counsel in an earlier consumer class action at a bellwether trial involving certain “fast-track” defendants. That trial established the prevailing standard for measuring liability, particularly in the brand market. Following a 21-day bench trial in this multidistrict litigation proceeding (consolidating 93 class actions) in the U.S. District Court for the District of Massachusetts, we secured the dismissal of multiple fraud and consumer protection claims involving the marketing and pricing practices of the Company’s brand drugs, and later won exoneration for its generic subsidiary. 
  • Serving as trial counsel in a case brought by the Massachusetts Attorney General seeking to recover the state-share of alleged damages following the national resolution of the federal-share of Medicaid reimbursement with the Department of Justice. In a case involving state consumer fraud, False Claims Act, common law fraud and unjust enrichment claims, we secured a significant post-trial victory in May 2011 on behalf of the same large pharmaceutical company when the U.S. District Court judge dismissed as legally invalid the principal false claims count against our client, as well as a breach of contract claim brought by the Commonwealth as a third-party beneficiary of the Medicaid Rebate Agreement. The ruling reduced liability by more than $190 million, and the key aspect of the ruling is significant for false claims cases more broadly. 
  • Serving as co-counsel defending the same large pharmaceutical company and its wholly-owned subsidiaries in multi-district litigation in which the plaintiffs, representing consumers and third-party payors, alleged that the defendants engaged in off-label promotion and paid improper remuneration to health care providers in connection with several oncology and hepatitis products. After significant procedural maneuvering by the plaintiffs, which required active litigation in six different districts, the nine putative class actions were consolidated by the Judicial Panel on Multidistrict Litigation in the District of New Jersey. In late 2008, the Company and several of its former officers or employees, who were also named as defendants, moved to dismiss the plaintiffs’ consolidated amended complaint. The complaint was dismissed on July 10, 2009, with leave to amend. The plaintiffs filed two amended complaints on September 9, 2009; the defendants moved to dismiss both complaints on October 28, 2009. In June 2010, the amended complaints were dismissed with prejudice. Certain plaintiffs appealed the dismissal to the United States Court of Appeals for the Third Circuit, which affirmed the dismissal on May 16, 2012.

Additional Experience

  • We represent various Sony entities as their global coordinating counsel with respect to the multiple litigations and government investigations that arose from the 2011 criminal cyber-attacks on certain of Sony’s computer networks. Significantly, 65 putative class actions have been filed against Sony entities alleging consumer harm as a result of the cyber-attacks. The actions have been centralized in a multidistrict litigation (“MDL”) before a single district court in San Diego, California. Sony successfully moved to dismiss all claims, obtaining an order in October 2012 dismissing the consolidated complaint in its entirety. The motion to dismiss plaintiffs’ amended consolidated complaint is pending.
  • We represent payment card processor Heartland Payment Systems, Inc. in multiple consumer class actions and government inquiries resulting from a security breach of its computer system, which was announced in 2009. Heartland has faced various legal challenges arising out of the intrusion on multiple fronts, including approximately 30 cardholder and financial institution class action cases centralized in a multi-district litigation proceeding in the U.S. District Court for the Southern District of Texas. This master complaint in the MDL “Financial Institutions Track” included allegations of violations of consumer protection statutes in New Jersey, New York, Washington, California, Colorado, Illinois, Texas, and Florida. In 2012, our work resulted in the entire dismissal of the financial institution class action cases. We also assisted Heartland with resolving the claims by cardholders arising out of the intrusion. 
  • We represented the TJX Companies in connection with a widely reported computer-network breach suffered by TJX in 2006. The intrusion into TJX’s computer systems spawned multiple actions by shareholders and allegedly injured customers, merchants and financial institutions in a multitude of federal, state and Canadian provincial courts, as well as investigations by the FTC and a multi-state group of 39 state Attorneys General, with Massachusetts leading the Executive Committee of 12 Attorneys General. Our work resulted in a notable victory before the U.S. Court of Appeals for the First Circuit, where the Court ruled in favor of TJX in the class action litigation brought by various financial institutions. The consumer class actions and state and federal regulatory investigations were also resolved for the Company. 
  • We are representing the global communications services group WPP plc (WPP) and its digital marketing affiliate, Media Innovation Group, LLC (MIG), in multiple data privacy actions and Attorneys General investigations arising from the alleged improper placement of advertising cookies on the web browsers of consumers surfing the web using Apple’s Safari browser. Plaintiffs in the putative class actions have asserted claims in federal courts in both New York and Delaware under various federal and state privacy-related statutes. We have fully briefed a motion to dismiss the New York action. We intend to move to dismiss the claims asserted against WPP and MIG in Delaware on similar grounds, however briefing on that motion is currently stayed pending the resolution of a complex procedural dispute. Additionally, Xaxis, LLC, another member of the WPP group, has been served with a subpoena issued by the Maryland Attorney General’s Office in connection with its investigation, in cooperation with the Florida Attorney General’s Office, of the same events giving rise to the data-privacy litigation. We are currently negotiating confidentiality issues with the Maryland Attorney General’s Office, and have produced no documents to either the Maryland or the Florida Attorney General’s Office to date. 
  • We represent TravelCenters of America and Petro Stopping Centers, two affiliated truck-stop chains, which – along with almost every other major fuel retailer in the country – have been sued over the practice of selling motor fuel without adjusting the retail price according to changes in the fuel’s temperature. These so-called “hot fuel” cases generally allege that defendants engaged in a consumer protection violation and committed common law violations when they sold fuel at temperatures in excess of 60 degrees Fahrenheit, and when they failed to disclose the temperature of the fuel being sold or the effect that temperature can have on fuel. The cases have been consolidated by the Judicial Panel on Multidistrict Litigation in the U.S. District Court for the District of Kansas.