People v. Johnson & Johnson (2022) · DecisionDepot

People v. Johnson & Johnson

Name: California Superior Court Tentative Rulings
Creator: DecisionDepot
License: https://creativecommons.org/licenses/by-nc/4.0/

California Court of Appeal Apr 11, 2022 No. D077945Published

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Holding. The court affirmed the judgment against Ethicon for violations of the Unfair Competition Law and False Advertising Law, but modified the judgment to strike civil penalties imposed for oral marketing communications due to a lack of evidence regarding their specific content.

Issues

Did the trial court apply the correct legal standards for UCL and FAL violations?
Was there substantial evidence to support findings that Ethicon's communications were likely to deceive?
Did the civil penalties violate constitutional rights or the excessive fines clauses?
Did the trial court err in counting oral marketing communications as separate violations without evidence of their content?

Disposition. Affirmed as modified.

Quotations verified verbatim against the opinion

“Therefore, we conclude substantial evidence did not support the trial court’s factual finding that Ethicon’s oral marketing communications were likely to deceive doctors, and we amend the judgment to strike the nearly $42 million in civil penalties”

“We discern no other error and affirm the judgment as modified.”

Filed 4/11/22

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

THE PEOPLE, D077945

Plaintiff and Respondent,

v. (Super. Ct. No. 37-2016- 00017229-CU-MC-CTL) JOHNSON & JOHNSON et al.,

Defendants and Appellants.

APPEAL from a judgment of the Superior Court of San Diego County, Eddie C. Sturgeon, Judge. Affirmed as modified. O’Melveny & Myers, Charles C. Lifland, Jason Zarrow, Lauren F. Kaplan, Stephen D. Brody, and Martha F. Hutton, for Defendants and Appellants. Horvitz & Levy, David M. Axelrad, and Scott P. Dixler for the Advanced Medical Technology Association as Amicus Curiae on behalf of Defendants and Appellants. Barnes & Thornburg and Kevin D. Rising for the American Urogynecological Society, the Society of Gynecologic Surgeons, the American Association of Gynecologic Laparoscopists, and the Society of Urodynamics,

Female Pelvic Medicine and Urogenital Reconstruction as Amicus Curiae on behalf of Defendants and Appellants. California Appellate Law Group, Ben Feuer, and Julia Partridge for the U.S. Chamber of Commerce and American Tort Reform Association as Amicus Curiae on behalf of Defendants and Appellants. Tucker Ellis, Mollie F. Benedict, and Peter L. Choate for the Washington Legal Foundation as Amicus Curiae on behalf of Defendants and Appellants. Rob Bonta, Attorney General, Nicklas Akers, Assistant Attorney General, Jon Worm, Adelina Acuña, Tina Charoenpong, Monica J. Zi, Gabriel Shaeffer, and Daniel Osborn, Deputy Attorneys General, for Plaintiff and Respondent.

I INTRODUCTION Johnson & Johnson, Ethicon, Inc., and Ethicon US, LLC (collectively, Ethicon) appeal an adverse judgment following a bench trial. The trial court levied nearly $344 million in civil penalties against Ethicon for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of Ethicon’s surgically-implantable transvaginal pelvic mesh products. The court found Ethicon committed 153,351 violations of the Unfair Competition

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In particular, the court found the IFUs for the SUI devices were misleading in the following respects: (1) the IFUs from 1998–2015 stated there could be “transitory local irritation at the wound site and a transitory foreign body response” resulting in mesh extrusion or exposure, and the IFUs from 2015 onwards stated there could be mesh “extrusion, exposure, or erosion,” but the IFUs did not disclose the risk of chronic foreign body reaction or the lifelong risks of mesh exposure and erosion; (2) the IFUs from 1998–2015 stated “transient leg pain” could occur but did not disclose the risk of chronic pain, and the IFUs from 2015 onwards stated the products could cause acute or chronic pain but did not disclose the risk of debilitating or life- changing pain; (3) the IFUs from 1998–2015 did not disclose the risks of dyspareunia, mesh contraction, or pain to partner, and the IFUs from 2015 onwards did not disclose the risk of mesh contraction; (4) the IFUs from 1998–2015 stated that potential urinary dysfunction complications were just like the risks presented by other incontinence procedures; and (5) the IFUs from 1998–2015 did not reference the possible need for mesh removal or the irreversibility of mesh complications, and none of the IFUs stated adverse reactions may not resolve following mesh removal. The court found the IFUs for the POP devices were deceptive as well. It found they were deceptive because: (1) the IFUs from 2003–2012 identified erosion and extrusion as complications, and the IFUs from 2015 identified mesh extrusion, exposure, and erosion as complications, but none of the IFUs disclosed that the risks of vaginal exposure and erosion were lifelong and recurrent; (2) the IFUs from 2003–2012 identified pain as a complication, some of the IFUs from 2003–2012 identified “transient leg pain” as a complication, and the IFU from 2015 identified acute and/or chronic pain as a complication, but none of the IFUs disclosed that the pain could be

deceived.’ ” ’ [Citations.] An advertisement or promotional practice is likely to deceive if it includes assertions that are (1) untrue, or (2) ‘ “true[, but are] either actually misleading or which [have the] capacity, likelihood or tendency to deceive or confuse the public.” ’ ” (Shaeffer v. Califia Farms, LLC (2020) 44 Cal.App.5th 1125, 1135 (Shaeffer).) The FAL “substantively overlap[s]” with the fraudulent prong of the UCL and the “burden under these provisions is the same: To prevail on a claim under the false advertising law, [the plaintiff] must show that ‘ “ ‘members of the public are likely to be deceived ….’ ” ’ ” (Id. at p. 1136; see also Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 226 [for claims under “ ‘the UCL or the false advertising law, based on false advertising or promotional practices, “it is necessary only to show that ‘members of the public are likely to be deceived’ ” ’ ”] (Chapman).) In assessing the likelihood of deception, the challenged advertisement or practice is typically viewed “through the eyes of the ‘reasonable consumer’—that is, the ‘ordinary consumer acting reasonably under the circumstances….’ ” (Shaeffer, supra, 44 Cal.App.5th at p. 1135.) However, “ ‘[w]here the advertising or practice is targeted to a particular group or type of consumers, either more sophisticated or less sophisticated than the ordinary consumer, the question whether it is misleading to the public will be viewed from the vantage point of members of the targeted group, not others to whom it is not primarily directed.’ ” (In re Vioxx Class Cases (2009) 180 Cal.App.4th 116, 130 (Vioxx), quoting Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496, 509–510 (Lavie).) The primary evidence of likelihood of deception is the challenged advertisement or practice itself. (People v. Overstock.com, Inc. (2017) 12 Cal.App.5th 1064, 1080–1081 (Overstock.com); Brockey v. Moore (2003) 107

“many physicians practicing today” did not learn how to implant mesh in medical school or their residency programs because pelvic mesh products were not launched until the 1990s. The court found the scientific literature on pelvic mesh products did not fill in doctors’ knowledge gap because doctors labor under busy schedules and struggle to keep up-to-date with the scientific literature. Further, the court noted several defense witnesses, including surgical specialists and urogynecologists, were unaware of complications unique to pelvic mesh products apart from vaginal erosion and exposure— even though these complications were “well-known to the company from launch.” For all these reasons, the court rejected Ethicon’s contention that it could not “be liable for hiding serious and long-term mesh risks in its IFUs and marketing materials because doctors already knew these risks.” The court then found doctors “read the IFU[s] and use manufacturer marketing material as a source of information in making treatment decisions.” In support of this finding, the court cited a written discovery response from Ethicon admitting IFUs were one of its “primary means for distributing printed information about its medical devices ….” It cited deposition testimony from Dr. Hinoul, who stated Ethicon expects doctors to rely on the warnings, complications, and adverse events listed in IFUs to counsel patients, and a “surgeon should be able to solely rely on the IFU.” The court also cited the testimony of Dr. Charles Nager, a defense expert and urogynecologist, who testified that professional journal advertisements and sales marketing drove the use of pelvic floor mesh kits among doctors. Further, the court noted that doctor witnesses for both parties claimed they relied on IFUs and believed other doctors did the same. Next, the court considered the text of each IFU and printed marketing communication in meticulous detail. It analyzed the text of the IFUs and

First, they cite Lavie, supra, 105 Cal.App.4th at page 508, a case in which our colleagues in the First District Court of Appeal determined that the usual “standard to be applied in assessing whether … conduct or [an] advertisement violates the UCL is whether it is ‘likely to deceive’ the [reasonable] consumer”—not a “least sophisticated consumer” standard that presumably would make it easier for a UCL plaintiff to prove liability. After reaching this conclusion, the Lavie court opined that “ ‘[l]ikely to deceive’ implies more than a mere possibility that the advertisement might conceivably be misunderstood by some few consumers viewing it in an unreasonable manner. Rather, the phrase indicates that the ad is such that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” (Ibid.) Ethicon claims the trial court erred because “it did not mention the ‘significant portion’ requirement at all.” The trial court did not err. The Lavie court’s reference to a “significant portion of the general consuming public or of targeted consumers” did not establish a new, standalone requirement for a plaintiff to prove UCL liability. (Lavie, supra, 105 Cal.App.4th at p. 508.) Rather, it characterized the circumstances under which a defendant’s conduct or advertisement is likely to deceive the general public or the target audience. As previously discussed, the trial court repeatedly cited and applied this legal standard. In any event, a court’s “failure to ‘discuss’ a particular standard does not imply it applied an incorrect standard. Error on appeal must be affirmatively shown by the record, and ‘[w]e presume the trial court knew and properly applied the law absent evidence to the contrary.’ ” (J.H. v. G.H. (2021) 63 Cal.App.5th 633, 644 (J.H.); see Committee for Responsible Planning v. City of Indian Wells (1989) 209 Cal.App.3d 1005, 1011 [appellant

did not establish that trial court applied wrong standard where minute order did “not state the court’s reasons” for denying motion].) Thus, the mere fact the statement of decision did not discuss Lavie’s “significant portion” language does not establish that the trial court necessarily erred. Second, Ethicon claims the court erroneously believed Ethicon could be held liable for failing to disclose all risks associated with its pelvic mesh products, even if doctors were already aware of the risks. In support of this argument, Ethicon relies on the following sentence plucked from the statement of decision: Ethicon “knew that it was required to include all risks reasonably associated with the device in the IFUs, whether already known to doctors or not.” Ethicon claims this statement, divorced from its context, proves the court did not consider the knowledge and experience of doctors when it assessed whether Ethicon violated the UCL and FAL. Ethicon’s citation is selective and misleading. Immediately prior to the sentence just discussed, the court referred to an earlier section of the statement of decision in which the court found a “manufacturer is expected to include all adverse reactions reasonably associated with the use of the device in the IFU.” In support of this finding, the court cited a memorandum from the director of the FDA’s Office of Device Evaluation (ODE), in which the director instructed ODE reviewers and industry members that the adverse reaction sections in IFUs should include “all adverse reactions reasonably associated with the use of the device ….” The court also supported its finding with a citation to testimony from one of the Attorney General’s witnesses, former FDA Commissioner Dr. David Kessler, who referenced the ODE memorandum just discussed, and opined that–in his view–federal regulations governing device labeling did not permit device manufacturers to omit adverse events merely because they were commonly known to practitioners.

presumption that, in turn, can assist a plaintiff to establish the well-defined community of interest necessary to obtain class certification. (See Tucker v. Pacific Bell Mobile Services (2012) 208 Cal.App.4th 201, 228 [“ ‘[I]f the issue of materiality or reliance is a matter that would vary from consumer to consumer, the issue is not subject to common proof, and the action is properly not certified as a class action.’ ”]; Weinstat v. Dentsply International, Inc. (2010) 180 Cal.App.4th 1213, 1223, fn. 8 [reversing class decertification order, in part, because “[t]he safety of the [defendant’s product] would be material to any [consumer]” and, thus, “[t]here [were] no individual issues concerning the nature and extent of [the] material misrepresentations”].) The parties have not referred us to any legal authorities in which materiality has been considered in a government enforcement action filed by the Attorney General or another public prosecutor to obtain civil penalties on behalf of the People. Nor have we uncovered such authority after conducting our own review of the case law. But, assuming without deciding that a materiality standard is implicit in the likelihood of deception standard applicable in all fraudulent and deceptive advertising cases, Ethicon has failed to establish that the court misapplied the materiality standard. Ethicon’s argument is based solely on the court’s alleged failure to discuss materiality. However, as we have explained, we must presume the court applied the correct legal framework in the absence of a contrary indication in the record. (J.H., supra, 63 Cal.App.5th at p. 644; Keep Our Mountains Quiet, supra, 236 Cal.App.4th at p. 741.) Because Ethicon points us to no contrary indication, we presume the court did not err. Further, it is apparent from the appellate record that the trial court believed Ethicon’s misstatements and omissions were material. The court found Ethicon misrepresented and concealed “serious risk and complication

For example, Kaiser v. Johnson & Johnson (7th Cir. 2020) 947 F.3d 996 (Kaiser) concerned a patient who received a Prolift implant and experienced irreversible pelvic pain, bladder spasms, and pain during intercourse. She filed a product liability suit against Ethicon pursuant to Indiana’s product liability statute, alleging defective product design and failure-to-warn theories. (Id. at p. 1006.) After trial, a jury returned a verdict for the plaintiff on both theories and the plaintiff was awarded $10 million in compensatory damages and $10 million in punitive damages. (Id. at p. 1007.) On appeal, Ethicon claimed the jury erred in finding that Prolift “expose[d] the user or consumer to a risk of physical harm to an extent beyond that contemplated by the ordinary consumer who purchase[d] the product with the ordinary knowledge about the product’s characteristics common to the community of consumers.” (Kaiser, supra, 947 F.3d at pp. 1008, 1014–1015.) It argued that “an ordinary pelvic-floor surgeon would be aware of the possibility of all relevant risks,” and “surgeons could have learned more about Prolift’s risks from medical literature.” (Id at pp. 1014, 1015, italics in original.) But the Seventh Circuit Court of Appeals rejected this contention, reasoning that “a reasonable jury could conclude that Prolift created risks beyond the expectations of ordinary pelvic-floor surgeons.” (Id. at p. 1014.) It cited the trial testimony of physicians (including Dr. Rosenzweig, a witness called by the Attorney General in the present case) who stated that they were unaware of all of the risks associated with Prolift and the permanency of pelvic mesh complications. (Id. at pp. 1014–1015.) The Seventh Circuit Court of Appeals also described the Prolift IFU as “brief” and “inadequate” because the IFU failed to warn doctors “about Prolift’s potential for permanent pelvic pain and sexual dysfunction,” or “the frequency, severity, or permanence of Prolift’s side effects.” (Kaiser, supra,

947 F.3d at pp. 1015, 1016.) The court concluded that, “[g]iven the limited scope of the warnings in Prolift’s Instructions for Use, a reasonable jury could conclude that Ethicon breached its duty to warn surgeons of its risks.” (Id. at p. 1016.) On this basis, the court affirmed the jury’s finding that Ethicon was liable on a failure-to-warn theory. (Id. at pp. 1015–1017.) Similarly, in Hrymoc v. Ethicon, Inc. (N.J. Super. Ct. App. Div. 2021) 467 N.J. Super. 42 (Hrymoc), certification granted October 19, 2021, 085547, a patient suffered severe medical complications after receiving a Prolift implant. She sued Ethicon under New Jersey’s products liability law and a jury returned a verdict in her favor on design defect and failure-to-warn theories of liability. (Id. at pp. 199–200.) The Hrymoc court reversed the judgment for a reason not relevant to the current appeal. But in the course of doing so, it opined that the jury reasonably found Ethicon’s failure to warn was the proximate cause of the patient’s injuries. (Id. at pp. 216–220.) In relevant part, the New Jersey appellate court rejected Ethicon’s claim that the patient’s surgeon “relied solely on medical literature, the patient’s presentation, and his own training and experience,” rather than the Prolift IFU, when he recommended the device to the patient. (Hrymoc, supra, 249 A.3d at pp. 218–219.) As the court explained, there was evidence that the patient’s surgeon reviewed the IFU to learn about Prolift. (Ibid.) According to the court, there was also evidence that Ethicon omitted known material risks from the Prolift IFU, including “mesh contraction, chronic pain, vaginal distortion, dyspareunia, and the need for additional surgery,” and there was evidence that the surgeon was “not aware of all the material risks of patient harm known by Ethicon at the time of plaintiff’s surgery.” (Id. at pp. 218, 219.) Thus, the court concluded that Ethicon’s “failure to provide adequate warnings to [the implanting surgeon] was reasonably found

to be a substantial factor in not alerting plaintiff about the risk of permanent and life-changing complications, depriving her of the opportunity to avert the ‘medical catastrophe’ that occurred.” (Id. at p. 220.) Hammons v. Ethicon, Inc. (Pa. Super. Ct. 2018) 190 A.3d 1248 (Hammons) also involved the adequacy of Ethicon’s Prolift IFU. In an all-too- familiar story, a patient received a Prolift implant and thereafter experienced recurrent pain, pain during intercourse, incontinence, and recurrent prolapse. (Id. at pp. 1255–1256.) She sued Ethicon for products liability under Indiana’s product liability statute on multiple theories including a failure-to-warn theory. (Id. at p. 1256.) After trial, a jury returned verdict in favor of the plaintiff and awarded her $5.5 million in compensatory damages and an additional $7 million in punitive damages. (Id. at p. 1258.) The Pennsylvania appellate court affirmed the judgment and rejected Ethicon’s claim that the patient failed to present evidence that Prolift’s inadequate warnings caused her injuries. (Hammons, supra, 190 A.3d at pp. 1269–1274, 1291.) Viewing the evidence in favor of the patient, the court determined that, “at the time of Prolift’s product launch in March 2005, Ethicon was aware of serious risks caused by Prolift but failed to make these risks clear in its indications for use (‘IFU’) and patient brochures. (Id. at pp. 1270–1271; id. at p. 1271 [“The IFU and brochures failed to disclose the full extent of the risks posed by Prolift—risks that Ethicon knew about prior to the March 2005 product launch.”].) The court cited evidence showing that “Ethicon’s warnings were inadequate because they failed to convey Prolift’s full risk profile, namely ‘all the known complications, their severity, their frequency.’ ” (Id. at p. 1272.) Additionally, the court cited evidence that “physicians are ‘dependent on the information that is provided by the manufacturer for the long-term risks or for the risks that are connected to

th[e] device.” (Id. at p. 1273.) Based on these findings, and others, the court concluded that “Ethicon failed to provide adequate warnings to [the surgeon] about the risks of Prolift, and that [the surgeon] neither knew nor should have known independently about these risks.” (Id. at p. 1273, italics added.) Finally, Carlino v. Ethicon, Inc. (Pa. Super. Ct. 2019) 208 A.3d 92 (Carlino) involved a patient who received a TVT implant and sued Ethicon for products liability after experiencing mesh exposure, recurrent pain in her vagina, and pain during intercourse. The jury found in favor of the patient, and she and her husband were awarded $3.5 million in compensatory damages and $10 million in punitive damages. (Id. at p. 101.) The Pennsylvania appellate court affirmed the judgment and rejected Ethicon’s challenge to the punitive damages award. (Id. at pp. 120–123.) In upholding the punitive damages award, the Carlino court cited evidence that the TVT device “pose[d] a high risk of catastrophic injury to patients” and Ethicon should have, but did not, warn about the “risks of serious injuries, and about the severity, frequency, or permanency of those injuries.” (Carlino, supra, 208 A.3d at pp. 121–122.) According to the court, “Ethicon knowingly understated the risks of the TVT in all six versions of the IFU published between 2000 and 2015. The IFU’s adverse reactions section … failed to acknowledge new information Ethicon was obtaining from treaters and its own researchers on adverse effects associated with the TVT. [Citation.] In addition, Ethicon consistently and misleadingly informed physicians that the TVT produced few adverse results and was intentionally evasive about common complications.” (Id. at p. 122.) As the court explained, “Ethicon knew that the TVT could cause permanent vaginal and muscular pain and sexual dysfunction, because of its mesh weight, pore size, pore collapse, and particle loss. Despite this knowledge, Ethicon promoted the

a reasonable inference that every single one of Ethicon’s thousands of oral communications with doctors included false or misleading statements. The mere fact a sales representative may have been trained in a particular way— even in a manner that promoted the disclosure of misleading information— reveals little, if anything, about the content of any particular conversation that may have occurred many months or years later. Further, there is no evidence—at least none of which we are aware of—suggesting Ethicon’s sales representatives read or recited a uniform script, Ethicon’s IFUs, or Ethicon’s printed marketing materials during their oral communications with doctors. Simply put, there was no evidence of the actual substance of any of Ethicon’s oral communications with doctors, let alone all of them. Further, there was insufficient evidence from which a court could reasonably infer that each one of Ethicon’s oral communications with doctors, or any of them, included a false or misleading statement that was likely to deceive doctors. In the absence of such evidence, the trial court erred in finding that Ethicon’s oral marketing communications violated the UCL and FAL. We hasten to add that there is nothing inherently less problematic about a false or deceptive statement that is spoken aloud, as opposed to one that has been memorialized in writing. In an appropriate case, where the content and deceptive nature of the oral statement is established, the speaker may be held liable for violating the UCL or FAL. (See People v. Dollar Rent- A-Car Systems, Inc. (1989) 211 Cal.App.3d 119, 128–129 [the FAL’s prohibition against false or misleading advertising “extends to the use of false or misleading oral statements”].) We merely conclude there was insufficient evidence in this case regarding the substance of Ethicon’s oral marketing communications; thus, there was insufficient evidence that these communications were likely to deceive their target audiences.

The FDA’s limited review of the draft Prolift and Prolift+M IFUs—a review undertaken as part of the section 510(k) clearance process—did not create a safe harbor. “To forestall an action under the unfair competition law, another provision [or executive action, per our stated assumptions] must actually ‘bar’ the action or clearly permit the conduct.” (Cel-Tech, supra, 20 Cal.4th at p. 183; Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1379 [“to qualify for the ‘safe harbor’ rule, the defendant must show that a statute ‘explicitly prohibit[s] liability for the defendant’s acts or omissions’ [citation] or ‘expressly precludes an action based on the conduct’ ”].) The FDA’s conduct during the clearance process did not clearly sanction or approve the final IFUs for non-510(k) purposes. “ ‘[T]he 510(k) process is focused on equivalence, not safety.’ … These determinations simply compare a post–1976 device to a pre–1976 device to ascertain whether the later device is no more dangerous and no less effective than the earlier device.’ ” (Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 493; accord Kaiser, supra, 947 F.3d at p. 1018 [in products liability case, trial court properly excluded evidence that FDA cleared Prolift because the section 510(k) clearance process and FDA safety review serve different purposes].) Indeed, former FDA Commissioner Dr. Kessler testified the FDA’s “clearance [of Ethicon’s] pelvic mesh devices [was] not a finding that the labeling [was] complete, accurate and not misleading.” As Dr. Kessler explained, the FDA “did not authorize [Ethicon] to exclude certain adverse events from [its] labeling.” In fact, the FDA even instructed Ethicon its “substantial equivalence determination [did] not mean that [the] FDA ha[d] made a determination that [its] device[s] complie[d] with other requirements of the [Food, Drug, and Cosmetic] Act or any Federal statutes and regulations administered by other Federal agencies.” The FDA also advised Ethicon it

Although commercial speech is generally protected under the First Amendment, “commercial speech that is false or misleading is not entitled to First Amendment protection and ‘may be prohibited entirely.’ ” (Kasky, supra, 27 Cal.4th at p. 953.) Indeed, “ ‘[i]t is well settled that false commercial speech is not protected by the First Amendment and may be banned entirely.’ ” (Osmose, Inc. v. Viance, LLC (11th Cir. 2010) 612 F.3d 1298, 1323, italics added; see Castrol Inc. v. Pennzoil Co. (3d Cir. 1993) 987 F.2d 939, 949 [“false commercial speech is not protected by the First Amendment”].) “ ‘With regard to misleading commercial speech, the United States Supreme Court has drawn a distinction between, on the one hand, speech that is actually or inherently misleading, and, on the other hand, speech that is only potentially misleading. Actually or inherently misleading commercial speech is treated the same as false commercial speech, which the state may prohibit entirely. [Citations.] By comparison, “[s]tates may not completely ban potentially misleading speech if narrower limitations can ensure that the information is presented in a nonmisleading manner.” ’ ” (HomeAdvisor, supra, 49 Cal.App.5th at p. 1085, italics added.) Article I, section 2, subdivision (a) of the state constitution contains a constitutional free speech guarantee as well, stating: “Every person may freely speak, write and publish his or her sentiments on all subjects, being responsible for the abuse of this right. A law may not restrain or abridge liberty of speech or press.” (Cal. Const., art. I, § 2, subd. (a).) “The state Constitution’s free speech provision is ‘at least as broad’ as [citation] and in some ways is broader than [citations] the comparable provision of the federal Constitution’s First Amendment.” (Kasky, supra, 27 Cal.4th at pp. 958–959.) But, “[i]n construing the free speech provision [of the state constitution], California courts have usually drawn the boundaries between noncommercial

the agent alleging UCL and FAL violations, and seeking civil penalties. (Id. at pp. 184–185.) The trial court found both statutes were unconstitutional (either facially or as applied to the agent), granted summary judgment for the agent, and ordered that, in the event of an appellate reversal, the agent could be liable only for one statutory violation for each day the advertisement appeared in a single edition of a newspaper. (Id. at pp. 186–188.) In a writ proceeding, the Court of Appeal concluded the trial court’s constitutional rulings were erroneous and ordered vacatur of the summary judgment ruling. (Olson, supra, 96 Cal.App.3d at pp. 195, 199.) With respect to the number of statutory violations, the court rejected the People’s claim that the number of violations must be based on “the number of persons to whom the representations were made so that the number of violations resulting from a false advertisement in a newspaper may theoretically be equated with the circulation of the paper.” (Id. at p. 198.) It reasoned the circulation of the advertisement in just one newspaper (the Los Angeles Times) could result in a civil penalty exceeding two and a half billion dollars per statute—an outcome that would violate due process. (Ibid.) On the other hand, the Court of Appeal rejected the trial court’s bright line rule that “dissemination of a false or deceptive advertisement through a single edition of a newspaper can constitute but one violation of each statute as a matter of law.” (Olson, supra, 96 Cal.App.3d at p. 198.) Instead, it determined “a reasonable interpretation of the statute in the context of a newspaper advertisement would be that a single publication constitutes a minimum of one violation with as many additional violations as there are persons who read the advertisement or who responded to the advertisement by purchasing the advertised product or service or by making inquiries concerning such product or service. Violations so calculated would be

Given that all of the IFUs and marketing communications pertained to the same products, shared the same or similar deceptive traits, and were likely to deceive their target audiences, the court did not exceed its discretion by imposing the same civil penalty amount for each violation. Ethicon also asserts the trial court abused its discretion because $1,250 was too much to impose for each violation. According to Ethicon, $1,250 was too large because Ethicon’s communications—not its pelvic mesh products— were the focus of the lawsuit, and Ethicon’s communications themselves did not harm patients. Further, Ethicon claims a lower penalty was warranted because Ethicon “vetted its warnings internally and externally,” and, according to Ethicon, the court found that Ethicon violated only one prong of the UCL (the fraudulent prong). Once again, we disagree with Ethicon. Ethicon’s effort to distinguish between its communications, on the one hand, and its pelvic mesh products, on the other hand, is mere semantics. The communications were made for the purpose of marketing and/or providing information about Ethicon’s products, and they misrepresented the safety and risks associated with Ethicon’s products. The products discussed therein were implanted into patients and, in many cases, resulted in medical, physical, and emotional turmoil that lasted years or for the rest of patients’ lives. The court did not abuse its discretion in considering the subject matter of Ethicon’s communications, or the dire harm flowing from those deceptive communications, when assessing the nature and seriousness of Ethicon’s misconduct. (See Fremont, supra, 104 Cal.App.4th at p. 529 [court did not abuse its discretion when imposing civil penalties because “[t]he offenses were serious in that they impacted the financial security” of the victims].) The other considerations raised by Ethicon do not suggest an abuse of discretion either. On the contrary, the fact Ethicon internally vetted its IFUs

Commission (2021) 62 Cal.App.5th 1, 20–21 [rejecting claim that penalty was excessive “simply because it represented [the government entity’s] ‘highest penalty ever’ ”]; see United States v. Dish Network L.L.C. (7th Cir. 2020) 954 F.3d 970, 980 [“Someone whose maximum penalty reaches the mesosphere only because the number of violations reaches the stratosphere can’t complain about the consequences of its own extensive misconduct.”].) Several additional factors undermine Ethicon’s argument that it was deprived of notice regarding the potential severity of its punishment. The UCL and FAL expressly define the maximum amounts a violator can be punished per violation—$2,500. (§§ 17206, subd. (a); 17536, subd. (a).) The Legislature enacted these provisions decades ago, giving Ethicon clear notice of the possible per-violation punishment of each statute. (See Stats. 1965, ch. 827, § 1, pp. 2419–2420 [adding section 17536 to the FAL]; Stats. 1972, ch. 1084, § 2, p. 2021 [adding predecessor to section 17206].) And, as discussed, judicial authorities have long discussed the broad discretion courts possess when it comes to defining and calculating the number of UCL and FAL violations. (E.g., Beaumont, supra, 111 Cal.App.4th at pp. 127–128.) The Attorney General even gave Ethicon direct notice of the potential punishment it faced—long before the statutory liability terminated in 2018. During the Attorney General’s investigation of Ethicon, the Attorney General and Ethicon entered into a tolling agreement effective October 17, 2012. At least as of this date, Ethicon was on direct notice that it could be held liable for its communications and practices. At that time, Ethicon could have altered its communications and practices to avoid this outcome or, at least, to minimize the amount of the potential civil penalty award. It did not do so. For all these reasons, we conclude Ethicon had notice of the punishment it could face for circulating false or misleading communications.

patients of the ability to make informed decisions about their own care.” Worse still, the court found that even after Ethicon amended its IFUs, the IFUs “still misleadingly omitted, and omit to this day, a number of risks associated with [Ethicon’s] pelvic mesh products ….” According to the trial court, Ethicon’s misconduct was “egregious.” These findings—which are not clearly erroneous—suggest Ethicon’s culpability was extremely high. The second factor, which considers the relationship between the harm and the penalty, also weighs against a finding of excessiveness. Ethicon claims the award was excessive because Ethicon’s products worked for many patients and product complications were typically “minor and easily addressed.” However, Ethicon harmed all consumers by depriving their doctors of material information necessary to counsel patients and forcing patients to make potentially life-altering decisions about their health and well-being based on this same false or incomplete information. Further, an especially unlucky subset of patients experienced more severe harm. After electing to receive a surgical implantation of Ethicon’s products based on false or incomplete information, these patients suffered debilitating and chronic complications that, according to the trial court, “literally cannot be undone.” These findings are not clearly erroneous. Regarding the third factor, the parties refer us to just one other supposedly similar statute—21 U.S.C. § 333, subd. (f)(1)(A), which limits the civil penalties available for violations of federal statutes and regulations governing medical devices to $1 million. To the extent this lone statute is relevant to the analysis, it counsels in favor of a finding of excessiveness. On the other hand, we note that the civil penalty imposed here is just half of what the trial court could have levied under the UCL and FAL (§§ 17206, subd. (a); 17536, subd. (a))—and half of what the Attorney General requested.

People v. Johnson & Johnson

AI Brief

CERTIFIED FOR PUBLICATION

COURT OF APPEAL, FOURTH APPELLATE DISTRICT

DIVISION ONE

STATE OF CALIFORNIA

THE PEOPLE, D077945

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III

HALLER, J.

IRION, J.

AI Brief