23andMe Named in Class Action Lawsuit

by McDonnell Boehnen Hulbert & Berghoff LLP
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23andMeThings are getting worse for genetic diagnostics company 23andMe.  On the heels of receiving a Warning Letter from the FDA over its Personal Genomic Services (PGS) test (see "FDA Threatens Agency Action Against 23andMe Over Personal Genetic Testing"), on Wednesday the company was named in a class action lawsuit in the U.S. District Court for the Southern District of California (13-CV-2847H; complaint).  The action was brought on behalf of Lisa Casey, "an individual" in the class, and on behalf of "tens or hundreds of thousands of women" who may have used the PGS testing service.  Representing the class plaintiffs is Mark Ankcorn of the Ankcorn law firm, whose website characterizes the practice as "fighting for consumers since 1993" (when, apparently, Mr. Ankcorn passed the California bar).

The suit alleges that 23andMe "falsely and misleadingly advertises their Saliva Collection Kit/Personal Genome Service ("PGS") as providing "health reports on 240+ conditions and traits," "drug response," "carrier status," among other things, despite the fact that "there is no analytic or clinical validation of the PGS for its advertised uses."  The asserted facts supporting these allegations are taken, frequently as direct quotes, from the FDA's Warning Letter.  For example, the complaint cites the letter for alleging that:

• Beginning in July 2009, FDA worked diligently with Defendant to try to help Defendant comply with regulatory requirements regarding safety and effectiveness and to obtain marketing authorization for the PGS device.

• "To date, 23andMe has failed to provide adequate information to support a determination that the PGS is substantially equivalent to a legally marketed predicate for any of the uses for which you are marketing it; no other submission for the PGS device that you are marketing has been provided under section 510(k) of the [FDC] Act, 21 U.S.C. § 360(k)."

• After more than 14 face-to-face meetings, hundreds of email messages, and dozens of written communications between Defendant and FDA concerning the public health consequences of inaccurate results from the PGS device, FDA has concluded, "...even after these many interactions with 23andMe, we still do not have any assurance that the firm has analytically or clinically validated the PGS for its intended uses..."

• "The risk of serious injury or death is known to be high when patients are either non-complaint or not properly dosed; combined with the risk that a direct-to-consumer test result may be used by a patient to self-manage, serious concerns are raised if test results are not adequately understood by patients or if incorrect test results are reported."

The complaint recites 23andMe's advertising that it characterizes as "[material] representations" class action plaintiffs allege are fraudulent:

• "Learn hundreds of things about your health.  Using your DNA information, 23andMe helps you know more about your health so you can take an active role in managing it.  With reports on over 240+ health conditions and traits, here are a few of the things you'll learn about you."

• "Plan for the future. Find out if your children are at risk for inherited conditions, so you can plan for the health of your family."

• "Living well starts with knowing your DNA."

• "Health tools - Document your family health history, track inherited conditions, and share the knowledge."

• "Drug response - Arm your doctor with information on how you might respond to certain medications."

• "Below are a few examples [diabetes, arthritis, coronary heart disease, breast cancer, plavix, lactose intolerance] where we can help you learn more.  And when you know more, you can make better lifestyle choices, look out for common conditions and take steps toward mitigating serious diseases."

(https://www.23andme.com/health/ Accessed 11/26/13)

In addition to fraudulently representing that its PGS tests can provide relevant health and genetic information to individuals, the complaint also alleges that "Defendant uses the information it collects from the DNA tests consumers pay to take to generate databases and statistical information that it then markets to other sources and the scientific community in general, even though the test results are meaningless."

As a consequence:

Plaintiff alleges that, in committing the wrongful acts alleged herein, Defendant, in concert with its subsidiaries, affiliates, and/or other related entities and their respective employees, planned, participated in and furthered a common scheme to induce members of the public to purchase the PGS by means of misleading, deceptive and unfair representations, and that Defendant participated in the making of such representations in that it disseminated those misrepresentations and/or caused them to be disseminated.

and

Defendant's misrepresentations and practices injured and caused Plaintiff and Class members to lose money or property in that they purchased an expensive product with the expectation that it was scientifically supported.

The class encompasses "[a]ll persons in any of the 50 United States and District of Columbia who purchased a 23andMe Saliva Collection Kit and Personal Genome Service within the Class Period."  The complaint also alleges facts relating to numerosity of class members, typicality (of the named plaintiff), and commonality and predominance of "[w]ell-defined, common legal or factual questions [that] affect all class members."  The complaint also asserts that acting as a class is superior to having the class members act individually.

The suit alleges liability under the California Business and Professional Code §§ 17200 as an "unlawful, unfair or deceptive business act or practice and unfair, deceptive, untrue or misleading advertising" (Count 1:" the "unfair" and "fraudulent" prongs; Count 2: the "unlawful" prong) and §§ 17500 ("false and misleading advertising"; Count 3); the California Civil Code §§ 1750 and 1770 (Count 4); breach of warranty of merchantability and fitness for a particular purpose (Count 5); unjust enrichment (Count 6);"deceit by concealment" under California Civil Code §§ 1709 and 1710 (Count 7); and negligent misrepresentation (Count 8).  They ask the court to enjoin 23andMe's advertising, and to provide "full restitution" to class members (estimated as being at least five million dollars).  Plaintiffs demand a jury trial, punitive damages, costs of suit and pre- and post-judgment interest.

Under plaintiffs' theory, even compliance with the FDA's requirements will not absolve 23andMe from the alleged liability; plaintiffs contend that their injury arose by 23andMe's representations made without FDA approval, and that these were fraudulent because the company did not have scientific evidence sufficient to satisfy the FDA that the tests were reliable and thus were not legally capable of making those representations.  And of course if the company cannot satisfy the FDA, the court can impose an injunction against 23andMe continuing to make its claims for (or to provide) the PGS test.

It has been a bad few weeks for 23andMe.  If their recent luck holds, next Myriad will sue them (since their tests include determinations of the risk of breast and ovarian cancer due to BRCA gene mutations).

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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