A New York Supreme Court allowed a Plaintiff to assert a statutory fraud claim in the context of deceptive business practices under New York General Business Law (“GBL”) § 349 against Plaintiff’s neurologist in conjunction with a medical malpractice negligence claim, finding Plaintiff sufficiently pled defendant physician, who was being paid by the drug manufacturer, unnecessarily prescribed the drug. Hill v. Newman, 2020 NY Slip Op 32550(U) (Sup Ct, NY County).

Plaintiff alleged the physician negligently prescribed Zinbryta to treat her multiple sclerosis, even though she was not a candidate for the drug, because he was being paid by the drug manufacturer. Plaintiff alleged she suffered permanent injuries as a result of taking the unindicated drug.

The physician, along with two defendant medical facilities, moved to dismiss Plaintiff’s fraud claim, arguing Plaintiff failed to plead separate and distinct damages from the medical malpractice. Rather, Plaintiff’s fraud claim “flowed from” the alleged medical malpractice negligence. Moreover, Defendants argued Plaintiff failed to plead the necessary elements of common law fraud in a medical malpractice action; namely, that defendant committed a subsequent, intentional, material misrepresentation known by defendant to be false at the time it was made. Finally, Defendants argued Plaintiff failed to meet the heightened pleading standard, which requires specific details of the alleged fraud.

Plaintiff cross-moved for leave to file an Amended Verified Complaint to clarify the fraud claim was based on GBL § 349, which is not subject to the heightened pleading requirements. The Court agreed with Plaintiff, denying Defendants’ motion to dismiss and granting Plaintiff leave to amend.

The Court noted GBL § 349 requires plaintiff to show three elements: 1) that the challenged act or practice was consumer-oriented; 2) that it was misleading in a material way; and 3) that the plaintiff suffered injury as a result of the deceptive act. Hill at *7 citing Stutman v. Chemical Bank, 95 NY2d 24, 29 (2000).

Providing Plaintiff every favorable inference, the Court found Plaintiff sufficiently pled the three elements of GBL § 349. First, that Defendant physician “was accepting payments from [defendant manufacturer] ‘totaling over 30 times the national average for specialists in his field’ as part of the joint sales and marketing efforts that influenced his treatment decisions[]”. Second, Defendant physician authored multiple studies funded by . . . the manufacturer and distributor[] [and] . . . failed to properly disclose the payments he received from these companies not only to [Plaintiff] but to the public in general who would rely on clinical studies like his to compare the benefits and risks of different medications[]”. Third, Defendant physician’s deceptive business practices resulted in permanent physical injuries that had plaintiff known of the risks, she would not have subjected herself to such risky treatment option.

This decision permits fraud claims related to allegedly deceptive business practices in conjunction with a medical malpractice cause of action.

This alert does not purport to be a substitute for advice of counsel on specific matters.

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