State ex rel Rosenblum v. Johnson & Johnson

Under the Oregon Unlawful Trade Practices Act, a material risk that a product has a latent defect is exactly the kind of inherent feature of a product implicated. The risk itself is a "fact" for the purposes of the UTPA, and its nondisclosure is actionable.

The State appealed the trial court's dismissal of this action under the Oregon Unlawful Trade Practices Act (UTPA) against Defendants who manufacture and distribute medication. The State argued that the trial court erroneously concluded that the failure to disclose a known material risk a product may be defective is not actionable under the UTPA. Defendants discovered a defective batch of medication but did not recall the product. The FDA later sanctioned Defendants for not issuing a recall. The State then filed this action under the UTPA, claiming that Defendants’ misrepresentation of the risk of a defective product was actionable under the UTPA. Defendants moved to dismiss, arguing that the State needed to prove that defective product actually reached Oregon. The State argues that a known material risk is a “characteristic” or “quality” that can affect its monetary value and misrepresenting such a risk is actionable. Defendants argue that the UTPA only prohibits the misrepresentation of an actual fact. Interpretations of the UTPA should be construed to effectuate its consumer protection purposes. The legislature’s intent was to broadly prohibit misrepresentations materially bearing on consumer purchased choices. “A material risk that a product has a latent defect is exactly the kind of inherent feature of a product implicated under [the statute] . . . [the] risk itself is a ‘fact’ for purposes of the UTPA, and its nondisclosure is actionable under the UTPA.” Reversed and remanded.