Second Circuit Holds Controverted Scientific Article Is Non-Actionable Opinion

Introduction

In a decision with implications for litigation over the promotional use of scientific or other technical studies of products or services, the Second Circuit held recently that published scientific conclusions concerning matters of legitimate dispute, using a disclosed methodology and non-fraudulent, accurately described data, are opinions that are not subject to liability under federal or state false advertising laws. ONY, Inc. v. Cornerstone Therapeutics, Inc., No. 12- 2414-cv, 2013 WL 3198153 (2d Cir. June 26, 2013). In affirming the dismissal of Lanham Act and other claims based on a comparative study of competing surfactants, the court found that because it is “the essence of the scientific method that the conclusions of empirical research are tentative and subject to revision,” it was more appropriate to treat the challenged statements as constitutionally protected opinion.[1]

The ONY ruling does not break new ground in Lanham Act jurisprudence; the claim that an academic article is, by itself, potentially actionable under the Lanham Act was rejected back in 1994 in Gordon and Breach Science Pubs. S.A. v. Am. Inst. of Physics.[2] The Second Circuit’s limited holding in ONY leaves intact Lanham Act claims based on false or misleading descriptions of research results or accurate descriptions of fraudulent research results (provided the “use in commerce” requirement is met). However, without addressing the “use in commerce” or “commercial speech” issues that were explored at length in Gordon and Breach, the Second Circuit, instead focusing on the merits, drew upon libel and First Amendment law to underscore the constitutional limits on liability for commercially motivated scientific studies. In doing so, the court emphasized the importance of not injecting the chilling effect of potential liability into an arena in which, as one commentator put it recently with respect to clinical drug trials, uncertainty is “the norm, not the exception.”[3]

Background

The case arose out of a dispute between ONY, Inc. (ONY) and Chiesi Farmaceutici, S.p.A. (Chiesi), two of the largest manufacturers of surfactants. Surfactants are biological substances that line the surface of human lungs and facilitate the transfer of oxygen from the air into the bloodstream. Although surfactants are naturally occurring, ONY and Chiesi produce surfactants that are used to treat infants with insufficient surfactant levels (RDS), who are at risk of respiratory failure and death. ONY makes a surfactant derived from bovine lung surfactant that is sold as “Infasurf.” Chiesi’s competing product, derived from porcine lung mince, is sold as “Curosurf.” Curosuf is distributed and marketed in the United States by Cornerstone Therapeutics, Inc. The two most significant variables relevant to the effectiveness of the surfactants are mortality rate and length of stay, the latter of which refers to the amount of time an infant remains in the hospital for treatment. In 2006, Chiesi hired Premier, Inc. to compile a database to study the relative effectiveness of different surfactants. Chiesi also hired several medical doctors to present findings at medical conferences based on the Premier database. At a May 2007 conference the doctors presented findings that Curosurf had a 20 percent lower mortality rate than either Infasurf or a third surfactant, and they presented findings at an October 2007 conference that Curosurf was associated with a 15 percent shorter length of stay. In September 2011, the doctors published an article containing findings from the same data set in the peer-reviewed Journal of Perinatology, the leading journal in the field of neonatology, the study of newborn infants. The article was published in a publicly accessible “open access” format, with the publication fees paid by Chiesi and Cornerstone.

The article acknowledged that its findings might be due to differences in the doses of the respective drugs administered (Curosurf generally is prescribed in higher doses), and it disclosed that the study was sponsored by Chiesi; that Chiesi hired Premier to conduct the study; and that the physician-authors served as consultants to Chiesi.

After the article was published, Chiesi and Cornerstone issued a press release and distributed promotional materials touting the article’s conclusions. In response, ONY officers wrote letters — several of which were published, although not until after the complaint had been dismissed — to the Journal of Perinatology rebutting the article and requesting a retraction. The article’s authors, in turn, published responsive letters.

In December 2011, ONY sued Chiesi and Cornerstone in the Western District of New York for violations of the Lanham Act and New York General Business Law § 349 and for tortious interference with prospective economic advantage, and it sued all defendants, including the article authors, for injurious falsehood (i.e., trade libel). ONY’s theory was that the article was intentionally deceptive and misleading and therefore that its publication and distribution constituted false advertising.

ONY claimed the article contained five erroneous factual statements concerning the relative effectiveness of Curosurf and Infasurf: (1) that Infasurf “was associated with a 49.6 percent greater likelihood of death” than Curosurf; (2) that the Curosurf treatment for RDS was associated with a significantly reduced likelihood of death compared with Infasurf; (3) that the authors’ model found Infasurf to be associated with a significantly greater likelihood of death than Curosurf; (4) that the study showed a significantly greater likelihood of death with Infasurf than Curosurf; and (5) that Curosurf was associated with lower mortality after adjusting for various patient and hospital characteristics.

ONY’s main methodological objection to the article was that it failed to mention the length-of-stay data, which, ONY claimed, was intended to obscure the fact that infants treated with Curosurf had a greater ex ante chance of survival than those treated with Infasurf. According to ONY, including the length-of-stay data would have made clear to readers that the different results stemmed from differences in the groups of patients treated, not from differences in the effects of the drugs. ONY also objected to the failure to cite articles that reached different conclusions; to the use of retrospective data, which allegedly gave rise to “selective distortion”; and to the fact that Chiesi and Cornerstone paid Premier to collect data demonstrating their product’s effectiveness.

The district court granted the defendants’ motions to dismiss. The court found the article to be non-actionable opinion because it “reflects the facts on which the authors’ conclusions are based,”[4] and it further found that the disclosures, under the heading “Conflict of Interest,” that the study was sponsored by Chiesi and that the authors had ties to Chiesi indicated to a reasonable reader that the article represented the authors’ opinions.[5] The court denied ONY’s cross-motion to amend the complaint as futile.

Second Circuit Ruling

On appeal, the Second Circuit, in a decision by Judge Gerard E. Lynch, first addressed the Lanham Act claims based on publication of the article. Section 1125(a)(1) of the Lanham Act, 15 U.S.C. § 1125(a), provides a civil cause of action for a “false or misleading description of fact, or false or misleading representation of fact” in interstate commerce. The court noted that the Act covers conduct that would be protected by the First Amendment but for its false and misleading character and that precedent requires particular care in applying defamation and related causes of action to academic works. In particular, the Constitution protects statements of opinion, although, as the court noted, “the line between fact and opinion is not always a clear one.”[6]

The court observed that academic scientific discourse “poses several problems” for the fact-opinion framework, notably that the conclusions presented in scientific journal articles are presented as being capable of objective verification or refutation. With respect to scientific discourse about matters that are subject to disagreement, the court noted that the “traditional dividing line between fact and opinion is not helpful.”[7] It pointed out that although scientific hypotheses are in principle matters of verifiable “fact,” for First Amendment purposes they are “more closely akin to matters of opinion, and are so understood by the relevant scientific community.”[8] The court explained that “it is the essence of scientific method that the conclusions of empirical research are tentative and subject to revision, because they represent inferences about the nature of reality based on the results of experimentation and observation.”[9]

Implicitly invoking the “marketplace of ideas” paradigm,[10] the court bolstered its reasoning by noting that conclusions presented to the scientific community in peer-reviewed journals are available for other scientists to attempt to replicate, analyze, refute, question, etc. Research in novel areas “may be highly controversial and subject to rigorous debate by qualified experts,” the court stated, and courts are “ill-equipped to undertake to referee such controversies.”[11] Instead, “the trial of ideas plays out in the pages of peer-reviewed journals, and the scientific public sits as the jury.”[12] For support, the court quoted Underwager v. Salter, 22 F.3d 730, 738 (7th Cir. 1994), for the proposition that scientific controversies “must be settled by the methods of science rather than by the methods of litigation,” as well as several district court decisions to the same effect. The court pointed out that ONY had not alleged that the data presented were fabricated or fraudulent but rather that the inferences drawn from the data were wrong and that other variables should have been included. When the conclusions reached are presented with an accurate description of the data and methods used, the court observed, the validity of their conclusions “may be assessed by other members of the relevant discipline or specialty.”[13]

The court held, therefore, that “to the extent a speaker or author draws conclusions from non-fraudulent data, based on accurate descriptions of the data and methodology underlying those conclusions, on subjects about which there is legitimate ongoing scientific disagreement,” those statements are not actionable under the Lanham Act, N.Y.G.B.L. § 349, or New York’s common law of injurious falsehood.

As for ONY’s claim that Chiesi and Cornerstone tortiously interfered with its prospective economic advantage by touting the article’s finding for promotional purposes, the court held that in the absence of any allegation that they misstated the article’s conclusions, the claim was not viable. The court therefore affirmed the dismissal of the complaint in its entirety.

Discussion

ONY represents a specialized application of the settled libel-law principle that opinions based on true, disclosed facts are not actionable.[14] The court implicitly adopted the view that, at least in cases where no deliberate wrongdoing is alleged, the refutation of faulty scientific findings “depend[s]...not on the conscience of judges and juries, but on the competition of other ideas.”[15] The court’s holding that accurately reported, non-fraudulent scientific findings are not actionable could apply to litigation involving scientific or technical studies relating to a wide range of products or services that implicate unsettled questions as well as to litigation over expert analysis in controversial — and high-stakes — areas such as art authentication, where millions of dollars can ride on whether a work was painted by Pollock or by a skillful imitator.[16]

The court’s refusal to inject itself into a matter of legitimate scientific debate drew upon the “marketplace of ideas” framework that has come to define our First Amendment jurisprudence. The court noted that academic freedom is a “special concern of the First Amendment,”[17] as did the district court in Gordon and Breach, where Judge Leonard B. Sand wrote that debate in academic journals, like classroom teaching, is “peculiarly” part of the “marketplace of ideas” and thus near the core of the First Amendment.[18] ONY is consistent in this respect with the Supreme Court’s embrace of the “marketplace of ideas” concept, as recently expressed most explicitly in Justice Anthony Kennedy’s plurality opinion in United States v. Alvarez, in which he quoted Brandeis and Holmes and wrote that in a free society “[t]he response to the unreasoned is the rational; to the uninformed, the enlightened; to the straight-out lie, the simple truth” and that “[t]he remedy for speech that is false is speech that is true.”[19]

The ONY court thoughtfully navigated the intersection of product promotion and academic freedom in a manner that allows breathing room for responsible commercial use of good-faith scientific and technical research, in keeping with fundamental free-speech principles. At the same time, by carefully limiting the circumstances in which scientific studies will qualify as protected opinion, the court left room for claims to go forward over assertedly manipulated data or false or misleading descriptions of research findings, such as in the context of pharmaceutical detailing.

To be sure, the “marketplace of ideas” may be more satisfying in theory than in fact. The potential harm from an erroneous study can be difficult to promptly and effectively counter — especially in our age of instantaneous electronic communications, in which falsehoods can rapidly take root and be hard to neutralize or eradicate. The market impact of effective promotion of faulty comparative product analysis can be substantial and long-lasting even if the study’s flaws are readily apparent to experts in the field. As the facts of ONY illustrate, logistics often do not favor the rapid rebuttal that the market requires; ONY’s rebuttal letters were not published in the Journal until after the district court had already dismissed its lawsuit. But in ONY the Second Circuit wisely declined to endorse court-imposed liability as a remedy for the shortcomings of informed scientific debate.