In re Natera Prenatal Testing Litig.

664 F.Supp.3d 995

IN RE NATERA PRENATAL TESTING LITIGATION

Case No. 22-cv-00985-JST

United States District Court, N.D. California

Signed March 28, 2023

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO DISMISS

Re: ECF No. 31

JON S. TIGAR, United States District Judge

Before the Court is Defendant Natera, Inc.'s motion to dismiss and strike class allegations. ECF No. 31. The Court will grant the motion in part and deny it in part.

I. BACKGROUND

Plaintiffs Amanda Davis, Lisa Cassinis, Lillian Delaurie, Laura Ashley Heryla, Sara Martinez, Yelena Kreynstein, and Amanda Law bring this action against Natera, representing themselves, a nationwide class, and six state subclasses.¹

For purposes of the present motion, the Court accepts the following facts as true. Natera markets and sells Panorama, a noninvasive prenatal testing ("NIPT") product which screens for an array of fetal chromosomal and genetic conditions. NIPTs are screening tests, not diagnostic tests; while an NIPT can screen patients for a "high risk" of the presence of a particular fetal condition, a patient who receives a positive NIPT result should follow up with diagnostic testing to confirm the presence of that condition. NIPTs offer some advantages over traditional diagnostic tests: NIPTs require only a blood draw and can be done earlier in a pregnancy. Diagnostic tests, though more accurate than NIPTs, are also more invasive, are associated with a risk of miscarriage, and must be conducted later in the pregnancy term. In 2020, the American College of Obstetricians and Gynecologists ("ACOG") changed its guidance to recommend that all pregnant persons "be offered both screening and diagnostic testing options." Id. ¶ 27.

Natera's Panorama brochure for consumers² advertises "fewer false positives and fewer false negatives." Id. ¶ 40. The brochure states that Panorama offers patients the ability to "[d]iscover more about your baby's health" and includes a testimonial from a patient "now planning a birth at a regular maternity ward instead of closer to the children's hospital thanks to this painless test!" Id. ¶ 73. Natera's website describes Panorama as "the most reliable way of non-invasively assessing a baby's health," having been tested with "the largest prospective NIPT study" with outcomes of "~90% samples with genetic truth." Id. ¶¶ 36-37. The website explains that a "high risk" finding for a particular condition "indicates a very high probability that your baby may have [the] condition." Id. ¶ 38 (alteration in original and emphasis omitted). The website highlights Panorama's positive predictive value ("PPV") for Down syndrome of over 90% and describes Panorama as "[n]on-invasive and highly accurate, . . . identif[ying] more than 99% of pregnancies affected with Down syndrome [with] the lowest reported false positive rate of any prenatal screening test for the commonly screened chromosomal abnormalities: [Down syndrome], trisomy 18, and trisomy 13." Id. ¶¶ 39, 42.

In fact, Panorama's accuracy varies widely across conditions. While Panorama is very effective in screening for Down syndrome, it is much less effective in screening for rare genetic conditions, including those caused by microdeletions. The PPV - the likelihood that a positive Panorama result for a particular condition is accurate, such that the fetus actually has that condition - for rare conditions is far lower than Panorama's advertised PPV for Down syndrome. Natera knew, but did not disclose, that Panorama has a high rate of false positives for microdeletion-related and other rare conditions. In 2016, Natera acknowledged the results of a published study which found that Panorama had an 18% PPV for DiGeorge syndrome, a rare genetic condition. Id. ¶ 47. In other words, 82% of Panorama's positive results for DiGeorge syndrome were false positives. Panorama's PPVs for other rare conditions - which similarly were not disclosed in marketing materials - are as low as 2-5%, such that up to 98% of positive results for those conditions are false positives.

Despite the significant difference in Panorama's accuracy across different conditions, Natera "advertises Panorama as reliable overall, prominently emphasizing the accuracy rates of the tests for more common conditions like Down [s]yndrome [which] Panorama can reasonably detect." Id. ¶ 50. Natera's brochure for consumers does not include any information about PPV rates, and the website lists only the PPV for Down syndrome. Plaintiffs allege that Natera's marketing misleads consumers regarding Panorama's accuracy, falsely implies that Panorama can replace more invasive diagnostic testing, and falsely suggests that Panorama has been externally validated.

Plaintiffs were each exposed to some Panorama marketing materials: Davis, Cassinis, Heryla, Delaurie, Law, and Kreynstein reviewed the Panorama brochure before purchasing the product; Law additionally reviewed "marketing materials on [Natera's] website" before purchase; Kreynstein reviewed unspecified additional "marketing materials" before purchase; and Martinez "encountered descriptions of the product" before purchase, then "reviewed . . . [the] brochure with her test results." Id. ¶¶ 81, 88, 96, 103, 111, 121, 130.

Plaintiffs each paid for Panorama: Davis paid $100 out of pocket; Cassinis and Kreynstein paid around $200; Heryla paid over $700; and Martinez, Delaurie, and Law paid an unspecified amount. Id. ¶¶ 86, 94, 101, 109, 119, 127, 133. Each named plaintiff, "[h]ad she been aware that [Panorama] is inaccurate and unreliable . . . would not have purchased it, or would have paid significantly less for it." Id. ¶¶ 87, 95, 102, 110, 120, 129, 135.

Plaintiffs all received Panorama results requiring further evaluation: Davis received an "atypical" "[s]uspected finding outside the scope of the test, which may include, but is not limited to, fetal mosaicism, fetal chromosome abnormality [or] maternal chromosome abnormality"; Cassinis, Heryla, Delaurie, and Law each received findings of "high risk for serous genetic conditions, including triploidy and trisomy 13"; Martinez received an "atypical finding on sex chromosomes, including potential Turner Syndrome"; and Kreynstein received a finding of "high risk for DiGeorge syndrome." Id. ¶¶ 82, 89, 97, 104, 112, 123, 131. Each subsequently underwent subsequent monitoring by medical specialists or invasive diagnostic testing, incurring additional expenses. Id. ¶¶ 84, 92, 99, 107, 117, 126, 134. Each of their Panorama results turned out to be a false positive; none of the fetuses had the conditions Panorama identified.

Plaintiffs bring claims for (1) violation of the California Unfair Competition Law ("UCL"), California Business and Professions Code §§ 17200, et seq.; (2) violation of California's False Advertising Law ("FAL"), California Business and Professions Code § 17500, et seq.; (3) violation of California's Consumer Legal Remedies Act ("CLRA"), California Civil Code § 1750, et seq.; (4) violation of the California Song-Beverly Consumer Warranty Act, California Civil Code § 1790, et seq.; (5) violation of the Maryland Consumer Protection Act ("MCPA"), Maryland Code Commercial Law § 13-101, et seq.; (6) violation of the Illinois Consumer Fraud and Deceptive Business Practices Act ("ICFDBPA"), 815 Illinois Compiled Statutes § 505/1, et seq.; (7) violation of the Florida Deceptive and Unfair Practices Act ("FDUPA"), Florida Statutes §§ 501.201, et seq.; (8) violation of the New Jersey Consumer Fraud Act ("NJCFA"), New Jersey Revised Statutes §§ 56:8-1, et seq.; (9) fraudulent concealment; (10) breach of implied warranty; and (11) unjust enrichment.

II. JURISDICTION

This Court has jurisdiction under 28 U.S.C. § 1332(d)(2).

III. LEGAL STANDARD

"Dismissal under [Federal Rule of Civil Procedure] 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). A complaint must contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). Facts pleaded by a plaintiff "must be enough to raise a right to relief above the speculative level." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.' " Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Twombly, 550 U.S. at 570, 127 S.Ct. 1955). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. In determining whether a plaintiff has met this plausibility standard, the Court must "accept all factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Knievel v. ESPN, 393 F.3d 1068, 1072 (9th Cir. 2005).

Federal Rule of Civil Procedure 12(f) authorizes the Court to "strike from a pleading . . . any redundant, immaterial, impertinent, or scandalous matter." Fed. R. Civ. P. 12(f). "The function of a 12(f) motion to strike is to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial." Clancy v. Bromley Tea Co., 308 F.R.D. 564, 568 (N.D. Cal. 2013) (quoting Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010)).

IV. REQUEST FOR JUDICIAL NOTICE

"Generally, district courts may not consider material outside the pleadings when assessing the sufficiency of a complaint under Rule 12(b)(6) of the Federal Rules of Civil Procedure." Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 998 (9th Cir. 2018). Judicial notice and incorporation by reference are exceptions to this rule. Id....