Thursday, May 31, 2007

Long Overdue Retirement for Anything Goes Pleading (Twombly)

It happened an antitrust case, but when the Supreme Court speaks even we tort lawyers listen – although it might take us a little while longer to get around to reading the opinion. Last week, in Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955 (U.S. 2007), a solid 7-2 majority (per Souter, J.) of the Court said some things about federal pleading that it (and we) recognized were long overdue.

Basically, federal courts (and we hope state courts with rules that track the federal rules) should no longer allow pleadings to become the almost fact-free zones that pre-Twombly practice has permitted. That has meant a lot of broad, vague allegations out there – particularly, but by no means exclusively, involving conspiracy or concerted action – that amount to little more than innocuous facts spliced together with sinister-sounding adjectives. Before Twombly, courts all too often contented themselves with punting on the pleadings and relegating to discovery the task of sorting out whether there’s really anything worth litigating.

We admit we’re a little late (there was a holiday, though, so give us a break). There’s already been commentary on Twombly from the usual suspects: Pointoflaw, AEI (http://www.aei.org/publications/filter.all,pubID.26242/pub_detail.asp), Lawprofessors, scotusblog, and Prof Dorf – as well as from antitrust mavens with whom we don’t often interact: Lawprofessors (the antitrust group, this time), Antitrustreview, and MoFo (http://www.mondaq.com/i_article.asp_Q_articleid_E_48811_A_rss_E_0). Sorry, but we couldn't make some of the abbreviated links work.

What happened in Twombly (very briefly) is that the antitrust statute (15 U.S.C. §1) only prohibits contracts, combinations and conspiracies in restraint of trade. The Twombly plaintiffs couldn’t quite gin up that level of coordinated enterprise in their complaint. All they pleaded was that established telephone carriers (the so-called “ILECs”) – who were government-tolerated local monopolies – engaged in “parallel conduct” that inhibited competition from so-called “CLECs”. We know, it sounds like something out of “A Brave New World,” but that’s telecommunications-speak.

Pleading issues entered into Twombly because so-called “conscious parallelism” isn’t enough to violate the antitrust laws (so Twombly states). The opinion contains lot of economic analysis about how similarly situated businesses can be expected to react similarly to similar economic stimuli, including the stimulus of competition, but we’ll leave that to the antitrust mavens that we’ve linked to.

Because conscious parallelism doesn’t read conspiracy out of the antitrust statute, the district court (in New York) granted a Rule 12(b)(6) motion to dismiss, holding that the complaint didn’t contain anything deserving of antitrust relief. On appeal, the Second Circuit found that to be error and reinstated the complaint. It held that as long as a conspiracy was one of the “plausible” possibilities suggested by these plaintiffs’ allegations, that was close enough. If there was any “set of facts” that, under the plaintiffs’ broad allegations, could constitute actionable collusion, it was up to discovery (and perhaps trial) to sort out what really happened. Twombly v. Bell Atlantic Corp., 425 F.3d 99, 114 (2d Cir. 2005).

Thankfully, the Supreme Court reversed. Close only counts in horseshoes and hand grenades.

As we said, Twombly’s erudite discussion of the economic justifications for “conscious parallelism” under the antitrust statutes isn’t what interests us. As product liability practitioners, we’re drawn to the Court’s broader ruling that pleadings must actually plead the facts that justify the requested relief – which is something not limited by the legal theory before the Court. The federal rules are the federal rules. There’s not one set of rules for antitrust and another for what we do. What the federal rules require in terms of pleading is a “short, plain statement” of the “grounds” that “entitle[]” the plaintiff to relief. Fed. R. Civ. P. 8(a). Needless to say, Rule 8(a) leaves courts with a lot of leeway – and Twombly held that for decades courts have been giving plaintiffs altogether too much leeway.

The backstory for the Twombly decision goes way back – fifty years to Conley v. Gibson, 355 U.S. 41 (1957). In Conley, after determining that the complaint before it was adequately pleaded, the Court went off on a bit of a tangent, and made some very indulgent observations about when dismissal for failure to state a claim under Rule 12(b)(6) was appropriate: “a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” 355 U.S. at 45-46 (emphasis added). As Twombly points out, 127 S. Ct. at 1968, that statement was dictum – which for you non-lawyers is just a fancy term for “not necessary to decide anything in the case.”

Dictum or no, since 1957, Conley’s “no set of facts” language became one of the most famous phrases in federal civil procedure – and one of the most widely abused. The problem has been, as Twombly accurately observed, that “taken in isolation,” Conley could be read “as saying that any statement revealing the theory of the claim will suffice unless its factual impossibility may be shown from the face of the pleadings.” 127 S. Ct. at 1968.

Tell us about it. For years, we’ve sought to remove fanciful allegations of industry-wide tortious conduct, decades of evil intent, and equivalent rubbish from mass tort pleadings. Whether we win or lose on the merits, time and time again we’ve been met with this exact Conley quote – improperly taken, as Twombly held, “in isolation.” E.g., Desiano v. Warner-Lambert Co., 326 F.3d 339, 347 (2d Cir. 2003); Thompson v. Goetzmann, 315 F.3d 457, 460 (5th Cir. 2002); In re Orthopedic Bone Screw Products Liability Litigation, 193 F.3d 781, 794 (3d Cir. 1999); Prohias v. Pfizer, Inc., 2007 WL 1228784, at *3 (S.D. Fla. Apr. 24, 2007); Adamson v. Ortho-McNeil Pharmaceutical, Inc., 463 F. Supp.2d 496 500 (D.N.J. 2006); Bailey v. Janssen Pharmaceutica, Inc., 2006 WL 3665417, at *2 (S.D. Fla. Nov. 14, 2006); Orso v. Bayer Corp., 2006 WL 2794975, at *2 (N.D. Ill. Sep. 27, 2006); Mattingly v. Medtronic, Inc., 466 F. Supp.2d 1170, 1172-73 (E.D. Mo. 2006); Bearden v. Wyeth, 2006 WL 4474723, at *6 n.1 (E.D. Pa. May 5, 2006); Vanderwerf v. SmithKlineBeecham Corp., 414 F.Supp.2d 1023, 1025 (D. Kan. 2006). This list could go on and on.

Thankfully it won’t any longer. Twombly recognized that, in practice it was impossible to take Conley “literally,” since the Conley “no set of facts” standard for dismissal “would dispense with any showing of a reasonably founded hope that a plaintiff would be able to make a case.” 127 S. Ct. at 1969. Thus, the Court formally “retired” the perplexing Conley formulation:

[T]he passage so often quoted fails to mention this understanding on the part of the [Conley] Court [that the complaint it examined “amply stat[ed] a claim”], and after puzzling the profession for 50 years, this famous observation has earned its retirement. The phrase is best forgotten as an incomplete, negative gloss on an accepted pleading standard: once a claim has been stated adequately, it may be supported by showing any set of facts consistent with the allegations in the complaint.
Id. (emphasis added) (we’ll be omitting internal citations in all Twombly quotations). In other words, the “any set of facts” business only comes into play after the cause of action itself has already been properly pleaded.

Thus Twombly holds that plaintiffs must allege is actual “facts” that establish the legal cause of action. These facts must be “plausible” – more than “speculative” and more than a “suspicion.” 127 S. Ct. at 1965, 1970. It’s no longer enough to say that some set of unpleaded facts might make out a claim – the plaintiff must allege a set of facts that actually does. Here’s the Court’s new standard, into which we have substituted the tort jargon we deal with for the antitrust jargon of Twombly itself:

[S]tating. . .a claim requires a complaint with enough factual matter (taken as true) to suggest that a[ duty] was [breached]. Asking for plausible grounds to infer [tortious conduct] does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of [such conduct].
127 S. Ct. at 1965.

The Court then hit the nail squarely on the head when it discussed why it was time to relegate Conley to the dustbin of history – and why we can no longer afford (if we ever could) to let lawyers throw allegations against the wall and let discovery see if they can make those allegations stick. Litigation is expensive, and that expense combined with overly permissive pleading leaves the door wide open to legalized extortion:

[S]omething beyond the mere possibility of [a claim] must be alleged, lest a plaintiff with a largely groundless claim be allowed to take up the time of a number of other people, with the right to do so representing an in terrorem increment of the settlement value.
127 S. Ct. at 1966. The Court was talking about antitrust, but every word is equally applicable to the mass torts we have to grapple with. E.g., In re Rhone-Poulenc Rorer Inc., 51 F.3d 1293, 1298-99 (7th Cir. 1995) (discussing “blackmail settlements” created by mass-tort class actions).

To level the playing field, Twombly held that there must be a “threshold of plausibility” before a “case should be permitted to go into its inevitably costly and protracted discovery phase.” 127 S. Ct. at 1966. Strengthened pleading requirements are the first line of defense against abusive and protracted litigation:

It is no answer to say that a claim just shy of a plausible entitlement to relief can, if groundless, be weeded out early in the discovery process through careful case management, given the common lament that the success of judicial supervision in checking discovery abuse has been on the modest. And it is self-evident that the problem of discovery abuse cannot be solved by careful scrutiny of evidence at the summary judgment stage, much less lucid instructions to juries. . . . [T]he threat of discovery expense will push cost-conscious defendants to settle even anemic cases before reaching those proceedings. Probably, then, it is only by taking care to require allegations that reach the level suggesting [a viable cause of action] that we can hope to avoid the potentially enormous expense of discovery in cases with no reasonably founded hope that the discovery process will. . .support a []claim.
Id. at 1967 (emphasis added). Paper “reassurances” from interested counsel are unfounded “optimism,” since in reality “the hope of effective judicial supervision is slim.” Id. at 1967 n.6.

Welcome to the club. We’ve been saying precisely the same thing about mass tort litigation for years. Sometimes, we’ve felt like voices crying in the wilderness in our opposition to the creation of ever larger and more complicated forms of aggregated litigation. Perhaps the poster child for Conley abuse is In re Methyl Tertiary Butyl Ether (MTBE) Products Liability Litigation, 379 F. Supp.2d 348, 367-68, 370, 432, (S.D.N.Y. 2005), in which the now-disapproved “set of facts” language was cited no less than five times in an opinion that invented a novel “commingled market share liability” theory and imposed it upon defendants in fifteen states, when only a couple of those states even allow ordinary market share liability. Id. at 374-440.

Good riddance to this sort of anything goes practice under Rule 12. Having the Supreme Court saying in Twombly what needs to be said about “sprawling, costly, and hugely time-consuming” litigation, 127 S. Ct. at 1967 n.6., is music to our very tired ears. Twombly gives defendants a means of distinguishing adverse precedent like the MTBE case as “decided on an improperly broad view of the pleadings” and of reinforcing beneficial precedent that was decided “even under the prior, broader standard.” We’ll take what we can get.

More specifically, Twombly held, “[w]ithout more, parallel conduct does not suggest conspiracy, and a conclusory allegation of agreement at some unidentified point does not supply facts adequate to show illegality.” 127 S. Ct. at 1966. Thus a conspiracy complaint that “fail[s] in toto to render plaintiffs’ entitlement to relief plausible” “must be dismissed” unless it “[]cross[es] the line from conceivable to plausible.” Id. at 1974. We’ll take that, too – because it’s not like we never see conspiracy (and similar) claims in our line of work. Whenever there’s a potentially insolvent manufacturer, this sort of thing gets pleaded to bring in defendants with deeper pockets. Similar pleading issues arise when plaintiffs have difficulty identifying the manufacturer of the offending product, and instead resort to market share liability or other forms of aggregate liability, sometimes including outright “civil conspiracy.”

We can think of some “minimal” pleading standards that would be appropriate in prescription medical product liability litigation after Twombly – things that should be necessary simply to state a viable cause of action. We invite our readers to add to the list:

  • Plead what the alleged defect is.
  • If alleging inadequate warnings (usually the most important theory), plead when any alleged new medical risk information became available, and that it was before the plaintiff used the product.
  • If alleging inadequate warnings, plead that the FDA would have allowed a different warning than the one it approved.
  • If alleging inadequate warnings, plead how a different warning would have altered the prescriber’s conduct and thus avoided the alleged harm.
  • If alleging concealment or misrepresentation, plead how this supposedly happened.
  • Plead the circumstantial underpinnings for res ipsa loquitur.
  • If pleading inadequate design in jurisdictions requiring a feasible alternative design, plead what the alternative is and how it can be considered feasible.
  • If alleging violations of FDA regulations, plead what the regulation is and how it was violated.
  • If alleging manufacturing defect, plead how the product failed to meet the manufacturer’s specifications.
  • In multi-defendant complaints, plead allegations against differently situated defendants separately.
  • If alleging concerted action between otherwise competing manufacturers, plead how it could be in a defendant’s interest to cover up safety problems in competing products.

There may well be an analogy here to how Celotex Corp. v. Catrett, 477 U.S. 317 (1986), affected summary judgment practice under Rule 56. Only time will tell, but we think that Twombly, if enforced according to its terms, makes a good start to restoring plausibility to pleadings that under the prior Conley rule all to often resembled castles in the clouds.

Now for our own castle in the clouds. We think it would be splendid if the Court would only follow up its own comments in Twombly about abusive and expensive discovery with some concrete action on that front (fee-shifting with regards to electronic discovery comes immediately to mind) to change the thrust of the Rules of Civil Procedure. If that happened, the millennium would truly have arrived.

Wednesday, May 30, 2007

Proposed Fed. R. Evid. 502 - An Update

We have previously posted on proposed Federal Rule of Evidence 502, which would codify at least portions of the law relating to waiver of the attorney-client privilege and work product protection.

The "big ticket" item in the proposed rule, which was not the focus of our post, was the "selective waiver" rule. This provision would have permitted producing privileged or protected documents or communications to regulatory agencies without thereby waiving otherwise applicable claims of privilege or protection in litigation.

Our post noted that the proposed rule did not address productions that go forward simultaneously in federal and state court proceedings. Unless the rule governed both, "protection" from waiver in the federal court proceeding would be of little value when the identical production in a state court proceeding resulted in a waiver. We also noted that the proposed rule did not fully explain how it applied in diversity actions. We attached to our post a comment that had been submitted to the Advisory Committee noting a number of troubling ambiguities. We closed with the observation that, "[w]ith luck, the Advisory Committee will address and clarify these issues before recommending that proposed Fed. R. Evid. 502 be adopted."

Luck happens.

On April 12 and 13, 2007, the Advisory Committee considered the public comments on the proposed rule, including the one linked to our previous post. In its May 15, 2007, report, the Advisory Committee released a revised version of proposed Fed. R. Evid. 502, which the Advisory Committee has now approved and forwarded to Congress for direct enactment. The "selective waiver" rule, which had been bracketed in the prior draft, is no more. Instead, the "selective waiver" rule now is a separate rule that the Advisory Committee forwarded to Congress without taking a position on its merits. The troubling issue of parallel productions in state court proceedings being governed by different and potentially contradictory rules remains because, in the Advisory Committee's view, its charge covers only events occurring in federal proceedings.

But we are happy to report that the Advisory Committee made some progress. The Committee clarified not only how the rule would apply in diversity actions -- the rule, not state law, would govern -- but addressed all of the potential ambiguities addressed in the comment we attached to our post. For those wanting to know more, the Advisory Committee's May 15, 2007 report can be accessed at www.uscourts.gov/Reports/EV05-2007.pdf.

Monday, May 28, 2007

"Relatedness" assessments (In re Accutane)

Patients taking prescription drugs sometimes have bad reactions. Was the reaction caused by the drug, or was it mere coincidence? Was the nausea caused not by the drug, but by the taco for dinner last night?

For subjects enrolled in clinical trials, both the physicians conducting the trials (the "investigators") and medical monitors overseeing the trials may assess whether an adverse event seems to have been "related" to ingesting the drug. On its face, making that assessment poses no problem; of course companies are interested in knowing whether a new drug appears to be related to an adverse event.

The difficulty arises when plaintiff's counsel seek to misuse those "relatedness" assessments in product liability litigation. If a subject took a drug and experienced a headache, and the investigator said that the headache was "probably related" to having ingested the drug, plaintiff's counsel assert that "causality has been established." The company admits -- indeed, the company has proved! -- that the drug causes the adverse event, says plaintiff's counsel.

This is silly, of course. Proving "causality" is tough. If proving causality were easy, why would anyone bother conducting expensive randomized clinical trials? Just give a sick person a drug. If the person gets better, then the drug cures the condition. If the person has a side effect, then the drug causes the side effect. Why bother with science?

This is not quite the way it works. Giving one person a drug and seeing if he or she gets better does not prove that the drug is effective. The FDA requires two positive randomized clinical trials to permit a drug to be labeled as indicated to treat a certain condition.

The converse is also true. If one person takes a drug and experiences an adverse event, that is not proof that the drug caused the adverse event. It might have been the taco, or it might have been coincidence.

That's why it gets our dander up when plaintiff's counsel root around through randomized clinical trial data to find examples of an investigator saying that a drug was "probably" or "possibly" related to an adverse event. A "relatedness" assessment is just an investigator's clinical guess as to whether the adverse event may have something to do with the drug. That assessment is not scientific proof of causation.

Why isn't it proof of causation?

First, it isn't science. To establish causation, one must first prove an "association" -- people taking a drug experience an adverse event more often than people taking placebo. (And not just "more often," but more often to a statistically significant level.)

Even once an association exists, "causation" has not yet been proved. Researchers must then "consider whether the association reflects a true cause-effect relationship." Reference Manual on Scientific Evidence 335-36 (Fed. Jud'l Center 2d ed. 2000). A single "relatedness" assessment is not even proof of an association, let alone the additional evidence needed to suggest a true cause-effect relationship.

Moreover, "relatedness" assessments are often demonstrably wrong. Randomized clinical trials are typically double-blind studies; neither the patient nor the physician knows whether the patient is receiving the test drug or placebo. Physicians often make "relatedness" assessments while the treatment is still blinded -- the physician doesn't know whether the patient actually received the test drug. Any lawyer who practices in this field has seen examples of physicians saying that an adverse event is "definitely" or "probably" related to ingesting the drug, only to learn, after the patient is unblinded, that the patient was not even taking the drug. The patient was taking placebo.

Relatedness assessments do not prove that a drug causes a side effect.

That's why we were pleased to see the recent decision by Judge Moody in the Accutane MDL. There, plaintiffs insisted (as they always do) that drug manufacturers' "causality assessments" were an admission that the drug Accutane causes inflammatory bowel disease. The defendants moved to exclude
that evidence under Federal Rules of Evidence 402, 403, and 702. And Judge Moody granted the motion. In re Accutane Product Liability Litigation, MDL 1626, 2007 WL 1288354 (M.D. Fla. May 2, 2007).

Judge Moody wasn't breaking any new ground here. He held, first, that the "relatedness" assessments were not admissions by a party opponent because they reflect only an assessment of a possible relationship, "not an actual relationship," between ingesting the drug and experiencing the adverse event. Id. at *3. Judge Moody held, second, that plaintiffs' expert witnesses could not base their assessment of causality on the companies' relatedness assessments. "The causality assessments in this case do not contain data which is reliable and upon which an expert opinion of causality can be based." Id. at *4. And Judge Moody held, third, that the assessments were not admissible to prove that the defendants had received notice that Accutane might be related to inflammatory bowel disease. If "Defendants admit they received notice that some users thought their use of Accutane might be related to their complaints, the reports themselves are unnecessary." Id. at *5. And, in any event, "to admit the causality assessments for the purpose of establishing notice would be more prejudicial than probative, and would inevitably confuse the jury." Id.

The only thing odd about the Accutane case is why the defendants were creating the particular relatedness assessments involved in this dispute. These were not the relatedness assessments that are required for subjects enrolled in clinical trials. They were instead relatedness assessments generated for post-marketing reports of adverse events experienced after Accutane was already being marketed. Judge Moody's opinion says that the defendants made these assessments because the defendants' foreign affiliates were required to make these assessments for certain European regulatory agencies, and so the defendants made these assessments at all of their companies, foreign and domestic.

Think harder, drug companies. First, assessments that are required only overseas should be made only overseas. The litigation environment may be different in those countries.

Second, assessments that are required overseas can be distorted in American courts because of errors in translation. We have seen counsel assert that French "imputabilite" assessments are "causality" assessments. They are not; they are "imputability" assessments, and they do not purport to assess causality. Errors in translation should not infect American courts.

Finally, why make corporate "relatedness" assessments at all for adverse events reported in the United States? If someone bothers to report an adverse event to a company, can't the company simply assume that the reporter thought the event was related to the drug? Just assume "relatedness," and report to the FDA on that basis, rather than generate additional internal documents that can come to haunt you in later litigation.

Relatedness assessments are not causality assessments, and ne'er the twain shall meet.

Thursday, May 24, 2007

Preemption Lite

At bottom, preemption is about power. Stripped to its essentials, any federal preemption argument amounts to the proposition that “supreme” federal power requires/encourages me/my client to do what we’re doing. Thus, your lesser (state) power can’t force me/my client to do something else or punish me/my client for doing what federal power demands. In our line of work, force/punish translates in to “hold liable.”

Well, state court judges are savvy and powerful people. That comes with being a judge, with the temperament needed to want to be a judge, and with the ability needed to make that desire a reality. So it’s not all that surprising that many of them bridle at being told, in effect, that they lack the power to do something. A visceral response along the lines of, “oh, yeah – watch me,” is something we’ve seen a lot in preemption cases. Even federal judges, many of whom arrive steeped in the system of state common law, are not immune to this reaction.

We don’t think that’s right, but we’re realists enough to know that it happens. That leads us to consider other alternatives – ways to package the “federal law tells me to do this” message – that aren’t so … peremptory. In short, we’re thinking about “preemption lite.” We’ve come up with a couple of alternatives. They’re not as powerful as straight preemption, but in some situations they might have more appeal.

The first of these is what we call judicial deference. This isn’t the “agency deference” issue that we’ve discussed recently (see here for that). Rather, it’s the argument that a federal agency (usually for us, the FDA) has molded the parameters of the law in such a way that it would not be a good idea for state law to stray from those contours. In such a situation, as a matter of jurisprudence and comity, state common law should conform to the standards set by the federal agency.

This argument, which casts the “federal government makes me do this” argument in normative rather than preemptive terms, is supported by general tort principles. Comment e to Restatement (Third) of Torts, Products Liability §4 (1997) states:

Occasionally, after reviewing relevant circumstances, a court may properly conclude that a particular product safety standard set by statute or regulation adequately serves the objectives of tort law and therefore that the product that complies with the standard is not defective as a matter of law. Such a conclusion may be appropriate when the safety statute or regulation was promulgated recently. . .; when the specific standard addresses the very issue of product design or warning presented in the case before the court; and when. . .the deliberative process by which the safety standard was established was full, fair, and thorough and reflected substantial expertise.

Non-FDA examples of decisions finding compliance precluding product liability as a matter of law cited in the Restatement’s Reporters’ Notes are: Beatty v. Trailmaster Products, Inc., 625 A.2d 1005, 1014 (Md. 1993); Dentson v. Eddins & Lee Bus Sales, Inc., 491 So.2d 942, 944 (Ala. 1986); Jones v. Hittle Service, Inc., 549 P.2d 1383, 1390 (Kans. 1976). Similarly, comment a to Restatement (Second) of Torts §288C (1965) provided: “Where there are no. . .special circumstances, the minimum standard prescribed by the legislation or regulation may be accepted. . .by the court as a matter of law, as sufficient for the occasion.”

Prosser on Torts states something similar – “Where there is a normal situation, coearly identical with that contemplated by the statute or regulation, it. . .can be ruled as a matter of law that the actor has done his full duty by complying with the statute, and nothing more is required.” §36, at 233 (5th ed. 1984). Harper & James, in their tort treatise, said much the same thing: “conformity to the legislative standard. . .may so clearly constitute due care under the circumstances of any given case that the court will decide it does as a matter of law.” §17.6.

So the judicial deference argument is sort of a compliance defense on steroids. Except in punitive damages cases, the effect of compliance is usually something the jury decides. See here (compliance as complete defense to punitives) and here (charging jury on FDA compliance).

So has judicial deference/compliance defense had any success in the FDA context?

The answer is yes, but only in certain types of cases. Courts have only occasionally deferred to FDA approval of labeling for specific products. See Carlin v. Superior Court, 920 P.2d 1347, 1353 (Cal. 1996) (“if state-of-the-art scientific data concerning the alleged risk was fully disclosed to the FDA and it determined, after review, that the pharmaceutical manufacturer was not permitted to warn. . .the FDA’s conclusion that there was, in effect, no known risk is controlling”); Kelso v. Bayer Corp., 398 F.3d 640, 643 (7th Cir. 2005) (applying Illinois law); Thomas v. Hoffman-LaRoche, Inc., 949 F.2d 806, 816 (5th Cir. 1992) (applying Mississippi law). Unfortunately, courts in this type of case are far more likely to fall back on the hoary “minimum standards” rationale.

Deference to FDA regulatory decisions has been more forthcoming where the decision affects the scope of the duty to warn itself, rather than the adequacy of a particular manufacturer’s warning. Thus, consistency with the FDA’s regulatory scheme setting up a physician’s prescription as a limitation on access to prescription medical products has been cited as one of the justifications for the learned intermediary rule. Vitanza v. Upjohn Co., 778 A.2d 829, 846 (Conn. 2001); Niemiera v. Schneider, 555 A.2d 1112, 1118-19 (N.J. 1989); Ellis v. C.R. Bard, Inc., 311 F.3d 1272, 1287 (11th Cir. 2002) (applying Georgia law); Fane v. Zimmmer, Inc., 927 F.2d 124, 129 (2d Cir. 1991) (applying New York law); Phelps v. Sherwood Medical Industries, 836 F.2d 296, 298-99 (7th Cir. 1987) (applying Indiana law). The FDA’s decision not to impose a prescription requirement led one court to preclude any duty to treat an OTC product like a prescription drug to avoid product tampering. Elsroth v. Johnson & Johnson, 700 F. Supp. 151, 156-57 (S.D.N.Y. 1988).

Deference to the FDA was the express basis of the decision in Ramirez v. Plough, Inc., that state law would not require warnings in Spanish where the FDA required only English language warnings:

[W]e reject plaintiff’s attempt to place on nonprescription drug manufacturers a duty to warn that is broader in scope and more onerous than that currently imposed by applicable statutes and regulations. the FDA has stressed that “it is in the best interest of the consumer, industry, and the marketplace to have uniformity in the presentation and clarity of message” in the warnings provided with nonprescription drugs. To preserve that uniformity and clarity, to avoid adverse impacts upon the warning requirements mandated by the federal regulatory scheme, and in deference to the superior technical and procedural lawmaking resources of legislative and administrative bodies, we adopt the legislative/regulatory standard of care.

863 P.2d 167, 177 (Cal. 1993). Ramirez is also one of the cases cited as the justification for Restatement (Third) §4, comment e.

Deference-type arguments have also had significant success where FDA regulations impose the duty to warn on somebody other than the defendant. Thus deference principles have led courts not to impose warning duties upon suppliers of bulk drug components beyond the minimal (“for repackaging”) warnings required by the FDA. George v. Parke-Davis, 733 P.2d 507, 515-16 (Wash. 1987); Bond v. E.I. DuPont De Nemours & Co., 868 P.2d 1114, 1121 (Colo. App. 1993); White v. Weiner, 562 A.2d 378, 385 (Pa. Super. 1989), aff’d, 583 A.2d 789 (Pa. 1991); Kalinowski v. E.I. Du Pont de Nemours & Co., 851 F. Supp. 149, 156-57 (E.D. Pa. 1994); Veil v. Vitek, Inc., 803 F. Supp. 229, 236-37 (D.N.D. 1992).

Common-law deference to the FDA’s regulatory scheme has also precluded liability in a couple of other situations. The Agency’s decision that mandated direct-to-patient labeling should not adversely affect a manufacturer’s product liability has been held to bar challenges to the sufficiency of patient labeling. MacPherson v. Searle & Co., 775 F. Supp. 417, 425-26 (D.D.C. 1991). Also, FDA regulations concerning clinical trials have precluded imposition of inconsistent state-law duties. Kernke v. Menninger Clinic, Inc., 173 F. Supp. 2d 1117, 1122-24 (D. Kan. 2001).

So that’s one form of preemption lite. Another form that comes to mind has to do with every plaintiff’s seeming favorite claim for the 21st Century – violation of state consumer protection/fraud laws. The laws of quite a few states, including Illinois and Minnesota (two statutes particularly preferred by plaintiffs) are based upon the old Uniform State Laws template that included an safe harbor for government approved activities. While the exact phrasing of course varies, the general intent of these exceptions is to immunize from liability under consumer protection statutes conduct that is taken in compliance with governmental oversight. The Illinois statute is representative:

10b. Nothing in this Act shall apply to any of the following:

(1) Actions or transactions specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States.

815 Ill. Comp. Stat. §505/10b(1).

A quick and dirty inquiry turned up the following examples of similar statutes: Alabama §8-19-4(c) (“compliance”); Alaska §45.50.481(a)(1) (“regulated”); Arkansas §4-88-101(4) (“permitted”); Colorado §6-1-106(a)(1) (“compliance”); Connecticut §42-110c(a) (“permitted”); Delaware 6 C. §2534(A)(1) (“compliance”); Florida §501.212(1) (“required or specifically permitted”); Georgia §§10-1-374(a)(1) (“compliance”), 10-1-396(1) (“specifically authorized”); Hawaii §481A-5(a)(1) (“compliance”); Idaho §§48-107(1)(b) (“required or affirmatively approved”), 48-605(1) (“permitted”); Illinois: 815 Stat. §510/4(1) (“compliance”); Indiana §24-5-0.5-6 (“required or expressly permitted”); Kentucky (§367.176(2) (“authorized or approved”); Maine 5 Stat. §§208(1) (“permitted”), 1214(1)(a) (“compliance”); Massachusetts c. 93A §3 (“permitted”); Michigan §445.904(1)(a) (“specifically authorized”); Minnesota §325D.46, Subd. 1(1) (“compliance”); Montana §30-14-105 (“permitted”); Nebraska §§87-304(a)(1) (“compliance”), 59-1617 (“permitted, prohibited, or regulated”); Nevada §598.0955(1)(a) (“compliance”); New Mexico §57-12-7 (“expressly permitted”); New York Gen. Bus. L. §349(d) (“subject to and complies with”); Ohio §§1345.12 (“required or specifically permitted”), 4165.04(a)(1) (“compliance”); Oklahoma 78 Stat. §55(A)(1) (“compliance”); Oregon §646.612(1) (“compliance”); Rhode Island §6-13.1-4 (“permitted”); South Carolina §39-5-40(a) (“permitted”); South Dakota §37-24-10 (“permitted”); Tennessee §47-18-111(a)(1) (“specifically authorized”); Utah §13-11-22(1)(a) (“required or specifically permitted”); Virginia §59.1-199(A) (“authorized”); Washington §19.86.170 (“permitted, prohibited or regulated”); Wyoming §40-12-110(a)(i) (“required or permitted”). In all of these statutes, the legislature expressly made “the government requires me to do this” a defense to liability. Thus, all of the usual preemption rationale becomes a defense under state law.

To fall within the provisions of such a safe harbor exclusion, there must be more than the mere absence of a federal prohibition.

Conduct is not specifically authorized merely because it has not been specifically prohibited. Conduct is not specifically authorized merely because it has been passively allowed to go on for a period of time without regulatory action being taken to stop it. Instead, we must look to the affirmative acts or expressions of authorization by the FTC to answer this question.

Price v. Philip Morris, Inc., 848 N.E.2d 1, 36 (Ill. 2005). The purpose of such exemptions “is to insure that a business is not subjected to a lawsuit under [a consumer protection statute] when it does something required by law, or does something that would otherwise be a violation of the Act, but which is allowed under other statutes or regulations.” Skinner v. Steele, 730 S.W.2d 335, 337 (Tenn. App. 1987). Accord, e.g., Showpiece Homes Corp. v. Assurance Co., 38 P.3d 47, 56 (Colo. 2001); D.J. Hopkins, Inc. v. GTE Northwest, Inc., 947 P.2d 1220, 1223-24 (Wash. App. 1997); McCarthy v. Middle Tennessee Electric Membership Corp., 466 F.3d 399, 413 n.20 (6th Cir. 2006) (applying Tennessee law); Riccio v. Ford Motor Credit Co., 238 F.R.D. 44, 48 (D. Mass. 2006); Burton v. William Beaumont Hospital, 373 F. Supp.2d 707, 721 (E.D. Mich. 2005); WVG v. Pacific Insurance Co., 707 F. Supp. 70, 72 (D.N.H. 1986).

FDA approval of a product’s labeling, following the sort of detailed approval process that can be established with FOIA-generated documents, should fit easily within this standard. See generally J. Leghorn, et al., “Defending An Emerging Threat: Consumer Fraud Class Action Suits In Pharmaceutical & Medical Device Products-Based Litigation,” 61 Food & Drug L.J. 519, 521-23 (2006).

To authorize is to “give legal authority; to empower,” “[t]o formally approve; to sanction.” Black’s Law Dictionary 143 (8th ed. 2004). That’s precisely what the FDA does when it allows a new drug or device to be marketed:

The rationale underlying the exemptive provisions of all of these [state consumer protection] statutes is the need for uniformity in the regulation of advertising and labeling and a deference to the expertise of the responsible regulatory agency. . . . [T]he FDA’s expert determinations as to the sufficiency of warnings on OTC drug labels should not be second-guessed by lay juries. Where the FDA has explicitly endorsed the particular facet of the labeling which is claimed to be inadequate, there is presented a clear conflict between federal law pertaining to the marketing of drugs in interstate commerce as directed by the FDA and the local law.

American Home Products Corp. v. Johnson & Johnson, 672 F. Supp. 135, 144-45 (S.D.N.Y. 1987).

The safe harbor does not “limit the application of the provision to authorization via formal agency rulemaking. Rather, so long as the conduct is specifically authorized ‘by laws administered by’ the regulatory body, it is exempt from Consumer Fraud Act liability.” Price, 848 N.E.2d at 37-38. Where the language the defendant uses has been approved by a federal agency, a defendant “may not be held liable under the Consumer Fraud Act, even if the terms might be deemed false, deceptive, or misleading.” Id. at 38. Thus FDA-approved statements have been exempted from consumer protection/fraud liability:

The pharmaceutical industry is highly regulated, both at the federal level and internationally. Technical requirements abound, and it is not only possible but likely that ordinary consumers will find some of them confusing, or possibly misleading as the term is used in statutes like Illinois’s CFA. But, recognizing the primacy of federal law in this field, the Illinois statute itself protects companies from liability if their actions are authorized by federal law.

Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 942 (7th Cir. 2001) (applying Illinois law).
Since labeling includes marketing, Kordel v. United States, 335 U.S. 345, 348 (1948), FDA approval has been held to marketing issues as well. Duronio v. Merck & Co., 2006 WL 1628516, at *7 (Mich. App. June 13, 2006) (drug marketing activities exempt because “the general marketing and advertising activities underlying plaintiff’s [consumer fraud] claim are authorized and regulated under laws administered by the FDA”); Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc., 2005 WL 2993937, at *4 (D. Del. Nov. 8, 2005) (“[h]aving reviewed all the advertising materials cited by plaintiffs, the court concludes that such materials are related to the safety and efficacy of [the drug], are consistent with the FDA-approved labeling and, therefore, are not actionable”); cf. Scott v. Glaxo Smith Kline Healthcare, 2006 WL 952032, at *2 & n.1 (N.D. Ill. Apr. 12, 2006) (refusing to dismiss marketing-based claim on pleadings because compliance not established; noting that plaintiff had a “very difficult burden to show that the statements were not specifically authorized” because industry was “highly regulated” by FDA).

In addition to the general safe harbors for “federal” regulation generally, several other states have similar provisions limited to activities authorized by the Federal Trade Commission. Iowa §714.16(14); Louisiana §51:1406(4); New Hampshire ch. 358-A:3 (III); New York: Gen. Bus. L. § 350-c; Texas Bus. & Com. Code §17.49. Since The FDA and the Federal Trade Commission have a longstanding arrangement by which FDA-approved labeling is considered compliant with the FTC, see 36 Fed. Reg. 18,539 (1971), FTC-specific safe harbor provisions have applied to FDA drug approvals. Pennsylvania Employee Benefit, 2005 WL 2993937, at *2; American Home Products Corp., 672 F. Supp. at 144.

All of these statutory safe harbors will likely become more salient grow as both the FDA itself, and Congress through legislation (including the bill just recently passed by the Senate), provide the Agency with greater pre-approval functions with respect direct-to-consumer and other forms of advertising.

While the New Jersey consumer fraud act does not have a statutory safe harbor provision, its courts have created an equivalent safe harbor judicially in cases involving prescription medical products. In New Jersey Citizen Action v. Schering-Plough Corp., 842 A.2d 174 (N.J. Super. App. Div. 2003), the court held that claims concerning DTC advertisements for a prescription drug were properly dismissed because:

[P]laintiffs’ complaint overlooks an essential difference between the pharmaceutical industry and others. Regardless of the claims in the DTC advertising campaign, the products in question remain subject to the strict regulation of the FDA. . . . [T]he wording of the ads, to the extent that it is subject to FDA oversight. . .is similarly not actionable.

Id. at 177 (emphasis added); see also In re Meridia Products Liability Litigation, 328 F. Supp.2d 791, 812 n.19 (N.D. Ohio 2004) (under New Jersey law, drug manufacturers’ warnings were presumptively adequate because plaintiffs “provided no reason to believe that defendants violated the FDA's rules and regulations”).

As we’ve said until we’re blue in the face, preemption is of such importance to our clients that it needs to be carefully protected and preserved. That means, among other things, not filing preemption motions that have a low probability of success. Nevertheless, in courts where resistance to preemption is likely some form of preemption lite might be a viable alternative to bring the FDA’s regulatory decisions to bear in product liability litigation.

Wednesday, May 23, 2007

Riegel v. Medtronic - The Solicitor General Weighs In On Medical Device Preemption

The Solicitor General has just weighed in today with his amicus curiae curiae brief in Riegel v. Medtronic, Inc., No. 06-179 (U.S. filed May 2007). You can read the brief here. (hit the "download" button to get the PDF)

The Solicitor General recommends against the Court accepting the appeal (“certiorari” is the technical term) because the decision of the Second Circuit, finding all but a couple of minor claims preempted, was “correct.”

Specifically, the Solicitor General argues:

(1) FDA pre-market approval (“PMA”) of a Class III device imposes federal “requirements” as meant by §360k(a) of the Medical Device Amendments (“MDA”) to the FDCA. PMA is in no way comparable to the less rigorous form of marketing clearance at issue in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996).

(2) Lohr recognized the FDA’s “significant role” in defining the preemptive scope of the MDA and gave “significant weight” to the Agency’s construction of the statute.

(3) PMA represents an Agency judgment concerning safety and efficacy. Once the FDA granted PMA, the manufacturer could not make any safety-related changes to its device without a supplemental application requiring further FDA approval.

(4) Common law product liability claims can impose “requirements” under §360k(a). Because those claims allege that the PMA device is “defective,” those requirements would be “inconsistent’ with the FDA’s requirements imposed via PMA. Thus the conflicting tort claims are expressly preempted.

(5) The FDA’s PMA involved rigorous review of the adequacy of product labeling/warnings.

(6) FDA’s “current judgment” reflects the withdrawal of the proposed rule that was the basis for the Agency’s contrary position in an amicus brief (Kernats) filed with the Court in 1998. The FDA has adopted different risk-management principles since 1998.

(7) There is no contrary appellate authority more recent than 1999, thus conflicting authority does not merit certiorari. All recent appellate authority is consistent with the Second Circuit and with the FDA’s current view of preemption.

Tuesday, May 22, 2007

A Preemption Tangent (Watters v. Wachovia Bank)

We don't often post about National Bank Act cases. (We would do it more often if we were more confident of the spelling of the word "bank," but that's too far from our field of expertise.)

We're making an exception for the U.S. Supreme Court's recent decision in Watters v. Wachovia Bank, N.A., No. 05-1342, slip op. (Apr. 17, 2007). Here's a link to the "Recent Decisions" page of the Supreme Court website; you're on your own from there. (Hat tip to Rob Weiner for bringing the case to our attention.)

In Watters, the Supreme Court held that the National Bank Act preempts state regulation of the subsidiaries of national banks, in addition to the banks themselves. (Somewhere, we're sure, people are cheering and weeping over that result. Not us. We just barely understand it. We're reciting the holding only to give our readers one sentence of context before going on to what we perceive to be the good stuff.)

Fellow drug lawyers: Skip the majority opinion; that's for bank regulatory jocks. Look instead at footnote 24 of Justice Stevens' dissent.

The majority decision turned on statutory grounds. Justice Stevens disagreed with that interpretation and so had to interpret a regulation adopted by the Office of the Comptroller of the Currency: "State laws apply to national bank operating subsidiaries to the same extent that those laws apply to the parent national bank." 12 C.F.R. Sec. 7.4006. The dissent asserted that the sole purpose of this regulation was to preempt state law, which was improper. Although the OCC had the power to enact regulations that have the effect of preempting state law, the OCC did not have the power to declare activities or entities immune from regulation.

Justice Stevens explained that his conclusion "does not touch our cases holding that a properly promulgated agency regulation can have a preemptive effect should it conflict with state law. . . . My analysis is rather confined to agency regulations (like the one at issue here) that 'purpor[t] to settle the scope of federal preemption' and 'reflec[t] an agency's effort to transform the preemption question from a judicial inquiry into an administrative fait accompli." Dissent at 19 n.24.

Why do we care? We've posted before about preemption cases. Most of the recent cases discuss the preamble to the FDA's January 2006 labeling regulations; that preamble explains why FDA labeling regulations often preempt state law failure-to-warn claims. The question for defense counsel is how to present the issue. Is it that (1) the Preemption Preamble itself preempts state law or (2) preexisting FDA regulations preempt state law, with or without the preamble?

We've always preferred the latter approach, for three reasons.

First, we think it's right.

Second, it avoids any supposed "retroactivity" issue. We are not suggesting that a preamble dated January 2006 retroactively preempted claims relating to a package insert that had been approved in, say, 2004. Rather, the existing regulations as of 2004 preempted the 2004 claim.

The Preemption Preamble merely interprets the existing regulations and provides the FDA's view that those regulations have always preempted state law.

Third, presenting the argument this way doesn't give anything away. The FDA's interpretation of its own regulations is entitled to deference. Thus, courts should defer to the FDA's belief, expressed in the preamble, that state laws that conflict with FDA regulations interfere with the FDA's ability to do its job.

Sometimes, we think that this blog gives new meaning to the phrase "inside baseball." But we can't help it. Preemption really matters to our clients and our cases; we're obsessed with the issue.

Monday, May 21, 2007

Preemption News (Colacicco v. Apotex)

This is the SSRI case out of the Eastern District of Pennsylvania in which the court found most claims preempted both against a generic and against a pioneer drug manufacturer. The appeal was delayed to coordinate it with the McNellis case out of the District of New Jersey (an adverse preemption ruling being appealed interlocutorily).

Third Circuit oral argument has been scheduled for September 17, 2007.

Premption news (Levine v. Wyeth)

Levine v. Wyeth was a decision by the Vermont Supreme Court holding against the preemption defense in the context of a prescription drug.

The defendant, Wyeth, petitioned for certiorari.

This morning, the United States Supreme Court ordered the Solicitor General to file a brief stating the position of the United States as to whether cert should be granted.

You'll hear more when we hear more.

Saturday, May 19, 2007

Contingent Fees and Government Lawyers

We led the charge on this issue.

Every once in a while, even a blind squirrel finds an acorn.

On April 4, a California trial court prohibited municipal governments from using private lawyers hired on a contingent fee basis. See County of Santa Clara v. Atlantic Richfiled Co., No. 1-00-CV-788657 (Cal. Super. Ct. Apr. 4, 2007). Here's a link to the decision.

Your ever-vigilant, and sometimes lucky, hosts at the Drug and Device Law Blog were the first to post on that case, on April 6. Here's what we had to say then.

Less than six weeks later, on Wednesday, May 16, President Bush signed an Executive Order forbidding the federal government from hiring private lawyers on a contingent fee basis. Here's a link to that order.

Then, the deluge.

The U.S. Chamber of Commerce was delighted with President Bush; the plaintiffs' bar not (although some not as outraged as others). The Wall Street Journal covered the story in its print edition. Peter Lattman did a post at the Wall Street Journal Law Blog, which drew the usual collection of outraged comments. (Our readers, we're proud to note, are much more civilized. That, or just quieter by nature, but it plays out the same way.)

Walter Olson's op-ed piece about the perils of permitting governments to hire private lawyers on a contingent fee basis appeared in yesterday's Wall Street Journal. Olson's colleagues at the Manhattan Institute promptly posted on their blogs at PointOfLaw and Overlawyered. The Volokh Conspiracy got in on the act. And David Kopel, who posted at Volokh, had previously written an Issue Backgrounder for the Independence Institute on the same subject. The Mass Tort Litigation Blog covered the issue briefly.

The legal press wouldn't be left out. The National Law Journal reports about efforts in many states to add transparency to the process by which state attorneys general hire contingent fee counsel.

Trial Ad Notes doesn't take a position on this issue, but it offered, among other things, a bibliography, which we reproduce here to save you a click:

Meredith A. Capps, "'Gouging the government': why a federal contingency fee lobbying prohibition is consistent with First Amendment freedoms," 58 Vanderbilt. L. Rev. 1885-1923 (2005);

Kris W. Kobach, "Contingency fees may be hazardous to your health: a constitutional analysis of Congressional interference with tobacco litigation contracts," 49 S. Car. L. Rev. 215-245 (1998);

Charles Silver and Lester Brickman, "Contingency fees: should plaintiffs lawyers in the tobacco settlement receive billions of dollars?," ABA J., Sept. 1997, at 74;

David Edward Dahlquist, "Inherent conflict: a case against the use of contingency fees by special assistants in quasi-governmental prosecutorial roles," 50 DePaul L. Rev. 743-98 (2000).

This issue of course matters to our drug and device clients, and not simply as a matter of abstract policy. State attorneys general are hiring private contingent fee counsel in, among other things, Medicaid "cost recovery" suits, which pose a terrible threat to the pharmaceutical industry.

We don't have much to add to our previous post on this issue, but we'd like to highlight a few points as to which we don't see much disagreement in the blogosphere.

First, even those who favor governments hiring contingent fee lawyers (and we do not count ourselves in that crowd) can't seriously object to adding more transparency to that process. If the government is going to enter contracts that have the ability to make select private citizens richer than Croesus, that process should be open and public.

Second, no one seems to object to competitive bidding for these lucrative contracts. If the government is going to hire private lawyers, surely it should strive for a reasonably low price. (We didn't write the "lowest price" there, because we believe that the cheapest lawyer is not necessarily the lawyer most likely to win your case.)

Third, when governments hire private contingent fee lawyers, those lawyers have a personal interest in maximizing the recovery of money damages, from which the fee will be paid. Maximizing damages, instead of seeking, say, broader injunctive relief, will not necessarily represent the preferred public policy. We know that the client -- the government -- is ultimately making the decision to settle, but even the most sophisticated client relies heavily on counsel -- the boots on the ground -- for advice. When that counsel has a personal interest in maximizing monetary recovery, sound government policy can be placed at risk.

Fourth, permitting the executive branch -- attorneys general -- to extract private money for government use infringes on the legislative branch's historic control of the government's taxing authority. We understand that this already occurs, to a limited extent, when the government imposes civil fines and the like. Call us fools, if you like, but we just think people act differently when billions of dollars are placed on the table.

So far as we can tell, that's where the discussion stands today. But we have a creeping suspicion that we haven't yet heard the end of this. We'll watch with interest.

Thursday, May 17, 2007

Picking Spots In Preemption Cases

We’ve seen two adverse preemption decisions over the last couple of weeks that have us scratching our heads. These opinions are Barnhill v. Teva Pharmaceuticals USA Inc., No. 06-0282, 22 BNA Toxic Law Rptr. #20 (S.D. Ala. Apr. 24, 2007), and Kelly v. Wyeth, 2007 WL 1302589 (Mass. Super. Apr. 12, 2007). Neither of them are particularly ground-breaking in what they say. Indeed, the reasoning in Barnhill is in our judgment one of the least persuasive anti-preemption decisions we’ve seen because:

(1) Barnhill never really come to grips with how the scope of labeling changes for generic drugs is more restricted than for so-called “pioneer” prescription drugs. Instead, it uses the general provision it prefers (21 C.F.R. §314.70(c) – as always) to override the more specific provision (that is, solely applicable to generics) that would require preemption (21 C.F.R. §314.150(b)).
See Slip op. at 6-8. Instead, Barnhill cites non-ANDA opinions indiscriminately.

(2) The “best reasoning” that Barnhill cites for ignoring the FDA Final Rule, slip op. at 9, no longer exists because the footnote in Desiano v. Warner Lambert & Co., 467 F.3d 85, 97 n.9 (2d Cir. 2006), was amended specifically to delete the Second Circuit’s original and ill-conceived (and never-briefed) dictum in that case.

(3) Barnhill states that only Colacicco has afforded deference to the FDA’s position. Slip op. at 11. That’s just plain wrong, and omits three other opinions, all of which deferred to the FDA with significant reasoning. See Sykes v. Glaxo-SmithKline, 2007 WL 957337, at *19-23 (E.D. Pa. March 28, 2007); In re Bextra & Celebrex Marketing Sales Practices & Product Liability Litigation, 2006 WL 2374742, at *6-9 (N.D. Cal. Aug. 16, 2006); Conte v. Wyeth, Inc., 2006 WL 2692469, at *5-6 (Cal. Super. San Francisco Co. Sept. 14, 2006). In addition, two other cases deferred to FDA amicus briefs saying essentially the same thing before the Final Rule was promulgated in January, 2006. Needleman v. Pfizer, Inc., 2004 WL 1773697, at *4-5 (N.D. Tex. Aug. 6, 2004); Dusek v. Pfizer, Inc., 2004 WL 2191804, at *6 (S.D. Tex. Feb. 20, 2004). That a federal court would make such a flat factual error gives us pause concerning the presentation of preemption argument.

(4) Barnhill doesn’t analyze the Supreme Court agency inconsistency precedent at all. It just states there was an FDA “about-face,” slip op. at 10, and leaves it at that. Again, this is simply wrong since the deference cases – going back to Chevron itself, 467 U.S. at 863-64, state repeatedly that courts should respect changes in administrative position as long as they are explained.

Another problem we have with Barnhill is that the case was decided on a motion to dismiss. That means there was no factual record at all, only the allegations of the complaint, before the court. We don’t think that’s a good idea. When moving on the basis of conflict preemption it’s far preferable to have as strong a factual record as possible demonstrating the conflict. Without that record, the chance for success, both at the trial court and appellate levels, is lessened.

With respect to Kelly, the most salient point for us is why a preemption motion was brought at all in a state trial court in Massachusetts – a known pro-plaintiff jurisdiction. There’s certainly no history of success with preemption motions in prescription medical product cases in Massachusetts. See Brown v. DePuy Spine, Inc., 2007 WL 1089337 (Mass. Super. Apr. 9, 2007); Belanger v. Safeskin Corp., 20 Mass. L. Rptr. 51, 2005 WL 2542936 (Mass. Super. Sep. 6, 2005); McNulty v. Hijikata, 3 Mass. L. Rptr. 562, 1995 WL 809930 (Mass. Super. Apr. 20, 1995) (all denying preemption). That’s three strikes even before Kelly. Massachusetts is even hostile to ERISA preemption, which isn’t even particularly controversial anymore in most states. See DeSantis v. Commonwealth Energy System, 864 N.E.2d 1211 (Mass. App. 2007).

Part of preemption strategy is choosing the jurisdictions in which such motions would have a reasonable likelihood of success. In plain English, you gotta pick your spots. If defendants go running helter skelter into courts filing preemption motions no matter how hostile the jurisdiction – well, the result is going to be decisions like Kelly. That doesn’t do the filing defendant any good. Nor does it do anyone else defending prescription drug cases any good.

Barnhill and Kelly share a common thread. In both cases the unsuccessful motions were filed by the same defendant, Teva Pharmaceuticals. Teva is a manufacturer of generic drugs. That might not seem important, because anybody can lose two in a row. The generics’ preemption argument seems pretty powerful to us, since the FDA flatly forbids them from deviating from the so-called “pioneer” drug’s label.

But it’s not just that. One of the facts of life in our business is that the so-called “pioneer” manufacturers that we both represent and the generics like Teva don’t like each other. Actually, it wouldn’t be too strong to say that the pioneers and the generics spend much of the time suing the living daylights out of each other for any number of good and sufficient business reasons which we won't get into.

One consequence of that is that the same law firms can’t represent pioneers and generics in defending product liability litigation, because there’s too much legal adversity elsewhere. We know we can’t.

So ne’er the twain shall meet. That’s troubling. We’re worried that, in preemption, this animosity is having deleterious effects. Most of the largest firms that have done the most sophisticated preemption thinking – here we are guilty of flattering ourselves – tend to represent the pioneers. That’s because, historically, the pioneers tend to get sued more often, because, well, they’re pioneers and thus out front with new drugs having new risks. As importantly, pioneers get sued about the same thing sooner than the generics, because generics have to wait for patent expirations.

The preemption cases are demonstrating what is a fact of life in pharmaceutical product liability - with more generic drugs being used, there will as time goes on be more product liability litigation involving these products. In a lot of ways product defendants are in the same boat doing battle with plaintiffs. We’re afraid that, because of the longstanding (and justifiable) commercial animosity, the generics aren’t getting the benefit of the hard-fought experience that the pioneers and their counsel have obtained in this area. Decisions like Barnhill and Kelly can be the result.

Preemption in product liability is one place where the interests of pioneer and generic manufacturers are aligned. We both want to beat the plaintiffs. Decisions like Barnhill and Kelly don’t help anyone except the plaintiffs. Ben Franklin said if we don’t hang together, we’ll all hand separately. Sort of the same thing applies here.

In Kelly, we wish that more attention was paid to the court in which the motion was filed. Sometimes, for the good of the developing law, one has to “take one for the team” – choose to refrain from raising preemption particular case. In Barnhill, we wonder (but don’t know for sure) whether the briefing was as good as it could have been, since a well-informed court wouldn’t be citing to language in a case that’s been deleted by subsequent amendment, and wouldn’t be stating that there’s only one case for a proposition when there are at least 4 (and arguably 6).

Also we think it would have been preferable to wait in Barnhill and file the preemption motion as a summary judgment motion with a full record demonstrating the conflict. It might not have made a difference, but it could have.

We’re not trying to bash either Teva or its counsel here. We’re sure they’re doing the best job they can with the hand they’ve been dealt. What we want to do is advance the defense cause generally, because that’s in the interest of our own clients, as well as to the development of the law generally. That’s why this blog tries to address cutting issues. It’s public, on the Web, and available for any and all to see. That means it’s accessible to generic manufacturers and their counsel, who might not share in the information networks available to pioneer manufacturers.

Tuesday, May 15, 2007

An Empirical Study Of The Value of Impeaching With Prior Inconsistent Statements

This guest post was written by Richard G. Stuhan, Melissa M. Gomez, and Daniel Wolfe. Mr. Stuhan is a partner resident in the Cleveland office of Jones Day. Ms. Gomez and Mr. Wolfe are trial consultants with TrialGraphix, Inc. This post is entirely their work:


The opposition’s key witness testifies at trial that the color of the car that ran the red light was “black.” On cross-examination, you establish that the same witness testified during her deposition that the car was “white.” At the end of the day, you return to your office confident that your success in impeaching the other side’s key witness with a prior inconsistent statement has undermined her credibility. Your trial strategy for the remainder of the case is predicated on that assumption. The verdict is not, however, what you had anticipated. To your surprise and dismay, post-verdict debriefings of the jurors reveal that they did not ascribe as much weight to your cross-examination as you believed.

Time and again in our post-verdict juror interviews, we have found that impeachment with prior inconsistent statements was over-valued. Recognizing, however, that our experience was limited, we set out to test our thesis experimentally. We designed and conducted a study of mock jurors’ opinions and attitudes about inconsistencies in witness testimony. Data were collected from over 800 respondents representing over a dozen states. Mock jurors were given a six-item pencil-and-paper questionnaire. Analyses of juror responses were conducted to determine jurors’ overall opinions and whether demographic characteristics (e.g., gender, race, age, education level, marital status, employment status, and income level) were associated with responses to the proposed questionnaires. The results of this study – including the survey instrument and data tables – are published in the April 2007 edition of For the Defense (Vol. 49, No. 4). Set forth below is a brief summary of the study.

A. Principal Findings

Recognizing the complexity of the issue, we took a multi-tiered approach to the problem. Our principal findings were as follows:

1. Juror Expectations of Witness Truthfulness. Our study suggests that jurors go into a trial with a generally positive attitude toward witnesses. The vast majority of them – 72% – believe that witnesses will be as honest as possible while testifying under oath in a civil trial, as opposed to saying whatever it takes to keep themselves out of trouble. There are, however, significant demographic differences in jurors’ expectations of witness truthfulness. For example, younger jurors, single jurors, and people of color are substantially more skeptical of witnesses than older, married white jurors.

2. Reaction to Inconsistencies. While a witness gets the benefit of the doubt when she begins testifying, the situation changes quickly when she is confronted with an inconsistency in her testimony. A majority – 60% – of respondents in our study indicated that, if a witness’s statements on the stand do not match previously made statements, they are more inclined to believe that she is lying than to believe that she is making an honest mistake. Again, there were demographic differences in the data. Specifically, younger jurors, single jurors, and part-time workers are more likely to believe that a witness was purposely lying.

3. How Jurors Process Inconsistencies. Perhaps the most interesting findings were in the responses to the question about how jurors process a showing that a witness has testified inconsistently. Only 20% of the jurors said that an inconsistency would lead them to disregard everything the witness said. Most of the jurors said that, if a witness’s testimony on the stand conflicted with prior statements, they would focus on the witness’s behavior instead of immediately jumping to conclusions about the witness’s credibility. Stated otherwise, jurors will look for behavioral clues in order to decide whether to believe a witness. There were no statistically significant demographic differences in juror processing of a showing that a witness had testified inconsistently with prior statements.

4. Receptivity to Excuses. Although jurors who were shown that a witness had testified inconsistently were initially inclined to believe that she was lying on the stand, they tended to cut the witness a little slack when it was suggested that the inconsistency might be the product of the stressful situation that a courtroom creates. Over half of the jurors agreed that the stress of testifying likely causes witnesses to make honest mistakes. People who were divorced or separated were more likely than people in other categories to have clear opinions on whether stress is an excuse for inconsistent statements; they were above average both in agreeing that stress could be an excuse and in disagreeing with that same proposition. Jurors were less receptive to the suggestion that an inconsistency was the product of forgetfulness. Less than half of the surveyed jurors were willing to accept forgetfulness as an excuse. Relatively few jurors, however, either strongly agreed or strongly disagreed with the proposition that forgetfulness is an excuse for inconsistencies, and there were no significant demographic differences in juror responses to this question.

5. Overall Impact of Inconsistency. There were substantial differences in the extent to which prior inconsistent statements taint other testimony. For about a third of the jurors, the inconsistency caused them to conclude that none of the witness’s testimony could be believed. A larger percentage of the jurors, however, did not believe that an inconsistency completely destroyed the witness’s credibility. There was, moreover, a substantial group of jurors who wanted to reserve judgment until they knew more about the situation. Again, there were some demographic differences in the responses. Jurors who were employed were more lenient in evaluating an inconsistency, while those who were unemployed tended to be less forgiving.

B. Caveats and Qualifications

While we believe that our study provides a valuable window into understanding likely attitudes towards witness testimony in courtroom settings, we also advise caution in applying the results of this study. This is so for several reasons:

1. Abstract versus Real World. Our study was conducted in a sterile environment, without contextual cues that impact juror interpretation of the witness’s testimony. That environment was quite different from a courtroom in which the jurors watch the witness sweating profusely and squirming in her chair as she seeks to reconcile diametrically opposed accounts of what transpired. At the same time, we believe that, on balance, our study understates, rather than overstates, jurors’ tendency to discount impeachment by prior inconsistent statement because real-world impeachment rarely goes as smoothly as the practice manuals suggest it should.

2. Frequency, Importance, and Witness Characteristics. Our study did not ask the participants to make any assumptions about either the frequency or the importance of the inconsistencies. Based on our experiences, we believe that lawyers should assume the jurors will be harsher with witnesses who are inconsistent repeatedly about key points and more forgiving with witnesses who are inconsistent only about collateral facts and only in a limited number of instances.

3. Impact of Videotaping. Our study did not consider – and we know of no other data that address – the relative “potency” of impeachment by videotape deposition versus impeachment by written transcript. Our sense, however, is that impeachment by videotape is likely to pack more of a wallop than impeachment by written transcript.

C. Demographic Profile

While the data do not permit us to make firm recommendations on which jurors are best and worst in processing prior inconsistent statements, there are a few trends in the data worth noting. Generally speaking, a lawyer who believes that she will be able to impeach the other side’s witness with prior inconsistent statements should be looking for young, single or divorced, low-earning people of color. In contrast, lawyers stuck with a witness likely to be impeached should be seeking jurors who are older, married or widowed, and with higher incomes.

D. Conclusion

We expect that our findings will encounter resistance in the legal community, particularly among lawyers who are convinced that impeachment with prior inconsistent statements is the most powerful weapon in their arsenal. We do not contend that our data show that impeachment by prior inconsistent statements does not matter. Clearly, it does. Our post-verdict interviewing experiences suggest, however, that inconsistencies are not as debilitating as lawyers generally assume, and the data in this study are consistent with those observations. Our hope is that our study will begin a dialog on this issue.

Monday, May 14, 2007

Agency Deference Prevents "Evisceration" of the FDCA Regulatory Scheme

We’re going to discuss preemption “inside baseball” again. If that’s not your thing, then click on the “back” button. If that’s what you’re really hot to hear about, then keep on reading. And after you’re done here, please, make arrangements to take a long vacation with your family to someplace where you can’t access this blog – because you’re working too hard and you need to get away.

Ever since the FDA began filing pro-preemption amicus briefs in mid-2000 (for more about that, see here), we’ve been trying to get the courts to listen to what the FDA has to say on the subject. After the FDA published its preemption opus in the Federal Register early last year, see 71 Fed. Reg. 3922 (but anyone reading this far has already memorized that cite), the value of FDA deference arguments grew exponentially.

In a nutshell, the basic FDA deference argument is that the FDA is the expert federal agency with the power to determine the preemptive effect of its decisions. No less an authority than the Supreme Court has said so, on more than one occasion. Medtronic, Inc. v. Lohr, 518 U.S. 470, 496-97, 505-07 (1996); Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 721 (1985). We won’t bore you with all the gradations and nuances of agency deference, since we have enough trouble ourselves choreographing all those angels dancing on the head of that pin. Suffice it to say that agency deference can range from “due respect” all the way up to very close to controlling.

In Hillsborough County the Court dealt with the FDA’s view about one of its regulation’s preemptive scope – something the Court found the Agency “possesse[d] the authority to” do. Id. at 721. The Court held the FDA’s determinations “dispositive. . .unless either the agency’s position is inconsistent with clearly expressed congressional intent. . .or subsequent developments reveal a change in that position.” Id. at 714-15. Since the FDA’s current preemption findings are mostly in a preamble to a Final Rule, Hillsborough’s specific recognition of “preambles” as an acceptable means for agency assertion of preemptive intent is particularly important. Id. at 718.

In Medtronic v. Lohr, 518 U.S. at 496-97, 505-07, the Court split on FDA deference just like it split on everything else. The majority followed Hillsborough and deferred to FDA’s interpretation of the FDCA’s Medical Device Amendments’ preemptive scope:

Congress has given the FDA a unique role in determining the scope of [the Act’s] pre-emptive effect. . . . Because the FDA is the federal agency to which Congress has delegated its authority to implement the provisions of the Act, the agency is uniquely qualified to determine whether a particular form of state law. . .should be pre-empted.

518 U.S. at 495-96 (Stevens, J. plurality). Accord id. at 505 (“absen[t]. . .a clear congressional command as to pre-emption. . ., the relevant administrative agency possesses a degree of leeway to determine. . .pre-emptive effect”) (Breyer, J. concurring).

Four plus one equals five.

Hillsborough and Lohr invoked deference under Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984). Chevron held that administrative deference inheres in even implicit congressional delegation of power to an agency:

Sometimes the legislative delegation to an agency on a particular question is implicit rather than explicit. In such a case, a court may not substitute its own construction of a statutory provision for a reasonable interpretation made by the administrator of an agency.

Id. (footnote omitted).

In one respect, the Hillsborough and Lohr results must be treated with caution. In a subsequent case, United States v. Mead Corp., 533 U.S. 218, 232 (2001), the Court held that an “interpretive rule” (which is what the Final Rule preamble technically is) is not entitled to what courts call “full Chevron deference.” But that’s getting back to the angels on the pins. For present purposes, it’s enough to remember that Hillsborough and Lohr establish: (1) FDA is the expert federal agency charged by Congress to ensure that prescription medical products are safe and effective, and (2) FDA labeling authority is sufficiently extensive to warrant substantial deference – whether it goes by the name “Chevron” or something else.

Thus courts should “give effect to an agency’s regulation containing a reasonable interpretation of an ambiguous statute.” Christensen v. Harris County, 529 U.S. 576, 586-87 (2000). Deference is owed to “longstanding administrative policy that comports with the plain language, history, and prophylactic purpose of the Act,” and is “particularly appropriate” where the issue is of “considerable public controversy,” and Congress has declined to act. United States v. Rutherford, 442 U.S. 544, 553-54 (1979) (another FDA case).

We’re not going to repeat what we’ve already posted about the extent to which the consistency of an agency position does – and does not – impact the amount of deference owed to the administrative interpretation by the courts. If you want to read about that, go here. The basic point is that any fair-minded reading of controlling precedent affords deference to “even” changed administrative interpretations as long as they are rationally explained.

Well, the FDA’s preemption briefs, and beyond them the 2006 Final Rule, are supported by more rational explanation than any non-result-oriented court would need to affirm them. Don’t just take our word for it. Read the opinions that refuse to give the Final Rule deference due to supposed inconsistency: Levine v. Wyeth, 2006 WL 3041078 ¶¶31-33 (Vt. Oct. 27, 2006); Weiss v. Fujisawa Pharmaceutical Co., 464 F. Supp.2d 666, 674 (E.D. Ky. 2006); McNellis v. Pfizer, Inc., 2006 WL 2819046, at *7-8 (D.N.J. Sept. 29, 2006); Coutu v. Tracy, 2006 WL 1314261, at *4 (R.I. Super. May 11, 2006). None of these cases goes much beyond using “inconsistency” as a scarlet letter and leaving it at that. They don’t come to grips with the FDA’s reasoning. They can’t, because simply to acknowledge that reasoning would demand deference under controlling precedent.

All of the above is prologue for the real reason for this post. There’s a very new, very analogous FDA deference case out of the Seventh Circuit, United States v. Genendo Pharmaceutical, N.V., 2007 WL 1364389 (7th Cir. May 10, 2007). The parallels are quite striking when we think about them. The anti-Final Rule cases all rely upon a federal regulation, 21 C.F.R. §314.70(c)(6)(iii)(a-b), the literal terms of which they interpret as giving drug manufacturers an essentially unfettered right to effect changes that “strengthen” warnings without the need for prior FDA approval. See, e.g.:

If the NDA process and the submission of changes for FDA approval were the exclusive means of creating and altering prescription drug labels, this might be a very different case. A key FDA regulation, however, allows a drug’s manufacturer to alter the drug’s label without prior FDA approval when necessary. [quotation from §314.70(c) omitted] Section 314.70(c) creates a specific procedure allowing drug manufacturers to change labels that are insufficient to protect consumers, despite their approval by the FDA. “The FDA’s approved label. . .can therefore be said to set the minimum labeling requirement, and not necessarily the ultimate label where a manufacturer improves the label to promote greater safety.

Levine v. Wyeth, 2006 WL 3041078 ¶¶12-13 (quoting McNellis, 2006 WL 2819046, at *5) (emphasis added). Since Levine and McNellis are probably the best reasoned of this rather spotty lot, you can get the drift. Their syllogism is, forget everything the Supreme Court’s ever said about the FDA’s authority over prescription drugs and their labeling – because of the wording of this one regulation, drug companies can rework their labels at will and the Agency can’t do anything about it, so long as the changes can be characterized as “strengthening” warnings (all plaintiffs ever argue for, of course) under 21 C.F.R. §314.70(c)(6)(iii)(a-b).

Slow down, Fast Eddie.

This is just where Genendo comes in. The arguments in this new case are almost the same as with the Final Rule – only the regulation and context have been changed in an attempt to protect the guilty.

In Genendo, a criminal case, the guilty party was an illegal importer of foreign-made drugs (Lipitor in this particular incident). The importer came up with a scheme involving another section of the FDCA that – if taken literally, like the anti-preemption cases do with 21 C.F.R. §314.70(c)(6)(iii)(a-b) – seemed to give the importer a way to evade the entire edifice of FDA regulation. The defendant in Genendo bought three-year-old (the limit in the US being two years) Lipitor, labeled in Portuguese in Sao Paulo Brazil. 2007 WL 1364389, at *2. It shipped the Brazilian Lipitor to a (pleaded out) co-defendant that was an “FDA-registered repacker and labeler.” Id. That status was key to the scheme.

The FDCA contains a section that directs the FDA to “exempt[] from any labeling or packaging requirement of this chapter drugs and devices which are. . .to be processed, labeled, or repacked” for resale. 21 U.S.C. §353(a) (emphasis added). The FDA’s corresponding regulation was narrower, however, providing that, once a party had a written agreement with a registered repacker that contained a number of required provisions, the drugs sent to that repacker,

shall be exempt, during the time of introduction into and movement in interstate commerce and the time of holding in such establishment, from compliance with the labeling and packaging requirements of [FDCA sections relating to specific new drug approval provisions].

21 C.F.R. §201.150(a). Although nothing in either the statute or the regulation limited the origin of the drugs that were subject to its terms, likewise nothing in their history indicated that these provisions were intended to apply to importation from foreign countries.

The defendant in Genendo, like the plaintiffs in the Final Rule preemption cases, argued that the specific terms of the statute prevented the FDA from advancing a narrower interpretation more in accordance with the Agency’s view of their context in the regulatory scheme as a whole. The lower court rejected the defendant’s narrowly focused reading and deferred to the FDA’s reading because:

[R]eading the exemption in §353(a) as [defendant] proposed would eviscerate the protections afforded by the new drug approval process. [The district court] thus attempted to harmonize the requirements of the new drug approval process and the §353(a) exemption by reading the “labeling and packaging requirements” referred to in §353(a) to apply to general “labeling and packaging,” but not the detailed requirements for packaging.

2007 WL 1364389, at *2 (discussing lower court ruling) (emphasis added).

The Seventh Circuit affirmed. It described the arguments of the two sides thusly:

The FDA argues that the labeling and packaging requirements contained in the NDA are a critical piece of the new drug approval process and must be adhered to at all stages of the drug’s production and distribution, and that §353(a) does not change that. [Defendant], however, contends that because the Lipitor was en route to an authorized repackager at the time it was seized, it is exempt from all labeling and packaging requirements.

2007 WL 1364389, at *3. “Any” did not necessarily mean “all.” Id. at *4. Even though the FDA’s interpretation of both the FDCA and its enabling regulation were narrower than their express terms could be read, a narrow interpretation was appropriate – and within the scope of valid deference to the FDA.

As a threshold matter, we must determine the level of deference to be accorded the FDA’s interpretation. . . . [Defendant], however, claims that the unambiguous language of §353(a) – directing the Secretary to promulgate regulations exempting certain drugs from “any labeling or packaging requirement of this chapter” – compels the conclusion that the Lipitor is exempt from all labeling and packaging requirements. . . .

2007 WL 1364389, at *3 The court agreed with the FDA that to read the statute and regulation in this way, although possible, would undermine the FDA’s authority over the approval and labeling of new drugs generally.

Reading the statute in isolation, [defendant’s] interpretation may be a plausible one, but so too is the FDA’s, particularly in light of the “well-accepted principle that remedial legislation such as the [FDCA]. . . . In short, there is enough ambiguity in the statute that we ask only whether the FDA’s interpretation is based on a permissible construction of the statute. [The FDA’s limiting regulation] exempting drugs in transit from only certain labeling and packaging requirements is a permissible exercise of the authority delegated by the statute, and is consistent with the public health concerns animating the new drug approval process and the FDCA as a whole. Thus, unless the regulation (and the FDA’s interpretation of it) is “arbitrary, capricious, or manifestly contrary to the statute,” we will defer to it.

2007 WL 1364389, at *4 (citations omitted) (emphasis added).

While the contrary, purely textual reading was plausible, “the FDA’s interpretation ma[de] good sense” because reading the literal language the way the defendant did would result in resellers being “given carte blanche to disregard the specifications in the NDA.” Id. at *5. Moreover, the FDA’s interpretation of “also comport[ed] with the underlying purposes of the FDCA, which exists to protect aspects of the lives and health of people which, in the circumstances of modern industrialism, are largely beyond self-protection.” Id. at *6. It was the FDA’s job to enforce the FDCA, thus the Agency’s “construction is entitled to deference.” Id.

In the 2006 Final Rule, the FDA interpreted 21 C.F.R. §314.70(c) in the same way that the Seventh Circuit found proper in Genendo. That regulation does not – indeed, could not consistently with the Agency’s overall authority over prescription drug labeling – give Genendo-style “carte blanche” permission to ignore in-force FDA labeling decisions, and the Agency has not so interpreted it. So-called “changes being effected” supplements are not effective “if the added information makes the labeling false or misleading.” 71 Fed. Reg. at 3934. For good reasons, the Act gave the FDA control over labeling. “Under the act, FDA is the expert Federal public health agency charged by Congress with ensuring that drugs are safe and effective, and that their labeling adequately informs users of the risks and benefits of the product and is truthful and not misleading.” Id. The FDA thus interpreted the CBE exception to harmonize it with the Agency’s overall statutory responsibilities, and listed six specific situations where §314.70 could not prevent preemption due to conflicts that would arise with in-force FDA labeling decisions. 71 Fed. Reg. at 3936.

The plaintiffs we deal with seek to read §314.70(c) to immunize any form of label “strengthening” – even label changes that would override FDA decisions about the precise risk in question – from preemption. They try to use a limited exception as a battering ram to knock down FDA labeling authority generally. Genendo demonstrates that even the express terms of the FDCA itself (let alone a few lines buried deep within a subsection of the CBE regulation) cannot be so employed. The FDA always has the ability, and more than that the obligation, to ensure that the regulatory scheme it administers operates as a whole. One aspect of its administrative expertise is to ensure that no bit part of that scheme is used out of context to tear holes in the larger regulatory fabric.

All this being said, we end with a cautionary note. Defense counsel should be wary of aligning their positions too closely with deference to the FDA. Ultimately the force of implied preemption rests upon the conflict that a particular product liability claim has with a particular FDA decision, whether the Agency has recognized it as such or not. Agency deference is more in the nature of gilding the lily – by telling courts that, “see, the FDA has recognized the same problem that we have.” But whether or not the FDA has recognized the conflict, it’s the conflict itself, and not Agency recognition of it, that creates preemption.

The plaintiffs like to jump up and down and holler “inconsistency.” They would like nothing better than for the FDA to surrender its current position and agree with them. Why? Well obviously, they could then turn the deference sword upon us. But it goes deeper than that. In case after case, the plaintiffs use common-law claims to displace FDA decisions. They know that to achieve that end, they need to destroy the Agency’s credibility as a regulator. Now, they describe the Agency as having made a U-turn. But to be able to describe FDA as going in circles would be far worse, because courts tolerate an occasional regulatory U-turn. To give themselves a clear field to run roughshod over any FDA decision that stands in their way, plaintiffs must wreck FDA credibility. If they succeed, we won’t be able to rely on deference towards the FDA on anything to defend our clients. Defense counsel need to keep these broader concerns in mind as the preemption battle continues to unfold.

Saturday, May 12, 2007

Welcome, DRI (and Cali Drug Cartel)

Our BlackBerries were buzzing off the table on Thursday. FDA Chief Counsel Sheldon Bradshaw was speaking about federal preemption at the Defense Research Institute drug and device meeting in San Francisco, and apparently he said something nice about this blog.

So, thanks both to Mr. Bradshaw (who's obviously a wise and sagacious man) for the plug and to our clients and colleagues who sent e-mails alerting us to what he had said.

And welcome to the DRI members who've now learned about this blog and chosen to visit us. For your convenience, here's a link to our post about the CBE regulations that Mr. Bradshaw praised.

We recently learned about other visitors, too. We assume that many of our visitors are luddites, like we are. But now that we're blogging luddites, we learned about the "Google Analytics" tool that tells us generally how many people are visiting our blog and where they're located.

A couple of weeks ago, one of your co-hosts, sitting at his home computer, was tickled pink to see that we'd had visitors from six different continents. (Antarctica, where are you?) Yours truly pointed this out to his teenage son, who responded, without missing a beat, "Why do you think they call it the World Wide Web, loser?"

No prophet is revered in his own home.

Anyway, we were recently surprised to see that we'd had a visitor from Cali, Colombia. We were wondering who in Cali would be interested in our views about defending pharmaceutical and medical device product liability cases in the United States. And then it struck us: When you host the "Drug and Device Law Blog," folks searching the internet for topics like "Drug Law" might stumble upon you by accident.

So we welcome our visitors from Cali, too, although we think our guests from DRI might find repeat visits to be of more interest.

Please do share our url with others who might be interested in the topics that we cover. We love the company.