Thursday, September 03, 2009

Embedded Fraud On The FDA

Last week we put In re Mentor Corp. Obtape Transobturator Sling Products Liability Litigation (Doria), 2009 WL 2600517 (M.D. Ga. Aug. 24, 2009) (slip op. here), on the device preemption scorecard. Only a couple of pages long, Doria held that punitive damages were unavailable the New Jersey Product Liability Act (“PLA”) because the fraud on the FDA exception in the PLA was preempted by Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).


No great shock there. Doria certainly wasn’t the first case to so hold. An appellate court in New Jersey did that last year. See McDarby v. Merck & Co., 949 A.2d 223, 271-76 (N.J. Super. A.D. 2008).


But Doria is the latest case to hold that preemption of fraud on the FDA allegations under the Buckman rationale applied to allegations that amounted to less than a full-blown, independent cause of action. In so doing, Doria came down firmly on what we consider to be the correct side of what we’ll call the Garcia/Desiano divide.


Both Garcia v. Wyeth-Ayerst Laboratories, 385 F.3d 961 (6th Cir. 2004), and Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006), aff’d by equally divided court, 128 S. Ct. 1168 (2008), involved a Michigan tort reform statute that was more thoroughgoing than the PLA. Michigan essentially bars all tort claims against FDA approved drugs and devices, except where the plaintiff proves fraud on the FDA (or bribery, but frankly we’ve never seen a plaintiff seriously allege that).


In Garcia, the Sixth Circuit (where Michigan is located) held that Buckman's preemption rationale applied whenever liability is predicated on fraud on the FDA, because the same deleterious effects on the Agency that supported preemption in Buckman would arise:



The United States Supreme Court has expressly considered the question of a state common law fraud-on-the-FDA tort claim and found that it was impliedly preempted. . . . This case, however, presents a somewhat different legal regime from the one invalidated in Buckman. The Michigan legislature has provided a general immunity for drug manufacturers with a specific exception for circumstances involving, inter alia, fraud on the FDA rather than a specific cause of action for fraud on the FDA. This difference, however, is immaterial in light of Buckman. . . . Buckman teaches that state tort remedies requiring proof of fraud committed against the FDA are foreclosed since federal law preempts such claims. . . .

Doubtless, Buckman prohibits a plaintiff from invoking the exceptions on the basis of state court findings of fraud on the FDA. Such a state court proceeding would raise the same inter-branch-meddling concerns that animated Buckman. But the same concerns do not arise when the FDA itself determines that a fraud has been committed on the agency during the regulatory-approval process. Thus, in this setting, it makes abundant sense to allow a State that chooses to incorporate a federal standard into its law of torts to allow that standard to apply when the federal agency itself determines that fraud marred the regulatory-approval process.


385 F.3d at 965-66 (a bunch of Buckman citations omitted) (emphasis added).


The Second Circuit in Desiano did not agree. It held that the very same Michigan fraud-on-the-FDA exception wasn’t preempted because the effect of the exception was not to create liability for fraud upon an agency. Rather, the exception only provided a route for assertion of “traditional” – and thus unpreempted – tort claims.



Appellants here are not pressing “fraud-on-the-FDA” claims, as the plaintiffs in Buckman were understood by the Supreme Court to be doing. They are, rather, asserting claims that sound in traditional state tort law. In Buckman, the Supreme Court mentioned two characteristics of preempted “fraud-on-the-FDA” claims that distinguish them from claims sounding in preexisting common law. . . .

[A]ll of the claims advanced by Appellants in this case are premised on traditional duties between a product manufacturer and Michigan consumers. None of them derives from, or is based on, a newly-concocted duty between a manufacturer and a federal agency. . . .

The second difference between common law actions and “fraud-on-the-FDA” claims, suggested in Buckman, is that in FDA-fraud cases, proof of fraud against the FDA is alone sufficient to impose liability. In Buckman, there were no freestanding allegations of wrongdoing apart from the defendant's purported failure to comply with FDA disclosure requirements.


467 F.3d at 94-95 (more Buckman citations omitted). Desiano thus exempted “traditional” state law duties from preemption and limited the scope of Buckman to “independent” actions for fraud on the FDA.


Naturally, as defense lawyers. we thought Desiano was wrongheaded and result oriented. We’ve said so a number of times, most thoroughly here. We view Desiano as an attempt to gut Buckman, since any plaintiff’s lawyer worthy of the name is able to plead fraud on the FDA as an element of some other, more “traditional” cause of action rather than as a cause of action in its own right. We had hoped the Supreme Court would clear things up when it accepted certiorari in Desiano (now called Kent), but that didn't happen either.


Anyway, what we say hardly matters – except to us and (we hope) to our readers. What matters is what courts say. It’s now been a good two years since Desiano was decided, and we wondered whether the Second Circuit’s rationale has made much on an inroad into preemption of fraud on the FDA claims.


We can happily report that we haven’t seen much.


First, to be fair, we have to exclude decisions from district courts in either the Sixth or Second Circuits. Those courts aren’t independent actors any more, because their circuits have ruled and they're bound to follow the law thus mandated . That means that we have to set aside these Sixth Circuit district court cases: Cupek v. Medtronic, Inc., 405 F.3d 421, 423-24 (6th Cir. 2005) (preempting “disguised fraud on the FDA claim”); In re Aredia & Zometa Products Liability Litigation, 2009 WL 2497229, at *2 (M.D. Tenn. Aug. 13, 2009) (Florida statute); White v. SmithKline Beecham Corp., 538 F. Supp.2d 1023, 1028-29 (W.D. Mich. 2008) (Michigan statute); In re Aredia & Zometa Products Liability Litigation, 2008 WL 2944910, at *3-5 (M.D. Tenn. July 25, 2008) (Texas statute); In re Aredia & Zometa Products Liability Litigation, 2008 WL 913087, at *2 (M.D. Tenn. Apr. 2, 2008) (Michigan statute); Alfred v. Mentor Corp., 2007 WL 708631, at *7 (W.D. Ky. March 5, 2007) (fraud “construed” as fraud on the FDA); In re Aredia & Zometa Products Liability Litigation, 2007 WL 649266, at *8-10 (M.D. Tenn. Feb. 27, 2007) (New Jersey statute); Weiss v. Fujisawa Pharmaceutical Co., 464 F. Supp.2d 666, 674-75 (E.D. Ky. 2006) (all “failure-to-warn claims based on conduct that occurred prior to and during the labeling approval process would be preempted”); and Zammit v. Shire US, Inc., 415 F. Supp.2d 760, 767-68 (E.D. Mich. 2006) (Michigan statute).


And while we would have to do the same for decisions from district courts in the Second Circuit, there aren't any. While In re Zyprexa Products Liability Litigation, 489 F.Supp.2d 230, 273-75 (E.D.N.Y. 2007), cited Desiano a lot, that was for things like a presumption against preemption. Zyprexa wasn’t a fraud on the FDA case. When you think about it, the absence of fraud on the FDA cases in the Second Circuit following Desiano isn’t all that surprising, since none of the states in that circuit (New York, Connecticut, Vermont) have statutes with fraud on the FDA exceptions in them.



So we're being fair about this, and setting to one side a lot more pro-defense decisions than pro-plaintiff ones. We can afford to be "fair," since the other side's getting clobbered anyway.


That's because, throughout the country most courts have continued to apply Buckman broadly, to all fraud on the FDA allegations, even when they're embedded in other, common-law causes of action. A lot of these decisions have to do with statutes that have fraud-on-the-FDA exceptions like Michigan’s.


Federal Vaccine Act: Sykes v. Glaxo-SmithKline, 484 F. Supp.2d 289, 305 n.16 (E.D. Pa. 2007).


Arizona: Kobar v. Novartis Corp., 378 F. Supp.2d 1166, 1172-74 (D. Ariz. 2005).


Florida: None except for the bound Aredia-Zometa decision out of a Sixth Circuit district court, cited above.


Michigan: Henderson v. Merck & Co., 2005 WL 2600220, at *10-11 (E.D. Pa. Oct. 11, 2005), reconsideration denied, 2005 WL 2864752, at *1 (E.D. Pa. Oct. 31, 2005); Taylor v. Smithkline Beecham Corp., 658 N.W.2d 127, 139 (Mich. 2003); Duronio v. Merck & Co., 2006 WL 1628516, at *5 (Mich. App. June 13, 2006) (unpublished). There’s also a bound Aredia-Zometa decision.


New Jersey: Doria, 2009 WL 2600517, at *1; McDarby, 949 A.2d at 271-76. And a bound Aredia-Zometa decision.


Texas: Ledbetter v. Merck & Co., 2007 WL 1181991 (Tex. Dist. Apr. 20, 2007) (“Whether it is an element of plaintiffs’ cause of action, or a way to defeat an affirmative defense, the proof is the same. All of the federalism concerns expressed in Buckman still apply.”), appeal dismissed, 2008 WL 2066580 (Tex. App. May 15, 2008) (unpublished). TAnd a bound Aredia-Zometa decision.


Utah: Grange v. Mylan Laboratories, Inc., 2008 WL 4813311, at *6-7 (D. Utah Oct. 31, 2008). On the other hand, there’s Lake-Allen v. Johnson & Johnson, L.P., 2009 WL 2252198, at *3-4 (D. Utah July 27, 2009), but that one's just weird. Lake-Allen didn't preempt the Utah statute’s exception, but only because it incorrectly treated Buckman as if were an express preemption case under the MDAs. There's nothing in it supporting the Desiano position.


Aside from the statutory fraud-on-the-FDA exception cases, there are also a large number of cases that dismiss as preempted fraud-on-the-FDA allegations that are incorporated/embedded into some other, ostensibly, common-law claims, usually denominated as “fraud,” but sometimes as negligence per se or failure to warn. See Miller v. DePuy Spine, Inc., ___ F. Supp.2d ___, 2009 WL 1767555, at *4 (D. Nev. May 1, 2009) (“any claim by [plaintiff] based on a contention that [defendant] provided inaccurate or incomplete information to the FDA would be preempted”); McCutcheon v. Zimmer Holdings, Inc., 586 F. Supp.2d 917, 923 (N.D. Ill. 2008) (off-label promotion asserted as “parallel” claim in PMA device case is preempted); Demahy v. Wyeth, Inc., 586 F. Supp.2d 642, 662 (E.D. La. 2008) (any and all claims “constitut[ing]” fraud on the FDA preempted); Clark v. Medtronic, Inc., 572 F. Supp.2d 1090 1094 (D. Minn. 2008) (preemption bars alleged “conceal[ment of] known defects from the FDA asserted as “parallel” claim in PMA device case); Mason v. Smithkline Beecham Corp., 546 F. Supp.2d 618, 627 n.5 (C.D. Ill. 2008) (any allegations “suggest[ing] that [defendant] withheld facts or studies from the FDA” are preempted); Horne v. Novartis Pharmaceuticals Corp., 541 F. Supp.2d 768, 785 (W.D.N.C. 2008) (wantonness, fraud, misrepresentation); Aubrey v. Sanders, 2008 WL 4443826, at *5 n.9 (W.D. Pa. Sept. 26, 2008) (fraud-on-the-FDA allegation in securities fraud claim preempted); In re Bextra & Celebrex Marketing Sales Practices & Product Liability Litigation, 2006 WL 2374742, at *10 (N.D. Cal. Aug. 16, 2006) (preempting fraud on the FDA allegations in failure to warn claim); Dusek v. Pfizer Inc., 2004 WL 2191804, at *7 & n.24 (S.D. Tex. Feb. 20, 2004) (“contentions [that] amount to allegations of ‘fraud-on-the-agency’” preempted; Texas prior to the statute); Webster v. Pacesetter, Inc., 259 F. Supp.2d 27, 36 (D.D.C. 2003) (fraud on the FDA allegations embedded in warning claim preempted; “plaintiffs cannot bootstrap their arguments regarding defendant’s alleged failure to report and to investigate adverse incidents to the FDA”); Andrx Pharmaceuticals v. Biovail Corp., 175 F. Supp.2d 1362, 1369-70 (S.D. Fla. 2001) (preempting fraud on the FDA allegations embedded in deceptive trade practices, tortious interference and negligence per se claims), vacated on other grounds, 276 F.3d 1368 (Fed. Cir. 2002); Baker v. St. Jude Medical, S.C., Inc., 178 S.W.3d 127, 138-39 (Tex. App. 2005) (“appellants’ fraud claim is really a fraud-on-the-FDA claim” and therefore preempted); Johnson v. Endovascular Technologies, Inc., 2008 WL 3139424 (Cal. Super. May 19, 2008) (fraud on the FDA allegations in supposed alleged “parallel” claim in PMA device case preempted); McGuan v. Endovascular Technologies, Inc., 2008 WL 3139418 (Cal. Super. May 19, 2008) (same); O’Shea v. Cordis Corp., 2008 WL 3139428 (Fla. Cir. May 19, 2008) (same).


Notably, three different New York state courts, not bound by Desiano, have not followed it. Instead, these courts all hold embedded fraud-on-the-FDA allegations preempted. Lake v. Kardjian, 874 N.Y.S.2d 751, 964 (N.Y. Sup. Dec. 17, 2008) (failure to report to FDA is not a defense to preemption); Mitaro v. Medtronic, Inc., 2009 WL 1272398, at *4 (N.Y. Sup. April 9, 2009) (“intentional misrepresentation and fraud” claims that “are premised on false representations to the FDA. . .are clearly preempted”); Rosner v. Mira, Inc., 2004 WL 5519541 (N.Y. Sup. Oct. 18, 2004) (fraud on the FDA could not be asserted as a basis for punitive damages), aff’d, 792 N.Y.S.2d 41 (N.Y. A.D. 2005).


There are also cases (like Lake) holding that fraud on the FDA is preempted when asserted as a defense to express preemption in medical device cases. See Riley v. Cordis Corp., 625 F. Supp.2d 769, 2009 WL 1606650, at *6 (D. Minn. 2009); Covert v. Stryker Corp., ___ F. Supp.2d ___, 2009 WL 2424559, at *11 (M.D.N.C. Aug. 5, 2009); Link v. Zimmer Holdings, Inc., 604 F. Supp.2d 1174, 1179 (N.D. Ill. 2008).


Finally, totally apart from formal assertions of fraud on the FDA, there is a body of case law holding that evidence tending to suggest fraud on the FDA to a jury is barred by preemption. In re Baycol Products Litigation, 532 F. Supp.2d 1029, 1052-53 (D. Minn. 2007) (expert testimony about fraud on the FDA); In re Prempro Products Liability Litigation, 2006 WL 3806391, at *6 (E.D. Ark. Dec. 27, 2006); Swank v. Zimmer, Inc., 2004 WL 5254312, at *2 (D. Wyo. Apr. 20, 2004); Skibniewski v. American Home Products Corp., 2004 WL 5628157, at *13 (W.D. Mo. April 1, 2004); Bouchard v. American Home Products Corp., 213 F. Supp.2d 802, 811-12 (N.D. Ohio 2002).


On the other side of the ledger, what’s actually followed Desiano? Not a whole lot, actually.



There’s In re Medtronic, Inc., Implantable Defibrillators Litigation, 465 F. Supp.2d 886, 896-98 (D. Minn. 2006), which used a Desiano-type argument (before Desiano was decided) to allow fraud on the FDA to defeat preemption in a pre-Riegel PMA device case. That’s contrary to unanimous PMA precedent post-Riegel. In re Guidant Corp. Implantable Defibrillators Products Liability Litigation, 2007 WL 1725289, at *10-11 (D. Minn. June 12, 2007), more or less blindly followed Medtronic Defibrillators in another pre-Riegel case. Given Riegel and its progeny, both of these are probably dead letters, unless the Eighth Circuit does something unusual. Compare In re Medtronic, Inc. Sprint Fidelis Leads Products Liability Litigation, 592 F. Supp.2d 1147 (D. Minn. 2009), reconsideration denied, 2009 WL 294353 (D. Minn. Feb. 5, 2009) (finding much broader preemption after Riegel).


One Massachusetts trial court has adopted a Desiano “independent” claim rationale. Brown v. DePuy Spine, Inc., 2007 WL 1089337, at *13. (Mass. Super. Apr. 9, 2007). Also, in Ackermann v. Wyeth Pharmaceuticals, 471 F.Supp.2d 739, 749-50 (E.D. Tex. 2006), the court more or less followed Desiano in dictum after granting summary judgment for the defendant on other, non-preemption grounds. Those other grounds – but not the court’s preemption rationale – were later affirmed. Ackermann v. Wyeth Pharmaceuticals, 526 F.3d 203 (5th Cir. 2008).


Stretching the limits, Knipe v. SmithKline Beecham, 583 F. Supp.2d 553 (E.D. Pa. 2008), seemed to be adopting a Desiano-type rationale, id. at 583 n.31, but on reconsideration, it redirected its analysis of the plaintiff’s claims towards a pure fraud on the public rationale. Id. at 597-98 (pointing out that plaintiffs “do not allege fraud on the FDA).


As mentioned, we had hoped that the Supreme Court would overturn Desiano in Kent, insteag the Court divided evenly. Still, with the missing member of the Court being Justice Roberts (a dissenting pro-preemption vote in Levine), we can be pretty confident that there’s a majority for the strong view of Buckman on the Court.


The current weight of precedent – massively in support of the Garcia view that Buckman preempts any form of state-law liability grounded in fraud on the FDA – seems to indicate that most courts share our assessment of the situation.

3 comments:

Anonymous said...

Bloggers wrote: [W]e can be pretty confident that there’s a majority for the strong view of Buckman on the Court.

My response: Not so fast. I agree that it is fortuitous for plaintiffs' lawyers that CJ Roberts recused in Desiano/Kent. But Justice Thomas, who joined the majority in Buckman, appears to have evolved in his thinking on preemption, as evidenced by his surprising concurrence in Wyeth v. Levine. I wouldn't be too confident that he's still a sure vote for preemption a la Buckman in a Desiano-type situation. He might be, but then again, maybe not.

Anonymous said...

Will someone please let Senator Orrin Hatch and Peter Barton Hutt know about this? At the Senate's HELP hearing on the Medical Device Safety Act last month, they both stated unequivocally that fraud on the FDA would provide a cause of action in a medical device lawsuit.

Beck/Herrmann said...

We're not counting on Thomas. In fact, we're pretty sure that his defection is what caused the 4-4 split. We think it's (at least) Roberts, Scalia, Kennedy, Breyer, and Alito in favor of preemption in the Desiano situation.

Nor has Sotomayor been bad for defendants in business cases, so we're not writing her off yet.