Monday, January 31, 2011

A Recent Zyprexa Ruling Lifts Our Mood

Yesterday, our 15-year-old son looked at the falling flakes and wondered aloud whether it was ever going to stop snowing. He's prone to complaint (future plaintiff lawyer) but, in truth, the ten-foot high snowbanks and the sheets of devilish, black ice are a bit depressing. We knew the arrival of 30 page Zyprexa opinion by Judge Weinstein, In re Zyprexa Products Liability Litigation, 2011 U.S. Dist. LEXIS 6207 (E.D.N.Y. Jan. 20, 2011), would move us along the happy-sad meter, but we didn't know which direction.

Not to put too fine a point on it, but Zyprexa rulings are a big deal. The Zyprexa litigation involves a big-selling medicine prescribed for important psychological maladies (including schizophrenia and bipolar disorder), with allegations that the drug is contributing to the American epidemics of obesity and diabetes. It involves claims for wrongful death, personal injury, consumer fraud, and securities violations. There have been third-party claims, federal and state civil actions, and a federal criminal action. Decisions in the Zyprexa litigation made our ten-best list in 2010 (the Second Circuit's reversal of Judge Weinstein's certification of a RICO class action by third-party payors), our ten-best list in 2009 ("Pigs Get Fat, Mississippi Got Slaughtered"), and our ten-worst list in 2008 (Judge Weinstein's certification of the RICO action). Zyprexa rulings have kept us rather busy. We've blogged about the case's treatment of Daubert challenges, caps on attorney fees, and sanctions for disclosure of confidential documents. And much more.

It's been riveting. Maybe that shouldn't come as a surprise, because the stakes have been so high, the lawyers on both sides have been so energetic and creative, and the judge has been so ... well, it's Judge Weinstein, after all. We might not agree with more than thirty percent of what Judge Weinstein writes, but there's no getting around the fact that he is brilliant, careful, and prolific. So a 30 page opinion by Judge Weinstein is like a new Oliver Stone film -- we know it'll be interesting and fear it'll be infuriating.

Except that the first 26 pages consists of listing counsel. That is one of the perils of an MDL. We flipped through the pages quickly and ended up reading a very short, straightforward discussion about learned intermediaries. Anxiety gave way to delight. Judge Weinstein granted summary judgment in a case because the plaintiffs' treating physicians testified that they "were aware of the potential metabolic side-effects of Zyprexa, including diabetes, at the time they made their prescription decisions." 2011 U.S. Dist. LEXIS at *95. Two of the doctors supplied the strongest possible statements: "none of the information they have learned about Zyprexa would have changed their treatment." Id. A third doctor stated that "he would not necessarily have treated [plaintiff] differently, and that today he would still 'tend not to change that a medicine' that a patient is already taking." Id. at *95-96. That's the sort of testimony that makes your average defense lawyer somewhat content, but also somewhat uneasy, as he or she is walking away from the deposition. It's enormously useful to know that even Judge Weinstein agrees that such testimony can end a case.

As is typical, the plaintiff did not take this sort of thing lying down. First, they submitted expert reports to the effect that a "reasonably prudent doctor" would not have prescribed the drug if they had known the truth. Id. at *97. Nice try. But the actual treating doctors testified that "they were already aware of the risks of diabetes at the time Zyprexa was prescribed." Id. Apparently, Judge Weinstein did not buy the implicit assertion by the plaintiff's experts that the treaters committed malpractice. Moreover, the plaintiffs' experts shaved things a bit too fine. They said that an informed physician would not have prescribed Zyprexa as a first-line agent. But, as is often the case with antipychotics, the plaintiff had already tried other drugs. Zyprexa here was not a first-line agent. Id. Next?

There always is a next, isn't there? And that "next" was something we've seen as often as the Seinfeld "The Contest" episode (with some striking similarities). The plaintiff trotted out the "overpromotion" theory. Judge Weinstein gave it short shrift: the plaintiff's doctors were aware of the risks, and there was no evidence that they were misled by detailers. Id. at * 98. Perhaps this was the part of the opinion that gladdened our hearts most. If Judge Weinstein can scrape the overpromotion theory off his shoe in a single paragraph, maybe that threadbare theory really is headed for the dustbin of history.

None of this clears our driveway or makes the trains run on time, but it puts us in a sunnier mood and maybe that makes it easier to deal with the insults of Winter.

Friday, January 28, 2011

Hoosier State Gets Its First MDA Preemption Decision

This guest post comes courtesy of Scott Kaiser at Shook Hardy.  He deserves all the credit and all the blame, as the case may be - but it looks like credit to us.


Indiana now has its first appellate decision concerning MDA preemption. McGookin v. Guidant Corp., ___ N.E.2d ___, No. 71A04-1001-CT-101, Slip op. (Ind. Ct. App. Jan. 21, 2011).

The decision is a straightforward affirmation of two familiar themes: that Riegel (not Wyeth or other non-medical device cases) provides the preemption rules governing Class III medical devices; and that “may” does not mean “must” when determining what constitutes a federal requirement under the MDA’s express-preemption clause.

McGookin involved the unfortunate and unexplained death of a 14-month old infant born with complete heart block.  According to the medical records and product testing introduced at trial, the “device provided therapy at all times.” Slip op. at 3. The crux of Plaintiffs’ case was not a design or manufacturing defect. Rather, Plaintiffs’ theory of defect was that the pacemaker’s labeling did not adequately warn that the pacemaker had not been tested on infants or in the particular implantation configuration in this case – i.e. abdominal implant with a unipolar epicardial lead.

The case was tried in August 2009. The jury returned a defense verdict.

Plaintiffs appealed, complaining that the trial court’s preemption ruling erroneously prevented Plaintiffs from arguing that Guidant could have and should have offered a different label than the one approved by the FDA:

Although Guidant’s label complied with the FDA requirements of its premarket approval, other FDA regulations gave Guidant the ability to add to or strengthen those regulations without prior FDA approval.  The Indiana Product Liability Act incorporates a “reasonableness” component in determining whether warnings are inadequate.  Therefore, it becomes a jury question as to whether Guidant acted reasonably in failing to add to or strengthen its warnings pursuant to 21 C.F.R. § 814.39(d).  The label, for example, could have informed consumers and physicians that the pacemaker had not been tested in infants or with epicardial leads, or with an abdominal implant.  The label could have stated that use with epicardial leads in infants was contraindicated.  The trial court therefore erred in granting Guidant’s motion for summary judgment and ruling that any attempt to impose liability on Guidant under substantive legal theories . . . predicated on challenges to conduct of Guidant allowed by and not in violation of any applicable federal requirements are preempted.
The Court of Appeals of Indiana rejected Plaintiff’s argument and affirmed the judgment.  Noting that Plaintiffs “do not allege that Guidant violated federal requirement,” the Court of Appeals of Indiana described what Plaintiffs were really alleging:  “they contend that Guidant should be liable for its failure to add warnings that are permitted, but not required, by federal law.  We cannot imagine a plainer example of an attempt to impose a standard of care in addition to the FDA’s specific federal requirements.”  Slip. op. at 13.

Thursday, January 27, 2011

Buckman Preemption – The Good, The Bad, And The Ugly – And (This Just In) The Funky

We’re returning to the topic of implied Buckman preemption today to discuss three recent decisions, Hughes v. Boston Scientific Corp., ___ F.3d ___, 2011 WL 184554 (5th Cir. Jan. 21, 2011); LeFaivre v. KV Pharmaceutical Co., ___ F.3d ___, 2011 WL 148730 (8th Cir. Jan. 19, 2011); and Goldsmith v. Allergan, Inc., 2011 WL 147714 (C.D. Cal. Jan. 13, 2011).  But before we get to these cases, we have to reiterate some things that we said not too long ago in our Bashing Bausch post.  These have to do with the relationship between implied preemption under Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), and express preemption under Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), and Riegel v. Medtronic, Inc., 552 U.S. 312 (2008).  Specifically, defendants need to keep in mind what implied Buckman preemption can and can’t do.

Specifically, as a matter of express preemption, Lohr created – under the rationale that remedies don’t matter – an exception for largely undefined state-law claims that are “identical” to FDA regulatory standards.  “Nothing in §360k denies [a state] the right to provide a traditional damages remedy for violations of common-law duties when those duties parallel federal requirements.”  518 U.S. at 495.  We have to live with that.  The Supreme Court was unanimous on the point.  Then there’s the Riegel dictum that MDA preemption “does not prevent a State from providing a damages remedy for claims premised on a violation of FDA regulations; the state duties in such a case “parallel,” rather than add to, federal requirements.”  552 U.S. at 330.

Keep that in mind.  Express preemption allows “parallel” state law duties “premised on a violation of FDA regulations.”  If such a claim exists, it may well fail for other reasons, but it won’t be expressly preempted.

Now we turn to implied preemption.  We know now – even if we don’t like it – after Wyeth v. Levine, 129 S. Ct. 1187 (2009), and Altria Group, Inc. v. Good, 555 U.S. 70 (2008), that with implied preemption, we have a presumption against preemption to deal with.  That is, where, under Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), there isn’t.

When isn’t there a presumption?

There's no presumption when we’re concerned with the dealings between the FDA and the manufacturer in question.  “[T]he relationship between a federal agency and the entity it regulates is inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law.”  531 U.S. at 348.

Keep that in mind, too.

Finally, Buckman – as a matter of implied preemption – held that preemption (akin to lack of standing) applies to bar certain types of FDCA violation claims by virtue of 21 C.F.R. §337(a), the statute’s preclusion of private enforcement.

Where is this reservoir of implied preemption found?

Where the federal claims aren’t parallel.

And when aren’t violation claims parallel?

Where the claim doesn’t have a state-law equivalent to be parallel to, but instead is wholly a creature of the FDA regulatory scheme:

[T]he fraud claims exist solely by virtue of the FDCA disclosure requirements.  Thus, although [Lohr] can be read to allow certain state-law causes of actions that parallel federal safety requirements, it does not and cannot stand for the proposition that any violation of the FDCA will support a state-law claim. In sum, were plaintiffs to maintain their fraud-on-the-agency claims here, they would not be relying on traditional state tort law which had predated the federal enactments in questions. On the contrary, the existence of these federal enactments is a critical element in their case.
531 U.S. at 353 (emphasis added).

To recap:

(1) Parallel violation claims aren’t expressly preempted by the statute’s “different from or in addition to” language.

(2) Parallel violation claims must parallel “traditional” state tort law.

(3) Buckman implied preemption is the converse – it preempts violation claims that are not grounded in “traditional” tort law.

(4) With Buckman implied preemption, there’s a presumption against preemption, again, with respect to traditional state law violation claims.

(5) With Buckman implied preemption, there’s not a presumption against preemption for claims grounded in the “relationship” between the FDA and (we’ll presume) the defendant.

The Bad – Hughes v. Boston Scientific

With those propositions in mind, we turn to the most recent case, Hughes, 2011 WL 184554.  Hughes “focus[ed] primarily on [plaintiff’s] claim that [the defendant] failed to provide adequate warnings.”  So we’re not dealing with a manufacturing defect claim.  Is this claim parallel to “traditional” tort claims? That’s the key question.  The answer, evident from the face of the complaint is (to us) no:

[Plaintiff] proceeded on the theory that [defendant] failed to comply with the FDA’s MDR regulations requiring a manufacturer of a Class III device to report incidents.
2011 WL 184554, at *3.  Specifically, the plaintiff claimed that the defendant’s reporting “algorithm” caused a failure to report certain injuries (burns similar to hers) that the FDA required be reported.  Id.  That claim is supported by your usual FDA expert spouting legal conclusions - that the defendant broke the law.

Think about that claim for a minute.  Where's the parallel tort duty?  What state common-law doctrine (as opposed to statutory-based requirement) requires anybody to report anything to a governmental agency?   Whether it's child abuse, adverse events, financial improprieties, whatever, the source of all obligations to report to the government - as opposed to duties to warn individuals - is statutory or regulatory.

There's no state common-law tort duty at all to report anything to the FDA.

Thus, as we see it, Hughes is the same as Buckman, in that the the obligation to report arises from the "relationship" between the FDA and the manufacturer, and nothing else. So that claim should have been preempted.

We call Hughes “bad” because that didn't happen.

It's not all bad.  The Hughes court first affirmed the throwing out all of the plaintiff’s standard product liability claims (manufacturing, design, and warnings).  2011 WL 184554, at *5. So far, so good. That illustrates another point we've made.  Riegel preemption remains extremely broad.  The easy to prove product liability claims, even under the worst decisions, are gone.  All the plaintiffs have left, no matter how much slack they get cut, is a rather technical regulatory based claim.

The first statement in Hughes that we really don’t like looks innocuous.  The court “[a]ssum[es] that a failure to warn claim may be pursued under Mississippi law as [plaintiff] argues.”  2011 WL 184554, at *6.



Where’s the legal argument that it doesn’t?

Apparently there wasn’t any.  That doesn’t look like a screw up by the court.  Instead, the defendant – for who knows what reason (money?) – chose to litigate with one hand tied behind its back.

Any defendant that does that – does not give the court state-law bases why these violation claims fail – is more likely to lose.  Period.  A good state-law ground:  (1) may induce the court not to reach preemption at all (that is preferentially to choose the non-constitutional ground), or (2) improves the atmosphere by demonstrating that the claim in question is pretty darn poor in any event and isn't worth salvaging.

Folks, there are lots of state-law obstacles to tort claims asserting FDCA violations.  We’ve dealt with these extensively in our negligence per se-related posts – particularly here and here.  They need to be utilized.

Defense counsel who litigate only half a case – particularly when the half they do pursue is preemption – aren’t doing their clients any favors by saving a little money.  It’s a case of penny-wise and pound foolish.  All they’re doing is increasing the likelihood of losing.

We don't like defendants losing, even when it's not our case.  It's the reverse of the rising tide floating all boats.  It's a major reason why we write this blog.

Turning back to Hughes’ treatment of the law, we have the statement “a failure to warn claim limited to an assertion that the defendant violated a relevant federal statute or regulation is ‘parallel’ to federal requirements as defined in Riegel.”  2011 WL 184554, at *6.  That’s true, as far as it goes, which is limited to Riegel and express preemption. The minimal discussion of such claims in Riegel is limited to reiterating Lohr’s conclusion that a violation claim isn’t “different from or in addition to” under the MDA preemption clause.

Hughes analogizes to an earlier case called Gomez. However, Gomez involved a very different kind of violation claim – a “negligence claim alleging that the defendant had defectively manufactured the device.” Hughes, 2011 WL 184554, at *7 (describing Gomez).

But a manufacturing-related claim is about as "traditional" a tort claim as anyone could ask for.  Such a claim is a world away from a claim that the defendant didn’t report stuff to the FDA.  But Hughes missed that distinction entirely, lumping blindly lumping together manufacturing defect claims in other cases with the peculiar warning claim before it, based entirely on failure to report, as unpreempted violation claims.  Id. at *8.

Where’s Buckman?

Where’s any discussion of violation claims that aren’t “traditional,” but rather are grounded in the “relationship” between the FDA and its regulated manufacturers?

Not yet.  That holding was limited to express preemption.

Then Hughes turns to “negligence per se” and dodges most issues – limiting itself to preemption.

[Defendant’s] preemption defense only requires us to decide which of [plaintiff’s] state law causes of action are foreclosed under § 360k. . . .  We need not decide, therefore, whether Hughes will be able to invoke the doctrine of negligence per se as a matter of Mississippi law.
Id. at *8.

There's that damn waiver again - the defendant throwing away half its defense.

What do we mean?  Well, how about Sumrall v. Mississippi Power Co., 693 So.2d 359 (Miss. 1997)?  In that case, the Mississippi Supreme Court rejected negligence per se based upon OSHA violations because, similarly to the FDCA, Congress expressed an intent that OSHA violations not become mixed up in private civil litigation:

In Otto v. Specialties, Inc., 386 F.Supp. 1240, 1244-45 (N.D. Miss. 1974), the District Court for the Northern District of Mississippi was forced to make an Erie determination of whether OSHA regulations were admissible as evidence of negligence under Mississippi negligence law. In finding the regulations to be not admissible, the district court stated:

We believe the Supreme Court of Mississippi, if faced with this question, would recognize, as we do, that what is at stake here is a question of judicial buttressing of legislative goals.  We believe that with this recognition would come a realization that, before the judiciary undertakes to supplement legislatively designed sanctions it should first inquire whether any supplementation was foreseen or is needed.  Such an inquiry into OSHA has been made by the federal courts, which have concluded that no private civil remedy is needed to fulfill the goals established by Congress in its adoption of the statute.  That this determination was made in the context of a federal civil remedy and not within the framework of the negligence per se doctrine is to us irrelevant, since both concepts share a common raison d'etre - a judicial addition to statutory penalties thought to be inadequate to the purposes the legislative branch sought to promote.

We concede that the Mississippi courts need not be bound in this matter by the federal determination of OSHA's purpose and effect.  We believe, however, that the Supreme Court of Mississippi would be persuaded by the logic of those opinions to refuse to permit the utilization of OSHA safety standards in this case, either as conclusive proof or evidence of negligence by [the defendant].
Otto, 386 F.Supp. at 1245.

We are persuaded by the district court's reasoning and hold that, in light both of it and of this Court's clearly stated rule that governmental codes and regulations are not admissible unless given compulsory force by the state legislature, evidence of OSHA regulations is not admissible to show negligence.
693 So.2d at 366-67 (emphasis added).  Cf. Chisolm v. Mississippi Dept. of Transportation, 942 So.2d 136, 143 (Miss. 2006) (negligence per se is “a tool for assessing a breach of duty only after a legal duty has already been established.  It cannot be used to create a legal obligation under Mississippi law”).

Why give away the argument that Mississippi negligence per se principles would not, as a matter of state law, recognize a cause of action predicated on the violation of a statute expressly intended by its legislative draftes to be enforced only by governmental entities?

Hughes in this respect is no different than Bausch – where the defendant also gave away this argument, likewise soundly grounded in state supreme court precedent.  Perhaps predictably, Hughes blindly follows Bausch, holding that, simply because state law generally allows “negligence per se,” there’s an unpreempted FDCA-based cause of action.  2011 WL 184554, at *8 (plaintiff “is not foreclosed by §360k from arguing at trial that the doctrine of negligence per se is available”) (citing Bausch).

But again, under express preemption, if the claim is assumed (because nobody bothers to argue otherwise) to be a “traditional” state-law tort claim, then, yes there’s no preemption because of the way Lohr read the “different from or in addition to” language.

So while Hughes so far is bad, it’s not necessarily wrong.

What was left in Hughes is fighting in the trenches, against paid FDA experts opining on what the law supposedly is.  2011 WL 184554, at *9-10.  Apparently, there are some bad facts:

[A]ny danger that the jury in this case may apply the plain terms of the MDR regulations in a different or more stringent manner than the FDA intended is considerably mitigated by the summary judgment evidence indicating that the FDA disapproved of [defendant’s] reporting practices. . . .  [T]he FDA told [defendant] that when information regarding a burn is “ambiguous” as to whether the burn requires medical treatment or intervention, the burn must be reported.
Id. at *10.  When a defendant has bad facts, it can’t afford to give up available defenses.

Finally, we get to Buckman, and here everything heads south.  Instead of evaluating whether the failure-to-report claim implicates the “relationship” with the FDA, as per Buckman, the court simply says this isn’t fraud on the FDA claim.  “The plaintiffs in Buckman were attempting to assert a freestanding federal cause of action based on violation of the FDA's regulations; the plaintiffs did not assert violation of a state tort duty.”  2011 WL 184554, at *11.  Well, that’s simply wrong as a matter of history.  Buckman was postured as being predicated on a state law duty - the duty not to commit fraud.  Cf. Cipollone v. Liggett Group, Inc., 505 U.S. 504, 530 (1992) (discussing such state law duty).  What resulted in preemption in Buckman was that the purported fraud occurred entirely in the context of the defendant’s dealings with the FDA.

Hughes then states that there’s a “recognized state tort claim,” 2011 WL 184554, at *11, but doesn't cite any case in the history of Mississippi law that created any common-law (as opposed to statutory) duty to report something to a government agency.  Hughes thus entirely papers over the yawning gap between a failure to warn and a failure to report claim.  Once again Bausch raises its ugly head.  Id.  But Bausch, wrong as it was on a lot of things, at least involved a manufacturing defect claim predicated on violation of FDA good manufacturing practices.  There's simply no traditional state law claim in Hughes.  Instead, the court did just what the Mississippi Supreme Court rejected in Chisolm, 942 So.2d at 143 – it allowed plaintiffs to use a reporting violation to “to create a legal obligation under Mississippi law.”

Hughes goes from bad to even worse at the end of its preemption discussion.  We’ll quote the language first:

[Defendant’s] interpretation of Buckman barring this otherwise parallel state claim is inconsistent with the Supreme Court’s reasoning in Riegel, decided long after BuckmanRiegel unequivocally held that parallel state claims survive a defendant’s preemption defense under the MDA because states may impose an additional “damages remedy for claims premised on violation of FDA regulations.”  Riegel, 522 U.S. at 330.  Our conclusion in this respect is also supported by our decision in Gomez, decided years after Buckman, in which we permitted a negligence claim for defective manufacturing to proceed.
2011 WL 184554, at *12.

This passage reminds of a certain scuplture on the campus of Harvard University known as the “statue of three lies.”  In all of three sentences, Hughes committed three major legal blunders.  (1) It ignored that Buckman was entirely an implied preemption case, whereas Riegel was entirely an express preemption case, thus there is no inconsistency at all between the two because they dealt with different doctrines.  (2) It overlooked that the entire violation question in Riegel was waived (552 U.S. at 229 (“we decline to address that argument”)) - so Riegel didn’t “unequivocally hold” anything at all about such claims.  (3) It ignored the fundamental difference between the “manufacturing” claim in Gomez, and the failure-to-report claim before it, with the former being a long-recognized tort claim, and the latter being a creation solely of FDCA reporting requirements.

So we think Hughes is really bad.  As to preemption it’s worse than Bausch, which for all its faults, at least involved a something that bore passing resemblance to a traditional state-law claim.  But us kvetching isn’t going to get either decision off the books.  As we already mentioned, Hughes and Bausch have one notable thing in common.  In neither case was the FDCA violation claim proper on state law, but in both cases the defendants never bothered to make state law arguments.

You can’t do that guys – not with the post-Levine legal climate surrounding preemption in the FDCA context.  We’ve said before that 2011 would probably the year that the contours of the parallel violation exception to PMA preemption would be decided.  So far, we'd have to say that the year's not off to a very good start.

The Ugly – LeFaivre v. KV Pharmaceutical

We’re sticking LeFaivre, 2011 WL 148730, with our “ugly” moniker because while we could see some logical way of arriving at the court’s result, we can’t stomach the route that the Eighth Circuit took to get there.  LeFaivre involved improperly manufactured drugs.  That much is not in dispute.  The FDA “filed a complaint” over certain manufacturing violations, and the defendant (actually more than one, but the court treated them as a unit) entered into a “consent decree” in which it “stipulated . . . that it had sold drugs that were ‘adulterated’” under the FDCA.  Id. at *1.

So LeFaivre is another “bad facts” case.  A civil suit, seeking economic damages for the same conduct was filed.  There isn’t any express preemption in prescription drug cases, so the defendant raised an implied preemption defense under Buckman.  It got lucky.  The trial court threw the case out, finding it to be nothing more than an attempt at private enforcement of the FDCA, which was barred under §337(a) as construed in BuckmanLeFaivre, 2011 WL 148730, at *2.

Recall the last three of the five propositions that we listed above with respect to Buckman preemption.  They have to do with the distinction between “traditional” common-law claims and “non-traditional” claims arising as a consequence of what the FDCA requires manufacturers to do.

Well, as we’ve already said in connection with Hughes, a manufacturing defect claim can be a state-law analogue to an allegation of violation of FDA good manufacturing practice regulations (assuming the regulations aren’t too vague – a state-law ground, and that the violation actually pertains to the product at issue).

So it would have been rational for an anti-preemption court to view the manufacturing violation claims in LeFaivre as paralleling a “traditional” state-law tort theory and, under Buckman, escaping preemption.

But the Eighth Circuit didn’t do that.  Instead, it construed the §337(a) argument as some sort of “field preemption” case – which it really isn’t, unless the “field” is so shrunken as to correspond to the sort of non-traditional tort claims that Buckman addressed.  “The Court’s comments in [Levine] regarding drugs and drug labeling strongly imply that field preemption does not apply in the present case.”  LeFaivre, 2011 WL 148730, at *5.  It also found no conflict preemption, since there was no impossibility or obstacle raised by requiring the defendant to manufacture its drugs in compliance with FDA regulations applicable to all drug manufacturers.  Id.  Well, duh.
Turning to BuckmanLeFaivre didn't couch its analysis in terms of a manufacturing defect claim having a state-law analogue and thus not being preempted because it wasn't solely a creature of federal law.  Instead, it construed Buckman as a field preemption case:

The Court in Buckman specifically applied field preemption to state-law fraud-on-the-FDA claims because policing fraud against federal agencies “is hardly a field which the States have traditionally occupied.”  Buckman, 531 U.S. at 347
2011 WL 148730, at *8.

That’s just ugly.  Buckman has nothing to do with “field preemption.”  It is purely an implied conflict preemption case.  Use of the word “field” didn't occur in the court’s preemption analysis, but rather in the context of whether a presumption against preemption applied:

Policing fraud against federal agencies is hardly a field which the States have traditionally occupied, such as to warrant a presumption against finding federal pre-emption of a state-law cause of action.  To the contrary, the relationship between a federal agency and the entity it regulates is inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law.  Here, petitioner’s dealings with the FDA were prompted by the MDA, and the very subject matter of petitioner's statements were dictated by that statute's provisions.  Accordingly – and in contrast to situations implicating federalism concerns and the historic primacy of state regulation of matters of health and safety – no presumption against pre-emption obtains in this case.
531 U.S. at 347-48 (all citations and quotation marks omitted) (emphasis added).  If Buckman had been about “field preemption,” it would have had to deal with all the other defendants and all the other myriad causes of action that had been alleged in the Bone Screw litigation.  Further, as we’ve discussed before, “field preemption” is where the unfortunate presumption against preemption was invented.  Buckman would never have found that the presumption didn't apply to a field preemption claim..

Having twisted Buckman into something unrecognizable, LeFaivre went on to conclude that “the present case is distinguishable from Buckman because [plaintiff’s] state-law claims are not fraud-on-the-FDA claims, as they focus on harm that is allegedly perpetrated against consumers rather than the FDA.”  2011 WL 148730, at *8.  We don’t know all the facts of LeFaivre, but as described in the opinion, both the nature of the claim – improper/defective manufacturing – and the nature of the facts – a violation already administratively adjudicated and thus well beyond a bare allegation – are such that we can’t say that the result violates either the language or policy of Buckman.

So we can’t describe the result in LeFaivre as necessarily bad (even though the defendant lost the preemption issue), but it sure was ugly.

The Good – Goldsmith v. Allergan

We saved the best for last, Goldsmith v. Allergan, Inc., 2011 WL 147714 (C.D. Cal. Jan. 13, 2011) – and a tip of the cyber cap to Kurt Karst at Hyman, Phelps for originally sending it along to us .

We consider Goldsmith to be an unimpeachable (if conservative) use of Buckman preemption in that the decision concluded that a purported state-law violation claim unrelated to any “traditional” state tort theory was preempted.  Goldsmith was a consumer fraud claim out of California alleging that the defendant should have to pay for “allegedly market[ing a drug] as a “multi-use” product to encourage administering physicians to use a single vile [sic] of [the drug] for more than one patient.”  2011 WL 147714, at *1.

Goldsmith offered no allegations that there was anything wrong with the design, manufacturing or labeling of the drug.

Thus Goldsmith did not involve any traditional product liability claim, only an allegation of off-label promotion.

As in Buckman, therefore, the claim arose solely because of an FDCA violation.  State common law doesn’t have a concept of off-label promotion.

[T]he Court agrees with Defendants suggestion that Plaintiff's [consumer protection] claims are based on conduct promoting [the drug] for off-label use. . . .  These, and related allegations . . . constituted an attempt to shoehorn allegations that Defendant had engaged in off-label promotion in violation of the FDCA into state consumer fraud causes of action.
2011 WL 147714, at *3 (quotation marks omitted).  Allegations of this sort are simply attempts to enforce the FDCA privately in violation of §337(a).  “No matter how artfully the Complaint is pleaded in attempting to enforce the FDCA, Plaintiff cannot enforce the FDCA’s off-label advertising provisions simply by calling it a violation of [a consumer fraud statute].”  Id. at *8.

Goldsmith contains a lot of discussion about pleading fraud under Fed. R. Civ. P. 9(b), and concludes that the complaint was insufficient with respect both the misrepresentation and reliance elements.  2011 WL 147714, at *5 (“Plaintiff never alleges that he saw any ads and relied on them”), at *7 (“Plaintiff has not alleged facts showing that Defendant's alleged representations were false or misleading”).  Thus Goldsmith contains a caveat – that such allegations might escape Buckman preemption if instead they paralleled a state-law fraud claim.  2011 WL 147714, at *3 (“Plaintiff’s [consumer protection] claims are actionable if they include properly pleaded allegations of false or misleading representations that resulted in Plaintiff's injuries”).  That also fits within Buckman’s rationale, which as discussed above, predicates §337(a) preemption/lack of standing on the state law claim at issue being purely a creature of the FDCA without any common-law analog.

For these reasons – its fidelity to Buckman in both rationale and result – we bestow our “good” designation on Goldsmith.

The Funky – Funk v. Stryker

Finally, while we were writing this post (yesterday) we noticed Funk v. Stryker Corp., No. 10-20022, slip op. (5th Cir. Jan. 25, 2011), had appeared on the Fifth Circuit’s website.

Even though it's not a Buckman case, we decided to add Funk because it’s an important appellate decision.  It creates a circuit split with Bausch, as both decisions arise from the same defect allegations involving the same device.  Circuit splits are one criteria the United States Supreme Court uses to decide whether to accept a case for appeal, and if any case deserves further review, it's Bausch.

But Funk – there’s no other way to say it –is rather funky.  Unfortunately (maybe even for us on the defense side), the plaintiff screwed up his appeal and only appealed from the original, pretty pathetically pleaded, complaint.  Slip op. at 5.  That original complaint was so poor that there wasn’t much question that the claims were all preempted.

Thus, the conflict between Funk and Bausch is more with respect to TwIqbal than preemption.  Contrary to Bausch, Funk holds that a parallel violation isn’t adequately pleaded without specifying both how the FDCA was violated and that the violation caused the plaintiff’s injury:

This complaint is impermissibly conclusory and vague; it does not specify the manufacturing defect; nor does it specify a causal connection between the failure of the specific manufacturing process and the specific defect in the process that caused the personal injury. Nor does the complaint tell us how the manufacturing process failed, or how it deviated from the FDA approved manufacturing process.
Funk, slip op. at 7.  Instead, an adequately pleaded complaint “specifies with particularity what went wrong in the manufacturing process and cites the relevant FDA manufacturing standards [the defendant] allegedly violated.”  Id. at 8.

Because Funk found that the only arguably unpreempted (violation) claim was insufficiently pleaded under TwIqbal, it didn’t have to reach any controversial preemption questions under Riegel or (as discussed above) under Buckman.

Funk does, however, hold that it’s proper to take judicial notice of “publically-available documents and transcripts produced by the FDA, which were matters of public record.”  Slip op. at 9. T hat’s a useful – if we think rather self evident – holding.

Wednesday, January 26, 2011

While We Wait On Mensing, Another Circuit Shoots Down Generic Preemption

We’re all curious to see what the Supreme Court does with the generic prescription drug manufacturers’ preemption defense in Actavis Elizabeth, LLC v. Mensing, which is scheduled for argument on March 30. In the meantime, the Ninth Circuit has weighed in on the issue, aligning with the Fifth Circuit and the Eighth Circuit and rejecting the generics’ preemption defense.

The case was filed by the guardians of a child who developed liver complications after taking OTC ibuprofen. See Gaeta v. Perrigo Pharms. Co., __ F.3d __, 2011 WL 198420, at *1 (9th Cir. Jan. 24, 2011). The Gaetas claimed that Perrigo should have warned of the increased risk of liver injury and renal failure when ibuprofen is taken concurrently with other hepatotoxic drugs. Id. The district court held, pre­-Wyeth v. Levine, that the conflict preemption doctrine barred failure to warn claims against Perrigo. Id. at *2. Even after Levine, the district court stuck to its guns and denied the plaintiffs' motion for reconsideration. Id.

The Ninth Circuit reversed, acknowledging that the Supreme Court’s Levine decision does not control the issue, but “does foreshadow a similar disposition” with respect to the preemption defense in both the brand name and generic contexts. Id. at *4. In quick order, the Ninth Circuit surveyed the state of the law, found that every post-Levine decision agreed there was no generic preemption (other than the Gaeta district court), and rejected Perrigo’s conflict preemption arguments:

(1) It was not impossible for Perrigo to comply both with state-law warning duties and FDA regulations. Perrigo could have provided additional warnings through a “changes being effected” (CBE” ) label change, requested a label change through the “prior approval” process, or requested FDA to send “Dear Doctor” letters to health care professionals. Id. at *5-8.

(2) There was no “clear evidence” that FDA considered and rejected stronger warnings. Although FDA in 2002 and 2006 considered additional hepatotoxicity warnings relating to ibuprofen, “[n]owhere does Perrigo point to any evidence that the FDA was presented with and actually considered the risk of hepatotoxicity due to concomitant use of ibuprofen and other drugs known to be hepatotoxic, which is the specific warning requested by the Gaetas in this case.” Id. at *10.

(3) Allowing state-law warning claims to proceed would not frustrate the purposes and objectives of FDA’s regulatory scheme. Although Perrigo argued that expanding liability would force generics out of business and remove low-cost drugs from the market, the court found that Congress’s goal of delivering low-cost drugs did not supplant the FDCA’s overarching goal of ensuring the safety and efficacy of those drugs. Id. at *11. The court also found it “speculative” to assume that “consumers will lose confidence in generic drugs if they contain warings different from those of the brand name drugs.” Id. at *12.

We’ll have to wait a few more months to see if the Supreme Court agrees with the Gaeta court’s decision or its underlying rationales, but in the meantime, add the Ninth Circuit to the roster of courts rejecting genericss’ preemption defense.

Tuesday, January 25, 2011

Snowbird Can’t Escape The Statute of Limitations She Left Behind

It’s cold here in Philadelphia and in much of the country. Really cold, your-car-makes-weird-noises-you-start-it cold. When it’s this cold up here, people start fantasizing about moving to Florida and leaving their snow shovels, rock salt, hats, coats, gloves, and all that behind.

Is there a point to this about drug and device law, you may wonder? Yes, there is. Like those constricting coats and scarves that keep us warm but limit our freedom of movement, many states in the Northeast and middle Atlantic states have two-year statutes of limitations for tort claims. But Florida, a sunnier land for tort plaintiffs, has a four-year statute. And snowbirds with potential causes of action might think that they left their home state’s restrictive statute of limitations behind with their snowblowers when they moved to Florida. Chapman v. Depuy Orthopedics, 2011 WL 149329 (M.D. Fla. Jan. 18, 2011), shows that ain’t necessarily so.

The plaintiff in Chapman had her hip replaced in 1995, when she lived in Virginia. She moved to Florida in 2000 and was treated by a Florida doctor, although he sent her x-rays back to her doctor in Virginia. In late 2006, a fatigue fracture was detected, and the injury manifested itself and was discovered in Florida. She returned to Virginia for treatment and had another hip replacement there in 2007. She sued Depuy in Florida in June 2009, more than two years, but less than four years, after detection of the problem with her replacement hip. Depuy moved for summary judgment, arguing that her claim was untimely under Virginia law. Plaintiff argued that she left Virginia’s statute of limitations behind and that Florida’s statute of limitations applied.

The court applied Florida’s choice of law rules to decide which state’s law to apply. Florida follows the “most significant relationship” test, which considers a bunch of factors. The bad news for Depuy is that the place of injury is usually considered the key factor in tort cases, and some judges stop their analysis right there.

But usually does not mean always. The Chapman court found “that the place where the injury occurred is little more than happenstance under the circumstances presented here.” Id. at *2. The court relied on the facts that plaintiff received her replacement hip in Virginia, had follow up care there from 1995 to 2000, had her x-rays sent there after she moved to Florida, and returned to Virginia for treatment when the hip failed in 2006. Id. The only factor favoring Florida was that the injury manifested itself and was discovered there, but that did not override the other factors. As a result, the court held that “Virginia, the state where the product was delivered and where all the significant medical services were rendered, has a greater interest in applying its law to determine the duties and liabilities arising from those activities than Florida.” Id. at *3.

That was the ballgame for plaintiff. The clock on her claim unquestionably started to run in December 2006, when the fatigue fracture was found, and her June 2009 lawsuit was therefore too late under the Virginia statute of limitations. Id.

A tip of the hat to David Walz of Carlton Fields, who alerted us to this little gem.

Monday, January 24, 2011

Will The Supreme Court Tackle a Plaintiff End-Run Around No Private Right of Action?

Okay, that's a klutzy title. The football obsession doesn't leave us until the morning after the Super Bowl. But the Iggles have been ignominiously bounced from the NFL playoffs, so the Supreme Court oral arguments have been our favorite spectator sport over the last week. One involved the continuing saga of the Anna Nicole Smith case. Who would've thought that case would outlive her? And yet, the case we paid the most attention to was Astra, USA v. Santa Clara County. The issue in that case is whether federal courts may confer a private right to sue for breach of contract on third-party beneficiaries of a government contract when the statute mandating the contract contains no private right of action. Are you excited yet? Ready to break out the chips and beer? Ready to wave that foam #1 finger?

Federal law imposes ceilings on prices that drug manufacturers may charge for prescription medicines that are sold to certain health care facilities providing services to the poor ("340B entities"). Federal law also, as a condition of participating in state Medicaid programs, requires drug manufacturers to enter into contracts with HHS. These contracts are called Pharmaceutical Pricings Agreements ("PPAs"). Under the PPAs, drug manufacturers agree to provide discounted prices to the 340B health care providers and entities. If HHS believes that a manufacturer is not complying with the requirements, the PPA authorizes HHS to initiate an informal dispute resolution process. Neither the federal laws nor the PPA provide for a 340B entity, or any third-party beneficiary of the agreement, to enforce the price ceiling.

In this case, Santa Clara County brought suit on behalf of numerous 340B entities, alleging that the drug companies were not complying with the price ceilings. The claim was not brought under the federal statute, because everybody agreed that the federal statute did not provide for a private right of action. Instead, the County pursued a third-party beneficiary breach of contract claim. The district court dismissed the third-party beneficiary breach of contract claim because neither the statute nor the pricing agreement reflected an intent to provide private parties the right to sue to enforce the pricing requirements.

And then the Ninth Circuit entered the picture. The Ninth Circuit reversed and held that federal common law permits a third-party beneficiary, such as a 340B entity, to bring a breach of contract action to enforce the statutory drug pricing provisions incorporated into the agreements. The case was remanded and a discovery dispute ensued. The plaintiff filed an interlocutory appeal to the Ninth Circuit, which invited HHS to file an amicus brief. Sometimes you get more than you ask for. The government brief stated that “it never imagined that a 340B entity could bring a third-party beneficiary lawsuit” and that such a lawsuit would confer “rights never intended” by the pricing agreements. Did that rather clear expression of government intent change the Ninth Circuit's mind? No, it did not. Instead, the Ninth Circuit simply reissued its earlier decision, changing it only to open up discovery. Strangely, the Ninth Circuit did not discuss HHS's position that permitting a private right of action would disrupt the statutory scheme. 588 F.3d 1237 (9th Cir. 2009).

Why are we interested in this rather Byzantine set of facts with an almost-as-Byzantine procedural posture? We've written often about various ways in which plaintiffs attempt to bring actions alleging violations of the FDCA even though there is clearly no private right of action under that statute. Here, for example. Most courts reject those efforts. But every once in a while a court will flout Congressional intent and permit such an action to go forward. For example, the recent Bausch abomination seized upon negligence per se as a basis for a plaintiff cause of action to proceed. Talk about waving a finger (though not number 1) at Congressional intent and Buckman.

So while Astra, USA is more different-from than similar-to our sort of case, it is interesting to see what happens to a plaintiff that uses a clever way (here, third-party beneficiary contract theory) to circumvent Congressional intent. It should come as no surprise that we agree with the position of the pharmaceutical companies in the case, as well as the government amicus, that unless Congress intends to create a private right of action, a cause of action does not exist and the courts may not create one. Because Congress didn't decide to create a private cause of action to allow the 340B entities to enforce the statutory price ceilings via damage suits, the federal courts cannot create such a right. Congress expected HHS to exercise judgment in enforcing price ceilings. To permit third party beneficiaries to sue drug companies for alleged overpricing would run afoul of the requirement that only Congress can authorize private enforcement of the Public Health Service Act.

The lawyer for the pharmaceutical companies barely got a minute into her presentation before Justice Sotamayor asked why this wasn't a straight contract case. The lawyer made the point that contracting parties "had no discretion to confer Article III power on courts to enforce an act of Congress." Justices Kennedy and Breyer seemed concerned as to whether, absent the contract theory, there was any remedy. The answer is that yes, there is a regulatory remedy.

The government amicus lawyer went next, arguing that this was "not an ordinary contract and it does not transform the 340B program from a regulatory scheme into a contractual one." The government lawyer also made the point that "[t]his isn't a negotiated agreement." The PPA contracts merely repeat the terms of the statute. Signing such a contract serves to "mark entry into the regulatory scheme" and it "would be very odd then to say that the entire area is regulated by breach of contract law rather than by the hundreds of pages of regulations and statutory provisions that govern the providers' rights here." The government lawyer also addressed the problem of individual actions disrupting the federal scheme: "if you start permitting covered entities to bring suit, this is essentially a preemption question, but you then have 50 different State regimes, State court regimes, put onto, grafted onto, the Medicaid rebate requirements." Sound familiar? You noticed that "preemption" word, right?

The lawyer for Santa Clara County argued that normal contract laws should apply to the case. Justice Scalia pounced on that thought: "but the third-party beneficiary has rights under the normal contract only when the parties intend him to have rights.... And I have trouble finding that intent here." Interestingly, Justice Sotomayor seemed to agree that the contract manifested no intent that third parties could enforce the price ceiling. Justice Alito asked whether it was possible for the parties to intend that third parties benefit, but not that they be able to sue. The answer? "Yes." [Narrow-grounds-of-opinion alert.]

Justice Breyer asked the County lawyer to address two major questions: "One of them is Congress, in the statute it incorporated here, didn't want a private person to be able to enforce it. And the second one is it is going to create a mess." Chief Justice Roberts elaborated on the "mess" point, pointing out that a private right of action puts "an awful lot of power and authority in the hands of one beneficiary and one lawyer saying -- all they have to do if filing a suit saying, look, we get a hundred doses of Lipitor from this program, we think we should get less. And if they win, the whole country's -- the pricing of Lipitor under this program has changed.... That strikes me as an argument in favor of leaving the enforcement with the Secretary." Chief Justice Roberts later observed that a lot of the County's argument came from "the earlier world of implied right of action jurisprudence that has changed dramatically in the last 30 years."

It's impossible to predict what the Supreme Court will do, but perhaps Justice Ginsburg summarized where the Court is likely headed: "Congress has not provided for a private right of action to enforce the terms of the statute. The contract embodies the terms of the statute. So it would be passing strange if Congress, as we now read Congress, says we want private parties out of this, this is to be between the agency and the manufacturer, to say the exact same result, the same aim can be achieved through this third-party beneficiary route." As indicated above, it's possible the Court will go off on narrow grounds, and we'll get something on whether there was an intention to benefit third-parties, or an intention to permit certain specific avenues of enforcement by third parties. But it is also possible we'll get something broader on why parties should not be able to do an end-run around Congressional decisions not to create a private right of action. Something along those lines could make us third-party beneficiaries of some very nice language.

Friday, January 21, 2011

Prempro Short Term Use Daubert Decision - Favorable

Here's an important decision that we can't say much about because we're involved up to our eyeballs in this litigation.  The MDL magistrate judge in the HT litigation has granted a Daubert motion excluding plaintiffs' expert testimony that short term use (less than three years) causes ductal breast cancer.  This will affect a lot of cases.  Here is a the opinion:  In re Prempro Products Liability Litigation, MDL No. 1507, slip op. (W.D. Ark. Jan. 18, 2011).

We'd like to say more, but we simply can't.

Caronia Update: What Went Down At The Oral Argument

We’ve blogged about United States v. Caronia before. In fact, some might say we’re a bit obsessed by it, and with good reason; the First Amendment’s a big deal to us, and Caronia represents an opportunity for a Court of Appeals to pass on the constitutionality of FDA’s draconian and convoluted off-label promotion rules. As a reminder, Mr. Caronia is the poor sales rep that was convicted of conspiring to misbrand Xyrem by promoting it for off-label uses.

Now we’ve gotten our hands on an unofficial transcript of the oral argument before the Second Circuit Court of Appeals (thank you Rick Samp, over at WLF), and here’s what happened:

The panel was Judge Denny Chin, Judge Debra Ann Livingston, and Judge Reena Raggi. Interestingly, Judges Raggi and Livingston were recently on a panel in another First Amendment case, where the court ruled that Vermont’s restriction of religious vanity license plates violated the Free Speech clause (that case is Byrne v. Rutledge, 623 F.3d 46 (2d Cir. 2010), if you’re interested).

The Caronia panel was a hot bench. In particular, Judge Raggi challenged all of the advocates – especially the government attorney, Douglas Letter. A few themes emerged:

1) We previously speculated that the Second Circuit could dodge the constitutional question because the defendant argued in the alternative that there was an inconsistency in the verdict sheet. The panel didn’t seem at all inclined to do that. It gave the verdict sheet issue pretty short shrift, and quickly homed in on the Constitutional issues raised by the appeal, so it’s looking likely that the decision will tackle the First Amendment issues head-on.

2) Jennifer McCann and Eric Murphy (WLF) argued on behalf of the defendant. They made clear that this case presents an overbreadth challenge. The FDA’s off-label regulatory scheme is unconstitutional as applied here, where approval for the off-label use is pending. That’s a rather limited, but particularly sympathetic fact pattern – but you know what they say about camel’s noses and tents. Thus, the defendant argued, the regulatory scheme is not narrowly tailored to achieve the government’s stated goals; although FDA says it restricts off-label speech so as to incentivize manufacturers to go through the rigorous approval process, in this case, the manufacturer was seeking approval for the off-label use. Judge Raggi asked Murphy whether there is a reasonable distinction between restricting the speech of company scientists or doctors, which she suggested would lead to an overbreadth problem, and restricting the speech of a sales rep, which could be viewed as a reasonable limitation consistent with the government’s regulatory purposes (i.e., limiting uninformed discussion by someone whose interest is simply to “tout” the drug).

3) Douglas Letter’s argument on behalf of the government started where you’d expect: First Amendment? We don't need no stinkin’ First Amendment. We’re punishing conduct – the introduction of a misbranded drug into interstate commerce – and the speech at issue is simply evidence of intent. Reading tea leaves, that argument isn’t going anywhere. Judge Raggi and Judge Chin both challenged Letter extensively on this point, in the process repeatedly underscoring that doctors may lawfully prescribe drugs for off-label purposes. So, asked Judge Raggi, since a doctor could prescribe Xyrem off-label, and the Xyrem that hypothetical doctor prescribed would carry an identical label to Xyrem being prescribed for an approved use, the only thing making the off-label Xyrem “misbranded” (and thus giving rise to criminal sanctions) is the speech “touting” the off-label use. Ergo, the government’s punishing speech, not seeking to use it as evidence of intent. When Letter tried to dodge this, Judge Livingston asked Letter whether a manufacturer violates FDA regulations where the manufacturer knows the prescriber is going to use Xyrem for an off-label use, but nonetheless ships the Xyrem to the prescriber without saying anything about that off-label use. Letter didn't really have a good answer to this; he dodged and said there would not be a violation because the hypothetical presented a scenario where the manufacturer had “subjective intent” as opposed to “objective intent.” Huh? Judge Livingston called him on this, asking what else a manufacturer might do that would be evidence of “objective intent.” Ultimately, Letter had to concede that he knew of no off-label case where the government proved misbranding without relying on evidence of off-label speech.

4) In a related argument, Letter repeatedly stressed that “promotion is not a crime.” Yet Judge Raggi said she was “really concerned that this case went to the jury with the understanding that what was proscribed here was drug promotion.” When she asked whether the First Amendment would require reversal if the jury was instructed that promotion is illegal, Letter responded (naturally) that there was no need to reverse because the regulations passed intermediate scrutiny under the Central Hudson test for restrictions on commercial speech.

5) On the core First Amendment issue, the judges expressed concerns about the vagueness of the regulatory scheme, as well as the seeming disconnect between the government’s stated purpose and the sweeping scope of that scheme. Right out of the box, Judge Raggi was all over Douglas Letter, asking where someone can look for clear guidance as to what a sales rep can or can't do. The government’s answer: the guidance put out by FDA “makes clear what manufacturers can do.” Judge Raggi followed up by questioning how that is a “standard” by which courts can decide whether a crime has been committed. A fine question, we might add, and one that the government tried to dodge by falling back on the “promotion is not a crime” mantra. And on the disconnect between the government’s stated interests and the regulatory scheme at issue, Judge Raggi again pushed Letter hard. If the government is concerned about a manufacturer “dilly-dallying” in its efforts to seek approval for an unapproved use, FDA could “put timetables” on the manufacturer. But, Judge Raggi said, “[t]he concept of completely precluding speech is one we look at with some concern. And so I’m not sure why this can't be much more narrowly tailored.” When Letter responded with the bugaboo of past experience – the horror story of widespread off-label use leading to “public health disasters” – Judge Raggi cut that argument off immediately, explaining that in such a situation, FDA could stop the sale of the product entirely, or otherwise limit its use. “But as long as you’re allowing the physician to prescribe it for off-label purposes… I think you have to agree that there’s a concern that more speech is generally better than less speech.” The government’s response to that? “Absolutely, Your Honor, I couldn't agree more.” We agree too.

So what’s going to happen in Caronia? A long time ago we learned that you can get burned when you try to predict an outcome based on questions asked at oral argument, but we'll give it a shot. Based on the transcript, we’d venture to say that the panel will reach the First Amendment issues, will reject the government’s argument that the First Amendment isn't implicated at all, and will tackle the overbreadth and vagueness problems pervading FDA’s regulatory scheme. We’d give an edge to the defendant on those arguments, but you probably could have guessed that by now. Stay tuned.

On The Preemption Radar Screen

It's not exactly drugs/devices, but it's food (which is close), and it's preemption, and it's the Supreme Court, so we thought we'd let you know.   There's a pending cert. petition called National Meat Ass'n v. Brown, No. 10-224.  One of the questions presented, which attracts our attention, is:
Did the Ninth Circuit err in holding that a "presumption against preemption" requires a "narrow interpretation" of the FMIA’s express preemption provision, in conflict with this Court’s decision in Jones v. Rath Packing Co., 430 U.S. 519, 540 (1977), that the provision must be given "a broad meaning?
As the docket indicates, the Court recently (on 1/18/11) invited the SG's office to file a brief stating the government's views.  Our readers interested in preemption might want to watch for that - we will.

The facts, we must admit, are not ones we're particularly happy with, as they involve "Mad Cow Disease" prophylactic measures (what to do with "nonambulatory" cattle), and whether a state statute that's stronger than current federal law is preempted.  Like radiation (remember Silkwood), bovine spongiform encephalitis is "scary" to the public, and that's probably not helpful to the pro-preemption side.

Thanks to Mike Imbroscio at Covington for the tip.

Thursday, January 20, 2011

Already DTC (Done Through Causation) - More Thoughts About A DTC Exception

We blogged about the highly suspect decision in Centocor, Inc. v. Hamilton, 310 S.W.3d 476 (Tex. App. 2010), and last month awarded it the dubious honor of our #4 worst drug/device decision of all 2010.

Well, that isn’t all we’ve done. We (well, Bexis) submitted an amicus brief in Hamilton in the Texas Supreme Court earlier this week.  Doing that required us to sit down and think about the supposed (except in New Jersey) “DTC (direct to consumer) exception” to the learned intermediary rule - more than we had before (which was relatively little). And it just so happened, that when we exercised our brains, we came up with more thoughts.

As we mentioned in the earlier post, the first problem with Hamilton was that it wasn’t even a DTC advertising case.  Instead, it was a situation where the defendant provided patient-friendly material (a videotape) to the doctors and those doctors had the final say in whether the plaintiff ever saw the material.

Our gut reaction then was that this sort of professionally-mediated information wasn’t what anybody really considered DTC advertising.  Now, having looked at that question further, we know we’re right.  Why?  Well, for one thing the FDA says so.  The Agency itself doesn’t consider a videotape (or anything else) provided to a physician for the physician use with patients (or otherwise) to be DTC advertising – or “advertising” at all.


The FDA considers material provided to physicians for them to use (or not) with their patients to be “labeling”:
(l)(1) Advertisements subject to section 502(n) of the act include advertisements in published journals, magazines, other periodicals, and newspapers, and advertisements broadcast through media such as radio, television, and telephone communication systems.

(2) Brochures, booklets, mailing pieces, detailing pieces, file cards, bulletins, calendars, price lists, catalogs, house organs, letters, motion picture films, film strips, lantern slides, sound recordings, exhibits, literature, and reprints and similar pieces of printed, audio, or visual matter descriptive of a drug and references published (for example, the “Physicians Desk Reference”) for use by medical practitioners, pharmacists, or nurses, containing drug information supplied by the manufacturer, packer, or distributor of the drug and which are disseminated by or on behalf of its manufacturer, packer, or distributor are hereby determined to be labeling as defined in section 201(m) of the act.
21 C.F.R. §202.1(l)(2) (emphasis added).  Indeed, a lot of package inserts have patient-friently information (often called “medication guides”) attached directly to them in “tear off” form for distribution for patients if the physician so chooses.  The FDA even compiles and makes this material available on its website.

Nor has any other court ever treated professionally-mediated patient information as if it were “DTC advertising.  See In re Prempro Products Liability Litigation, 514 F.3d 825, 830 (8th Cir. 2008); Thom v. Bristol-Myers Squibb Co., 353 F.3d 848, 852 (10th Cir. 2003); In re Norplant Contraceptive Products Liability Litigation, 955 F. Supp. 700, 708-09 (E.D. Tex. 1997), aff’d in pertinent part, 165 F.3d 374, 379 n.4 (5th Cir. 1999); Spychala v. G.D. Searle & Co., 705 F. Supp. 1024, 1033 (D.N.J. 1988); Frye v. Medicare-Glaser Corp., 605 N.E.2d 557, 560-61 (Ill. 1992); Seley v. G.D. Searle & Co., 423 N.E.2d 831, 840 (Ohio 1981); Terhune v. A.H. Robins Co., 577 P.2d 975, 979 (Wash. 1978); Banner v. Hoffmann-La Roche, Inc., 891 A.2d 1229, 1236 (N.J. Super. App. Div. 2006); Kennedy v. Merck & Co., 2003 WL 21658613, at *5 (Ohio App. July 3, 2003); Wyeth-Ayerst Laboratories Co. v. Medrano, 28 S.W.3d 87, 93 (Tex. App. 2000); Presto v. Sandoz Pharmaceuticals Corp., 487 S.E.2d 70, 74 (Ga. App. 1997); Taurino v. Ellen, 579 A.2d 925, 930 (Pa. Super. 1990); see also 3 American Law of Products Liability 3d §33.33, at p. 61 (1997 & Supp. 2010).

But even putting aside that the court in Hamilton reached for an irrelevant “exception” in its desire to find some sort of way around the prescribers’ full knowledge of the relevant risks, we don’t think that a DTC exception to the learned intermediary rule has any merit in prescription medical product liability litigation – for two reasons.  First, such an exception is at odds with the policy reasons why 48 states (and DC and Puerto Rico)  follow the learned intermediary rule.  Second, such an exception is totally unnecessary, because the scenario that the exception purports to address – patients marching into their doctors’ offices and demanding drugs based upon DTC advertising – is subsumed in the existing causation element of the learned intermediary rule.

We've seen a lot of discussion of reason #1, but not much of reason #2.

As for the first, there are about five policy reasons that courts have adopted the learned intermediary rule. They are:
  • The warning duty is owed to the physician because the physician is the only person with knowledge of both the particular patient’s medical history and condition (in Texas, the word used is “susceptibilities”) and the risk/benefit profile (called “complex” and “esoteric”) of the drug.
  • Directing the warning duty to the physician keeps the common law in accordance with the restricted distribution system for prescription drugs/devices imposed by the federal Food, Drug & Cosmetic Act.
  • Requiring prescription drug/device information to be routed through the doctor preserves the physician/patient relationship from outside interference.
  • Lay patients would be unable to understand the medical terminology necessary to explain the risk/benefit profile of prescription drugs/devices.
  • As a practical matter, it is difficult for drug/device companies to communicate directly with patients.

We’re not going to clutter up those bullet points with hordes of citations.  We’ve discussed these policy reasons before, and Chapter 2 of Bexis’ book has a complete listing of the cases (there are lots) supporting each of them.

The DTC exception does damage to all except possibly the last.

Doctors are still uniquely situated in that they know (in Texas-speak) both the “patient and the palliative.”  If anything, the divide between physicians and patients has grown.  Just take a look at practically any package insert for a prescription drug or device. The amount of technical terminology – particularly in the contraindications/warnings/precautions sections – is enormous.  What was “esoteric” three decades ago is even esotericer now.  The same is true of the other side of the interface, the patient’s medical condition, with genetics and MRIs and hosts of other new tests and knowledge crowding around.  And, of course, the law of informed consent still exists, so doctors remain obliged to have the risk/benefit discussions that the learned intermediary rule envisions with their patients.  If they don’t do it, because of “managed care” or whatever, that’s hardly a drug/device company’s fault, and there's an independent basis for informed consent liability.

Nor can a patient motivated by DTC advertising (legally) get around the need for a doctor’s evaluation.  The law hasn’t changed.  Prescription drugs are available only by prescription.  That it's somewhat tautological doesn't mean it's still true.  The FDA requires involvement of a physician precisely because of the inherent risks and benefits of prescription drugs.  If the consumer alone can handle the information, with no need for physician input, the drug would be over-the-counter.

Anytime an individualized physician/patient relationship exists, it should be protected from invasion by outsiders acting under compulsion of overly intrusive tort duties.  The supposed fear that “managed care” is eroding the physician/patient relationship:  (1) doesn’t justify the law ignoring such relationships where they do exist, and (2) is already addressed by the existing “mass immunization” exception, which covers the use of prescription drugs where there is no physician/patient relationship worthy of the name.  To the extent there is pressure on the physician/patient relationship, a DTC exception only makes it worse by broadly forcing drug/device companies to provide information that, at best, the patient’s physician considers unnecessary and at worst considers affirmatively harmful.

Nor would a DTC exception provide patients with comprehensible information beyond what is already available.  Modern package inserts already contain patient-friendly information, and that information is widely available on the web, including on the FDA’s website.  If a doctor wants to give this information to a particular patient s/he can do so.  If s/he doesn’t, there’s probably a good reason why not (for example, a lot of psychiatrists don't bring up suicide risk with depressed but non-suicidal patients), and forcing a manufacturer to provide information a doctor doesn’t want to provide is rarely a good idea.

Given the Internet, the practicalities of communications have indeed changed.  But that’s hardly a reason for a broad DTC rule that ignores the facts of individual cases.  Sure, the warnings, etc. are out there – or can be put out there – so that they’re only a few mouse clicks away.  That’s usually mentioned on DTC ads anyway (and the print ones provide full risk information already).  But this change in accessibility assumes that the patient is actively seeking the information, we would hope at the direction of the prescribing physician.  As to patients who are not taking positive steps to become informed, all of the practical problems remain, since drug/device companies rarely if ever know the identities of patients so that they could provide timely direct to patient information even if they wanted to.  If anything, the increasing emphasis on medical privacy only aggravates the practicality problems identified by the courts.

Since the DTC exception has always flown in the face of the jurisprudential policies that caused courts to adopt the learned intermediary rule in the first place, it’s hardly surprising that practically every court (except the New Jersey Supreme Court, which sprang it on everyone out of the blue) to consider such an exception has declined to adopt it.  In re Diet Drugs Products Liability Litigation, 2009 WL 902351, at *2 (E.D. Pa. April 2, 2009) (applying Missouri law); Allgood v. Glaxosmithkline PLC, 2008 WL 483574, at *3-4 (E.D. La. Feb. 20, 2008), aff’d, 314 Fed. Appx. 701 (5th Cir. 2009); Mendez Montes De Oca v. Aventis Pharma, 579 F. Supp.2d 222, 229 (D.P.R. 2008); Beale v. Biomet, Inc., 492 F. Supp.2d 1360, 1376 (S.D. Fla. 2007); Cowley v. Abbott Laboratories, Inc., 476 F. Supp. 2d 1053, 1060 n.4 (W.D. Wis. Feb. 28, 2007) (applying North Carolina law); Heindel v. Pfizer, Inc., 381 F. Supp.2d 364, 378 n.6 (D.N.J. 2004) (applying Pennsylvania law); In re Meridia Products Liability Litigation, 328 F. Supp.2d 791, 812 n.19 (N.D. Ohio 2004), aff’d, 447 F.3d 861 (6th Cir. 2006); Hackett v. G.D. Searle & Co., 246 F. Supp.2d 591, 594 (W.D. Tex. 2002); In re Norplant Contraceptive Products Liability Litigation, 215 F. Supp.2d 795, 812 (E.D. Tex. 2002) (applying law of every state except NJ); Norplant, 955 F. Supp. at 707-08; Allen v. G.D. Searle & Co., 708 F. Supp. 1142, 1148 (D. Or. 1989) (rejecting concept pre-Perez); Larkin v. Pfizer, Inc., 153 S.W.3d 758, 766 (Ky. 2004); Albertson v. Wyeth, Inc., 63 Pa. D. & C.4th 514, 539 (Pa. C.P. Philadelphia Co. 2003).  The ALI also excised such an exception from the Third Restatement of Torts after some academics floated it as a trial balloon in an initial draft.   See Restatement (Third) of Torts, Products Liability §103(a)(3)(iii) (Council Draft No. 1, 1993) (including DTC exception); Restatement (Third) of Torts, Products Liability §4(b)(3), at Preface (Council Draft No. 1A, 1994) (reiterating that a restatement of the law is no place for theoretical exceptions with virtually no case support).

But aside from all of the policy reasons why a DTC exception is a bad idea, after having considered the situations in which the New Jersey Supreme Court in Perez v. Wyeth Laboratories, Inc., 734 A.2d 1245 (N.J. 1999), postulated it would be applicable, we simply don’t think there’s any need.  While some of that opinion sounds like the court simply decided to give vent to its personal dislikes about advertising (id. at 1247, 1251, see Hamilton, 310 S.W.3d at 506), the substantive reason offered for the rule is that DTC advertising encourages patients to confront their doctors with demands for the drugs they saw advertised:
Physicians no longer make the final decision as to whether a patient will take a drug - patients make those decisions. . . .  After years of patients being subjected to direct advertising, physicians state that they are increasingly asked and pressured by their patients to prescribe drugs that the patient has seen advertised. . . .  Physicians argue it is not their fault; rather, they claim pushy patients, prodded by [direct-to-consumer] advertisements, pressed, wheedled, begged and berated them for quick treatments.  Physicians claim that it is impossible to compete with pharmaceutical companies’ massive advertising budgets, and resign themselves to the fact that if consumers make enough noise, they will eventually relent to patient pressure.

Hamilton, 310 S.W.3d at 507 (various citations omitted).

We personally doubt that doctors are patsies in the face of patient demands, as Hamilton suggests, but even assuming that the supine-physician scenario exists, so what?  Under that rationale, there’s no reason whatsoever to adopt a blanket exception to the learned intermediary rule for DTC advertising.  The existing requirement of warning causation under the learned intermediary rule is perfectly capable of handling this described situation.

Here’s what we mean.

In any product liability case (involving any product) the plaintiff can only recover is s/he proves that the defect in the product caused the injury.  In any warning case (involving any product), ignoring such monstosities as heeding presumptions, applying the general principle means that there must be facts establishing that a defect in the warning caused the injury.  That means that somebody, somewhere had to rely upon the defect in the warning when selecting or using the product.

OK, let’s get more specific. We’ve discussed the role of warning causation in learned intermediary rule cases many, many times, since it’s one of our major defenses.  Causation in a learned intermediary case means proving that the doctor in some way relied upon the inadequate information in a drug/device warning while deciding to put the plaintiff on the product.  Otherwise the plaintiff loses.  In Hamilton, for instance, there was no way for plaintiff to prove causation because the doctors who prescribed the drug both testified that they already knew about the risk in question, discussed it with the plaintiff, and elected to prescribe anyway.  310 S.W.3d at 485 (first prescriber “testified that he also discussed the risks of using Remicade, including the risk of developing a lupus-like syndrome”), 493 (second prescriber’s “notes indicate that she discussed the possibility of lupus-like syndrome with” plaintiff).

Since the Hamilton plaintiff was not exposed to any DTC advertising before a prescription was written, Hamilton is pretty far from the situation the DTC exception purports to address.  That's not accidental.

If the facts were otherwise, a plaintiff wouldn’t need to resort to the DTC exception at all.  If there was some inadequacy (whatever it might be) in DTC advertising that helped motivate a patient to go to his/her doctor and hector the doctor until the doctor rolled over and prescribed the drug/device, then under standard warning causation principles as routinely applied with the learned intermediary rule, the case goes to the jury on causation.  That’s because in the supine physician situation – the one postulated in Perez and Hamilton – the defect in fact caused (albeit indirectly, through motivating the patient to confront the doctor) the doctor to modify his/her prescribing decision from what it would otherwise have been.

So the DTC exception is totally unnecessary in the supine physician situation for which courts claim that it’s been created:  where assertive patients, influenced by DTC advertising, force changes in the prescription decisions made by their doctors.  That scenario, like other forms of indirect causation (one doctor telling another; overpromotion; misleading medical articles, etc.), is already encompassed by the warning causation element of the intact learned intermediary rule.  If the defect – some inadequacy in the DTC advertising – in fact causes the patient to do something that in turn causes the doctor to prescribe the drug/device when otherwise s/he wouldn't, then there’s a jury submissible case under the learned intermediary rule.

Carrying this analysis further, when does a DTC exception actually make a difference in a case outcome?

When the patient deserves to lose anyway, that’s when.

A DTC exception makes a difference where – like Hamilton – in fact, the supposed DTC advertising (assuming that there was any) does not have any causal effect under the specific facts and circumstances of a particular case.  In Hamilton the patient didn’t even see the film until after the prescription had already been made.  310 S.W.3d at 486 (“the decision to take Remicade has already been made by the time a patient arrives at his infusion clinic” where plaintiff saw the film).  DTC advertising causation in Hamilton, was in a word, impossible, since the prescription preceded the film.  The most basic cause-effect is absent.

As compared to current law, a blanket DTC exception only helps plaintiffs who have no right to expect assistance from the law – those whose prescriptions weren’t, in fact, affected by any DTC advertising.  Maybe: (1) they weren’t exposed to DTC advertising at all, or (2) (as with the first prescriber in Hamilton) weren’t exposed until after the prescription was made.  Maybe (3) they were exposed, and (like most advertising) it didn’t motivate them to do anything.  Maybe (4) they were exposed, and motivated to see their doctors, but they never said anything to their doctors about the advertised drug, because the doctor brought it up first.  Or maybe (5) they were exposed, and motivated, and did mention it, but the doctor (like the second prescriber in Hamilton) knew about the risk that the DTC advertising omitted.

In none of these five situations – and we doubt on any other set of facts where a DTC exception would produce a different result than current law – do the plaintiffs deserve to win.  The DTC advertising itself was simply non-causal.  It did not affect the decision of the physician to put, or to keep, the plaintiff on the drug/device.  Thus, in the only situations where a DTC exception makes a difference, the plaintiffs that it would benefit don’t deserve to win.

In sum, we think that when causation is factored in, a DTC exception is worse than useless.  It’s unnecessary in the supine physician situation that its advocates present as the paradigm because there’d be a jury-submissible causation case under current law.  It’s worse than useless because it allows plaintiffs to get to juries merely because DTC advertising existed, even when it had no effect whatsoever (as in Hamilton) on the doctor’s decision to prescribe the drug.

But if there’s some legal theory out there that would impose liability because of those ridiculous beer commercials…. We’re all ears.

Wednesday, January 19, 2011

Bad Facts Make Bad Law

We just saw LeFaivre v. KV Pharmaceutical Co., No. 10-1326, slip op. (8th Cir. Jan. 19, 2011), and all we can say is bad facts make bad law - sort of, anyway.  The bad facts are these:

KV stipulated as part of the Consent Decree that it had sold drugs that were "adulterated" as defined by 21 U.S.C. § 351(a)(2)(B), meaning that the drugs were manufactured, processed, packed, labeled, held, and distributed in violation of the FDA's current good manufacturing practice (cGMP) requirements. KV acknowledged that it had not used proper quality control procedures when manufacturing the medication. It also stipulated that some of the medication sold to retail pharmacies had been misbranded in violation of federal regulations.
LeFaivre, slip op. at 2.

Pretty bad.  After stipulating with the FDA that it broke the law, KV got sued privately in one of these fraud on the market consumer class actions.  The claims were implied warranty of merchantability and consumer fraud.  The allegations, aren't particularly clear, but they probably weren't much more than "you confessed that you violated the FDCA" and ipso facto you're liable on these state theories.

The district court held the state law claims were improper attempts to enforce the FDCA and were implied preempted under Buckman.  Well, the Eighth Circuit just reversed.

When a defendant admits it cut corners under the FDCA, it can't expect much sympathy and didn't get much.

Still, we've been practicing in this area since Buckman was decided a decade ago, and this is the first time we've heard it described as a "field preemption" case.  LeFaivre, slip op. at 13.  That's simply wrong, because Buckman itself says quite explicitly that it's decided on the basis of conflict preemption.  "[W]e hold that the plaintiffs' state-law fraud-on-the-FDA claims conflict with, and are therefore impliedly pre-empted by, federal law.  531 U.S. 341, 348.  LeFaivre took a statement totally out of context from Buckman's discussion of the presumption against preemption to say something different.

Even we don't think there's field preemption for drugs under the FDCA.  Could KV have possibly argued that?  We hope not.  That would be asking to get kicked in the teeth.

We expect that it argued the usual, that there's no private right of action and, as in Buckman, the statute itself precludes private enforcement.  But even that's tough when the defendant has already admitted that it violated the FDCA.  As LeFaivre pointed out that's exactly what the two-justice concurrence in Buckman was all about - that if (as was not true in Buckman) the FDA had already adjudicated the violation, there wouldn't be a conflict because all the speculation about what the FDA might have done goes away.  Slip op. at 12-13.  The scary thing about Buckman was the plaintiffs' assertion of "violations" that did not really exist as an excuse to allow a state jury ignore FDA actions that remained in effect.  That's just not present here.

Between these two points:  (1) construing Buckman as field preemption, and (2) the already admitted and adjudicated FDCA violation, LeFaivre pretty narrow, but still....  We wish bad facts wouldn't mess up the law.

Tuesday, January 18, 2011

Preclusive Effects of Class Action Certification Denials

Just a quickie post about today's Supreme Court oral argument in Smith v. Bayer, a copy of the transcript here.  This is the case where the, once the Baycol MDL had denied class certification, the plaintiffs tried for certification of an identical class in West Virginia state court.

In the interim, as we mentioned elsewhere, the plaintiffs' most certifiable cause of action - under the West Virginia consumer fraud statute - got blown out on substantive state law grounds.

Anyway, two things struck us about the argument:  (1) the substantive/procedural distinction was more prominent than we thought (based upon our experience years ago in the Ford Firestone case).  It seemed to endanger the plaintiffs' Due Process, because there's no Due Process right to a particular procedural tool, such as a class action.  It also seemed to undermine the defendant's Anti-Injunction Act position, insofar as the Act is phrased in terms of "judgments."  (2) Conversely, we were surprised that the adequacy of representation point didn't receive more attention.  The plaintiffs never got around to the point at all (although they said they would in rebuttal, they got sidetracked), and it came up at the tail end of the defendant's argument, but only in the context of due process.  We would have thought that, in representative litigation, that a finding of adequacy of repersentation for the class in the first would be a key to whether anything in that action could be binding on the absent class members.  The certification denial, as far as we can tell, was based on predominance, rather than on questions about the plaintiffs' (or their attorney's) representation.  That being the case, we think that privity would be permissible.

But what do we know?  Our ability to predict Supreme Court outcomes has been pretty lousy, so we've given that up.  As a practical matter, it's pretty much a moot point anyway, because:  (1) these West Virginia plaintiffs aren't likely to get a straight fraud claim (what their left with) certified in any court, and (2) this kind of shennanigans isn't very likely after CAFA.