Thursday, October 25, 2012
A Step Beyond – Due Process and the FDA
Bexis had been on the road a lot lately – it seems blogging attract speaking engagements – and at both the recent PLAC fall meeting and the ACI’s FDA Boot Camp, speakers discussed the recent Supreme Court decision in FCC v. Fox Television Stations, Inc., 132 S. Ct. 2307 (2012), as having implications for product liability actions involving regulatory allegation claims. We’d particularly like to thank Mike Walsh from Strassburger for sharing his thoughts (and some nice powerpoint slides) on this issue.
Fox Television is a Due Process case, and the way Due Process intersects with product liability, at least in this context, is whether there are Due Process constraints on plaintiffs ginning up FDA (or, indeed, other federal) regulatory violation claims based on weird interpretations by paid FDA “experts.”
Can you say “parallel violation” claims?
What do we learn from Fox Television? The case involved the regulation of purported “indecency” on television – no, it doesn't involve Quentin Tarantino movies, but rather a far more serious problem than blood-soaked megadeath. We mean “fleeting expletives.” On prime time, broadcasters can show as much killing as they want, but the actors can’t swear as they get killed (or about anything else). So the FCC has decreed – but not very well, the Supreme Court held.
The FCC held that an unscripted f-bomb on live TV was a no-no (ditto fleeting nudity (not the Superbowl wardrobe malfunction; that was another case)) and fined the TV networks. This was something of a regulatory flip-flop, so the networks sued alleging that their Due Process rights were violated by the arbitrary and capricious actions of the FCC. The Supreme Court agreed, sort of.
It wasn’t so much the regulatory flip-flop that the Court condemned, but the government’s failure to give notice of what was supposedly illegal. “A fundamental principle in our legal system is that laws which regulate persons or entities must give fair notice of conduct that is forbidden or required.” Fox Television, 132 S. Ct. at 2371 (lots of nifty cites and quotes omitted). This wasn’t just a free speech issue:
Even when speech is not at issue, the void for vagueness doctrine addresses at least two connected but discrete due process concerns: first, that regulated parties should know what is required of them so they may act accordingly; second, precision and guidance are necessary so that those enforcing the law do not act in an arbitrary or discriminatory way. When speech is involved, rigorous adherence to those requirements is necessary to ensure that ambiguity does not chill protected speech.
Id. (emphasis added). But remember, in this context, that Sorrell v. IMS Health, Inc., 131 S.Ct. 2653, 2664 (2011), held that pharmaceuticaldetailing is First Amendment protected speech.
In Fox Television the FCC’s actual indecency “guidelines” (apparently not even amounting to regulations) limited enforcement to situations where a broadcast “dwells or repeats at length” on sex or cursing (but not blood and gore). However, the FCC informally adopted a “new policy” through a published “decision” that even “fleeting” references were violations. Id. at 2314-15.
Then it tried to apply that decision retroactively. Id. at 2315.
The Supreme Court held that the government couldn’t do that consistently with Due Process.
This regulatory history, however, makes it apparent that the Commission policy in place at the time of the broadcasts gave no notice. . . . The [agency’s] lack of notice . . . that its interpretation had changed . . . failed to provide a person of ordinary intelligence fair notice of what is prohibited. This would be true with respect to a regulatory change this abrupt on any subject, but it is surely the case when applied to . . . the regulations in question, regulations that touch upon “sensitive areas of basic First Amendment freedoms.
Id. at 2381 (citations and quotation marks omitted) (emphasis added). Thus, Fox Television’s Due Process argument also applies to, say, the FDA.
The agency also argued that, because it didn’t fine the broadcasters, they hadn’t been injured, and the case was moot. The Court held that “reputational” injury was enough to support the constitutional violation:
[T]he due process protection against vague regulations does not leave regulated parties at the mercy of [governmental] noblesse oblige. . . . [R]eputational injury provides further reason for granting relief. . . . [F]indings of wrongdoing can result in harm to a broadcaster’s reputation . . . given that the challenged orders, which are contained in the permanent [administrative] record, describe in strongly disapproving terms the [plaintiff’s alleged conduct]. . . . [Government] sanctions on broadcasters for indecent material are widely publicized.
Id. at 2318-19. Everything that the Court said about the FCC’s orders could also be said about FDA warning letters and a variety of other adverse, informal, but publicly announced FDA enforcement actions - which are often featured prominently in plaintiffs' complaints.
We then add to Fox Television the Supreme Court’s decision three days earlier in Christopher v. SmithKline Beecham Corp., 132 S.Ct. 2156 (2012), rejecting the Department of Labor’s reclassification of pharmaceutical detailmen. The Court held that lack of prior notice was grounds not to defer to the government’s changed policy:
[Plaintiffs] invoke the [agency’s] interpretation of ambiguous regulations to impose potentially massive liability on respondent for conduct that occurred well before that interpretation was announced. To defer to the [this] interpretation . . . would result in precisely the kind of unfair surprise against which our cases have long warned. . . . Our practice of deferring to an agency’s interpretation of its own ambiguous regulations . . . creates a risk that agencies will promulgate vague and open-ended regulations that they can later interpret as they see fit, thereby frustrating the notice and predictability purposes of rulemaking. . . . It is one thing to expect regulated parties to conform their conduct to an agency’s interpretations once the agency announces them; it is quite another to require regulated parties to divine the agency’s interpretations in advance or else be held liable when the agency announces its interpretations for the first time in an enforcement proceeding and demands deference.
132 S. Ct. at 1367-68 (citations and quotation marks added) (emphasis added).
So what might these two recent Supreme Court cases do for us?
What they tell us is that no federal agency, including the FDA, can change its interpretation of regulations that have more than one possible interpretation (which would be almost all of them) without prior notice. That’s good because the FDA has been known to do that on occasion.
But better than that, consider plaintiffs and “parallel violation” claims, whether or not raised in the context of preemption (although non-identical claims should be preempted as well). The plaintiffs are essentially putting themselves – or, more properly, their experts − in the position of the FDA (which they shouldn’t be allowed to do either). Thus, if plaintiffs make up unprecedented interpretations of FDA regulations, guidances, etc. and attempt to apply them retroactively to conduct that took place before the interpretation existed, we could argue that it is constitutionally barred, under the Fox Television and Christopher precedents. If successful the argument would apply to all product liability claims since, by their nature, they involve retroactive application of litigation inspired expert opinions to pre-litigation facts.
How much these arguments are worth, we can’t say. There are a lot of other better established defenses – Buckman preemption for one. But getting the defense bar thinking about new defenses is one thing we like doing. So noodle it, dear readers, and perhaps there’s something here that might be worth considering in a case where a plaintiff’s expert is offering some never-before-seen interpretation of an FDA regulation as the supposed standard of care.