Monday, June 24, 2013
Bartlett – A Big Win For Preemption
Well, the First Circuit just had its bluff called. In Bartlett v. Mutual Pharmaceutical Co., 678 F.3d 30 (1st Cir. 2012), it essentially dared the Supreme Court to take the case and close off what Bartlett viewed as the plaintiff’s last option – a “pure” design defect claim, with no alternative design offered, explicitly amounting to a claim that – under state law − an FDA-approved product should have been pulled from the market.
The Supreme Court has obliged. Most fundamentally, from our perspective, it has definitively killed off (for all federally-regulated products everywhere, we believe) the facile “stop-selling” argument that conflict-based preemption can be avoided because a defendant can simply remove its product from the market. That's a red herring we remember from all the way back to airbag preemption days:
The Court of Appeals’ solution − that [defendant] should simply have pulled [the drug] from the market in order to comply with both state and federal law − is no solution. Rather, adopting the Court of Appeals’ stop-selling rationale would render impossibility pre-emption a dead letter and work a revolution in this Court’s pre-emption case law.
Mutual Pharmaceutical Co. v. Bartlett, No. 12–142, slip op. at 2 (U.S. June 24, 2013).
Good riddance. We’re happy to announce that one of our earlier #1 worst annual decisions list toppers, Wimbush v. Wyeth, 619 F.3d 632 (6th Cir. 2010), is no longer good law for the proposition that earned it that ranking. The Supreme Court wasn’t buying “stop-selling.”
The Bartlett majority (it was 5-4 with two two-justice dissents making quite different points) held that impossibility does not become “possible” merely because a defendant could have voluntarily removed an FDA-approved (or by any agency approved) product from the market altogether. “[A] manufacturer’s ability to stop selling does not turn impossibility into possibility.” Bartlett, slip op. at 13 n.3. Thus the Bartlett majority roundly rejected “stop-selling” as an argument against preemption:
We reject this “stop-selling” rationale as incompatible with our pre-emption jurisprudence. Our pre-emption cases presume that an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability. Indeed, if the option of ceasing to act defeated a claim of impossibility, impossibility pre-emption would be all but meaningless.
The incoherence of the stop-selling theory becomes plain when viewed through the lens of our previous cases. In every instance in which the Court has found impossibility pre-emption, the “direct conflict” between federal- and state-law duties could easily have been avoided if the regulated actor had simply ceased acting.
* * * *
Adopting the First Circuit’s stop-selling rationale would mean that not only [Mensing], but also the vast majority − if not all − of the cases in which the Court has found impossibility pre-emption, were wrongly decided. Just as the prospect that a regulated actor could avoid liability under both state and federal law by simply leaving the market did not undermine the impossibility analysis in [Mensing], so it is irrelevant to our analysis here.
Id. at 15 (citation to Mensing omitted). Indeed, the same “stop-selling” rationale had been enunciated by plaintiffs in Mensing, to no avail. Bartlett, slip op. at 16.
After Bartlett, “[a]t least where a State imposes liability based on a balancing of a product’s harms and benefits in light of its labeling [that’s most states] − rather than directly prohibiting the product’s sale [that’s all states] − the mere fact that a manufacturer may avoid liability by leaving the market does not defeat a claim of impossibility.” Id. at 16 n.5. There’s nothing in Bartlett limiting its rejection of “stop-selling” to generic drugs (as some anti-preemption lower courts have tried to do with Mensing). The Court’s rejection of the “stop-selling” dodge is not based on anything in the Hatch-Waxman amendments. Rather, it’s simply “incompatible with our pre-emption jurisprudence.” Bartlett, slip op. at 15. The Bartlett majority pointed out that the manufacturer of any drug, “whether generic or brand-name,” can’t make material post-approval changes to its design without prior FDA approval. “[T]he manufacturer is prohibited from making any major changes to the “qualitative or quantitative formulation of the drug product, including active ingredients, or in the specifications provided in the approved application.” Bartlett, slip op. at 3-4 (quoting 21 C.F.R. §314.70(b)(2)(i)). Bartlett applies across the board to all FDA-regulated products, and we’d say to all federally-regulated products (that’s the implication of the discussion (id. at 18-19) of Bates v. Dow Agrosciences LLC, 544 U.S. 431 (2005), which involved an herbicide, not regulated by the FDA at all). This scope is likewise recognized by one of the dissents. Bartlett, slip op. at 23-24 (Sotomayor and Ginsburg, JJ, dissenting) (criticizing the broad scope of the opinion).
In otherwise dealing with the plaintiff’s arguments, the Bartlett majority correctly identifies her primary argument for what it was – one that “conflates” “strict liability” with “an absolute liability regime.” Bartlett, slip op. at 7. The Court rejected that reading of state law, finding no support for “absolute liability” in New Hampshire (or anywhere else). The duty the Court read into that state's law was more limited:
[T]his duty can be satisfied either by changing a drug’s design or by changing its labeling. Since [defendant] did not have the option of changing [the drug’s] design, [state] law ultimately required it to change [the drug’s] labeling.
Id. at 9. There are two ways to produce a non-defective product, either change the design or change the warnings. Id. at 9; see id. at 19 (“where it is impossible − in fact or by law − to alter a product’s design . . . the duty to render a product ‘reasonably safe’ boils down to a duty to ensure . . . a warning”). Unless and until the New Hampshire Supreme Court rules otherwise, Bartlett has performed the additional public service of cleaning up the mess that Brochu v. Ortho Pharmaceutical Corp., 642 F.2d 652 (1st Cir. 1981), made of New Hampshire law. Most New Hampshire law relating to prescription medical products has previously arisen from improperly expansive Erie predictions by the First Circuit. These are now trumped by the Bartlett majority’s more restrained predictions of New Hampshire law (although one of the dissents vigorously disputes the majority’s reading of state law). Bienvenue Bartlett; bye-bye Brochu.
But back to preemption. There were two problems with the plaintiff’s design change option. First, it was impossible under Mensing. “[T]he FDCA requires a generic drug to have the same active ingredients, route of administration, dosage form, strength, and labeling as the brand-name drug on which it is based.” Bartlett, slip op. at 10. Indeed, if it changed the drug’s “design,” the manufacturer would have created a “new drug” that would have required separate FDA approval. Id.
Second, and more basically, a “design” change, in the context of a prescription drug usually makes no sense. “[B]ecause of [the drug’s] simple composition, the drug is chemically incapable of being redesigned.” Id. at 11. Thus, as a matter of “basic chemistry,” the defendant “was unable to change [the drug’s] composition.” Id. at 1. In so holding Bartlett provides the defense side with a little icing on the preemption cake. We’ve made the point repeatedly that with most prescription drugs the Restatement §402A idea of a “design defect” doesn’t carry over from “things that go clank.” A drug is a chemical – a molecule with a fixed chemical composition. You can’t take H2O, make it H2O2, and still call it “water” (that’s hydrogen peroxide). Thus, the “design” of most drugs cannot logically be changed. This rationale was the motivating force for Restatement (Second) of Torts §402A, comment k (1965), explaining that “unavoidably unsafe” products are “especially common” in the drug field. See Bartlett, slip op. at 12 n.2 (analogizing to, and taking pro-defense view of, comment k). They’re “common” for the same reason, because a drug has a fixed chemical composition that cannot be changed without creating another drug. With the Supreme Court’s weight now behind this argument, maybe more courts will pay attention to “basic chemistry” and interpret comment k in a sensible fashion.
With design change off the table, it was easy for the Bartlett majority to address the other alternative, that of changing the warning. This aspect of the case was Mensing all over again. It’s never a good idea to try to hoodwink the Supreme Court. Contrary to the plaintiff’s argument, which ran full tilt away from all the warning-related evidence and arguments plaintiff used throughout trial, the Court pointed out how “prominent” warning related issues had been. Bartlett, slip op. at 11-13. Preemption of the warning-related design defect claim followed as a matter of course. Id. at 13 (“federal law prohibited [defendant] from taking the remedial action required to avoid liability under [state] law”).
The last section of the Bartlett majority opinion deals with the dissent’s special pleading for product liability cases in the preemption pantheon. Basically, there isn’t any. The constitution doesn’t create any preferred position for product liability. “[S]tate-law design-defect claims like New Hampshire’s that place a duty on manufacturers to render a drug safer by either altering its composition or altering its labeling are in conflict with federal laws that prohibit manufacturers from unilaterally altering drug composition or labeling.” Bartlett, slip op. at 17. A state simply cannot require “remedial measures” that federal law “prevent[s].” Id.
Tort law is not merely an “incentive” – it is a “legal obligation.” Id. “[T]he distinction between common law and statutory law is irrelevant to the argument at hand: In violating a common law duty, as surely as by violating a statutory duty, a party contravenes the law.” Id. at 18. Both statutes and the common law allow persons to leave the market to avoid the burdens of compliance. That’s a distinction without a difference. A legal “requirement . . . reaches beyond positive enactments, such as statutes and regulations, to embrace common-law duties.” Id. at 19 (citation and quotation marks omitted). Thus the dissenters are actually “fighting a rearguard action against” the Mensing decision. Id. at 18. Since there is neither a savings clause nor a preemption clause in the FDCA, preemption flows from the practical effect of the statute. “That federal law forbids [defendant] to take actions required of it by state tort law evinces an intent to pre-empt.” Bartlett, slip op. at 20.
Anything else? Well, there’s still more dictum on “parallel” violation claims. What is a “parallel” claim for misbranding? Although no such claim was presented to the jury in Bartlett, the Court indicates that “a drug is misbranded under federal law only when liability is based on new and scientifically significant information that was not before the FDA.” Bartlett, slip op. at 14 n.4. We also recall from Wyeth v. Levine, 555 U.S. 555 (2009), that a very similar, if not identical, “new” and “significant” information standard determines when the CBE exception that helped doom preemption in that case is actually available. Since the entire concept of “parallel” claims is built on other dictum from Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) (where the issue was waived), maybe the Bartlett dictum can help limit the Riegel dictum, which from day one has been inflated beyond recognition by the lower courts. Maybe “new and substantial” could even someday limit the damage caused by Levine….
One can hope.
Finally, what about the erstwhile presumption against preemption? Not a word in the majority opinion. Instead, the majority “would welcome Congress’ ‘explicit’ resolution of the difficult preemption questions.” Bartlett, slip op. at 19. Thus, the majority isn’t “presuming” anything. Indeed, there’s no mention of any such “presumption” in the Breyer-Kagan dissent. Bartlett, slip op. at 1-4 (Breyer and Kagan, JJ. dissenting). As the other, liability uber alles dissent points out, the presumption against preemption is “conspicuously absent from the majority opinion.” Bartlett, slip op. at 2 (Sotomayor and Ginsburg, JJ. dissenting). May it stay that way.