Friday, September 06, 2013

Post-Bartlett, Post-Mensing, Tenth Circuit Correct on All Counts

We have written many times on generic drug cases (here and here) and plaintiffs’ attempts to pin liability where none exists. You might think you have read enough on how innovator manufacturers should not and cannot be liable for injuries allegedly caused by generic products they neither made nor sold. You might even think you have read enough about how federal law preempts failure-to-warn and design defect claims against generic drug manufacturers. But you would be wrong. We can never write enough about generic drug cases that go the right way—cases that Bexis has affectionately labeled "one-two punch" cases—because they highlight issues that are critical to innovator and generic manufacturers alike. It also gives us an opportunity to criticize (again) the wrongly reasoned and wrongly decided Conte v. Wyeth opinion, the 2008 opinion from the California Court of Appeal that turned the law on its head to hold an innovator drug manufacturer accountable for generic products that it had nothing to do with.

Thankfully, courts have almost uniformly rejected Conte’s unexplainable holding—sometimes called "innovator liability" by those who care to give it credence—and the latest example is a particularly clear-minded opinion that the Tenth Circuit published last week in yet another "one-two punch" generic drug case. The facts follow a familiar pattern. In Schrock v. Wyeth, No. 12-6078, 2013 U.S. App. LEXIS 17948 (10th Cir. Aug. 28, 2013), the plaintiff’s physician prescribed brand-name Reglan, and she purchased generic metoclopramide instead. When she later developed tardive dyskinesia, a risk disclosed on the product’s labeling since 1985, she sued the innovator manufacturers and later the generic manufacturers that actually made and sold the medicine she used. Id. at **5-8.

The court landed the first blow in connection with the innovator manufacturers, and it affirmed summary judgment on reasoning that makes perfect sense, beginning with the following observation: "Oklahoma courts usually require that a defendant have some relationship with the product alleged to have caused a plaintiff’s injuries, either through manufacturing, selling, or distributing the product. . . . Because [the innovator manufacturers] were never in control or possession of the metoclopramide [Plaintiff] took, [the Plaintiffs] cannot establish this element of their strict liability claim." Id. at *19.

In other words, there is no strict product liability if the defendant did not make or sell the product, a statement whose truth is nearly self-evident and which correctly formed the starting point for the Tenth Circuit’s analysis. Indeed, we would have been satisfied if the Tenth Circuit had stopped right there, but it continued on and rejected, one by one, every argument that the plaintiffs offered to expand product liability law. Negligent design? No, because the innovator manufacturers did not design the particular medicine that the plaintiff used and because the law required "a relationship between the defendant company and the product at issue." Id. at **20-22. Misrepresentation, concealment, or failure-to-warn? No, because the plaintiff made no purchase from the innovator manufacturers and because "the brand-name manufacturers had no relationship with [the plaintiffs]; there were no ‘matters with which they [we]re dealing.’" Id. at **22-24. Breach of warranty? No, because the Commercial Code provides remedies "only against the seller of the product at issue." Id. at **24-25.

Our favorite is the Tenth Circuit’s rejection of potential liability for the innovator manufacturers under "traditional theories of tort law." Id. at **25-27. This is our favorite because Conte based potential liability for innovator manufacturers on "common sense" and "the general rule of duty," which to us sounds a lot like "traditional theories of tort law." It is nice to see these nebulous concepts rejected in this context, no matter how you label them and no matter the forum. Of note, the plaintiffs in Schrock did not raise "traditional theories of tort law" in the district court, so their trial lawyers must have thought no more of Conte than we do. When raised on appeal, the Tenth Circuit responded with another very helpful and clear-minded passage:
[The plaintiffs] fail to cite Oklahoma case law suggesting that these general tort principles impose liability with respect to a defendant that did not sell, distribute, manufacture, or otherwise have contact with the allegedly harmful product. Instead, they ask this court to expand the scope of tort liability under Oklahoma law by imposing a duty under entirely unprecedented circumstances.

Id. at *26. Amen. The Tenth Circuit’s treatment of the claims against the innovator manufacturers is correct from top to bottom, as is its adherence to Erie, under which federal courts predict state law, not expand it.

The Court landed its second blow in connection with the claims against the generic manufacturers who supplied the medicine that the plaintiff actually used. We all know that failure-to-warn and design defect claims against generic drug manufacturers are preempted, thanks to PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharm. Co. v. Bartlett, 133 S. Ct. 2466 (2013). The Tenth Circuit faithfully followed these binding authorities. The court first summarized nicely the plaintiffs’ allegations and concluded that their failure-to-warn claims came down to a claim for inadequate "labeling." Id. at **32-35. Once the court arrived at that conclusion, it was a short way to the holding that the plaintiffs’ "claims are preempted to the extent they rest on inadequate labeling as broadly defined by the FDA." Id. at **37-38.

Again, we might have been satisfied had the court stopped there. But the court’s subsequent discussion of Bartlett is very useful. The plaintiffs had also alleged that the generic medicine was not merchantable, was unfit for its intended purpose, and was unreasonably dangerous. Id. at *38. Those allegations, however, ran headlong into Bartlett, because a claim that a generic drug is unfit or unreasonably dangerous would impose a duty to alter the composition of the product, or else be held liable under state law. That is a problem because the FDCA requires that generic drugs be the same as their listed counterparts. Id. at **39-40. In the end, the plaintiffs’ claims alleged that the generic manufacturers had a duty under state law either to alter the composition of the drug or to change the content of the labeling. The claims were preempted "[b]ecause [the generic manufacturers] could not have taken either action under federal law." Id. at *40.

The court might have stopped there, and again we might have been satisfied, but gladly the court did away with two additional arguments that the plaintiffs advanced. It was no solution for plaintiffs to argue that the generic manufacturers could have complied with both state and federal mandates by simply declining to make and sell the product—the so-called "stop selling" rationale. That is because "[t]he Supreme Court squarely rejected this contention in Bartlett, holding that the ‘"stop-selling" rationale [is] 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.’" Id. at *44. The plaintiffs’ "parallel claim" argument fared no better. Id. at **44-45.

We like this opinion a lot. The court kept its disciplined focus on the "product" in product liability and recognized throughout its analysis that there has to be a link, a connection, a sale, something upon which to base liability against a product manufacturer. The preemption holding is also sound as can be. Add this one to the scorecards
 
 

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