An antidote to preemption: plaintiff lawyers can see to it that the Supreme Court's Buckman decision does not spread preemption to perfectly healthy products claims.
Since then, products liability defendants have jumped on the preemption bandwagon, arguing that other state law claims are also preempted under Buckman. While most courts have declined this invitation to expand the scope of implied preemption, others have not.
Plaintiff attorneys must be mindful of Buckman when litigating pharmaceutical and medical device cases--especially when they involve mass torts with many injured plaintiffs--to defeat defense efforts to thwart victims' rights.
In Buckman, spinal surgery patients who claimed injuries from the implantation of orthopedic bone screws sued a consulting company that assisted the screws' manufacturer in obtaining FDA approval to market the devices. The plaintiffs alleged that the company had defrauded the agency by stating that the screws would be used in the patients' extremities, but that the defendant actually intended to promote the screws for use in spinal fusion procedures.
Ruling against the plaintiffs, the Supreme Court found that a state-law fraud-on-the-FDA claim encroaches on an area of regulation that is inherently federal--the relationship between the FDA and the entities it regulates. The Court held that these claims inevitably conflict with the agency's responsibility to police fraud on itself and stressed that off-label use of medical devices--that is, use other than the one approved by the FDA--is common and can be medically beneficial. (3)
Buckman differs from most fraud-on-the-FDA cases, which usually involve a manufacturer's failure to disclose to the agency reports of life-threatening adverse reactions to its product, unfavorable results of clinical studies, or animal research data. While many products liability cases involve better facts for a fraud-on-the-FDA claim than Buckman had, its broad holding makes it unlikely that an attorney could successfully pursue such a claim by urging the court to distinguish Buckman. In a concurring opinion, Justice John Paul Stevens emphasized that
the fact that the ... FDA has done nothing to remove the devices from the market, even though it is aware of the basis for the fraud allegations, convinces me that this essential element of the claim [but for the petitioner's fraud, the bone screws would not have reached the market] cannot be proved. (4)
It is doubtful that the Court would have embraced a company's withholding reports of death and serious adverse reactions from the FDA since there is no salutary justification for that type of fraud. Instead, the Buckman Court was seemingly unpersuaded that a real or meaningful fraud had occurred, largely because the FDA seemed unconcerned by the alleged fraud.
As a practical matter, then, under-Buckman, state-law fraud-on-the-FDA claims are no longer valid. The most dangerous ramification of Buckman, however, is that it has encouraged defense efforts to expand implied preemption to other state law claims in products cases. (5)
In the pharmaceutical context, overzealous members of the defense bar immediately tried to capitalize on Buckman by arguing that it preempts virtually all common law claims--such as those alleging negligence, fraud, and misrepresentation--since they generally involve a failure to warn. (6) Defendants argue that because the FDA approves the warning on a product's labeling (the package insert), any challenge to the warning's adequacy is preempted by the FDA's role in approving it. Since Buckman acknowledged that "certain state law causes of action that parallel federal safety requirements" are still valid, (7) these efforts to grossly distort the Court's decision generally have failed. (8)
However, the Buckman Court also cited Geier v. American Honda Motor Co., an earlier decision finding implied preemption in an auto case, for the proposition that "neither an express preemption provision nor a saving clause `bars the ordinary working of conflict preemption principles.'" (9) A saving clause provides that the valid provisions of the statute will be enforced in spite of any judicial determination that certain parts of the act are unconstitutional. (10)
In Geier, the Court noted that because the National Traffic and Motor Vehicle Safety Act of 1966 (11) contained an express preemption provision (12) and a saving clause--which says that "compliance with" a federal safety standard "does not exempt any person from any liability under common law" (13)--the preemption provision must be read narrowly to preempt only state statutes and regulations, not common law tort actions. (14) However, the Geier Court found that, despite the saving clause, the application of conflict preemption principles negates those state tort actions that conflict with the federal regulations. (15)
Therefore, federal courts relying on Geier and Buckman may find implied preemption more readily in other products cases, given this apparent trend toward finding implied preemption even when there is no express preemption clause.
Post-Buckman cases rejecting implied preemption
Since Buckman, defendants have used at least four different approaches in attempting to convince courts to expand the scope of implied preemption.
Fraud on the FDA "in disguise." The more audacious defendant-drug manufacturers may move for summary judgment on the grounds that the FDCA preempts the plaintiffs' state law claims of fraud, negligence, and failure to warn. They argue that these are fraud-on-the-FDA claims "in disguise," since they are supported, in part, by evidence that the defendant concealed damning information from the agency.
To date, every court that has considered this argument has rejected it as overreaching. (16) As the U.S. District Court for the Northern District of Alabama observed in Globetti v. Sandoz Pharmaceuticals Corp.,
Notwithstanding that information may have been misrepresented to or concealed from the FDA, once defendant undertook to misrepresent those facts to plaintiff, or to conceal from plaintiff facts it was bound to disclose, the plaintiffs claim no longer rests simply on the assertion that the agency was defrauded but on the additional fact that she was defrauded. (17)
Federal courts in other pharmaceutical cases have also rejected defendants' attempts to "recharacterize plaintiffs' misrepresentation claims as `fraud on the FDA' claims," recognizing that "traditional state tort law claims (even those that parallel FDCA requirements) are not necessarily preempted by the FDCA and are not necessarily the same as `fraud on the FDA' type claims." (18)
Additional safety requirements. Defendant manufacturers may also argue that plaintiffs' state-law failure-to-warn claims impose safety requirements in addition to the FDCA requirements for a package insert, which are preempted since the agency must approve them. Enlightened post-Buckman courts have recognized that FDA regulations concerning design and warning standards are minimum requirements that do not preempt state law defective-design and failure-to-warn claims and that product labeling may be strengthened without FDA approval. (19)
Design defect conflicts. Defendants have unsuccessfully relied on Buckman to argue that claims for design defects are impliedly preempted.
In a latex glove action, the defendant argued that the plaintiff's design defect claim premised on the consumer expectations test would impermissibly conflict with the authority of the FDA to regulate medical products. (20) A pesticide manufacturer argued that a design defect claim was impliedly preempted by the Federal Insecticide, Fungicide, and Rodenticide Act. (21) These recent cases reflect just how far defendants are seeking to push the preemption envelope.
Federal question jurisdiction. When a plaintiff files a case in state court claiming fraud on a federal agency--or even alleging facts that show fraud in the context of a different cause of action, the defendant may try to remove the case to federal court based on "federal question" jurisdiction under Buckman.
Federal question jurisdiction--which provides that the district courts shall have original jurisdiction over all civil actions arising under the Constitution, laws, or treaties of the United States--is one basis to either bring a case in federal court or remove a state court case to federal court. (22) Under the "well-pleaded complaint" doctrine, a case "arises under" federal law and is therefore removable only if a federal claim exists on the face of the plaintiff's complaint. (23)
Normally, federal preemption only provides a federal defense and does not permit removal. However, under the doctrine of "complete preemption" or "displacing preemption," a state court case may be removed on the basis of federal question jurisdiction if the federal statute completely displaces any state law causes of action and therefore leaves room only for federal law. (24)
The Buckman Court did not address federal question jurisdiction, since the basis for federal jurisdiction was not at issue in that case. Forum-shopping defense attorneys have attempted to use Buckman as authority to remove to federal court state court cases, pleaded on the basis of state law, where evidence of fraud on the FDA or another federal agency is advanced to support plaintiffs' state law claims.
At least two federal courts have rejected attempts to recharacterize plaintiffs' state law claims as federal questions. These courts have denied removal motions where the plaintiffs did not specifically claim fraud on the FDA. (25)
One such decision came in Dawson v. Ciba-Geigy Corp., a pharmaceutical case in which the plaintiffs sought more stringent warnings under state law. A New Jersey federal court reiterated the well-pleaded complaint rule. (26) The court also explained that "if it is presumed that, in enacting the FDCA, Congress determined that only the FDA may approve changes to labels or other literature regarding FDA-approved drugs, defendants would have only established that the FDCA may provide a defense to plaintiffs' state law claims or remedies," which is not a basis for removal. (27)
Post-Buckman cases embracing implied preemption
Not all courts are so enlightened. In Flynn v. American Home Products Corp., a Minnesota appellate court, while properly dismissing an FDA fraud claim, implied that Buckman may be interpreted as preempting other claims the court found otherwise untenable. (28)
Flynn also asserted claims of fraudulent misrepresentation, negligent misrepresentation, and violations of the Minnesota consumer fraud statutes. While the court went into a detailed analysis explaining that none of those claims was viable in its own right, it also concluded, following its Buckman analysis, that Flynn's "statutory consumer fraud claims are preempted by federal law and are not actionable in Minnesota." (29)
The facts of the case were not typical of pharmacuetical products liability suits. Flynn sued American Home Products for heart valve injuries she suffered while taking a generic version of the company's diet drug. The generic version was manufactured by an Italian company, which she did not sue. Flynn argued that American Home Products had committed fraud on the FDA in obtaining and maintaining approval for its product by not disclosing serious health problems related to its use. She claimed that if the company had not committed that fraud, the generic version could not have been marketed either, and Flynn would never have taken it.
The Flynn court, citing Buckman, stated that the plaintiff was not relying on traditional state tort law because the states have not traditionally policed fraud against federal agencies. Consequently, her claims were impliedly preempted. (30)
The court emphasized that the defendant "did not owe [Flynn], who did not purchase their product and with whom they had no relationship, the same obligation" that it owed to people who purchased its product. (31)
Flynn should have no bearing on a conventional products claim alleging failure to warn.
Furthermore, federal courts are not bound by a state court's interpretation of federal law. (32) Recently, a federal court in Minnesota, construing Flynn, "expressly rejected defendant's contention that the Minnesota Court of Appeals recently held that claims similar to plaintiffs' were preempted by Buckman." (33)
In Andrx Pharmaceuticals v. Biovail Corp., a generic drug manufacturer sued a brand-name drug maker for patent infringement, alleging state law claims of deceptive and unfair business practices, tortious business interference, and negligence per se. A U.S. district court in Florida held that the FDCA preempted these claims because they relied on the defendant's violation of patent-listing requirements in the Hatch-Waxman Amendments of the FDCA. (34)
In reaching its decision, the court relied on Buckman's distinction between cases in which the "existence of [the] federal enactments is a critical element in [the plaintiffs] case" and others in which the plaintiffs' claims "rely on traditional state tort law which predated the federal enactments." (35) Because the claims in Andrx belonged in the former category, the company's claims were preempted.
In Sprietsma v. Mercury Marine, (36) the Illinois Supreme Court cited Buckman in holding that the plaintiff's state law claims against a boat manufacturer for failing to install propeller guards were preempted by the Federal Boat Safety Act of 1971. The court determined that although the act established only minimum safety standards, the plaintiff's claims were impliedly preempted because the agency--the Coast Guard--had decided not to require the propeller guards. The court also cited precedent finding preemption in other propeller guard cases and emphasized the need for uniform decisions. (37)
In In re Bridgestone-Firestone, Inc., a U.S. district court in Indiana recently granted the defendants' motion to dismiss claims for injunctive relief. Relying in part on Buckman, the court found that the Motor Vehicle Safety Act impliedly preempted the plaintiffs' claims. (38)
The plaintiffs filed a class action asserting wrongful death, personal injury, and products liability claims regarding allegedly faulty tires and automobiles. The plaintiffs asked the court to order the defendants to recall, buy back, and/or replace the tires. The court dismissed the injunctive claims for a recall on the grounds that the comprehensiveness of the vehicle safety act regarding recalls demonstrated that any state law providing for a recall would frustrate the purposes of the act.
Avoiding Buckman problems
Buckman has ushered in a new era in products liability litigation. Plaintiff attorneys must now consider how to avoid the booby trap of implied preemption before filing a products liability case.
Understand the regulatory framework at issue. Before bringing an action in a regulated area, determine whether a federal agency already has addressed the problem or defect at issue in your case. Whether a federal agency took action or affirmatively decided not to do so can play a pivotal role in the court's decision regarding preemption.
Delete claims of fraud on the FDA or other agencies. To stop the expansion of implied preemption to claims beyond fraud on the FDA, remove fraud-on-the-FDA claims from your complaints. This can prevent wasteful motion practice on preemption issues and keep a misguided court from expanding the scope of Buckman preemption.
Also be aware that courts might apply Buckman to preempt state law claims of fraud on a federal agency other than the FDA. For example, in Green v. Fund Asset Management, L.P., the Third Circuit, in denying the defendant's preemption motion, noted that "the plaintiffs ... allege not fraud against a federal agency, but rather violations of state and federal securities laws." (39) Thus, the court implied that it might have granted the motion if the plaintiffs had alleged fraud against a federal agency.
Similarly, in McCall v. Pacificare of California, Inc., a man sued his physician and his HMO for not referring him to a specialist, alleging common law tort claims, unfair business practices, and violations of the Medicare Act. The defendants argued that each cause of action arose under the Medicare Act and was therefore subject to judicial review only in federal court.
The California Supreme Court concluded that the act did not preempt the state tort claims, but in a footnote added that "to the extent the [plaintiff's] complaint alleges fraud on the HCFA [Health Care Financing Administration], defendants may, on remand, assert it is preempted under the rule in Buckman." (40) Rulings like these suggest that, to stay well out of range of Buckman, you should avoid pleading claims of fraud against agencies other than the FDA as well.
Don't use the kitchen-sink approach to pleading. More is not always better. For example, be cautious about including a negligence per se claim that you do not believe will succeed. Products liability plaintiffs have rarely prevailed on this theory. Pleading a negligence per se cause of action requires state courts to determine whether agency regulations were violated, which encourages Buckman motions and increases the likelihood that a court will misconstrue the claim as preempted.
While the violation of a statute or regulation can be evidence of negligence, it is rarely an independent basis of liability. (41) If there is compelling evidence that the defendant misrepresented data to an agency, do not include this evidence in the complaint in support of other claims unless you absolutely must. Instead, save the evidence for the trial.
Injunctive relief. Be wary of asking for injunctive relief such as recalls or updated package labeling. Courts may find preemption when the plaintiff requests this relief in an area covered by a federal statute, or where injunctive relief impinges on the authority of the agency. (42)
Show that your case does not involve the Budonan "second-guessing" problem. One reason Buckman was unanimous (with a concurring opinion) may have been that while the FDA was aware of the alleged fraud, it seemingly was not troubled by it. The Court noted that the FDA did not act to remove the bone screws from the market even after it became aware of the basis for the fraud allegations. (43) The Court did not want to second-guess the FDA.
Many pharmaceutical cases have far stronger records of fraudulent conduct than Buckman did, particularly when the FDA has removed the drug from the market and has criticized the company and set forth the basis for its action in the Federal Register and on its Web site.
Where the FDA has openly criticized a company's lack of candor, you should state this in opposing a preemption motion, even if you concede that a claim of fraud on the FDA is preempted. This may assuage the fears of a court that is reluctant to encroach on FDA policy making, and minimize the possibility that the court will extend implied preemption beyond fraud on the FDA to your other claims.
Show that withholding safety data from the FDA is, in effect, failure to warn and misrepresentation or fraud against doctors and patients. Argue that common law claims of fraud and misrepresentation against the medical community or patients are not preempted along with claims of fraud on the FDA. The defense probably will say that an allegation of failure to warn doctors--where the warning was provided in the form of an incorrect, but FDA-approved, package insert--is a claim of fraud on the FDA "in disguise."
Respond by pointing out that, as courts have held, a manufacturer can improve a package insert without FDA approval. (44)
Also note that the package insert is not the only source of warning information. Once a manufacturer provides adverse-reaction and other safety information to the FDA, it is available for public disclosure. Also, because the FDA posts some of these data on its Web site, diligent doctors with questions about a drug's safety can find this information easily. A manufacturer's failure to disclose relevant data to the FDA effectively defrauds the doctor and the public by failing to warn them of pharmaceutical product hazards.
Evidence of FDA fraud
The Court's decision in Buckman will undoubtedly generate litigation over the extent to which evidence that information has been concealed from or misrepresented to the FDA is admissible in state law products cases. While you should plead claims to avoid Buckman issues, do not throw out the baby with the bathwater. Often, the best evidence in these cases is a drug maker's lies to the FDA about critical safety data. Buckman should not deter you from using this evidence in support of common law claims.
To counter the defendant's effort to keep this evidence out of court, cite Federal Rule of Evidence 105, which requires the court to instruct the jury on the scope of evidence that can be admitted for one purpose but not for another. Thus, the evidence should be admitted to support common law claims of failure to warn and misrepresentation to doctors and patients.
Often, the company's primary defense is that the drug was FDA-approved. To rebut this argument, plaintiffs must be allowed to present evidence that the agency was missing important data while it was reviewing the company's request for approval.
Buckman has added an unfortunate new obstacle to medical device, pharmaceutical, and other regulated-products litigation. It can generally be overcome if the traps are anticipated and avoided.
At presstime, the Ninth Circuit ruled that a claim for intentional interference with prospective economic advantage is "impliedly preempted' by the Federal Insecticide, Fungicide, and Rodenticide Act because the plaintiff's "state law claim hinges upon its contention that [defendant] committed fraud against the EPA." (Nathan Kimmel, Inc. v. DowElanco, No. 99-56746 (9th Cir. filed Jan. 7, 2002) available at www.ce9. uscourts.gov; click on Opinions.)
(1.) 531 U.S. 341 (2001).
(2.) 21 U.S.C. [section] 301 et seq.
(3.) Buckman, 531 U.S. 341, 350-51.
(4.) Id. at 353.
(5.) See, e.g., Morson v. Superior Court, 109 Cal. Rptr. 2d 343, 354-55 (Ct. App. 2001) (rejecting defendant's argument that plaintiffs' state products liability claims are preempted where the product at issue, rubber gloves, is used by general consumers and is not regulated under any federal statute).
(6.) Eric Lasker, The Buck Stops Here: The U.S. Supreme Court Expands the Scope of Federal Preemption of Product Liability Claims Involving FDA-Regulated Products, 29 Prod. Safety & Liab. Rep. (BNA), No. 22 at 551-53 (June 4, 2001).
(7.) Buckman, 531 U.S. 341, 353.
(8.) See, e.g., McCallister v. Purdue Pharma L.P., 164 F. Supp. 2d 783 (S.D.W. Va. 2001); Kittleson v. Sandoz Pharms. Corp., [Oct. 4, 2001] 6 Emerging Drugs & Devices (Mealey's) No. 19 at G-1-3 (D. Minn. Sept. 21, 2001); Caraker v. Sandoz Pharms. Corp., 172 F. Supp. 2d 1018 (S.D. Ill. 2001); Erickson v. Baxter Healthcare, Inc., 151 F. Supp. 2d 952, 965 (N.D. Ill. 2001); Dawson v. Ciba-Geigy Corp., 145 F. Supp. 2d 565 (D.N.J. 2001); Globetti v. Sandoz Pharms. Corp., No. CV98-TMP-2649-S, 2001 WL 419160 (N.D. Ala. Mar. 5, 2001).
(9.) Buckman, 531 U.S. 341,352 (citing Geier v. Am. Honda Motor Co., 529 U.S. 861,869 (2000)).
(10.) 16AM. JUR. 2d Const. L. [section] 187.
(11.) 15 U.S.C. [section] 1381 et seq.
(12.) 15 U.S.C. [section] 1392(d).
(13.) 15 U.S.C. [section] 1397(k).
(14.) Geier, 529 U.S. 861, 867-68.
(15.) Id. at 869-70.
(16.) See, e.g., Kittleson, 6 Emerging Drugs & Devices (Mealey's) No. 19 at G-1-3 (stating that although plaintiffs' evidence (including internal sales memos, animal studies, and adverse reaction reports) "may have been misrepresented or not provided to the FDA, the basis of plaintiffs' state law tort claims is not that the FDA was defrauded, but that plaintiffs and their physicians were defrauded."); Caraker, 172 F. Supp. 2d 1018 (finding little evidence that "Congress or the FDA intended on displacing almost the entire state products liability scheme with respect to prescription drugs"); Globetti, No. CV98-TMP-2649-S, 2001 WL 419160.
(17.) Globetti, No. CV98-TMP-2649-S, 2001 WL 419160, at *1.
(18.) Dawson, 145 F. Supp. 2d 565, 572; see also Erickson, 151 F. Supp. 2d 952.
(19.) See, e.g., Caraker, 172 F. Supp. 2d 1018, 1033-35; Globetti, No. CV98-TMP-2649-S, 2001 WL 419160, at *2 n. 1. For pre-Buckman decisions on minimum standards, see Goodlin v. Medtronic, Inc., 167 F.3d 1367, 1375-76 (11th Cir. 1999); Hill v. Searle Lab., 884 F.2d 1064, 1068 (8th Cir. 1989); Wells v. Ortho Pharm. Corp., 788 F.2d 741, 746 (11th Cir. 1986), cert. denied, 479 U.S. 950 (1986); Salmon v. Parke Davis & Co., 520 F.2d 1359 (4th Cir. 1975); Motus v. Pfizer, 127 F. Supp. 2d 1085, 1092 (C.D. Cal. 2000).
(20.) Morson, 109 Cal. Rptr. 2d 343.
(21.) Jeffers v. Wal-Mart Stores, Inc., 171 F. Supp. 2d 617 (S.D.W. Va. 2001).
(22.) See Judiciary Act of 1875, 28 U.S.C. [sections] 1331; see also 28 U.S.C. [section] 1441(a).
(23.) Dukes v. U.S. Healthcare, Inc., 57 E3d 350, 353 (3d Cir. 1995).
(24.) Metropolitan Life Ins. Co. v. Taylor, 481 U.S. 58, 63-65; see also Dukes, 57 E3d 350, 354.
(25.) Dawson, 145 F. Supp. 2d 565; McCallister, 164 F. Supp. 2d 783.
(26.) Dawson, 145 F. Supp. 2d 565, 568.
(27.) Id. at 570.
(28.) 627 N.W.2d 342 (Minn. Ct. App. 2001).
(29.) Id. at 349.
(31.) Id. at 350.
(32.) Hetzel v. Bethlehem Steel Corp., 50 F.3d 360, 363 (5th Cir. 1995).
(33.) Kittleson, 6 Emerging Drugs & Devices (Mealey's) No. 19 at G-1-3, G-3, n.4.
(34.) No. 01-6194-CIV-DIMITROULEAS, 2001 U.S. Dist. LEXIS 16904 (S.D. Fla. Sept. 19, 2001).
(35.) Id. at *18.
(36.) 757 N.E.2d 75, 78 (Ill. 2001).
(37.) Id. at, 84-86.
(38.) 153 F. Supp. 2d 935 (S.D. Ind. 2001).
(39.) 245 F.3d 214, 223 (3d Cir. 2001).
(40.) 21 P.3d 1189, 1199 n.9 (Cal. 2001).
(41.) Ellen Relkin, The Sword or the Shield: Use of Governmental Regulations, Exposure Standards and Toxicological Data in Toxic Tort Litigation, 6 DICK. J. ENVTL. L. & POUY, 1, 14-18 (1997).
(42.) See, e.g., In re Bridgestone-Firestone, Inc., 153 F. Supp. 2d 935, 947-48;Dawson, 145 F. Supp. 2d 565, 570.
(43.) Buckman, 531 U.S. 341, 353 (Stevens, J., concurring).
(44.) See, e.g., Caraker, 172 F. Supp. 2d 1018; Globetti, No. CV98-TMP-2649-S, 2001 WL 419160.
Ellen Relkin is of counsel and Catherine T. Heacox is an associate with Weitz & Luxenberg in New York City.
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|Author:||Heacox, Catherine T.|
|Date:||Feb 1, 2002|
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