Preemption, Preemption, and More Preemption – A Cert Petition, a Circuit Court Decision, and the Upcoming Battle in Mutual v. Bartlett

By Kurt R. Karst –      

Over the past week we’ve been inundated with new items concerning generic drug labeling and whether federal law – the FDC Act and FDA’s implementing regulations – preempts state-law product liability claims (failure-to-warn, design defect, failure-to-conform/update, etc.) against generic drug manufacturers.  This is all happening just as the U.S. Supreme Court is set to hear Oral Argument on Tuesday, March 19th in Mutual Pharmaceutical Co. v. Bartlett (Docket No. 12-142), a design defect generic drug preemption case. 

At the heart of all of this is the U.S. Supreme Court’s decision in PLIVA Inc. v. Mensing, 131 S.Ct. 2567 (2011), in which the Court ruled that FDA’s regulations preventing generic drug manufacturers from changing their labeling except to mirror the label of the brand-name manufacturer preempt state-law failure-to-warn claims against generic drug manufacturers, because it is impossible for generic drug manufacturers to comply with both federal and state duties to warn.  This is in contrast to the Court’s decision in Wyeth v. Levine, 555 U.S. 555 (2009), holding that a state-law tort action against a brand-name drug manufacturer for failure-to-warn is not preempted.

So here’s a run-down of the latest, including where things stand in the Bartlett case . . . .

Demahy v. Schwarz – Petition for Writ of Certiorari

This case has a lengthy history and involves the now familiar drug metoclopramide and allegations that a generic manufacturer’s version of the drug caused tardive dyskinesia in Petitioner Julie Demahy.  It is on its second petition to the U.S. Supreme Court.  In the first go-around (Docket No. 09-1501), the case was consolidated with Mensing, and the Court reversed a January 2010 decision from the U.S. Court of Appeals of the Fifth Circuit affirming a finding from the U.S. District Court for the Eastern District of Louisiana that Ms. Demahy’s state-law failure-to-warn claims are not preempted.  On remand, the Fifth Circuit mandated the district court to enter judgment in favor of the generic drug manufacturers.  In doing so, the Louisiana district court dismissed all of Ms. Demahy’s claims, including her allegations of design defect.  Ms. Demahy filed motions to alter the district court’s judgment and to revive her design defect claims.  Both motions were denied, and Ms. Demahy appealed the denials to the Fifth Circuit Court, which affirmed the district court decision in October 2012, stating that “Demahy’s only remaining claims had been characterized by the district court, this Court, and the Supreme Court as failure-to-warn claims.”  Moreover, said the Fifth Circuit, “even if we were to find that these claims survived [this Court’s] mandate . . . we would still affirm the district court insofar as the claims are, at base, failure-to-warn claims, which would be preempted in light of Mensing.”

In her petition for a writ of certiorari, Ms. Demahy presents the following question to the U.S. Supreme Court: “Are manufacturers of unreasonably dangerous generic drug products shielded from liability for design defect claims by virtue of federal preemption and PLIVA, Inc. v. Mensing?”  According to Ms. Demahy:

There is simply nothing in the district court’s order, or anywhere in the record, substantiating the [Fifth Circuit] court’s conclusion that Demahy’s design defect claims were somehow resolved in the course of the previous appeal.  To the contrary, there had never been any mention of these claims, and the court’s conclusion runs afoul of well-established law.

Moreover, according to Ms. Demahy, the Fifth Circuit court’s “determination that design defect claims are preempted by the duty of sameness at issue in Mensing” conflicts with the U.S. Supreme Court’s decision in Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), in which the Court held that certain state-law tort claims involving medical devices cleared under the premarket notification (i.e., 510(k)) process are not preempted by federal law, and creates a split of authority with the First Circuit Court’s decision in Bartlett.  Even if the Court declines to grant certiorari in this case, Petitioner asks that the Court hold the case until the decision in Bartlett is issued.

Fulgenzi v. PLIVA, Inc. – U.S. Court of Appeals for the Sixth Circuit

The Sixth Circuit Court’s recent decision in Fulgenzi raised the profile of another state-law tort claim against generic drug manufacturers: failure-to-update.  The case, also involving the drug metoclopramide, stems from a decision from the U.S. District Court for the Northern District of Ohio, in which the district court ruled that allegations that a generic drug manufacturer failed to update labeling to conform to the labeling of the reference listed drug is just another failure-to-warn claim preempted by Mensing.  Specifically, a generic drug manufacturer did not include the statement “Therapy should not exceed 12 weeks in duration” after the reference listed drug labeling was updated to include the warning.

On appeal, Plaintiff-Appellant Eleanor Fulgenzi argued that the case presents an issue of first impression that the Sixth Circuit did not adddress in Smith v. Wyeth, Inc., 657 F.3d 420 (6th Cir. 2011), in which the Court did not find an exception to preemption for a state-law warning claim based on failure to comply with FDA regulations.  According to Ms. Fulgenzi, where a generic drug manufacturer could have independently added a warning through FDA’s Changes Being Effected (“CBE”) labeling regulations, a state-law claim based on that manufacturer’s failure to update its labeling through the CBE process to add a warning is not preempted on impossibility grounds.  Generic drug manufacturer PLIVA, Inc. argued that the case falls squarely within the four corners of Mensing and the Sixth Circuit’s Smith decision.  (Copies of the briefs in the case are available here, here, and here.)

The Sixth Circuit, as an initial matter, agreed with Ms. Fulgenzi that this is a case of first impression and that the Court’s Smith decision is not controlling.  “Although the Smith plaintiffs did raise the same arguments that Fulgenzi does here, they were raised only on supplemental briefing and, from the court’s opinion, it does not appear that they were considered.  As a result, we are not controlled by Smith and are faced with a question of first impression,” wrote the Court.  The Court then proceeded to conduct a preemption analysis in accordance with the principles articulated by the U.S. Supreme Court in Wyeth and Mensing.  Under that analysis, the Sixth Circuit found against preemption:

Mensing explains that the key question is “whether the private party could independently” comply with its state duty—without relying on the prior exercise of federal-agency discretion.  Wyeth, by contrast, holds that there is no impossibility as long as the approval comes after the independent action of the private party (especially where denial is speculative and unlikely).  In our case, not only could PLIVA have independently updated its labeling to match that of the branded manufacturer through the CBE process, but it had a federal duty to do so.  As a result, compliance with federal and state duties was not just possible; it was required.  Impossibility preemption is inappropriate in such a case.  It is true that the FDA had the authority to reject PLIVA’s labeling change after the fact.  But this is precisely the “possibility of impossibility” that Wyeth found insufficient to warrant preemption.  Indeed, as PLIVA had a clear federal duty to update its label, it is even less likely here that the FDA would have rejected the change.  This case, therefore, presents an even weaker case for impossibility preemption than Wyeth. [(Internal citations omitted; emphasis in original.)]

Fulgenzi is not the first instance in which a court has ruled against preemption in the faulire-to-update/failure-to-conform context.  Just a week before the Sixth Circuit ruled in Fulgenzi, the U.S. District Court for the Southern District of Texas denied a Motion to Dismiss filed by several generic defendants in yet another metoclopramide product liability case who argued that Mensing requires dismissal of the case.  “Generic Defendants were preempted by federal law from including additional warnings not approved by the FDA; however, they could, and indeed they were required to, ensure that their labeling contained the stronger, FDA-approved warnings for the name-brand drug,” wrote the district court in a March 7th decision.

Mutual Pharmaceutical Co. v. Bartlett – U.S. Supreme Court

The Bartlett case that will be argued in the U.S. Supreme Court this week (Docket No. 12-142) is a design defect generic drug preemption case that has garnered significant attention.  The question presented to the Court is whether the First Circuit Court erred when it ruled that federal law does not preempt state-law design defect claims concerning generic drug products because any conflict between federal and state law can be avoided if the the generic drug manufacturer stops selling its products.  As we previously reported, the First Circuit’s decision, which characterized Wyeth as a general no-preemption rule and Mensing as an exception to that rule, left a lot of jaws on the floor.

Mutual contends in its Surpeme Court brief that the case is controlled by a straightforward application of Mensing.  Bartlett contends, among other things, in her brief that the case differs fundamentally from the “negligence-based failure-to-warn claims” preempted in Mensing. In Mensing, says Bartlett, “state law undisputedly required the manufacturers affirmatively to improve the drug’s label.  Here, however, the only state-law obligation is to compensate consumers for injuries caused by an unreasonably dangerous product.  Nothing in federal law prohibits petitioner from paying compensatory damages to Ms. Bartlett.”  In a recent reply brief, Mutual has characterized this as Bartlett’s abandonment of the First Circuit’s stop-selling theory and simply wrong at every turn.

Many parties have come to Mutual’s defense.  Amicus briefs have been submitted by the Washington Legal Foundation and Allied Educational Foundation, several generic drug manufacturers, the Product Liability Advisory Council, Inc., DRI–The Voice of the Defense Bar, the Chamber of Commerce of the United States of America and PhRMA, and GPhA.

Perhaps the most interesting amicus brief is that of the United States.  The United States, which has been allocated time during Oral Argument, takes the position that Mensing controls the case and that the First Circuit Court’s stop-selling theory cannot be squared with Mensing, “which reflects an implicit judgment that the optio of withdrawing from a market is not sufficient to defeat impossibility preemption in this context.”  That being said, however, the amicus brief includes at footnote 2 an ominous remark: “FDA is considering a regulatory change that would allow generic manufacturers, like brand-name manufacturers, to change their labeling in appropriate circumstances.  If such a regulatory change is adopted, it could eliminate preemption of failure-to-warn claims against generic-drug manufacturers.”  What might that “regulatory change” be?  We don’t know just yet; however, we understand that shortly after Mensing, FDA assembled a taskforce to analyze its regulations in light of the decision.  In addition, as we previously reported, in August 2011 Public Citizen submitted a citizen petition to FDA requesting that the Agency, in response to Mensing, amend its regulations to permit ANDA sponsors to revise their labeling through the CBE and Prior Approval Supplement procedures.  Although possible, it seems unlikely that FDA will propose new regulations or substantively respond to the Public Citizen petition before the Supreme Court hands down its decision in Bartlett.