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May 28, 2019

SCOTUS preemption ruling good news for drug and device plaintiffs

by: Louis M. Bograd

Last week, the U.S. Supreme Court issued its decision in an important Food Drug and Cosmetic Act preemption case Merck v. Albrecht. The case sought to settle whether a judge or jury should decide the fate of complex medical litigation surrounding Merck’s allegedly dangerous osteoporosis medication Fosamax that the company claims is barred by prior FDA action, and also to articulate standards for such “clear evidence” preemption under an earlier Supreme Court decision, Wyeth v. Levine.

As background, Merck previously proposed changes to Fosamax’s label that would have warned patients of a potential risk of stress fractures, but the FDA rejected the warnings. Merck claims that in doing so, the FDA preempted state claims that allege injuries caused by Merck’s failure to warn about a risk of stress fractures resulting from use of Fosamax.

A Third Circuit decision last year revived litigation against Merck, specifying that a jury, not a judge, should decide whether there was clear evidence that the FDA would have rejected the label changes that Plaintiffs contend were needed. Merck appealed to the Supreme Court as it continues to seek to have the litigation dismissed.

While the Supreme Court disagreed with the Third Circuit’s conclusion as to who should decide the preemption question, ruling that a judge is more qualified than a jury to decide whether the claims should go forward, it is my belief that the Court’s decision is largely good news for plaintiffs on “clear evidence” preemption in medical drug and device cases. We have seen the issue of FDA preemption in numerous cases including Zofran, Essure and the national Opioids MDL.

The decision was authored by Justice Breyer, with five Justices joining, including both Justice Thomas and Justice Gorsuch. Justice Thomas also concurred separately to apply his own unique impossibility preemption jurisprudence, in a way that is even more favorable to plaintiffs. Justices Alito, Roberts and Kavanaugh concurred only in the judgment in order to complain that the majority opinion is not sufficiently pro-preemption.

The Court’s only “holding,” which I anticipated, was that the question of preemption is an issue of law to be decided by the Court, not a question of fact for the jury. But, the majority acknowledged, this question of law may sometimes turn on issues of fact, stating:

“We understand that sometimes contested brute facts will prove relevant to a court’s legal determination about the meaning and effect of an agency decision. For example, if the FDA rejected a drug manufacturer’s supplemental application to change a drug label on the ground that the information supporting the application was insufficient to warrant a labeling change, the meaning and scope of that decision might depend on what information the FDA had before it. Yet in litigation between a drug consumer and a drug manufacturer (which will ordinarily lack an official administrative record for an FDA decision), the litigants may dispute whether the drug manufacturer submitted all material information to the FDA.” 

I read this to mean that where the “facts” concerning clear evidence are in dispute, the Court must essentially apply a summary judgment test and hold the claims preempted only where, on the undisputed evidence, it is clear that the FDA rejected the warning that state law requires with full knowledge of all material information concerning the proposed warning.

Application to other similar cases

There are a number of other very useful statements in the opinions that could bear some significance for similar cases. For example, the majority states that: “We also hold that ‘clear evi­dence’ is evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug’s label to include that warning.” (emphasis added). Thus, where plaintiffs can show that the manufacturer withheld information from the FDA, there can be no clear evidence preemption.

Later, in its description of a similar holding in another case Wyeth v. Levine, the majority opinion states:

“showing that federal law prohibited the drug manufacturer from adding a warning that would satisfy state law requires the drug manufac­turer to show that it fully informed the FDA of the justifi­cations for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve changing the drug’s label to in­clude that warning.”

Justice Breyer’s opinion goes on to make a couple of additional helpful points. First, he cites all of the best Supreme Court precedents on impossibility: Barnett Bank and Michigan Canners for the proposition that impossibility only exists where one sovereign’s law requires conduct that the other sovereign prohibits (rather than one permitting and the other prohibiting the conduct); and Rice v. Norman Williams Co. for the proposition that only actual conflicts give rise to preemption: hypothetical or potential conflicts are insufficient to warrant preemption.

This latter point is critical to Breyer’s next assertion: that only FDA actions “carrying the force of law” can provide a basis for preemption, such as notice-and-comment rulemaking or a formal denial of a Changes Being Effected (CBE) or Prior Approval Supplement (PAS) application. (Of note: The opinion is silent on the question of whether the denial of a citizen petition, as opposed to a supplement application from the manufacturer, would qualify as an agency action carrying the force of law.)The majority seems to suggest that a defendant cannot justify preemption based on creative interpretation of phrases drawn from FDA communications that are not formal agency actions.

In his concurrence, Justice Thomas goes even further and states expressly that Merck has not met the standard for preemption. He goes further than the majority in rejecting any attempt by Merck to find impossibility in the language of FDA correspondence with the company:

“By its reference to ‘the Laws of the United States,’ the Supremacy Clause ‘requires that pre-emptive effect be given only to those federal standards and policies that are set forth in, or necessarily follow from, the statutory text that was produced through the constitutionally required bicameral and presentment procedures.’ Wyeth, supra, at 586 (opinion of THOMAS, J.). Merck’s primary argument, based on various agency com­munications, is that the FDA would have rejected a hypo­thetical labeling change submitted via the CBE process. But neither agency musings nor hypothetical future rejec­tions constitute pre-emptive ‘Laws’ under the Supremacy Clause.”

In Thomas’s view, FDA’s 2009 correspondence with Merck “neither marked ‘the consum­mation of the agency’s decision making process’ nor de­termined Merck’s ‘rights or obligations.’ Bennett v. Spear, 520 U. S. 154, 178 (1997) (internal quotation marks omit­ted). Instead, it was ‘of a merely tentative or interlocutory nature.’ Ibid. Therefore, the letter was not a final agency action with the force of law, so it cannot be ‘Law’ with pre-emptive effect.” Likewise, according to Thomas, “Merck’s argument that the 2009 letter and other agency communications suggest that the FDA would have denied a future labeling change fares no better: hypothetical agency action is not ‘Law.’”

Any doubts about this positive reading of the decision should be resolved by a review of Justice’s Alito’s begrudging concurrence in the judgment, for himself, Justice Kavanaugh, and the Chief Justice. He begins by discussing the 2007 enactment of 21 USC 355(o)(4)(A), which permits the FDA to itself initiate a label change when it becomes aware of new safety information that should be included in labeling. Justice Alito wants the FDA’s failure to require a new warning, even though the manufacturer did not request one, to carry preemptive effect. But Thomas points out that the agency’s simple failure to take action is not a formal agency action carrying the force of law sufficient to invoke preemption.

Justice Alito then goes on to discuss all of the evidence that the FDA really meant to prohibit an atypical femur fracture warning based on its correspondence with Merck following its 2009 rejection of Merck’s proposed stress fracture warning. He chides the majority for not even citing this evidence, which makes sense only because such correspondence does not constitute formal agency action.

All in all, I would call the Supreme Court’s ruling a win for plaintiffs. Not just the Fosamax plaintiffs, but also for other plaintiffs confronting a clear evidence preemption defense.