At bottom, preemption is about power. Stripped to its essentials, any federal preemption argument amounts to the proposition that “supreme” federal power requires/encourages me/my client to do what we’re doing. Thus, your lesser (state) power can’t force me/my client to do something else or punish me/my client for doing what federal power demands. In our line of work, force/punish translates in to “hold liable.”
Well, state court judges are savvy and powerful people. That comes with being a judge, with the temperament needed to want to be a judge, and with the ability needed to make that desire a reality. So it’s not all that surprising that many of them bridle at being told, in effect, that they lack the power to do something. A visceral response along the lines of, “oh, yeah – watch me,” is something we’ve seen a lot in preemption cases. Even federal judges, many of whom arrive steeped in the system of state common law, are not immune to this reaction.
We don’t think that’s right, but we’re realists enough to know that it happens. That leads us to consider other alternatives – ways to package the “federal law tells me to do this” message – that aren’t so … peremptory. In short, we’re thinking about “preemption lite.” We’ve come up with a couple of alternatives. They’re not as powerful as straight preemption, but in some situations they might have more appeal.
The first of these is what we call judicial deference. This isn’t the “agency deference” issue that we’ve discussed recently (see here for that). Rather, it’s the argument that a federal agency (usually for us, the FDA) has molded the parameters of the law in such a way that it would not be a good idea for state law to stray from those contours. In such a situation, as a matter of jurisprudence and comity, state common law should conform to the standards set by the federal agency.
This argument, which casts the “federal government makes me do this” argument in normative rather than preemptive terms, is supported by general tort principles. Comment e to Restatement (Third) of Torts, Products Liability §4 (1997) states:
Occasionally, after reviewing relevant circumstances, a court may properly conclude that a particular product safety standard set by statute or regulation adequately serves the objectives of tort law and therefore that the product that complies with the standard is not defective as a matter of law. Such a conclusion may be appropriate when the safety statute or regulation was promulgated recently. . .; when the specific standard addresses the very issue of product design or warning presented in the case before the court; and when. . .the deliberative process by which the safety standard was established was full, fair, and thorough and reflected substantial expertise.
Non-FDA examples of decisions finding compliance precluding product liability as a matter of law cited in the Restatement’s Reporters’ Notes are: Beatty v. Trailmaster Products, Inc., 625 A.2d 1005, 1014 (Md. 1993); Dentson v. Eddins & Lee Bus Sales, Inc., 491 So.2d 942, 944 (Ala. 1986); Jones v. Hittle Service, Inc., 549 P.2d 1383, 1390 (Kans. 1976). Similarly, comment a to Restatement (Second) of Torts §288C (1965) provided: “Where there are no. . .special circumstances, the minimum standard prescribed by the legislation or regulation may be accepted. . .by the court as a matter of law, as sufficient for the occasion.”Prosser on Torts states something similar – “Where there is a normal situation, clearly identical with that contemplated by the statute or regulation, it. . .can be ruled as a matter of law that the actor has done his full duty by complying with the statute, and nothing more is required.” §36, at 233 (5th ed. 1984). Harper & James, in their tort treatise, said much the same thing: “conformity to the legislative standard. . .may so clearly constitute due care under the circumstances of any given case that the court will decide it does as a matter of law.” §17.6.So the judicial deference argument is sort of a compliance defense on steroids. Except in punitive damages cases, the effect of compliance is usually something the jury decides. See here (compliance as complete defense to punitives) and here (charging jury on FDA compliance).So has judicial deference/compliance defense had any success in the FDA context? The answer is yes, but only in certain types of cases. Courts have only occasionally deferred to FDA approval of labeling for specific products. See Carlin v. Superior Court, 920 P.2d 1347, 1353 (Cal. 1996) (“if state-of-the-art scientific data concerning the alleged risk was fully disclosed to the FDA and it determined, after review, that the pharmaceutical manufacturer was not permitted to warn. . .the FDA’s conclusion that there was, in effect, no known risk is controlling”); Kelso v. Bayer Corp., 398 F.3d 640, 643 (7th Cir. 2005) (applying Illinois law); Thomas v. Hoffman-LaRoche, Inc., 949 F.2d 806, 816 (5th Cir. 1992) (applying Mississippi law). Unfortunately, courts in this type of case are far more likely to fall back on the hoary “minimum standards” rationale. Deference to FDA regulatory decisions has been more forthcoming where the decision affects the scope of the duty to warn itself, rather than the adequacy of a particular manufacturer’s warning. Thus, consistency with the FDA’s regulatory scheme setting up a physician’s prescription as a limitation on access to prescription medical products has been cited as one of the justifications for the learned intermediary rule. Vitanza v. Upjohn Co., 778 A.2d 829, 846 (Conn. 2001); Niemiera v. Schneider, 555 A.2d 1112, 1118-19 (N.J. 1989); Ellis v. C.R. Bard, Inc., 311 F.3d 1272, 1287 (11th Cir. 2002) (applying Georgia law); Fane v. Zimmer, Inc., 927 F.2d 124, 129 (2d Cir. 1991) (applying New York law); Phelps v. Sherwood Medical Industries, 836 F.2d 296, 298-99 (7th Cir. 1987) (applying Indiana law). The FDA’s decision not to impose a prescription requirement led one court to preclude any duty to treat an OTC product like a prescription drug to avoid product tampering. Elsroth v. Johnson & Johnson, 700 F. Supp. 151, 156-57 (S.D.N.Y. 1988).Deference to the FDA was the express basis of the decision in Ramirez v. Plough, Inc., that state law would not require warnings in Spanish where the FDA required only English language warnings:
[W]e reject plaintiff’s attempt to place on nonprescription drug manufacturers a duty to warn that is broader in scope and more onerous than that currently imposed by applicable statutes and regulations. the FDA has stressed that “it is in the best interest of the consumer, industry, and the marketplace to have uniformity in the presentation and clarity of message” in the warnings provided with nonprescription drugs. To preserve that uniformity and clarity, to avoid adverse impacts upon the warning requirements mandated by the federal regulatory scheme, and in deference to the superior technical and procedural lawmaking resources of legislative and administrative bodies, we adopt the legislative/regulatory standard of care.
863 P.2d 167, 177 (Cal. 1993). Ramirez is also one of the cases cited as the justification for Restatement (Third) §4, comment e.Deference-type arguments have also had significant success where FDA regulations impose the duty to warn on somebody other than the defendant. Thus deference principles have led courts not to impose warning duties upon suppliers of bulk drug components beyond the minimal (“for repackaging”) warnings required by the FDA. George v. Parke-Davis, 733 P.2d 507, 515-16 (Wash. 1987); Bond v. E.I. DuPont De Nemours & Co., 868 P.2d 1114, 1121 (Colo. App. 1993); White v. Weiner, 562 A.2d 378, 385 (Pa. Super. 1989), aff’d, 583 A.2d 789 (Pa. 1991); Kalinowski v. E.I. Du Pont de Nemours & Co., 851 F. Supp. 149, 156-57 (E.D. Pa. 1994); Veil v. Vitek, Inc., 803 F. Supp. 229, 236-37 (D.N.D. 1992).Common-law deference to the FDA’s regulatory scheme has also precluded liability in a couple of other situations. The Agency’s decision that mandated direct-to-patient labeling should not adversely affect a manufacturer’s product liability has been held to bar challenges to the sufficiency of patient labeling. MacPherson v. Searle & Co., 775 F. Supp. 417, 425-26 (D.D.C. 1991). Also, FDA regulations concerning clinical trials have precluded imposition of inconsistent state-law duties. Kernke v. Menninger Clinic, Inc., 173 F. Supp. 2d 1117, 1122-24 (D. Kan. 2001).So that’s one form of preemption lite. Another form that comes to mind has to do with every plaintiff’s seeming favorite claim for the 21st Century – violation of state consumer protection/fraud laws. The laws of quite a few states, including Illinois and Minnesota (two statutes particularly preferred by plaintiffs) are based upon the old Uniform State Laws template that included an safe harbor for government approved activities. While the exact phrasing of course varies, the general intent of these exceptions is to immunize from liability under consumer protection statutes conduct that is taken in compliance with governmental oversight. The Illinois statute is representative:
10b. Nothing in this Act shall apply to any of the following:(1) Actions or transactions specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States.
815 Ill. Comp. Stat. §505/10b(1).A quick and dirty inquiry turned up the following examples of similar statutes: Alabama §8-19-4(c) (“compliance”); Alaska §45.50.481(a)(1) (“regulated”); Arkansas §4-88-101(4) (“permitted”); Colorado §6-1-106(a)(1) (“compliance”); Connecticut §42-110c(a) (“permitted”); Delaware 6 C. §2534(A)(1) (“compliance”); Florida §501.212(1) (“required or specifically permitted”); Georgia §§10-1-374(a)(1) (“compliance”), 10-1-396(1) (“specifically authorized”); Hawaii §481A-5(a)(1) (“compliance”); Idaho §§48-107(1)(b) (“required or affirmatively approved”), 48-605(1) (“permitted”); Illinois: 815 Stat. §510/4(1) (“compliance”); Indiana §24-5-0.5-6 (“required or expressly permitted”); Kentucky (§367.176(2) (“authorized or approved”); Maine 5 Stat. §§208(1) (“permitted”), 1214(1)(a) (“compliance”); Massachusetts c. 93A §3 (“permitted”); Michigan §445.904(1)(a) (“specifically authorized”); Minnesota §325D.46, Subd. 1(1) (“compliance”); Montana §30-14-105 (“permitted”); Nebraska §§87-304(a)(1) (“compliance”), 59-1617 (“permitted, prohibited, or regulated”); Nevada §598.0955(1)(a) (“compliance”); New Mexico §57-12-7 (“expressly permitted”); New York Gen. Bus. L. §349(d) (“subject to and complies with”); Ohio §§1345.12 (“required or specifically permitted”), 4165.04(a)(1) (“compliance”); Oklahoma 78 Stat. §55(A)(1) (“compliance”); Oregon §646.612(1) (“compliance”); Rhode Island §6-13.1-4 (“permitted”); South Carolina §39-5-40(a) (“permitted”); South Dakota §37-24-10 (“permitted”); Tennessee §47-18-111(a)(1) (“specifically authorized”); Utah §13-11-22(1)(a) (“required or specifically permitted”); Virginia §59.1-199(A) (“authorized”); Washington §19.86.170 (“permitted, prohibited or regulated”); Wyoming §40-12-110(a)(i) (“required or permitted”). In all of these statutes, the legislature expressly made “the government requires me to do this” a defense to liability. Thus, all of the usual preemption rationale becomes a defense under state law.To fall within the provisions of such a safe harbor exclusion, there must be more than the mere absence of a federal prohibition.
Conduct is not specifically authorized merely because it has not been specifically prohibited. Conduct is not specifically authorized merely because it has been passively allowed to go on for a period of time without regulatory action being taken to stop it. Instead, we must look to the affirmative acts or expressions of authorization by the FTC to answer this question.
Price v. Philip Morris, Inc., 848 N.E.2d 1, 36 (Ill. 2005). The purpose of such exemptions “is to insure that a business is not subjected to a lawsuit under [a consumer protection statute] when it does something required by law, or does something that would otherwise be a violation of the Act, but which is allowed under other statutes or regulations.” Skinner v. Steele, 730 S.W.2d 335, 337 (Tenn. App. 1987). Accord, e.g., Showpiece Homes Corp. v. Assurance Co., 38 P.3d 47, 56 (Colo. 2001); D.J. Hopkins, Inc. v. GTE Northwest, Inc., 947 P.2d 1220, 1223-24 (Wash. App. 1997); McCarthy v. Middle Tennessee Electric Membership Corp., 466 F.3d 399, 413 n.20 (6th Cir. 2006) (applying Tennessee law); Riccio v. Ford Motor Credit Co., 238 F.R.D. 44, 48 (D. Mass. 2006); Burton v. William Beaumont Hospital, 373 F. Supp.2d 707, 721 (E.D. Mich. 2005); WVG v. Pacific Insurance Co., 707 F. Supp. 70, 72 (D.N.H. 1986).FDA approval of a product’s labeling, following the sort of detailed approval process that can be established with FOIA-generated documents, should fit easily within this standard. See generally J. Leghorn, et al., “Defending An Emerging Threat: Consumer Fraud Class Action Suits In Pharmaceutical & Medical Device Products-Based Litigation,” 61 Food & Drug L.J. 519, 521-23 (2006).To authorize is to “give legal authority; to empower,” “[t]o formally approve; to sanction.” Black’s Law Dictionary 143 (8th ed. 2004). That’s precisely what the FDA does when it allows a new drug or device to be marketed:
The rationale underlying the exemptive provisions of all of these [state consumer protection] statutes is the need for uniformity in the regulation of advertising and labeling and a deference to the expertise of the responsible regulatory agency. . . . [T]he FDA’s expert determinations as to the sufficiency of warnings on OTC drug labels should not be second-guessed by lay juries. Where the FDA has explicitly endorsed the particular facet of the labeling which is claimed to be inadequate, there is presented a clear conflict between federal law pertaining to the marketing of drugs in interstate commerce as directed by the FDA and the local law.
American Home Products Corp. v. Johnson & Johnson, 672 F. Supp. 135, 144-45 (S.D.N.Y. 1987).The safe harbor does not “limit the application of the provision to authorization via formal agency rulemaking. Rather, so long as the conduct is specifically authorized ‘by laws administered by’ the regulatory body, it is exempt from Consumer Fraud Act liability.” Price, 848 N.E.2d at 37-38. Where the language the defendant uses has been approved by a federal agency, a defendant “may not be held liable under the Consumer Fraud Act, even if the terms might be deemed false, deceptive, or misleading.” Id. at 38. Thus FDA-approved statements have been exempted from consumer protection/fraud liability:
The pharmaceutical industry is highly regulated, both at the federal level and internationally. Technical requirements abound, and it is not only possible but likely that ordinary consumers will find some of them confusing, or possibly misleading as the term is used in statutes like Illinois’s CFA. But, recognizing the primacy of federal law in this field, the Illinois statute itself protects companies from liability if their actions are authorized by federal law.
Bober v. Glaxo Wellcome PLC, 246 F.3d 934, 942 (7th Cir. 2001) (applying Illinois law).
Since labeling includes marketing, Kordel v. United States, 335 U.S. 345, 348 (1948), FDA approval has been held to marketing issues as well. Duronio v. Merck & Co., 2006 WL 1628516, at *7 (Mich. App. June 13, 2006) (drug marketing activities exempt because “the general marketing and advertising activities underlying plaintiff’s [consumer fraud] claim are authorized and regulated under laws administered by the FDA”); Pennsylvania Employee Benefit Trust Fund v. Zeneca, Inc., 2005 WL 2993937, at *4 (D. Del. Nov. 8, 2005) (“[h]aving reviewed all the advertising materials cited by plaintiffs, the court concludes that such materials are related to the safety and efficacy of [the drug], are consistent with the FDA-approved labeling and, therefore, are not actionable”); cf. Scott v. Glaxo Smith Kline Healthcare, 2006 WL 952032, at *2 & n.1 (N.D. Ill. Apr. 12, 2006) (refusing to dismiss marketing-based claim on pleadings because compliance not established; noting that plaintiff had a “very difficult burden to show that the statements were not specifically authorized” because industry was “highly regulated” by FDA).In addition to the general safe harbors for “federal” regulation generally, several other states have similar provisions limited to activities authorized by the Federal Trade Commission. Iowa §714.16(14); Louisiana §51:1406(4); New Hampshire ch. 358-A:3 (III); New York: Gen. Bus. L. § 350-c; Texas Bus. & Com. Code §17.49. Since The FDA and the Federal Trade Commission have a longstanding arrangement by which FDA-approved labeling is considered compliant with the FTC, see 36 Fed. Reg. 18,539 (1971), FTC-specific safe harbor provisions have applied to FDA drug approvals. Pennsylvania Employee Benefit, 2005 WL 2993937, at *2; American Home Products Corp., 672 F. Supp. at 144.All of these statutory safe harbors will likely become more salient grow as both the FDA itself, and Congress through legislation (including the bill just recently passed by the Senate), provide the Agency with greater pre-approval functions with respect direct-to-consumer and other forms of advertising.While the New Jersey consumer fraud act does not have a statutory safe harbor provision, its courts have created an equivalent safe harbor judicially in cases involving prescription medical products. In New Jersey Citizen Action v. Schering-Plough Corp., 842 A.2d 174 (N.J. Super. App. Div. 2003), the court held that claims concerning DTC advertisements for a prescription drug were properly dismissed because:
[P]laintiffs’ complaint overlooks an essential difference between the pharmaceutical industry and others. Regardless of the claims in the DTC advertising campaign, the products in question remain subject to the strict regulation of the FDA. . . . [T]he wording of the ads, to the extent that it is subject to FDA oversight. . .is similarly not actionable.
Id. at 177 (emphasis added); see also In re Meridia Products Liability Litigation, 328 F. Supp.2d 791, 812 n.19 (N.D. Ohio 2004) (under New Jersey law, drug manufacturers’ warnings were presumptively adequate because plaintiffs “provided no reason to believe that defendants violated the FDA’s rules and regulations”).As we’ve said until we’re blue in the face, preemption is of such importance to our clients that it needs to be carefully protected and preserved. That means, among other things, not filing preemption motions that have a low probability of success. Nevertheless, in courts where resistance to preemption is likely some form of preemption lite might be a viable alternative to bring the FDA’s regulatory decisions to bear in product liability litigation.