When we heard the other day that Watson v. Philip Morris had been handed down, we weren’t expecting miracles. Watson was one of those cases that you can pretty well tell what’s going to happen from the oral argument – and the oral argument hadn’t given those of us who live on the right side of the “v.” much to cheer about. And so it turned out to be. The defendants got skunked, 9-zip.
Now that we’ve read it, here’s our mea culpa – we did it. The Court all but came out and said that we’re responsible for the result being what it was. By “we,” we mean prescription drug and medical device defendants. The Court knew what we’d do with an affirmance. At the end of the opinion, the Court stated:

We are left with the FTC’s detailed rules about advertising, specifications for testing, requirements about reporting results, and the like. This sounds to us like regulation, not delegation. If there is a difference between this kind of regulation and, say, that of Food and Drug Administration regulation of prescription drug marketing and advertising (which also involve testing requirements), that difference is one of degree, not kind.

2007 WL 1660910, at *11 (emphasis added).
That’s us – the folks regulated by the FDA. As big as tobacco litigation can sometimes get (something we’re both personally familiar with), that’s a minuscule number of cases compared with the amount of state-court litigation involving products that the FDA regulates. The Court knew – and if they didn’t, plaintiff-oriented amici certainly told them – that recognizing federal officer subject matter jurisdiction based upon the Federal Trade Commission’s superintendence of the tobacco companies would mean that FDA-regulated defendants could make many of the same jurisdictional arguments.
They were right. We would have. In fact, we already were. C’est la vie. It was worth the shot – long though it was – to get our clients out of the Madison and Miller Counties, the Valleys, and the “Banks” of this country where it’s difficult if not impossible to get a fair trial. For why that is, see this discussion of judicial hellholes.
The question now becomes, after Watson, is there anything left? Are there any circumstances under which an FDA-regulated manufacturer might be able to assert federal question jurisdiction based upon its being a federal officer of some sort? Well, were sad to say that there’s not much. The Supreme Court made sure to close as many doors as it could.
The purpose of statute is to protect what the government itself does. “[T]he removal statute’s ‘basic’ purpose is to protect the Federal Government from the interference with its ‘operations.’” 2007 WL 1660910, at *6. In and of itself, that’s not all that bad a holding. After all the Court had previously held fraud on the FDA claims preempted on the same grounds – because they interfere with FDA operations. Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 351 (2001) (the “incentive to submit a deluge of information that the Administration neither wants nor needs [would] result[] in additional burdens on the FDA’s evaluation of an application”). As we’ve already discussed here, despite Buckman, plaintiffs remain addicted to these sorts of arguments, and all too many courts still act as enablers of that addiction.
So there has to be more than just statutory purpose at work, and there is. The primary obstacle lies in the character of a “federal officer.” The Court said over and over that mere “regulation” wasn’t enough – there needs to be “affirmative” assistance provided to the government:

• “a private person acts as an assistant to a federal official in helping that official to enforce federal law,” 2007 WL 1660910, at *6.
• “the statute authorize[s] removal by private parties only if they were authorized to act with or for federal officers or agents in affirmatively executing duties under federal law.” Id.
• “the private person’s ‘acting under’ must involve an effort to assist, or to help carry out, the duties or tasks of the federal superior.” Id. at *7.
• “differences in the degree of regulatory detail or supervision cannot by themselves transform. . .regulatory compliance into the kind of assistance that might bring [the case] within the scope of the statutory phrase “acting under.” Id. at *11.

Conversely, the Court took pains to point out that regulation, no matter how complicated or intrusive, isn’t going to be enough:

When a company subject to a regulatory order (even a highly complex order) complies with the order, it does not ordinarily create a significant risk of state-court “prejudice”. . . . [A] highly regulated firm cannot find a statutory basis for removal in the fact of federal regulation alone. . . . And that is so even if the regulation is highly detailed and even if the private firm’s activities are highly supervised and monitored.

Id. at *8. That pretty much does it.
If there’s any saving grace in Watson for defendants, it comes in the discussion of the defendants’ “contrary” arguments. Id. First of all, a government contractor – say a drug or vaccine maker paid to deliver specially made products to the military for use in defending against a biological warfare attack – probably could still remove as a federal agent. Id. The Court didn’t delve deeply into facts not before it, but government contractors represent a limited universe of cases that the Court seemed willing to tolerate in the federal court system.
Second, and possibly a little more broadly applicable, the Court suggests that an express “delegation” (which the Watson defendants unfortunately could not establish as a factual matter) of governmental authority to a person then sued in state court over its exercise of that delegated power may well result in federal officer jurisdiction. Id. at *10-11. “[F]ormal delegation. . .might authorize [a defendant] to remove the case.” Id. at *10. Implicit delegation isn’t going to be enough. “[N]either Congress nor federal agencies normally delegate legal authority to private entities without saying that they are doing so.” Id. There would have to be “some such special relationship” to trigger the statute. Id. at *11.
So we guess that’s what an FDA-regulated manufacturer will have to shoot for to reach the promised land of federal officer jurisdiction – an express delegation by the FDA for the manufacturer to do something above and beyond mere regulatory compliance. At least after Watson a manufacturer asked for such extraordinary performance knows to get the “delegation” in writing. The Watson defendants could only show their own attorney’s confirming letter. Id. at *10. The court, in effect, said, “sorry, not good enough.” Id.
Engaging in our favorite pastime of unbounded speculation, what could such “delegation” entail? We’re not entirely sure, but it would probably involve something already so heavily intertwined with FDA authority that a good preemption argument would likely arise from the same facts. It would have to be something that the FDA, for its own reasons, really wanted a private company to do – but couldn’t just order done as a matter of regulatory compliance.
All this brings to mind the crash program to develop a diagnostic test for AIDS that supported the preemption ruling in R.F. v. Abbott Laboratories, 745 A.2d 1174 (N.J. 2000). That kind of a program, where the FDA positively encouraged development and submission of a product, may well constitute FDA “delegation,” since the FDA’s relationship with the defendant went well beyond the defendant’s mere compliance with regulations applicable to FDA submissions for approval.
We recall from our Bone Screw days another possible scenario out of which a defendant, if savvy enough to “get it in writing” from the FDA, might be able to establish “delegation.” The basic problem in Bone Screw was that the FDA allowed itself to get cross-wise with the medical standard of care. It was a situation where, because an off-label use had become the standard of care, the FDA’s usual way of bringing about a label change wouldn’t work. It simply wasn’t ethical to run the kind of clinical trial that the FDA ordinarily requires because that would have involved withholding standard-of-care treatment from patients – and doctors rightly wouldn’t do that.
So the FDA decided that the manufacturers were going to run a special retrospective (as opposed to prospective, controlled and double-blinded) study. The FDA specified many of the protocols for the study and signed off on the rest before the study was performed. Once the study was completed, the FDA told the manufacturers to submit reclassification petitions concerning the off-label use, which was done. Given the amount of litigation that surrounded bone screws at the time, the manufacturers were predictably sued for undertaking the FDA-mandated retrospective study. The FDA was sued as well.
After Watson, we’re afraid that to establish federal officer subject matter litigation in subsequent tort litigation, a defendant will to have to be able to show extraordinary FDA involvement on the order of the R.F. and Bone Screw examples. We wish it were otherwise, but the Supreme Court just isn’t prepared to open the proverbial floodgates and allow mass removal of prescription medical product liability litigation from state to federal courts – at least not without express congressional authorization.