The Solicitor General, on behalf of the FDA, has recently filed amicus briefs in both the Riegel v. Medtronic and Warner-Lambert v. Kent (formerly Desiano) Supreme Court preemption cases. We’re doing a separate post on Riegel, but we did this one first because it’s more in the nature of “breaking news” – it was only filed yesterday. However, so as not to keep our more impatient readers waiting here’s the link to the Riegel amicus brief.
Now, on to Kent. For the same reason, to satisfy those of you who’d rather read the Kent brief yourselves than wait for us yak things up, right up front, here’s a link to the Warner-Lambert/Kent amicus brief.
Everybody who read us by now knows that we like preemption as a defense. Where preemption applies, it’s relatively clean and it doesn’t get us too deeply involved the ins and outs of the peculiar facts of the case. Most important of all, though, preemption is an absolute defense, entitling our clients to summary judgment (it’s dangerous to raise preemption on less than a full record, as we’ve discussed before) and dismissal from the case – regardless of the merits of the underlying claims under state law.
That’s why after reading the federal government’s amicus briefs in Kent and Riegel, we feel a bit like Christmas came early this year. But why are we making such a big deal of these briefs, you might ask (especially if you’re not a litigator). Isn’t a brief just a brief?
No, not if the brief is by the government – especially if the government brief is on behalf of the administrative agency charged with running a particular regulatory scheme, as the FDA is with the FDCA.
This gets into an arcane field generally called “administrative deference.” Lawyers and judges, being the inveterate hair-splitters that we are, have created a bunch of gradations of deference – Chevron (the best), Skidmore (also pretty good), Auer (not quite as good, but nothing to sneer at, either), and more – but it all boils down to the same thing. An administrative agency’s (read “FDA” here) say-so about how it interprets the statute and regulations it is charged by Congress with administering (read “FDCA” and “MDA” here) is entitled to deference from the courts.
Yes, even the Supreme Court gives deference – although typically not all nine justices agree on what deference is due in what situations, even (especially) in preemption cases. “Chevron,” “Skidmore,” and “Auer” are the names of the Supreme Court cases recognizing various formulations of administrative deference applicable in different situations.
Anyway, what deference means as a practical matter is that these SG/FDA amicus briefs have independent significance. They command attention/deference not only from the Supreme Court in the cases in which they are filed, but also from any other court in the country, state or federal (although, realistically, federal courts institutionally tend to be more willing to grant deference to the views of a federal agency than state courts). Anyway, deference is one big reason why we think that these briefs are a big deal.
The other is what they say. So enough prologue you guys. What exactly did the government say?
Kent, as we’ve discussed at some length here, here, here, here, here, and here (we’re obsessive, aren’t we?) raises questions about how broadly allegations of “fraud on the FDA” are preempted.
We don’t like fraud on the FDA – we so much don’t like it that over ten years ago we invented the preemption arguments that percolated up in the Bone Screw litigation and eventually became Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), in the Supreme Court. Buckman, as most of you probably know (otherwise, why are you here?) is where the Supreme Court unanimously held that claims of fraud on the FDA – which were designated as such by the Bone Screw plaintiffs – were preempted, because (and this is greatly simplified) allowing state courts to ignore FDA actions because supposedly they were fraudulently pretty much unavoidably conflicts with those very actions (which, by definition, are still in effect). Also this type of claim would put state-law courts in the position of second-guessing federal agencies, cause cautious manufacturers to inundate the Agency with unwanted information, and generally muck up the administration of the FDCA.
We also don’t like fraud on the FDA because we don’t like plaintiffs being able to call our clients fraudsters, criminals, and the like before juries.
Anyway, enough nostalgia. The Second Circuit comes along in Desiano/Kent and basically neuters Buckman. It held that, as long as the plaintiff isn’t so stupid (after Buckman) to call a claim “fraud on the FDA,” it can make all the FDA fraud allegations it wants in the context of “traditional” tort claims, and there will be no preemption. In this particular context, a Michigan statute basically immunized FDA-approved drugs from product liability unless there was fraud on the FDA. Desiano/Kent thus created a loophole big enough to drive the largest mass tort litigation through.
You can see why the Supreme Court might be interested in that case.
You can see why we’re interested in it, too.
The precise question presented that the government addressed in Kent (from now on, no more double case name business) is:

Whether federal law preempts state law to the extent that it requires a court to determine whether a drug manufacturer committed fraud on FDA and whether FDA would have denied or withdrawn approval of a drug but for that fraud.

Kent SG brief at I.
Under the Michigan law, unless the plaintiff proves fraud on the FDA, s/he’s out of court on everything – all traditional tort claims. It’s that simple. Well it wasn’t (nothing ever is in the law), but Michigan courts had already held that preemption of this exception didn’t invalidate the whole statute (that it was “severable,” in legalese), and even the Second Circuit couldn’t go against that. Also along these lines, the government drops a helpful footnote that the general incorporation of FDA approval as the fact giving rise to immunity is not itself preempted because it raises no conflict. Kent br. at 13 n.2.
Basically the government agrees with the defendant, Warner-Lambert (manufacturer of the withdrawn diabetes drug Rezulin), that these fraud on the FDA claims masquerading as elements of “traditional” torts should be preempted. Because it’s the government, under deference, courts have to pay attention.
First, the government goes through all (or at least a lot of) the ways that the FDA and regulated manufacturers interact – both before and after a drug is approved. Kent br. at 1-3. After all, any time the FDA receives (or should receive) information from a manufacturer, that’s a point at which some plaintiff somewhere might later claim that information was fraudulently misrepresented or withheld. At any one of those points, a manufacturer, fearing a common-law fraud claim, might be tempted to give the FDA more than the Agency, in its discretion, really wants or needs.
Second, the government goes through all (or at least a lot of) the nasty things that the FDA can do to a regulated manufacturer if the Agency concludes that the manufacturer has, in fact, misrepresented or withheld information that the Agency really wanted and needed. Basically, the company (or those responsible) can go to jail or be fined lots of money, and the product can be removed from the market. The FDA can impose a lot of lesser penalties as well.
You don’t want to go there – believe us – so don’t even think of defrauding the FDA.
What there isn’t, however, is any direct private right to enforce the FDCA. Private citizens, like anybody else, can file citizen’s petitions with the FDA if they think that the Agency’s been defrauded. Such a petition requires the FDA to investigate and reach a conclusion. Kent br. at 4.
What you can’t do is just waltz into any state-law court and sue.
That’s just what these plaintiffs did. They claimed that the defendant “knowingly concealed material facts from FDA about the safety and efficacy of Rezulin. . .which would have prevented approval. . .or resulted in its earlier removal from the market.” Kent br. at 5. The FDA, of course, had never reached any such conclusion. Id.

Third, the government says outright that fraud on the FDA is fraud on the FDA, and it doesn’t matter a bit whether it’s a stand-alone claim or a part of some other, purportedly more “traditional” tort. As long as a finding that the FDA has been defrauded is a prerequisite to liability (however framed under state law), that liability is preempted.
Basically, the government thinks that preemption of all fraud on the FDA allegations is controlled by Buckman, which it’s brief discusses for several pages. It’s an excellent synopsis of Buckman, for those who aren’t familiar with the case, but not ground-breaking, so we’ll leave it that. Kent br. at 9-11.
None of the purported distinctions between a fraud on the FDA claim as such and a state statutory exceptions makes a difference to preemption, the government argues. The statutory exception is every bit as liability-threatening as the stand alone claim, since the statute “makes liability turn on the very same determination that Buckman held to be preempted as a predicate to liability under state law. Kent br. at 11. Because it threatens liability, it produces the same “extraneous pull” on FDA activities that supported preemption in Buckman. Id.
The government finds “no material difference” in the nature of the claims. Fraud on the FDA, after all, is just a variant of common-law fraud. Id. at 12. The novelty is not found in the labels attached to the underlying common-law claims, but rather in the nature of the duty being alleged – “premising liability on proof of fraud on the FDA.” Id. The Michigan statute did exactly the same thing that the plaintiffs did in Buckman. Id. at 13 (“[t]hat provision requires a court entertaining a state-law tort suit to make the same determination that was required and found preempted in Buckman”). Fraud on the FDA claims are inherently untraditional, and hiding them inside claims that “sound traditional” does not change their essential nature. Id. at 25-26. “[T]he question is not whether a claim relies on a traditional-sounding duty, but whether the particular suit interferes with a federal prerogative.” Id. at 26.
That the fraud on the FDA inquiry is mandated by statute, rather than a novel common-law theory, in the government’s view, “only strengthens the case for preemption.” Kent br. at 13. That the statute makes fraud on the FDA a limit to immunity rather than an affirmative claim “is not material” because the threat of liability would induce the same protective behavior by industry that supported preemption in Buckman. Id.
In both Buckman and the Kent case, the government had the same panoply of enforcement measures available to protect itself against fraud. Kent br. at 15-16 (if anything, now it has more after passage of the 2007 FDAAA amendments to the FDCA). Both situations give rise to the same disincentives against submitting new products, and to the same incentives to provide more information than the FDA wanted. Id. at 17. The impingement on the FDA’s discretion to determine what information it wants about a particular product is the same. Id. at 17-18. The intrusion of state-law discovery into the operation of the FDA remains the same. Id. at 21-23. Perhaps most importantly, both situations would put state courts in the position of speculating – contrary to actual fact – about what steps the FDA might have taken had it determined (which it had not in Kent) that it had been defrauded. Id. at 16-17. Even if there was fraud, the product might still be beneficial enough that it should remain on the market. Id. at 18.

The basic point of Buckman – that FDA is charged with striking a balance between keeping unsafe products off the market and making efficacious products available to patients and doctors that should not be skewed by state law – applies to all of FDA’s approval processes under the FDCA.

Id. at 17 n.3 (in a government brief, you gotta look at the footnotes). No state could invest one of its own administrative agencies with the power to investigate fraud on the FDA, so neither can state common law. Id. at 19.
Fourth, the government also reiterates Buckman’s ban against “second-guessing” the FDA by a state’s purporting to adjudicate “contrafactual situations” – allegations of fraud that the FDA has never found to exist in the first place. Kent br. at 19-20. That makes a great deal of sense, since a state cannot ignore in-force federal determinations. “Preemptive effect” must be accorded to “a federal administrative decision that has neither been rescinded by the agency nor set aside by a federal court in accordance with the procedures for review established by Congress.” Id. at 20. That means plaintiffs should have to sue in federal court for injunctive relief under the Administrative Procedures Act rather than in state court for damages under state law. To award damages “based on a determination of what [a federal agency] might have done. . . usurp[s] a function that Congress has assigned to a federal regulatory body.” Id.
Hear, hear. We think this principle should apply to every federal administrative agency, from NHTSA (that’s cars) to EPA (various chemicals), not just the FDA.
There’s preemption, the government argues, because under Michigan law liability turns on a finding that the FDA would have “withdrawn approval” on the basis of a fraud that the FDA has never found even to exist. Kent br. at 21. Here, Rezulin was ultimately withdrawn, but for reasons entirely unrelated to any purported fraud. Id.

[F]ederal law precludes a state rule – whether as an element of a claim or of a defense – that turns on whether FDA would have denied approval or withdrawn it sooner if it had received accurate information.

Id.
Fifth, along the way the government shreds the Second Circuit’s attempt to interpose one of our bugaboos – the “presumption against preemption” – where Buckman had already held that no such presumption could possibly apply. While states can create and limit tort immunities, that doesn’t automatically give rise to that presumption. The relationship between a federal agency and those it regulates remains “inherently federal” whether or not a state chooses to incorporate some aspect of that relationship into state law:

[T]hat presumption is not triggered when the State regulates in an area where there has been a history of significant federal presence, or where the interests at stake are uniquely federal in nature. Because the relationship between a federal agency and the entity it regulates is inherently federal, Buckman held that no presumption against pre-emption obtained in that case.

Kent br. at 14 (citation and quotation marks omitted). That the state might be regulating “health and safety” doesn’t matter, since its decision to do so by resorting to an inherently federal standard is hardly “traditional”:

[T]he question here is not whether traditional tort claims are preempted; it is whether the portion of the Michigan statute that requires a finding of fraud on FDA is preempted. Under Buckman, the presumption against preemption has no application to that non-traditional feature of the statute.

Id. Neither is there any basis for assuming that, because the presumption against preemption might apply to some portion of a claim, it necessarily applies to the entire lawsuit, since the Supreme Court held the opposite in Boyle v. United Technologies Corp., 487 U.S. 500 (1988). Kent br. at 14-15.
Sixth, the government finishes with its critique of the other reasons the Second Circuit gave for distinguishing Buckman. That “traditional tort claims” are not an attempt to police fraud on the FDA is irrelevant, since “the Michigan statute, not traditional tort claims,. . .is the proper focus of the preemption inquiry.” Kent br. at 27. That plaintiffs have to prove other elements in addition to fraud on the FDA doesn’t make the inherent conflict that fraud on the FDA claims raise somehow go away. Rather “the problem in Buckman was that the plaintiffs’ theory required them to prove fraud on the FDA, not the happenstance that plaintiffs’ theory required them to prove little else.” Id. at 29.
Next, the government disputes that fraud on the FDA evidence would be routinely admissible under Restatement (Third) of Torts: Products Liability §4(b), comment e (1998), pointing out:

In practice, however, relatively few reported cases have involved evidence of fraud on an agency under the Restatement approach (and the court of appeals cited none). And the Restatement emphasizes that “questions of federal preemption are beyond [its] scope.”

Kent br. at 30. At most the conflict becomes less “sharp” where agency fraud evidence is “not dispositive,” id., and in any event the Restatement was not describing the Michigan statute, where fraud on the FDA is an expressly mandated prerequisite. Id.
Finally, the government argues that whether state law labels something a “claim” or a “defense” doesn’t “matter for conflict preemption purposes.” Id. at 31. The effect of the required state-law determination of fraud on the FDA is the same. “Whatever label Michigan might place on the inquiry, courts would have to engage in the same intrusive inquiry which is forbidden.” Id. at 31-32 (citation and quotation marks omitted).
What other juicy nuggets are there in the Kent brief? Well, we like the teaser in footnote one. There the government points out that “[t]he petition does not present the question whether or when FDA’s approval of a drug impliedly preempts traditional state tort claims, and this brief expresses no view on that question.” That question, the government reminds the Court, “is presented in Wyeth v. Levine, petition for cert.,” which is still pending. Kent br. at 12, n.1. That reference suggests to us that: (1) the government wants the Court to take Levine, (2) so that will happen, the government is likely to file its long-awaited amicus brief in Levine sometime (in December) before it becomes practically impossible to get Levine on this Term’s Supreme Court docket, and (3) that the government’s position in Levine will support both review and preemption.
We also like the discussion of punitive damages on pages 18-19 and footnote 4, since as we’ve pointed out, there are even more state statutes predicating punitive damages on fraud on the FDA than there are general immunity statutes. The FDA suggests that punitive damages might even be more disruptive of its regulatory oversight than the (typically) lesser amount of compensatory damages at issue in Kent. Assuming (perhaps a big “if”) that the same state-law severability analysis applies, such an argument could effectively abolish punitive damages in prescription medical product cases in those states with such statutes.
Also, we posted not too long ago about a case in which the court allowed a fraud on the FDA claim to proceed because the FDA had made a finding of fraud. Well, the government suggests that there may well be preemption in that situation as well – because state tort litigation would “interfere” with FDA discretion to set the penalty for fraud, and would create incentives for would-be plaintiffs to try to game the system:

The federal government alone has responsibility to determine the appropriate remedy under the FDCA when it approved a product and later learned of misrepresentations that might have led it not to approve the product. The addition of potential damages liability in an uncertain amount under state law to the consequences ensuing from FDA’s own remedy under the FDCA would skew FDA’s exercise of its discretion under the FDCA. In addition, if FDA were the gatekeeper for private tort liability, it could anticipate numerous petitions filed by prospective tort plaintiffs urging the agency to make a finding of fraud.

Kent br. at 23. Interestingly, in this discussion, the government drops a “cf.” (that’s for an analogous, but not directly on point case) cite to Credit Suisse Securities (USA) LLC v. Billing, 127 S. Ct. 2383, 2396 (2007). Regular readers of this blog, of course, are already aware of the potential analogy of Credit Suisse in prescription medical product litigation.
Lastly, there’s the government’s parting shot at the result-oriented flavor of the Second Circuit’s decision.

The court of appeals appears to have been influenced by the fact that [the statute], as a whole, benefits drug manufacturers by providing a defense to an otherwise traditional tort claim. . . . [T]he preemption inquiry does not turn on whether the law is “pro-defendant” . . . Preemption does not exist to help particular parties; it exists to protect the federal sphere from interference by the States.

Kent br. 32. Result-oriented decision-making is a recurrent problem, particularly but not exclusively in preemption cases, and it’s refreshing (for once) to see this point made explicitly.