One of the things we really like about blogging is that it puts us in touch with smart defense lawyers all over the country. Sometimes, when we know who’s litigating certain issues in particular mass torts, well give him/her a call to check if s/he knows anything new on that point. Other times, somebody will call us to see what we might know on a particular topic. We try to be of assistance where we can.
Occasionally, we’ll have this sort of conversation, and it’ll turn out that neither of us knows anything much about a topic.
That kind of result that usually turns into a blog post.
The issue is this. As we’ve posted before, we don’t like the joinder of corporate sales reps in product liability cases. There shouldn’t be any separate claim against them, as long as they’re acting as the agent of a disclosed principal (their employer), anything a sales rep does is something that the manufacturer of the prescription medical product at issue has to deal with – for better or worse.
But as we noted in our prior post, sales reps are being named as defendants with increasing frequency, almost always as a ploy to destroy diversity, and therefore keep cases out of federal court. The legal doctrine that’s developed in response to baseless claims against non-diverse (in-state) parties is called “fraudulent joinder” – that there’s no possible state-law claim against the in-state defendant, so that defendant’s citizenship can be ignored for jurisdictional purposes.
Our thought isn’t a complete fix by any means. Rather, it’s strictly limited to manufacturers of pre-market approved (“PMA”) medical devices that are subjects of the preemption defense recognized in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008). Express preemption under Riegel bars any tort claims that are “different from or in addition to,” 21 U.S.C. §360k(a), FDA regulations pertaining to PMA medical devices.
We think that, if a given claim against a manufacturer is preempted under Riegel (which is most of them, except some “parallel violation” claims, see our scorecard), then a similar claim would be likewise be preempted under Riegel when brought against a manufacturer’s paid sales representative.
The statute’s “different from or in addition to” language suggests one real question in this regard: Does the FDA regulate the conduct of sales reps, so that there would be a state-law tort claim would be “different from or in addition to” that FDA regulation?
Umm … sure the FDA does. If you don’t believe us just ask, for instance, the unfortunate sales rep Mr. Caronia, who was prosecuted (we’d say – and WLF is arguing – in violation of the First Amendment) for supposedly promoting off-label uses. See United States v. Caronia, 576 F. Supp.2d 385 (E.D.N.Y. 2008). Obviously, in Caronia, the FDA was found to have authority over what a company’s sales rep says (allegedly “promot[ing] [a product] to a physician ‘John Doe’ for . . . off-label indications”) and does (allegedly “introduc[ing] another physician, who was paid by[the manufacturer], to ‘John Doe’”). 576 F. Supp.2d at 389-90.
We haven’t looked beyond the off-label promotion scenario, but we expect we’d find quite a few other examples of FDA regulation of a manufacturer’s sales representatives if we searched the statute, regulations, and FDA guidances. More power to anyone who does.
Given that the FDA regulates certain aspects of sales representative conduct and speech, then a purported state-law duty that a sales rep say (such as give specific warnings to either doctors or patients) or do (such as stay out of an operating room altogether) something else would be “different from, or in addition to” that rep’s obligations established by the FDA.
That, in turn, means that the allegations are plainly preempted under Riegel – where they don’t involve any claim that the rep violated FDA regulations, or where the violation claim isn’t pleaded properly under Twombly/Iqbal. See, e.g., Horowitz v. Stryker Corp., 613 F. Supp.2d 271, 284 (E.D.N.Y. 2009) (requiring pleading the specific PMA requirement allegedly violated); Hughes v. Cook, 452 F. Supp.2d 832, 841-842 (W.D. Tenn. 2006) (same).
Completing the circle, if the claims are preempted, then it’s impossible to recover against the sales rep, and the strict “no possibility of a claim” standard for fraudulent joinder should be met – where Riegel applies. That being the case, the sales rep should be ignored for diversity purposes and the action belongs in federal court.
A PMA medical device defendant pursuing this line of fraudulent joinder would need to take care in casting the preemption argument so that it’s limited to the sales rep defendant and is not a generalized attack on the merits of the case against, inter alia, itself – the so-called “common defense” exception to fraudulent joinder. See, e.g., Hunter v. Philip Morris USA, 582 F.3d 1039, 1045-47 (9th Cir. 2009); Smallwood v. Illinois Central Railroad Co., 385 F.3d 568, 574-75 (5th Cir.2004) (en banc); Collins v. American Home Products Corp., 343 F.3d 765, 768-69 (5th Cir. 2003); Green v. R.J. Reynolds Tobacco Co., 274 F.3d 263, 269 (5th Cir. 2001). For this reason, it may turn out in practice that preemption-based fraudulent joinder in the medical device area is most useful where, there are no facts pleaded to tie the sales rep defendant plausibly to any “parallel” FDCA violations alleged against the manufacturer.
We’d like to say more on this subject, but we ran really comprehensive Westlaw and Lexis searches trying to find any cases addressing the impact of medical device preemption on fraudulent joinder of sales representatives – or indeed any kind of fraudulent joinder – and came up empty. If there are medical device manufacturers out there using Riegel to protect their sales reps from preempted claims, we’re not seeing it, at least not at the fraudulent joinder stage. We found one pre-Levine drug case, where an analogous preemption argument (involving a distributor, not a sales rep) was made, but the court did not find the case for preemption strong enough to support fraudulent joinder. In re Fosamax Products Liability Litigation, 2008 WL 2940560, at *7 (S.D.N.Y. July 29, 2008). But where preemption is concerned, we all know that medical devices and drugs are very, very different. Unlike Fosamax, after Riegel, we think that the case for preemption in PMA medical device cases is strong enough to meet the fraudulent joinder standard.
Anyway, that’s our idea of the day.