As alluded to by Bexis last week, we know all about Stengel, but because of Reed Smith’s involvement, this post is from the Dechert folks only.When we first reported on Stengel back in 2010, it was simply another PMA preemption win. Earlier this year, we were excited when the Ninth Circuit upheld that decision. We ended that post with the thought: “What Riegel giveth (parallel violation claim), Buckman taketh away – at least when the allegation is based solely on FDA disclosure requirements (and except in the Fifth Circuit).” Unfortunately, today we need to amend that statement to “except in the Fifth and Ninth Circuits.” Yuck.
As we mentioned in our 2012 year end wrap up on our favorite cases, we’ve been awaiting the Ninth Circuit en banc decision in Stengel. Since all of our Stengel news has been positive for the last two years, we were hoping for more of the same. Not so. And just like that Stengel falls from 2012 favorites to quite possibly among 2013’s worst – and the year has only begun.
We refer you to our post earlier this year for the details of the case. In very short order, plaintiff alleged failure to warn based on an alleged failure to provide the FDA with information. Even more succinctly, the Ninth Circuit concluded that such a claim can constitute a parallel claim under Riegel that is not preempted by Buckman. Stengel v. Medtronic Inc., __ F.3d __, 2013 WL 106144 (9th Cir. Jan. 10, 2013). And so the Ninth Circuit, like the Fifth Circuit in Hughes v. Boston Scientific Corp., 631 F.3d 762 (5th Cir. 2011), conflates failure to warn with failure to report and therefore reaches, in our opinion, the wrong conclusion.
How did the court get there? Let’s start with the way it distinguishes Buckman. The Stengel court said “the plaintiffs in Buckman alleged no state-law claim and were concerned exclusively with alleged fraud on the FDA that had occurred as part of [the PMA] approval process.” Stengel 2013 WL 106144, at *4. That’s simply incorrect – as made clear in the concurring opinion: “In [Buckman], the plaintiffs asserted a state law fraud claim based on purported misrepresentations made to the FDA during the premarket approval process for the medical device at issue.” Id. at *10 (emphasis added). What resulted in preemption in Buckman was not that plaintiff didn’t plead a state law claim, but rather that the purported fraud occurred entirely in the context of the defendant’s dealings with the FDA. That’s no different than Stengel.
The court seemed to make the same mistake with respect to In re Medtronic, Inc., Sprint Fidelis Leads Products Liability Litigation, 623 F.3d 1200 (8th Cir.2010). How did the Ninth Circuit get around the split in the circuits on the very issue of whether state failure to warn claims based on a defendant’s alleged failure to provide the FDA with information are preempted by Buckman? By saying there wasn’t one. The Stengel court said that the Eighth Circuit dismissed the Sprint Fidelis plaintiffs’ failure to warn claims under Riegel and then also dismissed “actions based solely on the MDA rather than on state law, which the court found foreclosed by Buckman.” Stengel at *7. Therefore, concludes the Stengel court, “[a]t no point did the [Eighth Circuit] address a state-law claim based on a state-law duty that paralleled a federal-law duty.” Id. Again, incorrect. In the Sprint Fidelis MDL, plaintiffs asserted and the court analyzed and dismissed “some twenty distinct state law causes of action including failure to warn, defective design and manufacturing, breach of express warranty, and fraud.” Sprint Fidelis, 623 F.3d at 1203. In its discussion of parallel claims, the Eight Circuit specifically ruled on plaintiffs’ failure to warn, design defect, and manufacturing claims. Id. at 1205-07. While the court did find plaintiff’s failure to warn claims were expressly preempted by Riegel, to the extent they were based on a failure to provide information to the FDA, the court also found them impliedly preempted by Buckman:
Finally, Plaintiffs alleged that Medtronic failed to provide the FDA with sufficient information and did not timely file adverse event reports, as required by federal regulations. . . . [T]hese claims are simply an attempt by private parties to enforce the MDA, claims foreclosed by § 337(a) as construed in Buckman.
Id. at 1205. You can’t sweep under the rug that the actual claims dismissed in Buckman and Sprint Fidelis, were in fact state-law fraud and failure to warn claims that were premised on an alleged failure to provide information to the FDA. Or at least, if you’re a court, you’re not supposed to.
So, what is the recognized state law claim alleged in Stengel? The court says it is a “general duty of reasonable care.” Stengel at *8. To prove its point, the court relies on Arizona law that establishes a negligent failure to warn claim. Id. But nowhere does the court cite any Arizona case that created any common-law duty to report something to a government agency – the actual claim being brought by plaintiff Stengel. But this is really the same mistake we saw in Hughes and given Stengel’s reliance on Hughes – not that surprising. What really shocked us was the court’s apparent creation of a new Arizona state law cause of action – “failure to warn the FDA.” Id.
Arizona law contemplates a warning to a third party such as the FDA. Under Arizona law, a warning to a third party satisfies a manufacturer’s duty if, given the nature of the warning and the relationship of the third party, there is “reasonable assurance that the information will reach those whose safety depends on their having it.” Anguiano v. E.I. DuPont de Nemours & Co., 808 F.Supp. 719, 723 (D.Ariz.1992), aff’d 44 F.3d 806 (9th Cir.1995).
But Anguiano has absolutely nothing to do with failure to warn the FDA. Anguiano is about whether a bulk supplier of raw materials to a medical device manufacturer has a duty to warn the ultimate consumers of the medical device. We are happy to report that the court answered no to that question – but what it has to do with failing to provide information to the FDA, we don’t know. In fact, the language quoted in Stengel is actually from comment n to §388 of the Restatement (Second) of Torts dealing with suppliers of chattel and states:
Giving to the third person through whom the chattel is supplied all the information necessary to its safe use is not in all cases sufficient to relieve the supplier from liability. It is merely a means by which this information is to be conveyed to those who are to use the chattel. The question remains whether this method gives a reasonable assurance that the information will reach those whose safety depends upon their having it.
Finding a cause of action for failure to warn the FDA based on this case and this comment is more than a stretch – it is a suspension of reality. Without a traditional, recognized state law claim, plaintiffs are left with nothing more than an alleged failure to provide information to the FDA – an exclusively federal claim that is entirely preempted.
Finally, this brings us to the concurring opinion, which adds little more to the discussion other than an overt statement that this type of claim is an end run around Riegel preemption:
Given the Supreme Court’s preemption decisions in this area, the Stengels faced a dilemma in framing their failure-to-warn claim. The most direct way to state the claim would be to allege that under Arizona law Medtronic owed a post-sale duty to warn doctors when it learned of adverse events in which the medical device at issue here caused a death or serious injury. . . . [A]ny attempt to predicate the Stengels’ claim on an alleged state law duty to warn doctors directly would have been expressly preempted.. . .[Therefore], they predicate their claim on Medtronic’s reporting duty to the FDA, as they must to avoid express preemption.
Id. at *9-10. And, as if suggesting magic words to avoid express preemption weren’t enough, the concurrence gets around implied preemption by asserting that “the state law claim asserted [in Buckman] exist[ed] solely by virtue of the federal enactments, because state law traditionally had no role to play in policing the relationship between a federal agency and the entity it regulates.” Id. at *10. How that doesn’t apply to claims for failure to report information to the FDA is beyond us.
Buckman made fraud-on-the-FDA a household term (well, in our houses anyway). With a clear split in the circuits, “failure to warn the FDA” may be the new fraud-on-the-FDA. We certainly hope it meets the same fate and the quicker the better.