About two months ago we wrote the post Complaints Are Like Onions, They Have Layers about the need for courts to “address the viability of each claim” on a motion to dismiss. Bayer Corporation v. Leach, 2020 WL 3118509 at *1 (Ind. S. Ct. Jun. 12, 2020). Complaints need to be pulled apart and each cause of action and/or theory of liability needs to be examined – like they layers of an onion. Or to continue the theme of our prior post, maybe you’re more of a Donkey than an Ogre and you prefer to draw an analogy to parfaits. After all, “parfaits are delicious” and parfaits have layers. We certainly aren’t going to argue otherwise. But we think complaints are more like onions – they can stink, they can make you cry, and if left too long “they start sprouting little white heads.” Well, not literally, but you get the idea. Onions, ogres, complaints – they all have layers that require peeling because sometimes you find a layer or two worth tossing down the garbage disposal.
That’s what the Indiana Court of Appeals was charged with doing on remand – peeling apart the layers of plaintiffs’ complaint. In other words, this time they actually had to rule on defendant’s preemption arguments for all causes of action. Previously, the trial and appellate courts had ruled only that plaintiffs’ manufacturing defect claim was not preempted and therefore since one claim was viable, there was no need to determine if any others should be dismissed. Being forced to look at each cause of action led to a mixed-result, but at least we’re left with a smaller onion this time around.
First up was negligence per se. Plaintiffs attempted to premise liability on standards imported from the Indiana Uniform Food, Drug, and Cosmetic Act (“Indiana FDCA”). Like so many states, the Indiana FDCA follows the FDCA. Because the acts are parallel, claims premised on the Indiana FDCA are not independent from the FDCA making them impliedly preempted under Buckman. Bayer v. Leach, 2020 WL 4811506, *5 (Ind. Ct. App. Aug. 19, 2020).
Next plaintiffs brought manufacturing and warning defect claims under the Indiana Products Liability Act (“IPLA”). To the extent their manufacturing claims were premised on alleged violations of federal law such as that product failed to conform to performance standards or design specifications of the PMA – those are not preempted. Id. at *5, 6. But plaintiffs also included a manufacturing defect claim based on failure to strengthen warnings and on making false or misleading statements. Id. at *6. Plaintiffs claim that defendant should have proactively changed its labeling, something “that federal law permitted—but did not require.” Id. at *7. However, “[w]here a federal requirement permits a course of conduct and the state makes it obligatory, the state’s requirement is in addition to the federal requirement and thus is preempted.” Id. (citation omitted). Therefore, all warnings based claims were preempted.
On plaintiffs’ false and misleading statements claims, defendant offered the court documents showing that the statements complained about were approved by the FDA. The court was unwilling to look beyond the pleadings, and therefore was also unwilling to find the fraud claims based on non-warning statements were expressly preempted. Id. at *7-8. Adopting the reasoning of Bausch v. Stryker Corp., 630 F.3d 546, 552 (7th Cir. 2010), the court found plaintiffs’ manufacturing defect claim couched as “misbranding” survived implied preemption too. Under the IPLA, a manufacturing defect exists when a product is in a “condition . . . not contemplated by reasonable persons” that was “unreasonably dangerous to the expected user.” Id. at *8. The court reasoned that a jury could find that failure to comply with federal regulations regarding misbranding could create such a defect. Because the claim is grounded in state law and does not conflict with federal law, there is no preemption. Id. at *9.
Under the IPLA, Indiana recognizes claims for inadequate warnings and claims for inadequate instructions. To succeed on an inadequate warning claim, a jury would have to find that “the manufacturer should have used different labeling or packaging.” Id. at *10. But, because federal law required the manufacturer use the pre-market approved labeling/packaging – that claim is expressly preempted. Id. But the court decided it didn’t need to peel this whole layer off. Plaintiffs had included allegations about failure to report adverse events to the FDA in their warnings claim. The court found those allegations to be potentially actionable as manufacturing defect claims because violations of reporting requirements could render a product adulterated or misbranded. Claims the court allowed to continue under Bausch. Id. at *11.
The IPLA also recognizes a failure to instruct claim. The PMA for the product included a “duty to train physicians” that plaintiffs allege defendant violated. Id. Plaintiffs also alleged that defendant voluntarily undertook training duties beyond those imposed by the FDA and that defendant performed those duties negligently. Id. As with the non-warning statements, the court was unwilling to review documents outside the pleadings that defendant offered to demonstrate the actual scope of the FDA’s training requirements. Assuming plaintiffs’ allegations accurately reflected the FDA’s training requirements, plaintiffs’ failure to instruct claim was not preempted because it was a state law claim premised on a violation of federal law. Id. As to the voluntarily provided additional training (Good Samaritan theory), the court concluded that those claims either “do not implicate the explicit preemptive text of the MDA” because voluntary undertaking was “extra-regulatory” or defendant violated federal law when it undertook training not identified in the PMA because any change that affects safety or effectiveness requires pre-approval. Id. at *12.
Definitely a mixed-result, but we’d rather have a smaller, more-manageable onion as opposed to one that’s a “virtual planetoid that has its own weather system.” (had to bring Mike Myers full circle).