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Late last year we awarded our #10 spot on our Worst of 2020 post to In re Valsartan, Losartan, & Irbesartan Products Liability Litigation, 2020 WL 7418006 (D.N.J. Dec. 18, 2020) (“VLI”).  At that point the decision was brand new, and we promised a more in-depth analysis.  Here it is.

VLI fits neatly into our ongoing critique of MDL practice, where all too often the law – particularly pertaining to preemption – is distorted to become a settlement tool.  Since thorough briefing is another aspect of MDL practice (one with which we have no gripe), it’s hard to understand how VLI could possibly otherwise describe the then-11-year-old Wyeth v. Levine, 555 U.S. 555 (2009), decision as “the latest, single-most, on-point Supreme Court case for preemption of the FDCA in a pharmaceutical context.”  2020 WL 7418006, at *7.  It’s not, by a long shot.

The Supreme Court has issued three newer prescription drug implied preemption decisions:  Merck Sharp & Dohme Corp. v. Albrecht, 139 S. Ct. 1668 (U.S. 2019); Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013); and PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and VLI cites none of them.  These omissions are particularly troubling, as Albrecht in particular spent several pages revising the mess that was the Levine decision.  See 139 S. Ct. at 1676-78 (beginning with “[w]e begin by describing” Levine).  We can’t think of the last time we’ve seen the Supreme Court expend the kind of ink it did in Albrecht going through a prior precedent (Levine) almost line by line.  Thus, contrary to VLI, Levine is certainly not the “latest,” nor after Albrecht is it particularly “on point.”

From this poor foundation flows an equally questionable preemption rationale.  The claims at issue were “negligence per se, strict liability-defective design, breach of express warranty, fraud misstatement and negligent misstatement and state consumer-protection laws.”  2020 WL 7418006, at *7.  VLI lets all of them skate by.  VLI did so precisely by failing to apply more recent United States Supreme Court precedent.

To reach this result, VLI relies upon what it describes as “the traditional presumption against preemption of state law.”  Id. at *9.  That’s interesting, because this language quoted verbatim from a prior unpublished decision of the same court:  Tigert v. Ranbaxy Pharmaceuticals, Inc., 2012 WL 6595806 (D.N.J. Dec. 18, 2012).  We took a look at Tigert, as well, due to its common authorship.  Sure enough, the presumption against preemption was all over Tigert – cited no fewer than six times.  See 2012 WL 6595806, at *1 (“the presumption against preemption obtains in this case”); *3 (praising Desiano v. Warner Lambert & Co., 467 F.3d 85, 94 (2d Cir. 2006), for “first f[inding] that the ‘presumption against preemption,’ . . . attached to the plaintiff’s claims because they fell within . . . ‘a sphere in which the presumption against preemption . . . stands at its strongest’”); *4 (criticizing Lofton v. McNiel [sic] Consumer & Specialty Pharmaceuticals, 672 F.3d 372 (5th Cir. 2012), for “[s]kirting the question of whether the presumption against preemption applied” and “overlook[ing] these critical differences when it failed to recognize the applicability of the presumption against preemption”); at *5 (the source of the “traditional presumption against preemption of state law” language quoted in VLI).

What has happened since Levine and Tigert?

The effective abolition of the presumption against preemption, that’s what.

First, in Mensing, an implied preemption case, four justices went on record in favor of abolishing the presumption against preemption altogether.  See 564 U.S. at 621-23 (“courts should not strain to find ways to reconcile federal law with seemingly conflicting state law”).

Second, in Puerto Rico v. Franklin-California Tax-Free Trust, 136 S. Ct. 1938, 1946 (2016), the Court abolished the presumption against preemption in express preemption cases, holding that, when a statute “contains an express pre-emption clause,” we do not invoke any presumption against pre-emption but instead “focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent.”  See our post here.

Third, the Third Circuit in Shuker v. Smith & Nephew, PLC, 885 F.3d 760, 771 n.9 (3d Cir. 2018), refused to follow P.R. v. Franklin unless the Court did so in a product liability preemption case.  See our post here.

Fourth, in Albrecht, the Court did just that − its aforementioned multi-page restatement of Levine conspicuously omitted any reference to any “presumption” and instead retreated to the Court’s earlier language about merely an “assumption” that “historic police powers” should not be “superseded.”  See our post here.

So the primary reason why we’re critical of VLI is that its failure to apply current United States Supreme Court preemption precedent resulted in a decision that was obsolete the day it was written.

But there’s more.  VLI takes a “narrow” view of Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001).  2020 WL 7418006, at *9 (again quoting from the unpublished Tigert decision).  Thus, it refused even to hold negligence per se claims preempted.  Id. at *9-10.  However, by its nature negligence per se takes “a legislative enactment or an administrative regulation which is adopted by the court as defining the standard of conduct of a reasonable man.”  Ries v. National Railroad Passenger Corp., 960 F.2d 1156, 1158 (3d Cir. 1992) (quoting Restatement (Second) of Torts §288B(1) (1965)).  In an FDCA-based negligence per se claim, it is thus hard to view the FDCA violation as anything other than the “critical element in [a plaintiff’s] case” so that the “duty” that negligence per se defines “exist[s] solely by virtue of the [MDA] . . . requirements.”  Buckman, 531 U.S. at 353.  Once again, the reason negligence per se survived in VLI is reliance on the obsolete presumption against preemption:

[T]he Supreme Court in Buckman “reached concerns of interference [with the FDA’s regime] only after first finding that . . . the traditional presumption against preemption of state law did not apply.”  Thus, this Court ruled in Tigert that “the Supreme Court’s narrow ruling in Buckman is unstable ground on which to rest a finding of preemption.”  . . . “Because of its important role in state regulation of matters of health and safety, common law liability cannot be easily displaced in our federal system.”

2020 WL 7418006, at *9 (citations omitted).

Thus VLI ruled, contrary to Third Circuit precedent, that Buckman does not preempt FDCA-based negligence per se.  In one of Bexis’ Bone Screw cases, the Third Circuit held (pre-Buckman):

[Plaintiffs’] interpretation of per se liability would allow private plaintiffs to recover for violations of a federal statute that creates no private cause of action and, in fact, expressly restricts its enforcement to the federal government.  Plaintiffs’ theory would undermine section §337(a) by establishing a private, state-law cause of action for violations of the FDCA. . . .  We do not believe the concept of per se liability supports such a result.

In re Orthopedic Bone Screw Products Liability Litigation, 193 F.3d 781, 791 (3d Cir. 1999) (various citations omitted).  This is still good law in the Third Circuit – if anything being amplified by Buckman.

Other New Jersey federal and state case law have similarly held that tort claims with an embedded element dependent on FDCA violations are preempted by virtue of Buckman and §337(a).  Most directly on point is the New Jersey Supreme Court in Cornett v. Johnson & Johnson, 48 A.3d 1041, 1054  (N.J. 2012), holding that because negligence per se “depend[s] on the alleged violation of a federal requirement,” it is “functionally equivalent to a claim grounded solely on the federal violation” and thus preempted under BuckmanId. at 1054.  As VLI did not cite any FDCA preemption cases more recent than Levine, it did not address Cornett.  Considerable other precedent reached the opposite result from that in the underlying Tigart decision – that punitive damages claims with a fraud on the FDA predicate are preempted.  McDarby v. Merck & Co., Inc., 949 A.2d 223, 275 (N.J. Super. App. Div. 2008) (“Although there are differences between the fraud-on-the-FDA claim asserted in Buckman and [plaintiff’s] punitive damage claim premised on the withholding of information . . ., we find the single focus upon fraud on the FDA in each to be sufficiently similar to warrant the application of Buckman to this case.”); Mendez v. Shah, 28 F. Supp.3d 282, 303-05 (D.N.J. 2014) (punitive damages based on purported fraud on the FDA preempted by Buckman); Johnson v. Draeger Safety Diagnostics, Inc., 2013 WL 3788937, at *7 (D.N.J. July 19, 2013) (“common law fraud claim is based upon statements allegedly made by Defendant . . . to the FDA”  preempted by Buckman); Nelson v. Biogen Idec Inc., 2013 WL 1700918, at *3 (D.N.J. April 19, 2013) (same as Mendez); Stanger v. APP Pharmaceuticals LLC, 2010 WL 4941451, at *4 (D.N.J. Nov. 30, 2010) (following McDarby); Hayes v. Howmedica Osteonics Corp., 2009 WL 6841859, at *8 (D.N.J. Dec. 15, 2009) (claims with an element of “showing a fraud on the FDA” would “fl[y] in the face of the PMA process” and are therefore preempted); accord Atkinson v. Luitpold Pharmaceuticals, Inc., 448 F. Supp.3d 441, 450-52 (E.D. Pa. 2020) (rejecting Tigart and following Buckman and Lofton).

Similarly, by not considering BartlettVLI erroneously let the design defect also escape preemption, despite any design change constituting a “major” change that would require prior FDA approval and thus is preempted.  Bartlett stated:

Once a drug – whether generic or brand-name – is approved, the manufacturer is prohibited from making any major changes to the qualitative or quantitative formulation of the drug product, including active ingredients, or in the specifications provided in the approved application.

570 U.S. at 477 (citation and quotation marks omitted).  State-law design defect claims are “impossible” to comply with “[b]ecause [defendant] was unable to change [the drug’s] composition as a matter of both federal law and basic chemistry.”  Id. at 475.

Finally, VLI extended it erroneous reliance on a presumption against preemption to an express preemption claim directly controlled by P.R. v. Franklin when it decided a matter of first impression – preemption under the Drug Supply Chain Security Act, 21 U.S.C. §§360eee to 360eee-4, since some of the claims in VLI attacked how these drugs were handled post-manufacture.  This statute contains a broad express preemption clause:

Uniform national policy. . . .

(a) Product tracing and other requirements

. . . [N]o State or political subdivision of a State may establish or continue in effect any requirements for tracing products through the distribution system (including any requirements with respect to statements . . ., or verification, investigation, disposition, notification, or recordkeeping relating to such systems . . .) which are inconsistent with, more stringent than, or in addition to, any requirements applicable under section 353(e) of this title or this part (or regulations issued thereunder). . . .

21 U.S.C. §360eee-4(a) (emphasis original).  That language is even more emphatic than the express preemption language in the Medical Device Amendments.  However, this section also contains a savings clause for “[s]tate requirements related to the distribution of prescription drugs if such requirements are not related to product tracing.”  §360eee-4(e).

Quoting Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), VLI rejected any preemption at all because it would “‘have the perverse effect of granting complete immunity from’ products liability claims to an entire industry, so long as the actors complied with basic tracing requirements.”  2020 WL 7418006, at *11.  VLI thus interposed the savings clause to nullify the statute’s preemptive language – without any underlying state requirement to trigger it − finding nothing at all in the plaintiffs’ MDL complaints was preempted.  Id.  In keeping with VLI’s overall anachronistic approach to preemption, it did not acknowledge the Supreme Court’s more recent rejoinder to this sort of reasoning in Riegel v. Medtronic, Inc., 552 U.S. 312 (2008):

The dissent would narrow the pre-emptive scope of the term “requirement” on the grounds that it is “difficult to believe that Congress would, without comment, remove all means of judicial recourse” for consumers injured by FDA-approved devices.  But, as we have explained, this is exactly what a pre-emption clause . . . does by its terms.  The operation of a law enacted by Congress need not be seconded by a committee report on pain of judicial nullification.

Id. at 326 (citations omitted).

And yes, once again, VLI was “guided” by a presumption against preemption that, as already discussed, no longer exists:

Finally, the Court is guided by the presumption against preemption in this case.  Although the preemption clause arguably could be subject to more than one interpretation − and could potentially be read more broadly, as defendants urge − the Court chooses to read the clause in a way that disfavors preemption.

2020 WL 7418006, at *11.

Another of our long-standing concerns about MDL litigation is the absence of meaningful appellate review of decisions about key issues like preemption until years later, after a defendant loses some bellwether trial, when by then so much time and effort has been expended that the appellate court is pressured to affirm lest all that go to waste.  One can only hope that the pendulum that has swung against the presumption against preemption since Mensing continues in that direction and produces more binding precedent that cannot be ignored, even in VLI.