A Vaudeville act is supposed to leave the audience wanting more. Not so a judicial decision. But that is what we have today: a decision whose result—the dismissal of Lanham Act claims brought by a device manufacturer against a competitor—is underexplained.
The plaintiff in Impact Applications, Inc., v. Concussion Management, LLC, 2021 WL 978823 (D. Md. 2021), manufactures a computer-based device that helps assess and manage concussions. So does the defendant. The plaintiff’s device was classified and cleared by the FDA; the defendant’s was not.
The plaintiff sued under the Lanham Act, which creates a private right of action for “false or misleading description[s] of fact, or false or misleading representation[s] of fact” that “misrepresent the nature, characteristics, [or] qualities … of [the speaker’s] or another person’s goods.” 15 U.S.C. § 1125(a). The plaintiff claimed that the defendant had misrepresented the defendant’s device by implying that it had been reviewed and cleared by the FDA, by suggesting that it possessed qualities that only FDA-cleared devices possess, and by falsely asserting that it was superior to plaintiff’s device despite lacking FDA clearance.
The court dismissed the plaintiff’s claims, but its analysis is unsatisfying.
The court concluded that the plaintiff’s claim that the defendant had misrepresented its device by falsely implying that it had been reviewed and cleared by the FDA was not actionable for two reasons. First, the court relied on a couple cases holding that only explicit, not implicit, misrepresentations of FDA approval are actionable under the Lanham Act. Why is that? The court doesn’t say. Second, quoting the Fourth Circuit’s decision in Mylan Laboratories, Inc. v. Matkari, 7 F.3d 1130 (4th Cir. 1993), the court found that allowing a Lanham Act claim based on implicit misrepresentation of FDA clearance “would, in effect, allow the plaintiff to use the Lanham Act as a vehicle by which to enforce the FDCA.” 2021 WL 978823, at *6 (internal quotation marks omitted). Why is that? Because the alleged misrepresentation could be deemed misbranding under 21 U.S.C. § 352? Again, the court doesn’t say. Unfortunately, neither does Mylan.
The court also rejected the plaintiff’s claim insofar as it was based on the defendant’s supposed suggestion that its device possessed qualities that only FDA-cleared devices possess. Understandably perplexed by the plaintiff’s assertion that only FDA-cleared device can possess certain qualities, the court found that the claim would require it “to interpret and apply the FDCA in order to determine what qualities only an FDA-approved device can have and determine, before the FDA has had an opportunity to do so, whether [the defendant’s] products have those qualities.” 2021 WL 978823, at *7.
What the plaintiff and court mean by “qualities only an FDA-approved device can have” is far from obvious. Perhaps it is an inartful way of saying that devices with certain characteristics must receive FDA approval before being marketed. So understood, plaintiff’s claim might be construed as resting on the contention that the defendant’s device required FDA approval given its characteristics and that by selling a device with those characteristics the defendant impliedly represented its device as FDA-approved. If construed in this manner, adjudication of the claim—which sounds like a variant of the plaintiff’s first claim—would force the court to determine whether the defendant’s device in fact required FDA approval. That seems to be what the court was thinking, as it cited two earlier Lanham Act cases for the proposition that a “Lanham Act claim that requires direct application or interpretation of the FDCA or FDA regulations is within the FDA’s jurisdiction.” 2021 WL 978823, at *7 (internal quotation marks and alterations omitted).
That is well and good, but why is it so? There are two possible reasons, neither of which the court clearly articulated.
First, there is the doctrine of primary jurisdiction—discussed, inter alia, here, here, here, and here—which, under certain circumstances, allows a court to stay an action or dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency. Whether a device that is purported to help assess and treat concussions requires FDA clearance is certainly an issue within the FDA’s special competence.
Second, there is implied preemption under 21 U.S.C. § 337(a), which declares that all actions to enforce the FDCA “shall be by and in the name of the United States.” As readers of the blog know, that provision—interpreted by the Supreme Court in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001)—prohibits private plaintiffs from attempting to enforce the FDCA. A Lanham Act claim that seeks to impose liability based on the defendant’s failure to obtain FDA approval when purportedly required is effectively an attempt to privately enforce the FDCA in contravention of § 337(a).
Product-liability plaintiffs suing drug and device manufacturers routinely try to evade § 337(a). Sometimes they invoke state negligence-per-se doctrine; other times they assert claims under consumer-protection statutes. Those attempts are rightly denounced by defendants—and often rejected by courts—as thinly veiled attempts to privately enforce the FDCA.
We should therefore cheer any decision that dismisses claims barred by the FDCA even when they are brought under a different statute. But the readers of this post and of the underlying decision are left wondering how exactly the Impact Applications court reached that result that it did.