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This post is from the non-Reed Smith side of the blog.

Shouldn’t you call it a duck?  Apparently not in New Jersey.  Primarily because New Jersey is still governed by one of our Bottom Ten decisions of 2012Cornett v. Johnson & Johnson, 48 A.3d 1041 (N.J. 2012).  Today’s ducky decision was handed down by the trial court in the New Jersey state counterpart to the federal MDL concerning textured breast implants.  We covered the MDL’s decision on defendant’s motion to dismiss just a few weeks ago.  In many respects, the New Jersey state court decision is similar – except for the quacky part on failure to warn.  But let’s look at the basics first.

As in federal court, plaintiffs in New Jersey have brought claims alleging that various of defendant’s textured breast implants and tissue expanders caused plaintiffs to develop or be at increased risk of developing a form on non-Hodgkin’s lymphoma.  In re Allergan Biocell Textured Breast Implant Products Liability Litigation, 2021 N.J. Super. Unpub. LEXIS 837, *1 (N.J. Super. Law Div. May 4, 2021).   Most of the medical devices at issue underwent Premarket Approval (“PMA”) by the FDA.  One line was granted an Investigational Device Exemption (“IDE”) which allows the device to be studied in FDA-regulated clinical trials and the tissue expanders received 510k clearance.  Id. at *2-4.  Plaintiffs’ causes of action were for manufacturing defect, design defect, breach of express warranty, consumer fraud, and failure to warn.  Defendant moved to dismiss all claims as preempted.  We will take them in this order.

New Jersey products liability claims are governed by the New Jersey Product Liability Act (NJPLA), which provides a claim for manufacturing defect where a product deviates from specifications or performance standards.  Id. at *31.  Because plaintiffs alleged that defendant failed to comply with specific manufacturing requirements imposed by the FDA as part of the PMA process, the court found the manufacturing claims were not preempted.  Id. at *32-34.  Not a surprising result in state court at the pleadings stage where plaintiffs provided at least some detail about the alleged manufacturing violations.

In dismissing most of the design defect claims, the court noted that “it is well-settled that design defect claims against devices approved through the PMA process are preempted.”  Id. at *37.  Further, “the express preemption clause of the MDA extends to devices being studied under an IDE.”  Id. at *38.  The court was unwilling to find the design defect claims involving the 510k cleared devices preempted, so those survived.  Id.

The court considered express warranty and consumer fraud claims together.  Here, plaintiffs argued that their claims were based on voluntary statements made by the defendant.  In other words, plaintiffs said they were not challenging the content of the FDA-approved, PMA governed labels and package inserts.  Because voluntary statements are not approved or mandated by the FDA, claims regarding them are not preempted.  Id. at *39-42.

That brings us to failure to warn – the part of the decision that put us in a fowl mood. Plaintiffs premised their failure to warn claims on four different theories:  failure to update the label; failure to conduct post-approval studies; failure to report information to the FDA; and failure to warn based on deliberate nondisclosure.  Again, let’s walk this through.

On failure to update the label, plaintiffs argued defendant was required to use the Changes Being Effected (CBE) process to provide additional warning information.  Id. at *27.  The court, however, recognized that the CBE process is permissive, not required.  Therefore, “a state duty mandating the process is different from or in addition to federal requirements.”  Id. So, this claim was preempted.

Plaintiffs’ failure to warn claims based on a failure to conduct post-approval studies were likewise preempted because there was no parallel state law duty.  Without a basis in state tort law, the claim was an unlawful attempt to privately enforce the MDA. Id. at *29-30.

On failure to report to the FDA, the court ruled the claim was preempted because “New Jersey does not recognize a standalone failure-to-report-to-FDA claim.  Id. at *25.  Relying on a portion of Cornett we don’t take issue with, the court stated that in New Jersey “challenges to the adequacy of the information required by the FDA during the PMA process and label approved by the agency are preempted.”  Id. at *15 (citation omitted).

So to recap, plaintiffs cannot attack the adequacy of the FDA-approved warning directly, cannot bring a claim based on a failure to provide information to the FDA as part of the PMA process, cannot argue that defendant was required to use the CBE process, and cannot challenge whether defendant failed to conduct FDA-required clinical trials.  What’s left?  And what is it that makes us quackers about this decision?  Plaintiffs’ failure to warn claim based on “deliberate nondisclosure” to the FDA survived preemption.

Under the NJPLA, there is no failure to warn if the product is accompanied by an adequate warning.  Id. at *16.  Further, the NJPLA provides a rebuttable presumption of adequacy for FDA-approved labels.  Id.  Therefore, in New Jersey, a plaintiff seeking to rebut the presumption “must plead specific factual allegations of deliberate concealment or nondisclosure of after-acquired knowledge of harmful effects, or manipulation of the post-market regulatory process.  Id. at *16-17 (quoting Cornett).  These are judicially created “exceptions” to the statutory presumption of non-defectiveness created by FDA compliance.  They are not and never have been causes of action in their own right.  Which means that they are not underlying state law claims which can be said to parallel a federally imposed duty.  Even the court’s description of the supposed parallel claim shows that it is indeed not:

Federal law imposes a duty on manufacturers to comply with post-market federal disclosure requirements. New Jersey law parallels those duties by incorporating compliance with federal regulations as a prerequisite to the presumed adequacy of the label.

Id. at *19-20(emphasis added).  Where is the underlying unpreempted warning-based cause of action?  The court has already tossed the failure-to-report claim and repeatedly describes “deliberate nondisclosure” as a “possible basis for rebutting the presumption” – not as a recognized state law duty on which liability is based.

So, what’s the basis for the court’s conclusion that “New Jersey law requires manufacturers to disclose newly acquired information of harmful effects to the FDA.”  Id. at *22.  The whole concept originated in Perez v. Wyeth Laboratories, 734 A.2d 1245, 1259 (NJ 1999) (“absent deliberate concealment or nondisclosure . . .  compliance with FDA standards should be virtually dispositive”).  But Perez predates Buckman’s holding that fraud on the FDA claims are preempted.  And isn’t nondisclosure just another way of saying fraud on the FDA?  Whether it’s Daffy or Donald – a duck is a duck.

The court jumps from talking about reporting evidence as a method to overcome the adequacy presumption to concluding that “[p]laintiffs’ failure to warn claim founded on deliberate nondisclosure of material information from the FDA is not preempted.”  Id. at *26.  Not only have they created a cause of action that does not exist, but that is practically a textbook definition of fraud on the FDA, only avoiding the word “fraud.”  But that’s what “fraud” is, a deliberate failure to disclose material information.  The causation element of a nondisclosure claim is expressly based upon the contention that, but for the nondisclosure, the FDA would have done something other than what it in fact has done.  That has all the attributes of a fraud on the FDA claim, and it’s preempted under Buckman.  No two quacks about it, Cornett got this issue wrong nine years ago and In re Allergan just dredged it all back up.