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We reported nearly two years ago on a California trial court that dismissed claims against generic over-the-counter drug manufacturers under California’s notorious Proposition 65, on the basis that federal law preempted those claims.  You can read that post here, and you will see that we said at the end that an appeal was likely. 

Well, that easily foreseen appeal has come and gone, and the OTC defendants once again prevailed.  In Center for Environmental Health v. Perrigo Co., No. A163682, 2023 WL 2421132 (Cal. Ct. App. Mar. 9, 2023) (to be published), the California Court of Appeal held that federal regulation of drug warnings under the Food Drug & Cosmetics Act preempted Prop 65’s warnings requirements. 

To recap, Prop 65 is a voter-enacted law that requires businesses to warn Californians about significant exposures to chemicals that allegedly cause cancer or birth defects.  See Cal. H&S Code § 25249.5 et seq.  We can see why this passed a popular vote.  Who would vote against requiring warning about alleged cancer-causing chemicals?  In practice, however, Prop 65 has resulted in boilerplate warnings being posted in businesses of every kind all over California, making the warnings ubiquitous—and eminently ignorable.  That is why Prop 65 has become a poster child for ineffective and counterproductive over-warning. 

The primary beneficiaries of Prop 65 are attorneys who file lawsuits to recover generous statutory penalties and attorneys’ fees from businesses that do not provide Prop 65 warnings.  That was the purpose in Center for Environmental Health, where the plaintiff sued over the alleged presence of N-nitrosodimethylamine—known as NDMA—in certain generic OTC drugs.  The trial court ruled that federal law preempted a state-law action seeking to require Prop 65 warnings that were different from the FDA-approved drug labeling. 

The Court of Appeal affirmed the dismissal on the basis that the plaintiff could not identify any method by which the generic drug manufacturers could provide a Prop 65 warning while still complying with federal law.  That is implied impossibility preemption, i.e., when it is impossible to comply with both state and federal law, the state law requirements have to give way. 

How did the court get there?  The court started with interesting commentary on the odd nature of this lawsuit.  Prop 65 is intended to regulate toxic substances that are deliberately introduced into the environment.  By comparison, NDMA—if it actually exists in the subject drugs in the first place—is an alleged contaminant.  As a result, “A lawsuit seeking to require warnings that the products contain NDMA—which, again, is not supposed to be in them at all—seems a poor way to address the potential danger to consumer health.”  Id. at *6.  The court has a point.  This lawsuit is a square peg in a round state-law hole.

On preemption, recall that the FDCA contains a provision expressly preempting state-law requirements for OTC drugs.  Prop 65, however, is exempted from express preemption by a savings clause stating that express preemption does “not apply to a State requirement adopted by a State public initiative or referendum enacted prior to September 1, 1997.”  Id. at *5 (citing 21 U.S.C. § 379r(d)(2)).  Prop 65 is the only state enactment that falls within the exemption, which is surely no coincidence.  Id. at *5.  For its part, Prop 65 has its own exception, under which it does not apply to “[a]n exposure for which federal law governs warning in a manner that preempts state authority.”  Id. at *7 (citing Cal. H&S Code § 25249.10(a)). 

The Court of Appeal’s discussion of the two statutes is long and detailed, but it boils down to this:  Only implied preemption can apply, and even then, only if federal law governs warning in a manner that preempts state law governing warning.  The dispositive question then was “whether it is possible for the generic-drug defendants to provide warnings about their products that satisfy both Proposition 65 and federal law.”  Id. at *9. 

The court held that they could not and therefore that federal law impliedly preempted state law.  The FDA has not approved drug warnings like those required by Prop 65.  Moreover, under the Supreme Court’s opinion in PLIVA, Inc. v. Mensing, generic drug manufacturers have an ongoing duty to ensure that their drug labeling is the same as the innovator’s FDA-approved labeling.  Id. at *10.  Here, the plaintiff failed to identify any method by which the generic-drug defendants could give a Prop 65 warning without deviating from FDA-approved labeling and thus violating federal law.  Thus, implied preemption. 

The plaintiff argued that the generic-drug defendants had avenues to provide Prop 65 warnings while still complying with federal law, but the Court of Appeal rejected those arguments.  The plaintiff argued that the FDA had never stated that Prop 65 warnings regarding NDMA were inappropriate.  But that did not change the fact that the FDA has never approved such a warning and that it was impossible for the generic-drug defendants to seek such approval in any event (even assuming that the FDA would ever grant approval, and there is no indication that it would).  Id. at *15.  It also made no difference that the FDCA exempted Prop 65 from express preemption, since the issue here was implied preemption.  Id. 

The court rejected the argument that point-of-sale signs are not federally regulated “labeling,” relying on U.S. Supreme Court authority interpreting “labeling” broadly to include material “designed for use in the distribution and sale of the drug[s]” as part of “an integrated distribution program.”  Id. (citing Kordel v. United States, 335 U.S. 345, 349 (1948)).  The court likewise rejected the plaintiff’s reliance on a Ninth Circuit case interpreting warnings under the federal statute regulating fungicides more narrowly, finding “no basis for importing that focus into the [FDCA].”  Id. at *15-*16. 

Finally, the generic-drug defendants could not comply with Prop 65 through public advertising either.  Prop 65 requires that the warning be delivered so “as to render [it] likely to be seen, read, and understood by an ordinary individual under customary conditions of purchase or use.”  Id. at *16 (emphasis in original).  Any public advertising that met this standard would necessarily qualify as “labeling” under federal law.  Id. at *17. 

Our prediction of an appeal in this case required no particular insight, nor does it require clairvoyance to predict that the plaintiff will petition for review in the California Supreme Court.  We will report back with any further developments.