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This post is from the non-Reed Smith, non-Dechert , and non-Holland & Knight side of the blog. Everyone else is involved.

The Good, the Bad, and the Ugly is a classic Clint Eastwood spaghetti Western where even the Good may not be all good.  In California state court, a demurrer sustained is a defense win, right?  Although there are some bright spots, In re Ranitidine Cases is one of the ugliest defense wins we have seen in a while, providing leave to amend and a roadmap for further expansion of the Gilead duty-to-innovate.

Ranitidine, sold under the brand name Zantac, is an H2 blocker used to treat ulcers, heartburn, indigestion, and GERD.  Plaintiffs claim that ranitidine breaks down into the carcinogen N-nitrosodimethylamine (NDMA) and that the NDMA levels increase at higher storage temperatures.  We have blogged before about the plaintiffs’ downfall in the federal Zantac MDL due to their dubious science. 

In re Ranitidine Cases is a coordinated proceeding in California for claims involving both generic and brand-name ranitidine.  In its Order, the Court sustained the demurrers of both the Brand and Generic Defendants, but gave leave to amend and some very unfortunate rulings along the way.  In re Ranitidine Cases, 2024 WL 2115449 (Cal. Super. Apr. 23, 2024) (the caption misspells the medicine as “rantidine,” but we’ve corrected that here and notified Westlaw).

First, the Good.  The Court sustained the Brand Defendants’ demurrer on both negligent and strict liability design defect, in line with prior decisions from another judge presiding over the JCCP and the Zantac MDL Court.   It is classic Bartlett preemption.  Any claim based on a defect in the design of the FDA-approved drug was preempted because the manufacturer could not independently make any major design change under federal law.  And because “strict products liability” is limited to the three traditional categories (design defect, manufacturing defect, and failure to warn), any “non-standard” design defect claim would also fail.  Id. at *6–7.

The decision is also good on Buckman and generic preemption.  The Court correctly held that any claim based on the Brand or Generic Defendants’ failure to fully inform the FDA when they sought approval of the drug would be preempted by Buckman.  And the failure to warn and design claims against the Generic Defendants are preempted by Mensing because, of course, the Generic Defendants could not under federal law alter the approved drug’s labeling or design.  The Court rejected the plaintiffs’ argument that Mensing preemption does not apply if the plaintiff claims the drug was “misbranded” under the FDCA.  It is for the FDA to pursue misbranding claims, not plaintiffs. 

If the FDA has approved the design and labeling of a drug, then FDCA impossibility preemption has the effect of preempting any claim by a private plaintiff that the FDA approved design and labelling of a drug are inadequate. The federal government has the ability to pursue claims against a drug manufacturer under 21 USC 337(a) that an FDA approved drug is misbranded under 21 USC 352(j). The possibility of federal law enforcement does not eliminate the actuality of FDA approval of a drug or the effect of that FDA approval on the duty of sameness and thus on the analysis of impossibility preemption.

Id. at *15.  Nor could plaintiffs bring a parallel misbranding claim except in the limited circumstance (and none was alleged here) where there was a court judgment or administrative order to remove the drug from the market and the plaintiff purchased the product and alleged injury after that date.  Id. at *15–16.

Now the Bad.  First, the Court permitted all sorts of subspecies of negligence duties, something the MDL Court refused to allow.  Under the general umbrella of “Negligence,” the Court permitted various subduties, including a duty on the part of both the Brand and Generic Manufacturers to ensure safe handling, distribution, and storage of the drug.  Id. at *2–4, 8–9, 18.  The Court also permitted a claim against the Generic Defendants based on their purported discretion in setting the expiration dates on generic drugs.  Id. at *18–19.  And even though it acknowledged that “[t]he regulations on adverse event reporting appear to apply only the Brand Defendants,” the Court still permitted plaintiffs to attempt to amend to allege a claim against the Generic Defendants for breach of a parallel duty to submit adverse event reports to the FDA.  Id. at *19.

Finally, the Ugly.  As part of the negligence claim, the Court considered “whether a drug manufacturer has a duty to seek FDA approval for a safer drug when it already has FDA approval for a drug that treats the same condition.” Id. at *9.  The Court concluded that it could, leaning on the reasoning of the Gilead decision, which we have discussed before, where the California Court of Appeal expanded a manufacturer’s duty to bring a different, allegedly safer drug to market sooner, even though the drug at issue was not claimed to be defective.  Based on the Gilead reasoning, the Court concluded that plaintiffs had adequately alleged a breach of a duty to seek FDA approval for a safer drug. 

Of course, there are many problems with this expansion of liability.  Any claim based on asking the FDA to do something should be preempted under Bartlett because it requires the FDA’s permission or assistance to comply with state law.  And such a claim is based on layer upon layer of speculation and could be stated even where there was nothing wrong with the product itself, which flies in the face of all traditional notions of a manufacturer’s duty of care.  On the Bartlett preemption issue, the Court was persuaded by plaintiffs about the possibility of a “pre-approval” claim—that the drug should never have been “defectively designed” in the first place.  We have addressed the wrongness of such claims before on this blog.  Gliding past the serious preemption issues, the Court sustained the demurrer, but with leave to amend to assert a negligence claim based on the manufacturers’ “choice of drug to submit to the FDA.”

Gilead argued in the California Court of Appeal that a duty to innovate would open the floodgates to lawsuits.  In response, the California Court of Appeal assured that “[w]e think Gilead overstates the threat given the narrowness of the duty at issue.”  Gilead Tenofovir Cases, 317 Cal. Rptr. 3d 133, 164 (Cal. App. 1st Dist. 2024), as modified on denial of reh’g (Feb. 1, 2024).  Sure enough, here we are.  The California Supreme Court has granted review in the Gilead cases, and we hope it will slam the floodgates shut.