Earlier this year we discussed the application of Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), to a variety of private litigation that sought to second-guess the FDA’s drug or medical device classification decisions.  Then we followed up with what we described as a “doozy” of a case along the same lines, Exela Pharma Sciences, LLC v. Sandoz, Inc., ___ F. Supp.3d ___, 2020 WL 5535026 (W.D.N.C. Sept. 15, 2020).  Today we report on a couple more Buckman-based cases along the same lines.

Nexus Pharmaceuticals, Inc. v. Quva Pharma, Inc., 2020 WL 6498970 (C.D. Cal. Oct. 29, 2020), and Nexus Pharmaceuticals, Inc. v. Central Admixture Pharmacy Services, Inc., 2020 WL 6555052 (C.D. Cal. Oct. 29, 2020), are related decisions in litigation over the compounding of certain prescription drugs.  “Compounding” of drugs by pharmacies (see our prior posts here, here, here, and here) exists at the intersection of FDA-regulated drug manufacturing, repackaging, and distribution with state-regulated pharmacy practice.  FDA regulations define what compounders can and can’t do:

Defendant[’]s . . . “outsourcing facilities” [are] regulated by Section 503B of the Federal Food Drug & Cosmetics Act (“FDCA”).  Defendants compound drugs which means that “a person under the supervision of a licensed pharmacist, combines, mixes, or alters ingredients of a drug to create a medication tailored to the needs of an individual patient.”

2020 WL 6555052, at *2 (citation omitted).

In the Quva case, the plaintiff drug manufacturer claimed that the defendants violated various state unfair competition laws because “they have not obtained the approval of [the] FDA (or any other relevant regulatory authority) to “ a compounded product that competed with the plaintiff’s FDA-approved drug.  Id.  In the Central Admixture case, the same plaintiff sought a preliminary injunction against other compounder defendants’ sale of similar products.  2020 WL 6555052, at *2.  Both actions were dismissed under Buckman because they challenged the FDA’s determination that the defendant’s products were not “essentially a copy” of plaintiff’s approved drug in accordance with an FDA Guidance.  Id.; Quva, 2020 WL 6555052, at *1.

Implied preemption under Buckman barred both actions.  In Quva, plaintiffs’ unfair competition claims were tautological – the competition was only “unfair” because it allegedly violated the FDCA.

[Plaintiff] argues that it is not suing to privately enforce the FDCA because Defendants’ violation of the FDCA is a separate harm of unfair competition.  Yet Defendants’ actions are unfair only because they purportedly violate the FDCA. . . .  Put another way, [plaintiff] alleges that Defendants’ actions constitute unfair competition because they are not following the rules − and those rules are the FDCA rules.

2020 WL 6555052, at *3.  Thus, the unfair competition “claims exist only because of the FDCA’s requirements,” requiring implied preemption under BuckmanId.  The question whether the defendant’s product could, or could not, be marketed as “essentially a copy” of another already approved product was for the FDA to decide:

FDA approval is clearly within the scope of the FDCA’s comprehensive regulatory authority.  And whether Defendants’ product is “essentially a copy” of [plaintiff’s] product is a determination which implicates various exceptions that directly implicate the FDA’s rulemaking authority.  In effect, [plaintiff] is asking the Court to displace the FDCA, which requires individual determinations by the FDA, and does not afford space for non-federal enforcement.

Id. (citations and most quotation marks omitted).

The plaintiff in Quva sought to avoid Buckman by relying on the infamous Stengel v. Medtronic, Inc., 704 F.3d 1224 (9th Cir. 2013) (en banc), decision.  That attempt failed because Stengel involved allegations of “parallel” claims:

[Stengel] held that a negligence claim for failure to warn the FDA was not preempted insofar as the state-law duty parallels a federal-law duty under the MDA.  Yet . . ., a parallel duty may save a claim only from express preemption. . . .  Implied preemption is another hurdle.”

2020 WL 6555052, at *3 (citations and quotation marks omitted).  Buckman does not allow suits over allegations simply that the defendant engaged in “conduct that violates the FDCA.”  Id.

Similar reasoning disposed of the injunction request in the Central Admixture case.  Private FDCA-based injunctions were no less barred under Buckman than private damages actions:

Congress made the FDA responsible for investigating potential violations of the FDCA, and gave it a number of enforcement mechanisms, including injunction proceedings, civil and criminal penalties, and seizure.  Given this scheme, if someone believes the FDCA is being violated, a private lawsuit is generally not the way to address it.  While citizens may petition the FDA to take administrative action, private enforcement of the statute is barred.

2020 WL 6555052, at *2 (citations and quotation marks omitted).  After repeating its discussion of the tautological nature of the plaintiff’s legal theory described above, id. at *3, Central Admixture reiterated that “whether Defendants’ product is ‘essentially a copy’ of [plaintiffs’], in violation of the FDCA, must be left to FDA.”  Id.

The additional injunction requirements did not change the result in Central Admixture.  In particular, the “public interest” in “enforcing the law,” could not overcome Congress’ decision that FDCA enforcement was the exclusive province of the FDA.

[T]he law that [plaintiff] seeks to enforce, the FDCA, is to be exclusively enforced through the FDA’s comprehensive regulatory authority.  To grant [its] preliminary injunction would ignore Congress’s determination that the public interest is best served when the FDCA is enforced by the FDA.

Id. at *5 (citations and quotation marks omitted).

While the two Nexus Pharmaceuticals cases arose in the context of business disputes, the preemption principles they enforce are equally applicable to product liability and other tort claims (including unfair competition claims) that are brought against our clients.  For that reason, we’ll keep bringing them to our readers’ attention.

In the ever-extending period of working from home and social distancing, we have spent some time watching various exemplars of the “superhero” genre and noted that the uber kitschy afterschool and weekend morning staple of our youth is not being recreated.  (If Stevie Mac is from the Pleistocene, then our youth was in the Pliocene with the other hairy hominids.)  There was something reassuringly silly and innocent about those shows, whether rendered in clunky animation or clunkier acting and costumes.  Nowadays, shows are generally more complicated, layered, and darker.  Back then, candy in the shape of cigarettes or gum shredded up like chewing tobacco seemed innocent.  Now, electronic nicotine delivery systems (“ENDS”), also known as e-cigarettes and vaping products, are sold in a range of flavors perhaps designed to appeal to young taste buds.

It appears that the plaintiff in Yimam v. Mylé Vape, Inc., No. 2019 CA 008050, 2020 D.C. Super. LEXIS 7 (D.C. Super. June 11, 2020), was on something of a crusade with a test case against a vaping product manufacturer.  Maybe he was just out to make some money, but his purchase of the products was clearly to set up the ability to sue.  Why do we say that?  Well, he bought defendant’s “iced watermelon” and “pound cake” flavored products on November 26, 2019, to “test and evaluate” them and brought his consumer protection case within the next five weeks.  We certainly have railed against untimely suits before, but this seems really fast and somewhat suspicious given the regulatory status of the products.  The purchase of the products and initiation of the suit just happened to be within a seven and a half month gap when the products were being sold without an arguably required FDA authorization.  The short version of this is that FDA had extended the time for certain ENDS products to file necessary premarket tobacco applications until August 2022, but a court struck that down in May 2019; while that decision was on appeal, FDA issued a the replacement guidance in January 2020 that extended the application deadline to May 2020.  Id. at **2-4.  Got it?  So, it does not look like coincidence that the purchase and subsequent complaint occurred before the murky regulatory window closed.  Arguably, consumer protection statutes are really meant to protect consumers and not test case purchasers, but that is not where the court took it.  Instead, preemption, both express preemption under the Family Smoking Prevention and Tobacco Control Act of 2009 (mercifully, “TCA”) and good old Buckman implied preemption, was the focus of the court’s analysis.  That is why we are discussing it, cartoonish lead-in notwithstanding.

Plaintiff teed up claims for deceptive trade practice under DC’s expansive consumer protection act, unjust enrichment, and implied warranty.  The gist of plaintiff’s claims was that the products’ packaging did not include any statement about FDA authorizations, submissions, or requirements, falsely implying to a purchaser (even one who did not intend to vape) that the products were legally on the market.  On its face, the DC act might have covered this allegation given that it did not require that any consumer was misled or damaged by any misrepresentation or omission.  It prohibited misrepresentations as to “approval” and material facts, failure to state material facts, and sales inconsistent with federal requirements.  Id. at *5.  The court considered these and their possible intersection with preemption in turn.

Rather than allege that there was an affirmative misrepresentation about approval status, plaintiff contended that “the very act of marketing the products, standing alone, constituted an implicit representation that the products had received premarket FDA approval.”  Id. at **7-8.  As a matter of DC law and statutory interpretation, that allegation could not satisfy the requirement of a misrepresentation:  “This would untether the term ‘misrepresentation’ from its ordinary definition . . . .”  Id. at *8.  This determination meant that the court did not address preemption yet, although we can certainly see how such a claim, if permitted, would have implicated both express and implied preemption.

The next theory that plaintiff offered—that the absence of FDA approval as a material fact that should have been disclosed—clearly did.  “The claim that the defendant violated the CPPA [DC act] by failing to disclose on its packaging that its products lacked FDA approval is expressly preempted.”  Id.at *10.  Like other express preemption provisions in the FDCA, the TCA’s preempted state (and DC counts as a state for these purposes) requirements to the extent they were “different from, or in addition to,” federal requirements.  The federal labeling requirements for these products “do not impose an affirmative duty to advise consumers about the status of any marketing authorization order from the FDA.”  Id. at 11.  That meant express preemption, sending our mind to how similar consumer fraud claims would fare with Class III and Class II medical devices.  It was brought back when the court went ahead and analyzed implied preemption.

Starting with food and device cases recognizing that FDA’s sole right to enforce violations of the FDCA means that state law (DC still counts) claims predicated on purported violations “intrude[] upon the FDA’s exclusive province” and are impliedly preempted, the court quickly got to Buckman.  Id. at **12-13 (citations omitted).  Cutting through some of the usual smoke about what claims are not impliedly preempted, the court rightly framed the dispositive question as “whether the FDCA violation at issue is ‘a critical element’ of the state law claim” and whether the “claim would not exist in the absence of the FDCA.”  Id. at *14 (citations omitted again).  When it comes to disclosing the lack of FDA approval, this is not a hard call:

[T]he resolution of this claim would necessarily require a determination that FDA premarket approval was required and not obtained in a circumstance in which the FDA has yet to conclude that such a violation occurred.

Id. at **14-15 (citations still omitted).  That means implied preemption (Bam!) on top of express preemption (Pow!).

After that deep draw, it was quick work to conclude that plaintiff’s remaining argument under the DC act—selling these ENDS without approval was inconsistent with federal requirements—would be impliedly preempted.  Id. at **15-16.  The violation of the FDCA would not only be a critical element of the claim, it would be the only element.  (Plaintiff also attempted to argue that the DC act allowed an unenumerated claim for an unfair trade practice based on selling the ENDS without FDA approval, which also impliedly preempted even if it had been supported by DC law and properly pleaded. Id. at *17.)

Plaintiff also tried to get his claims for unjust enrichment and implied warranty left through the Buckman gauntlet.  We cannot recall seeing an analysis like this for unjust enrichment, which is often asserted but rarely lasts long in product liability cases.  The gist of the claim is that it is, well, unjust for the defendant to keep the payment for the ENDS because they were being sold in violation of the FDCA.  Wham, with the TCA implied preemption out of nowhere.  Id. at *20.  (Really, out of the same place as all the other implied preemption.)  The implied warranty claim was also based on the ENDS not being fit to sell because they were not approved by FDA, so—what is left?  Blam!—implied preemption again.  Id. at **21-22.

One last nugget (or easter egg, were this buried in the end credits) is that it looks like this dismissal did not come with leave for the plaintiff to amend.  Because preemption knocked out every claim he asserted, there would be no point in letting plaintiff amend to try to come up with non-preempted ways to assert liability for selling products that were apparently purchased to launch a lawsuit.

As we mentioned in our recent Preemption Teaser post, last month’s concurrence in denial of certiorari in Lipschultz v. Charter Advanced Services (MN), LLC, ___ S. Ct. ___, 2019 WL 5300908 (U.S. Oct. 21, 2019), provides an indication that, at least to some extent, Justice Thomas might have found a kindred spirit of sorts in Justice Gorsuch (who joined that concurrence) as to some of his hitherto idiosyncratic preemption views.  In particular, the opinion repeated, id. at *2, the “freewheeling judicial inquiry” catchphrase from Justice Thomas’ concurrence in Wyeth v. Levine, 555 U.S. 555, 558 (2009), in which he, alone among the Justices, rejected the concept of “obstacle to purposes and objectives” implied preemption (which hereafter we’ll just call “obstacle”) altogether for precisely that reason.

As an alternative to “obstacle” preemption, the Lipschultz concurrence posits a theory whereby implied conflict preemption occurs when state law “logically contradicted the ‘Constitution,’ the ‘Laws of the United States,’ or ‘Treaties.”  Id. at *1 (quoting Supremacy Clause).  Under such a theory, “final agency action” would have “preemptive effect” as to “federal standards and policies that are set forth in, or necessarily follow from, the statutory text.”  Id. (quoting Thomas concurrence in Wyeth v. Levine, 555 U.S. 555 (2009)).  Since the petitioner in Lipschultz didn’t make this argument, Justices Thomas and Gorsuch concurred in the denial of certiorariId. at *2.  That amounts to an engraved invitation to make the argument in the future.

On to Buckman.  In concluding that fraud on the FDA claims were preempted in Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), the 7-justice majority followed what was essentially an obstacle preemption rationale.

The conflict stems from the fact that the federal statutory scheme amply empowers the FDA to punish and deter fraud against the Administration, and that this authority is used by the Administration to achieve a somewhat delicate balance of statutory objectives. The balance sought by the Administration can be skewed by allowing fraud-on-the-FDA claims under state tort law.

Id. at 348.  Thus Buckman’s analysis looked to:  (1) the FDA’s extensive disclosure requirements; (2) the FDA’s ability to detect, deter, and punish fraud; (3) the FDA’s nuanced position on off-label use; and (4) that tort claims attacking the adequacy of submissions to the FDA could gum up the regulatory works with additional, unnecessary paper.  Id. at 348-51.

The two main holdings in Buckman are, first, that claims attacking agency decisions as fraudulently obtained are preempted, and second, that private persons (such as tort plaintiffs) lack the ability to enforce the FDCA and thus cannot assert claims in which purported violations are a “critical element.”  Id. at 353.

Applying Justice Thomas’ preemption views, how can we reach the same result?

First of all, the scope of preemption cannot “wander far from the statutory text.”  Levine, 555 U.S. at 583 (Thomas, J., concurring).  Philosophically, for Justice Thomas, preemption rests upon supreme federal powers that are “few and defined.”  Id. at 585.  The Supremacy Clause grants supremacy only to “[t]his Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties,” id. at 586, so that is where preemption starts and stops – not “broad federal policy objectives, legislative history, or generalized notions of congressional purposes that are not contained within the text of federal law.”  Id. at 587.

This rationale alone should be plenty to support Buckman’s second prong, concerning private FDCA enforcement.  The pertinent statutory language, as Buckman aptly put it, “leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance.”  531 U.S. at 349 n.4.

(a) Except as provided in subsection (b), all such proceedings for the enforcement, or to restrain violations, of this chapter shall be by and in the name of the United States. . . .

(b)(1) A State may bring in its own name and within its jurisdiction proceedings for the civil enforcement, or to restrain violations, of [enumerated FDCA provisions concerning] food . . . located in the State.

21 U.S.C. §337(a-b).

“Pre-emption must turn on whether state law conflicts with the text of the relevant federal statute or with the federal regulations authorized by that text.”  Levine, 555 U.S. at 588 (Thomas, J., concurring).  See also Virginia Uranium, Inc. v. Warren, 139 S. Ct. 1894, 1901 (2019) (“a litigant must point specifically to ‘a constitutional text or a federal statute’ that does the displacing or conflicts with state law”) (Gorsuch, J., joined by Thomas & Kavanaugh, JJ.).  With respect to private FDCA enforcement masquerading as a state-law tort, nobody claims – at least in this century − that the federal government lacks the constitutional authority to enact the FDCA and invest enforcement solely (for everything other than some food-related provisions) in the hands of the FDA.  Thus a “comparison between federal and state law,” that reveals a state-law action seeking to impose liability for failure to comply with purported “duties” created by the FDA/FDCA has found something directly contrary to the express terms of the federal act.  Preclusion of private FDCA enforcement flows directly from the express terms “set forth in” the FDCA.  Lipschultz, 2019 WL 5300908, at *2.

Turning to agency fraud claims, we are informed by Justice Thomas’ discussion in Mensing, 564 U.S. at 621-23, that the Supremacy Clause is a “non obstante” provision understood by the Framers to preempt state law where it “logically contradicted. . . the ‘Laws of the United States.’”  Lipschultz, 2019 WL 5300908, at *1 (discussing Mensing).  As mentioned in Lipschultz, Justice Thomas is by no means wedded to “physical impossibility” as the defining characteristic of impossibility preemption.

The Court . . . has not explained why a narrow “physical impossibility” standard is the best proxy for determining when state and federal laws “directly conflict” for purposes of the Supremacy Clause.  There could be instances where it is not “physically impossible” to comply with both state and federal law, even when the state and federal laws give directly conflicting commands. . . .   Therefore, “physical impossibility” may not be the most appropriate standard for determining whether the text of state and federal laws directly conflict.

Levine, 555 U.S. at 590 (Thomas, J., concurring) (citation omitted).

Indeed, the Supremacy Clause “suggests that courts should not strain to find ways to reconcile federal law with seemingly conflicting state law,” since non obstante provisions “specif[ied] that they did not want courts distorting the new law to accommodate the old.”  Mensing, 564 U.S. at 622 (citations omitted).  In such situations, preemption is appropriate, under Justice Thomas’ view of the law, to prevent FDA-regulated manufacturers from “be[ing] required continually to prove the counterfactual conduct of the FDA and [regulated] manufacturer in order to establish the supremacy of federal law.”  Id. at 623.

Preemption of agency fraud claims fits neatly within this framework.  A fraud on the FDA claim is nothing more – and nothing less – than the assertion that a state-law jury can ignore whatever in-force FDA (or other federal) regulatory determination is under attack because that decision was allegedly induced by the defendant’s lies or omissions to the agency.  Purported “counterfactual conduct of the FDA” is inherently at issue in such claims, as causation turns on the plaintiff’s contention that a fully-informed agency would not have made the decision that it did.  Further, fraud on the FDA claims are in logical contradiction with federal law.  They necessarily conflict with whatever in-force agency decision the plaintiff is attacking.  Forget impossibility.  If federal supremacy is to mean what Justice Thomas says it means, then the lawful decisionmaking processes of federal agencies, within the scope of their properly delegated authority, cannot be open to collateral attack by state law.  That is the sort of “direct conflict” that would be preemptive in Justice Thomas’ view of the preemption world.

Indeed, in Buckman itself, Justice Thomas agreed with preemption, given evidence “that the Food and Drug Administration (FDA) has done nothing to remove the devices from the market, even though it is aware of the basis for the fraud allegations.”  531 U.S. at 354 (Thomas, J. joining Stevens, J. concurring opinion).  Only if “the FDA had determined that [defendant] had committed fraud,” would the inherent logical conflict between the agency fraud claim and the agency’s actual decision be resolved, and thus remove the basis for preemption.  Id. at 354.

Under those circumstances, respondent’s state-law fraud claim would not depend upon speculation as to the FDA’s behavior in a counterfactual situation but would be grounded in the agency’s explicit actions.  In such a case, a plaintiff would be able to establish causation without second-guessing the FDA’s decisionmaking

Buckman, 531 U.S. at 354.

We here at the DDLaw Blog are perfectly content with the Buckman majority’s resort to “obstacle” preemption to preclude agency fraud allegations and private FDCA enforcement.  However, given the doctrinal disdain that Justice Thomas (and perhaps Justice Gorsuch) have for this form of implied preemption, we offer the above as an example of the sort of argument that a defendant can make to ensure that the preemptive force of Buckman survives such doctrinal disputes.  Given the current makeup of the Court, a successful implied preemption argument in the prescription medical product liability context is unlikely without the votes of both of these justices.  Early in the Blog’s existence, we lost Justice Thomas in Warner-Lambert Co., LLC v. Kent, 552 U.S. 440 (2008), and the result was a 4-4 non-precedential tie on a Buckman issue.

Thus, we think that defendants would be well advised to accept the invitation extended in Lipschultz to frame their Buckman preemption arguments not only in the traditional way that the Buckman Court did, but also in a way that would allow Justices Thomas and (perhaps) Gorsuch also to rule in favor of preemption.

Bexis vividly remembers how he first learned of 21 U.S.C. §337(a).  It was early 1995, and he had just joined the Danek Medical legal team in the early going of the Orthopedic Bone Screw MDL.  The plaintiffs’ complaints went on and on about “negligence per se” and purported violations of the FDCA.  Bexis figured that he better learn all he could about negligence per se as fast as he could.  He had already (since 1987) been churning out internal monthly memos to the firm product liability group about new developments in Pennsylvania personal injury law, and some of those cases involved negligence per se.  So he searched for the term.  That produced a couple of intriguing (and then relatively recent) OSHA cases, Ries v. National Railroad. Passenger Corp., 960 F.2d 1156 (3d Cir. 1992), and Rolick v. Collins Pine Co., 975 F.2d 1009 (3d Cir. 1992) – and Third Circuit law governed where the just-being-established Orthopedic Bone Screw MDL was situated.

OSHA has a provision, 29 U.S.C. §653(b)(4), that provided, in relevant part “Nothing in this chapter shall be construed . . . to enlarge or diminish or affect in any other manner the common law. . . .”  Both Rolick and Ries had held that that provision meant that “a violation of an OSHA regulation could not constitute negligence per se.”  Rolick, 975 F.2d 1015 (quoting Ries, 960 F.2d at 1165.  That seemed pretty good, so Bexis pulled out the maroon colored statute book that contained the FDCA and read it from beginning to end, looking for anything analogous that he could argue did the same for tort claims based on the FDCA.  He found §337(a), which provides:  “all such proceedings for the enforcement, or to restrain violations, of this chapter [the FDCA] shall be by and in the name of the United States.”

That seemed pretty good, even better than the OSHA language in some respects.  There wasn’t much law, and nothing in the product liability field, but it was “run whatcha brung.”  With plaintiffs trying to create new causes of action, it was up to our side to create new defenses.  So Bexis ran (some would say amok) with §337(a) throughout the Bone Screw MDL litigation – eventually all the way to the Supreme Court where, in a Bone Screw appeal, the Supreme Court agreed.  “The FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the medical device provisions.”  Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341, 349 n.4 (2001) (quoting §337(a)).

That, in a nutshell, is how Buckman came to be.

And Buckman (and §337(a)) is the gift that keeps on giving, most recently in Amarin Pharma, Inc. v. International Trade Comm’n, 923 F.3d 959 (Fed. Cir. 2019).  Yes, that’s the same Amarin.  Amarin v. ITC, involved completely different claims concerning the same drug, Vascepa, that several years ago produced the landmark First Amendment decision in Amarin Pharma, Inc. v. FDA, 119 F. Supp.3d 196 (S.D.N.Y. 2015).  This time Amarin asserted Lanham Act claims that competing products containing the same active ingredient were “deceptively” labeled and advertised as “dietary supplements” when they were really illegal “new drugs” that had never received proper FDA approval.  923 F.3d at 961-62.  It filed a statutory action (under the Tariff Act of 1930) with the International Trade Commission, seeking to bar importation of those “supplements.”  Id. at 961.

The FDA, however, had reached no such conclusion, and let the ITC know about it:

[T]he FDA submitted a letter urging the Commission not to institute an investigation and instead to dismiss Amarin’s complaint.  In the FDA’s view, the FDCA prohibits private enforcement actions, including unfair trade practice claims that seek to enforce the FDCA.

Id. at 962 (record cites omitted).  The ITC agreed with the FDA, “declining to institute an investigation and dismissing the complaint.”  Id.  Amarin appealed.

Amarin’s main argument was that a more recent Supreme Court decision, POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102 (2014), which we blogged about here and here, meant that §337(a) was a dead letter in the Lanham Act context and that it could therefore challenge the FDA classifications of products – here, dietary supplement versus prescription drug – in a private action.  Once again, the FDA intervened, filing an amicus brief through the Department of Justice in Amarin v. ITC.  The FDA liked Buckman and §337(a) in a big way:

“The FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with” the FDCA.  Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 349 n.4 (2001).  Private parties are expressly prohibited from bringing “proceedings for the enforcement, or to restrain violations, of ” the FDCA.  21 U.S.C. §337(a).  Yet that is precisely what Amarin seeks to do here. Amarin’s claims, though nominally brought under the Tariff Act, attempt to enforce or restrain violations of the FDCA because they seek − as a necessary component of the stated cause of action − to prove FDCA violations and compel obedience to the FDCA through the remedies provided by that statute. For that reason, the International Trade Commission correctly concluded that Amarin’s claims are precluded by the FDCA.

Amarin v. ITC, FDA amicus brief at 1 (now also available at 2018 WL 8459460).

And again:

The FDCA prohibits private proceedings “for the enforcement, or to restrain violations, of” that statute.  21 U.S.C. §337(a).  The FDCA instead commits enforcement exclusively to the federal government to ensure that complex enforcement decisions are made with the benefit of FDA’s scientific and regulatory expertise.  As a consequence, private parties . . . may not initiate proceedings in a court or administrative agency to remedy alleged violations of the FDCA.  Nor can private parties circumvent that prohibition by wrapping their FDCA enforcement claims inside some other cause of action.  The FDCA prohibits “all” private proceedings to enforce or restrain violations of the FDCA, id., including private claims that are nominally brought under another statute but seek to prove violations of the FDCA.

Id., FDA amicus brief at 7 (emphasis original).

There’s still more:

Centralizing FDCA enforcement authority within FDA ensures that FDA’s expertise will inform often-difficult factual and legal determinations, such as which requirements apply to particular articles and whether an article is being distributed in violation of the FDCA.  It also ensures that discretionary determinations − like whether enforcement measures should be pursued for a violation, and if so, which remedies are appropriate − will be made by policymakers, not private parties.  And it promotes uniformity. . . .  Congress deliberately chose to centralize within FDA the crucial decision whether to seek to prove and redress alleged violations of the FDCA.  Doing so maximizes the benefits of centralized enforcement.

The FDCA’s prohibition on private “proceedings for the enforcement, or to restrain violations, of” the Act, 21 U.S.C. §337(a), means that private parties may not bring suit under the FDCA itself to remedy what they allege to be violations of the Act.  It also means that private parties may not circumvent this straightforward prohibition by invoking some other cause of action, under another federal statute, in order to bring what is, at bottom, still an action “for the enforcement” or “to restrain violations” of the FDCA. See Buckman, 531 U.S. at 353 (preempting state fraud claims that “exist solely by virtue of the FDCA”).

Id., FDA amicus brief at 9-10 (other citations omitted) (emphasis original).  We particularly like these last two quotes because the twice-emphasized “other” places the government on record squarely on the defense side of the ledger with respect to the “Buckman is nothing more than fraud on the FDA” rationale of a Second Circuit panel back in Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006), aff’d by equally divided court, 552 U.S. 440 (2008).

So, almost as much as we liked Amarin winning on the First Amendment, we were rooting against it in Amarin v. ITC.  And that’s what happened.  Private FDCA enforcement – under the Lanham Act or anywhere else – took it on the chin.  As a matter of law, a complaint about the FDA’s failure to act could not be “unfair competition” under either the Tariff Act, the Lanham Act, or seemingly anything else.

First, as the Supreme Court recognized in the aforesaid POM Wonderful decision, “The FDCA provides the United States with ‘nearly exclusive enforcement authority.’”  Amarin v. ITC, 923 F.3d at 966 (quoting POM Wonderful, 573 U.S. at 109).  Under both Buckman and POM Wonderful, “[p]rivate parties may not bring suits to enforce the FDCA.  Id.  Amarin v. ITC discussed various decisions that had examined the relationship between the Lanham Act and the FDCA, particularly PhotoMedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010); Alpharma, Inc. v. Pennfield Oil Co., 411 F.3d 934 (8th Cir. 2005), and Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc., 902 F.2d 222 (3d Cir. 1990).  Analyzing them, and POM Wonderful, Amarin v. ITC concluded:

[T]he FDA has not provided guidance as to whether the products at issue in this case should be considered “new drugs” that require approval.  Given this lack of guidance . . .  a complainant fails to state a cognizable claim under §337 where that claim is based on proving violations of the FDCA and where the FDA has not taken the position that the articles at issue do, indeed, violate the FDCA. Such claims are precluded by the FDCA.

923 F.3d at 968.  Only if the FDA concluded that the products in question violated the FDCA, could the plaintiff go back to the ITC.  Id. (“Amarin is free to file a new complaint once the FDA issues sufficient guidance with respect to the accused products such that the Commission is not required to interpret the FDCA in the first instance”).  The court thus did not reach the amicus position of the United States (discussed above) that “that all such claims are precluded regardless of whether the FDA has provided guidance.”  Id. (emphasis original).

But having the government on record is a good thing.

In the final holding of significance to blog readers, the court held that POM Wonderful did not expand the traditional role of the Lanham Act with respect to FDCA matters.  Nothing in the Supreme Court’s decision authorized private plaintiffs to usurp the role of the FDA in deciding, in the first instance, whether any given conduct violated the FDCA:

[Plaintiff] views POM Wonderful as rejecting the view that the FDCA precludes Lanham Act claims.  But this reads POM Wonderful too broadly.  Although POM Wonderful held that the FDCA does not categorically preclude a Lanham Act claim . . ., the court did not open the door to Lanham Act claims that are based on proving FDCA violations.  The allegations underlying the Lanham Act claim in POM Wonderful did not require proving a violation of the FDCA itself.  This stands in stark contrast to the allegations in our case, which are based solely on alleged violations of the FDCA’s requirements.

923 F.3d at 969 (POM Wonderful citations omitted).  By the way, there was a dissent in Amarin v. ITC, but only on an issue of appealability, and the dissent did not address the substantive rationale discussed this post.

Thus, Amarin v. ITC is helpful to our side in at least two ways.  First, definitively rejects post-POM Wonderful attempts to pursue new FDCA violations that the FDA has not found, relying on a strong reading of Buckman and §337(a).  Second, the litigation has resulted in a useful explication of the FDA’s current views regarding private FDCA enforcement, which turns out to be at least as strong as anything that the Court held in Buckman itself – and utterly inconsistent with plaintiff-side attempts to hide attacks upon the sufficiency of submissions to the FDA behind the smokescreen of some “other” cause of action.  Particularly given the Supreme Court’s recent comments in Albrecht, 2019 WL 2166393, at *7, about the FDA being “fully informed,” it is a very good thing to have another decision like Amarin v. ITC on the books for the proposition that whether the FDA is fully informed about any particular matter is something for the FDA to decide in the first instance.

First of all, in response to some comments on our last post, we wanted to close the loop on our dog show narrative. We liked the Wirehaired Fox Terrier, though we have no explanation for the inordinate number of times this breed has won Best in Show (twenty-two, we think we heard). Truth be told, once a dog has won over all of the other entries in its breed, and all of the other breed winners in its group, it is pretty hard for there to be a “wrong” choice. We will say that the Dachshund and the flashy Boxer bitch (featured, by the way, in Netflix’s “7 Days Out” segment on Westminster) showed their hearts out, whereas the Wire seemed a little tired to us. But, unless there is a Standard Poodle (the breed of our heart) among the final seven, we are always happy for whichever gorgeous example of its breed takes the top honor.

In today’s case, federal law takes the top honor. In the Eleventh Circuit’s unpublished decision in Markland v. Insys Therapeutics, Inc., — Fed. Appx. —. 2018 WL 6666385 (11th Cir. Dec. 19, 2018), the plaintiff’s decedent died after being administered the defendant’s pain medication for an allegedly off-label use. The plaintiff filed a wrongful death suit, asserting a single claim for “negligent marketing.” The plaintiff alleged that the defendant engaged in “fraudulent” and “unlawful” marketing to convince doctors to prescribe the drug for off-label uses.

Explaining that, under the FDCA and Buckman, only the United States government may enforce the FDCA’s provisions, the court emphasized that state law tort claims are preempted to the extent that they “seek to privately enforce a duty owed to the FDA.” Markland, 2018 WL 6666385 at *2 (citation omitted).  While the plaintiff in Markland styled his claim as one for “negligent marketing,” the court explained that that is not a recognized tort under Florida law. The plaintiff’s complaint included the allegation that the defendants had “intentionally violated requirements imposed by the FDA” regarding the proper use of the drug.  Id.

The district court had held that the substance of the plaintiff’s complaint was an allegation that the defendant had violated the FDCA, and the Eleventh Circuit agreed. The court held, “A critical premise of [the] complaint is that [the defendant’s] promotion of off-label uses was improper, a proposition that can only be established by pointing to federal law.”  Id.  Moreover the plaintiff did not “point[] to any traditional state-law duty owed by [the defendant] to [the plaintiff’s decedent] that was breached by the company’s marketing of [the drug] for off-label use.”  The court concluded, “It is only because of the FDCA and FDA enforcement decisions that the promotion of off-label uses is prohibited.  Indeed, the very concept of a drug use being ‘off-label’ is derived from the FDCA and FDA policymaking decisions. . . . As with the Buckman plaintiffs, Markland seeks to enforce a duty that exists solely by virtue of the FDCA.  That kind of claim is preempted.”  Id. (internal punctuation and citation to Buckman omitted).

Hornbook stuff, and we like it that way.

This isn’t the first time, but the Blog has a problem with its reporting on cases decided in the ongoing “Opioid” litigation.  As lawyers, our first obligations are to our clients, and in this instance some of our clients in the opioid litigation don’t want us talking about their cases.  So when that happens, we don’t.

That doesn’t mean that we aren’t looking for ways to help, but it can’t be through reporting on what went down in individual cases.  We can do concepts, however. That’s why we have been particularly intrigued with one aspect of the recent opioid decision in Floyd v Feygin, 2018 WL 6528728 (N.Y. Sup. Dec. 6, 2018), that dismissed the plaintiff’s “negligence” claim.  The defendant (not a RS client) in Floyd successfully argued the following:

In support of its motion, [defendant] argues that plaintiff’s negligence cause of action against it is, in effect, an attempt to privately enforce the Controlled Substances Act. [Defendant] asserts that plaintiff lacks the authority to regulate its conduct in this regard or to enforce the Controlled Substances Act since Congress has committed enforcement of the Controlled Substances Act exclusively to the Attorney General and the Department of Justice.

Id. at *5. Thus the defendant argued that this “negligence” claim was preempted.  Id.

As we discussed earlier, the Floyd court agreed that the Controlled Substances Act (“CSA”) could not be used in this way, because there isn’t any private right of action:

It has been held that pursuant to its plain terms, the [CSA] is a statute enforceable only by the Attorney General and, by delegation, the Department of Justice.  Based on the regulatory structure of the [CSA] federal courts have uniformly held that the [CSA] does not create a private right of action.  The manufacture, distribution, and dispensing of opioids is comprehensively regulated by the [CSA], and the DEA is the primary federal agency responsible for the enforcement of the Controlled Substances Act.

Id. (citing: Schneller v Crozer Chester Medical Center, 387 F. Appx. 289, 293 (3d Cir. 2010); Smith v Hickenlooper, 164 F. Supp.3d 1286, 1290 (D. Colo. 2016), aff’d, 859 F3d 865 (10th Cir. 2017); McCallister v Purdue Pharma L.P., 164 F. Supp.2d 783, 793 (S.D.W. Va. 2001); DEA, Practitioner’s Manual, at 4 (2006)) (citations and quotation marks omitted).  Further, the New York equivalent of the CSA likewise carried with it no private right of enforcement. Id. at *6 (discussing 10 N.Y.C.R.R. Part 80).

Because the CSA provided no means of private enforcement, its requirements could not create novel common-law duties that did not otherwise exist.

[P]ursuant to both the [CSA] and New York State regulations, [defendant’s] sole duty with respect to its manufacture and distribution of opioids was to collect and record data, and make reports to federal and state agencies.  Although these regulations define circumstances that trigger reports to federal or state agencies, there is nothing within these regulations that requires a manufacturer to stop or restrict its distribution of opioids. . . .  Thus, [defendant] had no duty to control the prescribing, dispensing, and use of its [drug].

Id. at *6 (citations omitted).

The rationale in Floyd – that a federal statute’s lack of a private cause of action preempts a common-law plaintiff from using its requirements to create a “duty” – is what Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), is all about.  Curiously, Buckman is nowhere cited in Floyd, although Buckman’s implied preemption principles are applicable to all similarly situated federal statutes.

Which raises the question – how much can we “Buckmanize” the CSA, replacing the FDA with the equivalent federal authority of the “Attorney General?  Buckman, of course depended on statutory designation of the FDA as the sole enforcer of the FDCA. So we looked through the CSA looking for similar designations. We found:

21 U.S.C. §811(a), which governs scheduling of the substances to be “controlled”:

The Attorney General shall apply the provisions of this subchapter to the controlled substances listed in the schedules . . . and to any other drug or other substance added to such schedules under this subchapter.

21 U.S.C. §821, which governs enforcement generally:

The Attorney General is authorized to promulgate rules and regulations and to charge reasonable fees relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances and to listed chemicals.

21 U.S.C. §822(a), which governs registration of manufacturers and distributors generally:

(1) Every person who manufactures or distributes any controlled substance . . . shall obtain annually a registration issued by the Attorney General in accordance with the rules and regulations promulgated by him.

(2) Every person who dispenses, or who proposes to dispense, any controlled substance, shall obtain from the Attorney General a registration issued in accordance with the rules and regulations promulgated by him.

21 U.S.C. §823(a-b), which governs requirements imposed through registration

The Attorney General shall register an applicant to manufacture controlled substances in schedule I or II if he determines that such registration is consistent with the public interest. . . .

The Attorney General shall register an applicant to distribute a controlled substance in schedule I or II unless he determines that the issuance of such registration is inconsistent with the public interest.

Section 823 is particularly interesting because it also permits the federal government (through the attorney general) to register “practitioners” – that is, physicians – and contains a limited anti-preemption savings clause:

Notwithstanding section 903 of this title, nothing in this paragraph shall be construed to preempt any State law that . . . requires a qualifying practitioner to comply with additional requirements relating to . . . reporting requirements.

21 U.S.C. §823(l). Section 823 thus is further support for Buckman-type preemption arguments by manufacturers and distributors, since Congress only preserved state-law reporting requirements imposed on “practitioners,” but does not allow state law to impose reporting requirements on manufacturers or distributors of controlled substances.

21 U.S.C. §825(a), regarding labeling:

It shall be unlawful to distribute a controlled substance in a commercial container unless such container, when and as required by regulations of the Attorney General, bears a label . . . containing an identifying symbol for such substance in accordance with such regulations.

21 U.S.C. §825(c), regarding drug warnings:

The Secretary shall prescribe regulations under section 353(b) of this title which shall provide that the label . . . contain[s] a clear, concise warning that it is a crime to transfer the drug to any person other than the patient.

The “secretary” refers to the HHS and thus the FDA.  See 21 U.S.C. §802(24). Section 825(c) thus seamlessly integrates federal enforcement authority.  Go directly to Buckman; do not pass “Go.”

21 U.S.C. §826(a, b), governing amounts of controlled substances it is legal to make:

The Attorney General shall determine the total quantity and establish production quotas for each basic class of controlled substance. . . .

. . .[U]upon application therefor by a registered manufacturer, the Attorney General shall fix a manufacturing quota for the basic classes of controlled substances . . . that the manufacturer seeks to produce.

21 U.S.C. §827(b, d-e), dealing with reporting requirements:

Every inventory or other record required . . . shall be in accordance with, and contain such relevant information as may be required by, regulations of the Attorney General, . . . and [] shall be kept and be available . . . for inspection and copying by officers or employees of the United States authorized by the Attorney General.

Every manufacturer registered . . . shall, at such time or times and in such form as the Attorney General may require, make periodic reports to the Attorney General of every sale, delivery or other disposal by him of any controlled substance, and each distributor shall make such reports with respect to narcotic controlled substances. . . .

[E]ach manufacturer registered . . . shall, with respect to narcotic and nonnarcotic controlled substances manufactured by it, make such reports to the Attorney General, and maintain such records, as the Attorney General may require. . . .  The Attorney General shall administer the requirements of this subsection. . . .

That’s a lot of “attorney general” references, thus further demonstrating that Floyd reached the correct result.  It seems very clear from the statute that reports about controlled substances are not the kind of thing that states have traditionally required or administered.

21 U.S.C. §830(a-b), imposing record-keeping and additional reporting requirements:

(1) Each regulated person who engages in a regulated transaction . . . shall keep a record of the transaction for two years after the date of the transaction.  (2) . . . Such record shall be available for inspection and copying by the Attorney General.  (3) . . . The Attorney General shall specify by regulation the types of documents and other evidence . . . for purposes of this paragraph.

(1) Each regulated person shall report to the Attorney General, in such form and manner as the Attorney General shall prescribe by regulation–(A) any regulated transaction involving an extraordinary quantity of a listed chemical, an uncommon method of payment or delivery, or any other circumstance that the regulated person believes may indicate that the listed chemical will be used in violation of this subchapter. . . . A regulated person may not complete a transaction . . . unless the transaction is approved by the Attorney General. The Attorney General shall make available to regulated persons guidance documents describing transactions and circumstances for which reports are required. . . .

Again, all reports are to the federal government, about information specified by the federal government, and subject to the approval of the federal government.

21 U.S.C. §843, concerning fraudulent reporting:

It shall be unlawful for any person knowingly or intentionally . . . to furnish false or fraudulent material information in, or omit any material information from, any application, report, record, or other document required to be made. . . .

In addition to any penalty provided in this section, the Attorney General is authorized to commence a civil action. . . .

Who can sue over fraudulent reporting to the Attorney General? The federal government.

21 U.S.C. §871(b), regarding the role of the Attorney General generally:

The Attorney General may promulgate and enforce any rules, regulations, and procedures which he may deem necessary and appropriate for the efficient execution of his functions under this subchapter.

21 U.S.C. §880(b), concerning inspections of regulated facilities:

[T]he Attorney General is authorized, in accordance with this section, to enter controlled premises and to conduct administrative inspections thereof. . . .  [E]ntries and inspections shall be carried out through officers or employees (hereinafter referred to as “inspectors”) designated by the Attorney General.

21 U.S.C. §882(c), providing for state enforcement against internet pharmacies:

[T]he State may bring a civil action on behalf of such residents in a district court of the United States with appropriate jurisdiction. . . .  No private right of action is created under this subsection.

In this rare instance where the CSA authorizes independent state enforcement, the statute specifically prohibits a private right of action.

21 U.S.C. §902, preserving the FDCA:

Nothing in this chapter, except [additional reporting requirements to the Attorney General, and prescription restrictions] shall be construed as in any way affecting, modifying, repealing, or superseding the provisions of the Federal Food, Drug, and Cosmetic Act.

Nothing in the CSA impairs the basis for Buckman preemption.

21 U.S.C. §903, concerning “field” preemption:

No provision of this subchapter shall be construed as indicating an intent on the part of the Congress to occupy the field . . ., to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and that State law so that the two cannot consistently stand together.

States can enforce their own laws against illegal drugs.  Notably, this savings clause expressly limits its scope to “field” preemption, and does not address other types of implied preemption, such as Buckman or “purposes and objectives” preemption.  To avoid preemption, the “subject matter” of the state law must be “otherwise within the authority of the State,” which would seem to preclude ad hoc imposition of reporting requirements on interstate commerce.  No private right of action is provided.

Probably the provision of the CSA that is most analogous to Buckman’s 21 U.S.C. §337(a) is §871(b) concerning the Attorney General’s general authority, but as we’ve detailed above, a lot of other CSA provisions reject private enforcement or specify federal enforcement.  Thus, as did the court in Floyd, we think that the structure of the CSA fully supports a preemption rationale, similar to Buckman, that because there is no private right of CSA action, would be private enforcers of the CSA – and in particular its reporting requirements to the federal government – are preempted from doing so under state law.

Private plaintiffs love to scream “fraud on the FDA”!  Agency fraud is their magic potion for dissolving any FDA action that they don’t like.  Just assert that the FDA was bamboozled and invite some jury somewhere to ignore what the FDA actually did.  Unfortunately for the other side, Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001), precludes private plaintiffs from bringing such allegations bases on state tort law.  The FDCA is quite clear, in 21 U.S.C. §337(a), that only the government – not private plaintiffs – may seek to enforce the Act.

In Buckman, the Court held (unanimously), first, that “fraud-on-the-FDA claims inevitably conflict with the FDA’s responsibility to police fraud consistently with the Administration’s judgment and objectives.”  Id. at 350.  That’s rather obvious, because the logic of any agency fraud claim is that “fraud” allows a factfinder to conclude that, if not defrauded, the agency wouldn’t have done what it did.  That presents a rather raw conflict with whatever the agency actually did, which (unless revoked by the affected agency) is a federal decision presumably still in effect.

Second, in the context of the FDCA specifically, the Court recognized that Congress did not want private individuals running around purporting to enforce any of the many requirements imposed by the FDA under the Act.  That’s the §337(a) aspect:  “The FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the medical device provisions:  ‘[A]ll such proceedings for the enforcement, or to restrain violations, of this chapter shall be by and in the name of the United States.’”  531 U.S. at 349 n.4 (quoting §337(a)). “[W]e have clear evidence that Congress intended that the MDA be enforced exclusively by the Federal Government.”  Id. at 352 (again citing §337(a)).

But Buckman involved only state-law claims and thus preemption was easily invoked to prevent both the inherent conflict and the private enforcement problems identified by the Court.  So Buckman does not directly prohibit private litigants from using a federal statute to assert purported fraud-on-the-FDA claims.  One federal statute does not preempt another.  POM Wonderful LLC v. Coca-Cola Co., 573 U.S. 102, ___, 134 S. Ct. 2228, 2236 (2014) (“the alleged preclusion of a cause of action under one federal statute by the provisions of another federal statute” “is not a pre-emption case”).  There are at least four types of federal statutes that we expect plaintiffs to use to attempt private enforcement of fraud-on-the-FDA claims:  the False Claims Act (“FCA”), the Lanham Act, RICO, and antitrust statutes.  Most of the action, particularly recently, has involved the FCA.

There are other types of wanna-be private FDCA enforcement than fraud on the FDA – that’s what POM Wonderful was about (FDA-permitted food labels that allegedly deceived the public, not the FDA) – but we’re more interested in Buckman than anything else, so we wanted to see how fraud-on-the-FDA claims specifically have fared, when asserted under these other federal statutes.

Most recently, in a FCA decision that we discussed here, the First Circuit rejected allegations that were little different, substantively, from those that had produced Buckman itself.  Plaintiff alleged that the defendant “made a series of false statements to the FDA . . ., but for which the FDA would not have approved the [product] or would have withdrawn that approval.”  United States ex rel. Nargol v. DePuy Orthopaedics, Inc., 865 F.3d 29, 31 (1st Cir. 2017).  Based on those allegations, the Nargol plaintiffs claimed the every use of the product was as false claim – without the FDA’s (allegedly fraudulently obtained) approval, “doctors would not have certified the devices for government reimbursement.”  Id.  The First Circuit held, in effect, “hell, no.” The FDA was aware of all the mud the plaintiffs threw against the wall and did not rescind its decision:

Such very strong evidence [of immateriality] becomes compelling when an agency armed with robust investigatory powers to protect public health and safety is told what Relators have to say, yet sees no reason to change its position.  In such a case, it is not plausible that the conduct of the manufacturer in securing FDA approval constituted a material falsehood capable of proximately causing the payment of a claim by the government.  Ruling otherwise would “turn the FCA into a tool with which a jury of six people could retroactively eliminate the value of FDA approval and effectively require that a product largely be withdrawn from the market even when the FDA itself sees no reason to do so.”  [T]here is no allegation that the FDA withdrew or even suspended product approval upon learning of the alleged misrepresentations.

Id. at 35 (citations omitted).  Thus, “the FDA was paying attention,” but the Agency “viewed the information . . . differently than [plaintiffs] do.”  Id.

The government, having heard what [plaintiffs] had to say, was still paying claims not because of what was said to or by the doctors, but because the government through the FDA affirmatively deemed the product safe and effective.  And, absent some action by the FDA, we can see no plausible way to prove to a jury that FDA approval was fraudulently procured.

Id. at 36.  So, rather than preemption, Nargol disposed of fraud on the FDA-based FCA claims on materiality grounds, as long as the FDA (as is 95%+ the case) did not act on the purported fraud.  That’s basically Buckman modified by that decision’s two-justice concurrence that a different result might occur had the FDA itself found fraud.  531 U.S. at 353-55 (Stevens & Thomas, JJ. concurring).

The omitted citations in our quote from Nargol were to an earlier First Circuit decision that reached a similar result, D’Agostino v. ev3, Inc., 845 F.3d 1 (1st Cir. 2016).  In D’Agostino (which we previously discussed here), the First Circuit saw FCA-based fraud-on-the-FDA claims for what they really were, an attempt to hijack the FCA and turn it into a vehicle for second-guessing FDA decisions:

To rule otherwise would be to turn the FCA into a tool with which a jury of six people could retroactively eliminate the value of FDA approval and effectively require that a product largely be withdrawn from the market even when the FDA itself sees no reason to do so.  The FCA exists to protect the government from paying fraudulent claims, not to second-guess agencies’ judgments about whether to rescind regulatory rulings.

Id. at 8 (citation omitted).  Thus, the same policy reasons the Supreme Court gave for preemption in Buckman all counseled against recognizing agency fraud claims under a federal statute:

The collateral effects of allowing juries in qui tam actions to find causation by determining the judgment of the FDA when the FDA itself has not spoken are akin to those practical effects that counsel in favor of not allowing state-law fraud-on-the-FDA claims.  See Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341, 349-51 (2001).  If jurors in a single qui tam case could determine precisely what representations were essential to approval, which experts to believe, and how the FDA interpreted submissions made to it, some potential applicants who would otherwise seek approval for new products might be deterred, others might swamp the FDA with more data than it wants, and the “FDA’s responsibility to police fraud consistently with the Administration’s judgment and objectives” might be undercut.  Id. at 350.

Id. at 8-9.

Additionally, as already mentioned in connection with Nargol, the D’Agostino decision also relied upon the “demanding” materiality standard for “implied certification” FCA claims.  Id. at 7.  That agency fraud supposedly “could have” influenced FDA approval wasn’t enough.  “[C]ould have . . . falls short of pleading a causal link between the representations made to the FDA and the [false claim] payments.”  Id.

If the representations did not actually cause the FDA to grant approval it otherwise would not have granted, [the government] would still have paid the claims. In this respect, [relator’s] fraudulent inducement theory is like a kick shot in billiards where the cue ball “could have” but did not in fact bounce off the rail, much less hit the targeted ball.

Id.  Moreover, the D’Agostino fraud-on-the-FDA allegations failed for lack of causation.  If the FDA’s response to the fraud allegations is “doesn’t impress me much,” and the FDA thus doesn’t rescind its decision, then causation is impossible – and that’s what happened in D’Agostino:

In the six years since [relator] surfaced the alleged fraud, the FDA has apparently demanded neither recall nor relabeling of [the product] − this notwithstanding the agency’s [list of enforcement options].  The FDA’s failure actually to withdraw its approval . . . in the face of [plaintiff’s] allegations precludes [plaintiff] from resting his claims on a contention that the FDA’s approval was fraudulently obtained.

Id. at 8.  “[C]ausation is an element of the fraudulent inducement claims [plaintiff] alleges and . . . the absence of official action by the FDA establishing such causation leaves a fatal gap.”  Id. at 9.

In Southeast Laborers Health & Welfare Fund v. Bayer Corp., 444 F. Appx. 401, 410 n.2 (11th Cir. 2011), the court held that plaintiffs could not pursue a fraud on the FDA-based RICO causation theory.  However, the court’s discussion of RICO simply referred back to its prior discussion of why a similar state-law claim could not survive:

A theory of causation relying solely on an allegation that the medication in question would not have been on the market absent the alleged fraudulent conduct is no more than a state law “fraud on the FDA” theory, a theory that has been specifically rejected by the Supreme Court. . . .  Accordingly, [our prior decision] could not have implicitly approved of a state law “fraud on the FDA” theory of causation . . . whereby a third-party payor is permitted to state a causal nexus between the alleged fraudulent conduct and the payor’s ascertainable loss by simply asserting that absent the allegedly fraudulent conduct, the FDA would not have approved the medication to be on the market.

Id. at 407 (Buckman discussion omitted).

Those are all the appellate cases having anything to do with agency fraud that cite Buckman in the same paragraph as one of the four federal statutes we earlier identified.  As for district courts, United States ex rel. v. Medtronic, Inc., 2017 WL 4023092 (C.D. Cal. Sept. 11, 2017), likewise rejected a fraud on the FDA-based FCA claim:

[C]laims of fraud are disfavored if made by third parties who seek to second guess a decision by the FDA to certify a device.  Relator’s claims are in effect such a challenge as to the decision of the FDA to grant §510(k) clearance for the Subject Devices. Alleged fraudulent conduct directed to the FDA, without more, is inadequate to support an FCA claim.  [discussion of Buckman omitted]

Given the resources available to the FDA to investigate and approve medical devices, and to pursue remedies for alleged violations that arise in connection with the process, the policy concerns expressed in [Buckman] are material here.  The premise of the alleged fraud in the FAC is that Defendants misled the FDA during the §510(k) certification process.  However, an FCA action is not the proper way to bring such a claim.

Id. at *7 (citing inter alia the district court opinion in D’Agostino, 153 F. Supp.3d 519).

In United States ex rel. Sullivan v. Atrium Medical Corp., 2015 WL 13799759 (Mag. W.D. Tex. June 15, 2015), the court also rejected a fraud-on-the-FDA claim, but on a somewhat different rationale, that the fraud was too remote since it was not alleged to have been committed against the same government agency that also paid the claim:

Here, . . . the FDA was not the payor agency and was not directly involved in the reimbursement process.”  Relator has failed to allege that [defendant] engaged in any fraudulent conduct or made any false statement to CMS or TRICARE – the government agencies that administer reimbursements – as part of a request for payment.  There must be a direct and immediate link between a false statement or fraudulent conduct and the resulting request for payment; payment must be conditioned on the falsity.  Accordingly, because relator has not pleaded any direct or immediate link between [defendant’s] alleged false statement or fraudulent conduct and any resulting claim for payment, [its] motion for judgment on relator’s claim of fraud on the FDA should be granted, and plaintiff’s claim for violations of the FCA based on a theory of fraud on the FDA dismissed.

Id. at *9 (footnotes and quotation marks omitted).

On the other side, we have also found a couple of district court FCA cases that have allowed the sort of fraud on the FDA-based allegations that Nargol and D’Agostino reject.  See United States ex rel. Brown v. Pfizer, Inc., 2016 WL 807363, at *9 (E.D. Pa. March 1, 2016) (“The claims in Buckman were state law tort claims, not claims brought under the FCA.  Defendant has provided no authority, and we are aware of none, that has extended the holding in Buckman to FCA claims.”); United States ex rel. Krahling v. Merck & Co., 44 F. Supp. 3d 581, 593 (E.D. Pa. 2014) (“alleg[ations] that Defendant consistently and deliberately withheld pertinent information as to the safety and efficacy of a medication from the government . . . is [a] grounds for FCA liability.”).  Neither of these cases had the benefit of Nargol or D’Agostino, and neither addressed causation/materiality, so it is questionable whether they would be decided in the same fashion today.

Beyond the FCA, we found a magistrate’s opinion, Meijer, Inc. v. Ranbaxy Inc., 2016 WL 4697331 (Mag. D. Mass. Sept. 7, 2016), that the case “present[ed] an issue of apparent first impression: whether Sherman Act claims . . . may be predicated on an underlying fraud on the [FDA].”  The Magistrate effectively gave antitrust plaintiffs free rein to assert fraud-on-the-FDA claims:

The FDA’s enabling statute does not entrust it with policing antitrust or RICO; therefore, Plaintiffs’ claims do not usurp the agency’s statutory right to… calibrate a measured response to alleged fraud committed against it.  The question of whether or not particular acts of regulatory gaming harm competition is and should be an antitrust question

Id. at *11 (citations and quotation marks omitted).  See Id. at *19 (“these claims sound in antitrust, not violations of the FDCA”).  We note that Meijer evidently differs from the vast majority fraud-on-the-FDA pleadings, in that the plaintiffs allege that the FDA actually did determine that it had been misled and took affirmative corrective action.  Id. at *5, 13.  Perhaps that is the reason that Meijer nowhere cited the otherwise extremely pertinent D’Agostino district court decision.  Also of interest, permission for an interlocutory appeal has been granted, Meijer, Inc. v. Ranbaxy Inc., 245 F. Supp.3d 312 (D. Mass. 2017), and that appeal in pending in the First Circuit.  In the interim, of course, the First Circuit has decided both Nargol and D’Agostino since the district court originally decided Meijer.

Finally, we expected to find agency fraud claims brought under the Lanham Act, but didn’t.  There are certainly enough other types of attempted private FDCA enforcement that have been asserted under the Lanham Act.  But our search (which required the term “Lanham” to appear in the same paragraph as “Buckman” or several variants of “fraud on the FDA”) didn’t produce anything directly on point.  The closest approximation was Intra-Lock International, Inc. v. Choukroun, 2015 WL 11422285 (S.D. Fla. May 4, 2015), which alleged the sale of a “medical device” without getting any form of FDA pedigree.  There was no fraud on the FDA, because there were no interactions with the FDA at all. The Lanham Act claim in Intra-Lock was dismissed because plaintiff’s theory of selling a medical device without a license was purely a violation of the FDCA.  Id. at *7.  But the case wasn’t – at least overtly – a true agency fraud claim.  Cf. Organ Recovery Systems, Inc. v. Preservation Solutions, Inc., 2012 WL 116041, at *7-8 (N.D. Ill. Jan. 16, 2012) (allowing non-FDA-related Lanham Act claims while making clear that plaintiff’s preempted agency fraud claims were not based on the federal statute).

So far, there hasn’t been an appellate court in the country that has allowed a private plaintiff to avoid Buckman by bringing a fraud-on-the-FDA claim disguised as a federal statutory claim.  While we’re not out of the woods, yet, the current trend can be described as favorable.

Next week, under pressure from the Drug and Device Law Lifelong Best Friend, we are participating in a “murder mystery dinner theatre” in the “conservatory” of a local cemetery.   (We didn’t know cemeteries had “conservatories.”) It is a Halloween-themed event, with costumes encouraged, and we may or may not wear our eerily-lifelike Standard Poodle mask/hood. In any event, the premise of the event is that actors are scattered among the paying audience “guests.” At some point during the cocktail hour, one of the actors will “die.” During the ensuing dinner hour, clues are revealed and everyone tries to solve the “murder” in time for dessert. We think this sounds like fun, and we like the idea of not knowing what to expect and not being able to predict the result.

But sometimes a predictable result (to the extent that preemption jurisprudence is ever predictable) is just fine. In In re Bard IVC Filters Prods Liab. Litig. (Hyde v. C. R. Bard, Inc.), 2018 WL 4356638 (D. Ariz. Sept. 12, 2018), the plaintiff was implanted with the defendant’s inferior vena cava (“IVC”) filter. Three years later, the plaintiff learned that the filter had perforated the IVC wall and had fractured. The filter was removed shortly thereafter. The plaintiff filed suit, asserting the usual panoply of product liability claims. After the court granted summary judgment for the defendant on several claims, the plaintiff’s claims for strict liability design defect and negligent design remained pending, along with a claim for negligence per se.

Under Wisconsin law, which governed the plaintiff’s substantive claims, a claim for negligence per se arises from violation of a statute, where the plaintiff can show that “(1) the harm inflicted was the type the statute was designed to prevent; (2) the person injured was within the class of persons sought to be protected; and (3) there is some expression of legislative intent that the statute become a basis for imposition of civil liability.” Hyde, 2018 WL 4356638 at *2. In her negligence per se claim, the plaintiff asserted that the defendants violated provisions of the Federal Food, Drug, and Cosmetic Act. As the court commented, “Far from containing an expression that FDA regulations are intended to form the basis of civil liability, . . . [t]he FDCA leaves no doubt that it is the Federal Government rather than private litigants who are authorized to file suit for noncompliance with the medical device provisions.” Id. (citing Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341, 349 n.4 (2001)) (internal punctuation and additional citations omitted).   “Thus,” the court continued, a private litigant cannot bring a state-law claim [that] is in substance . . . a claim for violating the FDCA – that is, when the state claim would not exist if the FDCA did not exist,” because, under Buckman, such claims are impliedly preempted by the FDCA.  Id. (citations omitted). All correct, even if it conflates Buckman preemption with the plaintiff’s simple failure to state a negligence per se claim under the requirements of Wisconsin state law.

The court held that, as in Buckman, the plaintiff’s negligence per se claim was more accurately characterized as a “negligence claim based solely on violations of FDA regulations,” id., and was therefore impliedly preempted. As the court emphasized, “. . .where the plaintiff was not suing under state law for conduct that happen[ed] to violate the FDCA, but instead [was] suing solely because the conduct violate[d] the FDCA,” the claim was preempted by federal law. Id. (emphasis in original, internal punctuation and citation omitted). The court contrasted such claims to traditional tort claims like plaintiff’s negligent design claim, which arose from a duty owed under state law and which was not subject to Buckman preemption.

We like this correct, methodical, predictable decision.   We’ll let you know how the mystery thing goes.

At times, we have given a glimpse into the sausage making that goes into our production of posts on recent interesting cases and developments.  Part of the process involves standing searches for “published” (including by the electronic services) decisions from trial courts and appellate courts.  Sometimes, the trial court decisions are unpublished but interesting, and the appellate decisions are published but not too interesting.  When we saw the Sixth Circuit decision in Agee v. Alphatec Spine, Inc., — Fed. Appx. –, 2018 WL 1020078 (6th Cir. Feb. 22, 2018), on one of our standing searches, it was not interesting enough to merit a post.  A short per curiam decision noted how awful plaintiffs’ complaint was and how they had waived their position on preemption by mixing up express preemption with the implied preemption raised by the defendant’s motion to dismiss.  We were feeling sleuthy, however, so we tracked down the district court’s decision from a year ago.  It has a nice discussion of Buckman, and will now be published, so we are going to discuss it.

Agee v. Alphatec Spine, Inc., No. 1:15-cv-750, 2017 WL 5706002 (S.D. Ohio. Mar. 27, 2017), reads like the sort of case brought when the plaintiffs are looking for someone on whom to pin liability in the absence of a claim against the most logical defendant.  The plaintiffs claimed that a surgeon used defendant’s product in connect with unnecessary spinal surgeries without proper informed consent, but the surgeon fled the country with criminal charges pending.  So, the plaintiffs asserted various product liability claims against the manufacturers of the product, PureGen.  Usually, we would state clearly what type of product is at issue, but neither decision really says, other than to say the defendants are medical device companies and the product was used to stimulate bone growth.  We did a little looking and saw that PureGen is an “osteoprogenitor cell allograft” derived from donated adult stem cells.  We also saw that there was some history with FDA over whether this was a biologic, requiring approval of a Biologics License Application, or a device that might go through the 510(k) pathway.  In any event, plaintiffs seemed to claim defendants should be liable for their injuries—it was unclear that there were any physical injuries—solely because PureGen “had never been approved by FDA for use in the spine.”  Defendants moved to dismiss.

We will skip over the TwIqbal part of this—although there are nice statements and the interesting fact that some of the plaintiffs were suing in the same court with contrary allegations about another product—and the some of the details of Ohio law to get to the Buckman part.  After reiterating the Buckman standard and the cases explaining that a court is to look at the asserted claims to see if a violation of the FDCA is a critical element, the court did just that, providing something of a roadmap on what is preempted under Buckman.  The claim for defective manufacturing alleged that the failure to obtain FDA approval made the product produce injury.  (That is not close to a manufacturing defect claim under Ohio law, which has codified the claim under ORC 2307.74.)  The design defect claim was identical (and similarly off-target from ORC 2307.75).  The warning defect claim was also predicated on lack of approval of the product, but not even that the warning misrepresented the regulatory status.  The misrepresentation claim was predicated on a representation to plaintiffs and their doctors that the product was approved or concealing from them that it was not.  A similar claim for nonconformance with representation (under ORC 2307.77) was slightly less clear, in that it referenced “representations made by defendants concerning the product and/or with applicable federal requirements.”

The court’s analysis of these claims was clear and quotable:

Each of the above-quoted claims is clearly dependent upon the FDCA to a degree that the claims would not exist but for the statute. It may or may not be the case that the promotion and distribution of PureGen for use in the surgeries references in the complaint was in violation of the FDCA and relevant FDA regulations.  However, if that is the case, it is the sole responsibility and privilege of the federal government, and not private plaintiffs, to bring a suit to enforce those violations.

Well-reasoned. And dispositive.  And now affirmed on appeal.

Here’s the crux of today’s case, In re Trader Joe’s Tuna Litig., 2017 WL 2408117, at *1 (C.D. Cal. Jun. 2, 2017):

Plaintiffs determined that the Trader Joe’s tuna cans were underfilled and underweight by commissioning testing with the U.S. National Oceanic and Atmospheric Administration (“NOAA”) on December 1, 2015. NOAA tested several varieties of Trader Joe’s tuna according to the FDA’s standards for canned tuna, pursuant to 21 C.F.R. § 161.190. This statute determines the standard fill of tuna within a container based on its pressed cake weight.

Even though there’s more, we cut this block quote short because we saw the word “cake.” It’s distracting. Cake has always distracted us. It’s a minor miracle that it didn’t cause us to simply insert a post-ending ellipsis and begin a blurry daydream about cake, like a daydreaming scene in a movie. The only thing that stopped us was that the block quote also said “tuna.” We like tuna just fine. But tuna cake? That’s not so enticing.

Unless—apparently—you’re a class action plaintiffs’ lawyer. Ever in search of financial damages and the type of factual and legal sameness that leads to class certification, pressed cakes of tuna had the plaintiffs’ lawyers daydreaming. They dreamed of financial damages for underweighted tuna cans and the necessary sameness created by an FDA regulation that set the standard for weighing them. And so they gathered putative class representatives and filed claims ranging from breach of implied warranty of merchantability, unjust enrichment and fraud to violations of New York General Business Law §§ 349, 350 and violations of the ever-present California Consumer Legal Remedies Act, Unfair Competition Law, and False Advertising Law. Id.

And, while many of these claims are not typical in product liability litigation, they certainly do implicate defenses that are. The claims are—explicitly—premised on alleged violations of FDA regulations. And that allowed defendants to bring a motion to dismiss asserting a number of very familiar defenses, including implied preemption, conflict preemption, and primary jurisdiction. Id. at *2. For instance, primary jurisdiction was in play because, according to defendants (id. at *1), the FDA was actively considering revising its weight regulation that relied on pressed cake. . . . . . .

. . . Yum, there it is again. Cake. We’re imagining it as chocolate cake—with chocolate icing. Better yet, chocolate ganache. That’s probably the same as chocolate icing, but it sounds so much tastier. And no “erries”—that means, no blueberries, strawberries, raspberries, or anything like them. They get in the way of the chocolate without being nearly as good. It’s fine to include vanilla, preferably as ice cream. But that’s it. No other additions. That is, unless we make it a chocolate soufflé—or bread pudding. Or how about a three-course meal of chocolate cake, soufflé and bread pudding . . . . .

Oh, sorry. Back to the law. . . . . .

It wasn’t primary jurisdiction that won dismissal. It was implied preemption under Buckman. A reminder on the standard:

The plaintiff must be suing for conduct that violates the FDCA (or else his claim is expressly preempted by § 360k(a)), but the plaintiff must not be suing because the conduct violates the FDCA (such a claim would be impliedly preempted under Buckman). Perez v. Nidek Co., 711 F.3d 1109, 1120 (9th Cir. 2013) (quoting In re Medtronic, 623 F.3d 1200, 1204 (8th Cir. 2010) (emphasis in original)). Thus, “under principles of implied preemption … private litigants may not bring a state-law claim against a defendant when the state-law claim is in substance (even if not in form) a claim for violating the FDCA.” Loreto v. Procter & Gamble Co., 515 F. App’x 576, 579 (6th Cir. 2013)

Id. at *2.

And there simply was no way for the plaintiffs to get around the fact that they were absolutely suing “because” the underweighting of the tuna cases allegedly violated the FDA regulated testing standard. And so the court dismissed the claims:

In sum, Plaintiffs’ claims would not exist without the FDCA. Plaintiffs allege that Trader Joe’s misrepresented that its cans contained an adequate amount of tuna . . . . Plaintiffs also maintain that the reason the amount in the tuna cans was inadequate is because it failed to meet the pressed cake weight standard under 21 C.F.R. § 161.190. Consequently, the theory underlying Plaintiffs’ state-law claims depends entirely on an FDA regulation. Plaintiffs’ state law claims are in reality claimed violations of an FDA regulation, and therefore, the FDCA prohibits Plaintiffs from bringing them. On this basis, the Court GRANTS Defendants’ Motion to Dismiss.

Id. at *4.

Piece of cake.