Over The Counter Drugs

            We don’t spend much time on this blog on over-the-counter (“OTC”) drugs, but when OTC crosses paths with preemption in our own backyard, we can’t help but be interested.  And as this case also had a few other interesting bits, we thought we’d share it. 
The case is Crozier v. Johnson & Johnson Consumer Cos., Inc., 2012 U.S. Dist. LEXIS 140320 (D.N.J. Sep. 28, 2012).  The product at issue is one of many in J&J’s Neosporin brand line.  Neosporin is well known as a topical antibiotic cream, but in fact there are many products in the line, including “Neosporin NEO TO GO! first aid antiseptic/pain relieving spray.”  Note the difference in our description of the cream and the spray.  The former contains an antibiotic, the latter an antiseptic.  Plaintiff claims this is confusing.  Specifically, plaintiff alleges that J&J’s labeling and marketing of the antiseptic spray under the Neosporin brand misleads consumers to believe that the spray contains antibiotics.  Id. at *3-5.  So plaintiff in Crozier (and its companion case McNamee v. J&J), brought a putative class action against J&J alleging violations of the New Jersey Consumer Fraud Act and breach of implied warranty.  J&J moved to dismiss. 
First, we recommend the court’s nice discussion of the Twiqbal standard for motions to dismiss which includes a rejection of plaintiff’s attempts to rely on either pre-Twiqbal law (“Plaintiffs seem unaware that pleading standards in federal court have changed in the past five years”), id. at *11, or state law (“The Federal Rules of Civil Procedure govern the procedure in all civil actions and proceedings in the United States district courts.”).  Id. at *12.  Although, it ends with an equally well-stated justification for allowing plaintiffs in diversity cases an opportunity to amend when their complaints don’t come up to Twiqbal snuff.  If the case was, as Crozier was, originally filed in a state court with more liberal pleading standards “it is important for the Court to exercise its discretion in favor of permitting Plaintiffs to attempt an amended pleading” that meets the “enhanced” federal standard.  Id. at *13.  We are long familiar with second bites at the apple and also well aware that they often fail to satisfy as well.  So, while we prefer a dismissal with prejudice, we’ll take what we can get.
Next, in response to the motion to dismiss, plaintiff cited, referenced, and quote materials obtained in discovery in other proceedings and described television ads she alleged supported her claims.  But, as the court reminds, this is a motion to dismiss:

To the extent that Plaintiffs reference exhibits in their Opposition to establish facts beyond those pled in the Complaint, the Court must disregard them. Plaintiffs cannot add factual allegations in Opposition; the mechanism for curing pleading deficiencies is to file an amended complaint . . .  It is axiomatic that the complaint may not be amended by the briefs in opposition to a motion to dismiss.

Id. at *16.
            Then the court turned to the substance and rather quickly ruled that plaintiff’s labeling-based claims were expressly preempted.    21 U.S.C. §379r provides that express preemption for OTC drugs:

Except as provided in subsection . . . (e) . . . of this section, no State or political subdivision of a State may establish or continue in effect any requirement – that relates to the regulation of a drug that is not subject to the requirements of section 353(b)(1) or 353(f)(1)(A) of this title [that means an OTC drug]; and that is different from or in addition to, or that is otherwise not identical with, a requirement under this chapter . . . .

21 U.S.C. §379r(a).  For a more fulsome discussion of OTC preemption (and the exception thereto) see our post here.  So New Jersey becomes yet another state to recognize OTC preemption:

Federal regulations . . . specify the required content on over-the-counter medication labels and, with 21 U.S.C. § 379r, Congress preempted state law claims regarding such labels. Any of Plaintiffs’ claims that pertain to the spray’s label are preempted.

Id. at *24-25.  Plaintiff tried to argue that preemption didn’t apply because she wasn’t alleging that the product’s label was inaccurate but rather that it was misleading – that consumers would be confused by the antiseptic spray carrying the Neosporin brand name.  The court didn’t see the distinction:

FDA regulations cover the entire label, including indications of a product’s brand name, and thus preempt challenges to a label, even if the challenge is not based on inaccuracy  or incompleteness. . . . . [Since] the FDA specifically considered brand name confusion in drafting its regulations; Plaintiffs’ present claims pertaining to the spray’s label are preempted.

Id. at *26-27. 
            The court, however, was unwilling to extend its preemption decision to all of plaintiff’s marketing claims.  While the court agreed that “claims based upon FDA-approved statements in product labeling and advertising are preempted,” id. at *29 (emphasis added; citing Carter v. Novartis Consumer Health, Inc., 582 F. Supp. 2d 1271 (C.D. Cal. 2008)), it turned to Rule 9(b) to dismiss plaintiff’s consumer fraud claims.  And as we’ve seen time and time again, plaintiff failed to plead any, let alone sufficient, facts to establish causation:

The Complaint[] contains no information about when Plaintiffs saw J&J’s advertising, when or where they bought the spray, why they bought the spray, whether they bought the spray because they thought it contained antibiotics, or whether Plaintiffs even noticed the Signature Gold Mark and trade dress. In short, [the] Complaint [does not] allege[] with particularity the gravamen of Plaintiffs’ claims, i.e., that Plaintiffs bought the spray specifically because its advertising contained the Neosporin trade dress and signature gold mark, thus leading them to believe that the product contained antibiotics. Plaintiffs’ failure to plead that they were misled is fatal, particularly given the specificity that Rule 9(b) requires for NJCFA claims.

Id. at *32-33.  But, as we indicated earlier, the court was inclined to let the plaintiff try it again – at least as to consumer fraud claims based on marketing activities.  The court tossed out plaintiff’s breach of warranty claims due to no allegation of a product defect.  Id. at *39-40.  Those claims are gone and aren’t coming back. 

            Not a complete victory, but plaintiff has her work cut out for her.

            Since the first sneeze, people have been trying to cure the common cold.  While the cure remains elusive, everyone has a remedy for its symptoms – chicken soup, salt water gargle, fresh chopped garlic on crackers and, our personal favorite, the hot toddy.  But, do any of them really work?  And, if they don’t, who is to blame – your Great Aunt Martha?  So, what if you take a homeopathic remedy, put it in a bottle with a label that identifies its ingredients, directions for use and indications for usage and put it on a shelf in a drug store?  Now, who can you blame if it doesn’t work – the manufacturer of course.  Well, the court in Delarosa v. Boiron, Inc., 2011 U.S. Dist. LEXIS 80562 (C.D. Cal. Jul. 25, 2011), at least thought plaintiffs should get a chance to make that claim.
            This case caught our attention because we have never seen a preemption argument advanced concerning an over-the-counter homeopathic product before and while the decision goes against the defendant, we thought it warranted a passing mention – primarily because no one, including the FDA, seems to know what to do with homeopathic remedies.
            Plaintiff alleges that she purchased and used an over-the-counter homeopathic cold remedy called Children’s Coldcalm based on the product’s labeling and advertising that it relieved symptoms of the common cold including “sneezing, runny nose, nasal congestion, sinus pain, headaches, and sore throat.”  Delarosa, 2011 U.S. Dist. LEXIS 80562 at *3.  Sound too good to be true – plaintiff thinks so.  Plaintiff claims she did not obtain the advertised relief or any other benefit from the product and therefore did what so many others have done – filed a class action under California’s notorious consumer protection statutes (and alleging common law fraud, too).  Id. at *4.  The defendant filed a motion to dismiss based on both express and implied preemption. 
            Putting aside the complexities of preemption law, the crux of the court’s decision can be summed up by its comparison of the FDA’s regulation of OTC drugs versus what the court deemed “quasi-regulation” of homeopathic OTC drugs.  Id. at *4-12.  First and foremost – according to the court – homeopathic OTC drugs “are not evaluated by the FDA at all.”  Id. at *8. 

[T]he FDA allows a private organization [Homeopathic Pharmacopoeia of the United States (“HPUS”)] to designate which homeopathic drugs meet certain (and unknown) standards for strength, quality and purity. . . . [T]he FDA did not review any studies or information on homeopathic drugs .

Id. at *21-22.  While HPUS governs how ingredients are prepared for homeopathic use, it does not dictate indications for use, nor does it set forth any standards to ensure that homeopathic OTC drugs are safe and effective.  Id. at *8-9, *11. 

The FDA does not impose additional standards for strength, purity, quality, safety, or efficacy on homeopathic OTC remedies. Indeed, the FDA has advised that unless a homeopathic remedy is being offered for use (or promoted) significantly beyond recognized or customary practice of homeopathy, federal policies on health fraud do not apply.  And perhaps most significant, a product’s compliance with requirements of the HPUS . . . does not establish that it has been shown by appropriate means to be safe, effective, and not misbranded for its intended use.

Id. at *11-12 (citations and quotation marks omitted). 
            So, confronted with what amounts more to a lack of regulation, it is not altogether surprising that the court was reluctant to find preemption in the context of a homeopathic OTC … umm … drug.  (Actually, we have a hard time even calling the product at issue here a “drug” when its ingredients are “various flowers, vegetables, insects, metals, and poison” – id. at *3 – seriously?). 
As to express preemption, we won’t bore you with a reiteration of the court’s very detailed analysis, but suffice it to say that the court found that homeopathic drugs are excepted from the express preemption provisions for non-prescription drugs.  See id. at *14-24.  So, the court was essentially left with conflict preemption – but can there be a conflict if there is no regulation?  The court continued its focus on the difference between non-homeopathic drugs and homeopathic drugs, finding that as to the former

The . . . decision to defer to the FDA’s labeling regulations relie[s] in no small part on the FDA’s comprehensive process that test[s] the safety and efficacy of the drugs which it regulate[s].

Id. at *29-30.  Absent such a process for homeopathic drugs, the court was unwilling to conclude “that inclusion in the HPUS is sufficient to guarantee the efficacy and safety of a homeopathic OTC drug.”  Id. at *29.   Since the efficacy of homeopathic drugs is not regulated by the FDA and the FDA has said that compliance with HPUS does not establish that a product is effective or correctly labeled — a state law fraud claim, which if proven true, would “simply require Defendant to truthfully state its efficacy” is not different than or in conflict with the requirements of the FDCA.  Id. at *30-31.
            While we may have come a long way from Dr. Kilmer’s Swamp Root and Clark Stanley’s Snake Oil Liniment — we, like the court and apparently the FDA, are left scratching our heads about what is actually regulated about homeopathic drugs.  So, for now, at least where the alternative is apparently “flowers, vegetables, insects, metals, and poison” – we’ll just stick with the hot toddy.

No this post isn’t about Canadian pharmacies, Chinese counterfeits, or anything dodgy like that. Instead, we’re referring to a preemption topic we’ve never discussed before.

We can almost hear you scoffing. Surely, in over two years of “all preemption, all the time” blogging, that’s the one topic we haven’t missed. Wouldn’t that be like Court TV discovering something new about the OJ trial?

Well, we’re not saying that we know anything new about OJ, but there actually is an aspect of preemption we’ve ignored until now.


Over-the-counter (“OTC”) drugs (which, in our jargon-filled field, are also referred to as “monograph” drugs) are governed by a limited form of express preemption provided by 21 U.S.C. §379r. The general preemption language protecting OTC drugs is similar to, but even stronger than, the language that the Supreme Court held broadly preemptive in Riegel v. Medtronic, Inc., 128 S. Ct. 999 (2008):

Except as provided in subsection . . . (e) . . . of this section, no State or political subdivision of a State may establish or continue in effect any requirement – that relates to the regulation of a drug that is not subject to the requirements of section 353(b)(1) or 353(f)(1)(A) of this title [that means an OTC drug]; and that is different from or in addition to, or that is otherwise not identical with, a requirement under this chapter . . . .

21 U.S.C. §379r(a). In Riegel, “different from or in addition to” was enough to preempt a whole lot of things. The express preemption clause for OTC drugs has all that, and more – “otherwise not identical with.” So the preemption protection provided to OTC drug manufacturers is very, very deep, indeed.

It’s just not very broad.

There are various exceptions, but only one’s of interest to us product liability litigators. That’s subsection (e), which provides:

(e) No effect on product liability law

Nothing in this section shall be construed to modify or otherwise affect any action or the liability of any person under the product liability law of any State.

This preemption exception is (like the UCC) recognized by every state in the union except Louisiana. Green v. BDI Pharmaceuticals, 803 So.2d 68, 74-75 (La. App. 2001) (preempting product liability claim notwithstanding exception). We don’t often say it, but Green is a pro-defense result that we think was just wrong.

So now we’ve drilled all the way down to §378r(e) – subsection e of part r of section 378. Jeez, the FDCA is getting as complicated as the Internal Revenue Code these days.

That means we’ve got really comprehensive preemption, except that it doesn’t apply to “the product liability law of any state.”

But we’re lawyers. We can nitpick anything if it’s likely to help our clients.

And we have.

The question becomes what is “product liability”?

Well, under both the second and third Restatements, liability for product defects requires physical injury to person or property. This requirement was stated in the “physical harm” language of Restatement (Second) of Torts §402A (1965), and in section 21 of the Restatement (Third) of Torts, Products Liability, which allows recovery of “economic loss” only in connection with personal injury or property damage.

Thus, the proposition that OTC drug manufacturers advance is that suits for purely economic loss – primarily, but not exclusively, brought under state consumer protection statutes – are not “product liability” actions saved from preemption by §379r(e).

And we’ve been winning.

It all started, as much product liability law has, in California. For a long time the Golden State had a consumer protection statute that was really bizarre – like you-didn’t-even-have-to-use-the-product-to-sue type bizarre. A few years back, the voters of California cut that statute back to just ordinarily bizarre, something we alluded to here. The upshot of California’s bizarrely expansive consumer protection statute has been that there were lots of economic-loss only class actions filed in the state targeting almost everything, including OTC drugs.

OTC manufacturers subject to these suits responded by first developing the preemption defense. The big win for the good guys (the defense, of course) was Kanter v. Warner-Lambert Co., 122 Cal. Rptr.2d 72 (Cal. App. 2002), involving head lice treatments. Supposedly these products were ineffective because those nasty little buggers had developed resistance to the active ingredient. In other words, the evolution of the organism had overcome the original intelligent design of the product. The defendants argued, and the court agreed, that the claim for purely economic loss, brought (inevitably) as a class action, was preempted because it wasn’t “product liability”:

The savings clause states plainly and unambiguously that the preemption provisions of the section do not affect “the product liability law of any State.” Under the product liability law of California, injury to the plaintiff from a defective product is an essential element of a cause of action. Liability may be imposed either for personal injury or for physical damage to property, but if the damage consists solely of economic losses, recovery on a products liability theory is unavailable.

Plaintiffs acknowledge that their complaint does not allege any personal injury or injury to property as a result of using defendants’ products. They argue, however, that Congress intended “product liability law” within the meaning of section 379r(e) to have a broader meaning, encompassing an expansive category of state common law and statutory actions imposing liability on commercial sellers of products. The argument is inconsistent with the fundamental principle that a savings clause should not be interpreted in such a way as to undercut or dilute an express preemption clause. . . .

[L]egislative history. . .confirms its plain meaning. Commenting on the scope of the savings clause, the Senate committee report. . .states, “Finally, the legislation explicitly provides that it shall not be construed to modify or otherwise affect the traditional product liability law of any State. Tort liability rules and requirements would remain unchanged and unaffected.” Plaintiffs have not alleged a cause of action under the traditional product liability law of this state, and the savings clause does not exempt their claims from preemption.

122 Cal. Rptr.2d at 80-81 (various citations omitted).

The California Supreme Court got its hands on the same question a few years later in Dowhal v. SmithKline Beecham Consumer Healthcare, 88 P.3d 1 (Cal. 2004), involving OTC nicotine gum used to stop smoking. The court acknowledged the extraordinary depth of OTC preemption. A state requirement “may be ‘different from, in addition to, or … not identical’ to an FDA requirement, without actually conflicting with the federal requirement.” Id. at 7 (statutory citation omitted). The court found the claim preempted:

Although there is reason to believe that nicotine can cause reproductive harm, plaintiff has offered no qualitative assessment of this risk. The mere existence of the risk, however, is not necessarily enough to justify a warning; the risk of harm may be so remote that it is outweighed by the greater risk that a warning will scare consumers into foregoing use of a product that in most cases will be to their benefit. The FDA has so determined in this case, and we find no basis to question the FDA’s expert determination.

Id. at 14. Since then, federal courts have also joined the party in California. Carter v. Novartis Consumer Health, Inc., ___ F. Supp.2d ___, 2008 WL 4694585, at *9-10 (C.D. Cal. Aug. 5, 2008) (adopting Riegel preemption in light of similarity of preemption language; consumer fraud claims against manufacturers of OTC cough/cold medicines preempted; although safety issue was alleged, only economic loss was sought); cf. Gaeta v. Perrigo Pharmaceuticals Co., 562 F. Supp.2d 1091, 1095 (N.D. Cal. 2008) (noting issue in personal injury case; finding claims preempted on other grounds).

But it’s not just California anymore – especially after Riegel. In Mills v. Warner-Lambert Co., ___ F. Supp.2d ___, 2008 WL 4488308 (E.D. Tex. Sep. 30, 2008), the same head lice claims that Kanter held preempted resurfaced in Texas. Citing Kanter extensively, the court in Mills held that the claims (again, for purely economic loss) were preempted. First, under Riegel and Kanter there were broadly preemptive federal “requirements”:

The similarities between the approval process for medical devices [in Riegel] and the approval process for drugs make the reasoning of those cases relevant here. Based on that reasoning, the NDA approval process establishes a federal requirement for drug labeling under Section 379r. As the California Court of Appeals wrote in Kanter, “[t]he parallels between the premarket approval process for medical devices and the new drug application process with respect to product labeling are striking.”

2008 WL 4488308. at *11.

Second, state law potentially imposed additional requirements:

[A]part from Riegel, the text of Section 379r also indicates that the term “requirements” includes State law claims. Section 379r(e), the statute’s “saving clause,” exempts “any action. . .under the product liability law of any State.” There would be no reason to exempt only product liability actions, unless Congress intended to encompass State law claims within the term “requirement,” in Section 379r(a). . . . [B]y excluding only product liability actions, Congress made clear that the term “requirement” includes all other State law claims.

2008 WL 4488308. at *14.

Third, the standards were different. Plaintiffs took a position concerning the safety and effectiveness of the product that was “diametrically opposed” to that of the FDA:

[T]he FDA specifically reviewed the safety and effectiveness of [the first product] during the NDA process. The FDA determined that [it] was “effective” for the [indicated use in question]; and, required that such language appear on the [product’s] label. Similarly, during monograph process, the FDA tested the active ingredients in [the other products] and determined that they were “safe and effective” for the [indicated use]. The FDA then issued a final monograph for [this type of product], specifying the terms upon which they may be sold without being misbranded. If Defendants sell [their products] without the FDA-required language on the drug’s label, they are subject to regulatory action. However, if they sell the drugs with the FDA-required label (and Plaintiffs prevail in this suit), Defendants will be subject to liability. The two requirements are clearly different.

2008 WL 4488308. at *15.

Fourth, and finally, plaintiffs’ action for purely economic loss was not a “product liability” action saved from preemption by §379r(e):

[This provision] indicates that Congress did not intend to attribute any particular meaning to “product liability law.” Rather, the statute’s language reflects an intent to defer to each State’s interpretation of “product liability,” and thereby avoid interfering with the State’s product liability regime. Despite Plaintiffs’ attempt to frame the issue differently, the relevant question for this Court is whether Texas considers Plaintiffs’ claims to be product liability actions. . . .

It is beyond dispute that Plaintiffs’ claims in this lawsuit do not “aris[e] out of personal injury, death, or property damage.” Their claims seek only recovery of the purchase price for the [products]. As such, they are not products liability actions, as defined by [Texas statutory law].

2008 WL 4488308. at *16. Since claims for purely economic loss were not “product liability” claims as defined under state law, they were not saved from preemption, and the court granted summary judgment. Id. at *19.

There are a few other cases construing §379r(e). In Warner-Lambert Co. v. Mills, 117 S.W.3d 488, 494 (Tex. App. 2003), the court found economic loss claims so thoroughly preempted by §379r(a) – and not saved by subsection e – that there wasn’t even state court jurisdiction to hear them. The Texas Supreme Court reversed that latter aspect of Mills, holding “[e]ven if the defendants are correct that the FDCA preempts this state-law claim, however, it does not mean that the trial court lacked jurisdiction over the claim.” Mills v. Warner Lambert Co., 157 S.W.3d 424, 427 (Tex. 2005). In Tesauro v. Quigley Corp., 2006 WL 4401695 (Pa. C.P. Philadelphia Co. Nov. 8, 2006), a state trial court, citing Kanter, held that economic loss claims (breach of warranty and unjust enrichment) involving a cold medicine were preempted. In Berenguer v. Warner-Lambert Co., 2003 WL 24299241, at *4 (Fla. Cir. Hillsborough Co. July 31, 2003), another head lice case was held preempted.

We haven’t handled many OTC cases in our careers (we surely would have touched upon this topic sooner, if we had). So we have to fess up to a little jealousy here, that manufacturers of products for which the FDA doesn’t even require a prescription have a nice, clean preemption defense to purely economic loss class actions – something we consider strike suits – whereas our clients’ more heavily regulated products don’t. But then, we’re talking about express preemption, and nobody said Congress has to act rationally in everything it does.

But if we ever do get one of these OTC purely economic loss cases, we certainly won’t question our good fortune, or §379r.