Supreme Court Deals a Blow to Pro-Preemption Advocates in Warner-Lambert Case, But Wyeth v. Levine Might Be the Real Test
March 3, 2008Earlier today, the U.S. Supreme Court announced a 4-4 split in Warner-Lambert v. Kent – just a few days after hearing oral arguments on February 25, 2008. The case, which concerns the narrow issue of a Michigan law immunizing drug companies from products liability claims except in cases of “fraud-on-the-FDA” is a blow to pro-preemption advocates, as it leaves the U.S. Court of Appeals for the Second Circuit’s October 2006 ruling intact.
In 1995, Michigan enacted legislation immunizing pharmaceutical companies from products liability claims, provided FDA approved the drug product at issue. The law contains an exception, however, that preserves liability if the drug company withheld or misrepresented information that would have altered FDA’s decision to approve the drug product (i.e., “fraud-on-the-FDA”). Specifically, the Michigan law states, in relevant part:
In a product liability action against a manufacturer or seller, a product that is a drug is not defective or unreasonably dangerous, and the manufacturer or seller is not liable, if the drug was approved for safety and efficacy by the [FDA], and the drug and its labeling were in compliance with [FDA’s] approval at the time the drug left the control of the manufacturer or seller.
This subsection does not apply if the defendant at any time before the event that allegedly caused the injury does any of the following:
(a) Intentionally withholds from or misrepresents to the [FDA] information concerning the drug that is required to be submitted under the [FDC Act] and the drug would not have been approved, or the [FDA] would have withdrawn approval for the drug if the information were accurately submitted.
In March 2000, Warner-Lambert (a wholly-owned subsidiary of Pfizer), which marketed REZULIN (troglitazone), voluntarily withdrew the drug product from the market amid certain safety concerns. Several Michigan consumers alleging injuries caused by REZULIN subsequently sued Warner-Lambert in state court alleging, among other things, that Warner-Lambert “knowingly concealed material facts about the safety and efficacy of Rezulin from the FDA, which would have prevented its approval and/or resulted in its earlier removal from the market.” The case was removed to federal district court, where the court granted Warner-Lambert’s motion for judgment on the pleadings on the grounds that the Plaintiffs could not establish under Michigan law that REZULIN was “defective,” and that that an immunity exception in the Michigan law was preempted by the FDC Act under the reasoning of the Supreme Court’s 2001 decision in Buckman Co. v. Plaintiffs’ Legal Comm. In Buckman, the Court ruled that federal law impliedly preempted state “fraud-on-the-FDA” claims.
The case was appealed to the U.S. Court of Appeals for the Second Circuit to determine whether, under the rationale of Buckman, federal law also preempts traditional common law claims that survive a state’s legislative narrowing of common law liability through a fraud exception to that statutory limitation. In vacating the district court’s ruling, the Second Circuit ruled that:
because Michigan law does not in fact implicate the concerns that animated the Supreme Court’s decision in Buckman, and because Appellants’ lawsuits depend primarily on traditional and preexisting tort sources, not at all on a “fraud-on-the-FDA” cause of action created by state law, and only incidentally on evidence of such fraud, we conclude that the Michigan immunity exception is not prohibited through preemption. It follows that common law liability is not foreclosed by federal law, and Appellants’ claims should not have been dismissed.
Warner-Lambert challenged the Second Circuit’s decision and presented two issues for the Supreme Court’s review:
1. Whether, under the conflict preemption principles in [Buckman], federal law preempts state law to the extent that it requires the fact-finder to determine whether the defendant committed fraud on a federal agency that impacted the agency’s product approval, where the agency—which is authorized by Congress to investigate and determine fraud—has not found any such fraud, and thus—as in Buckman—the state requirement would interfere with the agency’s critical functions.
2. Whether, under the conflict preemption principles in Buckman, federal law preempts the provision in a Michigan statute that allows a product liability claim to be maintained against a manufacturer of an FDA-approved drug where, without an FDA finding of fraud on that agency, the fact-finder is required to make a finding under state law as to whether the manufacturer committed fraud-on-the-FDA and whether, in the absence of that fraud, the FDA would not have approved the drug.
Warner-Lambert argued, among other things, that “the Second Circuit’s holding will interfere with the FDA’s ability to perform its critical functions, which is precisely what this Court sought to avoid in Buckman.”
The Supreme Court’s March 3, 2008 4-4 split in Warner-Lambert is the result of Chief Justice Roberts’s decision to recuse himself from the case because of stock ownership. Although the Warner-Lambert case is important, the most significant preemption case for the drug industry might be Wyeth v. Levine, which concerns whether federal law preempts state torts claims imposing liability with respect to FDA-approved drug labeling. A decision in that case is anticipated later this year or in early 2009, although oral argument has not yet been scheduled.
ADDITIONAL INFORMATION:
- March 7, 2008 Washington Legal Foundation Legal Backgrounder on the what the Supreme Court’s Riegel decision portends for drug and device suit preemption.