A Feb. 22 decision deepened the split among circuit courts on whether federal law preempts state fraud-on-the-Food & Drug Administration (FDA) statutes. The 5th Circuit ruled in Lofton v. McNeil Consumer & Specialty Pharmaceuticals that federal law preempts Texas’ statute, unless the FDA itself finds fraud.
The family of Christopher Lofton, who contracted the rare skin disease toxic epidermal necrolysis and died after taking Motrin, sued Motrin’s maker, alleging common law negligence and product liability. The company moved for summary judgment, asserting that the Supreme Court’s decision in Buckman Co. v. Plaintiffs’ Legal Comm. preempted the family’s failure-to-warn claims, which they brought under Texas law. The Buckman decision held that federal law preempts state fraud-on-the-FDA claims because they “conflict with the FDA’s responsibility to police fraud.” Under the Texas statute in question in Lofton, plaintiffs bringing failure-towarn claims have to assert that drug manufacturers misrepresented information to the FDA.
The district court granted summary judgment to the defendants, and only the preemption issue remained when they appealed the case to the 5th Circuit. The 5th Circuit unanimously affirmed the district court’s ruling, and wrote that the Texas statute amounted to a fraudon- the-FDA provision, and thus federal law preempts it unless the FDA itself finds fraud.
“Under the Texas provision, a plaintiff must ‘establish’ a violation of FDA’s required disclosures,” the court wrote. “In so doing, the plaintiff necessarily retreads the FDA’s administrative ground.”
In reaching its decision, the 5th Circuit analyzed the rulings of two other circuits on whether Buckman required the preemption of a Michigan provision similar to the Texas one discussed in Lofton.
In Desiano v. Warner-Lambert Co., the 2nd Circuit ruled that federal law didn’t preempt a Michigan statute because claims brought under it were traditional product liability claims, and the statute was not attempting to police fraud on the FDA.
The 6th Circuit interpreted the same statute differently, finding in Garcia v. Wyeth-Ayerst Labs that federal law did preempt it. Even though the provision is not a direct fraud-on-the-FDA cause of action, the court reasoned that because it required plaintiffs to show fraud on the FDA to rebut a presumption of nonliability, Buckman still applied.
“Michigan’s [statute is] broader than Texas’ is,” says Lisa Capote, a partner at Arrastia, Capote & Phang. “There’s less wiggle room with the Texas statute because it pretty much carves out that the FDA needs to have found fraud.”
With the 5th Circuit siding with the 6th, the circuit split is now leaning toward preemption for these kinds of statutes, but experts are still divided.
“This area of law is in a state of flux,” says David Rosen, a partner at Foley & Lardner who formerly spent 15 years working for the FDA. “[The Lofton decision] is trying to provide some clarity with respect to whether manufacturers get any protection by virtue of the fact that they’re in a very highly regulated industry.”
Several experts say that this may well be something the Supreme Court has to issue some guidance on before there is any real clarity. But Duane Morris Partner Sharon Caffrey says the 5th Circuit is in line with the high court’s intent.
“What the Supreme Court has been telling us is that when the FDA really does speak fully and finally about a labeling, and you don’t have any further control over it, that’s probably going to be preempted,” Caffrey says.
Preemption in Practice
This ruling is generally seen as a win for pharmaceutical companies, and in-house counsel “should be jumping for joy right now,” Capote says.
When faced with a product liability suit, in-house counsel should first look at the laws in their jurisdiction. If failure- to-warn claims require evidence of fraud on the FDA, as is the case under the Texas statute, Lofton could serve as a strong argument for preemption. Makers of generic drugs needn’t worry at all about failure-to-warn claims, as a recent Supreme Court case offers them total protection (see “Generic Guidance”).
Long before litigation even becomes an issue, though, companies can be proactive when going through the disclosure process with the FDA for a new product. It is actually to a company’s benefit to overdisclose, in light of this decision. “If it’s in the FDA’s documents somewhere, the assumption is that at one point in time, the FDA reviewed that documentation and said ‘OK, let it go to market,’” Capote says. Then, if a lawsuit does come up, “the pharmaceutical company can say ‘Whoa, the FDA definitely didn’t find fraud, because if they did, they would’ve told us something years ago when we filed this documentation.’”
The unfortunate truth, Capote says, is that the FDA doesn’t have enough manpower to do its job all of the time. It can’t guarantee that it will review every piece of information a company submits. But as long as in-house counsel submit as much or more information than is necessary, they will have the argument under their belt should a product liability suit come along. And though Lofton likely will be persuasive in jurisdictions with similar statutes to Texas, the circuit split is something counsel should monitor.