Roundup: 5th, 6th, 9th and 11th Circuits

Brand-name manufacturers not liable for harm that generic drugs cause; Transit company can ban anti-Islam ads; Information calls can constitute telemarketing; Lower court cannot invalidate FCC cell phone fee requirement

5th Circuit
Louisiana, Mississippi, Texas

Brand-name manufacturers not liable for harm that generic drugs cause

On Oct. 25, 2012, the 5th Circuit declined to hold brand-name drug manufacturers liable for harm the generic versions of their products cause. 

In Demahy v. Schwarz Pharma, Inc., Julie Demahy alleged that she had sustained neurological harm from taking a generic version of Reglan, a heartburn medication, and that the brand-name manufacturer was liable for it. Demahy claimed that the Supreme Court’s ruling in PLIVA Inc. v. Mensing eliminated brand-name manufacturers’ immunity against generic drug-related suits because that immunity was based on consumers’ ability to bring failure-to-warn claims against generic manufacturers, claims that PLIVA found federal law preempted.

Both the district court and the 5th Circuit rejected this argument. The 5th Circuit relied heavily on the 4th Circuit’s 1994 opinion in Foster v. American Home Products Corp., which said “a name-brand manufacturer has no duty of care to consumers that are not using the manufacturer’s product.” The 5th Circuit went on to say that, in light of PLIVA, it’s wrong to assume that plaintiffs can sue generic drug-makers for failure-to-warn claims, but “this fact does not impose on name-brand manufacturers a duty of care to customers using generic products.”

 

6th Circuit 
Kentucky, Michigan, Ohio, Tennessee

Transit company can ban anti-Islam ads

The American Freedom Defense Initiative’s (AFDI) mission is to act “against the treason being committed by … capitulation to the global jihad and Islamic supremacism.” In 2010, the group sought to place advertisements on buses in four of Michigan’s southeastern counties that read: “Fatwa on your head? Is your family or community threatening you? Leaving Islam? Got Questions? Get Answers! RefugefromIslam.com.”

The Suburban Mobility Authority for Regional Transportation (SMART) refused to run the ads, saying they violated the transit authority’s policy against offensive speech and political advertisements. AFDI sued and won a district court ruling in March 2011 that said the ad policy gave inadequate guidance, violating the First Amendment. 

On appeal, the 6th Circuit reversed this ruling. On Oct. 25, 2012, in AFDI v. SMART, the court found that because SMART rejected all political advertisements, the side of the bus did not count as a public forum for discourse. And as long as the buses were a nonpublic forum, SMART could ban political speech in a “reasonable and viewpoint neutral” way, which the 6th Circuit found it did.

 

9th Circuit 
Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington

Informational calls can constitute telemarketing

On Oct. 17, 2012, the 9th Circuit found in Chesbro v. Best Buy Stores L.P. that the Telephone Consumer Protection Act of 1991 (TCPA) can apply to informational calls that don’t advertise goods or services.

Michael Chesbro filed a class action lawsuit against Best Buy over automated phone calls he was receiving from the company regarding his participation in Best Buy’s Reward Zone program. The calls provided information about coupon expiration dates and benefits of the program. The district court granted summary judgment to Best Buy, saying the TCPA didn’t apply to the store’s courtesy calls.

The 9th Circuit disagreed and reversed, writing that the company was urging “the listener to redeem his Reward Zone points … [which] required going to a Best Buy store and making further purchases of Best Buy’s goods.” Therefore, because the calls encouraged customers to “engage in future commercial transactions” with the company, they violated the TCPA.

 

11th Circuit 
Alabama, Florida, Georgia

Lower court cannot invalidate FCC cell phone fee requirement

In Self v. Bellsouth Mobility Inc. et al., the 11th Circuit put an end to a 14-year-old lawsuit over cell phone fees. The Oct. 30, 2012, decision marked the end of a saga that began in 1998 when Martha Self sued AT&T Inc. over fees the company added to her cell phone bill. 

The Federal Communications Commission (FCC) mandated the fees, which were part of AT&T’s contribution to the Universal Service Fund (USF). In 1999, the 5th Circuit decided a separate, similar case, ruling that the FCC exceeded its authority by including all state-to-state call revenue when it calculated wireless carriers’ USF payments. The FCC could only base these payments on international and state-to-state long distance calls, the court said. The agency took this to mean that it did not have to refund the incorrect payments that carriers had already made.

Self argued that although carriers were not entitled to a refund, consumers were, and she sought a refund of the USF fees she paid before the 5th Circuit’s decision. A lower court dismissed her case in 2008, and the 11th Circuit ruled that it was correct to do so because it didn’t have jurisdiction to invalidate an FCC requirement.

Contributing Author

Join the Conversation

Advertisement. Closing in 15 seconds.