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Mutual Pharmaceutical Co. v. Bartlett and Its Implications

Monday, October 21, 2013

By Brian Wolfman and Anne King

Brian Wolfman is visiting professor and co-director of the Institute of Public Representation at Georgetown University Law Center in Washington. Wolfman actively litigates federal preemption cases. He is co-coordinator of the Consumer Law & Policy Blog (www.clpblog.org) and may be reached at wolfmanb@law.georgetown.edu.

Anne King is a graduate fellow and staff attorney at the Institute for Public Representation. King may be reached at ak682@law.georgetown.edu.

PART II
3. Suits Against Brand-Name Manufacturers

Since at least the early 1990s, some plaintiffs alleging injuries from prescription generic drugs have sought damages from the manufacturers of the brand-name products on which the generic products were based. As discussed below, the brand-name manufacturers maintain that these suits fail as a matter of state law, while plaintiffs claim that they are authorized by traditional common-law tort principles. For convenience, we refer to these cases as “brand-name suits.”

These suits may take on added significance in light of the Supreme Court's preemption holdings in PLIVA and Mutual, which largely (if not entirely) eliminated generic manufacturers' state-law liability for injuries caused by their products, and Wyeth v. Levine, where the Court held that state-law inadequate-warning suits against brand-name manufacturers generally are not preempted by the FDCA, in significant part because brand-name manufacturers can make safety enhancing changes to their labels without prior FDA approval.1 That is, though brand-name suits raise a controversial question of state law, they do not raise federal preemption issues in light of Wyeth. We now consider whether brand-name suits are a viable future option for plaintiffs seeking compensation no longer available to them from generic prescription drug manufacturers.

Factually, brand-name suits are premised on a brand-name manufacturer's alleged labeling misstatements about its product's hazards or contraindications. These alleged misstatements, the plaintiff's complaint will allege, had their origins in the brand-name manufacturer's label. This brand-name label appeared on the generic manufacturer's label because the law required it. Moreover, an “exact copy” of the brand-name-generated label appeared in the Physicians’ Desk Reference, which doctors use to learn about a product's safety and efficacy before making their prescribing decisions.2 So, when doctors rely on labeling to prescribe a prescription drug (whether brand-name or generic), they are relying on the brand-name manufacturer's labeling. Thus, the plaintiff will maintain that the brand-name manufacturer's labeling misstatements foreseeably caused her injuries, even though she ingested only the generic equivalent, because the brand-name manufacturer knows that whenever one of its products is mislabeled, the generic product will be as well.

Legally, brand-name suits are not based on strict products liability, which imposes liability on the sellers of products.3 Instead, they are premised on claims of negligent and/or intentional misrepresentation, which plaintiffs maintain authorizes liability against a non-seller who has reason to know that a third party could suffer harm.4 Brand-name-suit plaintiffs claim support for these theories in Sections 310 and 311 of the Restatement (Second) of Torts. Section 311--entitled “Negligent Misrepresentation Involving Risk of Physical Harm”--provides that “one who negligently gives false information to another is subject to liability for physical harm caused by action taken by the other in reasonable reliance upon such information, where such harm results …to such third persons as the actor should expect to be put in peril by the action taken.”5

The “one” who gives false information is the brand-name manufacturer who, the plaintiff claims, negligently (or intentionally) made false statements in its labeling. The “other” generally would be the prescribing doctor who relied on the false labeling. And the “third person” is the patient who relied on the doctor's misinformed prescription (and, in turn, was injured by the drug).

Is the doctor's reliance reasonable in these circumstances? And should the brand-name manufacturer have expected that patients would be put in peril? Here is what the California Court of Appeal said on those topics in Conte v. Wyeth, Inc.:

In California, as in most states, pharmacists have long been authorized by statute to fill prescriptions for name-brand drugs with their generic equivalents unless the prescribing physician expressly forbids such a substitution. …. It is therefore highly likely that a prescription for [the brand-name drug] written in reliance on [the brand-name's] product information will be filled with [the] generic…. And, because by law the generic and name-brand versions of drugs are biologically equivalent … , it is also eminently foreseeable that a physician might prescribe [the] generic … in reliance on [the brand-name's] representations about the [brand-name drug]. In this context, we have no difficulty concluding that [the brand-name manufacturer] should reasonably perceive that there could be injurious reliance on its product information by a patient taking [the] generic [drug].6

Although we find this logic persuasive, Conte remains an outlier. Most courts presented with the question have held that brand-name suits are not viable under state law. The lead case is the Fourth Circuit's decision in Foster v. American Home Products Corp.,7 which rejected what it viewed as an impermissible end-run around the standard products-liability action against the seller.8 A negligent misrepresentation suit against a brand-name manufacturer, the court added, “stretch[ed] the concept of foreseeability too far.”9 Though Foster involved only an interpretation of Maryland common law, many other courts, applying the law of a variety of states, have followed its lead.10

Despite the lopsided split in the case law, patients injured by generic drugs as a result of labeling inadequacies should give serious thought to brand-name suits for three reasons.

First, most (though not all) of the rulings that have rejected brand-name suits pre-date the Supreme Court's decision in PLIVA. Before PLIVA, plaintiffs regularly maintained that FDA's so-called “changes-being-effected” (CBE) regulation, 21 C.F.R. §314.70, authorized generic manufacturers, like their brand-name parents, to make safety-related label changes without first obtaining FDA's approval. Under that view, a generic manufacturer's right to amend its label, on its own, weakens a claim that the name-brand manufacturer is responsible for the generic manufacturer's label deficiencies, which is critical to the misrepresentation theory underlying a brand-name suit.

Indeed, in Foster, the Fourth Circuit held a brand-name suit non-viable in significant part because “[m]anufacturers of generic drugs, like all other manufacturers, are responsible for the representations they make regarding their products.”11 The court explained that although generic manufacturers do “not initially formulate the warnings and representations,” they are “permitted to add or strengthen warnings and delete misleading statements on labels, even without prior FDA approval.”12

PLIVA rejected that position, deferring to FDA's view that the CBE regulation authorizes only brand-name manufacturers, and not generic manufacturers, “to unilaterally strengthen their labels,”13 effectively holding that generic manufacturers are in the labeling straightjacket that Foster maintained did not exist. PLIVA’s bedrock premise, in other words, is the same one that forms the basis for a brand-name suit: that a brand-name manufacturer bears sole responsibility for a generic manufacturer's label.14

Second, although the case law generally holds that brand-name suits are not authorized by state law, almost all of the case law involves federal district court predictions of state law. Very few are state-court decisions, and none is from a state court of last resort, the only court that possesses final authority on whether state-law brand-name suits are viable.

On the other hand, an intermediate appellate court (Conte) has backed brand-name suits under California law, and, as noted earlier, the Alabama Supreme Court is poised to decide the issue in Wyeth v. Weeks.15Weeks arrived at the Alabama Supreme Court from the U.S. District Court for the Middle District of Alabama, which had certified the state-law issue to it.16 Other federal courts should follow the Alabama district court's lead. Because most suits against drug manufacturers are filed in, or removed to, federal court on diversity-of-citizenship grounds,17 certification will allow the state courts to weigh in on a question that is rightfully theirs.18

Third, absent congressional or FDA action,19 brand-name suits may be the only option for patients seeking compensation for injuries suffered from their use of mislabeled generic prescription drugs. PLIVA and Mutual may provide complete (or at least substantial) immunity to generic manufacturers, but their reasoning--that generic drug labels are the province of brand-name manufacturers--is consistent with a state-law duty that makes brand-name manufacturers responsible.

C. Potential Regulatory and/or Congressional Action
Whatever one thinks of the Supreme Court's legal analyses in Wyeth, PLIVA, and Mutual, the results of those decisions, taken together, make nonsensical public policy. A state-law failure-to-warn suit--the traditional claim against drug makers--may be brought against a brand-name manufacturer for alleged product mislabeling, but a suit against the generic manufacturer of the same drug for the same alleged mislabeling is barred by federal law. Nor does the same claim against the generic manufacturer escape preemption if it is pleaded as a design-defect claim (with limited potential exceptions discussed above in Parts II.A & B).

Justice Sotomayor noted the “absurd” consequences of the Supreme Court's rulings in her PLIVA dissent. An injured consumer's ability to recover for her injuries from a culpable drug manufacturer depends, she said, on “the happenstance” of whether the consumer's pharmacist dispensed the brand-name or generic version of the drug.20

Justice Thomas, speaking for the majority in PLIVA, also acknowledged the irrationality of the current regime. He noted that had the plaintiffs there taken the “brand-name drug prescribed by their doctors,” instead of the generic drug substituted by their pharmacists, “Wyeth would control and their lawsuits would not be pre-empted.”21 From the plaintiffs' perspective, he acknowledged, “finding preemption [in PLIVA] but not in Wyeth makes little sense.”22

We now turn to whether FDA and/or Congress can make sense of the scheme left in the wake of the Supreme Court's recent decisions.

1. Potential FDA Regulatory Action

Because the rulings in Mutual and PLIVA turned on the asserted impossibility of a manufacturer's simultaneous compliance with both federal labeling rules for generic drugs and a state-law duty to make safety-based revisions to a generic drug label, FDA could amend its labeling rules to eliminate the impossibility identified by the Supreme Court majority.

In Wyeth, the Court had rejected preemption-by-impossibility because, among other reasons, FDA's CBE regulation authorized brand-name drug manufacturers unilaterally to amend their labels to add warnings, rendering a state-law claim premised on a duty to have issued these warnings consistent with, and not in conflict with, federal law.23

As noted earlier, PLIVA came to the opposite conclusion because, the Court held, FDA regulations did not authorize unilateral changes to generic drug labels.24 Presumably, then, if FDA were to amend its rules to authorize generic drug manufacturers to use the CBE regulation in the circumstances under which brand-name manufacturers currently have that authority, the federal regulatory basis for PLIVA’s impossibility holding would no longer exist. This amendment would eliminate the absurd consequences of having inconsistent state-law tort duties for brand-name and generic drug manufacturers highlighted in Justice Sotomayor's PLIVA dissent.

The tort system operates to provide compensation and to induce safer behavior in the future, but only after someone has suffered an injury. It bears emphasis, therefore, that authorizing generic manufacturers to make labeling changes would be aimed principally at enhancing drug safety and preventing injuries that might otherwise occur.25

In considering whether to provide generic manufacturers access to the CBE process, FDA's principal consideration should be to rationalize and modernize its generic drug labeling rules. FDA promulgated its CBE regulation because it wanted to provide a mechanism for companies to amend their labels when new safety information “require[d] prompt corrective action,”26 without forcing the products off the market while the agency was considering the labeling changes. The idea, then, was to protect patients both by putting the most up-to-date information into their (and their doctors’) hands and by ensuring their continued access to needed medications. There is no reason why this same mechanism should not be available to generic manufacturers and--given the growing market dominance of generic drugs--every reason why it should.

Like their brand-name counterparts, generic manufacturers will be capable of using the CBE process when appropriate. Both brand-name and generic drug manufacturers must comply with regulations designed to ensure the post-approval safety of their drugs, and must “promptly review all adverse drug experience information obtained or otherwise received by the applicant from any source, foreign or domestic, including information derived from commercial marketing experience, postmarketing clinical investigations, postmarketing epidemiological/surveillance studies, reports in the scientific literature, and unpublished scientific papers.”27

Any report of a “serious and unexpected” drug experience must be reported to FDA within 15 days and must be promptly investigated by the manufacturer.28 Most other adverse event reports must be submitted quarterly for three years after the application is approved and annually after that.29 These periodic reports must include “a history of actions taken since the last report because of adverse drug experiences (for example, labeling changes or studies initiated).”30 Thus, generic manufacturers, like brand-name manufacturers, participate actively in post-market surveillance of their products and are in a good position to know about adverse events and the need, if any, for labeling changes that would enhance patient safety.

After a brand-name manufacturer employs the CBE process, FDA must determine whether the label changes are appropriate. If FDA approves the label changes as submitted or in modified form, it then requires that the new label be adopted across the board by all sellers of the drug. FDA can make the same determinations when a generic manufacturer employs the CBE process.

FDA appears to be moving toward establishing uniformity between brand-name and generic manufacturers. Soon after the Supreme Court's ruling in PLIVA, the non-profit consumer organization Public Citizen petitioned FDA to revise its generic drug labeling regulations to authorize generic manufacturer to update their labels, without prior FDA approval, as currently authorized for brand-name manufacturers in the CBE process.31

For nearly a year and a half, FDA did not comment publicly on Public Citizen's petition. Then, in its Supreme Court brief in Mutual, FDA acknowledged that it “is considering a regulatory change that would allow generic manufacturers, like brand-name manufacturers, to change their labeling in appropriate circumstances[,]” adding that “[i]f such a regulatory change is adopted, it could eliminate preemption of failure-to-warn claims against generic-drug manufacturers.”32

Thereafter, in July 2013, the federal Office of Management and Budget announced that FDA planned to issue “proposed revisions to FDA's regulations [that] would create parity between NDA holders and ANDA holders with respect to submission of CBE labeling supplements.”33 The proposed rule, which was slated for publication in September 2013 (but has yet to appear), would “revise and clarify procedures for changes to the labeling of an approved drug to reflect certain types of newly acquired information in advance of FDA's review of such change.”34

Justice Alito ended his decision in Mutual by claiming that although Ms. Bartlett's “tragic circumstances” “evoke[d] deep sympathy,” his preemption ruling was demanded by “a straightforward application of pre-emption law,” triggered by a regulatory scheme that “leaves generic drug manufacturers incapable of modifying either the drugs' compositions or their warnings.”35 An FDA rule authorizing generic drug manufacturers to amend their labeling to make safety-related enhancements would put those manufacturers in the same position as brand-name manufacturers and effectively overrule PLIVA.

That rule would not affect Mutualdirectly because it would not authorize manufacturers to make unilateral changes to a drug's design. But because “[f]ailure to instruct or warn is the major basis of liability for manufacturers of prescription drugs,”36 an FDA regulation that empowered generic drug manufacturers to modify their warnings would lift the bar to state-law tort compensation erected by PLIVA and render Mutual largely irrelevant. More importantly, that regulation would help prevent drug-related injuries by freeing generic drug manufacturers to put new safety information in the hands of doctors and patients before injuries occur.

2. Potential Congressional Action

Congress is unlikely to consider legislation to overrule Mutual. As noted above, state-law suits seeking compensation for injuries caused by prescription drugs generally allege a failure to warn of the product's hazards, not defects in the drug's design. Legislation aimed at Mutual alone would not free plaintiffs to maintain state-law inadequate warning claims and thus would fail to give them parity with patients injured by brand-named drugs. That is, from the patients' perspective, a liability scheme altered to overule Mutual alone would, to use Justice Thomas's words, still “make[] little sense.”37

On the other hand, overruling PLIVA would make sense. Congress could accomplish that in one of two ways. First, it could amend the FDCA to provide that neither the Act nor its regulations preempt state-law damages claims premised on a failure to warn. If Congress were to do this, it would make sense to overrule Mutual as well by aiming not only at failure-to-warn claims but by explicitly exempting from preemption state-law damages suits alleging injuries from prescription drugs. Congress has taken similar action with respect to over-the-counter drugs by preempting some state regulatory requirements that differ or add to federal regulatory requirements but, at the same time, expressly exempting products-liability actions.38

Second, as FDA now is contemplating, Congress could provide that generic drug manufacturers, like brand-name manufacturers, are authorized to use the CBE process. Indeed, in April 2012, legislation was introduced in both the Senate and the House of Representatives to authorize “the holder of an approved [ANDA to] … change the labeling of a drug … in the same manner authorized by regulation for the holder of an approved new drug application.”39 The bill has not received a committee vote, let alone reached the floor, in either chamber. That stagnation comes as no surprise. In 2008, three years before it decided PLIVA, the Supreme Court held that federal law preempts most state-law damages claims for injuries caused by medical devices that go through full FDA premarket approval.40 Shortly thereafter, legislation was introduced to overrule the decision,41 but it, too, has languished.

In our view, the first route--congressional passage of an anti-preemption provision--would be more appropriate because it would allow Congress to patrol the borderline between state and federal law without dictating the details of federal labeling regulation. As noted, Congress has exempted from preemption state-law products-liability claims concerning over-the-counter drugs,42 and it has taken the same or similar approaches in other contexts.43 And FDA, like most regulators, is not charged by Congress with determining the best means to compensate patients injured by the products it regulates.

Put another way, it is sensible for Congress to step in when it believes that the preemptive effect of federal law threatens the states' traditional role in providing compensation for consumers harmed by products. At the same time, Congress can leave the nuances of drug labeling policy to FDA, the expert agency it charged with creating and enforcing that policy.

In any event, it is doubtful the votes are there to overrule PLIVA or Mutual. As noted, bills to overrule PLIVA by authorizing generic drug manufacturers to employ the CBE process have gone nowhere. In sum, if change is to come anytime soon, it is going to come from FDA.

D. Effects on Preemption Doctrine


Mutual raises questions about the Supreme Court's preemption doctrine regarding the presumption against preemption and the differences, if any, between federal preemption of state positive law and federal preemption of state damages liability.

1. The Precarious Status
of the Presumption Against Preemption


a.
For decades, in both express and implied preemption cases, the Supreme Court has applied a presumption against preemption.44 The Court has grounded this principle in federalism, in the idea that, unless Congress ousts state law with unmistakable clarity, the states should be free to chart their own course, especially in areas that they have historically regulated:

[B]ecause the States are independent sovereigns in our federal system, we have long presumed that Congress does not cavalierly pre-empt state law causes of action. In all pre-emption cases, and particularly in those in which Congress has 'legislated … in a field which the States have traditionally occupied,' we 'start with the assumption that the historic police powers of the States were not to be superseded by [a] Federal Act unless that was the clear and manifest purpose of Congress.'45

The Court has applied the presumption against preemption with special force where a finding of preemption would ascribe to Congress an intent to eliminate all damages remedies for consumers injured by unlawful conduct.46 The presumption arguably hit its high-water mark in the tort preemption area in Bates v. DowAgrosciences, which imposed on courts “a duty to accept the reading that disfavors preemption” when a federal statute plausibly admits of both a preemptive and non-preemptive reading.47

But the presumption may not be with us for long. The Mutual majority made no mention of the presumption at all, not even bothering to respond to Justice Sotomayor's criticism of the “majority's failure to adhere to the presumption” despite its “call[] on Congress to provide greater clarity with regard to the 'difficult pre-emption questions that arise in the prescription drug context.’”48 As she put it, “the whole point of the presumption against pre-emption is that congressional ambiguity should cut in favor of preserving state autonomy.”49

Mutual followed a recent trend. In Wyeth, Justice Alito, writing in dissent for himself, Chief Justice Roberts, and Justice Scalia, had strongly suggested that no presumption against preemption applies in implied conflict-preemption cases.50 And, then in PLIVA, the majority opinion, authored by Justice Thomas, also ignored the presumption. And, in a plurality section of his opinion, joined by the Chief Justice and Justices Scalia and Alito, Justice Thomas appears to have rejected the presumption against preemption entirely. Focusing on the Supremacy Clause's text, he asserted that the phrase “any Thing in the Constitution or Laws of any State to the Contrary notwithstanding” is a “non obstante provision,”51 that is, a phrase in a new statute that “repeal[s] older, potentially conflicting statutes in the same field.”52

These non obstante provisions were used at the time of the Founding, Justice Thomas maintained, as an instruction to courts “not to apply the general presumption against implied repeals.”53 Thus, the Constitution's drafters intended that “federal law should be understood to impliedly repeal conflicting state law.”54 Under the Supremacy Clause's non obstante language, Justice Thomas went on, courts should not “distort federal law to accommodate conflicting state law,” and instead should look to a statute's “ordinary meaning.”55

Justice Thomas's view that only the text of federal law, and not a presumption against preemption, should guide implied conflict-preemption analysis builds on his earlier four-justice dissent in Altria Group, Inc. v. Good, where he maintained that the presumption has no place in construing an express preemption clause.56 Relying on a dissenting view expressed years earlier by Justice Scalia,57 Justice Thomas argued in Altria that when Congress has said that it desires some preemption, and the only question is its scope, “[t]he text of the statute must control.”58

Taken together, these recent rulings indicate that four justices--Chief Justice Roberts, along with Justices Scalia, Thomas, and Alito--are prepared to ditch the presumption against preemption in all cases. This movement represents a significant shift over the last two decades. For years, the Justices regularly joined opinions relying on the presumption. Indeed, early in his Supreme Court tenure, Justice Thomas himself penned a partial dissent arguing that the Court erroneously had held a state common-law claim preempted in part because it had not accorded sufficient “[r]espect for the presumptive sanctity of state law[.]”59

Is the presumption dead? For now, the answer likely depends on Justice Kennedy. In PLIVA, although Justice Kennedy joined the majority's conclusion that impossibility preemption barred state-law failure-to-warn claims against generic drug manufacturers, he did not join Justice Thomas's plurality, suggesting that he, like the four dissenters,60 was concerned that Justice Thomas's reading of the Supremacy Clause would, if adopted by a Court majority, kill off the presumption against preemption.

And in Altria, Justice Kennedy joined the majority opinion, which invoked the presumption and rejected Justice Thomas's dissenting position that it does not apply in express-preemption cases.61 On the other hand, Justice Kennedy joined the Mutual majority, which, like the PLIVA majority, found preemption without even a nod to the presumption. In sum, the preemption remains on life support, but it is not dead yet. Stay tuned.

b.
But, it's fair to ask, does any of this matter? Commentators have noted the inconsistency with which the presumption is invoked,62 suggesting that the presumption matters little. Others have said more bluntly that the Court's preemption doctrine owes far more to desired results than to principle, with the presumption serving as something on which to hang one's judicial hat when useful.63 The question whether federalism jurisprudence is governed more by raw politics than principle is beyond the scope of this article. Focusing here only on the presumption against preemption, we believe, for at least two reasons, that the presumption has some practical importance.

First, it strikes us as unlikely that the presumption's four opponents on the Court would have expended so much effort laying the groundwork for its demise if they thought it was never outcome-determinative. They have seen the cases litigated before them and debated within the Court, and if they thought that the presumption against preemption never moved its adherents to vote against preemption, the fight would not be worth it. In other words, if four Justices think it matters, there's a good chance it does matter, at least sometimes.

Second, most preemption cases, including most tort preemption cases, are not destined for the Supreme Court. The lower courts, both state and federal, are supposed to adhere to the presumption. Those courts have been instructed that they have “a duty to accept the reading [of a federal statute] that disfavors preemption” when the statute is ambiguous,64 and so it is likely that they will apply the presumption faithfully, at least as an anti-preemption tie-breaker in cases that they view as close.

2. Tort Preemption vs. Positive-Law Preemption

a.
The majority and dissenting opinions in Mutual contain discussions of whether federal preemption questions should be viewed differently if the target of potential preemption is a state-law remedy that results only in the payment of damages as opposed to a state statute or regulation that purports to prohibit conduct directly. Frequently, this distinction is described as a difference between state common-law actions, which typically seek only an award of damages, and state “positive” law--that is, statutes and regulations--which often (if not always) may be enforced through prohibitions on unlawful conduct.65

These labels, which we will use here for convenience, are imprecise. On occasion, common-law remedies include injunctions that prohibit conduct, and sometimes violations of statutes or regulations may be redressed only by payment of a fine while the violator is free to continue to break the law. And some states have codified their common law, making tort damages remedies available by statute. In any event, the distinction we mean to draw is one between state-law damages remedies and direct prohibitions on conduct.

In his opinion for the Court in Mutual, Justice Alito was adamant that it was “impossible” simultaneously to comply with both the federal-law requirements governing labeling and design of generic prescription drugs and a state-law damages remedy premised on a duty to label or design the drug differently.66 That view of impossibility preemption, as noted earlier, is one that focuses on the claimed conflict between federal requirements and the abstract state-law duty (for instance, the duty not to market an unreasonably dangerous product).67

The Mutual dissenters, on the other hand, explained that despite potential tension between federal and state law, simultaneous compliance with both was not impossible because the state-law remedy was one to pay damages (not actually to change the product's design or label).68 And, besides, the dissenters said, a defendant could choose not to sell the product at all (which is not prohibited by federal law) when faced with a state-law damages judgment premised on inadequacies in the design or labeling of its product.69

The Mutual majority rejected the latter “'stop-selling’ rationale as incompatible with our pre-emption jurisprudence.”70 The majority firmly held that “the mere fact that a manufacturer may avoid liability by leaving the market does not defeat a claim of impossibility.”71 Thus, absent a re-evaluation of this holding that might come with a change in the Court's composition, the stop-selling argument appears dead, at least in the impossibility-preemption context.

b.
But what of the argument that impossibility does not occur in the tort preemption context because a manufacturer confronting a state-law damages verdict can always just pay the verdict and continue to sell the product? The Mutual majority rejected that argument on the ground that common-law remedies and remedies for violations of positive-law obligations “do precisely the same thing.”72 Faced with either remedy, Justice Alito suggested, the manufacturer of the offending product can simply pay the money demanded for violating the state-law norm (whether in the form of a governmental fine or a damages verdict) and continue to market the product. As we now explain, that view overstates the Court's prior preemption doctrine and fails to come to grips with the practical differences between damages liability and direct government regulation.

We turn first to preemption doctrine. Has the Supreme Court embraced the idea that positive state regulation and a jury's award of damages are equivalent? Sometimes yes, and sometimes no.

The Court's first statement on this topic came in San Diego Building Trades Council v. Garmon.73Garmon involved a business's attempt to prevent union picketing through a suit under California law for an injunction and damages. In an earlier stage of the litigation, the Supreme Court held that the injunctive relief was preempted by the National Labor Relations Act.74 In Garmon, the Court also rejected the attempt to impose damages under California law, explaining that “[state] regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.”75

Garmon was not a products liability case, and federal labor law, unlike most federal statutes that regulate consumer products and services, authorizes monetary and other remedies. Thus, Garmon presented a situation distinguishable from cases such as Mutual and PLIVA and other recent tort preemption cases that have reached the Supreme Court, where the relevant federal regulatory scheme did not provide a means to compensate people harmed by federally regulated products. Nonetheless, it is easy to see why modern preemption-seeking defendants would rely heavily on Garmon. Its exclusive focus on damages as a regulatory, rather than a compensatory, tool is useful to defendants seeking to equate positive law with tort law. Whenever positive state law is preempted, they argue, so is state-law damages liability.

But even after Garmon, the prevailing assumption remained that state regulatory standards and state tort law or other state compensation schemes occupied separate spheres, with the latter largely unaffected by federal preemption.76 The best example is probably Goodyear Atomic Corp. v. Miller,77 where the Court considered whether an Ohio administrative agency could, consistent with federal preemption principles, award additional workers' compensation benefits based on violations of state safety standards at a federally owned, privately operated nuclear production facility. The Court held that the additional award was not preempted. Acknowledging that state positive-law safety requirements might be preempted, the Court viewed damages liability as fundamentally different:

Congress' reluctance to allow direct state regulation of federal projects says little about whether Congress was likewise concerned with the incidental regulatory effects arising from the enforcement of a workers' compensation law, like Ohio's, that provides an additional award when the injury is caused by the breach of a safety regulation. The effects of direct regulation on the operation of federal projects are significantly more intrusive than the incidental regulatory effects of such an additional award provision. Appellant may choose to disregard Ohio safety regulations and simply pay an additional workers' compensation award if an employee's injury is caused by a safety violation. We believe Congress may reasonably determine that incidental regulatory pressure is acceptable, whereas direct regulatory authority is not.78

Until the 1990s, the Supreme Court had never held a state-law tort claim preempted by federal regulation, at least not where the federal law itself did not provide a right of action for damages. In 1992, the Court began to change course. A plurality opinion in a tobacco liability case, Cipollone v. Liggett Group, Inc.,79 relied on the language from Garmon quoted above, and concluded that the Public Health Cigarette Smoking Act of 1969, which requires specific warnings on cigarette packages, preempted some (but not all) tort claims based on a failure to warn about the dangers of smoking.80 Since then, defendants in tort preemption cases have relied on this language from Garmon and Cipollone in an effort to show that state tort law and state positive law have the same regulatory effect, that is, that the two are inherently the same.

But the Court has continued to send contradictory signals. In the majority portion of the Cipollone decision, which addressed the preemptive effect of an earlier, 1965 version of the cigarette labeling law, just a few paragraphs above the plurality's endorsement of Garmon, the same justice who wrote the plurality (Justice Stevens) said something quite different: that the 1965 Act, because of its particular wording, preempts “only positive enactments by legislatures or administrative agencies that mandate particular warning labels,” and “not … common-law damages actions.”81 In responding to the tobacco industry's arguments that the 1965 Act was preemptive, the Court seemed to reject the Garmon principle as a general, overarching justification for preemption:

There is no general, inherent conflict between federal pre-emption of state warning requirements and the continued vitality of state common-law damages actions.82

The internal tension evident in Cipollone was carried over to Medtronic, Inc., v. Lohr,83 a case involving claimed preemption of a tort suit by the federal medical-device law. There, a four-Justice plurality suggested that a rational Congress could treat state common-law duties damages actions differently from positive state law,84 while dissenters and a concurring Justice appeared to equate the two as a general proposition.85

And, finally, Garmon’s tort-as-regulation viewpoint cannot be squared with another important tort preemption case, Sprietsma v. Mercury Marine.86There, a boater had died tragically when she fell overboard and was struck by the boat's propeller blades. One of the questions presented in Sprietsma was whether a state common-law duty premised on a boat manufacturer's failure to install a propeller guard was preempted by the Federal Boat Safety Act's express preemption provision, which the manufacturer claimed preempted all positive law and all common law regarding boat safety.

The Court rejected that argument, maintaining that it is “perfectly rational” for Congress to preempt state positive law, but not “common-law claims, which--unlike most administrative and legislative regulations--necessarily perform an important remedial role in compensating accident victims.”87 This statement is important because tort law's ability to compensate is one way that tort law and most regulatory requirements indisputably are not the same.

c.
Having shown that the Supreme Court's preemption doctrine has both embraced and rejected the claim that positive law and tort law have the same purpose and effect, we turn to the question whether the claim makes real-world, empirical sense. In our view, it does not.

It is a significant leap from the proposition endorsed in Garmon that tort law is meant to and does to some degree have regulatory effect on defendants' future behavior to the proposition that its impact is equivalent to direct, positive-law regulation. Although this point can be illustrated by reference to most state or federal regulatory schemes, we use FDA as an example because its regulations were at issue in Mutual, PLIVA, and Wyeth.

If FDA wants to get a food, drug, or device off the market, it can do so swiftly. If FDA determines that a product is misbranded because its labels create a hazard for consumers, it would not seek only payment of a fine to the government, which would do nothing to protect current consumers. Rather, it would insist on changes to the label or the product's removal from the market. The Mutual majority understood this basic point when it acknowledged that a misbranded product may no longer be sold in interstate commerce.88

Thus, if FDA determines that a product is misbranded, it can obtain an injunction to halt its sale,89 and even seize products if need be,90 as former FDA Commissioner David Kessler did with misbranded orange juice when he first took office.91 We recognize that state and federal agencies often do not exercise their full regulatory authority because of indifference, insufficient resources, lack of political will, or “capture” by the regulated industry. Our point here, however, is that positive-law authority often gives those regulators the ability to quickly alter the conduct of the regulated industry.

Contrast these direct regulatory powers with the tort system. Most prominently, damages are the only form of relief available in the types of tort suits that regularly populate the Supreme Court's preemption docket. For people like Ms. Bartlett, who have already been hurt, and are no longer using the product, it is damages or nothing.

Moreover, large industry players generally react very slowly, and sometimes not at all, to liability pressures. Most instances of liability are absorbed without any change in manufacturer conduct of the kind that can be obtained swiftly by a regulator. As the Supreme Court has recognized, after the imposition of damages liability, the defendant is never legally compelled to alter its future conduct.92

Thus, to the extent that tort law exerts regulatory effect against a drug manufacturer generally, the effect occurs only after repeated suits, settlements, and findings of liability, and, even then, the cause-and-effect relationship is rarely clear (which is hardly the case when a regulator takes products off retailers' shelves). The Supreme Court stated this well in Goodyear Atomic, when it said that “the effects of direct state regulation on the operation of federal government are significantly more intrusive than the incidental regulatory effects of state [compensation] law.”93

Of course, there is some symbiosis between direct regulation and damages liability, as the regulatory system imposes pressures on the tort system and vice versa. Both exert financial and political pressure on industry and government, and both are capable of making public information that would otherwise stay locked away in corporate file cabinets. But some interaction and overlap between the tort and regulatory systems do not alter our basic position: Preemption doctrine should not be built on a claim of equivalency between direct regulation and damages liability because the equivalency does not exist--that is, the claim does not reflect reality on the ground.

d.
But none of this matters if Mutual definitively has held otherwise. We do not think it has. Compared to its clear rejection of the stop-selling rationale, the Mutual majority's consideration of the positive-law/common-law distinction was less emphatic and more ambiguous.

First, Justice Alito began his discussion by noting that “the distinction between common law and statutory law is irrelevant to the argument at hand,”94 a reference to Justice Sotomayor's statement that application of New Hampshire tort law in the case had not “impose[d] any actual 'legal obligation,’”95 suggesting that the majority was not making an all-encompassing pronouncement for tort preemption cases generally.

Second, the Mutual majority said that state common-law remedies and direct state regulation “do precisely the same thing” because “[t]hey require a manufacturer to choose between leaving the market and accepting the consequences of its actions (in the form of a fine or other sanction).”96 This statement suggests that a manufacturer has the same freedom of choice in responding to either a jury verdict or a regulator's edict. To be sure, in both situations, the manufacturer can voluntarily leave the market. But, as we have noted, the final result of state regulatory enforcement often is not payment of money (or at least not only payment of money) but a prohibition on the underlying offending conduct. That is, the “other sanction” referred to by Justice Alito may be the product's forced departure from the market, and if the state were to impose that sanction, the manufacturer would have no choice at all.

This latter point is important because when a state requires the removal from the market of a product that the federal government has approved, there is far greater potential for interference with federal regulatory objectives than if the product remains on the market and the manufacturer pays for the injuries that the product has caused.97 The latter scenario may increase the cost of the product to a small degree, but it does not make the product unavailable to consumers, which might be a concern to federal regulators.

The Mutual majority confronted none of this. Its discussion of the tort-direct regulation distinction is brief and undeveloped, and if the Court had intended to put tort-preemption and regulatory-preemption cases on equal footing for all time, we would have expected it at least to have considered its prior discussions of the issue in cases such as Cipollone and Goodyear Atomic.

Finally, as noted earlier, the Mutual majority acknowledged that Congress expressly preempted state regulatory requirements for over-the-counter drugs while exempting from preemption product-liability suits against their manufacturers,98 including manufacturers of generic over-the-counter drugs, for whom, like the generic prescription drug manufacturers in Mutual and PLIVA, unilateral changes to drug labeling and design are impermissible. This acknowledgement suggests that the Court understands that the impact of state positive law and state-law damages liability are not inherently the same and that allowing the latter while preempting the former may not undermine federal regulatory objectives.

In sum, we think that Mutual’s off-hand statement that tort remedies and direct regulation do “the same thing” may fade away when the Court again is presented with the issue and has the opportunity to treat it with more care.

1 555 U.S. at 570-71.

2See Gilbert v. Sec'y HHS, 2005 WL 3320085, *8 n.22 (Fed. Cl. 2005); see also, e.g., Garvey v. O'Donoghue, 530 A.2d 1141, 1144 n.4 (D.C. 1997).

3See Restatement (Second) of Torts §402A, at 347 (1965).

4See Conte v. Wyeth, Inc., 85 Cal. Rptr. 3d 299, 309-10 (Cal. App. 2008) (explaining differences in strict products liability and misrepresentation theories in case brought by generic drug user who sued brand-name manufacturer on misrepresentation theory).

5 Restatement (Second) of Torts §311(b), at 106 (1965) (emphasis added). Section 310 imposes similar liability for knowing misrepresentations. See id. §310, at 103.

6 85 Cal. Rptr. 3d 299, 313 (Cal. App. 2008) (internal citations omitted); accord Kellogg v. Wyeth, 762 F. Supp. 2d 694, 705-09 (D. Vt. 2010).

7 29 F.3d 165 (4th Cir. 1994).

8Id. at 168 (“Although actions for negligent misrepresentation arise in many contexts other than products liability, in this case the allegations of negligent misrepresentation are an effort to recover for injuries caused by a product without meeting the requirements the law imposes in products liability actions. Maryland law requires a plaintiff seeking to recover for an injury by a product to demonstrate that the defendant manufactured the product at issue.”).

9Id. at 171.

10See, e.g., Schrock v. Wyeth, Inc., ___ F.3d ___, 2013 WL 4529359, *7-*11 (Aug. 28, 2013); Smith v. Wyeth, 657 F.3d 420 (6th Cir. 2011); Finnicum v. Wyeth, Inc., 708 F. Supp. 2d 616, 619-21 (E.D. Tex. 2010); Swicegood v. Pliva, Inc., 543 F. Supp. 2d 1351, 1358 (N.D. Ga. 2008); Colacicco v. Apotex, Inc., 432 F. Supp. 2d 514, 540-41 (E.D. Pa. 2006); rev'd on other grounds, 521 F.3d 253 (3d Cir. 2008); Stanley v. Wyeth, Inc., 991 So. 2d 31, 34-35 (La. Ct. App. 2008); Sharp v. Leichus, 952 So. 2d 555 (Fla. Dist. Ct. App. 2007); Flynn v. American Home Products Corp., 627 N.W. 2d 342, 350 (Minn. Ct. App. 2001). But seeWyeth, Inc. v. Weeks, ___ So. 3d ___, 2013 WL 135753, *21-*26 & n.8, *30 (Ala. Jan. 11, 2013) (Murdock, J., dissenting) (reviewing dozen of decisions rejecting brand-name suits). In Weeks, the Alabama Supreme Court held 8-1 that Alabama law authorized suit by a generic drug user against a brand-name manufacturer on fraud and misrepresentation theories. The court issued its decision without hearing oral argument and now is reconsidering its ruling. It heard oral argument on September 4, 2013, and a decision is pending. See http://pubcit.typepad.com/clpblog/2013/06/alabama-supreme-court-grants-rehearing-on-whether-brand-name-drug-co-can-be-held-liable-for-inadequa.html.

11Foster, 29 F.3d at 179.

12Id. at 169-70 (citing 21 C.F.R. §314.70).

13PLIVA, 131 S. Ct. at 2575.

14See Fullington v. Pfizer, Inc., 720 F.3d 739, 747-48 (8th Cir. 2013) (Murphy, J., concurring) (explaining in dicta that PLIVA and Mutual “severely eroded the foundation of th[e] analysis” of the courts that have rejected brand-name suits because that analysis has “generally been predicated on the assumption that the generic manufacturers could independently safeguard and strengthen their own labels.”).

15See supra note 151.

16Wyethv. Weeks, ___ So. 3d at ___, 2013 WL 135753, *1 (setting out certified question).

17See id. at __; 2013 WL 135753, *26 & n.8.

18See id.at ___, 2013 WL 135753, *2 (“Certification is appropriate here to resolve the disagreement among the federal district courts within Alabama and to prevent both federal courts within the State and state courts around the country from having to 'mak[e] unnecessary Erie guesses' about unsettled questions of Alabama law.”) (quoting Tobin v. Michigan Mut. Ins. Co., 398 F.3d 1267, 1274 (11th Cir.2005)); see also Arizonans for Official English v. Arizona, 520 U.S. 43, 79-80 (1997) (discussing benefits of federal-court certification of state-law questions to state high courts).

19See infra Part III.C.

20PLIVA, 131 S. Ct. at 2592 (Sotomayor, J., dissenting).

21Id. at 2581 (majority opinion).

22Id.

23Wyeth, 555 U.S. at 568-69; accord id. at 591-92 (Thomas, J., concurring in the judgment).

24PLIVA, 131 S. Ct. at 2575-76.

25See Wyeth, 555 U.S. at 578-79.

26 47 Fed. Reg. 46,622, 46,635 (Oct. 19, 1982).

27 21 C.F.R. §314.80(b) (made applicable to ANDA holders by 21 C.F.R. §98(a)).

28Id. §314.80(c)(1)(i-ii).

29Id. §314.80(c)(2)(i).

30Id. §314.80(c)(2)(ii).

31See[Public Citizen] Citizen Petition (Aug. 29, 2011), available at http://www.citizen.org/documents/1965.pdf.

32 Brief for the United States as Amicus Curiae Supporting Petitioner in Mutual Pharm. Co. v. Bartlett, at 15 n.2, No. 12-142 (U.S. filed Jan. 22, 2013), available at 2013 WL 314460, *15 n.2.

33See Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, RIN 0910-AG94, available at http://www.reginfo.gov/public/servlet/ForwardServlet?SearchTarget=Agenda&textfield=0910-AG94.

34Id.

35Mutual, 133 S. Ct. at 2480.

36 Restatement (Third) of Torts: Products Liability §6, cmt. d, at 147 (1998).

37PLIVA, 131 S. Ct. at 131.

38 21 U.S.C. §379r(a), (e).

39 S. 2295, §2 (2012); H.R. 4384, §2 (2012).

40Riegel, 552 U.S. 312.

41SeeH.R. 1346 (2009); S. 540 (2009).

42 21 U.S.C. §379r(a), (e).

43See, e.g., 7 U.S.C. §136v (preemption and anti-preemption provisions for federally regulated pesticides); 21 U.S.C. §360k (preemption provision for medical devices, with exemption from preemption in some circumstances); 49 U.S.C. §30103 (preemption provision regarding motor vehicle standards, with savings clause for common-law liability).

44See PLIVA, 131 S. Ct. at 2591 (Sotomayor, J., dissenting) (citing both express and implied preemption cases that invoke the presumption against preemption); see also, e.g., Lohr, 518 U.S. at 485.

45Lohr, 518 at 485 (citations omitted).

46See, e.g., Bates, 544 U.S. at 449-50; Sprietsma v. Mercury Marine, 537 U.S. 51, 69 (2002); Silkwoodv. Kerr-McGee Corp., 464 U.S. 238, 251 (1984); see generally Wyeth, 555 U.S. at 565 & n.3.

47Bates, 544 U.S. at 449.

48Mutual, 133 S. Ct. at 2483 n.1 (Sotomayor, J., dissenting) (citing id. at 2840 (majority opinion)) (emphasis added); see also id. at 2483, 2486.

49See id. at 2483 n.1.

50Wyeth, 555 U.S. at 623-24 & n.14.

51Id.

52Id.

53Id.(quoting Caleb Nelson, Preemption, 86 Va. L. Rev. 225, 241-42 (2000)).

54Id. at 2580.

55Id. (citing Wyeth, 555 U.S. at 588 (Thomas, J., concurring in the judgment)).

56 555 U.S. 70, 98-103 (2008) (Thomas, J., dissenting, joined by Roberts, C.J., Scalia, J., and Alito, J.).

57Id. at 98 (citing Cipollone v. Liggett Group, Inc., 505 U.S. 504, 545 (1992) (Scalia, J., concurring in the judgment in part and dissenting in part)).

58Id. at 103. Justice Thomas's reliance on text as the sole basis for express-preemption analysis is consistent with his view that the “obstacle” or “purposes and objectives” form of implied preemption is illegitimate because it permits courts to engage in freewheeling predictions about congressional intent and ''encourages an overly expansive reading of statutory text[.]’’ Wyeth, 555 U.S. at 601 (Thomas, J., concurring in the judgment).

59CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 679 (1993) (Thomas, J., concurring in part and dissenting in part); see also Gade v. Nat'l Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 116-17 (1992) (Souter, J., dissenting) (forceful reliance on presumption against preemption joined by Justice Thomas).

60PLIVA, 131 S. Ct. at 2591-92 (Sotomayor, J., dissenting).

61Altria, 555 U.S. at 98-103 (Thomas, J., dissenting).

62See, e.g., Catherine M. Sharkey, Against Freewheeling, Extratextual Obstacle Preemption: Is Justice Clarence Thomas the Lone Principled Federalist?, 5 N.Y.U. J. L. & Liberty 63, 78 (2010).

63See id. at 65 (“Notwithstanding alternative explanations of the Court's preemption jurisprudence, the one with the greatest staying power is that which attributes everything to ideology and politics.”) (internal citation omitted).

64Bates, 544 U.S. at 449.

65See Mutual, 133 S. Ct. at 2479.

66Mutual, 133 S. Ct. at 2476.

67Id. at 2474-75.

68Id. at 2481 (Breyer, J., dissenting); id. at 2491 (Sotomayor, J., dissenting).

69Id. at 2481 (Breyer, J., dissenting); id. at 2491 (Sotomayor, J., dissenting).

70Id. at 2477 (majority opinion).

71Id. at 2478 n.5.

72Id. at 2479.

73 359 U.S. 236 (1959).

74See id. at 238.

75Id. at 247.

76See, e.g., Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984); Hurley v. Lederle Labs., 863 F.2d 1173, 1176-78 & n.2 (5th Cir. 1988) (rejecting preemption and reviewing case law); Osburn v. Anchor Labs., Inc., 825 F.2d 908, 911-13 (5th Cir. 1987); Ferebee v. Chevron Chem. Co., 736 F.2d 1529, 1539-43 (D.C. Cir. 1984); Feldman v. Lederle Labs., 479 A.2d 374 (N.J. 1984).

77 486 U.S. 174 (1988).

78Id. at 185- 86.

79 505 U.S. 504 (1992).

80Id. at 521 (quoting Garmon, 359 U.S. at 247).

81Id. at 519.

82Id. at 518.

83 518 U.S. 470.

84Id. at 486-91.

85See id. at 504-05 (Breyer, J., concurring in part and concurring in the judgment); id. at 510 (O'Connor, J., concurring in part and dissenting in part) (relying on Garmon).

86 537 U.S. 51 (2002).

87Id. at 64.

88Mutual, 133 S. Ct. at 2477 n.4.

89See 21 U.S.C. §§331(a), (b), 332(a); see also FDA's “Recall, Market Withdrawals, & Safety Alerts” homepage, http://www.fda.gov/Safety/Recalls/default.htm.

90 See 21 U.S.C. §334 (seizure authority).

91 Warren E. Leary, “Citing Labels, U.S. Seizes Orange Juice,” New York Times, p. 18 (Apr. 25, 1991).

92See, e.g., Goodyear Atomic, 486 U.S. at 185-86; see also, e.g., Ferebee, 736 F.2d at 1544 (D.C. Cir. 1984).

93Goodyear Atomic, 486 U.S. at 185.

94Mutual, 133 S. Ct. at 2479 (emphasis added).

95Id.(quoting id. at 2489 (Sotomayor, dissenting)).

96Id.

97See id. at 2482 (Breyer, J., dissenting).

98Id. at 2480 (citing 21 U.S.C. §379r(a), (e)).

 

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