Monday, November 17, 2008

Another Buckman Preemption Case (Grange v. Mylan)

Who got it right -- the Sixth Circuit in Garcia v. Wyeth-Ayerst Labs, 385 F.3d 961 (6th Cir. 2002), or the Second Circuit in Desiano v. Warner-Lambert & Co., 467 F.3d 85 (2d Cir. 2006)? We almost found out when the Supreme Court granted cert in Desiano (under the name Warner-Lambert v. Kent), but the justices split four to four in that case, providing no guidance. 128 S. Ct. 1168 (2008). We were of course dismayed.

Without Supreme Court guidance, the issue will continue to percolate in the lower courts.

And percolate it has.

The most recent decision came down on Halloween. See Grange v. Mylan Laboratories, No. 1:07-CV-107 TC, 2008 WL 4813311 (D. Utah Oct. 31, 2008).

Physicians prescribed Mylan Labs' Fentanyl Transdermal System to relieve Ronald Grange Sr.'s pain. The fentanyl patch allegedly malfunctioned, delivering a fatal overdose of fentanyl. Grange's estate and two of his children filed suit in Utah.

We're going to note in passing a couple of preliminary issues that might matter in particular cases but that are not the thrust of our post today. First, Grange used the fentanyl patch in Utah, but Mylan manufactured the patch in Vermont. The federal trial court held that Utah, not Vermont, law applied to plaintiffs' claims.

Second, the court dismissed plaintiffs' strict liability design defect claim, because that claim is not viable under Utah Supreme Court precedent.

And the court then addressed the issue that we're thinking about today -- the one that the Supreme Court didn't resolve in Warner-Lambert v. Kent.

A Utah statute says that plaintiffs cannot recover punitive damages in a case involving a drug that was approved by the FDA. Utah Code Ann. Sec. 78B-8-203(1). That immunity does not apply, however, if "the drug manufacturer knowingly withheld or misrepresented information required to be submitted to the Federal Food and Drug Administration." Id. Sec. 78B-8-203(2).

As readers of this blog well know, the Supreme Court case of Buckman Co. v. Plaintiff's Legal Comm., 531 U.S. 341 (2000), holds that state law fraud-on-the-FDA claims are impliedly preempted by federal law. So what happens when a statute gives a drug manufacturer some type of immunity, but the statute then creates an exception to the immunity if the manufacturer defrauded the FDA? Is the exception preempted by Buckman? If so, does the immunity still stand? We posted here on a similar issue that arose under Texas law in the Vioxx litigation last year.

Judge Tena Campbell, of the federal court in Utah, came down on the side that we prefer. If plaintiffs were allowed to present evidence of fraud on the FDA, then "state courts are essentially second-guessing the FDA and drug companies, nervous about state litigation, will have an incentive to flood the FDA with information." Grange, 2008 WL at *7. The fraud-on-the-FDA exception is thus preempted under Buckman, leaving only the immunity from liability for punitive damages intact.

The court noted that preemption would not apply "in cases where the FDA itself has found that there was fraud in the application process." Id.

As we've noted previously, many states have laws that give drug manufacturers some type of immunity if their products are FDA-approved, but then create fraud-on-the-FDA exceptions to that immunity.

Utah courts will not be alone as they grapple with this issue in the future.


say what???? said...

So this judge is telling pharmaceutical companies to do whatever they want, just don't tell the FDA or get caught by the FDA, thus encouraging even greater fraud on the FDA but, as long as the FDA doesn't find out, no problem, no accountability. Even defense lawyers have to admit that this is a dangerous decision. You may be happy with it, but do you really believe that it makes sense?

Soronel Haetir said...

I think it makes plenty of sense to leave fraud on the FDA claims up to the FDA. I would not, howeer, mind seeing these law's rebuttable presumption rest on actual enforcement by the FDA instead of having a 3rd party make that claim.

Even with the FDA not in a position to enforce any but the most henious cases I see this as preferable to some sort of jackpot jury award system.

hg said...

Can you tell us precisely what constitutes an FDA finding of fraud against itself? Is there anything other than successful prosecution of felony fraud that would "count" in this regard?

Thank you.

Anonymous said...

The drug company knew they were doing something wrong, but they would rather pay off others and try to hide there mistake just to keep making money. Shame on those companies. They need to be responsible for what they have done.