Wednesday, January 19, 2011

Bad Facts Make Bad Law

We just saw LeFaivre v. KV Pharmaceutical Co., No. 10-1326, slip op. (8th Cir. Jan. 19, 2011), and all we can say is bad facts make bad law - sort of, anyway.  The bad facts are these:

KV stipulated as part of the Consent Decree that it had sold drugs that were "adulterated" as defined by 21 U.S.C. § 351(a)(2)(B), meaning that the drugs were manufactured, processed, packed, labeled, held, and distributed in violation of the FDA's current good manufacturing practice (cGMP) requirements. KV acknowledged that it had not used proper quality control procedures when manufacturing the medication. It also stipulated that some of the medication sold to retail pharmacies had been misbranded in violation of federal regulations.
LeFaivre, slip op. at 2.

Pretty bad.  After stipulating with the FDA that it broke the law, KV got sued privately in one of these fraud on the market consumer class actions.  The claims were implied warranty of merchantability and consumer fraud.  The allegations, aren't particularly clear, but they probably weren't much more than "you confessed that you violated the FDCA" and ipso facto you're liable on these state theories.

The district court held the state law claims were improper attempts to enforce the FDCA and were implied preempted under Buckman.  Well, the Eighth Circuit just reversed.

When a defendant admits it cut corners under the FDCA, it can't expect much sympathy and didn't get much.

Still, we've been practicing in this area since Buckman was decided a decade ago, and this is the first time we've heard it described as a "field preemption" case.  LeFaivre, slip op. at 13.  That's simply wrong, because Buckman itself says quite explicitly that it's decided on the basis of conflict preemption.  "[W]e hold that the plaintiffs' state-law fraud-on-the-FDA claims conflict with, and are therefore impliedly pre-empted by, federal law.  531 U.S. 341, 348.  LeFaivre took a statement totally out of context from Buckman's discussion of the presumption against preemption to say something different.

Even we don't think there's field preemption for drugs under the FDCA.  Could KV have possibly argued that?  We hope not.  That would be asking to get kicked in the teeth.

We expect that it argued the usual, that there's no private right of action and, as in Buckman, the statute itself precludes private enforcement.  But even that's tough when the defendant has already admitted that it violated the FDCA.  As LeFaivre pointed out that's exactly what the two-justice concurrence in Buckman was all about - that if (as was not true in Buckman) the FDA had already adjudicated the violation, there wouldn't be a conflict because all the speculation about what the FDA might have done goes away.  Slip op. at 12-13.  The scary thing about Buckman was the plaintiffs' assertion of "violations" that did not really exist as an excuse to allow a state jury ignore FDA actions that remained in effect.  That's just not present here.

Between these two points:  (1) construing Buckman as field preemption, and (2) the already admitted and adjudicated FDCA violation, LeFaivre pretty narrow, but still....  We wish bad facts wouldn't mess up the law.

1 comment:

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