United States: Dismissing Drug Design Defect Based On Preemption

Last Updated: June 10 2016
Article by Eric Alexander

In a rare harkening to our past and discussion of specific judges, we recall that our first gig after law school was clerking for Judge Jon P. McCalla of the United States District Court for the Western District of Tennessee. Downtown Memphis had not yet undergone "gentrification," so a short walk in any direction from the Federal Building had to be undertaken with some caution. In addition to barbecue and blues, a federal litigant's visit to Memphis held the prospect of appearing before any one of an interesting assemblage of district judges. Judge Odell Horton had taken senior status after a long stint as chief judge of the district; he was a Carter appointee and exceedingly nice to everyone. He was also the first African American federal judge in Tennessee since Reconstruction. Judge Julia Smith Gibbons had taken over as the chief judge after starting on the federal bench at 33—a Reagan appointee—and everyone knew she would be heading up to the Sixth Circuit at some point. Judge Jerome Turner was another Reagan appointee, who we recall mostly for taking his clerks to lunch regularly and for an untimely death a few years later. Judge Bernice Donald assumed the bench while we were there, having been tapped to jump up from the bankruptcy court by the first President Clinton. (The actor/Senator who was in Die Hard 2: Die Harder showed up for the swearing in ceremony.) Judge McCalla had been appointed by the first President Bush and clerked (for Judge Bailey Brown, before he went up to the Sixth Circuit) in the same chambers some years earlier. He had the military bearing you would expect from his pre-law background as an office in Vietnam and a well-deserved reputation for being "by the book" and "no nonsense." (The softer side that attorneys appearing before him missed was evident when he was with his family, including the puppy we helped train while housesitting.)

Twenty years later, we discuss Judge McCalla's decision in Fleming v. Janssen Pharms., Inc., No. 2:15-cv-02799-JPM-dkv, 2016 WL 3180299 (W.D. Tenn. June 6, 2016), which follows the memorable Yates decision authored by Judge Gibbons, who did, indeed, head up to the Sixth Circuit. Hence why we recounted the iudicis personae of the Western District from our relative youth. Fleming involves asserted state law claims in connection with plaintiff's alleged kidney injuries from a branded prescription diabetes drug. Defendants moved to dismiss on various grounds, which we will discuss in the order of importance to us.

First, of course, was the argument that plaintiff's design defect claim was preempted as pleaded. This angle of attack is noteworthy because winning any kind of preemption for a branded prescription drug at the motion to dismiss phase is rare and because the progression from Bartlett to Yates (decided on summary judgment) to such motions being viable was something we forecast/ urged. As discussed more later, plaintiff had pretty barebones design defect allegations that suggested that all drugs within this class of anti-diabetic agents was too risky and that there were "several safer alternative products"—not alternative designs for this product. Id. at *1. In response to defendant's argument for impossibility preemption, plaintiff contended that its claim was based on a "duty to design the drug differently before FDA approval," which could have been characterized as "never start selling theory." Id. at *5. "The Sixth Circuit, however, found this type of argument to be 'too attenuated' and 'speculat[ive]' because it requires several assumptions as to FDA approval and a patient's selections of and medical reaction to the alternative design." Id. (quoting Yates, 808 F.3d 281, 199-300). While a case with the same drug in the Eleventh Circuit had rejected Yates impossibility preemption while granting a motion to dismiss, the analysis in Fleming was straightforward. "The Court finds that Plaintiffs' design defect claims are preempted by federal law because preemption can apply to both generic and branded drugs and because it would have been impossible for Defendants to comply with both state and federal law." Id. Like we said, this is a "by the book" judge. Other judges taking a similar approach could provide the advantage of getting obviously preempted design defect claims out early, narrowing the scope of fact and expert discovery.

One of the defendants also sought dismissal based on lack of personal jurisdiction. The New Jersey parent company of the defendant that marketed the drug was alleged to have co-developed the drug with a Japanese co-defendant and derived income from the subsidiary's sales in Tennessee and other states. Plaintiff had not alleged anything that the parent did to purposely avail itself of Tennessee's jurisdiction and just being one of the parties that helped put a product in the stream of commerce is not enough in the Sixth Circuit. While the parent was alleged to have developed the drug, "Plaintiff failed to allege facts that connect the design and development of [the drug] to the flow of [the drug] in Tennessee." Id. at *3 Accordingly, there was no specific jurisdiction over the parent. Although Bauman is not mentioned, this result is influenced by it. Plaintiff did not even try to assert general jurisdiction over the parent based on its nationwide activities or those of its subsidiary. We assume the Japanese co-defendant's motion to dismiss, which was not addressed in the decision, was also for lack of personal jurisdiction.

Next, at least in our re-ordering, was the defendant's argument that a claim under state consumer protection law failed without an allegation of "an ascertainable loss of money or property." Id. at *5. Like many consumer protection statutes, Tennessee's is not intended to provide an additional vehicle for recovering for personal injury. Instead, it is for a consumer's economic loss—"an ascertainable loss of money . . . or thing of value . . . [from] an unfair or deceptive act"—that is "more than trivial or speculative." Id. at *6. Plaintiff offered two arguments, both of which were rejected. First, he claimed that the purchase price of the drug was ascertainable loss, but "[t]hese damages are speculative, however, since there is nothing in the record that indicates Plaintiff's expenditures from purchasing [the drug]." Id. We suspect that is because plaintiff did not pay for the drug himself. Next, plaintiff claimed that his medical and other expenses connected to the physical injuries should count, but these were clearly not independent of personal injury claims. So, the plaintiff had not stated a claim under the Tennessee Consumer Protection Act and the count was dismissed with prejudice. We suspect there was no do-over allowed here because it is obvious that additional facts from an amendment cannot cure that the case is for personal injury not purely economic injury.

Last was a TwIqbal challenge to the lack of factual allegations to support a claim under the Tennessee Product Liability Act, which covered the product liability claims the plaintiff had asserted under various headings. While this was granted and plaintiff got a chance to amend—consistent with the general practice of allowing two or three strikes before dismissal with prejudice—but we are confused as to design defect not being carved out given the preemption ruling. (Nobody should say that we play favorites.) The complaint was full of legal conclusions, rather than factual assertions, so "the Court cannot make a reasonable inference of Defendants' liability from the facts alleged." Id. at *7. This went for design defect, warnings, and causation. The holding that "[t]he Court cannot reasonably infer from the generic description of SGLT2 inhibitors' mechanism of action that [the drug] was defective or unreasonably dangerous" is a good guide for cutting through design defect allegations in complaints that are often not just boilerplate, but have also been recycled through multiple litigations. Id. However, when plaintiff was allowed to "re-plead with specificity any TPLA claims he wishes to pursue," it should have been clear that he cannot take another shot at design defect. No additional factual allegations could avoid the conflict that preempted the design defect claim urged in the first complaint. After all, the allegations that plaintiff did include suggest that his theory is that the risk of liver injury is inherent in the mechanism of action of this entire class of antidiabetic drugs. We cannot see how that theory, even with extra detail, could result in a non-preempted design defect claim.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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