United States: Something Went Right In Brazil

Last Updated: July 19 2016
Article by James Beck

Zika virus, Olympic unpreparedness, economic collapse, presidential impeachment − a lot of things have gone wrong in Brazil lately. But we're not here to talk about any of that. Here's something that went right: Brazil v. Janssen Research & Development LLC, ___ F. Supp.3d ___, 2016 WL 3748771 (N.D. Ga. July 11, 2016). Brazil is the second major branded (innovator) drug preemption win in an Invokana case in little over a month.

Yes, we brought you the first one, too, right here (discussing Fleming v. Janssen Pharmaceuticals, Inc., ___ F. Supp.3d ___, 2016 WL 3180299 (W.D. Tenn. May 6, 2016)).

In Brazil the plaintiff brought the usual defect claims (manufacturing, design, warning) under Georgia law. The defendants moved to dismiss.

In the most significant part of the Brazil opinion, the defendants successfully asserted preemption. First and foremost, we direct our readers' attention to the last holding in Brazil, because it has potentially the widest impact. The court held that, under the preemption rationale in PLIVA v. Mensing, 131 S. Ct. 2567 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013), no warning claims could be asserted against anybody other than the then-current holder of a drug's New Drug Application ("NDA"). Why? Because nobody else had the ability to change that drug's warnings.

Defendants argue that Plaintiff's claims against Janssen Ortho, which are premised on a failure to warn, are preempted because Janssen Ortho is not the NDA applicant and thus cannot seek to change [the drug's] label. [A different entity] holds the NDA for [the drug]. The Court agrees. When a company does not have the NDA, it has no more power to change the label of a drug than a generic manufacturer. A distributor, even of a brand name drug, has no power to change labeling. That power lies with the applicant who filed the [NDA]. Because Janssen Ortho could not independently do under federal law what state law requires of it,' the state law claims brought against it are preempted."

Brazil, 2016 WL 3180299, at *11 (citation and quotation marks omitted) (emphasis added).

Brazil becomes the fourth decision on our Post-Levine Drug/Vaccine Preemption Cheat Sheet to hold that Mensing/Bartlett preemption defeats warning claims asserted against entities other than a drug's NDA holder. We also note, since distributors are often joined to defeat diversity, that this preemption argument is, by definition, not available to an NDA holder. That could be important in fraudulent joinder cases in circuits that require remand where the defendants are asserting a "common defense" – for a fuller explanation of this point, see our post on "common defense" in the removal context here.

Preemption also wiped out the plaintiff's design defect claim in Brazil. Defendants argued that "Plaintiff's design defect claims are preempted because federal law precludes Defendant manufacturers from redesigning a prescription drug without FDA approval." Id. at *9. The court agreed to the extent that plaintiff was claiming that the product's "chemical design" should have been altered. Id.

Any claim by Plaintiff that Defendants should change the formulation of [the drug] is preempted by FDA regulations. Plaintiff, however, may argue that Defendants should be liable because a stronger warning would have changed.

Id. at *10. Thus, the "design" claim was divested of any independent significance and essentially converted into a warning-based claim. Id. That means that the claim is now subject to the usual, non-preemption warning-related defenses – such as the learned intermediary rule.

In a third pro-defense preemption ruling the court also rejected plaintiff's "pre-approval design" defect dodge. The court found this contention both incoherent, and to the extent it meant anything at all, akin to the "stop-selling" claim held preempted in Bartlett:

The Court also rejects Plaintiff's argument that her claim is not preempted because her "claim is on the original design of [the drug] before FDA approval, not Defendants' failure to redesign the drug after FDA approval." This original design theory of liability makes little sense in the face of the Supreme Court's precedents. The Supreme Court has repeatedly characterized the state tort law at issue in this case as a duty to make changes or as a remedial effort. [Mensing and Bartlett citations omitted] Indeed, it is unclear how any of the lawsuits in Bartlett, Mensing, or Levine could have even had an issue with preemption if the duty required by state law covered the original design. To the extent, Plaintiff argues Defendants should have never sold [the drug], the Court notes that the Supreme Court rejected a "stop-selling" rationale in Bartlett. We reject this 'stop-selling' rationale as incompatible with our pre-emption jurisprudence.

2016 WL 3748771, at *11 (citations omitted).

By the way – the design defect claim also failed TwIqbal. The complaint didn't allege anything about the drug's actual design, "[m]erely describing how [it] works." Id. at 6.

Besides preemption, as in most cases, the manufacturing defect claim collapsed upon the slightest examination. The complaint "does not so much as suggest that the manufactured [drug] differed in any way from the manufacturer's design specifications." 2016 WL 3748771, at *6.

Finally, on the minus side of the ledger, plaintiff's warning claim survived. Under Levine, warning claims against innovator drug NDA holders aren't preempted, so long as the FDA's Changes Being Effected ("CBE") exception arguably applies. Id. at *10. Also, plaintiff experienced the risk at issue. Id. at *7. Lastly, the complaint survived TwIqbal – barely. "While these allegations border on conclusory, the Court finds that the Amended Complaint has stated enough at this time to allege causation." Id. Another warning-related claim, negligence, survived while a count asserting the Georgia consumer protection statute was TwIqballed. Id. at *8-9.

Brazil is a further reminder, if any were needed, that Levine notwithstanding, preemption remains a viable argument in product liability actions involving branded drugs. Since skillful plaintiffs will resort to pleading tricks, particularly in the Rule 12 context, Defendants should study all allegations in order to isolate those that don't fit within the FDA's limited CBE exception. The non-CBE allegations are subject to preemption, and the other side's argument that "it's not a generic drug" – never logical in implied preemption cases – is looking more tattered each week.

We give a tip of the cyberhat to friend of the blog Richard Dean of Tucker Ellis, who after winning Brazil, was kind enough to send it our way.

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

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