United States: MDL Court: Preemption Leaves No "Glimmer of Hope" for Labeling Claims Against a Pharmacy (Guest Post)

Last Updated: January 14 2017
Article by James Beck

What follows is a post authored by Jaclyn Setili, a Reed Smith associate.  She is discussing what we believe is the first extension of Mensing/Bartlett preemption to claims involving pharmacies – something we've previously proposed as theoretically possible, but had yet to see.  As always, our guest posters are entitled to 100% of the credit (and any blame) for their blogposts.

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As a Mitten native (that's Michigan for the uninitiated), this guest blogger is regularly on the lookout for good news connected with her home state.  Typically this involves events of the sporting championship variety, but cause for celebration has been scarce of late on that front (see, e.g., Michigan football, an impressive early season dominance culminating in two close late season losses and a devastating defeat in the Orange Bowl; the Red Wings, currently sitting in last place in their division and slipping progressively further away from a Stanley Cup title since their last championship win in 2008; and the Lions, every year, forever). Even reports of Detroit's flourishing restaurant scene and a slot in the New York Times' 52 Places to Go in 2017 fail to inspire much collective awe from this guest blogger's big-coastal-city friends and colleagues.

As it turns out, however, we need only look a few months back to the In re Lipitor MDL (which we have blogged about before, most recently here, and in which all but one of the cases have now been dismissed) for such news.  In In re Lipitor (Atorvastatin Calcium) Marketing, Sales Practices and Products Liability Litigation, 2016 WL 7368203 (D.S.C. Nov. 1, 2016), the district court ultimately granted plaintiffs' motions to remand, but in the process became the first court ever (as far as we know) to apply impossibility preemption to bar warning claims against a pharmacist selling a branded drug.

The details: The two actions at issue were originally filed in Michigan state court; each plaintiff alleged that Lipitor caused her to develop Type II diabetes, and that the manufacturer failed to properly disclose the risks associated with the drug.  That defendant removed both cases to the Eastern District of Michigan based on diversity jurisdiction; from there the cases were transferred to the MDL court.  Plaintiffs named a local pharmacy in order to destroy diversity.  While the parties agreed that the pharmacy and at least one named plaintiff in each case were residents of Michigan, defendants claimed that the pharmacy was fraudulently joined and that the non-Michigan plaintiffs were fraudulently misjoined.  Plaintiffs moved to remand.

As we and the MDL court know all too well, to establish that a nondiverse defendant has been fraudulently joined, a removing party in the Fourth Circuit must show either:  (1) "outright fraud" in plaintiff's pleading of jurisdictional facts, or (2) that there is no possibility that plaintiff would be able to establish a cause of action against the in-state defendant in state court.  2016 WL 7368203, at *1 (emphasis added).  That is always an uphill battle.  Here, defendants argued that there was no possibility that plaintiffs could state a claim against the pharmacy where plaintiffs allegedly purchased the drug under Michigan law for four reasons:  (a) their claims were preempted by federal law, (b) Michigan's seller immunity statute bars pharmacy claims, (c) the pharmacy had no duty to warn plaintiffs, and (d) the learned intermediary theory further barred plaintiffs' claims.

Of primary importance for our purposes is the court's analysis of the first ground, preemption.  The court first noted plaintiffs' admission that they "may not have a claim regarding labeling with respect to . . . a pharmacy."  Id. at *2.  The court swiftly concluded that even if it were possible to state such a claim, it would be preempted by federal law because, under the Federal Drug and Cosmetic Act, "a pharmacy has no authority to unilaterally change a drug's label."  Id.  Thus, any claims based on labeling were preempted under PLIVA, Inc. v. Mensing, 131 S. Ct. 2567, 2571 (2011).  In other words, the court concluded that there was no possibility that plaintiffs could establish a cause of action against a pharmacist based on labeling.  That result is a first, and could be a big deal.

Claims based on alleged advertising and marketing, beyond the scope of regulated labeling, were not preempted.

Also interesting was the court's analysis of the seller immunity statute and the duty to warn.  Under Michigan's seller immunity statute, a seller other than a manufacturer cannot be liable for harm caused by a product except when the seller fails to exercise reasonable care, or when the product fails to conform to an express warranty.  Mich. Comp. Laws Ann. § 600.2947(6).  Thus, the court found there was no possibility that plaintiffs could establish a strict liability cause of action against the pharmacy under Michigan law – a result that also applies to manufacturers themselves, so long as the drug was in compliance with FDA approved labeling at the time of sale, and in practice forecloses most product liability claims in Michigan under § 600.2947(5)).

As to the duty to warn, while Michigan law strictly states that a pharmacy has no duty to warn the patient of possible side effects of a prescribed medication where the prescription is proper on its face and neither the physician nor manufacturer has required that any warning be given to the patient by the pharmacist, a pharmacy might (at least under the "no possibility" standard for fraudulent joinder) be liable under Michigan law where it "voluntarily assume[s] a function that it was under no legal obligation to assume."  Id. at *3.  For such a claim to exist, the pharmacy defendant must take some voluntary, affirmative action, such as "through advertising or telling a patient about side effects."  Id.  Where such affirmative action occurs, a pharmacy possibly has a duty of care in the warnings issued.

The court acknowledged that a Michigan court may hold that plaintiffs here ultimately failed to state such a claim; however, the standard to be applied in the Fourth Circuit (where the MDL is situate) is whether there is any possibility that plaintiffs could establish such a claim under state law.  For this reason, and others, the Court therefore granted plaintiffs' motions to remand to Michigan state court, acknowledging that plaintiffs still had a "glimmer of hope" of establishing a cause of action based on an assumed duty to warn.

While this result does not seem intuitively defense-friendly, we think the preemption decision deserves mention—even with the lax "any possibility" standard, the court reasoned that the labeling claims were preempted.  This guest blogger will chalk it up as a Michigan win, and continue to harbor her own "glimmer of hope" for the Tigers' 2017 season.

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

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