United States: The Third Circuit Fosamax Preemption Error Has Got To Go

Last Updated: September 14 2017
Article by Stephen J. McConnell

Last week we were going through the regulatory record of a drug that is now the subject of mass tort litigation. This effort is central to assembling, per the SCOTUS Wyeth v. Levine case, "clear evidence" that the FDA would not have approved whatever label change the plaintiffs are advocating. Then we remembered something. It was even worse than remembering that we left the stove on, or that we left the garage door open, or that we root for the Phillies. We remembered that our case would be governed by Third Circuit precedent, and that the Third Circuit had done its best in the Fosamax case to make it impossible to get summary judgment on preemption.

As we blogged back in March, the Third Circuit in Fosamax reversed summary judgment for the manufacturer and held that it is a question for the jury whether the manufacturer had proved with clear and convincing evidence that the FDA would have disapproved the exact warning suggested by the plaintiffs. Throwing what was really a legal issue to the jury and wrapping said issue in a heightened evidentiary standard that neither the Supreme Court nor any other court of appeals has ever adopted was doubly wrong, wrecked the law on preemption, and presented the plaintiff bar with an undeserved gift that would ultimately decrease drug innovation and increase drug prices. What was truly bizarre about the Fosamax decision was that the FDA had, in fact, rejected the warning. That is about as "clear" a bit of evidence as one could imagine. But that rejection was not good enough for the Third Circuit, which wondered whether the rejection might have turned on the particular wording of the warning.

The Fosamax decision is such an obvious, pernicious error that, in the words of Tony Soprano's crew members when another gangster becomes much too troublesome, it "has got to go." (The Sopranos was set in North Jersey, which is, in fact, in the Third Circuit, so the analogy isn't too overwrought.)

The petition for certiorari in the Fosamax abomination has been filed, and it is a beauty. You can read it here. If it doesn't catch the Supreme Court's eye and alert it to lower court destruction of preemption precedent, it is hard to imagine what would. To begin with, the petition does a magnificent job of doing that thing we were all taught to do in law school: stating the issue in a way that seems to compel the right – and winning – answer. Here is the question presented according to the petition: "Is a state-law failure-to-warn claim preempted when the FDA rejected the drug manufacturer's proposal to warn about the risk after being presented with the relevant scientific data; or must such a case go to a jury for conjecture as to why the FDA rejected the proposed warning?" Petition at i. See what we mean? Asking a jury to conjecture about motives is plainly silly, especially in the face of an FDA rejection of a warning.

The Third Circuit's decision turns on dithering over whether the FDA might have approved the warning if it had been phrased slightly differently. The petition places this speculative misadventure in the context of a larger trend of lower courts erecting substantive and procedural hurdles to the preemption defense because lots of judges simply don't like preemption. The Fosamax decision is especially crazy because it invites "a lay jury's psychoanalysis of why the agency had blocked compliance with local law." Petition at 2. There are two key aspects of the Fosamax preemption test. First, the panel took the "clear evidence" language from Levine and twisted it into a requirement that a defendant prove it is "highly probable" that the FDA would have rejected the label change. That bit is hard enough. But the second step really builds in the impossibility of establishing impossibility preemption: because the issue of whether the FDA would have rejected a proposed change is "counterfactual," the question must go to the jury unless there is a "smoking gun" rejection letter from the FDA that would leave the jury no choice but to find the state-law claim preempted. Petition at 12.

This sort of manifest error needs correction, and SCOTUS has demonstrated a proclivity for granting review to correct lower court decision that limited or circumvented (or, as the petition says on page 15, "defied") preemption. See Mensing and Bartlett. The petition also takes us on a tour of rotten preemption decisions, such as Reckis (Mass. 2015), Mason (7th Cir. 2010), In re Prempro (8th Cir. 2009), and Hutto (La. Ct. App. 2011). We are unsurprised to see a decision from our own Commonwealth represented in this preemption Hall of Shame: Gurley (Pa. Super. Ct. 2015). But the Fosamax error reaches a high-water mark because it makes it virtually impossible for a brand name drug manufacturer to establish preemption, as plaintiff lawyers and their paid experts "can always dream up some 'hypothetical' reason why the FDA might have rejected a proposed warning – and under the decision below, that suffices to reach a lay jury. The jury would then be asked (case-by-case) to guess as to why the federal regulator blocked the manufacturer's state-law compliance." Petition at 14. The way in which the rule was concretely applied in Fosamax highlights its absurdity: "[E]ven though the FDA did reject Merck's warning, the jury could conjecture about the FDA's reasoning and thereby conclude that the agency would not have rejected the warning had Merck improved its draftsmanship." Petition at 25.

The Fosamax transformation of Levine's "clear evidence" language into a heightened "clear and convincing evidence" standard abrogates the strong default rule in civil litigation that matters are to be proved by a preponderance of the evidence. Petition at 26. Typically, courts await direction from the legislature before raising the evidentiary burden. But the much-abused presumption against preemption, coupled with judicial hostility to preemption, apparently works doctrinal wonders Moreover, the requirement that the clear and convincing evidence eliminate any possibility that the FDA might have arrived at a different decision from some theoretical change in circumstances or warning language is at odds with the teaching of Mensing and Bartlett that theoretical possibilities should not dislodge preemption. (Further, as we pointed out in an earlier post, the Fosamax determination that clear evidence preemption is a matter of fact for the jury is fully at odds with Third Circuit precedent that preemption is a question of law for the court.)

The petition concludes with an incisive discussion as to how the Fosamax erosion of preemption "threatens the pharmaceutical industry and the FDA's regulatory role." Petition at 31. The manufacturer in the Fosamax case voluntarily disclosed risk information to the FDA, and the FDA rejected an enhanced warning. To be found liable under such circumstances is ridiculously unjust, and places companies in a quandary. Meanwhile, the FDA's rejection would be merrily second-guessed by juries around the country – a veritable nationwide festival of cynical counterfactualism.

The petition is so well reasoned, and the Third Circuit's error is so egregious, that we harbor optimism that SCOTUS will take the case and, once again, clean up the law of preemption. Two relatively minor references in the petition caught our eye. First, we are told that it was Justice Alito who extended the time to file the petition for certiorari. Petition at 3. Second, there is a quote from Justice Alito's prescient dissent in Levine, where he warned against allowing "juries in all 50 states ... to contradict the FDA's expert determinations." Petition at 31, quoting Levine, 555 U.S. at 626. Justice Alito comes from the Third Circuit. We are hoping he has a keen interest in ridding the law of an error created by his home Circuit.

It is also possible that the petition will induce SCOTUS to invite the FDA, now under a more pro-defense (and, we hope, pro-preemption) commissioner, for its views.

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

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