United States: Guest Post – Revisiting The Third Circuit's Struggles With Design-Defect Preemption

Last Updated: November 20 2018
Article by James Beck

Today we have another guest post by long-time friend of the blog, Dick Dean, and his colleague at Tucker, Ellis, Mike Ruttinger. Regular readers will recall, that right after Sikkelee v. Precision Airmotive Corp., ___ F.3d ___, 2018 WL 5289702 (3d. Cir. Oct. 25, 2018), was decided, we blogged about the aspect of that decision that we thought was most directly relevant to drug/device litigation – the court's rejection of tort claims based on failure to make reports to government agencies. We briefly mentioned the remainder of the Third Circuit's decision (which was actually by far the lengthier discussion), but didn't spend much time on it. In this post, Dick and Mike rectify that oversight. As always, our guest bloggers deserve 100% of the credit (and any blame) for their discussion.

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The Third Circuit is having a bad year on preemption. Its decision in In re Fosamax Products Liab. Lit., 852 F.3d 268 (3rd Cir. 2017), in which it held that it is for juries and not judges to determine whether there is "clear evidence" sufficient to meet the Wyeth v. Levine, 555 U.S. 555 (2009), standard for preemption in a failure-to-warn case, was accepted for review by the Supreme Court and is widely expected to be reversed. [Editorial note – Fosamax ended up tied for the worst decision of 2017. We hope to be rid of it in 2018.] And now the Circuit has injected needless confusion into the test for impossibility preemption set forth in Levine's follow-up case, PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011). Mensing is familiar to many as the case that clarified the rule for determining when an impossible-to-resolve conflict between federal and state law preempts plaintiffs' claims. If the change the plaintiff seeks is one that requires prior approval or federal permission, then the claim is preempted. Id. at 620 ("The question for 'impossibility' is whether the private party could independently do under federal law what state law requires of it.") (emphasis added). [Editorial note: We call that the "independence principle."]

The recent Third Circuit decision, Sikkelee v. Precision Airmotive Corp., No. 17-3006, 2018 WL 5289702, at *8 (3rd Cir. Oct. 25, 2018), is a wrongful-death case that originated from a 2005 airplane crash. As the date suggests, it has been around for quite a while; this is the litigants' second trip to the Third Circuit after a 2016 appeal [blogged about here] culminated in denial of a petition for certiorari and a remand for the Middle District of Pennsylvania to consider conflict preemption issues. Specifically, the focus of Sikkelee became the design of the airplane carburetor. The district court initially found the plaintiff's defect claim to be barred by field preemption under the Federal Aviation Act because federal regulation of aviation is so extensive as to preempt the entire field of airplane design-related tort law. Sikkelee v. Precision Airmotive Corp., 45 F. Supp. 3d 431 (M.D. Pa. 2014). But the Third Circuit reversed that decision, suggesting that while field preemption does not apply, "the case law of the Supreme Court and our sister Circuits supports the application of traditional conflict preemption principles." Sikkelee v. Precision Airmotive Corp., 822 F.3d 680, 699 (3rd Cir. 2016). Accordingly, the Third Circuit remanded with an opinion directing that the district court should consider the conflict preemption principles set forth in Mensing.

Given the Third Circuit's lengthy discussion of Mensing in its 2016 opinion, what came next was quite a surprise. The panel that issued the 2016 decision acknowledged the role that Mensing, as well as a subsequent decision, Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472 (2013), play in the conflict preemption analysis at length. The court even honed in on the FAA's "preapproval process for aircraft component part designs" as a key factor for the district court to consider in any conflict preemption analysis because the FAA would need to preapprove the alternate design that the plaintiff alleged as the basis for her lawsuit. Sikkelee, 822 F.3d at 708 ("Thus, the reasoning of the Bartlett majority, 133 S. Ct. at 2473, 2480, and the consideration we must give to the FAA's views under separation of powers principles, see Wyeth, 555 U.S. at 576-77, 129 S. Ct. 1187, lead us to conclude that the FAA's preapproval process for aircraft component part designs must be accorded due weight under a conflict preemption analysis."). On remand, the district court followed the Third Circuit's suggestion and found that the design-defect claim regarding the carburetor was indeed preempted because federal regulations required prior approval of the suggested design change. Sikkelee v. AVCO Corporation, 268 F. Supp. 3d 660 (M.D. Pa. 2017). But on October 25, that decision was reversed on appeal by a completely different panel of Third Circuit judges. The new panel found no conflict preemption, applying the "clear evidence" test from Wyeth v. Levine rather than the Mensing prior approval test. Specifically, the panel reasoned that "the nature of FAA regulations and Lycoming's interactions with the FAA—including the changes it has made to its type certificate—demonstrate that Lycoming could have—indeed it had—adjusted its design." Sikkelee, 2018 WL 5289702 at *8. For the defendant "to be entitled to an impossibility-preemption defense," the court reasoned, "it must present 'clear evidence that the [FAA] would not have approved a change.'" Id. Because it found evidence that the FAA would have permitted the change, the court held conflict preemption inapplicable.

The contrast between the Third Circuit's two Sikkelee decisions is made only starker by the dissenting opinion filed by Judge Roth. From the outset, Judge Roth notes that the majority erred by taking "a piecemeal approach to the Supreme Court's impossibility preemption precedents." Id. at *13. Put simply, Wyeth v. Levine cannot be read in a vacuum; for the Supreme Court's trilogy of conflict preemption cases—Levine, Mensing, and Bartlett—to make sense, they must be read together. This is not a novel position, but one spelled out by a wide variety of courts over the last five years. Among the many to do so are Yates v. Ortho-McNeil-Janssen Pharmaceutical, Inc., 808 F.3d 281 (6th Cir. 2015), In re Celexa and Lexapro Marketing and Sales Practices Litigation, 779 F.3d 34 (1st Cir. 2015) (reading Wyeth and Mensing in combination), Utts v. Bristol-Myers Squibb Co., 226 F. Supp. 3d 166, 178-83 (S.D.N.Y. 2016), and—yes—the Third Circuit's first Sikkelee decision, Sikkelee, 822 F.3d at 702-03 (reading Levine, Mensing, and Bartlett together to spell out different preemption rules for claims based on different regulatory scenarios). The point, Judge Roth explained after reviewing the three decisions, is that:

When a manufacturer operating in a federally regulated industry has a means of altering its product independently and without prior agency approval . . . state-law claims against the manufacturer alleging a tortious failure to make those alterations ordinarily are not preempted; but, when federal regulations prohibit a manufacturer from altering its product without prior agency approval, state-law claims imposing a duty to make a different, safer product are preempted.

Sikkelee, 2018 WL 5289702 at *13.

Put another way, the fact that a defendant may have made changes in the past which were approved does not negate the fact that it still had to ask a federal agency for permission to make a change. The fact that a party has to ask is dispositive, as the Supreme Court clarified in Mensing when it held that "[t]he question for 'impossibility' is whether the private party could independently do under federal law what state law requires of it." 564 U.S. at 620. Levine was simply the wrong framework because in Levine, it was undisputed that the brand drug-manufacturer could unilaterally do what the plaintiff alleged state law required.

In contrast with Levine, on which the majority relied, it was undisputed in Sikkelee that the design change would require prior approval. The first Third Circuit panel expressly held that "the type certification process results in the FAA's preapproval of particular specifications from which a manufacturer may not normally deviate without violating federal law." Sikkelee, 822 F.3d at 702. The majority ignored that conclusion entirely. Indeed, though parsing several of the applicable FAA regulations, the majority never addressed whether those regulations require prior approval of the requested change. Instead, it short-circuited the inquiry by merely concluding that since the changes had been made subsequent to the accident, the prior approval element was meaningless. Judge Roth, in dissent, was the only member of the panel to address the prior-approval issue and came to the same conclusion as the first Sikkelee panel—that prior approval was a necessary predicate to the design change. And since prior approval was required, the case was more like Mensing than Levine, leaving no need to apply the clear-evidence standard.

The trilogy of Levine, Mensing, and Bartlett lay out a clear rule for conflict preemption—the same one summarized by Judge Roth. If en banc review does not cure the Sikkelee opinion, the Third Circuit may find that Fosamax is not the last preemption decision it sends to the Supreme Court for review.

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

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