United States: Breaking News – Arizona Supreme Court Repudiates Stengel

Last Updated: December 27 2018
Article by James Beck

We've always hated the Ninth Circuit's decision in Stengel v. Medtronic Inc., 704 F.3d 1224 (9th Cir. 2013) (applying Arizona law), holding that allegations of failure to provide adverse event reports ("AERs") to the FDA created a viable, and unpreempted, state law claim. Now our #2 worst case of 2013 is effectively gone. Kaput.

Today the Arizona Supreme Court in Conklin v. Medtronic, Inc., No CV-17-0322-PR, slip op. (Ariz. Dec. 18, 2018), expressly – and unanimously − disagreed with Stengel's misinterpretation of Arizona product liability warning law, and since the Arizona Supreme Court is "supreme" on state-law issues, Stengel is invalid. We'll get directly to the good stuff:

We disagree with Stengel. . . . In Stengel, the Ninth Circuit held that the [Medical Device Amendments] did not expressly or impliedly preempt the plaintiffs' Arizona common law failure-to-warn claim based on Medtronic's alleged failure to submit adverse event reports to the FDA. That holding, however, was based on the unsupported premises that "Arizona law contemplates a warning to a third party such as the FDA" and that, "[u]nder Arizona law, a warning to a third party satisfies a manufacturer's duty if . . . there is 'reasonable assurance that the information will reach those whose safety depends on their having it.'" Neither premise comports with Arizona law. . . . [E]stablished law does not recognize a claim merely for failing to provide something like adverse event reports (which may not qualify as "warnings" under Arizona law) to a government agency that has no obligation to relay the information to the patient.

Because Stengel incorrectly recited and applied Arizona law, we decline to follow it. . . . [O]ur case law contemplates that a medical device manufacturer may satisfy its duty to warn consumers by properly warning a third party, such as a learned intermediary. But the FDA is not a learned intermediary or other relevant third party in that analysis. And we are not aware of any case that supports the proposition that a manufacturer is independently required under Arizona law to warn a governmental regulatory body.

Slip op. at 10 ¶¶30-31 (citations omitted) (emphasis added, except for final emphasis, which is original). Put the red flag on Stengel.

So how did the Conklin court reach this exemplary conclusion? The path begins with an excellent preemption ruling in the trial court, Conklin v. Banner Health, 2015 WL 10688305 (Ariz. Super. Oct. 30, 2015), in a case involving a pre-market approved infusion pump. That decision held all negligence per se claims (including the failure to report claim at issue here), preempted under Buckman Co. v. Plaintiffs Legal Committee, 531 U.S. 341 (2001). The intermediate Arizona appellate court reversed preemption of the failure to report claim, following Stengel. See Conklin v. Medtronic, Inc., 418 P.3d 912, 919 (Ariz. App. 2017). A further appeal produced today's opinion.

The Arizona Supreme Court first recognized that, contrary to Stengel, there is no presumption against preemption in express PMA preemption cases. "[A]lthough federal laws are presumed not to preempt state laws, courts do not invoke that presumption when the federal statute contains an express preemption clause." Slip op. at 3 ¶8 (citations and quotation marks omitted). Interestingly, though, Conklin ultimately based its decision mostly on implied, not express, preemption, id. at 7 ¶21 (finding duty-to-report claim impliedly preempted and not reaching express preemption), so the presumption against preemption didn't really figure in the result.

Conklin also utilized the "narrow gap" metaphor to describe the interaction of express preemption and implied preemption in PMA device cases:

Read together, these two types of preemption, operating in tandem, have created a "narrow gap" for pleadings. To make it through, a plaintiff has to sue for conduct that violates a federal requirement (avoiding express preemption), but cannot sue only because the conduct violates that federal requirement (avoiding implied preemption).

Slip op. at 6 ¶18 (citations and quotation marks omitted).

The one aspect of the plaintiff's duty-to-report claim that Conklin held to be expressly preempted was the assertion that the FDA was obligated to make AERs widely available to the public. Federal law did not require that, so:

[T]o the extent [plaintiff] argues that the FDA either has or assumed a duty to convey information from adverse event reports to treating physicians, patients, or more broadly public consumers . . ., [that] claim is expressly preempted because it likewise would impose under state law a requirement that is "different from, or in addition to," any applicable federal requirement.

Id. at 6 ¶20 (regulatory citations omitted).

The broader implied preemption ruling was based, as indicated above, on the absence of any reporting duty owed under state law. Conklin "assume[d] without deciding" that AERs could be "warnings" under state law, but several "but cf." citations indicated its disinclination to so rule. Slip op. at 7 ¶22. The learned intermediary rule, which the court previously adopted in Watts v. Medicis Pharm. Corp., 365 P.3d 944 (Ariz. 2016) (we discussed Watts here and here), proved to be key. Under Arizona law, prescription medical product warnings need only go to learned intermediaries, and the FDA didn't qualify as a "learned intermediary." Arizona's learned intermediary rule "only extends . . . to prescribing and other health-care providers." Slip op. at 8 ¶26. There was never any state-law obligation to warn the FDA:

The FDA is not a health care provider and does not prescribe anything for patients. . . . Accordingly, even if we assume that adverse event reports may constitute relevant warnings, Arizona law does not permit a manufacturer to satisfy its duty to warn end-user consumers by submitting adverse event reports to the FDA. And conversely, a manufacturer does not breach its duty to warn end users under Arizona law by failing to submit adverse event reports to the FDA. [Plaintiff] cites no authority, and we are aware of none, for the proposition that Arizona law requires a manufacturer to warn a federal agency.

Id. at 8 ¶¶26-27 (citations omitted). The duty to warn in Arizona "has not been extended to require a manufacturer to submit warnings to a governmental regulatory body." Id. at 8 ¶28. Submitting AERs to the FDA does not provide "reasonable assurance" that such information "will reach end users (or end users' health care providers) because the FDA is not required to publicly release such reports." Id. at 9 ¶28 (citations omitted).

Thus, the lack of any Arizona state-law duty to report was fatal to plaintiff's reporting-based claims. While Conklin held that such claims don't exist from the outset, the case was litigated and appealed on preemption grounds. Thus followed the preemption ruling that plaintiff's purported reporting claims were purely FDCA-related, and thus preempted under Buckman:

Because only federal law, not state law, imposes a duty on [defendant] to submit adverse event reports to the FDA, [plaintiff's] failure-to-warn claim is impliedly preempted under 21 U.S.C. § 337(a). Absent an independent state law duty to submit adverse event reports to the FDA, [plaintiff's] failure-to-warn claim, at bottom, is an attempt to enforce a federal law requirement. That claim is impliedly preempted under the MDA.

Slip op. at 9 ¶29 (Buckman citations omitted).

Then came the slicing, dicing, and pureeing of Stengel that we quoted at the outset. Conklin closed by dispatching the other cases plaintiff relied on, thus performing the additional service of highlighting the questionable validity of Fiore v. Collagen Corp., 930 P.2d 477 (Ariz. App. 1996). See Id. at 11 ¶33 (Fiore "adopted a minority view . . ., and in any event likely does not survive Riegel").

On this blog, we have declared, until we are blue in the face, that it is a usurpation of state court power for a federal court sitting in diversity to make up new theories of liability under state law. That's what Stengel did, and thankfully, in Conklin, the state high court thereby bypassed by the Ninth Circuit's novel ruling had both the opportunity and inclination to call out the trespassing federal court. Once again:

We disagree with Stengel. . . . Stengel incorrectly recited and applied Arizona law.

Slip op. at 10 ¶¶31-32.

Mic drop.

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

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