Thursday, June 23, 2011

No State Remedy for Plaintiffs Harmed by Generic Drugs

A sharply divided Supreme Court ruled (5-4) today in PLIVA, Inc. v. Mensing that federal prescription drug laws preempt plaintiffs' state failure-to-warn claims against a generic drug manufacturer.  The ruling comes just two years after the Court ruled in Wyeth v. Levine that similar federal law doesn't preempt a plaintiff's state failure-to-warn claims against a brand-name drug manufacturer.  As a result, the cases together mean that a plaintiff injured by a brand-name manufacturer can sue in state court, while a plaintiff injured by a generic manufacturer can't--a bizaare result, even by the Court's reckoning, and a significant one given generics' dominant place in the prescription drug market.

The difference, says the majority, is how federal law treats generic manufacturers versus brand-name manufacturers.  Justice Thomas wrote for Chief Justice Roberts and Justices Scalia, Kennedy, and Alito that federal law governing generic labels doesn't allow generic manufacturers to unilaterally change their label.  Instead, a generic manufacturer has to petition the FDA for a change in label.  In contrast, federal law governing brand-name labels allows a brand-name manufacturer to unilaterally enhance a label (to account, e.g., for newly discovered harms from the drug).

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According to Justice Thomas, this means that generic manufacturers can't simultaneously comply with federal law (prohibiting unilateral changes to their labels) and state failure-to-warn standards (requiring them to change their labels).  In contrast, brand-name manufacturers can comply with federal law (allowing unilateral changes) and state failure-to-warn standards (requiring them to change their labels).  In the former case, as in Mensing, federal law preempts; in the latter case, as in Wyeth, it doesn't. 

Justice Thomas wrote that the mere possibility that the FDA would grant a generic manufacturer's petition for a label change isn't enough to show that the manufacturer could comply with both federal law and state standards. Thus he wrote that "[t]he question for [impossibility preemption] is whether the private party could independently do under federal law what state law requires of it."  Op. at 13.

But this is a significant change from the way the Court analyzed preemption in Wyeth--in both result and method.  In Wyeth, the defendant brand-name manufacturer had a similar kind of possibility of complying with both federal law and state standards: federal law allowed the FDA to disapprove a brand-name manufacturer's label change, even as it allowed the manufacturer to unilaterally make the change.  In other words, federal law takes away from both generic manufacturers and brand-name manufacturers the ability to "independently do under federal law what state law requires of it."  They both lack independence; it's just a different degree of independence.  But by setting this new preemption standard at "independence," the Court puts a thumb on the scale in favor of federal preemption whenever there's any intervening third party (like the FDA in both Mensing and Wyeth).  This changes the traditional presumption against federal preemtion in impossibility preemption cases and tilts in favor of manufacturers (and against state tort plaintiffs).

Justice Thomas would have gone even farther.  His opinion included a section appealing to the original uses of clauses like the Supremacy Clause, in particular the phrase "any Thing in the Constitution or Laws of any State to the Contrary notwithstanding."  Justice Thomas wrote that this phrase was a non obstante provision under 18th century usage, and "suggests that federal law should be understood to impliedly repeal conflicting state law," op. at 15, underscoring his more narrow textual approach.  But Justice Thomas had just four votes for this section of his opinion; Justice Kennedy declined to join it.

Justice Sotomayor wrote a lengthy and critical dissent for herself and Justices Ginsburg, Breyer, and Kagan.  She appealed to congressional purpose--the traditional touchstone for preemption analysis--and looked to text, context, and legislative history to conclude that federal law did not preempt the plaintiffs' state failure-to-warn claims.

Coming just two years after Wyeth, Mensing marks a significant shift in the Court's approach to impossibility preemption, and maybe to preemption more generally.  Wyeth was a 6-3 ruling, with both Justices Kennedy and Thomas agreeing that federal law did not preempt.  (They're the only two Justice to switch.)  In Wyeth, Justice Thomas wrote a detailed concurrence, arguing for a more limited, textual approach to preemption doctrine.  His approach came to full fruition in his majority opinion in Mensing, although Justice Kennedy's refusal to join the strongest portion of his opinion denied him a majority for his non obstante theory.  Now it appears that the narrow, textual approach (in contrast to Justice Sotomayor's more traditional approach) has five votes on the Court, at least in cases where a defendant can't "independently do under federal law what state law requires of it."  But as discussed above, that standard would also sweep in Wyeth, unless there's some more subtle line-drawing that's not entirely obvious from today's ruling.  (Just to be clear: the Court today did not overturn Wyeth.)

But in the end, this case, like all preemption cases, gives Congress the last word.  And as mentioned above, even Justice Thomas (for the Court) recognizes the bizaare result here and in some places comes close to suggesting that Congress revisit this differential treatment.  In the meantime, prescription drug consumers are well advised to pay attention to the drugs they get from the pharmacy: A generic may come at a lower out-of-pocket cost, but it now also comes with a significantly higher opportunity cost of suing the manufacturer in state court when a consumer is harmed because of a bad label.

SDS

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