Fraud on the FDA may disentitle a manufacturer from protection against state law claims

In re Medtronic, Inc., Implantable Defibrillators Litigation, 2006 WL 3420285 (D. Minn.)

This multidistrict litigation could have ended swiftly if the court had accepted defendant’s summary judgment motion arguing that plaintiffs’ state-law claims were preempted by the FDCA.

Medtronic makes implantable defibrillators for treating cardiac arrhythmia. As Class III medical devices, the defibrillators are intensely reviewed by the FDA, including a rigorous premarket approval process requiring the maker to demonstrate a “reasonable assurance” that the device is both safe and effective for the conditions set forth in its labeling. After approval, device manufacturers must self-report adverse events, defined as events that, if they recurred, would be likely to cause or contribute to a death or serious injury.

For summary judgment purposes, these are the facts: Medtronic’s defibrillators were approved in 1998, after which Medtronic systematically modified them. The modifications required supplemental applications to the FDA, which were reviewed less rigorously than the initial approval. In 2000, Medtronic sought and received approval for a new battery, which was a major change.

In 2003, as part of routine testing, Medtronic discovered a battery defect that caused the battery to short and discharge prematurely – batteries could lose their charge in days instead of years. Over the course of eight months, Medtronic continued to test and understand the shorting problem. Medtronic alleges that it didn’t notify the FDA, physicians, or patients during this period because it hadn’t received any field reports of actual failure, and assumed that the problem was limited to laboratory conditions. During this period, Medtronic sold thousands of devices with the potentially defective batteries.

Even without field reports of failure, Medtronic began to redesign its battery in spring 2003. Meanwhile, Medtronic sought and received approval for three additional models, each containing the old battery. Each supplemental application failed to inform the FDA about the shorting problem. In October 2003, Medtronic filed another supplemental application for three design changes to the battery, stating that the prior design had a “known failure mode” in which it shorted. The FDA approved the new battery that month. Even so, Medtronic didn’t notify doctors or patients about the old battery and continued to sell units with the old batteries.

In early 2004, Medtronic began to receive field reports of premature battery depletion, at which time it first reported adverse events to the FDA. By December 2004, there were nine field returns of prematurely depleted batteries. In February 2005, Medtronic first notified the public of the defective battery by sending out a “Dear Doctor” letter warning about the short. The next month, the FDA initiated a regulatory enforcement action against Medtronic, ordering a recall of 87,000 devices containing the old battery.

Against this background, plaintiffs seek damages for personal injuries under theories including negligence, strict liability, breach of warranty, misrepresentation, and violations of state unfair practices laws.

Plaintiffs provided the affidavit of Dr. Suzanne Parisian, a former FDA employee. She says that Medtronic omitted information essential to the FDA’s continued approval of the battery. “She points to specific post-marketing requirements, which she claims imposed upon Medtronic certain obligations which were not fulfilled, particularly concerning timely performance of post-marketing studies, timely submission of reports, and altering devices without prior FDA approval. The court assumed that these allegations were true for motion purposes.

The FDCA provides that states may not impose on medical devices any safety or effectiveness requirement “different from, or in addition to,” any applicable FDCA requirement. The key cases are Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), and the Eighth Circuit Court of Appeals' decision in Brooks v. Howmedica Inc., 273 F.3d 785 (2001) (en banc). The court made the most use of Justice Breyer’s partial concurrence in Lohr, which explained the majority rule about whether general state tort law can be preempted in these terms: “if a jury were to find negligence in the use of a wire longer than one inch in the manufacture of a hearing aid when the FDA had required a two inch wire, there would be federal preemption as surely as if a state regulation were to impose such a limitation.” In Lohr, however, defective design, manufacturing, and labeling claims survived preemption because there were no specific federal requirements with which such claims could conflict. In that case, the device at issue was approved under the less rigorous premarket notification process, and approval simply reflected the FDA’s conclusion that a new device was substantially equivalent to a pre-existing device.

Lohr sets forth a two-part rule: (1) Are there any device-specific federal requirements? (2) If so, would the state common-law claim impose a requirement different from, or in addition to, the federal requirements? The Eighth Circuit considered those principles in the case of a product that had been through the full approval process, and found that it did impose specific requirements; thus, the plaintiff’s failure to warn claims would interfere with federal labeling requirements and was preempted.

As with Brooks, the court here concluded that the full approval process involves device-specific federal requirements. Once a Class III device receives approval, its maker can’t make any changes affecting safety and effectiveness without a further FDA approval. Thus, the key issue was question (2). To prove preemption, Medtronic needed to show that plaintiffs’ state claims “would require it to design, manufacture, or label its devices in a manner inconsistent with its PMA specifications.”

The court rejected the argument that FDA approval shields Medtronic from any state law claims at all. Medtronic failed to show how plaintiffs’ state law claims would actually impose conflicting requirements on it. Plaintiffs claim Medtronic violated FDA regulations, and their state law claims are premised on those violations. (For example, they claim that Medtronic improperly manufactured the devices and failed to comply with FDA reporting requirements.) Plaintiffs’ claims, if successful, allow additional remedies, but do not differ from or add to federal requirements.

It seems that the court's holding was driven by evidence which, if believed, could show that Medtronic withheld critical information from the FDA while seeking supplemental approvals. Given that Congress decided to regulate medical devices strictly, manufacturers can’t claim the benefit of FDA approval when that approval was obtained through subterfuge.

The court’s specific analysis of the failure to warn, implied warranty, and express warranty claims found them non-preempted. Of most note for advertising law purposes: Plaintiffs’ express warranty claims, based on Medtronic’s promotional statements and product literature, challenge Medtronic’s claims that its defibrillators were safe and highly reliable. Medtronic argued that its labeling was FDA-mandated, so any allegations about incomplete information are preempted. Though the FDA approves the label, Medtronic hadn’t shown that the FDA imposes requirements for promotional statements (and I believe it would be difficult for Medtronic to do so with the specificity required by Lohr, given that the FDA does not engage in rigorous review of most ads). In any event, express warranties arise from the parties’ representations, and requirements imposed by the warranty are created by the warrantor, not imposed by state law, and thus not subject to preemption.

As for the consumer protection claims, they are also based on advertising and promotional materials. Thus, a jury verdict wouldn’t conflict with the specific FDA approval of the devices and their labeling. Moreover, FDA regulations also specifically exclude state unfair trade practices laws from preemption.

So much for express preemption. What about the idea that a jury should not be evaluating whether Medtronic complied with the FDA’s requirements, given that the FDA has never found or cited it for a regulatory violation? In a careful analysis, the court found no implied preemption. Medtronic relied on Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001), which rejected independent enforcement of “fraud on the FDA” claims. Plaintiffs aren’t claiming fraud on the FDA as their cause of action. They claim to have been themselves deceived and injured by Medtronic’s misrepresentations and continued sales of defective devices. Plaintiffs can use evidence, if such exists, of Medtronic’s manipulation of the regulatory process in order to prove their tort claims, even though they can’t sue for fraud on the FDA. The states’ historic interest in regulating health and safety is further reason to reject implied preemption.

In a final section, the court raised the possibility that Medtronic’s actions might have placed it beyond the scope of FDA preemption entirely. Under the model set out by Congress, the manufacturer has the “highest duty” to make safe products. The FDA has only a limited ability to obtain the information it needs for approvals. Thus the manufacturer has a heightened duty to disclose relevant information. If plaintiffs are correct, Medtronic had an affirmative duty to disclose information about the battery flaw posthaste, but instead sought approval for more devices “bearing a medical Trojan horse.” That arguably placed it beyond federal preemption protection, given that failure to comply with a post-approval requirement such as adverse event reporting is a ground for revoking that approval. Returning to Justice Breyer’s one-inch wire/two-inch wire example, it is as if the manufacturer knew but failed to disclose that the FDA-required two-inch wire is “defective, corrosive and barbed” rather than safe and effective. At this point, Congress’s self-disclosure scheme has been subverted, and the protection it offers manufacturers is no longer justified.