FDLI conference: top cases

Food & Drug Law Institute Annual Conference

Top 20 Cases in Food & Drug Law in 2012 and Cases to Watch in 2013

Bill Janssen, Charleston School of Law: Weddle v. Bayer AG

Weddle, former college football player/San Diego Chargers player.  Aug. 2009 copromotion between Bayer and a sports publication, Athlon: jointly marketing a football yearbook and Alka-Seltzer.  Companion packaging includes an image of Weddel (photoshopped without his permission; his number 32 is visible).   Sued for misappropriation of likeness.  Typical defenses—innocent infringement, First Amendment, newsworthiness.  Weddel moved to strike affirmative defenses under Iqbal/Twombly.  Does Twiqbal apply to defenses?  Generations of federal pleaders have pled sparse/spartan, nonfactual affirmative defenses, notifying plaintiff of the category of the defense defendants are asserting.  Eliminating all the legal conclusions, they don’t allege surviving facts!  (Although one could argue, I suppose, that given the allegations of the complaint, the legal conclusions are backed up by facts.) 

Initially defendants attempt to enhance some of the factual bases for the affirmative defenses, but not the First Amendment defense: purely a legal claim.  Will the defendants have the legal right to introduce evidence about a First Amendment defense?  There is no circuit-level authority on pleading general/affirmative defenses.  There is a horrific split among district courts throughout the 9^th Circuit.  Judge examines text & function of the two rules.  Rules are textually different.  Rule 8(c)(1): defenders must “affirmatively state any avoidance or affirmative defense,” while claimants must plead a “claim showing that the pleader is entitled to relief.”  That language points against applying Twiqbal. Defending parties and pleaders are not similarly situated—defenders have less time; other concerns.  Twiqbal ought not to apply.  In a quick docket jurisdiction, leave to amend may be hard to come by.

On one side: fairness. It’s only fair to treat all federal pleaders the same.  Plausiblity isn’t the same as possibility, and plausibility saves costs, time, and discovery. Over the years, though, the courts grow to conclude that there are important differences.   Defenders only get 21 days; only defenders must counterplead; unasserted affirmative defenses are deemed waived; defenders gather info reactively; judicial culling usually not necessary for factless affirmative defenses; discovery is already opened; risk of inducing extortionate settlements is low; won’t delay.  Original trend was 50/50 but courts are now trending to not apply Twiqbal.

But: J&J Sports Productions sues a bunch of establishments for misappropriating its signal.  Four cases: E.D. Cal: Twiqbal does apply to affirmative defenses; boilerplate affirmative defenses stricken for lack of plausibility.  Arizona: Twiqbal doesn’t apply. Indiana: Twiqbal doesn’t apply, but boilerplate affirmative defenses are stricken for lack of “fair notice.”  So three variants today exist.  One view: plausibility required; another: simple notice of the type of affirmative defense: third, “enough facts to impart contextual comprehensibility”—good luck with that.

This is a problem for federal litigators, and not one being well highlighted.  Could have significant consequences—emerging majority exists but is very fractured. The split is not national, not circuit-level, not district-level, but chambers-level.  Waiver risk in unasserted/underasserted affirmative defenses, which can be case-dispositive with new boundary-pressing defenses given new life by recent litigation developments.  This is a discretionary ruling; judges have wide discretion and examined on appeal for harmless error; it’d be an interlocutory appeal anyway if there isn’t a settlement or defendant victory on other grounds, so this will be around for years.

Resolving Twiqbal’s applicability has potentially case dispositive implications, especially for a re-enlivened First Amendment defense.  The only current solution is research at the chambers level.

Case to watch for 2013: how broadly Buckman preemption ought to apply in 9^th Circuit; court held that it didn’t apply if the foundation of the claim was linked to a statement that finds its basis in state law.  Stengel: Arizona case alleging that FDA didn’t receive all it was supposed to receive and thus wrongfully approved/wrongfully allowed a product to stay on the market. Common law claim for failure to warn. Panel originally applied Buckman preemption. En banc, 9^th Circuit unanimously reversed.  Joined a bunch of other circuits; split with 8^th; good candidate for SCt review.

Allison Zieve, Director, Public Citizen Litigation Group/Director, FDLI Board

Bartlett v. Mutual: generic equivalent of product that poses risk of extremely serious side effect: lost 60-65% of her skin deteriorated or burned off; had to be put in a coma for months; tube fed for a year; permanently disfigured and legally blind; many serious consequences.  She sued Mutual under NH product liability law on a theory of design defect: magnitude of risk outweighed benefit to public.  Jury returned a verdict for Bartlett.  Of course, none of this is relevant to the issue before the SCt.

Latest in a line of FDA preemption cases about state law product liability.  There is no federal product liability law, so if state law is preempted, there’s no way to seek compensation and no potential liability for manufacturer. Mutual moved for JMOL arguing preemption, because Hatch-Waxman required it to use the same design as the brand name equivalent.  One element: the role of the labeling in the product defect case—under NH law, manufacturer can use label to ameliorate danger by providing a warning that makes the danger manageable.  In Mutual, company didn’t assert that defense at trial, and the jury was instructed that the standard was whether the product was unreasonably dangerous.  So one question is whether the label ought to matter, and whether design claims are preempted in the same way that label claims are because federal law requires the design of the product to be the same as the brand.  The First Circuit said that one could comply with both federal and state law by not marketing the product—federal law doesn’t require the marketing of the product.  Congress didn’t intend to make the FDA the sole means of ensuring safety and effectiveness.

SCt granted cert and FDA filed amicus.  Supreme Court has disagreed with FDA on preemption in recent cases (in both directions), unusually for cases about implied preemption. FDA says the question is close but comes down on pro-preemption unless design claims are based on new scientifically significant evidence that would have rendered the product misbranded under federal law.  She doesn’t think this exception would have any practical effect.  Prediction: court will decide for both prescription generics and brand names, but the OTC statutory analysis is different.

Note that the costs of injury will be the same; the difference is who pays.  Traditionally allocation of responsibility has been left to state courts, but that’s been shifted as a result of preemption.

Short case to watch: Mississipi ex rel Hood v. AU—whether a state parens patriae case is removable under CAFA.  Conflict is over whether it’s a mass action that can be removed; 5^th Circuit has said yes but others have said no. Of interest to food & drug folks because AGs sue them a lot.

Margaret Foster Riley, U Va. Law: US v. Regenerative Sciences LLC, 878 F. Supp. 2d 248 (D.D.C. 2012)

Deceptively simple case, like the healthcare cases.  Probably your reaction to the outcome depends more on first principles than on the law or the facts.  This case looks really easy but is likely not. Through litigants’ tenacity we may actually get profound changes in law.

Regenerative Sciences operates only in Colorado.  Its product/treatment Regennex consists of autologous stem cells from bone marrow expanded in a nutrient solution including growth factors from pateint’s blood, isolated using an enzyme, inspected in a Colorado lab, combined with at least one drug product and other additives, placed in syringes and injected into the patient to treat orthopedic conditions and injuries.  (Claims trade secret over what’s actually in it.)  Either creating a product or expanding it into a treatment and putting it back into the patient.

Issues: Is Regennex a drug subject to FDA regulation or is its use the practice of medicine outside FDA purview?  (Does it change the biological characteristics/change use in the body when reimplanted?  FDA says by expanding cells, growing them, and adding other products, you’ve moved out of the lower standard for regulation and into the tier of creating a new product.  Bone marrow transplants are ok to the FDA.) Does it involve more than “minimal manipulation” making it subject to more stringent approval requirements?  Since RS operates only in Colorado, does FDA’s Commerce Clause based authority extend to its activity?  (I can’t see how the healthcare cases change this, because this is affirmative commercial activity instead of inactivity, but then I’m traditional.)

Court says: Regennex is a drug and a biological product w/in the meaning of the FDCA.  It qualifies as “more than minimally manipulated” and that makes it subject to the FDCA’s approval requirements. Because Regennex includes drug components shipped in interstate commerce, the interstate commerce requirement was met.  Going forward, it might not be hard to make the components in Colorado, so what then?

RS has appealed.

Issues: Stem cell politics. Are autologous stem cells (taking it out of a person and putting it back in)/“regenerative medicine” different?  FDA says autologous stem cells aren’t different and her opinion is that we don’t know how they work, so we need to think a lot more about safety etc. Is the minimal manipulation standard for FDCA coverage too restrictive?  Stem cell tourism—companies moving abroad, with fewer protections for patients--and the future of industry.

She also discussed Myriad as a case to watch and made a point that she didn’t put this way but I will: Sotomayor was excoriated in commentary for using an analogy to cookie components, whereas Roberts completely got away with a baseball analogy, and she made the point that she’d used a cake analogy once in class and this made the law school’s “revue” for four years running.  While the takeaway she gave was “don’t use cooking analogies,” perhaps a more pointed takeaway would be that male-oriented/sports analogies pass unnoticed while analogies to more feminized endeavors get picked apart as ludicrous. 

Lisa Heinzerling, Georgetown: Pom Wonderful v. Coca-Cola

“100% juice blend to help nourish your brain”: Product name Pomegranate Blueberry (small print: flavored blend of five juices).  Vignette: picture of the fruits, including a pomegranate, apple, raspberries, and blueberries.  Pom alleged that this was misleading because pomegranates were .3% of beverage and blueberries were .2% of the product.  Many consumers would be surprised to find the small amounts of the product represented by the fruits in the name.  Two federal regulatory regimes competing for space in the same general area: FDCA and Lanham Act.  How will they coexist?  Not federal-state preemption.

In 1976, half of our food supply was regulated by food identity standards.  Here, the issue is whether Coca-Cola engaged in false advertising under the Lanham Act; food identity standards come into play because FDA has a regulation on multiple-juice beverages. The name was fine under that regulation.  Thus, the 9^th Circuit said, the FDA had engaged in comprehensive label regulation for multiple juice beverages, so the Lanham Act had to give way.

Odd features: no close analysis of the exact regulatory language; no finding of irreconcilable conflict; no recognition that the Lanham Act came after the FDCA and would ordinarily prevail. 9^th Circuit analysis is just not careful. It has a certain sense but is casual.  Indeed, in a number of cases, the 9^th Circuit doesn’t seem to know what the FDA did—“as far as we can tell,” and “apparently,” which is odd since you can see what the FDA did in the Federal Register in 1993. 

On the merits, one could say the 9^th Circuit got it wrong—refers to “comprehensive regulation,” but Pom Wonderful points out in its cert petition that the FDA lacks the resources to go after all the food mislabeling out there.  FDA regulation is a floor, but doesn’t give authority to go out & deceive consumers.  Pom’s position: be comfortable with multiple regulatory regimes.

A number of district courts have taken this decision to mean not just that the Lanham Act should give way but also that state laws should.  (Ed. note: though others haven’t; I’ve got another upcoming case that reads Pom Wonderful narrowly.)

Case to watch: Pom Wonderful’s challenge to the FTC’s enforcement action.  (Regulations for thee but not for me!  Pom’s claim against Coca-Cola seems strong to me, though its defense against the FTC is unconvincing.)

Various points of discussion; Zieve made the point that the FDA is gunshy now after cases after Caronia and Western States; shockingly, courts aren’t that sympathetic to the public safety mission.