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More on Tuesday’s Grant in No. 06-1948, Warner-Lambert v. Kent

Six years ago, in Buckman v. Plaintiffs’ Legal Committee, the Supreme Court held that state-law claims alleging that the manufacturer of orthopedic bone screws made fraudulent representations to the Food and Drug Administration (“FDA”) were impliedly preempted by the Federal Food, Drug, and Cosmetic Act. On Tuesday, the Court granted certiorari in No. 06-1498, Warner-Lambert Co. v. Kent, to clarify the scope of its holding in Buckman: specifically, whether a state product liability statute that creates a general “safe harbor” from liability for FDA-approved drugs but carves out an exception for cases in which the approval was obtained through fraud is also preempted.

Under Michigan law, an FDA-approved drug cannot be deemed defective or unreasonably dangerous for product liability purposes unless the approval was obtained through fraud. Pursuant to this state statute, the respondents – all Michigan citizens – filed suit in Michigan state court, alleging that they were injured by Rezulin, a diabetes drug approved by the FDA but ultimately withdrawn from the market by Warner-Lambert. The case was removed to federal district court in Michigan and then subsequently transferred to the Southern District of New York by the Judicial Panel on Multidistrict Litigation. Warner-Lambert moved for judgment on the pleadings, arguing that under Buckman the claims were impliedly preempted, and the district court agreed.

On appeal, the Second Circuit reversed. It held that Buckman applied only to claims based solely on fraud and did not extend to statutes, such as the Michigan one at issue here, in which the fraud on the FDA was merely part of the exception to a product liability claim rather than an element of the claim.

Warner-Lambert petitioned for certiorari. It warned the Court that the Second Circuit’s decision not only conflicted with the Court’s decision in Buckman, but also “threaten[ed] to upset the basic understanding of preemption law that has informed this Court’s decisions since Rice v. Santa Fe Elevator Corp.” in 1947. Certiorari was also warranted, the petition argued, because the courts of appeals were divided on the issue: in contrast with the Second Circuit’s narrow reading of Buckman, three other circuits have adopted a more “functional” approach that deems state law preempted if it requires a plaintiff to establish fraud on a federal agency. Finally, Warner-Lambert asserted that if the Second Circuit’s decision were allowed to stand, it would interfere with the FDA’s “ability to perform its critical functions, which is precisely what this Court sought to avoid in Buckman.”

Opposing certiorari, respondents argued that the effect of the Second Circuit’s decision was much more limited than Warner-Lambert would have the Court believe: it applies only to cases brought in the Second Circuit under Michigan law and in which the plaintiffs can prevail on their contention that fraud was committed during the FDA approval process. Moreover, respondents emphasized, the Michigan legislature was considering a repeal of the product liability statute. In any event, they explained, the burdens on the FDA from the law were in fact minimal – because the FDA can simply decline to allow its employees to testify in any court proceedings – and there is no conflict with Buckman, which – in contrast to the state tort law scheme at issue here – did not implicate the presumption against preemption because it involved only the use of state law to police fraud.

The case is expected to be argued in January or February.