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Argument preview: Court to write yet another chapter on tort protections for generic pharmaceutical manufacturers

Next week’s argument in Mutual Pharmaceutical Co. v. Bartlett has the Court returning to what is becoming increasingly well-trodden ground.  It is the second of a trilogy of arguments this winter in biotech cases – following Bowman v. Monsanto in February and preceding Myriad Genetics in April.  At the same time, it is the third case in the last five Terms on the question of FDA preemption of state torts related to pharmaceutical labels.  First, Wyeth v. Levine held in 2009 that a failure-to-warn claim related to a branded pharmaceutical was not preempted.  Last year, the Court held in PLIVA, Inc. v. Mensing that a negligence claim for failure to warn by a generic manufacturer was preempted.  The distinction on which those cases turn was the freedom to make changes to the product’s label: available under federal law to the branded manufacturer in Wyeth, but denied to the generic manufacturer in PLIVA.  Because federal law denied the generic manufacturer in PLIVA discretion to use a different label, the Court could not tolerate a state-tort action premised on the poor quality of that label.

This case arose when the First Circuit upheld a strict-liability verdict premised on the finding that a generic version of sulindac was unreasonably dangerous.  All agree that the injuries suffered by respondent Karen Bartlett, who was the plaintiff below, were horrific — burns over most of her body associated with Stevens-Johnson Syndrome and toxic epidermal necrolysis (“SJS/TEN”). All agree that the condition is a recognized, though rare, side effect of administration of sulindac.  And all agree that at the time the plaintiff consumed the pharmaceutical, the generic product and label conformed to FDA standards requiring that it be substantially similar to the branded product and its label.

As it comes to the Court, the generic manufacturer (represented by Jay Lefkowitz – fresh from his victory in PLIVA) argues that the case is in all relevant respects identical to PLIVA.  Why should it matter, he asks, whether the state court characterizes the tort as “negligence” or “strict liability”: if it requires an award of damages based on alleged defects on the label required by the FDA, the cause of action must be preempted.  Now before the Court embraced the foundational nature of the distinction between generic manufacturers and branded manufacturers, the case might have seemed hard.  But coming on the heels of PLIVA, Lefkowitz can present a simple, straightforward, and compelling argument.

The grievously injured plaintiff turned to David Frederick for representation in the Supreme Court; he turns in a predictably masterful brief in response.  Essentially, he argues that the type of tort liability at issue here – strict liability – is fundamentally different from negligence.  Negligence is designed to change the defendant’s conduct, and thus conflicts with a federal rule defining the proper standard of conduct.  Strict liability, by contrast, is not concerned with changing the defendant’s conduct or preventing marketing of the approved federal product.  It is, rather, simply requiring the manufacturer that sells a dangerous product to internalize the inevitable costs associated with use of the product.  Frederick emphasizes that outside the express preemption context (where the Court is interpreting a federal statute that specifies the boundaries of preemption), the Court has never faced such a tort.  Thus, he is free to argue vigorously that this tort really is quite different from the negligence tort at issue in PLIVA.

The argument he presents has some attractive attributes.  For one thing, it produces a result that resonates with a sensible framework of regulatory design – if we are going to sell these kinds of products because they are so incredibly valuable to society, it makes some sense to price them in a way that includes the costs of compensating those harmed by the product. This is particularly true on the facts of this case, where the choice between a generic product (where recovery seems doubtful under PLIVA) and a branded product (where recovery often would be available under Wyeth) is doubtless a choice made by the patient’s insurance company (or pharmacist), with little consideration of the multimillion-dollar consequences for the patient.  More broadly, the facts of this case resonate with the concerns about the scope of the FDA’s mission that undergirded the decision in Wyeth.  A great deal of information about the risks of sulindac was available at the time of Bartlett’s injury, but the FDA was still mulling the significance of that information.  Ultimately, some years later, it required a number of changes to the labels of the affected products, too late to have any effect on Bartlett’s situation.

Having said that, at the end of the day, Frederick’s argument also has some salient weaknesses.  The most obvious problem relates to the standard for liability under state law.  It would be one thing if liability was predicated simply on the sale of a dangerous product.  But in fact Frederick’s argument rests on a tort doctrine imposing strict liability only on products that are “unreasonably” dangerous.  And the litigation below branded this particular product “unreasonably” dangerous in part because of the label’s failure to address the likelihood of her particular condition.  Hence, although it is a form of strict liability, it remains, like the tort held preempted in PLIVA, a tort premised on an assessment of the “reasonableness” of the generic manufacturer’s decision to use the label the FDA required it to use.  It is safe to predict it will be hard (though perhaps not impossible) to get any of the Justices from the PLIVA majority to accept that argument.  Which isn’t to say the argument won’t be enjoyable.  Lefkowitz and Frederick are both veterans who can be counted on to put on a first-rate show.

Recommended Citation: Ronald Mann, Argument preview: Court to write yet another chapter on tort protections for generic pharmaceutical manufacturers, SCOTUSblog (Mar. 14, 2013, 11:33 AM),