United States: Supreme Court Puts New Spin On Preemption Analysis

Last Updated: June 4 2019
Article by Paige Hester Sharpe and Neda N. Hajian

On May 20, 2019, the Supreme Court issued its opinion in Merck Sharp & Dohme Corp. v. Albrecht, No. 17-290 (May 20, 2019), a case that provided it the opportunity to clarify the standard for the impossibility preemption defense in pharmaceutical cases. While the ruling was unanimous and made clear that preemption is a question for the judge—not the jury—to decide, the Court put only a gloss on the "clear evidence" standard of Wyeth v. Levine, 555 U.S. 555 (2009), and left it to the lower courts to grapple with the application of that standard to the facts. Justice Alito's concurring opinion, however, put the statutory framework and the regulatory history of the case into greater context, suggesting that the Third Circuit should find preemption on remand and offering pharmaceutical defendants a roadmap for arguing the preemption defense in future litigation.

The Court's Decision

Merck stemmed from a large multidistrict litigation in which the plaintiffs alleged that the defendant failed to warn of the risk of severe bone breaks known as "atypical femoral fractures" associated with the osteoporosis drug Fosamax. Merck argued that FDA would have barred a warning about the fractures in the Fosamax label—as evidenced by years of back and forth with the agency and a response letter rejecting a proposed warning—and that the failure to warn claims were accordingly preempted. The district court agreed and granted Merck's motion for summary judgment. In re Fosamax (Alendronate Sodium) Prods. Liab. Litig., 951 F. Supp. 2d 695 (D.N.J. 2013). The Third Circuit reversed, finding that a jury should decide preemption as a question of fact and that "clear evidence" is a standard of proof that requires the manufacturer to show "high probability" that FDA would have rejected a label change. In re Fosamax (Alendronate Sodium) Prods. Liab. Litig., 852 F.3d 268 (3d. Cir. 2017).

In re Fosamax thus presented the Supreme Court with two important preemption issues: (1) who should decide the ultimate question, and (2) what does "clear evidence" of impossibility mean. With respect to the first issue, the Court in Merck could not have been more clear. Justice Breyer, writing for a majority of five, held "that a judge, not the jury, must decide the pre-emption question." Judges are in a better position than juries to assess the statutory and regulatory context for an agency's action and should, in theory, produce more uniform interpretations—"normally a virtue when a question requires a determination concerning the scope and effect of federal agency action." Merck, slip op. at 16.

With regard to the second issue, the Court was similarly unambiguous in one respect: "clear evidence" is not an evidentiary standard, but instead a matter of law in which "the judge must simply ask himself or herself whether the relevant federal and state laws irreconcilably conflict." Id. at 14 (quotation and alteration omitted). The Court also adopted a revised definition for the term:

"[C]lear evidence" is evidence that shows the court that the drug manufacturer fully informed the FDA of the justifications for the warning required by state law and that the FDA, in turn, informed the drug manufacturer that the FDA would not approve a change to the drug's label to include that warning.

Id. at 1-2. As to how a pharmaceutical defendant can show FDA disapproval, the Court noted that it must point to agency actions "taken pursuant to the FDA's congressionally delegated authority" and cited notice-and-comment rulemaking setting forth labeling standards, formal rejection of a warning label, or "other agency action carrying the force of law." Id. at 15. But the Court declined to apply the law to the facts in In re Fosamax, sending that task back to the Third Circuit.

Justice Thomas wrote separately to reiterate his distinct perspective on preemption, reasserting the skepticism he expressed in Wyeth that "physical impossibility" is the best proxy for determining preemption because "logical contradiction" could also have preemptive effects. Thomas, J., concurring, at 2. However, in this case, he would have gone further than the majority and found that Merck's preemption defense failed because it did not identify any law that would have prohibited it from adding a warning that would have satisfied state law. Id. at 4. In Justice Thomas' lone opinion, FDA's response letter rejecting Merck's proposed label change was of "tentative or interlocutory nature." Id. at 5. The letter "was not a final agency action with the force of law, so it cannot be 'Law' with pre-emptive effect." Id. But this position does not square with the majority opinion, which cited the statutory provision for response letters as an example of the agency formally rejecting a warning label. Slip op. at 15.

Justice Alito, joined by Chief Justice Roberts and Justice Kavanaugh, separately concurred and all but instructed the Third Circuit to find the claims against Merck preempted. While the majority gave passing attention to the statutory framework and regulatory history in the case, Justice Alito expounded further on both. As he noted, FDA was "for years . . . aware of this [atypical femoral fracture] issue, communicating with drug manufacturers, studying all relevant information, and instructing healthcare professionals and patients alike to continue to use Fosamax as directed." Alito, J., concurring, at 6. He stressed FDA's statutory duty to require label changes when the agency becomes aware that scientific evidence warrants a change, and noted that FDA requires Prior Approval Supplement applications when there are significant questions on drug labeling changes. Id. at 3-4. And he emphasized the Solicitor General's legal arguments on FDA's behalf—in particular, that the agency's decision not to require a change to the Fosamax label "reflected the FDA's determination that a new warning should not be included in the labeling of the drug." Id. at 6 (quotation and alterations omitted). Justice Alito clearly wanted to provide further guidance to the lower courts on how to interpret and apply the Court's decision, both on remand and in future cases. See id. at 1 (noting his concern that the majority opinion's discussion of the law and the facts may be misleading).

The Implications

The Court's decision in Merck that impossibility preemption is a question of law for the judge offers enormous strategic value to pharmaceutical defendants because it confirms that courts should conclusively rule on the defense, either on a motion to dismiss or on summary judgment. This also means that, in deciding such motions, judges will bring to bear their understanding of both the FDA regulatory scheme and preemption law generally.

With respect to the ultimate issue, the concurring opinions of Justice Thomas on one hand and Justice Alito, Chief Justice Roberts and Justice Kavanaugh on the other made fairly plain that they would reach divergent conclusions. But Justice Breyer's majority opinion leaves it for the Third Circuit to hash out on remand, using the newly articulated definition of "clear evidence." If, however, the Third Circuit heeds Justice Alito's direction to consider FDA's statutory duty to initiate label changes, as well as the totality of the regulatory history, a finding of preemption should result. The decision further reinforces the benefits of the Prior Approval Supplement process that Justice Alito cited as a means to engage with FDA on label changes.

An even more recent Supreme Court decision shows that the majority is inclined to let the lower courts continue to grapple with the preemption standard. In Dolin v. GlaxoSmithKline LLC, 901 F.3d 803 (2018), the Seventh Circuit found preemption of failure to warn claims based on correspondence from FDA rejecting a proposed label change. On May 28, 2019, just a week after deciding Merck, the Supreme Court denied certiorari, letting that preemption decision stand.

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