We talk a lot on this blog about Buckman preemption. That isn't just out of pride regarding Bexis's role in the bone screw litigation that led up to the Buckman decision. The principle in Buckman is important. What happened in Buckman? Here is a nice summary: "In Buckman, the plaintiffs brought state law claims against a consultant for injuries caused by orthopedic bone screws alleging that the defendant made fraudulent representations to the Food and Drug Administration ('FDA') in the course of obtaining approval to market the screws. 531 U.S. at 343. The Supreme Court found that federal law preempted state-law tort claims for fraud on the FDA." Meijer, Inc. v. Ranbaxy, Inc., 2017 U.S. Dist. LEXIS 45527 (D. Mass. March 28, 2017).
The Buckman principle is crucial for our drug and device clients because most lawsuits against them challenge products and/or communications that were approved or cleared by the FDA. If promises were made, they were made in both directions. FDA action or inaction gave rise to settled expectations. Are the plaintiffs saying that the FDA's review and acquiescence meant nothing, or that the FDA erred? Usually not. More often, plaintiffs are prone to suggesting that the defendants somehow bamboozled the FDA. In the feverish dreams of a mass tort plaintiff lawyer, it is a two-fer: the defendant not only lied to the public, it lied to the FDA. Go ahead and read any mass tort complaint and count how many times that story is told.
Still, plaintiffs and their lawyers and their experts are also not shy about asserting that the FDA is not up to the job. According to the plaintiffs' parable, the FDA is overworked, lazy, and dumb. By contrast, it is the regulated companies that hold up FDA personnel as being competent and well-intentioned. But let's stick to the fraud claim for a moment. How often do you really think that major drug and device companies intentionally withhold from the FDA material evidence about risks and benefits? How often do these companies make affirmative misstatements to the FDA, hoping to pull the wool over the government's eyes? No individual product approval would be worth such a risk. Companies try to do the right thing because it is the right thing, and also because it is good business. A claim of fraud on the FDA is invariably itself fraudulent.
In Buckman, SCOTUS rightly decided that juries have no business determining whether the FDA was fooled. Rather, that is for the FDA to address. If FDA findings or conclusions could be undermined by juries, we would see inconsistent verdicts all around the country, and FDA processes would become virtually meaningless. So now, in the wake of Buckman, we are treated to plaintiff claims and arguments that tip-toe right up to the edge of asserting fraud on the FDA. The plaintiff lawyers want the benefit of nasty implications without blowing up their case with preemption dynamite. Oh, let's not kid ourselves; edge-schmedge. Plaintiff lawyers cannot help vaulting over the edge and shouting fraud on the FDA. Buckman has given rise to kabuki theater on preemption. It calls to mind that curious phrase about something being "honored in the breach."
The Meijer case is interesting, not in spite of the fact that it is not a tort claim, but because of it. Meijer is an action brought by a direct purchaser class. The class alleged claims under both the Sherman Antitrust Act and RICO. Surely, dear reader, you know that both statutes are federal. The Meijer opinion does not make it clear exactly why this is so, but everyone in the case agrees that "all of the plaintiffs' claims are predicated on fraud on the FDA." The issue, then, is whether the Buckman holding halts these claims in their tracks. It is not a matter of preemption, for all of the claims in Meijer are federal. The supremacy clause is not implicated. Rather, we are now talking about one statute precluding resort to another. The effect of preclusion would be the same as preemption – dismissal of claims.
The district court in Meijer held that the antitrust and RICO claims can proceed, but did so uneasily. The court agreed with the plaintiffs' reading of the SCOTUS holding in POM Wonderful LLC v. Coca Cola, 134 S.Ct. 1228 (2012), which harmonized Lanham Act claims with the Food, Drug, and Cosmetic Act. But – and the district court acknowledged as much – SCOTUS did not really confront a defense of flat-out preclusion in POM Wonderful. (The phrase "primary jurisdiction" does not crop up in Meijer, but it is not hard to see its relevance here.)
Hence, even though the defendants lost their Buckman argument in Meijer, they convinced the court that the issue was a controlling question of law, that its disposition would materially advance the termination of the litigation (that is, application of Buckman would end the case completely), and there was substantial ground for a difference of opinion. The district court said that "this is the first time a party has brought antitrust claims predicated on fraud on the FDA." Some of us here at the DDL blog are not so sure that is right. Be that as it may, it is an open question whether Buckman preemption/preclusion affects claims based on other federal statutes. The POM case focused on statutory interpretation, and followed the maxim of finding consistency wherever possible. There was no reference to Buckman or its underlying principles. The issue was simply not on the High Court's radar screen. Consequently, the Meijer defendant's reliance on Buckman is "sufficiently novel," is purely legal, and therefore warrants interlocutory review by the First Circuit. The very interesting issue of the scope of Buckman has been kicked upstairs.
It will be fascinating to see what the First Circuit does. Courts are loath to permit the mere form of an action to circumvent fundamental principles of jurisprudence. Buckman is fundamental in terms of protecting the integrity and reliability of administrative actions. Consistency and predictability for a vital part of our economy and healthcare are at stake. Dressing up a case in the garb of antitrust or RICO claims should not change things one bit.
This article is presented for informational purposes only and is not intended to constitute legal advice.
