ROGER W. TITUS, District Judge.
This pharmaceutical products liability lawsuit involves the drugs Aredia and Zometa, both of which were approved by the United States Food and Drug Administration ("FDA") and are sold by defendant Novartis Pharmaceuticals Corporation. This matter is before the Court on Defendant's Motion to Preclude Punitive Damages. As explained below the Defendant's motion will be granted.
On December 5, 2007, Plaintiff, Stacy Zimmerman, as personal representative of the estate of her deceased mother Phyllis Newman, filed a products liability suit against Defendant, Novartis Pharmaceutical Corporation, in the United States District Court for the Middle District of Tennessee. Novartis is a Delaware corporation with its principal place of business in New Jersey. Ms. Newman was a resident of Maryland, as is her personal representative.
In the amended complaint, Plaintiff asserted strict liability and negligence claims against Novartis in connection with the manufacturing, distribution, promotion, testing, labeling and selling of Aredia and Zometa, two FDA approved bisphosphonate drugs which were approved for the treatment of patients with hypercalcemia of malignancy (a potentially fatal elevation of calcium in the blood), multiple myeloma, and breast cancer that has metastasized to bone. Ms. Newman, who was diagnosed with metastatic breast cancer to bone, was prescribed and received Aredia and Zometa in Maryland. As a result of her use of these drugs, she allegedly developed a jaw condition known as osteonecrosis of the jaw.
On August 14, 2008, the United States District Court for the Middle District of Tennessee transferred the case under 28 U.S.C. § 1404 to this Court. On September 22, 2008, the Judicial Panel on Multidistrict Litigation issued a conditional transfer order transferring the case from this Court back to the Middle District of Tennessee for coordinated pretrial proceedings. On July 27, 2011, the Middle District of Tennessee advised the panel that coordinated pretrial proceedings have been completed and that the case should be remanded back to this Court.
Defendant filed a Motion to Preclude Punitive Damages on December 9, 2011. On December 20, 2011, Plaintiff filed her Response and on January 3, 2012, Defendant
New Jersey and Maryland laws differ with respect to punitive damages. Because this case was filed in Tennessee, the choice of law rules of that state apply. In determining the substantive law to apply in tort cases, Tennessee applies the Restatement (Second) of Conflict of Laws "significant relationship" approach. Under the "significant relationship" approach, this Court can theoretically apply Maryland law to the issues of liability and compensatory damages and New Jersey law to the issue of punitive damages. In the present case, the threshold issue is whether New Jersey has a more significant relationship to Plaintiff's punitive damages claim than Maryland. Here, the Court finds that New Jersey has a more significant relationship to the issue of punitive damages than Maryland in light of Novartis' contacts with New Jersey and the Restatement's § 6 principles.
The issue before the court is whether New Jersey or Maryland law governs the issue of punitive damages. But before embarking on a choice of law analysis, courts generally analyze whether there is in fact a difference.
Under Maryland law, a plaintiff must show more than mere negligence to recover punitive damages in connection with a products liability action. See ACandS, Inc. v. Godwin, 340 Md. 334, 360, 667 A.2d 116, 128 (1995). More specifically, to recover punitive damages a plaintiff must establish "actual malice" through clear and convincing evidence. See Owens-Illinois, Inc. v. Zenobia, 325 Md. 420, 601 A.2d 633, 653 (1992).
Because Maryland allows for the recovery of non-capped punitive damages upon clear and convincing evidence of actual malice, and New Jersey generally immunizes drug and device manufacturers from punitive damages and limits recovery to $350,000 or five times the compensatory damages award, the laws of New Jersey and Maryland are different, thus necessitating
A federal district court sitting in diversity applies the substantive law of the state in which it sits. Erie R. Co. v. Tompkins, 304 U.S. 64, 78-79, 58 S.Ct. 817, 82 L.Ed. 1188 (1938). As part of that principle, the federal court must also apply that state's choice of law principles. Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941). However, when cases are transferred from another district, the transferee court applies the law of the state in which the transferor court is located. See Van Dusen v. Barrack, 376 U.S. 612, 639, 84 S.Ct. 805, 11 L.Ed.2d 945 (1964) ("[W]here the defendants seek transfer, the transferee district court must be obligated to apply the state law that would have applied if there had been no change of venue. A change of venue under § 1404(a) generally should be, with respect to state law, but a change of courtrooms."). The present case was filed in a Federal District Court in Tennessee and transferred here twice; thus, as the transferee court, this Court must apply Tennessee's choice of law principles.
In determining which state's substantive law to apply in a tort case, Tennessee's choice of law rules adopt the "significant relationship" approach contained in the Restatement (Second) of Conflict of Laws. See Hataway v. McKinley, 830 S.W.2d 53, 59 (Tenn.1992) (holding that the "most significant relationship" approach of Restatement (Second) of Conflict of Laws is the best-reasoned rule for resolving conflicts questions in tort cases and will be adopted and applied to all cases applying Tennessee choice of law principles).
The parties agree that under the Restatement (Second) of Conflict of Laws "significant relationship" approach, Maryland law governs the issues of liability and compensatory damages. Yet Plaintiff asserts that under the "significant relationship" approach, once this Court finds Maryland law governs compensatory damages and liability, this Court must also find that Maryland law governs punitive damages. This Court disagrees.
The "significant relationship" approach allows for "depecage," such that a court can apply different state laws to different issues in a single case — i.e. liability, compensatory damages, and punitive damages. See Restatement (Second) of Conflicts of Law § 146 (1971) ("the local law of the state where the injury occurred determines the rights and liabilities of the parties, unless, with respect to the particular issue, some other state has a more significant relationship") (emphasis added); id. § 145 cmt. d ("courts have long recognized that they are not bound to decide all issues under the local law of a single state."); Brown v. Novartis Pharmaceuticals Corp., No. 08-cv-00130-FL, 2011 WL 6318987 at *2 (E.D.N.C. Dec. 16, 2011) ("The Restatement and Tennessee choice of law jurisprudence allow for depecage, the application of different state's laws to different issues in a case"); see also Aguirre Cruz v. Ford Motor Co., 435 F.Supp.2d 701, 706
Under the Restatement (Second) of Conflict of Laws "significant relationship" approach, Tennessee courts will apply "the law of the state where the injury occurred,... unless some other state has a more significant relationship to the litigation." Id.; see also MacDonald v. General Motors Corp., 110 F.3d 337, 342 (6th Cir. 1997). To clarify, although the law of the place where the injury occurred provides the default rule, "the Restatement approach allows a court to apply the law of a state that legitimately has a stronger interest in the controversy...." Hataway, 830 S.W.2d at 59; Aguirre Cruz, 435 F.Supp.2d at 704.
In this case, there is no dispute that the harm to Ms. Newman occurred in Maryland and that under Tennessee choice of law principles, Maryland law, as the law of the place of injury, governs liability and compensatory damages. Thus, having determined that New Jersey and Maryland laws on punitive damages differ, the issue before this Court is whether Defendant Novartis can overcome the "default" rule and show that New Jersey has a more significant relationship to the issue of punitive damages than Maryland. Hataway, 830 S.W.2d at 59.
In determining whether a particular jurisdiction — i.e. New Jersey — has a more significant relationship or stronger interest in the controversy than this state — Maryland — courts generally consider the following contacts: (1) the place where the injury occurred; (2) the place where the conduct causing the injury occurred; (3) the domicile, residence, nationality, place of incorporation and place of business of the parties; and (4) the place where the relationship, if any, between the parties is centered. Hataway, 830 S.W.2d at 59; Restatement (Second) of Conflicts of Law § 145(2)(a)-2(d) (1971).
Novartis' contacts weigh in favor of applying New Jersey law. The place where the injury occurred, Maryland, is "simply fortuitous" with respect to punitive damages as "it bears little relation to the occurrence and the parties with respect to the particular issue." Restatement (Second) of Conflicts of Law § 145 cmt. e (1971); Meng, 2009 WL 4623715, at *2 (finding in an Aredia and Zometa products liability litigation that the place where the injury occurred is "simply fortuitous" with
The next two factors — i.e. the place where the conduct causing injury occurred and the place of business/incorporation — also weigh in favor of applying New Jersey law. Novartis' primary place of business is in New Jersey and the corporate decisions with respect to labeling and packaging of Aredia and Zometa took place in New Jersey. To the extent that Plaintiff contends New Jersey law should not apply because these decisions occurred in Switzerland, such an argument is unavailing since Plaintiff does not ask this court to apply Swiss law. See Talley, 2011 WL 2559974, at *4 (holding in a similar Aredia and Zometa litigation that "Plaintiff's contention that the relevant decisions were made in Switzerland is unpersuasive based on the record; additionally, Plaintiff does not request that Swiss law be applied"); Deutsch v. Novartis Pharmaceuticals Corp., 723 F.Supp.2d 521, 525 (E.D.N.Y. 2010) (holding in a similar Aredia and Zometa litigation that the "testimony does not establish the broad proposition that all corporate decisions are made in Basel [Switzerland] [and] [e]ven if it did, under the proper choice of law analysis, this would simply mean that Swiss law governing punitive damages would apply in this case ... [and] punitive damages are not permitted under Swiss law").
The final factor — the place where the relationship, if any, between the parties is centered — also supports application of New Jersey law because Novartis' New Jersey business activities, including its interactions with the FDA, form the foundation of Plaintiff's claim for any punitive damage award. See Meng, 2009 WL 4623715, at *4 (holding that the relationship between Novartis and the Aredia and Zometa plaintiffs was centered in New Jersey with respect to any claims for punitive damages); Talley, 2011 WL 2559974, at *4 (finding that the relationship between the Novartis and the Aredia and Zometa plaintiffs was centered in New Jersey with respect to punitive damages because "the relevant contacts are those that relate to the alleged conduct giving rise to their claims for punitive damages" and the corporate decisions at issue regarding labeling and packaging, occurred in New Jersey); Brown, 2011 WL 6318987, at *3 (same).
The "significant relationship" test does not merely focus on the number of contacts with a particular state, but also the nature of those contacts in light of the Restatement's § 6 principles: (a) the needs of the interstate and international systems, (b) the relevant policies of the forum, (c) the relevant policies of other interested states and the relative interests of those states in the determination of the particular issue, (d) the protection of justified expectations, (e) the basic policies underlying the particular field of law, (f) certainty, predictability and uniformity of result, and (g) ease in the determination and application of the law to be applied. See Restatement (Second) of Conflicts of Law § 6 (1971).
These principles fully support the application of New Jersey law to the issue of punitive damages. At their core, the § 6 principles ask courts to consider the policy reasons for applying the law of a particular state. In this regard, the reasoning in Talley is particularly instructive for three reasons. First, in Talley, as in the instant case, the plaintiff filed an Aredia and Zometa products liability suit against Novartis in Tennessee and the case was transferred to North Carolina. Thus, as in the present case, the Talley court sitting in diversity applied Tennessee choice of law principles. Second, as here, both
Talley, 2011 WL 2559974, at *4. Here, the Court agrees with the reasoning in Talley and finds that the Restatement § 6 principles weigh in favor of applying New Jersey law to the issue of punitive damages.
The Supremacy Clause, Article VI, Clause 2 of the United States Constitution states: "This Constitution, and the Laws of the United States shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." The Supremacy Clause "invalidates state laws that `interfere with, or are contrary to,' federal law." Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 712, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985) (quoting Gibbons v. Ogden, 9 Wheat. 1, 211, 6 L.Ed. 23 (1824)). State laws can be preempted by federal regulations as well as by federal statutes. See City of Charleston v. A Fisherman's Best, Inc., 310 F.3d 155, 169 (4th Cir.2002), cert. denied, 539 U.S. 926, 123 S.Ct. 2573, 156 L.Ed.2d 602 (2003) ("Regulations duly promulgated by a federal agency pursuant to a Congressional delegation have the same preemptive effect as a legislative enactment"). The imposition of damages is a form of state law that may be subject to preemption. See Geier v. Am. Honda Motor Co., 529 U.S. 861, 881, 120 S.Ct. 1913, 146 L.Ed.2d 914 (2000).
Over a century ago, Congress passed the precursor to the Federal Food, Drug, and Cosmetic Act ("FDCA"), 21 U.S.C. §§ 301, et seq., which empowers the federal
The present case implicates a type of implied conflict preemption known as obstacle preemption.
Id.
At issue is whether New Jersey's statutory immunity provision for punitive damages is preempted by federal law because it requires a jury to speculate as to whether Novartis misrepresented material information that was required to be submitted under the FDCA and applicable regulations. This speculation raises a preemption concern because the FDA is charged with determining whether a new drug is safe and effective enough to be sold in the United States, and with ensuring compliance with FDCA-mandated disclosure obligations in connection with new drugs. Here, the FDA approved Aredia and Zometa and has not made any finding that Novartis did not comply with its FDCA-mandated disclosure obligations. Thus, because the New Jersey statute predicates punitive damages on whether a jury finds Novartis violated the FDCA and applicable regulations, the New Jersey statute creates an obstacle to the FDA's ability to effectively police compliance.
The resolution of the preemption issue depends largely on how one interprets the Supreme Court's decision in Buckman v. Plaintiffs' Legal Committee, 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001). There, the Supreme Court held that plaintiffs' state tort fraud on the FDA claim — i.e. a claim that the manufacturer of orthopedic bone screws made fraudulent representations to the FDA and but for these fraudulent representations the FDA would not have approved the bone screws that injured plaintiff — was preempted by the FDCA. In reaching this conclusion, the Court reasoned that the plaintiffs' state tort fraud on the FDA claim enjoys no presumption of validity because "policing fraud against Federal agencies is hardly a field the states have traditionally occupied." Id. at 347, 121 S.Ct. 1012. This is especially true because plaintiffs' fraud on the FDA claim exists "solely by virtue of the FDCA disclosure requirements" and the alleged failure of a manufacturer to comply with those requirements. Id. at 353, 121 S.Ct. 1012. Consequently, a new tort remedy based entirely on the concept of fraud on the FDA would inevitably create an obstacle to the FDA's ability to effectively police fraud because it includes compliance or non-compliance with FDA regulations as a "critical element" of the claim and leaves open the possibility that the tort regimes of the 50 States could reach a different conclusion than the FDA with respect to this critical element. Id. at 351-53, 121 S.Ct. 1012.
Lower courts analyzing New Jersey's immunity provision have reached opposite conclusions as to whether this immunity provision is preempted under Buckman. This is because, as one commentator has noted, "[w]hile there is near consensus on the view that Buckman forecloses a claim predicated solely upon the failure to disclose material information to the FDA in
The divide amongst courts analyzing New Jersey's statutory immunity provision is not surprising because federal courts of appeals considering this issue in the context of similar state statutory schemes
With this lack of consensus, the Court enters the debate reluctantly and only after confirming on the record that Plaintiff intends to seek punitive damages even if the Court decides that New Jersey law applies. For the reasons that follow, the Court concludes that Plaintiff's claim for punitive damages is preempted.
There are "two cornerstones of ... preemption jurisprudence." Wyeth v. Levine, 555 U.S. 555, 565, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009). The first and "ultimate touchstone of preemption analysis is the intent of Congress." Medtronic v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996). Because preemption claims turn on Congress's intent, this Court will begin its analysis by examining the text and structure of the FDCA, as well as its legislative history and the accompanying regulations. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516, 112 S.Ct. 2608, 120 L.Ed.2d 407 (1992) (conducting a similar analysis of the Federal Cigarette Labeling and Advertising Act in the preemption context).
Over a century ago, Congress passed the precursor statute to the FDCA.
After reviewing the NDA and providing the drug manufacturer with notice and an opportunity to respond, the FDA may refuse to approve a drug if the FDA determines that the application itself does "not include adequate tests," testing reveals that the "drug is unsafe for use," there is a lack of substantial evidence that the "drug product will have the effect it purports," or the drug label "is false or misleading." See 21 C.F.R. § 314.125(b). The FDA may also deny approval if it determines that the NDA "contains an untrue statement of a material fact." See id. § 314.125(b)(7). The FDA will approve a new drug only after "it determines that the drug meets the statutory standards for safety and effectiveness, manufacturing and controls, and labeling." Id. § 314.105(c); see id. §§ 201.56(d), 201.57.
Even after approval, the FDA continues to monitor the safety of drugs. The drug manufacturer is required to maintain records on the drug after approval, report on any additional testing or clinical evidence as directed, and report on any significant adverse drug experiences. See 21 U.S.C. § 355(k)(1); 21 C.F.R. §§ 314.80 and 314.81. If scientific data indicates that the drug is not safe or if new information reveals that the labeling of the drug "is false or misleading in any particular," the FDA can withdraw approval of a drug. 21 U.S.C. § 355(e).
The FDA enforces violations of the drug approval process, not private litigants. Id. § 337 ("all such proceedings for the enforcement, or to restrain violations, of this chapter shall be by and in the name of the United States."). And, the FDA is specifically authorized to investigate suspected fraud or misrepresentations by the manufacturer. Id. § 372. Indeed, the FDCA provides the FDA with a number of enforcement options. These options include in rem forfeiture, injunction, and even criminal prosecutions. See id. § 332(a) (injunctions); id. § 333 (criminal penalties); id. § 334(a) (seizure); and id. § 337(a) (enforcement proceedings). In fact, the FDA is vested with considerable discretion in how it chooses to deploy these enforcement tools. The FDCA provides that "[n]othing in [FDCA] shall be construed as requiring [FDA] to report for prosecution, or for the institution of libel or injunction proceedings, minor violations of this chapter whenever [FDA] believes that the public interest will be adequately served by a suitable written notice or warning." Id. § 336. Finally, courts have found the FDA's decision not to undertake certain enforcement actions to be non-reviewable.
The second cornerstone of preemption analysis is that state statutes enjoy a presumption of validity "in a field which the States have traditionally occupied." Wyeth v. Levine, 555 U.S. 555, 565 n. 3, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009) (citations omitted). A threshold question then is whether New Jersey's statutory immunity provision stands in an area of traditional state regulation, entitled to a presumption of validity, or instead receives no benefit from the presumption because it attempts to legislate in an area of significant federal concern. Commentators and courts are not in agreement as to this issue. See generally, Mary J. Davis, The "New" Presumption Against Preemption, 61 HASTINGS L.J. 1217, 1220 (2010) ("In the one hundred plus years that the Supreme Court has addressed preemption issues, it has been inconsistent about the role that the presumption against preemption plays").
As a general matter, "[c]onsideration under the Supremacy Clause starts with the basic assumption that Congress did not intend to displace state law." Maryland v. Louisiana, 451 U.S. 725, 746, 101 S.Ct. 2114, 68 L.Ed.2d 576 (1981). The presumption against preemption "is strongest when Congress legislates `in a field which the States have traditionally occupied.'" Southern Blasting Services, Inc. v. Wilkes County, 288 F.3d 584, 590 (4th Cir.2002) (quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996)). And states have traditionally occupied the field as it relates to the protection of their citizens' health and safety. Abbot v. American Cyanamid Co., 844 F.2d 1108, 1112 (4th Cir.1988) (citing Lohr, 518 U.S. at 485, 116 S.Ct. 2240); see also Hillsborough County v. Automated Med. Labs., Inc., 471 U.S. 707, 719, 105 S.Ct. 2371, 85 L.Ed.2d 714 (1985) ("the regulation of health and safety matters is primarily, and historically, a matter of local concern"). For this reason, the Court in Wyeth v. Levine applied the presumption against preemption where a plaintiff brought a products liability suit against a drug manufacturer even though the Federal Government has regulated drug labeling for more than a century. 555 U.S. at 565 n. 3, 129 S.Ct. 1187. The Court reasoned that the "presumption ... accounts for the historic presence of state law but does not rely on the absence of federal regulation." Id.
In analyzing whether the presumption against preemption applies in the context of state statutory immunity provisions, two out of three federal appeals courts have applied the presumption and began with the "assumption that a state law is valid." Garcia v. Wyeth-Ayerst Labs., 385 F.3d 961, 965 (6th Cir.2004) (applying presumption against preemption in the context of Michigan's immunity provision); Desiano v. Warner-Lambert & Co., 467 F.3d 85, 94-95 (2d Cir.2006) (same). But see Lofton v. McNeil Consumer & Specialty Pharmaceuticals, 672 F.3d 372, 378 (5th Cir.2012) (expressing doubt as to whether a presumption against preemption exists in the context of a Texas immunity provision for drug manufacturers). For example, in Desiano, Judge Calabrasi applied the presumption against preemption in his analysis of the Michigan statutory immunity provision — a provision that closely resembles the New Jersey provision at issue in this case. 467 F.3d at 94-95. Judge Calabrasi reasoned that presumption should apply because this provision, unlike the fraud on the FDA claim in Buckman, "cannot reasonably be characterized as a state's attempt to police fraud against the FDA." Id. at 94. Rather, the immunity provision just "regulate[s] and restrict[s] when victims could continue to recover under preexisting state products liability law." Id. at 94. Because the immunity provision is a reflection of the state legislature's "desire to rein in state-based tort liability," the provision falls into "a sphere in which the presumption against preemption applies" and "stands at its strongest." Id. at 93-94; See also Forman v. Novartis Pharmaceuticals Corporation, 793 F.Supp.2d 598, 609 (E.D.N.Y.2011) (following Desiano and applying the presumption against preemption to claims brought under New Jersey's statutory immunity provision for punitive damages); Yocham v. Novartis Pharmaceuticals Corp., 736 F.Supp.2d 875,
Although this Court agrees that the presumption against preemption applies to state tort claims implicating health and safety generally, the Court concludes that such a presumption does not apply to that part of Plaintiff's claim, which by virtue of New Jersey law, conditions any recovery of punitive damages on a showing that a defendant-drug manufacturer "knowingly withheld or misrepresented information required to be submitted under the [FDA's] regulations, which information was material and relevant to the harm in question." N.J. Stat. Ann. § 2A:58C-5(c) (West 2012). This conclusion is confirmed by the Court's analysis in Buckman. There, the Court found that the presumption against preemption did not apply to a specific type of tort claim — a fraud on the FDA claim — even though the presumption against preemption applies to traditional tort claims implicating health and safety matters. 531 U.S. at 347-48, 121 S.Ct. 1012. See also Boyle v. United Technologies Corp., 487 U.S. 500, 504-05, 108 S.Ct. 2510, 101 L.Ed.2d 442 (1988) (applying no presumption against preemption to the question of under what circumstances government contractors have a "defense" to state tort suits even though state tort law as a whole related to health and safety); Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199, 1205 (9th Cir.2002) (applying no presumption against preemption to a specific type of tort claim — a claim based on pesticide manufacturer's allegedly purposeful submission of false information to Environmental Protection Agency (EPA) — even though the presumption applies to state traditional tort claims generally); McDarby v. Merck & Co., 401 N.J.Super. 10, 949 A.2d 223, 275 (N.J.Super.Ct.App.Div.2008) (finding that a presumption against preemption does not apply in the context of New Jersey's statutory immunity provision for punitive damages even if the presumption against preemption applies to compensatory damages generally). Accordingly, this Court declines to apply the presumption against preemption in this case. However, as explained below, even if it were to be applied, any presumption against preemption is overcome in this case.
Even if the presumption against preemption were applied to New Jersey's immunity provision, this presumption is hardly outcome-determinative and courts have found preemption even where the presumption against preemption did apply. See, e.g., Garcia v. Wyeth-Ayerst Labs., 385 F.3d 961, 965-66 (6th Cir.2004) (finding preemption despite agreeing with the notion that "a court must begin with the assumption that a state law is valid"). In this case, any presumption against preemption is rebutted because Plaintiff's claim for punitive damages under New Jersey's statutory immunity provision poses an obstacle to the FDCA regulatory scheme and FDA enforcement prerogatives. Although the form of Plaintiff's punitive damages claim differs from that of her counterparts in Buckman, both claims are identical in substance because they present the same conflict with the FDA's regulatory scheme and enforcement prerogatives.
Implied conflict preemption occurs when "under the circumstances of a particular case, the challenged state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Crosby v. Nat. Foreign Trade Council, 530 U.S. 363, 372-73, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000). In evaluating whether a state claim serves as an obstacle to the purposes and objectives of a federal statute, courts primarily consider whether the state claim requires a fact finder to make a determination that a federal law leaves exclusively to the agency.
If a state claim requires a fact finder to make a determination exclusively committed by federal law to the agency, courts are likely to find this claim to be an obstacle to the purposes and objectives of a federal statute. Arizona v. United States, ___ U.S. ___, 132 S.Ct. 2492, 2502, 183 L.Ed.2d 351 (2012) (finding obstacle preemption because "[p]ermitting the State to impose its own penalties for the federal offenses would conflict with the careful framework Congress adopted.").
For example, in Buckman, plaintiffs filed a state tort fraud on the FDA claim against the consulting company
First, the FDCA imposed a duty on medical device manufacturers to make specific disclosures to the FDA during the device approval process. Id. at 346, 121 S.Ct. 1012 (citing 21 U.S.C. § 360(e)). Second, the FDCA vests the FDA, not private litigants, with the exclusive authority to investigate and prosecute any suspected fraud or misrepresentation in connection with FDCA-created disclosure requirements. Id. at 349 n. 4, 121 S.Ct. 1012 (citing 21 U.S.C. § 337). Third, the FDCA accords the FDA considerable flexibility in how it chooses to address any fraud or misrepresentation in connection with the disclosure requirements: the FDA has authority to seek civil penalties, injunctive relief, seizure of the device, and criminal convictions or the authority not to pursue any remedy. Id. at 349, 121 S.Ct. 1012 (citing 21 U.S.C. §§ 372, 333, 334, 18 U.S.C. § 1001). Thus, unlike an ordinary tort claim that requires a jury to consider whether a manufacturer breached a common law duty of care owed to the
Because plaintiffs' state tort fraud on the FDA claim requires a fact finder to make a determination under state law that a federal law leaves exclusively to the FDA — i.e. that the device manufacturer made a material misrepresentation to the FDA in violation of FDCA-created disclosure requirements — the Buckman Court found plaintiffs' claim to be an obstacle to the purposes and objectives of the FDCA.
If a state claim requires a fact finder to make a separate determination that federal law contemplates may be made in parallel by both a state fact finder and a federal agency, courts are unlikely to find any obstacle to the enforcement of a federal statute. Medtronic, Inc. v. Lohr, 518 U.S. 470, 495, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (holding that the FDA's approval of a new medical device based on the finding that this device is substantially similar to devices already on market did not "den [y] Florida the right to provide a traditional damages remedy for violations of common-law duties when those duties parallel federal requirements.").
For example, in Wyeth v. Levine, the Court rejected a drug company's argument that a plaintiff's state tort failure to warn claim regarding the drug Phenergan posed an obstacle to the purposes and objectives of the FDCA "because [plaintiff's state tort claims] interfere with Congress's purpose to entrust an expert agency to make drug labeling decisions that strike a balance between competing objectives." 555 U.S. at 573, 129 S.Ct. 1187. In its reasoning, the Court emphasized that neither it nor the defendant-drug company could identify a specific federal statute, federal regulation, or collection of federal statutes and regulations, which precludes the possibility of two separate but parallel determinations — i.e. the possibility that the FDA could find a particular label to be adequate in terms of safety for purposes of the FDCA and a jury could find that same label to be inadequate in terms of safety and efficacy for the purposes of state tort duties. Id. at 578-80, 129 S.Ct. 1187. This understanding is reinforced by the fact that Congress chose to expressly preempt common law state tort claims in the medical device context but retain common law tort claims in the pharmaceuticals context.
In contrast, Plaintiff's claim for punitive damages under New Jersey's statutory immunity provision poses an obstacle to the FDCA regulatory scheme because it requires a fact finder to make a determination that a federal law leaves exclusively to the agency. Here, as in Buckman, the FDA has exclusive authority to decide whether a drug is safe and effective enough to be approved for sale in the United States and the flexibility to decide whether and what type of enforcement claim to bring against a drug manufacturer that breaches the FDCA-mandated disclosure duty owed to it during the NDA and post-approval processes. See supra Part II.A. But the FDA has never found that Novartis knowingly withheld or misrepresented information required to be submitted under the agency's regulations, which was material to Ms. Newman's osteonecrosis of the jaw. Yet, under New Jersey law, Plaintiff can only recover punitive damages in connection with Aredia and Zometa — both of which are FDA approved drugs — if a jury first finds that (1) Novartis "knowingly withheld or misrepresented information" to the FDA (2) this information was "required to be submitted under the [FDA's] regulations" and (3) "information was material and relevant to the harm in question," specifically, Ms. Newman's osteonecrosis of the jaw. See N.J. Stat. Ann. § 2A:58C-5(c) (West 2012).
In finding Plaintiff's claim for punitive damages to be preempted, this Court recognizes that its decision conflicts with that of its counterpart in the Eastern District of New York, which reached the opposite conclusion in the Aredia and Zometa products liability context. See Forman v. Novartis Pharmaceuticals Corporation, 793 F.Supp.2d 598 (E.D.N.Y.2011).
The Eastern District of New York declined to find preemption because Forman's claim for punitive damages under New Jersey law was "not premised principally (let alone exclusively) on a drug maker's failure to comply with federal disclosure requirements" whereas the fraud on the FDA claim in Buckman was based exclusively on a device maker's failure to comply with federal disclosure requirements. Id. at 605. It concluded that "the fact that fraud in FDA disclosures is necessary for the pre-existing common law punitive damages claim to survive [under New Jersey law], is not equivalent to a [fraud on the FDA] claim `based solely on the wrong of defrauding the FDA.'" Id. (citing Desiano, 467 F.3d at 95 (emphasis in original)). This distinction is meaningless because it is simply not entirely accurate. In Buckman, the plaintiffs not only had to prove the device maker's non-compliance with FDCA disclosure requirements, which served as the predicate false representation in a common law fraudulent misrepresentation action, but also other common law elements of a fraudulent misrepresentation action such as injury and proximate cause. See In re Orthopedic Bone Screw Liab. Litig., 159 F.3d 817, 822
The Forman court also declined to apply Buckman to New Jersey's statutory immunity provision because the claim in Buckman was based on a "newly concocted duty between manufacturer and a federal agency," whereas the plaintiff's New Jersey punitive damages claim is based on traditional tort duties. 793 F.Supp.2d at 606. Such a distinction might make sense if one were comparing a traditional tort claim with the claim in Buckman before New Jersey passed its punitive damages immunity statute. In the pre-statutory immunity world, a jury would consider whether a drug manufacturer's communications with the plaintiffs, their doctors, or the public violates a common law duty to the plaintiff and whether those communications were motivated by actual malice or accompanied by a wanton and willful disregard of potential harm whereas the FDA considers whether a drug manufacturer's submission supports a finding that the drug is safe enough to be approved or violates a FDCA-created disclosure obligation. Wyeth v. Levine, 555 U.S. 555, 578-80, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009) (finding no preemption because federal law does not preclude the FDA from finding a particular label to be adequate in terms of safety and efficacy under FDCA and a jury from finding the same label to be inadequate in terms of safety and efficacy under common law state tort duties.) Once New Jersey passed the statutory immunity provision for punitive damages, the traditional cause of action is no more rooted in common law doctrine than the stand-alone claim in Buckman. This is because, in the post-statutory immunity world, a plaintiff's punitive damages claim hinges on whether the defendant-drug maker made adequate disclosures to the agency and whether, in the face of these inadequate disclosures, the agency would have approved the drug. See Buckman, 531 U.S. at 353, 121 S.Ct. 1012 (finding obstacle preemption because the "critical element" of plaintiffs' claim requires a jury to consider whether the device maker breached a FDCA-created disclosure duty owed to the FDA). In this way, New Jersey's statutory immunity provision makes fraud on the FDA a "critical element" of every punitive damages claim.
For these reasons, this Court is convinced that the formalistic differences between Plaintiff's punitive damages claim and the Buckman plaintiffs' fraud on the FDA claim are immaterial. Garcia v. Wyeth-Ayerst Labs., 385 F.3d 961, 966 (6th Cir.2004) (finding formalistic differences between the claim in Buckman and a claim brought under Michigan's statutory immunity provision to be "immaterial"); Lofton v. McNeil Consumer & Specialty Pharm., 672 F.3d 372, 380 (5th Cir.2012) (same). The Plaintiff's punitive damage claim in this case is preempted because it requires a fact finder to make a determination under state law that federal law leaves exclusively to the FDA. Allowing state fact finders to second-guess the very decisions that federal law leaves entirely to the agency presents "the same inter-branch-meddling concerns that animated Buckman." Garcia, 385 F.3d at 966. As in Buckman, allowing punitive damages liability here would require applicants to submit a "deluge" of unnecessary information during the approval process, which in turn, delays the approval of new drugs. 531 U.S. at 351, 121 S.Ct. 1012. In seeking to
While the legal journey leading to this conclusion has encountered many twists and turns, the destination is clear: Plaintiff's punitive damages claim cannot be pursued and, accordingly, the Defendant's motion will be granted.
A separate order follows.
One state, Michigan, adopted a complete, blanket immunity based upon compliance with FDA regulations. See Mich. Comp. Laws Ann. § 600.2946(5).
Other states — Colorado, Indiana, Kansas, Kentucky, New Jersey, Tennessee, Texas, and Utah — establish a rebuttable presumption that FDA-approved warnings are adequate in the face of failure-to-warn claims. See Colo.Rev. Stat. § 13-21-403(1)(b); Ind.Code Ann. § 34-20-5-1(2); Kan. Stat. Ann. § 60-3304(a) (2005); Ky. Rev. Stat Ann. § 411.310(2); N.J. Stat. Ann. § 2A:58C-4; Tenn.Code Ann. § 29-28-104; Tex. Civ. Prac. & Rem.Code Ann. § 82.007(a); Utah Code Ann. § 78-15-6(3).
