WLF Briefing Discusses FDA’s “Plaintiffs’ Bar Over Patients” Generic Drug Labeling Proposal

FDA’s Generic Drug Labeling Proposal: Unauthorized and Counterproductive Disturbance of the Hatch-Waxman Balance

Our Panelists

  • Ralph G. Neas, The Generic Pharmaceutical Association
  • Alex Brill, American Enterprise Institute
  • Richard A. Samp, Washington Legal Foundation

Accompanying Materials

 

Ninth Circuit Ruling Rejecting Preemption in Food Labeling Class Action Difficult to Swallow

Cruz-Alvarez_FFeatured Expert Column

by Frank Cruz-Alvarez, Partner, Shook, Hardy & Bacon, L.L.P., Miami office, with Travis Robert-Ritter, an associate in the firm’s Miami office.

Last week, the U.S. Court of Appeals for the Ninth Circuit in Lilly v. ConAgra Foods, Inc. held that California statutes obligating food manufactures to label the sodium content of the coating on sunflower seed shells are not expressly preempted by federal labeling law that exempts “bone, seed, shell, or other inedible components” from nutritional labeling requirements. — F.3d —-, No. 12-55921, 2014 WL 644706, at *1–3 (9th Cir. Feb. 20, 2014) (emphasis added). In doing so, the court departed from the fundamental precept of judicial interpretation that a statute or regulation “should be construed to give effect to the natural and plain meaning of its words,” and read a distinction into an unambiguous federal regulation where none exists. Id. at *3–4 (Vinson, J. Dissenting).

The appeal arose out of a putative class action filed against ConAgra Foods, Inc. for allegedly violating various California statutes by failing to include the sodium content of the coating on sunflower seed shells in the Nutritional Facts Panel of the company’s products. Id. at *1–2. ConAgra argued before the district court that the state-law claims were expressly preempted because they sought to impose a labeling requirement for sodium that is different from what is required under federal food labeling law. Id. The district court agreed, dismissing the putative class action as preempted because the claims attempted “‘to impose an additional sodium labeling requirement that [was] not identical to the’ Nutrition Labeling and Education Act (21 U.S.C. § 343).” Id. Continue reading

Two More Food Labeling Class Action Rulings: Harbingers of the New Year?

Not from lactating cows

Not from lactating cows

Cross-posted at WLF’s Forbes.com contributor page

In our Legal Pulse commentaries on regulation-by-litigation of food labeling, one issue has predominated this year: What is a “reasonable consumer”? Two court decisions issued on consecutive days last week, one from the infamous Food Court (the Northern District of California) and the other from the Southern District of Florida, turned in large part on that issue and indicate that judges will continue addressing the question in 2014.

You Mean They’re Not from Cows? Ang v. Whiteway Foods, authored by Judge Conti of the ND of California, involved consumer fraud claims against the maker of soymilk/almond milk/coconut milk and related yogurt products. The plaintiffs challenged the use of the term “milk” in the products as well as ingredient references to “evaporated cane juice” (ECJ).

Judge Conti found that an earlier settlement in a similar Florida lawsuit barred Mr. Ang’s ECJ-based claims due to res judicata. He then turned to the soy/almond/coconut “milk” claims. He first found that federal labeling rules preempt Mr. Ang’s claims. Federal rules do not prescribe how the plant-based beverages must be labeled, and the rules relating to “milk” only “pertain to what milk is, rather than what it is not.” In such situations, federal rules require that products use “the common or usual name” for the food. Judge Conti found that the “Silk” drink makers did that, and thus Mr. Ang’s suit would improperly impose rules beyond what FDA requires. Continue reading

FDA Proposed Rule on Generic Drug Preemption May Violate Its Statute

FDALast Friday just prior to the Veterans’ Day weekend, the Food and Drug Administration (FDA) issued a highly anticipated notice of proposed rulemaking which addresses the U.S. Supreme Court’s 2012 decision, PLIVA v. Mensing. The proposal, Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products, was introduced by Dr. Janet Woodcock, director of FDA’s Center for Drug Evaluation and Research, in an FDA Voice blog post. The proposal, according to her, is “intended to improve the communication of important drug safety information about generic drugs to both prescribers and patients.”

As emphasized in a New York Times story about the proposal, “The rule would also pave the way for lawsuits from patients who could now claim that generic companies did not sufficiently warn them of a drug’s dangers.”

As WLF’s Rich Samp argued here last August in Can FDA Lawfully Overrule SCOTUS Generic Drug Preemption Decision Through Regulation?, WLF doubts that FDA has the authority under federal law to take such an action. We look forward to participating in the regulatory process and the accompanying debate that will intensify now that FDA has formally proposed the rule.

A Trail To Data Insecurity: ObamaCare’s “Navigator” Program Lacks Privacy Protections

sextantCross-posted at WLF’s Forbes.com contributor page

With the October 1 date for open enrollment in ObamaCare health insurance exchanges rapidly approaching, the handful of states which agreed to run the exchanges are relying on everything from football teams to storied folk legends to spread the word. In the 36 other states that the federal government is in charge for now, outreach and education will be done by “Navigators,” a fancy term for taxpayer-funded community helpers. Though the Navigator program has yet to begin, many elected officials have raised serious concerns over whether it sufficiently prevents Navigators from helping themselves to sensitive consumer information. October 1 is just 26 days away, and those valid privacy concerns remain unaddressed.

$67 Million with Scant Privacy Strings Attached. The Department of Health and Human Services, which just two weeks ago doled out $67 million to 100 organizations for ObamaCare navigation, has ignored letters from congressional committee chairmen and state attorneys general criticizing the Navigator program’s severe privacy shortcomings. The rule governing the Navigator program, finalized just this past July, offers broad principles and platitudes about data quality and integrity, but few clear standards for ensuring the privacy of health records, social security numbers, and other patient information. It neither requires background checks nor dictates that any prior criminal act (such as, perhaps, identify theft) would per se disqualify a Navigator applicant. There are no licensing requirements, no obligations that Navigators or their employers carry liability insurance, and no provisions holding any entity, including HHS, responsible for data breaches. It’s not even clear whether HHS will assist an ObamaCare insurance exchange customer who is defrauded. Continue reading

Update: Court Allows Energy Drink Maker’s Defensive Lawsuit Vs. San Francisco to Advance

GoldenGateIn a post last June, FDA And Caffeine: Selective Regulation By Unsubtle Threat, we mentioned San Francisco Attorney Dennis Herrera’s suit against energy-drink maker Monster Beverage Corp. for allegedly marketing to children. This suit was in fact filed after Monster had already filed its own declaratory judgment action against Attorney Herrara on April 18. In it, Monster urged the District Court for the Central District of California to declare Herrara’s pre-suit actions, which included letters to Monster and FDA, in violation of the First Amendment and preempted by federal law.

On August 22, Judge Virginia Phillips rejected Herrara’s effort to dismiss Monster’s these claims. She found that Monster’s First Amendment claims regarding Herrara’s labeling demands were viable. She found that the warnings Herrara’s letter referenced were in addition to what FDA already requires, and would thus be preempted. She then ruled that the prudential doctrine of primary jurisdiction would also bar the warnings Herarra sought.

This past summer, Monster successfully removed Attorney Herrara’s May 6 lawsuit against the company to the Northern District of California. Monster is currently petitioning that court to transfer the suit to Judge Phillips’ chambers in the Central District, arguing that the claims and defenses in the Monster v. Herrara case are substantially similar to those in Herrera v. Monster.

Proponents of paternalism in and outside of government have seemingly chosen energy drinks as their poster child/whipping boy for targeting (non-coffee related) foods and beverages with caffeine. The need for regulatory action is debatable, but as we argued in June, an on-the-record process at FDA is by far preferable to bureaucratic sabre rattling. And it certainly is preferable to a City Attorney’s regulation by letter and lawsuit.

Can FDA Lawfully Overrule SCOTUS Generic Drug Preemption Decision Through Regulation?

FDA

Cross-posted at WLF’s Forbes.com contributor page

In its June 2013 decision Mutual Pharmaceutical Co. v. Bartlett, the Supreme Court forcefully repeated what it said in 2011:  federal law bars States from imposing tort liability on the manufacturer of a generic drug for providing allegedly inadequate warnings regarding health risks associated with use of the drug.  The federal government—which embraces the tort bar’s mantra that every injured consumer ought to have a sporting chance of recovering damages from at least one deep-pocketed defendant—immediately responded by announcing plans to propose new regulations designed to overrule Bartlett.  The details of the new regulations have not yet been disclosed.  It is nonetheless highly unlikely that such regulations could survive a court challenge.  The Hatch-Waxman Act, adopted by Congress in 1984, simply does not authorize the Food and Drug Administration to adopt the sort of regulations that it apparently has in mind.

Bartlett determined that federal law preempts the state-law failure-to-warn cause of action at issue in the case because the latter conflicts with federal law: it would be impossible for the generic manufacturer (Mutual Pharmaceutical Co.) to comply with the labeling requirements imposed on it by state law while also complying with federal law.  The plaintiff was a New Hampshire resident who developed toxic epidermal necrosis, which caused much of her skin to burn off, after taking generic sulindac manufactured by Mutual.  A jury awarded her $21 million in damages because, it determined, sulindac was defectively designed in light of Mutual’s failure to provide adequate warnings regarding the drug’s side effects. Continue reading

Food Court Update: Judge Grants Defendant’s Request, Asks FDA to Define “Natural”

FDAIn our June 18 post, Courts From Coast To Coast Address “Natural” In Food Labeling Class Actions, we reported on Northern District of California Judge Rogers’ preliminary determination to stay a mislabeling class action suit and refer a regulatory question to the Food and Drug Administration (FDA). Judge Rogers’ inclination surprised those of us who have closely followed these suits, as other judges’ efforts to seek FDA input have gone for naught, and because another judge in the same court had recently denied another defendant’s similar request for a stay.

Yesterday, Judge Rogers formally granted defendant Gruma Corp.’s request to stay the plaintiff’s suit based on the primary jurisdiction doctrine (order here).

Judge Rogers explained that FDA had issued nonbinding guidance indicating that it would not require on-label disclosure if a food product contained genetically modified ingredients, and had also issued an informal statement on what “natural” means in the labeling context. But as both parties in Cox v. Gruma agreed, “FDA has not addressed, even informally, the question of whether foods containing GMO or bioengineered ingredients may be labeled ‘natural’ or ‘all natural.’ Despite plaintiff’s eagerness to fill the “gaping hole in the current regulatory landscape for ‘natural claims and GMOs.” the judge wrote that “The FDCA and the NLEA unquestionably and squarely give that authority to the FDA.”

Under the Ninth Circuit precedent of Pom Wonderful v. Coca-Cola, Judge Rogers deferred to FDA, staying the Cox suit for six months and directing the parties to present and explain the question to FDA.

Update: Mixed Outcome For Kraft In False Labeling Class Action Decision

Still in The Food Court

Still in The Food Court

Cross-posted at WLF’s Forbes.com contributor page

In a March post, Another Grocery Basket Full of Lawsuit Claims for The Food Court, we examined a U.S. District Court for the Northern District of California decision on Kraft’s motion to dismiss a false labeling suit aimed at a slew of Kraft products. Some claims survived outright while others were temporarily rejected; for the rejected claims, Judge Ronald Whyte drafted a road map for plaintiffs to follow for their forthcoming amended complaint.

Ruling on the Amended Complaint. Ms. Ivie’s lawyers not only reasserted the rejected claims, but also took the opportunity to accuse countless other Kraft products (which she had never actually purchased) of being misbranded. On June 28, Judge Whyte issued his latest ruling in Ivie v. Kraft on that amended complaint.

Regarding Ms. Ivie’s unpurchased products, Judge Whyte threw out (with prejudice) each claim on products which featured only “similar” packaging to those she had bought. He allowed her to pursue new claims involving gum which had “essentially identical” packaging to gum targeted in her first complaint.

On the claims involving certain purchased products that Judge Whyte previously preempted, Kraft again received mixed results. The amended claim involving “natural lemon flavor” for Crystal Light packets met the same fate as the original claim: preempted. Judge Whyte reversed his previous rulings on allegations involving nutrient content claims for a Planter’s nut mix and for a Mexican-style cheese blend. He permitted those amended allegations to proceed. Because rulings on the nutrient content claims would merely parallel, not exceed, what federal labeling rules require, Judge Whyte rejected Kraft’s express preemption arguments.

No Implied Preemption.  More importantly, the judge also addressed implied preemption. Kraft argued that a March 2013 U.S. Court of Appeals for the Ninth Circuit ruling, Perez v. Nidek, created a “narrow gap” through which a state lawsuit must navigate to avoid conflicting with the relevant federal regulatory scheme. Kraft argued that Ivie’s claims did not thread that needle. Continue reading

WLF Web Seminar Program Spotlights Physician Payment Sunshine Act

PodiumPic1Washington Legal Foundation hosted a Web Seminar program yesterday, Physician Payments in the “Sunshine”: Implications of CMS Regulations for Businesses and the Future of American Health Care.

Speakers James Stansel and Meenakshi Datta of Sidley Austin LLP delved into the complicated and often vague data collection and reporting mandates required under the Physician Payment Sunshine Act and the regulations promulgated to implement it. They paid particular attention to how the mandates will impact research and development of new drugs, biologics, and medical devices, processes where physicians play an integral role.

The program is available as an on-demand file by clicking on the title above.

Click here for the slides our speakers utilized.

During the program, it was mentioned that WLF would be filing comments with CMS on the First Amendment problems with the Sunshine Act rules failing to exempt the sharing of medical textbooks and chapters of textbooks with doctors and teaching hospitals.  Those comments can be downloaded here.