United States Court of Appeals
FOR THE EIGHTH CIRCUIT
___________
No. 10-1326
___________
Allen Lefaivre, Individually and on *
behalf of all others similarly situated,
*
*
Appellant, *
* Appeal from the United States
v. * District Court for the
* Eastern District of Missouri.
KV Pharmaceutical Company; Ethex *
Corporation; Ther-Rx Corporation, *
*
Appellees. *
___________
Submitted: September 21, 2010
Filed: March 3, 2011
___________
Before BYE, BEAM, and SMITH, Circuit Judges.
___________
SMITH, Circuit Judge.
Allen Lefaivre, individually and on behalf of all others similarly situated,
brought this potential class action suit against KV Pharmaceutical Company, ETHEX
Corporation, and Ther-Rx Corporation (collectively, "KV"). KV manufactures a
hypertension medication called Metoprolol Succinate ER. Lefaivre alleged that KV
breached its implied warranty of merchantability and violated the Missouri
Merchantability Practices Act (MMPA) by failing to manufacture the medication in
compliance with federal regulations. In response, KV moved to dismiss the suit,
asserting that the claims were essentially claims for violation of federal regulations
themselves and that no private cause of action existed. The district court held that
Lefaivre's state law claims were preempted by federal law because the claims were
based entirely on violations of federal regulations, and the enforcement of federal
regulations is solely the province of the federal government. We hold that Lefaivre's
claims are not impliedly preempted and accordingly reverse and remand.
I. Background
KV manufactures Metoprolol Succinate ER in Missouri, and markets and
distributes it throughout the United States. Lefaivre, a resident of Rhode Island, had
a prescription for the medication and purchased it several times at retail pharmacies
in Rhode Island.
On March 2, 2009, the Food and Drug Administration (FDA) filed a complaint
against KV alleging that KV had not manufactured the medication in compliance with
FDA standards under certain provisions of Chapter V of the Federal Food, Drug, and
Cosmetic Act (FDCA), 21 U.S.C. § 351(a)(2)(B). On March 6, 2009, the FDA and
KV jointly filed a Consent Decree of Permanent Injunction ("Consent Decree") that
settled the FDA's complaint with KV. In the Consent Decree, KV neither admitted nor
denied the FDA's claims.
KV stipulated as part of the Consent Decree that it had sold drugs that were
"adulterated" as defined by 21 U.S.C. § 351(a)(2)(B), meaning that the drugs were
manufactured, processed, packed, labeled, held, and distributed in violation of the
FDA's current good manufacturing practice (cGMP) requirements. KV acknowledged
that it had not used proper quality control procedures when manufacturing the
medication. It also stipulated that some of the medication sold to retail pharmacies had
been misbranded in violation of federal regulations. KV agreed to destroy the
remaining stock of "adulterated" drugs and issue a recall for all stocks of the
medication sold to retailers between May 2008 and February 3, 2009. KV issued the
recall notice "at the retail level." A retail-level recall instructs all retailers that had
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purchased the medication to return all unsold product to KV. The Consent Decree did
not require KV to distribute its recall notice to individual purchasers of the
medication, and it did not do so.
Lefaivre filed suit against KV alleging (1) a breach of the implied warranty of
merchantability and (2) violations of the MMPA. Specifically, Lefaivre alleged that
the medication was "unmerchantable" because it was "not manufactured, marketed
and/or distributed in compliance with cGMP and [was] accordingly adulterated as a
matter of law." Lefaivre sought damages "in the amount of the difference between the
values of the [medication] as warranted (their values if they were manufactured in full
compliance with cGMP) and the values of the [medication] as actually received
(adulterated)." With regard to the MMPA claim, Lefaivre alleged that KV "concealed,
suppressed and omitted to disclose the material fact that the [medication was]
adulterated under federal law in connection with its sale of the [medication] in trade
or commerce in and from the State of Missouri." Lefaivre requested an award of actual
damages and punitive damages under the MMPA.
KV moved to dismiss the suit, asserting that the claims were essentially claims
for violation of federal regulations themselves and that no private cause of action
existed. The district court held that Lefaivre's state law claims were preempted by
federal law because the claims were based entirely on violations of federal regulations
and the enforcement of federal regulations is solely the province of the federal
government.
II. Discussion
On appeal, Lefaivre asserts that the district court's ruling leaves him and all
other purchasers of the adulterated medication without a legal remedy for economic
injuries. According to Lefaivre, the district court's determination that the FDCA
impliedly preempts his state law causes of action is without legal support and contrary
to Wyeth v. Levine, 129 S. Ct. 1187 (2009), in which the Supreme Court held that the
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FDCA does not preempt state law claims against drug manufacturers for failure to
adequately warn of potential hazards. Additionally, Lefaivre asserts that the district
court erred in relying on the Supreme Court's decision in Buckman Co. v. Plaintiffs'
Legal Committee, 531 U.S. 341 (2001), as support for its finding of preemption.
Lefaivre distinguishes Buckman arguing it concerned "fraud-on-the-FDA" claims not
present here.
In response, KV maintains that the district court simply applied a basic legal
doctrine—that Lefaivre may not convert FDCA violations into private causes of
action—to dismiss Lefaivre's claims. According to KV, the Supreme Court in Wyeth
left this doctrine intact.
"The general law of preemption is grounded in the Constitution's command that
federal law 'shall be the supreme Law of the Land.'" In re Aurora Dairy Corp.
Organic Milk Mktg. & Sales Practices Litig., 621 F.3d 781, 791 (8th Cir. 2010)
(quoting U.S. Const. art. VI, cl. 2). As a result, any state law conflicting with federal
law "has no effect." Id. (internal quotation and citations omitted). "Whether a
particular federal statute preempts state law depends upon congressional purpose." Id.
We "entertain two presumptions" when "interpreting the presence and scope of
preemption." Id. at 792.
First, Congress does not cavalierly pre-empt state-law causes of action.
In all pre-emption cases, and particularly in those in which Congress has
legislated in a field which the States have traditionally occupied, we start
with the assumption that the historic police powers of the States were not
to be superseded by the Federal Act unless that was the clear and
manifest purpose of Congress. Second, congressional purpose is the
ultimate touchstone in every preemption case.
Id. (internal quotations, alterations, and citation omitted).
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The express language of a statute or its structure and purpose may indicate
Congress's preemptive intent. Id. "A state law is expressly preempted when a federal
statute states the congressional intention to preempt state law by defining the scope
of preemption." Id. Here, KV has not asserted, nor do we find any evidence of,
"explicit pre-emptive language" in the FDCA to bar Lefaivre's present claims. Id.
(internal quotation and citation omitted). Therefore, we need only consider whether
Lefaivre's claims are impliedly preempted.
Implied preemption exists where a federal statutory or regulatory scheme
is so pervasive in scope that it occupies the field, leaving no room for
state action—this is termed field preemption. Implied preemption also
occurs where state law has not been completely displaced but is
superseded to the extent that it conflicts with federal law—this is known
as conflict preemption.
Id. (internal quotation and citation omitted). There are two types of conflict
preemption—impossibility preemption and obstruction preemption. See Wis. Pub.
Intervenor v. Mortier, 501 U.S. 597, 605 (1991). Impossibility preemption "arises
when compliance with both federal and state regulations is a physical impossibility."
Id. (internal quotation and citation omitted). "Impossibility pre-emption is a
demanding defense." Wyeth, 129 S. Ct. at 1199. Obstruction preemption exists "when
a state law stands as an obstacle to the accomplishment and execution of the full
purposes and objectives of Congress." Wis. Pub. Intervenor, 501 U.S. at 605 (internal
quotation and citation omitted).
In determining whether Lefaivre's claims are impliedly preempted, we must
determine Congress's purpose and intent in enacting the FDCA. To determine
Congress's intent, we "may consider the statute itself and any regulations enacted
pursuant to the statute's authority." Aurora, 621 F.3d at 792. A tension exists "between
the presumption against preemption and the possibility of implied preemption"; as a
result, "it is often a perplexing question whether Congress has precluded state action
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or by the choice of selective regulatory measures has left the police power of the
States undisturbed except as the state and federal regulations collide." Id. (internal
quotation, alteration, and citation omitted).
Fortunately, the Court extensively discussed Congress's purpose with regard to
drugs and drug labeling in Wyeth, stating:
In 1906, Congress enacted its first significant public health law, the
Federal Food and Drugs Act, ch. 3915, 34 Stat. 768. The Act, which
prohibited the manufacture or interstate shipment of adulterated or
misbranded drugs, supplemented the protection for consumers already
provided by state regulation and common-law liability. In the 1930's,
Congress became increasingly concerned about unsafe drugs and
fraudulent marketing, and it enacted the Federal Food, Drug, and
Cosmetic Act (FDCA), ch. 675, 52 Stat. 1040, as amended, 21 U.S.C.
§ 301 et seq. The Act's most substantial innovation was its provision for
premarket approval of new drugs. It required every manufacturer to
submit a new drug application, including reports of investigations and
specimens of proposed labeling, to the FDA for review. Until its
application became effective, a manufacturer was prohibited from
distributing a drug. The FDA could reject an application if it determined
that the drug was not safe for use as labeled, though if the agency failed
to act, an application became effective 60 days after the filing. FDCA,
§ 505(c), 52 Stat. 1052.
***
As it enlarged the FDA's powers to "protect the public health" and
"assure the safety, effectiveness, and reliability of drugs," [76 Stat.] 780,
Congress took care to preserve state law. The 1962 amendments added
a saving clause, indicating that a provision of state law would only be
invalidated upon a "direct and positive conflict" with the FDCA. § 202,
id., at 793. Consistent with that provision, state common-law suits
"continued unabated despite . . . FDA regulation." Riegel v. Medtronic,
Inc., 552 U.S.___,___, 128 S. Ct. 999, 1017, 169 L. Ed.2d 892 (2008)
(GINSBURG, J., dissenting); see ibid., n. 11 (collecting state cases). And
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when Congress enacted an express pre-emption provision for medical
devices in 1976, see § 521, 90 Stat. 574 (codified at 21 U.S.C. §
360k(a)), it declined to enact such a provision for prescription drugs.
***
Building on its 1906 Act, Congress enacted the FDCA to bolster
consumer protection against harmful products. See Kordel v. United
States, 335 U.S. 345, 349, 69 S. Ct. 106, 93 L. Ed. 52 (1948); United
States v. Sullivan, 332 U.S. 689, 696, 68 S. Ct. 331, 92 L. Ed. 297
(1948). Congress did not provide a federal remedy for consumers
harmed by unsafe or ineffective drugs in the 1938 statute or in any
subsequent amendment. Evidently, it determined that widely available
state rights of action provided appropriate relief for injured consumers.
It may also have recognized that state-law remedies further consumer
protection by motivating manufacturers to produce safe and effective
drugs and to give adequate warnings.
If Congress thought state-law suits posed an obstacle to its objectives,
it surely would have enacted an express pre-emption provision at some
point during the FDCA's 70-year history. But despite its 1976 enactment
of an express pre-emption provision for medical devices, see § 521, 90
Stat. 574 (codified at 21 U.S.C. § 360k(a)), Congress has not enacted
such a provision for prescription drugs. See Riegel, 552 U.S., at ___,
128 S. Ct., at 1009 ("Congress could have applied the pre-emption clause
to the entire FDCA. It did not do so, but instead wrote a pre-emption
clause that applies only to medical devices"). Its silence on the issue,
coupled with its certain awareness of the prevalence of state tort
litigation, is powerful evidence that Congress did not intend FDA
oversight to be the exclusive means of ensuring drug safety and
effectiveness. As Justice O'Connor explained in her opinion for a
unanimous Court: "The case for federal pre-emption is particularly weak
where Congress has indicated its awareness of the operation of state law
in a field of federal interest, and has nonetheless decided to stand by both
concepts and to tolerate whatever tension there [is] between them."
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 166–167,
109 S. Ct. 971, 103 L. Ed.2d 118 (1989) (internal quotation marks
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omitted); see also supra, at 1194 (discussing the presumption against
pre-emption).
***
In keeping with Congress' decision not to pre-empt common-law tort
suits, it appears that the FDA traditionally regarded state law as a
complementary form of drug regulation. The FDA has limited resources
to monitor the 11,000 drugs on the market, and manufacturers have
superior access to information about their drugs, especially in the
postmarketing phase as new risks emerge. State tort suits uncover
unknown drug hazards and provide incentives for drug manufacturers
to disclose safety risks promptly. They also serve a distinct compensatory
function that may motivate injured persons to come forward with
information. Failure-to-warn actions, in particular, lend force to the
FDCA's premise that manufacturers, not the FDA, bear primary
responsibility for their drug labeling at all times. Thus, the FDA long
maintained that state law offers an additional, and important, layer of
consumer protection that complements FDA regulation.
129 S. Ct. at 1195–96; 1199–1200, 1202 (emphasis added) (footnotes omitted).
The Court's comments in Wyeth regarding drugs and drug labeling strongly
imply that field preemption does not apply in the present case. Specifically, in relating
the history of federal regulation of drugs and drug labeling, the Court recognized that
when Congress first enacted the Federal Food and Drugs Act, Congress
"supplemented the protection for consumers already provided by state regulation and
common-law liability." Id. at 1195. Furthermore, when Congress enacted an express
preemption provision for medical devices, it declined to do so for prescription drugs.
Id. at 1196. Nor has Congress ever provided a federal remedy for consumers harmed
by ineffective drugs. "Evidently, it determined that widely available state rights of
action provided appropriate relief for injured consumers. It may also have recognized
that state-law remedies further consumer protection by motivating manufacturers to
produce safe and effective drugs and to give adequate warnings." Id. at 1199–1200.
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Thus, we conclude the "federal statutory or regulatory scheme" in the present case is
not "so pervasive in scope that it occupies the field." Aurora, 621 F.3d at 792 (internal
quotation and citation omitted). To the contrary, "the FDA [has] traditionally regarded
state law as a complementary form of drug regulation" and has "long maintained that
state law offers an additional, and important, layer of consumer protection that
complements FDA regulation." Wyeth, 129 S. Ct. at 1202 (footnote omitted).
Nor does conflict preemption—impossibility or obstacle—apply in the present
case. First, it is not physically impossible for KV to comply with both federal and state
law. See Wis. Pub. Intervenor, 501 U.S. at 605 (1991). In fact, Lefaivre's state law
claims—breach of the implied warranty of merchantability and MMPA
claims—admittedly rest on KV's admission in the Consent Decree that it had sold
drugs that were "adulterated," as defined by 21 U.S.C. § 351(a)(2)(B), and had failed
to manufacture, process, pack, label, hold, and distribute the drugs in compliance with
the FDA's cGMP requirements. Second, Lefaivre's state law claims do not "stand[ ]
as an obstacle to the accomplishment and execution of the full purposes and objectives
of Congress" because, as the Court explained in Wyeth, state law is complimentary to
federal drug regulation and serves as an additional "layer of consumer protection." 129
S. Ct. at 1202.
Nevertheless, KV maintains that Buckman forecloses Lefaivre's state law
claims. In Buckman, the plaintiffs claimed injuries arising from the use of orthopedic
bone screws in their spines. 531 U.S. at 343. The defendant was a consulting company
that assisted the screws' manufacturer in obtaining approval for the devices from the
FDA. Id. The plaintiffs asserted that the consulting company "made fraudulent
representations to the . . . FDA . . . in the course of obtaining approval to market the
screws." Id. Additionally, they claimed that the fraudulent representations were a "but
for cause" of their injuries. Id.
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The Court held "that the plaintiffs' state-law fraud-on-the-FDA claims
conflict[ed] with, and [were] therefore impliedly pre-empted by, federal law." Id. at
348. The Court applied the doctrine of field preemption, explaining that "[p]olicing
fraud against federal agencies is hardly a field which the States have traditionally
occupied, such as to warrant a presumption against finding federal pre-emption of a
state-law cause of action." Id. at 347 (emphasis added) (internal quotation and internal
citation omitted). Instead, the federal agency's relationship with the entity that it
regulates "is inherently federal in character because the relationship originates from,
is governed by, and terminates according to federal law." Id. According to the Court,
the consulting company's "dealings with the FDA were prompted by the MDA [the
Medical Device Amendments of 1976 (MDA)], and the very subject matter of [the
consulting company's] statements were dictated by that statute's provisions." Id. at
347–48. Therefore, "in contrast to situations implicating federalism concerns and the
historic primacy of state regulation of matters of health and safety," the Court
concluded that "no presumption against pre-emption obtains in this case." Id. at 348
(internal quotation and internal citation omitted).
Thereafter, the Court explained that the "state-law fraud-on-the-FDA claims"
conflicted with federal law because "the federal statutory scheme amply empowers the
FDA to punish and deter fraud against the Administration, and that this authority is
used by the Administration to achieve a somewhat delicate balance of statutory
objectives." Id. at 348 (emphasis added). According to the Court, these claims
inevitably conflict with the FDA's responsibility to police fraud
consistently with the Administration's judgment and objectives. As a
practical matter, complying with the FDA's detailed regulatory regime
in the shadow of 50 States' tort regimes will dramatically increase the
burdens facing potential applicants—burdens not contemplated by
Congress in enacting the FDCA and the MDA. Would-be applicants may
be discouraged from seeking § 510(k) approval of devices with
potentially beneficial off-label uses for fear that such use might expose
the manufacturer or its associates (such as petitioner) to unpredictable
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civil liability. In effect, then, fraud-on-the-FDA claims could cause the
Administration's reporting requirements to deter off-label use despite the
fact that the FDCA expressly disclaims any intent to directly regulate the
practice of medicine, see 21 U.S.C. § 396 (1994 ed., Supp. V), and even
though off-label use is generally accepted.
Id. at 350–51. Additionally, such claims would "cause applicants to fear that their
disclosures to the FDA, although deemed appropriate by the Administration, will later
be judged insufficient in state court." Id. at 351. Furthermore, "Congress intended that
the MDA be enforced exclusively by the Federal Government." Id. at 352 (citing 21
U.S.C. § 337(a)).
Finally, the Court rejected the plaintiffs'
attempt to characterize both the claims at issue in Medtronic[, Inc. v.
Lohr, 518 U.S. 470 (1996)] (common-law negligence action against the
manufacturer of an allegedly defective pacemaker lead) and the fraud
claims here as "claims arising from violations of FDCA requirements."
Brief for Respondent 38. Notwithstanding the fact that Medtronic did not
squarely address the question of implied pre-emption, it is clear that the
Medtronic claims arose from the manufacturer's alleged failure to use
reasonable care in the production of the product, not solely from the
violation of FDCA requirements. See 518 U.S., at 481, 116 S. Ct. 2240.
In the present case, however, the fraud claims exist solely by virtue of
the FDCA disclosure requirements. Thus, although Medtronic can be
read to allow certain state-law causes of actions that parallel federal
safety requirements, it does not and cannot stand for the proposition that
any violation of the FDCA will support a state-law claim.
In sum, were plaintiffs to maintain their fraud-on-the-agency claims here,
they would not be relying on traditional state tort law which had predated
the federal enactments in questions. On the contrary, the existence of
these federal enactments is a critical element in their case. For the
reasons stated above, we think this sort of litigation would exert an
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extraneous pull on the scheme established by Congress, and it is
therefore pre-empted by that scheme.
Id. at 352–53.
Justice Stevens, joined by Justice Thomas, concurred in the judgment,
explaining that
[t]his would be a different case if, prior to the instant litigation, the FDA
had determined that petitioner had committed fraud during the § 510(k)
process and had then taken the necessary steps to remove the
harm-causing product from the market. Under those circumstances,
respondent's state-law fraud claim would not depend upon speculation
as to the FDA's behavior in a counterfactual situation but would be
grounded in the agency's explicit actions. In such a case, a plaintiff
would be able to establish causation without second-guessing the FDA's
decisionmaking or overburdening its personnel, thereby alleviating the
Government's central concerns regarding fraud-on-the-agency claims.
If the FDA determines both that fraud has occurred and that such fraud
requires the removal of a product from the market, state damages
remedies would not encroach upon, but rather would supplement and
facilitate, the federal enforcement scheme. Cf. Medtronic, Inc. v. Lohr,
518 U.S. 470, 495, 116 S. Ct. 2240, 135 L. Ed.2d 700 (1996) (holding
that the presence of a state-law damages remedy for violations of FDA
requirements does not impose an additional requirement upon medical
device manufacturers but "merely provides another reason for
manufacturers to comply with . . . federal law"); id., at 513, 116 S. Ct.
2240 (O'CONNOR, J., concurring in part and dissenting in part) (same).
Id. at 354 (Stevens, J., concurring) (emphasis added).
The hypothetical scenario that Justice Stevens conceived of in Buckman is
virtually identical to the present case. Here, the Consent Decree between the FDA and
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KV established that KV had, in fact, manufactured "adulterated" medication in
violation of cGMP requirements. In compliance with the Consent Decree, KV
destroyed its remaining stock of "adulterated" drugs and issued a recall for all stocks
of the medication sold to retailers. Thus, Lefaivre's state law claims are not
"depend[ent] upon speculation as to the FDA's behavior" but instead are "grounded
in the agency's explicit actions. In such a case, [Lefaivre] would be able to establish
causation without second-guessing the FDA's decisionmaking or overburdening its
personnel . . . ." Id. (Stevens, J., concurring).
Furthermore, the present case is distinguishable from Buckman because
Lefaivre's state-law claims are not fraud-on-the-FDA claims, as they "focus on [harm]
that is allegedly perpetrated against [consumers] rather than the FDA." Couick v.
Wyeth, Inc., No. 3:09-cv-210-RJC-DSC, 2009 WL 4644394, at *5 (W.D.N.C. Dec.
7, 2009) (unpublished) (holding that Buckman did not apply to plaintiff's state-law
claims, including claims for unfair trade practices and breach of warranties); see also
Fulgenzi v. Wyeth, Inc., 686 F. Supp. 2d 715, 724 (N.D. Ohio 2010) (holding that
Buckman did not apply to plaintiff's "multiple state law tort claims, including several
claims sounding in fraud"). "The misrepresentation at issue in Buckman was not made
to the plaintiff—or consumers at large—but to the FDA itself." In re Bayer Corp.
Combination Aspirin Prod. Mktg. & Sales Practices Litig.,701 F. Supp. 2d 356, 369
(E.D.N.Y. 2010). And, "simply because conduct violates the FDCA does not mean a
state-law claim based on that same conduct depends on the FDCA's existence."
Couick, 2009 WL 4644394, at *5.
The Court in Buckman specifically applied field preemption to state-law fraud-
on-the-FDA claims because policing fraud against federal agencies "is hardly a field
which the States have traditionally occupied." Buckman, 531 U.S. at 347 (internal
quotation and internal citation omitted). The present case involves no such claims,
and, as explained supra, implied preemption does not bar Lefaivre's state law claims.
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III. Conclusion
Accordingly, we reverse the judgment of the district court and remand for
further proceedings consistent with this opinion.1
BEAM, Circuit Judge, concurring.
I concur in the result reached by the court.
______________________________
1
Nothing in this opinion prohibits KV from raising, or the district court from
considering on remand, whether Lefaivre's pleading states no independent claim under
state law upon which relief can be granted under Federal Rule of Civil Procedure
12(b)(6).
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