The following brief, filed in the 8th Circuit on behalf of Gladys Mensing gives a great deal of history both of Reglan (Metoclopramide) and of why lawsuits against Metoclopramide manufacturers shouldn’t be preempted. It’s not a light read, but it’s a good one.
TABLE OF AUTHORITIES … iii
SUPPLEMENTAL STATEMENT OF FACTS … 1 o
FDA Orders “Boxed Warning” Added to Reglan/Metoclopramide Label t Warn of Danger of Tardive Dyskinesia … 1
Supreme Court Rules That Failure-to-Warn Claims Against Name-Brand Pharmaceutical Companies Are Not Preempted by Federal Law. … 3
FDA Withdraws Its Position That Failure-to-Warn Claims Against Generic Drug Companies Are Preempted. … 5
ARGUMENT … 5
I. Ms. Mensing's Failure-to-Warn Claims Against the Manufacturers of Generic Metoclopramide Are Not Preempted … 5
A. The Generic Appellees' Briefs Ignore Essential Statutory and Regulatory Provisions, Mischaracterize Appellant's Arguments, and Engage in Other Fallacious Reasoning. … 6
1. The Generic Appellees Ignore Their Obligation Under Federal Law to Maintain Adequate Warnings. … 6
2. The Generic Appellees Mischaracterize Ms. Mensing's Position as Seeking Warnings on Generic Metoclopramide Different from Those on Reglan. … 9
3. The Generic Appellees Falsely Assert That They Could Not Have Sought Approval for Stronger Warnings Without First Conducting Expensive Scientific Studies … 13
4. The Generic Appellees Oversimplify the Congressional Purpose Underlying the Hatch-Waxman Amendments … 15
B. The Supreme Court's Recent Wyeth v. Levine Decision Strongly Supports a Determination of No Preemption. … 17
1. The Levine Decision … 17
2. Federal Courts Following Wyeth v. Levine Have Rejected Preemption Claims By Generic Drug Manufacturer … 20
II. Name-Brand Appellees Schwarz and Wyeth May Be Held Liable for Their Own Misrepresentations … 23
A. Ms. Mensing's Claims Are Consistent with Flynn … 24
B. Foster Does Not Limit the Name-Brand Appellees' Liability Under Minnesota Law … 26
1. Schwarz and Wyeth May Be Held Liable for Their Misrepresentations about Metoclopramide … 26
2. Foster's Policy Analysis Cannot Shield Schwarz and Wyeth from Liability. … 28
C. Schwarz and Wyeth Err in Denying That They Owed a Duty of Care to Appellant. … 29
1. No Confidential or Fiduciary Relationship or Transaction with Appellees Is Required to Establish a Duty of Care … 31
2. Nor Can Schwarz and Wyeth Avoid Liability on the Ground that Appellant Is Not a Member of Their Intended Audience. … 34
3. Direct Communication Is Also Not an Element of the Duty of are. … 35
D. Appellant's Fraud Claims Are Supported by Minnesota Law and Have Not Been Waived … 6
1. The Name-Brand Appellees' Arguments Regarding the Elements of Fraud Are Incorrect … 36
2. Appellant Did Not Waive Her Fraud Claims … 39
CONCLUSION … 40
TABLE OF AUTHORITIES
Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571 (1981) … 12
Baker v. Surman 361 N.W.2d 108 (Minn. Ct. A. 1985) … 34, 36
Bonhiver v. Graff, 248 N.W.2d 291 (Minn. 1976) … 33, 34, 35
Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141 (1989) … 9
Bundy v. Holmquist, 669 N.W.2d 627 (Minn. Ct. App. 2003) … 23
Busterud v. Farrington, 31 N.W. 360 (Minn. 1887) … 27, 33
Colacicco v. Apotex Inc., 129 S. Ct. 1578 (2009) … 4
Colacicco v. Apotex Inc., No. 06-3107 (3d Cir. Apr. 28, 2009) … 4, 20, 22
Colacicco v. Apotex Inc., 521 F.2d 253 (3d Cir. 2008) … passim
Conte v. Wyeth, 85 Cal. Rptr. 3d 299 (Cal. Ct. App. 2008), review denied (Jan. 21, 2009) … 28, 36
Davis v. Re-Trac Mfg. Corp., 149 N.W.2d 37 (Minn. 1967) … 40
Florenzano v. Olson, 387 N.W.2d 168 (Minn. 1986) … 28
Flynn v. American Home Products Corp., 627 N.W.2d 342 (Minn. Ct. App. 2001) … assim
Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994) … passim
Handeen v. Lemaire, 112 F.3d 1339 (8th Cir. 1997) … 38
Harmon Contract Glazing, Inc. v. Libby-Owens-Ford Co., 493 N.W.2d 146 (Minn. Ct. App. 1992) … 1
Kellogg v. Wyeth, — F. Supp. 2d —,2009 WL 975382 (D. Vt. Apr. 10, 2009) … passim
Kociemba v. G.D. Searle & Co., 707 F. Supp. 1517 (D. Minn. 198 … 25, 32, 36
Kronebusch v. MVBA Harvestore Sys., 488 N.W.2d 490 (Minn. Ct. App. 1992) … 36
LeBouef v. Goodyear Tire & Rubber Co., 623 F.2d 985 (5th Cir. 1980) … 26
Lehman v. Hansord Pontiac Co., 74 N.W.2d 305 (Minn. 1955) … 33
McNeil v. Wyeth, 462 F.3d 364 (5th Cir. 2007) … 32, 36, 38
M.H. v. Caritas Family Servs., 488 N.W.2d 282 (Minn. 1992) … 29
Mulder v. Parke Davis & Co., 181 N.W.2d 882 (Minn. 1970) … 36
Mulroy v. Wright, 240 N.W. 116 (Minn. 1931) … 27, 33
Noble Systems Corp. v. Alorica Central, LLC, 543 F.3d 978 (8th Cir. 2008) … 32
Richfield Bank & Trust Co. v. Sjogren, 244 N W 2d 648 (Minn 1976) … 31, 32, 33, 38
Rochester Methodist Hosp. v. Travelers Ins. Co., 728 F2d 1006 (8th Cir 1984) … 27, 32, 38
Schrock v. Wyeth, Inc., 601 F. Supp. 2d 1262 (W.D. Okla. 2009) … 4, 20, 21
Simonsen v. BTH Props., 410 N.W.2d 458 (Minn. Ct. App. 1987) … 2
Smith v. Brutger Cos., 569 N.W.2d 408 (Minn. 1997) … 28, 34
Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520 (Minn. 1986) … 37
Stacel v. Teva Pharms., USA, No. 08 C 1143, 2009 WL 703274 (N.D. Ill. Mar. 16, 2009) … 4, 20, 21
Stephenson v. Deutsche Bank AG, 282 F. Supp. 2d 1032 (D. Minn. 2003) … 5
Swedeen v. Swedeen, 134 N.W.2d 871 (Minn. 1965) … 27
Tri-Bio Laboratories, Inc. v. United States, 836 F.2d 135 (3d Cir. 1987) … 16
Wyeth v. Levine, — U.S. —, 129 S. Ct. 1187 (2009) … passim
21 U.S.C. §321(p)(1) … 11
21 U.S.C. §352(f)(2) … 6
Pub. L. No. 110-85, 121 Stat. 823 (2007) … 2
21 C.F.R. §201.57 (2005) … 7, 8
21 C.F.R. §201.57(e) (2005) … 7, 8, 10
21 C.F.R. §310.3(h) … 11
21 C.F.R. §314.70 (2005) … 11, 12,22
21 CFR § 314 70(b) (2005) … 10, 11
….21 C.F.R. §314.70(b)(2) (2005) … 13
21 C.F.R. §314.70(c) (2005) … 9, 10
21 C.F.R. §314.70(c)(2) (2005) … 13
21 C.F.R. §314.80(c)(1)(i) (2005) … 14
21 C.F.R. §314.80(c)(1)(ii) (2005) … 14
21 C.F.R. §314.97 … 22
21 C.F.R. §314.97 (2005) … 1, 22
71 Fed. Reg. 3922 … 26, 35
Changes in the Labeling of ANDAs Subsequent to Revision Policy & Proc. Guide #8-89 (Aug. 21, 1989) … 9
Letter from Gary Buehler, Center for Drug Evaluation and Research, FDA (Feb. 26, 2009) … 2
Letter from Joyce Korvick, Center for Drug Evaluation and Research, FDA (Feb. 26, 2009) … 2, 3, 14, 38 t of Appeals
Letter from Sharon Swingle, U.S. Dep't of Justice to Clerk, U.S. Cour for the Third Circuit (Apr. 28, 2009) … 5
Rest. (Second) of Torts §310 cmt. c (1965) … 35
Rest. (Second) of Torts §310 cmt. d (1965) … 33, 3
Rest. (Second) of Torts §311 (1965) … 30, 34
Rest. (Second) of Torts §311 cmt. b (1965) … 29
Rest. (Second) of Torts §311 cmt. f (1965) … 33, 35
SUPPLEMENTAL STATEMENT OF FACTS
Since Appellant Gladys Mensing filed her opening brief, there have been a number of significant developments in the regulatory and judicial landscape relevant to this appeal. Ms. Mensing submits this supplemental statement of facts in order to apprise the Court of these developments.
FDA Orders “Boxed Warning” Added to Reglan/Metoclopramide Label to Warn of Danger of Tardive Dyskinesia.
This is a personal injury action brought by Gladys Mensing for injuries caused by her long-term ingestion of the prescription drug metoclopramide as treatment for diabetic gastroparesis. Specifically, Ms. Mensing alleges that her long-term use of metoclopramide, as prescribed, caused her to develop tardive dyskinesia, a severe, often irreversible, neurological disorder. Ms. Mensing alleges that the appellees, drug companies that manufactured and/or distributed metoclopramide in either its generic form or under the brand name Reglan,[FN1] misrepresented the risk that metoclopramide use could cause tardive dyskinesia and failed to provide adequate warnings of that risk.
FN1. Ms. Mensing will use the term “name-brand appellees” to refer collectively to Wyeth, Inc. and Schwarz Pharma, Inc., manufacturers of Reglan, and will use the term “generic appellees” to refer collectively to Pliva, Inc., Teva Pharmaceuticals USA, Inc., UDL Laboratories, Inc., and Actavis Elizabeth, LLC, manufacturers of generic metoclopramide. However, because Actavis filed a separate brief, references to the “Generic Appellees' Brief” are to the brief filed by Pliva, Teva, and UDL.
On February 26, 2009, one week after Ms. Mensing filed her opening brief, the federal Food and Drug Administration (“FDA”), acting on its own initiative pursuant to powers granted to the agency in the recent Food and Drug Administration Amendments Act of 2007, Pub. L. No. 110-85, 121 Stat. 823, issued a safety alert and ordered manufacturers of metoclopramide to add a “Boxed Warning” to their labels. In letters to manufacturers of Reglan and generic metoclopramide, the FDA noted that the prevalence of tardive dyskinesia among patients exposed to metoclopramide for at least three months may be as much as 20%, 100 times greater than the 1 in 500 incidence for all extra-pyramidal symptoms (“EPS”), including tardive dyskinesia, represented on the drug's label. See Letter from Joyce Korvick, Center for Drug Evaluation and Research (“CDER”), FDA 3 (Feb. 26, 2009) (“Korvick Letter”) (included in addendum); Letter from Gary Buehler, CDER, FDA 3 (Feb. 26, 2009) (“Buehler Letter”) (same).[FN2] Therefore, the agency ordered metoclopramide manufacturers to include a Boxed Warning that states, inter alia, “Prolonged treatment (greater than 12 weeks) with metoclopramide should be avoided in all but rare cases where therapeutic benefit is thought to outweigh the risks to the patient of developing tardive dyskinesia.” Korvick Letter 2; Buehler Letter 2.
FN2. These FDA letters are also available at http://www.fda.gov/cder/drug/ DrugSafety/NDA metoclopramide REMS.pdf and http://www.fda.gov/ CDER/drug/DrugSafety/ANDA metoclopramide SR letter.pdf respectively.
The FDA's issuance of this safety alert is relevant to this appeal for at least two reasons. First, the safety alert confirms the validity of Ms. Mensing's allegations that the appellees' prior warnings regarding tardive dyskinesia were both false and inadequate. Second, the FDA based its safety alert not on extensive clinical trials, but rather on a review of published literature concerning metoclopramide. See Korvick Letter 1 & nn.1-3 (citing three published studies). Such studies, and the information they contain, were equally available to all manufacturers of metoclopramide, yet no manufacturer took steps to act on these or prior studies before the FDA ordered them to do so.
Supreme Court Rules That Failure-to-Warn Claims Against Name-Brand Pharmaceutical Companies Are Not Preempted By Federal Law.
Two weeks after Ms. Mensing filed her opening brief, the United States Supreme Court issued its decision in Wyeth v. Levine, — U.S. —, 129 S. Ct. 1187 (2009). The Supreme Court held that FDA approval of a prescription drug label does not immunize a drug company from state tort liability for failure to warn when that approved label is subsequently found to be inadequate. In so holding, the Court rejected the views of the FDA regarding preemption, determining that the FDA's position “does not merit deference.” Id. at 1201, 1204.
Although Levine involved failure-to-warn claims against a name-brand drug company, rather than generic manufacturers, its analysis and discussion of the preemption issue are highly relevant to the first issue on appeal before this Court. To date, at least three federal courts have issued rulings against preemption claims by generic drug companies on the basis of Levine. See Kellogg v. Wyeth, — F. Supp. 2d —, 2009 WL 975382 (D. Vt. Apr. 10, 2009) (denying motion to certify ruling denying preemption for immediate appeal); Stacel v. Teva Pharms., USA, No. 08 C 1143, 2009 WL 703274 (N.D. Ill. Mar. 16, 2009) (denying motion to dismiss on preemption grounds); Schrock v. Wyeth, Inc., 601 F. Supp. 2d 1262 (W.D. Okla. 2009) (same).[FN3] In addition, the Third Circuit Court of Appeals vacated its judgment in Colacicco v. Apotex Inc., 521 F.2d 253 (3d Cir. 2008), in which it had affirmed dismissal of claims against both name-brand and generic drug companies on preemption grounds, and remanded the case for further proceedings consistent with Levine. See Colacicco v. Apotex Inc., No. 06-3107 (3d Cir. Apr. 28, 2009) (included in addendum).[FN4] All of the generic appellees relied on the Third Circuit's original ruling as support for affirmance here. See Generic Appellees' Br. 65; Actavis Br. 38.[FN5]
FN3. The Kellogg and Stacel opinions are included in the addendum to this brief.
FN4. The Colacicco case was again before the Court of Appeals because the Supreme Court granted certiorari, vacated, and remanded the case for reconsideration in light of Levine. See Colacicco v. Apotex Inc., 129 S. Ct. 1578 (2009).
FN5. That reliance was misplaced. The Third Circuit's original ruling expressly left open the question of “whether actions against generic drug manufacturers are preempted on the basis of their obligations under the Hatch-Waxman Amendments,” the argument appellees advance here, and instead limited its holding to circumstances in which the FDA had expressly rejected a warning that plaintiffs argued was required by state law. Colacicco, 521 F.3d at 271-72.
FDA Withdraws Its Position That Failure-to-Warn Claims Against Generic Drug Companies Are Preempted.
All of the generic appellees-as well as the court below-also relied on the position of the FDA on preemption of failure-to-warn claims, as set forth in two amicus briefs submitted in the Colacicco litigation. See Generic Appellees' Br. 35, 39, 45; Actavis Br. 20, 21, 30; App. to Appellant's Opening Br. (“App.”) 295a-296a. The FDA has since withdrawn those amicus briefs, and “the United States does not take a position on whether plaintiffs-appellants' claims… are preempted.” Letter from Sharon Swingle, U.S. Dep't of Justice, to Clerk, U.S. Court of Appeals for the Third Circuit (Apr. 28, 2009) (included in addendum). As FDA's counsel advised the court: “The [FDA] has not yet conducted the sort of reexamination of various preemption issues following the Supreme Court's decision in Wyeth that would be necessary to inform a position of the United States in this case.” Id.
I. Ms. Mensing's Failure-to-Warn Claims Against the Manufacturers of Generic Metoclopramide Are Not Preempted.
Although the generic appellees have submitted more than 120 pages of briefing, totaling nearly 29,000 words, they say little that is new: their arguments largely track those advanced by the district court or made by these same companies in other cases. As such, the majority of their arguments have already been addressed in Ms. Mensing's opening brief. Rather than repeating those arguments here, appellant will devote this section of her reply brief, first, to highlighting the central flaws in the generic appellees' arguments and, second, to a discussion of the implications of the ruling in Levine for the issues in this appeal.
A. The Generic Appellees' Briefs Ignore Essential Statutory and Regulatory Provisions, Mischaracterize Appellant's Arguments, and Engage in Other Fallacious Reasoning.
1. The Generic Appellees Ignore Their Obligation Under Federal Law to Maintain Adequate Warnings.
Reading the generic appellees' briefs, one might come to the conclusion that a generic drug company's only obligation under federal law is to ensure that its product's label is identical to that of the equivalent name-brand drug product, that generic drug companies have no independent federal obligation to ensure that their products carry adequate warnings of their risks. But that is not the case. Federal law-both by statute and by regulation-requires that all prescription drugs, generic as well as name-brand, bear labels that provide adequate warnings of their risks.
Section 502(f)(2) of the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. §352(f)(2), expressly provides that a drug “shall be deemed to be misbranded” unless its label bears “adequate warnings against use in those pathological conditions or by children where its use may be dangerous to health, or against unsafe dosage or methods or duration of administration or application, in such manner and form, as are necessary for the protection of users….” This statutory provision, which by its terms applies to all drugs and medical devices, establishes a federal requirement that generic drugs, just like their name-brand counterparts, must have adequate label warnings. Yet neither of the generic appellees' briefs contains even a single citation to this statutory obligation.
The FDA further clarified and operationalized drug companies' responsibility to maintain adequate label warnings in regulations. 21 C.F.R. §201.57 (2005)[FN6] sets forth “[s]pecific requirements on content and format of labeling for human prescription drugs.” Subsection §201.57(e) governs “Warnings” and provides: “Under this section heading, the labeling shall describe serious adverse reactions and potential safety hazards…. The labeling shall be revised to include a warning as soon as there is reasonable evidence of an association of a serious hazard with a drug; a causal relationship need not have been proved.” Thus, this regulation adds a timeliness component to the federal labeling requirement: label warnings must be revised “as soon as there is reasonable evidence of an association.”
FN6. This brief refers to regulations in effect during the relevant time period, noting subsequent changes where relevant.
The generic appellees do not offer any satisfactory explanation of how their failure to strengthen the warnings on their labels regarding the risk of tardive dyskinesia can be squared with 21 C.F.R. §201.57(e). Appellee Actavis simply asserts, inaccurately and without citation to authority, that the provision does not “appl[y] to generics.” Actavis Br. 50; but see Kellogg, 2008 WL 5272715, *4 (“The obligation to revise a label to include a warning as soon as there is reasonable evidence of an association of a serious hazard with a drug applies to both generic and listed drug manufacturers.”). The other generic appellees, by contrast, concede that their labels “must include the same information required by… §201.57,” but argue that “ a priori the label does include that information given it must be identical to the approved labeling of its branded counterpart.” Generic Appellees' Br. 17 n.7. The present case reveals the flaw in that logic: if the name brand label has not been revised to provide an adequate warning about a serious hazard associated with the drug, then neither the name brand label nor the generic label will be in compliance with 21 C.F.R. §201.57(e).
Because federal food and drug law obligates generic manufacturers to maintain adequate warnings, state failure-to-warn suits do not conflict with federal law, but rather complement it. See Appellant's Opening Br. 34-36. As the Supreme Court recently said in rejecting a preemption claim by name-brand drug manufacturers, “state-law remedies further consumer protection by motivating manufacturers to produce safe and effective drugs and to give adequate warnings.” Levine, 129 S. Ct. at 1200. Furthermore:
State tort suits uncover 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.
Id. at 1202.
2. The Generic Appellees Mischaracterize Ms. Mensing's Position as Seeking Warnings on Generic Metoclopramide Different from Those on Reglan.
The generic appellees devote page after page of their briefs to establishing a proposition that is essentially undisputed: that, generally speaking, under federal law the warnings on a generic drug should be the same as those on its name-brand bioequivalent. Ms. Mensing does not disagree. Except during the transition from one set of warnings to another,[FN7] the warnings on name-brand and generic drug products should be identical.
FN7. The generic appellees-and the FDA-acknowledge that temporary differences in warnings will exist during the transition to new, improved warnings, especially when one manufacturer effects a change in warnings under 21 C.F.R. §314.70(c) and other manufacturers await FDA approval of that change. See, e.g., Changes in the Labeling of ANDAs Subsequent to Revision of Innovator Labeling, FDA, Div. of Generic Drugs, Policy & Proc. Guide #8-89 (Aug. 21, 1989) (“It is the policy of the Division to… seek to minimize the time between changes in the innovator's labeling and similar revision in the labeling of generics.”) (quoted in Actavis Br. 8-9); Actavis Br. 18 (“[The Changes Being Effected regulation] provides the method to be used to implement label changes already made to the name brand drug's labeling.”); id. 12 n.3 & Generic Appellees' Br. 28 (asserting that generic manufacturers may not implement “Boxed Warning” until FDA approves new warning for branded product).
Ms. Mensing does not contend that the generic appellees should have had stronger warnings on their labels than on Reglan. Rather, her contention is that the warnings on all metoclopramide products should have been stronger. If any manufacturer had sought FDA approval for stronger warnings about the risk of tardive dyskinesia, either through a “Changes Being Effected” (“CBE”) supplement under 21 C.F.R. §314.70(c) or a “Prior Approval Supplement” under 21 C.F.R. §314.70(b), the FDA would have required all manufacturers of metoclopramide to strengthen their labels accordingly. But no manufacturer ever proposed such a change.[FN8]
FN8. As the Supreme Court made clear in Levine, the burden is not on Ms. Mensing to prove that the FDA would have approved such a proposed change. Rather, the burden is on the party arguing for preemption to establish that the FDA would have rejected the change. See Levine, 129 S. Ct. at 1198 (“absent clear evidence that the FDA would not have approved a change to [the drug's] label, we will not conclude that it was impossible for [the manufacturer] to comply with both federal and state requirements”).
The parties do disagree about whether the generic appellees could have invoked 21 C.F.R. §314.70(c), the CBE provision, to propose a stronger warning. The generic appellees cite several statements by the FDA during the past administration in which the agency stated that the CBE process was unavailable to generic manufacturers, but, as noted above, at least two of those statements (the amicus briefs in Colacicco) have since been withdrawn. Section 201.57(e) clearly requires generic companies to strengthen warnings as soon as possible, while 21 C.F.R. §314.97 expressly authorizes them to utilize §314.70 “regarding the submission of supplemental applications and other changes to an approved abbreviated application.”[FN9] For this reason, the majority of courts to consider the issue have concluded that generic manufacturers can use the CBE process to strengthen their label warnings. See Appellant's Opening Br. 28-29 (collecting cases).[FN10]
FN9. Appellee Actavis acknowledges that generic companies may use the CBE process, at least to “implement label changes already made to the name brand drug's labeling.” Actavis Br. 18.
FN10. The generic appellees' brief also argues that any changes in the warnings on their labels would have rendered their drugs “new drugs” under the FDCA and thereby subjected the changes to FDA approval prior to marketing. Generic Appellees' Br. 30. The Supreme Court rejected this precise argument in Levine:
[Wyeth's] argument that a change in Phenergan's labeling would have subjected it to liability for unauthorized distribution rests on the assumption that this labeling change would have rendered Phenergan a new drug lacking an effective application. But strengthening the warning about IV-push administration would not have made Phenergan a new drug. See 21 U.S.C. §321(p)(1) (defining “new drug”); 21 C.F.R. §310.3(h). Nor would this warning have rendered Phenergan misbranded.
129 S. Ct. at 1197.
In any event, there should be no dispute that the generic appellees could have applied for a strengthened warning about the risk of tardive dyskinesia, for both generic metoclopramide and name-brand Reglan, through a Prior Approval Supplement under 21 C.F.R. §314.70(b). Under the prior approval process, there need not have been any difference, even temporarily, between the labels for Reglan and for generic metoclopramide.
Appellee Actavis argues that it would be speculative to assume the FDA's response to any Prior Approval Supplement and that “[i]t is impermissible to base a cause of action on speculation as to how a federal agency might rule.” Actavis Br. 38 n.6.[FN11] But, as just discussed, see supra n.8, the Supreme Court made clear in Levine that any uncertainty as to the FDA's response cuts against preemption, not in favor of it.
FN11. The case cited by Actavis for this proposition, Arkansas Louisiana Gas Co. v. Hall, 453 U.S. 571 (1981), is wholly inapposite. Arkla Gas involved the Federal Energy Regulatory Commission's “filed rate” doctrine. The case holds that any suit for damages based on rates other than those filed with the agency conflicts with the purposes of that doctrine, because a judgment for plaintiff would, in effect, allow that party to be paid more than its filed rate. Id. at 576-81. The case has no applicability whatsoever to the issue of the FDA's consideration of an application for prior approval of a labeling change.
Actavis also makes the absurd argument that generic companies could not have employed a Prior Approval Supplement to obtain authorization for stronger warnings because heightened warnings are “excepted” from the category of “major changes” that require prior FDA approval, even as it simultaneously argues that it was prohibited from invoking the alternative CBE procedure to implement such a change. Compare Actavis Br. 48 with id. 44-47. This argument cannot be squared with the language of §314.70 itself, which repeatedly uses the non-restrictive clause “[t]hese changes include, but are not limited to” to describe the changes that may be sought through each kind of supplement. 21 C.F.R. §314.70(b)(2), (c)(2) (2005). Moreover, as the other generic appellees explain in their brief, the FDA established the CBE process as “a limited exception” that permitted, but did not require, drug companies “to implement some labeling changes before obtaining approval.” Generic Appellees' Br. 30. There was, quite simply, nothing to prevent the generic appellees from applying to the FDA for prior approval to strengthen the tardive dyskinesia warning on their product and also on Reglan.
3. The Generic Appellees Falsely Assert That They Could Not Have Sought Approval for Stronger Warnings Without First Conducting Expensive Scientific Studies.
The generic appellees also argue repeatedly that it would be inconsistent with federal law for them to have sought approval for stronger warnings, because it would have been necessary for them to conduct expensive clinical studies in order to gather the scientific substantiation necessary to support a proposed labeling revision. Generic Appellees' Br. 7, 43, 48-49, 57; Actavis Br. 22-23, 39-40. This argument is a complete red herring.
Of course, nothing in the Hatch-Waxman Amendments or the FDCA prohibits generic drug companies from conducting clinical research into the safety of their products. But such research is not required to propose a labeling change. All that generic companies need do is pay attention to the published medical literature regarding their products, as well as to the adverse event reports they receive from users of their drugs. See 21 C.F.R. §314.80(c)(1)(i), (ii) (2005) (requiring generic manufacturers to collect and report adverse drug experiences).
That the scientific substantiation for a labeling change can come from published literature is readily established by examining the recent FDA safety alert concerning metoclopramide. As noted earlier, supra p.3, the FDA based the safety alert not on extensive clinical trials, but rather on a review of published medical studies concerning metoclopramide. See Korvick Letter 1 & nn.1-3. These and prior studies were equally available to the generic appellees.
Similarly, support for a labeling change can come from adverse event reports. In Levine, the Supreme Court concluded that twenty reports of gangrene and amputation resulting from accidental arterial injection of Phenergan provided sufficient substantiation to justify a determination that Wyeth should have strengthened the warnings on that drug. 129 S.Ct. at 1197 (“as amputations continued to occur, Wyeth could have analyzed the accumulating data and added a stronger warning about IV-push administration of the drug”).
Under Minnesota law, as in most states, a product manufacturer is required to keep informed about scientific knowledge and developments in its field. See, e.g., Harmon Contract Glazing, Inc. v. Libby-Owens-Ford Co., 493 N.W.2d 146, 150 (Minn. Ct. App. 1992). Ms. Mensing contends that, had the generic appellees merely paid attention to published studies and adverse drug experience reports concerning metoclopramide, they would have had more than sufficient information to seek a change in their label warnings. Thus, there is no tension whatsoever, let alone irresolvable conflict, between her state failure-to-warn claims and federal regulatory provisions exempting generic companies from certain clinical research.[FN12]
FN12. The generic appellees make a related argument that, under federal law, there was no need for them to consider stronger label warnings because, by the time a drug comes off patent and generic equivalents enter the market, its “safety profile” has already been established. Generic Appellees' Br. 20, 21, 43, 56, 71; Actavis Br. 39. Though they make this assertion repeatedly, they offer no authority for it. No federal statute or regulation exempts generic drugs from the need to maintain adequate warnings because their “safety profile” has been established. Indeed, there have been numerous cases in which the FDA has ordered stronger warnings be added to the labels for drugs for which generic equivalents were available. This is true not just for metoclopramide, but also, for example, in the case of suicidality warnings for selective serotonin reuptake inhibitors. See, e.g., Colacicco, 521 F.2d at 270, 273 (discussing labeling history of SSRIs).
4. The Generic Appellees Oversimplify the Congressional Purpose Underlying the Hatch-Waxman Amendments.
Stripped to its core, the generic appellees' argument for preemption boils down to the proposition that tort liability for failure-to-warn claims is inconsistent with Congress' desire, when it enacted the Hatch-Waxman Amendments to the FDCA, to make low-cost generic drugs readily available. See, e.g., Generic Appellees' Br. 6, 12. They assert: “State law claims that subvert that objective are preempted.” Id. at 13.
But this grossly oversimplifies Congress' intent. There is no suggestion anywhere in the legislative history of the Hatch-Waxman Amendments that Congress was unconcerned with the safety of generic drugs or the adequacy of the warnings they carried. Indeed, the very case cited by appellants for the legislative intent behind Hatch-Waxman, Tri-Bio Laboratories, Inc. v. United States, 836 F.2d 135 (3d Cir. 1987), is careful to mention that, in balancing the interests of generic drug manufacturers and pioneer drug companies, Congress remained “mindful of the public need for safe commercial drugs.” Id. at 139.[FN13]
FN13. Justice Thomas's concurring opinion in Levine wisely cautions against the simplistic approach to legislative intent advocated by the generic appellees: “[I]t frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary objective must be the law… . [T]here is no factual basis for the assumption… that every policy seemingly consistent with federal statutory text has necessarily been authorized by Congress and warrants pre-emptive effect.” 129 S. Ct. at 1215-16 (Thomas, J., concurring in the judgment) (internal quotation marks and citations omitted).
In its recent ruling denying certification for interlocutory review of an order denying preemption, the U.S. District Court in Vermont thoroughly dismantled the argument that state failure-to-warn claims are inconsistent with the purposes behind Hatch-Waxman:
[T]he Hatch-Waxman Amendments to the FDCA were enacted in 1984, against the backdrop of decades of federal drug labeling regulation coexisting with state tort litigation. Only eight years earlier, Congress enacted an express preemption provision for medical devices…. Given that[,] … it is telling that Congress did not make any express preemption provision when it amended the FDCA in 1984 to authorize abbreviated new drug applications. Evidently, in the Congressional view, creating a streamlined process for generic drugs to reach the market did not preclude their manufacturers' duty to ensure the safety and effectiveness of their products.
Keogg,, (ctatons omtte).
B. The Supreme Court's Recent Wyeth v. Levine Decision Strongly Supports a Determination of No Preemption.
As the generic appellees clearly recognize, the Supreme Court's recent ruling in Levine has significant implications for the preemption issue in this case. However, contrary to their view, that decision strongly supports reversal of the district court's ruling that Ms. Mensing's failure-to-warn claims are preempted.[FN14]
FN14. The generic appellees cite Justice Breyer's concurring opinion in Levine as support for their position. Generic Appellees' Br. 41; Actavis Br. 30-31. While Ms. Mensing disagrees with their reading of that opinion, see Kellogg, 2009 WL 975382, *4, it is perhaps more significant that none of the other five justices who concurred in the judgment – a majority of the Court-joined Justice Breyer's opinion.
1. The Levine Decision.
In Levine, the Supreme Court rejected a claim by a name-brand drug manufacturer that FDA labeling regulations preempt state tort claims for inadequate warnings. The Court issued a sweeping opinion that found no conflict between FDA regulation and state tort law.
The Court began its analysis of the preemption issue by emphasizing the importance of congressional intent, 129 S. Ct. at 1194, and the strong presumption against preemption of state law. Id. at 1194-95. The Court then reviewed the history of federal regulation of pharmaceuticals, emphasizing the ways in which federal law “supplemented” and “preserve[d]” the consumer protections that already existed under state law. Id. at 1195-96. The Court also deemed it significant that Congress had declined to adopt an express preemption provision for prescription drugs at the time it enacted one for medical devices. Id. at 1196.
The Court ruled, first, that it would not have been impossible for Wyeth to strengthen its label warnings. The Court stressed that it is “a central premise of federal drug regulation that the manufacturer bears responsibility for the content of its label at all times. It is charged both with crafting an adequate label and with ensuring that its warnings remain adequate as long as the drug is on the market.” Id. at 1197-98. “[A]bsent clear evidence that the FDA would not have approved a change to [the drug's] label, we will not conclude that it was impossible for [the manufacturer] to comply with both federal and state requirements.” Id. at 1198.[FN15]
FN15. The Court found it “difficult to accept” the idea that “the FDA would bring an enforcement action against a manufacturer for strengthening a warning pursuant to the CBE regulation.” Id. at 1197. Neither Wyeth nor the United States could point to a single instance in which the agency had done so, presumably because none exists.
The Supreme Court next turned to Wyeth's argument that state tort liability posed an obstacle to congressional objectives. The Court rejected the argument, finding that it “relies on an untenable interpretation of congressional intent.” Id. at 1199. The Court took note of the absence of a federal remedy for persons injured by unsafe drugs and of the 70-year coexistence of state tort remedies and federal regulation of prescription drugs:
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, Congress has not enacted such a provision for prescription drugs. 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.”
Id. at 1200 (quoting Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 166-167 (1989)) (other citations omitted). The Court concluded: “In short, Wyeth has not persuaded us that failure-to-warn claims like Levine's obstruct the federal reulation of dru labelin.” Id. at 1204.[FN16]
FN16. The Court rejected the views of the FDA supporting preemption, determining that the agency's position “does not merit deference.” Id. at 1201. The Court noted that the FDA had “traditionally regarded state law as a complementary form of drug regulation” that “offers an additional, and important, layer of consumer protection.” Id. at 1202. In the present case, of course, there is no agency position on preemption to defer to, because the FDA has withdrawn its prior position for reexamination in light of Levine. See supra p.5.
2. Federal Courts Following Wyeth v. Levine Have Rejected Preemption Claims By Generic Drug Manufacturers.
Since Levine was decided, a number of federal courts have had the opportunity to consider the applicability of that decision to preemption claims by generic drug manufacturers. With one minor exception,[FN17] these courts have consistently ruled, based on Levine, against the position of the generic appellees. See Kellogg, 2009 WL 975382, *2-*4; Stacel, 2009 WL 703274, *2-*7; Schrock, 601 F. Supp. 2d at 1264-65; see also Colacicco, No. 06-3107 (3d Cir. Apr. 28, 2009) (order vacating and remanding for proceedings consistent with Levine).
FN17. In three identical “notices” issued the day after Levine was decided, the U.S. District Court for the Western District of Kentucky, which had already granted generic companies' motions to dismiss on preemption grounds and denied motions for reconsideration, declined to revisit the “analysis in its previous opinions.” In so doing, however, “the Court reiterate[d] its sentiment that the determination of the legal issues in those opinions was not easily reached” and invited “review by the Sixth Circuit Court of Appeals.” See Actavis App. 755-57.
The courts in Stacel and Schrock relied on Levine in denying motions to dismiss on preemption grounds. Stacel began by noting that, although the Supreme Court's analysis in Levine was not “directly controlling,” “key parts of its analysis are applicable.” 2009 WL 703274, *3. After reviewing those parts, the court explained:
There is no reason to conclude that Congress felt differently about generic drugs. Although it is clear that the Hatch-Waxman Amendment was devised to allow generic drug manufacturers to get their drugs to market both cheaply and quickly, this purpose was to be achieved by permitting manufacturers to forego duplicative clinical trials. It was not to be achieved by permitting manufacturers to engage in negligent activities… .
Nor, from this history and the Court's analysis in Levine, can the court agree that permitting state-law tort actions would necessarily frustrate the purpose of Congress in passing the Hatch-Waxman Amendment. The underlying purpose of the FDCA is not making sure that drugs can be quickly and cheaply brought to market, but rather to assure that the drugs are safe when they are brought to market. Congress has indicated that state tort-law is an integral part of this process.
Id. at 6 (citation omitted); see also Schrock, 601 F. Supp. 2d at 1264-65 (determining, on the basis of Levine, that it was not impossible for generic drug companies to comply with both state and federal requirements and that plaintiff's state-law action did not “obstruct the purposes and objectives of Congress”).
In Kellogg, the Vermont district court was confronted with a motion to certify its ruling denying preemption for interlocutory review. The court denied the motion because Levine “reduces substantially the grounds for difference of opinion concerning whether federal law preempts state law failure-to-warn cases against drug manufacturers.” 2009 WL 975382, *2. The court acknowledged that, because Levine involved a branded drug, it did not decide the preemption issue as applied to generics; but, the court recognized, Levine was also not a narrow decision “that merely… parsed the terms and applicability of the CBE provision to brand name manufacturers.” Id. The Kellogg court asked: “What remains of the generic manufacturers' preemption arguments post-Levine?”, id. *3, and then answered:
[I]t is telling that Congress did not make any express preemption provision when it amended the FDCA in 1984 to authorize abbreviated new drug applications. Evidently, in the Congressional view, creating a streamlined process for generic drugs… did not preclude their manufacturers' duty to ensure the safety and effectiveness of their products.
FDA's own regulations bear this out…. 21 C.F.R. §314.97 requires an ANDA applicant to comply with the requirements of §§314.70 and 314.71 for NDAs. Section 314.70 includes the CBE provisions. The plain language of FDA's regulations communicates the obligation borne by name brand and generic manufacturers alike to revise a label to add or strengthen a warning in the light of newly acquired information… .
Thus, although the Levine decision did not definitively dispose of the issues in this case, its statement that “[f]ailure-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,” does not appear to permit the caveat, “except for generic drug manufacturers.”
Id. *4 (citations omitted).[FN18]
FN18. In Colacicco, the Third Circuit asked the parties to comment on Levine's effect on the court's prior ruling upholding preemption (though on the ground that the FDA had explicitly rejected the warning sought by plaintiffs, not because of FDA regulations governing generics). The plaintiffs responded that the defendants had not met “the heavy burden imposed by the decision… on manufacturers seeking to preempt failure-to-warn claims” and recommended that the case be remanded to the district court for further proceedings. The Third Circuit “agree[d] with this proposed disposition,” vacated its prior opinion, and remanded. Colacicco, No. 06-3107 (3d Cir. Apr. 28, 2009).
Thus, in none of these post-Levine decisions did the courts uphold a generic drug company's assertion of preemption. To the contrary, these courts all recognized that the Levine ruling either completely foreclosed a generic company's claim of preemption or at least substantially limited the basis for such a claim.
For the reasons given above, as well as in appellant's opening brief, and consistent with the Supreme Court's decision in Levine, Ms. Mensing urges this Court to reverse the ruling below that her claims against the generic appellees are preempted.
II. Name-Brand Appellees Schwarz and Wyeth May Be Held Liable for Their Own Misrepresentations.
The arguments offered by name-brand manufacturers Schwarz and Wyeth fare no better than those of their generic counterparts.
It is well-settled under Minnesota law that an intentional or negligent tortfeasor is liable for its own wrongdoing even if another defendant also contributed to the plaintiff's injury. See Appellant's Opening Br. 55-56 (citing cases); see also Bundy v. Holmquist, 669 N.W.2d 627, 632 (Minn. Ct. App. 2003) (“[E]very person in the conduct of his affairs is under a legal duty to act with care… and, if injury results to another from his failure so to do, he may be held accountable in an action at law.”) (internal quotation marks omitted). None of the name-brand manufacturers' arguments provides any basis for concluding that the Minnesota Supreme Court would deviate from this settled rule.
A. Ms. Mensing's Claims Are Consistent with Flynn.
Schwarz and Wyeth devote much of their brief to the argument that Ms. Mensing's claims are foreclosed by Flynn v. American Home Products Corp., 627 N.W.2d 342 (Minn. Ct. App. 2001). What appellees ignore is that Flynn involved a theory of liability – fraud on the FDA” – that Ms. Mensing does not invoke here. Id. at 346.[FN19] The plaintiff in Flynn alleged that she was induced to take a generic version of the diet drug fen-phen by the FDA's approval of the name-brand drug- an approval that resulted, in part, from the defendants' communications with the agency. See id. at 345, 349-50. The Minnesota Court of Appeals concluded that the plaintiff was a third party to those communications and had not relied on them; thus, she was not entitled to sue on the basis of the drug manufacturers' representations to the FDA. Id. at 350. The court further held that the plaintiff could not state an ordinary claim for fraud because she did not allege that her physician relied on any statements made by the defendants, only that he relied on the FDA's approval. Id. at 349-50. Unlike the plaintiff in Flynn, Ms. Mensing does not claim fraud on the FDA or allege reliance on an FDA approval; instead, she alleges her physician relied on misrepresentations made directly to him by Schwarz and Wyeth. See App. 30a, 33a-36a, 45a-54a.
FN19. This may explain why Flynn does not cite or rely on Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994), notwithstanding Schwarz's assertion that Flynn “followed [ Foster's] reasoning.” Schwarz Br. 13.
Schwarz and Wyeth nonetheless try to shoehorn this case into Flynn's holding by describing Ms. Mensing as a “third party” who “intercepted a communication not intended for her.” Schwarz Br. 26. This argument makes no sense: the alleged misrepresentations at issue in this case were made to Ms. Mensing's physician, not to a third party – a dispositive distinction under Flynn. See Flynn, 627 N.W.2d at 349 (plaintiff alleged “misrepresentations to the FDA”) (emphasis added); id. (plaintiff's physician relied only on FDA approval; plaintiff did “not point to any affirmative representations made by respondents that were relied upon by her physician”); see also, e.g., Kociemba v. G.D. Searle & Co., 707 F. Supp. 1517, 1524-26 (D. Minn. 1989) (medical-device manufacturer liable for statements made to plaintiff's physician).
The name-brand appellees' reliance on Flynn is flawed for a second reason as well. Schwarz and Wyeth contend that their communications were intended only for customers who ultimately purchased their product, not for potential customers like Ms. Mensing. See, e.g., Schwarz Br. 29. But this argument, too, is counterfactual in the extreme. The intended audience for any drug's warning label necessarily includes potential customers who (through their physicians) consider the label's warnings before deciding whether to purchase the drug at issue. As the FDA has explained, the entire purpose of such warning labels is to guide patients and their physicians in making “prescribing decisions” – i.e., the decision about whether a patient will become a customer. Requirements on Content and Format of Labeling for Human Prescription Drug and Biological Products, 71 Fed. Reg. 3922, 3930, 3933, 3952, 3995 (Jan. 24, 2006) (final rule). Schwarz's and Wyeth's arguments to the contrary are disingenuous at best.
B. Foster Does Not Limit the Name-Brand Appellees' Liability Under Minnesota Law.
The name-brand appellees also contend that Ms. Mensing's claims should be rejected on the basis of the Fourth Circuit's interpretation of Maryland law in Foster v. American Home Products Corp., 29 F.3d 165 (4th Cir. 1994). This argument fails under controlling Minnesota precedent.
1. Schwarz and Wyeth May Be Held Liable for Their Misrepresentations about Metoclopramide.
Schwarz and Wyeth repeatedly cite Foster for the proposition that “a manufacturer has no duty to warn about another manufacturer's product.” Schwarz Br. 9, 12. Even if this proposition were true as a general rule, which it is not, [FN20] it has no bearing here. Ms. Mensing's claims do not depend on whether Schwarz and Wyeth had an affirmative duty to warn about generic metoclopramide; instead, her claims turn on whether the name-brand appellees-having already spoken about the generic compoundmay be held liable for having done so falsely.
FN20. The law imposes liability on manufacturers for failure to warn about other manufacturers' products in a variety of circumstances. See, e.g., LeBouef v. Goodyear Tire & Rubber Co., 623 F.2d 985, 990 (5th Cir. 1980) (manufacturer of Mercury Cougar owed a duty to warn that tires manufactured by Goodyear could fail at the Cougar's high speeds).
The key statements on Schwarz's and Wyeth's label refer not to name-brand Reglan, but to the generic compound metoclopramide. See Schwarz App. 5 (“[M]etoclopramide … may produce extrapyramidal reactions, although these are comparatively rare.”); id. at 8 (“Extrapyramidal symptoms… occur in approximately 1 in 500 patients treated with the usual adult dosages of 30-40 mg/day of metoclopramide.”). Because these statements refer directly to metoclopramide, the issue in this case is not whether Schwarz and Wyeth had an affirmative duty to warn about the generic compound, contra Schwarz Br. 9, 12, but whether, having done so, they may be liable for having spoken in a false and misleading way.
The clear answer to that question under Minnesota law is “yes”:
Though one may be under no duty to speak as to a matter, if he undertakes to do so, either voluntarily or in response to inquiries, he is bound not only to state truly what he tells, but also not to suppress or conceal any facts within his knowledge which materially qualify those stated. If he speaks at all, he must make a full and fair disclosure.
Rochester Methodist Hosp. v. Travelers Ins. Co., 728 F.2d 1006, 1017 (8th Cir. 1984) (quoting Swedeen v. Swedeen, 134 N.W.2d 871, 877-78 (Minn. 1965)); see also Mulroy v. Wright, 240 N.W. 116, 116-17 (Minn. 1931) (clerk liable for misrepresentation made about another's property); Busterud v. Farrington, 31 N.W. 360, 361-62 (Minn. 1887) (non-vendor may be liable for misrepresentations about another's product).[FN21]
FN21. Schwarz and Wyeth cite Foster for the additional proposition that Ms. Mensing's causes of action should be re-characterized as products liability claims. See Schwarz Br. 10. However, as Ms. Mensing explained in her opening brief, the rule in Minnesota is that intentional deceit and negligent misrepresentation are species of fraud, not products liability, see Florenzano v. Olson, 387 N.W.2d 168, 173 (Minn. 1986), and that the duty to exercise reasonable care in conveying information is different from, not interchangeable with, the duty to protect or warn. See Smith v. Brutger Cos., 569 N.W.2d 408, 411-413 (Minn. 1997); Appellant's Opening Br. 54-55. The name-brand appellees offer no response to these authorities.
2. Foster's Policy Analysis Cannot Shield Schwarz and Wyeth from Liability.
Schwarz and Wyeth also cite Foster in support of a speculative public policy argument that liability for name-brand manufacturers might deter new drug development. See Schwarz Br. 35. This argument ignores the fact that Congress has given name-brand manufacturers years of exclusive marketing in exchange for the risk they bear, and also that name-brand manufacturers benefit from brand recognition and the ability to charge a higher price even after their exclusivity expires. See Conte v. Wyeth, 85 Cal. Rptr. 3d 299, 317 (Cal. Ct. App. 2008), review denied (Jan. 21, 2009); Appellant's Opening Br. 55-57. [FN22]
FN22. Although the name-brand appellees contend that Foster has been followed by 28 “other state and federal courts,” several decisions they cite are from the same courts, and the vast majority are trial court opinions that pre-date Conte and that were issued when Foster was the only appellate authority available; only one unreported decision has considered Conte's analysis. Most importantly, none of the cases cited – including Flynn – decides the issues presented by Ms. Mensing's claims as a matter of Minnesota law.
In any event, even if the name-brand defendants' argument were correct (which it is not), it would be improper to shield Schwarz and Wyeth from ordinary principles of liability on the basis of a speculative policy rationale that the Minnesota Supreme Court has never considered. This is particularly true given that court's admonition that, if policy considerations should override “common law liability for misrepresentation, the legislature is the appropriate body to extend such immunity.” M.H. v. Caritas Family Servs., 488 N.W.2d 282, 288 n.6 (Minn. 1992) (emphasis added).[FN23]
FN23. Caritas's rule also forecloses the name-brand appellees' equally speculative policy argument that the Court should reject Ms. Mensing's claims because her position could lead, in their view, to inappropriately widespread liability. Schwarz Br. 36. That argument fails, in addition, because claims for negligent misrepresentation and fraud are subject to several proof requirements – such as foreseeability, reasonable reliance, and fraudulent intent – that serve to limit liability.
C. Schwarz and Wyeth Err in Denying That They Owed a Duty of Care to Aellant
A duty of care is one of the elements of negligent misrepresentation. As Ms. Mensing explained in her opening brief, the test for determining whether the name-brand appellees owed such a duty is the foreseeability of resulting injury. See Appellant's Opening Br. 46-47 (citing cases); Rest. (Second) of Torts §311 cmt. b (1965) (defendant may be liable whenever it “knows or should realize that the safety of the person of others may depend on the accuracy of the information” it provides).[FN24]
FN24. Schwarz points out that the cases cited by Ms. Mensing for the proposition that foreseeability determines duty differ from each other, and from Ms. Mensing's case, in terms of the underlying facts alleged. See Schwarz Br. 20. That, however, only strengthens her argument, because it shows that the foreseeability test has been applied in a variety of contexts to a variety of claims.
The foreseeability test is satisfied easily in Ms. Mensing's case, see Appellant's Opening Brief 47-49, and neither Schwarz nor Wyeth disputes the foreseeability of her reliance or her injury. Nor do the name-brand appellees respond to Ms. Mensing's arguments that the Minnesota Supreme Court would likely adopt the tort of negligent misrepresentation articulated in Restatement §311, or that Ms. Mensing could alternatively prove her claim under other already-adopted theories of negligence. See Appellant's Opening Br. 51-54.
What Schwarz and Wyeth argue instead is that Ms. Mensing must prove a series of elements in addition to foreseeability in order to establish a duty of care. However, each additional requirement that the name-brand manufacturers propose – a special “relationship,” membership in their “intended audience,” and a “direct” communication – is either foreclosed by controlling case law or satisfied by the facts alleged.
1. No Confidential or Fiduciary Relationship or Transaction with Appellees Is Required to Establish a Duty of Care.
The name-brand manufacturers argue, on the basis of Richfield Bank & Trust Co. v. Sjogren, 244 N.W.2d 648, 650 (Minn. 1976), that Ms. Mensing must prove a special relationship, consisting of either a confidential or fiduciary relationship with the defendants or a transaction with them, in order to establish a duty of care. But Richfield Bank itself disproves appellees' argument.
As an initial matter, the analysis in Richfield Bank is limited to the issue of when a duty to disclose arises for purposes of proving fraud based on omissions. See id. It thus has no application to the separate question of when a duty of care arises for purposes of proving negligence, nor to Ms. Mensing's allegations of affirmative misstatements, rather than omissions.
Even with respect to fraudulent omissions, Richfield Bank provides no support for appellees' argument. The Minnesota Supreme Court held that a duty to disclose can arise in at least three, distinct circumstances, only one of which involves a special relationship:
(a) One who speaks must say enough to prevent his words from misledading [sic] the other party.
(b) One who has special knowledge of material facts to which the other party does not have access may have a duty to disclose these facts to the other party.
(c) One who stands in a confidential or [f]iduciary relation to the other party to a transaction must disclose material facts.
Id. (citations omitted); see also Simonsen v. BTH Props., 410 N.W.2d 458, 461 (Minn. Ct. App. 1987) (defendant may have had duty to disclose, notwithstanding lack of fiduciary relationship).
Under Richfield Banks paragraph (b), a defendant may have a duty to disclose based simply on “special knowledge of material facts”-a test met here in light of Ms. Mensing's allegations that the defendants had information about metoclopramide's risks that was unavailable to her. See App. 47a, 53a-54a. The Fifth Circuit has also already held that a jury could find Reglan's label “misleading,” which gives rise to a duty to disclose under Richfield Bank's paragraph (a). McNeil v. Wyeth, 462 F.3d 364, 369, 370 (5th Cir. 2007); see also Rochester Methodist Hosp., 728 F.2d at 1017; Kociemba, 707 F. Supp. at 1524-26 (jury could have found against medical device manufacturer under theories stated in Richfield Bank (a) and (b)).[FN25]
FN25. The name-brand appellees also cite Flynn and Noble Systems Corp. v. Alorica Central, LLC, 543 F.3d 978 (8th Cir. 2008), in support of their argument that a special relationship is required to prove a duty of care. Neither case supports appellees' position.
The plaintiff in Flynn (which was bound to follow Richfield Bank) could not rely on Richfield Bank's paragraph (a) or (b) because there was no communication with the plaintiff's physician, half-truth or otherwise. This explains Flynn's focus on the possibility of a fiduciary relationship. 627 N.W.2d at 349-50. Similarly, the defendants in Noble did not make any statements to the plaintiff and had no special knowledge of the underlying facts, 543 F.3d at 981-82, 985, so (a) and (b) were inapplicable. The plaintiff's reliance in Noble was also unforeseeable and per se unreasonable, unlike Ms. Mensing's. Id. at 985.
Further, although Richfield Bank involved a claim arising out of a transaction between the parties, nothing in the court's opinion requires a transaction to establish liability. Any doubt about this point is dispelled by Bonhiver v. Graff, 248 N.W.2d 291 (Minn. 1976), which held that the defendant could be liable for negligent misrepresentations to an insurance agent with whom he had no apparent contractual or fiduciary relationship. Id. at 295-96, 301-303 (describing the insurance agent as a “third part[y]”); see also Mulroy, 240 N.W. at 116-17 (defendant liable without evidence of any transaction with the plaintiff); Busterud, 31 N.W. at 361-62 (non-vendor may be liable for statements about another's product).
Bonhiver's result is consistent with the Restatement, which provides that liability for negligent misrepresentation is not limited “to harm received in the particular transaction which the misrepresentation was intended to induce.” Rest. (Second) of Torts §310 cmt. d (1965); id. §311 cmt. f (incorporating §310 cmt. d); see also Lehman v. Hansord Pontiac Co., 74 N.W.2d 305, 311 (Minn. 1955) (“Whether the person making the representation received any benefit from the deceit is unimportant[;] nor is it necessary that he should collude with the party who has benefited.”). Schwarz's argument is directly contrary to this rule.[FN26]
FN26. Schwarz contends that the Court should ignore the fact that several of its arguments are rejected in the Restatement because Flynn disposes of Ms. Mensing's claims. But Flynn is not controlling for the reasons given above, and the Minnesota Supreme Court relied explicitly on Restatement §311 when discussing negligent misrepresentation in Smith, 569 N.W.2d at 413.
2. Nor Can Schwarz and Wyeth Avoid Liability on the Ground that Appellant Is Not a Member of Their Intended Audience.
The name-brand appellees also argue that they cannot be held liable because Ms. Mensing, as a potential, rather than established, customer, fell outside their “intended audience.” E.g., Schwarz Br. 19.
Schwarz's and Wyeth's argument is inconsistent with Minnesota precedent, which holds that foreseeability, not membership in an intended audience, determines the scope of liability. See, e.g., Baker v. Surman, 361 N.W.2d 108, 111 (Minn. Ct. App. 1985) (defendant “who negligently supplies false information” may be liable even to “third parties if they are foreseeable recipients of the information and justifiably rely upon it to their detriment”) ( citing Bonhiver, 248 N.W.2d at 298-99). The name-brand manufacturers' argument is also again contrary to the Restatement, which provides that a “misrepresentation may be negligent not only toward a person whose conduct it is intended to influence but also toward all others whom the maker should recognize as likely to be imperiled by action taken in reliance.” REST. (SECOND) OF TORTS §310 cmt. c (1965); id. §311 cmt. f (incorporating §310 cmt. c).
But even if Schwarz and Wyeth were correct that Minnesota law requires membership in their intended audience, that requirement would be satisfied here because, as explained above, the intended audience for any drug's label includes potential customers like Ms. Mensing who (through their prescribing physicians) consider the label's warnings before deciding whether to take the manufacturer's drug. See supra Part II(A); 71 Fed. Reg. at 3930, 3933, 3952, 3995. It is simply a matter of common sense that name-brand manufacturers intend to communicate with potential customers because they hope to win their business. Schwarz and Wyeth may not have been successful in that effort, but their failure cannot remove Ms. Mensing from their “intended audience” after the fact.
3. Direct Communication Is Also Not an Element of the Duty of Care.
Schwarz makes various stray suggestions that Ms. Mensing must prove a direct communication with the defendants. E.g., Schwarz Br. 21.
This theory finds no support in Minnesota law. As long as a plaintiff alleges reliance on statements made by the defendant, it does not matter if that reliance occurs through an intermediary. See Stephenson v. Deutsche Bank AG, 282 F. Supp. 2d 1032, 1061 (D. Minn. 2003) (“Minnesota law does not require that the defendant generate the plaintiff's reliance directly.”); see also, e.g., Bonhiver, 248 N.W.2d at 301-03; Kronebusch v. MVBA Harvestore Sys., 488 N.W.2d 490, 493, 496 (Minn. Ct. App. 1992); Baker, 361 N.W.2d at 110, 112.
This rule applies with particular force in prescription drug cases because physicians stand in patients' shoes when communicating with manufacturers. See Schwarz Br. 21-22; Mulder v. Parke Davis & Co., 181 N.W.2d 882, 885 & n.1 (Minn. 1970); Conte, 85 Cal.Rptr.3d at 308 n.5. Thus, manufacturers are routinely held liable to patients on the basis of statements made to their physicians. See, e.g., Levine, 129 S.Ct. at 1191-93; Kociemba, 707 F. Supp. at 1524-26; cf. McNeil, 462 F.3d at 369-70. Indeed, at another point in its brief, Schwarz concedes that communication with a learned intermediary is all that is required. Schwarz Br. 26.
D. Appellant's Fraud Claims Are Supported by Minnesota Law and Have Not Been Waived.
Schwarz and Wyeth also contend that Ms. Mensing cannot prove all of the elements of intentional fraud and that she waived her fraud claims in the district court. Neither of these contentions has merit.
1. The Name-Brand Appellees' Arguments Regarding the Elements of Fraud Are Incorrect.
Schwarz argues that Ms. Mensing cannot establish fraud because she cannot show that Schwarz “intentionally induce[d] her to purchase its competitor's product.” Schwarz Br. 23. But no Minnesota court has ever required proof of that specific intent in order to establish fraud. Instead, all that is required is that the defendant intended to induce “reliance,” not that it intended to induce the specific transaction that resulted. See, e.g., Specialized Tours, Inc. v. Hagen, 392 N.W.2d 520, 532 (Minn. 1986); REST. (SECOND) OF TORTS §310 cmt. d (1965) (liability is not limited “to harm received in the particular transaction which the misrepresentation was intended to induce”).
The name-brand appellees' fall-back arguments fare no better. Schwarz and Wyeth repeat their argument that Ms. Mensing was not a member of their “intended audience.” This argument fails because potential customers like Ms. Mensing are within the intended audience for a name-brand label. See supra Parts II(A), II(C)(2). While Schwarz and Wyeth may not have intended the next event that occurred here, i.e., the pharmacist's decision to dispense a generic equivalent, that specific intent is not an element of fraud. See Specialized Tours, 392 N.W.2d at 532.
Schwarz and Wyeth also contend for the first time on appeal that Ms. Mensing cannot prove any affirmative misrepresentations to establish her intentional fraud claims. Compare Schwarz Br. 30-32 with Appellant's Supplemental App. la-32a, 53a-75a.
It would be improper to consider this new fact-based argument on appeal when summary judgment was decided in the district court on the basis of a pure legal issue – particularly in light of Schwarz's statement to the district court that there was “no factual issue on [its] motion.” Appellant's Supplemental App. 76a:12-13; id. at 80a:2-6 (stating that whether defendants made false statements is “irrelevant to this motion”); Handeen v. Lemaire, 112 F.3d 1339, 1345-47 (8th Cir. 1997) (court would not consider new argument on appeal, citing defendant's statement below that its motion did not depend on “any disputed question of fact”).
This new argument is also beside the point because Ms. Mensing's fraud claims are sufficient to survive summary judgment on the basis of her allegations of fraudulent omissions alone. The Fifth Circuit has held that there is a genuine issue of material fact regarding whether Reglan's label is “misleading,” McNeil, 462 F.3d at 369, 370, and misleading half-truths create a duty to disclose. See, e.g., Rochester Methodist Hosp., 728 F.2d at 1017-18; Richfield Bank, 244 N.W.2d at 650.
Even if the Court were to consider Schwarz's new argument, Ms. Mensing did allege affirmative misrepresentations, see, e.g., App. 35a, 45-47a, 52a-53a, and the Fifth Circuit has now cited evidence that at least some statements on Reglan's label are factually inaccurate. See McNeil, 462 F.3d at 370 n.5, 372 (citing evidence that extrapyramidal reactions are not “comparatively rare” and that the prevalence of movement disorders is greater than 1 in 500); see also Korvick Letter 3 (prevalence of tardive dyskinesia may be as high as 20% for patients treated for at least three months). Although the name-brand manufacturers contend that their statements are true if Reglan is limited to short-term use, the critical text in their label does not include that limitation. See Schwarz App. 5 (“[M]etoclopramide produces sedation and may produce extrapyramidal reactions, although these are comparatively rare.”); id. 8 (“Extrapyramidal symptoms, manifested primarily as acute dystonic reactions, occur in approximately 1 in 500 patients treated with the usual adult dosages of 30-40 mg/day of metoclopramide.”).
2. Appellant Did Not Waive Her Fraud Claims.
Schwarz and Wyeth argue that Ms. Mensing waived her fraud claims in the brief she submitted to the district court. See Schwarz Br. 23. In fact, Ms. Mensing preserved her fraud claims on page three of her brief in opposition to summary judgment, and the district court correctly noted that Ms. Mensing's claims against these appellees included claims for fraud. See Appellant's Supplemental App. 35a; App. 318a (district court order). Ms. Mensing also preserved her right to argue that fraud does not require proof of a “duty of care.” Her brief to the district court included a list of the elements to be proved, which did not include “duty of care” as an element. See Schwarz App. 16; see also Appellant's Supplemental App. 33a-52a (Ms. Mensing's brief in opposition to summary judgment, discussing a general duty to be truthful rather than a “duty of care”); id. at 78a:8-16 (same, at oral argument). [FN27]
FN27. Although Ms. Mensing described the list in her brief as stating the elements of negligent misrepresentation, it actually stated the elements of fraud. See Davis v. Re-Trac Mfg. Corp., 149 N.W.2d 37, 38-39 (Minn. 1967). In any event, even if Ms. Mensing is required to prove a duty of care in order to establish fraud, that requirement is satisfied for the reasons given in Part II(D) of appellant's opening brief and Part II(C) above.
Ultimately, the name-brand appellees cannot establish that any of Ms. Mensing's claims fail under Minnesota law. She has alleged the required elements for her claims, and no Minnesota precedent undermines her ability to prove them. She should be given the opportunity to do so.
For the foregoing reasons, appellant urges this Court to reverse the judgment of the district court and remand for further proceedings.