Judges to Decide Whether Manufacturers Meet “Clear Evidence” Impossibility Preemption Standard, Supreme Court Says

Yesterday the U.S. Supreme Court issued its potentially most significant preemption decision in several years, Merck Sharp & Dohme Corp. v. Albright, 587 U.S. ____ (2019) ₁, reversing what some had dubbed the worst drug and device opinion in 2017₂. In a unanimous decision, the Supreme Court held that whether a manufacturer has established by “clear evidence” that the FDA rejected a proposed labeling change is a question for the judge, not the jury, to decide. While the decision is significant, the Supreme Court offered little guidance on how judges are to complete this task, leaving open the question of whether courts interpreting the decision will broaden recognition of preemption for medical products manufacturers.

To recap, the multidistrict litigation (MDL) trial court in the Fosamax MDL dismissed the claims of more than 500 individuals who used the drug Fosamax and experienced “atypical femoral fractures” – a medical condition related to bone fractures that occur in low-activity scenarios when bone cells fail to regenerate at a rate to keep the bone healthy, between 1999 and 2010 –Merck, p. 1. The manufacturer argued the claims were preempted on grounds that the FDA would have rejected the warning and supported this argument with evidence that it had tried to change the label in 2008 to warn about “stress fractures,” and the FDA rejected that label change. Id.

The Third Circuit Court of Appeals vacated the summary judgment orders entered against the plaintiffs and remanded, while simultaneously inviting the Supreme Court to “clarify or build out” the doctrine in Wyeth v. Levine, which held that whether “a state-law failure-to-warn claim is preempted where there is ‘clear evidence that the FDA would not have approved a change to the label.” 852 F.3d at 302 (quoting Wyeth, 555 U.S. at 571).

The Supreme Court’s decision partly clarifies the “clear evidence” standard, holding that “a judge, not the jury, must decide the pre-emption question” and “elaborate[ing] Wyeth’s requirements” about how the district court should address that question. Merck, p. 9.

On the first issue, the Court squarely held that impossibility preemption is a question of law for the Court to decide. Although there are factual issues relating to the label’s regulatory treatment, “judges, rather than lay juries, are better equipped to evaluate the nature and scope of an agency’s determination” and they are also “better suited to understand and interpret agency decisions in light of the governing statutory and regulatory context.” Id. at 16. Thus, the Court remanded the case back to the Third Circuit to address the preemption question as a legal, not a factual issue.

The Supreme Court offered some guidance but few details about how trial courts are to address the preemption question as a matter of law. The Court dispelled the confusion about the meaning of “clear evidence,” explaining that because the issue presents a legal question for a judge, “[s]tandards of proof, such as preponderance of the evidence and clear and convincing evidence, have no place in the resolution of this question of law.” (Alito, J., concurring). While the justices agreed on this point, they offered little guidance to trial court judges other than instructing them to ask “whether the relevant federal and state law ‘irreconcilably conflict.”’ Id. at 14. The Court reiterated that impossibility preemption remains a high bar, quoting Rice v. Norman Williams Co., 458 U.S. 654, 659 (1982) for the proposition that “the existence of a hypothetical or potential conflict is insufficient to warranty the pre-emption” of the state law claims.

The Court, however, did note that “brute facts will prove relevant to a court’s legal determination about the meaning and effect” of the FDA’s decision. Merck, p. 16. For example, “if the FDA rejected a drug manufacturer’s supplemental application to change a drug label on the ground that the information supporting the application was insufficient to warrant a labeling change, the meaning and scope of the decision might depend on what information the FDA had before it.” Id.

This may enable defendants to argue that state law failure-to-warn claims should be preempted if 1) there is evidence the FDA rejected language in the label regarding the medical condition/risk at issue in the case and 2) the FDA had sufficient information before it when it made that decision. Arguably, such a ruling should not depend on whether FDA made its determination based on publicly available information in the literature, information presented by the manufacturer, or a combination of the two, so long as the FDA made its decision based on the full facts. The Court notes that “litigants may dispute whether the drug manufacturer submitted all material information to the FDA,” which could blunt the reach of preemption if plaintiffs provide credible evidence that FDA did not have and/or the manufacturer did not submit “all material information” regarding the issue subject to the rejected label change.

Overall, this case assists defendants urging impossibility preemption by putting the issue in the hands of judges and eliminating the tendency to punt the issue to a jury. Whether this ultimately leads to a broader recognition of preemption for medical product manufacturers will depend largely on how lower courts address the issue now that they must decide it rather than passing it to the jury. While this opinion was decided in the context of a pharmaceutical case, its impact could be broader because impossibility preemption potentially applies to any situation where there is evidence of conflicting duties imposed by federal and state law. Thus, manufacturers and product liability litigators should watch further developments closely.