Gustavsen v. Alcon Laboratories, Inc. , 903 F.3d 1 ( 2018 )

United States Court of Appeals
For the First Circuit
No. 17-2066
ROBERT GUSTAVSEN; JOSEPH CUGINI; DEMETRA COHEN; JACKIE CORBIN;
LEE WILBURN; MARY LAW; CECILIA BRATHWAITE,
Plaintiffs, Appellants,
v.
ALCON LABORATORIES, INC.; ALCON RESEARCH, LTD.; FALCON
PHARMACEUTICALS, LTD.; SANDOZ, INC.; ALLERGAN, INC.; ALLERGAN
USA, INC.; ALLERGAN SALES, LLC; PFIZER, INC.; VALEANT
PHARMACEUTICALS INTERNATIONAL, INC.; BAUSCH AND LOMB, INC.; ATON
PHARMA, INC.; MERCK & CO., INC.; MERCK, SHARP & DOHME (I.A.)
CORP.; PRASCO, LLC; AKORN, INC.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Mark L. Wolf, Senior U.S. District Judge]
Before
Thompson, Kayatta, and Barron,
Circuit Judges.
Leah M. Nicholls, with whom Public Justice, P.C., Richard S.
Cornfeld, Law Office of Richard S. Cornfeld, John C. Simon, Kevin
M. Carnie, Jr., The Simon Law Firm, P.C., Kenneth J. DeMoura,
DeMoura Smith LLP, Emily Lisa Perini, Perini-Hegarty & Associates,
P.C., and Brian Wolfman were on brief, for appellants.
Gregory E. Ostfeld, with whom David G. Thomas, Michael
Pastore, Christiana Jacxsens, Greenberg Taurig, LLP, Peter
Simshauser, Skadden, Arps, Slate, Meagher & Flom LLP, Robyn E.
Bladow, Austin Norris, Kirkland & Ellis LLP, Joseph P. Crimmins,
Posternak Blankstein & Lund LLP, John M. Kilroy, Jr., J. Santon
Hill, Polsinelli PC, W. Scott O'Connell, Nixon Peadoby LLP, James
P. Muehlberger, Lori A. McGroder, Shook, Hardy & Bacon LLP, Stephen
G. Strauss, Bryan Cave LLP, David J. Volkin, Law Offices of David
J. Volkin, David B. Chaffin, and White and Williams LLP were on
brief, for appellees.
Jeffrey S. Bucholz, Paul Alessio Mezzina, King & Spalding
LLP, Peter Tolsdorf, and Manufacturers' Center for Legal Action,
on brief for American Tort Reform Association, The Chamber of
Commerce of the United States of America, The National Association
of Manufacturers, and Pharmaceutical Research & Manufacturers of
America, amici curiae.
David R. Geiger, Kristyn M. DeFillip, and Foley Hoag LLP, on
brief for Product Liability Advisory Council, Inc., amicus curiae.
August 27, 2018
KAYATTA, Circuit Judge. Our disposition of the merits
of this appeal turns on a single question: Can manufacturers of
prescription eye drops change the medication's bottle so as to
alter the amount of medication dispensed into the eye without first
getting the FDA's approval? Finding that federal law requires
prior approval for such a change, we hold that state law claims
challenging the manufacturers' refusal to make this change are
preempted. Our reasoning follows.
I.
Because this appeal comes to us following the district
court's grant of a motion to dismiss, we draw the facts from the
operative complaint. SEC v. Tambone, 597 F.3d 436, 438 (1st Cir.
2010) (en banc).
Defendants in this case are companies engaged in the
manufacturing, marketing, and distribution of both brand name and
generic prescription eye drops. These drops treat a multitude of
ailments, including glaucoma, allergies, infections, inflammation,
and pre- and post-operative conditions. The eye drop solutions
are sold in plastic bottles shaped at one end to form a plastic
dispenser. To use the eye solution, consumers must squeeze or tap
the bottle, emitting a drop of solution directly into the eye.
Consumers cannot dispense less than one drop at a time. And the
dimensions of the bottle's dispenser, rather than any factor under
human control, determine the size of each drop. Specifically, the
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complaint explains, the volume of the drop dispensed varies based
on the "inner diameter or hole and the outer diameter of the tip"
of the dispenser. The bottles do not disclose the size of the eye
drops, nor do they reveal an estimate of the number of drops or
doses contained in each bottle.
Plaintiffs complain that defendants deliberately
designed their dispensers to emit unnecessarily large drops, on
the order of 24 to 52 microliters. This ploy, plaintiffs say,
forces patients to waste medication, to their detriment and to
defendants' gain. Plaintiffs marshal a body of scientific
literature to support their argument. The scientific consensus,
they say, is that the optimal size of drops rests between 5 and
15 microliters. The reason is a matter of human anatomy. The
fornix, which is the area between the eye and the lower eyelid, is
only capable of absorbing a small portion of the unnecessarily
large drops dispensed by defendants' bottles.
All manufacturers of prescription eye drops, plaintiffs
say, engage in this practice; there is no prescription eye solution
on the market that dispenses drops that are not substantially
larger than 15 microliters. Plaintiffs do not allege, however,
that this industry standard is the result of conspiracy, or that
defendants otherwise acted in concert. Rather, they allege that
defendants "separately engaged in" the challenged conduct. And
that conduct, plaintiffs allege, harms patients in two ways.
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First, it costs patients money. If the bottles dispensed
smaller drops, then each bottle would deliver more doses, and
patients would be able to purchase fewer bottles over any set
amount of time. By comparing the number of bottles a patient would
use if the bottles dispensed 15 microliter doses against the number
of bottles each patient is now required to purchase, plaintiffs
calculate that a patient, on a yearly basis, could save upwards of
$500, depending on the brand and type of solution used.
These calculations naturally rely on an assumption that
a manufacturer would not substantially increase the price of a
bottle that dispensed smaller drops. Support for this assumption
in the complaint comes in two forms. Plaintiffs point out that
defendants currently price the various sized bottles proportionate
to their volume. A bottle twice the size costs approximately twice
as much. The inference they would have us draw is that, if only
the drop size were to change but the volume of solution in the
bottle were to stay consistent, the price of the bottle would stay
constant too. Plaintiffs also point to various statements in
academic studies that draw a connection between the drop size and
cost to plaintiffs. For example, in a study published by Allergen
(one of the defendants here), the authors say that "a smaller drop
size would mean that more doses could be dispensed from each bottle
of medication, providing cost savings to patients and managed care
providers." They also allege that, following a study by scientists
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employed by Alcon (another defendant here) that concluded that
16 microliter drops were as effective as 30 microliter drops,
Alcon's top marketing executive said that Alcon would not make the
change to its bottles because "patients would use the bottles
longer and Alcon would therefore sell less product and make less
money."
The second alleged impact on patients is physical.
Excess eye drops that stream down the cheek can cause allergies
and pigmentation. The excess drops that enter the bloodstream do
so without first going through metabolic inactivation in the liver.
And without the liver's processes, say plaintiffs, the eye solution
can lead to decreased cardiovascular response to exercise, lowered
blood pressure, and emotional and psychiatric side effects.
Although plaintiffs allege an increased risk of these
consequences, they do not allege that any named plaintiff did, in
fact, experience any such side effect.
Armed with these grievances, the named plaintiffs filed
suit in federal court on their own behalf and on behalf of a
putative class of prescription eye solution purchasers. The named
plaintiffs are residents of either Massachusetts or New York who
purchased eye solution from at least one of the defendant
manufacturers during the four years preceding the filing of their
lawsuit. They allege two categories of violations.
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First, they allege that defendants' practice is "unfair"
under Massachusetts state law and the laws of twenty-five other
states and the District of Columbia, all of which adopt the meaning
of "unfair" as applied in section 5 of the Federal Trade Commission
Act. 15 U.S.C. § 45(a)(1). Plaintiffs do not allege that
defendants' actions are deceptive.
Second, under the laws of New York and sixteen other
states, plaintiffs allege claims for unjust enrichment and for
"money had and received." The basis for these latter two causes
of action is plaintiffs' contention that defendants received
excess profits from their actions to which they are not entitled.
All defendants moved to dismiss. They asserted first
that the court lacked subject-matter jurisdiction because
plaintiffs had failed to satisfy the "injury in fact" requirement
of Article III standing. Second, defendants argued that
plaintiffs' claims were preempted by Food and Drug Administration
regulations. Specifically, they contended that changing the
dispensers to reduce the size of the eye drops -- the change
plaintiffs claim state law mandates -- requires pre-approval from
the FDA, thus implicating the doctrine of impossibility
preemption. Third, defendants argued that plaintiffs failed to
state a claim under the state laws pleaded.1
1For the sake of simplicity, we mention only the grounds
for defendants' motion that they repeat on appeal.
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Citing In re Pharmaceutical Industry Average Wholesale
Price Litigation, 582 F.3d 156, 190-91 (1st Cir. 2009), the
district court ruled that plaintiffs' "plausible claim that
they've overpaid for the defendants' eyedrops," alleged a
"cognizable form of injury for standing purposes." The district
court nevertheless dismissed the complaint without ruling on the
merits of the claims under state laws, finding that the FDA
regulations preempted plaintiffs' suit. See Gustavsen v. Alcon
Labs., Inc., 272 F. Supp. 3d 241, 250 (D. Mass. 2017). In so
doing, the court relied on a section of an FDA regulation that
categorized changes "that may affect . . . drug product sterility
assurance" as major changes requiring FDA approval prior to
implementation. Id. at 251; 21 C.F.R. § 314.70(b)(2)(iii).
Plaintiffs now appeal.
II.
Because Article III standing implicates our ability to
hear a case, see Baena v. KPMG LLP, 453 F.3d 1, 4 (1st Cir. 2006),
we begin with defendants' contention that plaintiffs fail to
satisfy the injury in fact requirement of Article III standing.
Our review is de novo. Hochendoner v. Genzyme Corp., 823 F.3d
724, 730 (1st Cir. 2016).
Article III of the Constitution limits the judicial
power of the federal courts to "Cases" and "Controversies." U.S.
Const. art. III, § 2. Such a case or controversy exists only when
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the plaintiff demonstrates "such a personal stake in the outcome
of the controversy as to assure that concrete adverseness which
sharpens the presentation of issues upon which the court so largely
depends." Katz v. Pershing, LLC, 672 F.3d 64, 71 (1st Cir. 2012)
(quoting Baker v. Carr, 369 U.S. 186, 204 (1962)). To demonstrate
a "personal stake" necessary to invoke the jurisdiction of the
federal courts, a plaintiff must satisfy the familiar triad of
injury in fact, causation, and redressability. Lujan v. Defs. of
Wildlife, 504 U.S. 555, 560-61 (1992).
Plaintiffs bear the burden of establishing standing.
See Lujan, 504 U.S. at 561; Hochendoner, 823 F.3d at 730. The
manner in which plaintiffs must make these showings varies with
"the manner and degree of evidence required at the successive
stages of the litigation." Lujan, 504 U.S. at 561. Thus, at the
motion to dismiss stage, we apply the same plausibility standard
used to evaluate a motion under Rule 12(b)(6). See Hochendoner,
823 F.3d at 731. We first "accept as true all well-pleaded factual
averments in the plaintiff's . . . complaint and indulge all
reasonable inferences therefrom in his favor." Katz, 672 F.3d at
70-71 (quoting Deniz v. Mun'y of Guaynabo, 285 F.3d 142, 144 (1st
Cir. 2002)). We then ask whether the plaintiff has pleaded
"sufficient factual matter to plausibly demonstrate his standing
to bring the action." Hochendoner, 823 F.3d at 731. Because this
appeal comes to us before any class is certified, we evaluate only
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whether the named plaintiffs have standing to pursue their own
claims. Katz, 672 F.3d at 71.
With this general framework in mind, we begin with the
question of whether the complaint adequately alleges injury in
fact. The injury in fact requirement is, itself, composed of
several prongs. A constitutionally sufficient injury arises from
an "invasion of a legally protected interest" that is both
"concrete and particularized" as well as "actual or imminent,"
rather than "conjectural or hypothetical." Lujan, 504 U.S. at 560
(internal quotation marks omitted); see also Spokeo, Inc. v.
Robins, 136 S. Ct. 1540, 1545 (2016) (clarifying that "concrete"
and "particularized" constitute independent, necessary
requirements for standing).
The injury alleged here takes the form of an out-of-
pocket loss of $500 to $1000 per year.2 This alleged loss passes
muster under each of these prongs. Certainly plaintiffs have a
legally protected interest in their own money. See Cent. Az. Water
Conservation Dist. v. EPA, 990 F.2d 1531, 1537 (9th Cir. 1993)
(noting that "pecuniary or economic injury is generally a legally
protected interest"). Nor do defendants argue otherwise.
2A careful reader will also remember that plaintiffs alleged an
increased risk of certain physical side effects. But plaintiffs
do not press that allegation as a basis for standing. See Kerin
v. Titeflex Corp., 770 F.3d 978, 979 (1st Cir. 2014) (identifying
the situations in which increased risk of harm can be a cognizable
injury for standing).
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We also have no trouble concluding that the injury is
particularized. Here, we are concerned with whether a plaintiff
has been affected "in a personal and individual way." Spokeo, 136
S. Ct. at 1548 (quoting Lujan, 504 U.S. at 560 n.1). An out-of-
pocket loss of money satisfies the requirement of
particularization because it constitutes undisputed harm to the
plaintiff specifically. See Katz, 672 F.3d at 71 ("Particularity
demands that a plaintiff must have personally suffered some
harm.").
The injury as alleged is also concrete. Like the
requirement of a "legally protected interest," concreteness
concerns the nature of the injury alleged. It asks whether the
alleged injury is something courts recognize to be cognizable for
the purpose of Article III standing. See Spokeo, 136 S. Ct. at
1548. Thus, "[f]or example, when an alleged injury is nothing
more than 'a bare procedural violation,' there may be no cognizable
harm to the plaintiff and thus no concreteness." Hochendoner, 823
F.3d at 731 (quoting Spokeo, 136 S. Ct. at 1549). Here, by
contrast, we have actual economic loss, which is the prototypical
concrete harm. See Danvers Motor Co. v. Ford Motor Co., 432 F.3d
286, 291 (3d Cir. 2005).
Last, we consider whether the injury is "actual or
imminent," as opposed to "conjectural or hypothetical." This
requirement "ensures that the harm has either happened or is
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sufficiently threatening; it is not enough that the harm might
occur at some future time." Katz, 672 F.3d at 71; see also Clapper
v. Amnesty Int'l USA, 568 U.S. 398, 409 (2013) (requiring an injury
to be "certainly impending"); McInnis-Misenor v. Me. Med. Ctr.,
319 F.3d 63, 68 (1st Cir. 2003) (requiring some "immediacy or
imminence to the threatened injury"). In this instance, the
complaint alleges a harm that has already occurred.
Defendants respond to the foregoing by challenging the
assumption on which the claim of actual existing harm is
predicated: that a bottle that dispensed smaller drops would not
be priced in such a way as to obliterate any cost savings that
would result from a consumer's ability to squeeze more drops out
of the bottle. The fact that defendants have "discretion to base
prices on the number of drops or doses provided," they say, renders
plaintiffs' theory of injury speculative.
Assessing the ultimate merits of plaintiffs' "but-for"
pricing scenario could indeed keep an economist busy for a while,
given the unusual market posited by the complaint in which a large
number of companies independently forgo what seems like a profit
maximizing opportunity of lowering marginal costs. Be that as it
may, plaintiffs expressly allege that scientific studies and the
admission of a marketing executive for one of the major defendants
all state that consumer cost would fall to some degree were the
drops smaller. At this stage of the case, these allegations are
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enough to satisfy the minimal plausibility standard applicable to
our assessment of the complaint.
Defendants also contend that plaintiffs suffered no
injury because they received the "benefit of the bargain."
Plaintiffs bought an "effective product, consume[d] it fully," and
now, defendants say, "seek a partial refund solely on the basis of
their belief that the product should have been more efficiently
designed."
This argument sweeps too broadly. Suppose, for example,
that defendants successfully conspired directly to fix prices on
any competing products, or entered into a similar collusive
agreement to, perhaps, sell products with unnecessarily large
drops while holding price constant. It would still be true that
consumers bought an "effective product, consume[d] it fully" and
now "seek a partial refund" solely based on their belief that the
price should have been lower. Yet certainly in such a case the
aggrieved consumer who directly purchased the product would have
standing to sue for the anticompetitive surcharge. Similarly, if
the consumers alleged similar conduct but instead brought their
cause of action under an applicable price-gouging statute, we would
have no trouble concluding that plaintiffs would have standing (as
defendants conceded at oral argument). What differs here is the
nature of the alleged duty violated by the defendant. But
defendants do not explain how that difference bears on the
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concreteness of plaintiffs' alleged injury, nor do we see how it
would.
Finally, defendants contend that plaintiffs' theory
rests on speculation because, in order for a "but for" world to
exist in which plaintiffs could benefit from a bottle that
dispensed smaller drops, the FDA would have to approve that bottle
design and doctors would have to prescribe medications using that
design. Pointing to Clapper, 568 U.S. at 414, they argue that
plaintiffs' theory rests on "speculation about the decisions of
independent actors." Clapper, though, spoke of the speculation
inherent in a claim of injury that might arise in the future as
the result of decisions by independent actors. Here, the alleged
injury (the claimed overpayment) has already occurred, and does
not "require guesswork as to how independent decisionmakers will
exercise their judgment." Clapper, 568 U.S. at 413. The only
relevant uncertainty is whether defendants can show that they
lacked the ability to change their behavior that was causing the
alleged harm.
We therefore conclude that plaintiffs satisfy the injury
in fact requirement of Article III. The two additional factors in
our analysis -- causation and redressability -- follow easily.
There can be no real dispute that plaintiffs' claim of injury
traces itself directly to the challenged conduct. Nor can there
be any doubt that plaintiffs' financial injury can be redressed by
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damages. Plaintiffs, therefore, have standing to assert their
cause of action.
In reaching this conclusion, we do not write on a blank
slate. Two other circuits have decided this issue. Our decision
is in accord with that of the Third Circuit. See Cottrell v. Alcon
Labs., 874 F.3d 154, 159 (3d Cir. 2017). And although the Seventh
Circuit has dismissed a similar suit on what appear to be standing
grounds, see Eike v. Allergen, 850 F.3d 315, 318 (7th Cir. 2017),
we agree with the Third Circuit that the rationale in Eike is more
appropriately aimed at the merits. See Cottrell, 874 F.3d at 165-
66 (stating that the Seventh Circuit in Eike "blended standing and
merits together in a manner that the Supreme Court has exhaustively
cautioned against"). Satisfied that we have jurisdiction, we turn
to the merits.
III.
Plaintiffs seek a judgment based on an allegation that
defendants have breached duties owed to plaintiffs under various
state laws. For present purposes, we assume without deciding that
plaintiffs correctly describe the duties owed and breached under
state law. The question is whether application of those state
laws is preempted by federal law. In analyzing this question, "we
are not wedded to the lower court's rationale, but may affirm the
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order of dismissal on any ground made manifest by the record."
Katz, 672 F.3d at 71 (brackets omitted).
The principles of federal preemption that control our
disposal of this appeal are not in dispute. If a private party
(such as the manufacturers here) cannot comply with state law
without first obtaining the approval of a federal regulatory
agency, then the application of that law to that private party is
preempted. See PLIVA, Inc. v. Mensing, 564 U.S. 604, 620 (2011);
In re Celexa & Lexapro Mktg. & Sales Practices Litig., 779 F.3d
34, 41 (1st Cir. 2015). Conversely, a private party's ability to
do without prior agency approval that which state law requires
defeats a preemption defense even if the federal regulatory agency
"retains authority to reject [the] changes," unless the defendant
establishes by clear evidence that the agency would, in fact,
reject the changes. Wyeth v. Levine, 555 U.S. 555, 571-72 (2009).
In applying these principles, we proceed de novo, accepting as
true all of plaintiffs' well-pleaded facts and drawing all
reasonable inferences in plaintiffs' favor. In re Celexa, 779
F.3d at 39.
Defendants point us to an FDA regulation as the source
of federal law that purportedly preempts plaintiffs' state law
claims. See 21 C.F.R. § 314.70. This regulation governs the
manner in which a manufacturer can make a change to an already-
approved drug product. It operates by dividing changes into three
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categories: major, moderate, and minor changes. The
classification of the manufacturer's anticipated alteration into
one of these three categories dictates the manufacturer's ability
to unilaterally implement its change. Major changes require
approval from the FDA prior to implementation, while moderate and
minor changes do not. Id. § 314.70(b). Controlling case law is
clear -- and plaintiffs here concede -- that if the change they
contend state law requires qualifies as "major," then federal law
preempts plaintiffs' cause of action because defendants cannot
lawfully make such a change without prior FDA approval. See Mut.
Pharm. Co. v. Bartlett, 570 U.S. 472, 486-87 (2013); PLVIA, Inc.,
564 U.S. at 620; In re Celexa, 779 F.3d at 41. Our inquiry thus
appears, at first glance, straightforward: Does the change urged
by plaintiffs qualify as "major"? If so, our work is done.
But before getting to the meat of this question, we must
address a threshold question regarding the interpretation of
regulatory text. "Major changes" are defined in section (b) of
the FDA regulation. See 21 C.F.R. § 314.70(b). The top level
heading -- "(b)" -- is a title: "Changes requiring supplement
submission and approval prior to distribution of the product made
using the change (major changes)." Id. The next level down --
"(b)(1)" -- defines a broad category of qualifying changes:
A supplement must be submitted for any change
in the drug substance, drug product,
production process, quality controls,
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equipment, or facilities that has a
substantial potential to have an adverse
effect on the identity, strength, quality,
purity, or potency of the drug product as
these factors may relate to the safety or
effectiveness of the drug product.
Id. (b)(1) (emphasis added). Following, at the same level heading,
is section (b)(2), which states: "These changes include, but are
not limited to" a host of ensuing categories of changes to drug
products, listed at sections (b)(2)(i) through (viii). The
threshold question is: To what do the words "[t]hese changes"
refer. The answer is relevant because, if "[t]hese changes" refer
to the "major changes" in the top level heading "(b)," then all
the categories of changes included in section (b)(2) are examples
of major changes. Conversely, if the words "[t]hese changes" refer
only to the "changes" in section (b)(1), then perhaps any category
identified in section (b)(2) must also be shown to have a
"substantial potential to have an adverse effect" in order to
qualify as "major."3
No party or amicus advocates for this latter reading.
Nor do we think it the better reading of the text. For one, the
3 There is also a third possible interpretation: that
"[t]hese changes" refer to changes that meet the entire definition
provided in (b)(1), i.e., they per se qualify as changes that have
a "substantial potential" for an "adverse effect." But since the
consequence of this reading -- changes identified in (b)(2) are
necessarily major changes -- is the same as the first reading
identified above, we do not discuss this possibility in more
detail, nor do we rule out the possibility that it might be
correct, should it matter in a future case.
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inclusion of "[t]hese changes" in a heading of the same level as
the broad definition in section (b)(1) (rather than in
section (b)(1) itself, or as perhaps in a hypothetical
section (b)(1)(i)), makes it unlikely that the "changes" in (b)(2)
are a subcategory of the changes in (b)(1). Second, "moderate
changes" are defined with the identical broad definition,
substituting out only the word "substantial" for "moderate." Thus,
if we read "[t]hese changes" in section (b)(2) as referring only
to "changes" in section (b)(1), then whether a change is major or
moderate would depend in every case on a separate determination of
the qualitative magnitude of the change. Third, the categories
later defined in section (b)(2) do not map easily onto the types
of changes identified in (b)(1). For example, section (b)(2)(v)
lists a variety of labeling changes. But in order for this
category to have any meaning under the latter reading, labeling
changes would have to, in at least some instances, qualify as
changes to a "drug substance, drug product, production process,
quality controls, equipment, or facilities." Id. § 314.70(b)(1).
This, too, makes it more likely that the changes identified in
section (b)(2) are a separate category. Finally, neither the
Supreme Court nor our court has previously read these regulations
to impose a requirement that every major change be shown to have
a "substantial potential to have an adverse effect," nor,
relatedly, that every moderate change to thus have a "moderate
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potential." See Wyeth, 555 U.S. at 568; In re Celexa, 779 F.3d at
37. We therefore conclude that, if a change fits under any of the
categories listed in section (b)(2), that change necessarily
constitutes a "major" change requiring FDA pre-approval.
With this holding in mind, we turn to the categories of
major changes listed in (b)(2). One such category strikes us as
particularly applicable:
Changes in a drug product container closure
system that controls the drug product
delivered to a patient or changes in the type
(e.g., glass to high density polyethylene
(HDPE), HDPE to polyvinyl chloride, vial to
syringe) or composition (e.g., one HDPE resin
to another HDPE resin) of a packaging
component that may affect the impurity profile
of the drug product.
21 C.F.R. § 314.70(b)(2)(vi). Under a plain reading, this language
establishes three categories of changes that qualify as major.
They are: (1) changes in a drug product container closure system
that control the drug product delivered to a patient; (2) changes
in the type of packaging component that may affect the impurity
profile of the drug product; or (3) changes in the composition of
a packaging component that may affect the impurity profile of the
drug product.
The change urged by plaintiffs to the product dispensing
bottle fits comfortably into the first of these categories. The
dispensing bottle in which the eye solution is contained is a "drug
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product container closure system," the eye solution is a "drug
product," and, by dictating the size of the drops, the dispenser
"controls" the "drug product delivered" (specifically, its amount)
to a patient. Merriam-Webster defines "control" to include
"exercise restraining or directing influence over," see Control,
Merriam-Webster Collegiate Dictionary (11th ed. 2012), and Black's
Law Dictionary defines the word as "to regulate or govern," see
Control, Black's Law Dictionary 378 (9th ed. 2009). Dictating the
size of the drops dispensed clearly falls within the ambit of these
definitions. Indeed, plaintiffs' fundamental complaint is
precisely that the FDA-approved current container closure system
controls the drug delivered to a patient in a manner that
systematically delivers too much medication. If the patient could
control the amount of drug product, plaintiffs could simply
dispense only the desired 5 to 15 microliter dose, obviating the
need to bring this case. It therefore seems quite clear that the
change urged by plaintiffs is one to a "drug product container
closure system that controls the drug product delivered to a
patient," 21 C.F.R. § 314.70(b)(2)(vi), and is for that reason
alone a "major" change.
Adding belt to suspenders, regulatory guidance further
bolsters our conclusion that a change in the volume of a dispensed
drop is a "major" change. In the regulation's preamble, the FDA
describes the container closure system category as follows:
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For some drug products, the container closure
system itself, rather than a person, regulates
the amount of drug product that is
administered to a patient. These container
closure systems are considered to "control
drug delivery." For example, a patient that
uses a metered dose inhalation product as
instructed cannot control the amount of drug
product the container closure system delivers
or verify that the appropriate amount has been
administered. . . . The design and operation
of these container closure systems is critical
to ensure that the patient receives the
correct dose. A drug product may not be safe
or effective if a patient receives too much or
too little of the drug product.
Supplements and Other Changes to an Approved Application, 69 Fed.
Reg. 18,728, 18,739 (Apr. 8, 2004) (codified at 21 C.F.R.
pt. 314). Here, the dispenser determines how much solution --
i.e., "amount of drug product" -- a patient receives. And in a
separate document, the FDA lists as "major changes" ones that "may
affect the controlled (or modified) release, metering or other
characteristics (e.g., particle size) of the dose delivered to the
patient . . . ." U.S. Food & Drug Ass'n, Guidance for Industry:
Changes to an Approved NDA or ANDA 12 (2004),
https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatory
Information/Guidances/UCM077097.pdf (2004 FDA Industry Guidance).
It is hard to conceive that the size of the drops is anything other
than a "characteristic[] . . . of the dose delivered."
In the face of the foregoing, plaintiffs offer three
retorts.
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First, they ask us to rely on a "Highlights" portion of
the regulatory preamble to construe section 314.70(b)(2)(vi). As
we have just described it, that section expressly classifies as
major changes three separate types of changes: "[c]hanges in a
drug product container closure system that controls the drug
product delivered . . . or changes in the type . . . or composition
. . . of a packaging component that may affect the impurity
profile." By contrast, the preamble language to which plaintiffs
point mentions only two types of changes in describing the section:
"FDA has limited the requirement to include only those changes to
a drug product container system that involve changes in the type
or composition of a packaging component." 69 Fed. Reg. at 18,729.
From this language, plaintiffs ask us to conclude that a change
that is not to the type or composition of packaging cannot qualify
as "major."
We do not share plaintiffs' reading of the preamble.
The quoted portion describes not the highlights of the rule, but
rather the "Highlights of the Revisions to the Proposed Rule."
See 69 Fed. Reg. at 18,729 (April 8, 2004). The category
describing as major changes any "[c]hanges in a container closure
system that controls drug delivery" was in the proposed rule, see
64 Fed. Reg. 34,606, 34,623 (June 28, 1999), and was not materially
changed by these revisions. Hence, it makes sense that a
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discussion of the highlights of the revisions includes no mention
of the unrevised category.
Later portions of the final rule's preamble confirm this
view. When the FDA described this regulatory category outside of
the context of discussing revisions to the rule as first proposed,
it included within the requirement changes that affect both drug
delivery and the impurity profile of the drug product. See 69
Fed. Reg. at 18,739 (describing the relevant provision as
regulating container closure systems that "control[] drug delivery
or that may affect the impurity profile of the drug" (emphasis
added)). In any event, it is well-established that a regulatory
preamble is incapable of altering regulatory text's plain meaning.
See Christensen v. Harris Cty., 529 U.S. 576, 588 (2000) (holding
that an agency's interpretation of its own regulation cannot
"overcome the regulation's obvious meaning," as it would "permit
the agency, under the guise of interpreting a regulation, to create
de facto a new regulation").
We turn next to plaintiffs' second retort. In their
reply brief and at oral argument, plaintiffs contend that the
provision governing container closure systems is concerned only
with devices that "verify" that the "correct dose" has been
administered. They claim that "[t]he dose is one drop, no matter
its size," and, unlike a metered dose inhaler mentioned in the FDA
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guidance, see 69 Fed. Reg. at 18,739, a patient can verify whether
"a drop" has been administered.
Neither the text of the regulation nor the substance of
the guidance documents define the dose as only the notional unit
(e.g., a single drop, no matter how big), rather than the amount
of the medication. To the contrary, FDA guidance defines the
qualifying changes as ones that "regulate[] the amount of drug
product." 69 Fed. Reg. at 18,739 (emphasis added). Because this
guidance also defines "drug product" as "[a] finished dosage form,
for example, . . . [a] solution[] that contains an active
ingredient," a change in the amount of solution dispensed would
appear to be a change in the "amount of drug product." 2004 FDA
Industry Guidance at 35. And in the very portion of the guidance
to which plaintiffs point, the FDA notes that a patient "cannot
control the amount of drug product the container delivers or verify
that the appropriate amount has been administered." 69 Fed. Reg.
at 18,739 (emphasis added). For the reasons already stated, it
would appear that a patient using one of defendants' eye solution
dispensers cannot "control the amount of the drug product"
dispensed. Indeed, as we have already noted, that is precisely
the basis of plaintiffs' grievance. Plaintiffs' argument thus
fails in its premise.
Finally, plaintiffs allege that drug manufacturers have
on five previous occasions changed the drop size of their
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prescription eye medication without first obtaining FDA approval.
And, in at least one case, they say, the FDA approved of a
manufacturer's proposed change even though it had been submitted
under the "moderate," rather than "major," changes protocol.4 As
became evident at oral argument, a number of factual questions
swirl around plaintiffs' contentions. The parties dispute, for
example, whether the manufacturers in these instances did, in fact,
make changes sufficiently similar to the one urged here. Nor is
it always clear what role the FDA played, if any, in approving the
relevant changes. But, given that we are reviewing a dismissal of
a complaint for failure to state a claim, we will accept
plaintiffs' allegations as true. Even so, they do too little work
for plaintiffs.
Deference to an agency's interpretation of its own
regulation is "unwarranted when there is reason to suspect that
the agency's interpretation 'does not reflect the agency's fair
and considered judgment on the matter in question.'" Christopher
v. SmithKline Beecham Corp., 567 U.S. 142, 155 (2012) (quoting
4 Plaintiffs also point to additional documents in which an
FDA reviewer appears to have notified a manufacturer that a change
in a dropper tip should be submitted through the "moderate" changes
protocol, rather than the "minor" changes protocol the
manufacturer had originally used. The district court refused to
consider these documents, as they had not been mentioned in the
complaint, a determination plaintiffs ask us to reverse on appeal.
But we need not entertain this contention. For the reasons
articulated below, even if we were to consider these additional
documents, they are incapable of altering our conclusion.
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Auer v. Robbins, 519 U.S. 452, 462 (1997)). Whether sporadic
agency action in individual cases is capable of reflecting the
"fair and considered judgment" of the agency on a matter of
regulatory interpretation is far from clear. This is especially
true when the record reflects, as it does here, that the regulatory
actions to which plaintiffs point are, in at least some cases,
made by mid-level FDA scientists, or even a single "reviewer."
And our suspicion of whether such a decision can reflect the "fair
and considered" judgment of the agency is even stronger when that
decision appears in clear tension with regulatory guidance that
almost certainly reflects the agency's considered judgment, and to
which courts often defer if it represents a reasonable reading of
the text. See, e.g., PLVIA, Inc., 564 U.S. at 613; Rucker v. Lee
Holding Co., 471 F.3d 6, 12 (1st Cir. 2006). Additionally,
regarding the examples cited by plaintiffs that reflect only FDA
inaction, other possible inferences, including the possibility
that the FDA used its discretion not to enforce a rule, or that a
company otherwise slipped through the cracks, further undermine
any probative weight that the examples might hold for plaintiffs'
position.
For the foregoing reasons, we therefore conclude that
changing the product bottle so as to dispense a different amount
of prescription eye solution is a "major change" under 21 C.F.R.
§ 314.70(b). That conclusion, in turn, means that plaintiffs'
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attempt to use state law to require such a change is preempted.
See PLVIA, 564 U.S. at 620.
IV.
The decision of the district court is affirmed.
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