Arthur Drager v. PLIVA USA ( 2014 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 12-1259
ARTHUR L. DRAGER, as personal representative for the Estate
of Shirley Gross,
Plaintiff – Appellant,
v.
PLIVA USA, Inc.,
Defendant – Appellee,
and
PFIZER, Inc.; WYETH, Inc.; WYETH PHARMACEUTICALS, Inc.;
SCHWARZ PHARMA, Inc.; TEVA PHARMACEUTICALS USA, Inc.,
Defendants.
Appeal from the United States District Court for the District of
Maryland, at Greenbelt. Alexander Williams, Jr., District
Judge. (8:10-cv-00110-AW)
Argued: December 12, 2013 Decided: January 28, 2014
Before SHEDD, DUNCAN, and DAVIS, Circuit Judges.
Affirmed by published opinion. Judge Duncan wrote the opinion,
in which Judge Shedd and Judge Davis joined.
ARGUED: Louis Martin Bograd, CENTER FOR CONSTITUTIONAL
LITIGATION, PC, Washington, D.C., for Appellant. Michael David
Shumsky, KIRKLAND & ELLIS LLP, Washington, D.C., for Appellee.
ON BRIEF: Terrence J. Donahue, Jr., MCGLYNN GLISSON & MOUTON,
Baton Rouge, Louisiana, for Appellant. Joseph P. Thomas, Linda
E. Maichl, Jeffrey Peck, ULMER & BERNE, LLP, Cincinnati, Ohio;
Jay P. Lefkowitz, John K. Crisham, KIRKLAND & ELLIS LLP,
Washington, D.C., for Appellee.
2
DUNCAN, Circuit Judge:
Appellant Arthur Drager, as personal representative of the
estate of Shirley Gross, seeks reversal of the district court’s
denial of Gross’s request to amend her complaint and its
dismissal of her state common law tort claims against appellee
PLIVA USA, Inc. for injuries sustained as a result of her use of
a drug it manufactured. Drager contends on appeal that the
proposed amendments were not futile and that Gross’s state tort
claims are not preempted by the requirements of the Federal
Food, Drug, and Cosmetics Act, 21 U.S.C. §§ 301 et seq.,
(“FDCA”). For the reasons that follow, we affirm.
I.
In 2006, Gross was prescribed Reglan, a brand of
metoclopramide, a drug used to treat gastroesophageal reflux
disease and other ailments. Gross followed a ten-month course
of generic metoclopramide, produced by appellee PLIVA, from
March 2006 to January 2007. As a result of Gross’s long-term
use of metoclopramide, she developed permanent injuries
including the movement disorders tardive dyskinesia and
akathisia.
On January 15, 2010, Gross filed suit against PLIVA and
brand-name Reglan producers, including Pfizer, Inc., alleging
state law claims of negligence, breach of warranty, fraud and
3
misrepresentation, strict liability, and failure to warn.
Pursuant to Gross’s stipulation that she ingested only PLIVA’s
generic metoclopramide, the district court dismissed her claims
against the brand name manufacturers on November 9, 2010. The
district court stayed further proceedings against PLIVA, the
only remaining defendant, on April 7, 2011, pending the Supreme
Court’s decision in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567(2011).
After Mensing was decided, holding that FDCA labeling
requirements preempted state failure-to-warn laws, see id. at
2577-78, the stay was lifted and PLIVA filed a motion for
judgment on the pleadings. It contended that pursuant to
Mensing, Gross’s claims were preempted by the FDCA because of
the impossibility of PLIVA’s compliance with both that statute
and the alleged state law duties. In her response to PLIVA’s
motion, Gross requested that the district court allow her to
amend her complaint to include allegations that PLIVA violated a
state law duty by failing to update its warnings to include
changes made by brand name manufacturers in 2004. On November
22, 2011, the district court granted PLIVA’s motion, holding
under the reasoning of Mensing that all of Gross’s state law
claims were preempted by FDCA requirements applicable to generic
drug manufacturers. The district court also denied leave to
amend on the ground that the proposed amendments would be futile
4
under Maryland law. Gross filed a motion to alter or amend the
judgment, which the district court denied on January 27, 2012.
During the pendency of this action, Gross passed away and Drager
continued the case on behalf of her estate. The district
court’s November 22 and January 27 orders form the basis of
Drager’s appeal.
II.
We review de novo a district court’s ruling on a motion for
judgment on the pleadings under Federal Rule of Civil Procedure
12(c). Butler v. United States, 702 F.3d 749, 751 (4th Cir.
2012). The standard of review for Rule 12(c) motions is the
same as that under Rule 12(b)(6). Id. at 751-52. Therefore, a
motion for judgment on the pleadings “should only be granted if,
after accepting all well-pleaded allegations in the plaintiff’s
complaint as true and drawing all reasonable factual inferences
from those facts in the plaintiff’s favor, it appears certain
that the plaintiff cannot prove any set of facts in support of
his claim entitling him to relief.” Edwards v. City of
Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999). A Rule 12(c)
motion tests only the sufficiency of the complaint and does not
resolve the merits of the plaintiff’s claims or any disputes of
fact. Butler, 702 F.3d at 752.
5
Under Federal Rule of Civil Procedure 15(a)(2), the “‘grant
or denial of an opportunity to amend is within the discretion of
the district court.’” Scott v. Family Dollar Stores, Inc., 733
F.3d 105, 121 (4th Cir. 2013) (quoting Foman v. Davis, 371 U.S.
178, 182 (1962)). Consequently, we review the district court’s
denial of a motion to amend for abuse of discretion. Nourison
Rug Corp. v. Parvizian, 535 F.3d 295, 298 (4th Cir. 2008). A
district court’s denial of leave to amend is appropriate when
“(1) ‘the amendment would be prejudicial to the opposing party;’
(2) ‘there has been bad faith on the part of the moving party;’
or (3) ‘the amendment would have been futile.’” Scott, 733 F.3d
at 121 (quoting Laber v. Harvey, 438 F.3d 404, 426-27 (4th Cir.
2006)).
We may affirm on any ground supported by the record
regardless of the ground on which the district court relied.
United States v. Moore, 709 F.3d 287, 293 (4th Cir. 2013).
III.
A.
Drager contends on appeal that the district court’s denial
of leave to amend was an abuse of discretion because Gross’s
proposed allegations would have stated a cause of action under
Maryland law. However, Drager concedes that Gross never filed a
motion to amend her complaint or a proposed amended complaint
6
with the district court. Regardless of the merits of the
desired amendment, a district court does not abuse its
discretion “by declining to grant a motion that was never
properly made.” Cozzarelli v. Inspire Pharms., Inc., 549 F.3d
618, 630-631 (4th Cir. 2008) (finding no abuse of discretion
where plaintiffs requested leave to amend in a response but did
not file a motion to amend or a proposed amended complaint).
Consequently, we affirm the district court’s denial of
leave to amend and hold that none of Drager’s claims regarding
PLIVA’s alleged failure to update its warnings are before us on
appeal. Similarly, we find that the complaint did not allege
any violation of the federal misbranding laws or parallel state
duties. To the extent Drager makes those claims on appeal they
are waived. United States v. Evans, 404 F.3d 227, 236 n.5 (4th
Cir. 2005).
B.
Drager also argues that the district court erred by finding
Gross’s state tort claims to be preempted by the FDCA because of
the impossibility of PLIVA’s simultaneous compliance with FDCA
requirements and relevant Maryland law. Although one of
Drager’s objections to the district court’s reasoning gives us
pause, all of Gross’s causes of action are indeed preempted by
the FDCA. We therefore affirm the district court on all counts.
7
1.
In Mensing, the Supreme Court reaffirmed the principle that
“[p]re-emption analysis requires [courts] to compare federal and
state law.” 131 S. Ct. at 2573. To make this comparison,
courts first “identify[] the state tort duties and
federal...requirements applicable” to the parties. Id. If the
applicable federal statute does not include a statement that
either expressly preempts or expressly preserves otherwise
applicable state law duties, the court must determine if there
is preemption by conflict. Id. at 2577 n.5.
“[S]tate law is naturally preempted to the extent of any
conflict with a federal statute,” Crosby v. Nat’l Foreign Trade
Council, 530 U.S. 363, 372 (2000), because the federal
Constitution provides that every federal enactment is superior
to any state law or constitutional article, U.S. Const. art. VI,
cl. 2. As a result, under the Supremacy Clause, “[w]here state
and federal law directly conflict, state law must give way.”
Mensing, 131 S. Ct. at 2577 (internal quotation marks and
citation omitted). The Supreme Court has held that state and
federal law conflict when it is impossible for a private party
to simultaneously comply with both state and federal
requirements. Id. In such circumstances, the state law is
preempted and without effect. By definition a party cannot
state a claim for which relief may be granted pursuant to a law
8
that has been “effectively repeal[ed]” as it applies to a
particular set of circumstances. Id. at 2579.
Mensing and another recent Supreme Court case, Mutual
Pharmaceutical Co., Inc. v. Bartlett, 133 S. Ct. 2471 (2013),
address the preemptive effect of the FDCA on state tort laws as
they apply to generic drug manufacturers. For a variety of
policy reasons, under the Hatch-Waxman amendments, codified at
21 U.S.C. § 355(j), the FDCA imposes substantially different
requirements on producers of name brand drugs and producers of
non-branded, or generic, counterparts. In greatly simplified
terms, manufacturers of generic medications gain authorization
to market their products by demonstrating that those products
are equivalent to the previously authorized name brand versions
in a number of ways, including formulation and labeling.
Generics must maintain this equivalence to maintain
authorization. See generally 21 U.S.C. § 355(j).
In Mensing, the Supreme Court made clear that under
§ 355(j) generic drug manufacturers are not entitled to
unilaterally change their labeling and therefore any state law
tort premised on the failure of a generic to alter its labeling
is preempted. Id. at 2578. In Bartlett, the Supreme Court
emphasized that generics are also not permitted to change the
formulation of their products. 133 S. Ct. at 2471, 2475.
Further, the Court rejected the argument that a generic drug
9
manufacturer is required to leave the marketplace in order to
avoid state law liability resulting from its inability to change
either its labeling or formulation. Id. at 2477. In other
words, courts may not avoid preempting a state law by imposing
liability on a generic manufacturer for choosing to continue
selling its product.
Together, these cases establish that under the FDCA a
generic may not unilaterally change its labeling or change its
design or formulation, and cannot be required to exit the market
or accept state tort liability. Therefore, if a generic drug
manufacturer cannot satisfy a state law duty except by taking
one of these four actions, that law is preempted and of no
effect.
2.
Drager first argues that we must reverse the district
court’s order as a whole because it failed to conduct a full
preemption analysis. The district court did not undertake to
identify and compare all of the relevant duties imposed on PLIVA
by Maryland common law and the FDCA. Instead, it held that
because of the structure of Maryland products liability law, all
of Gross’s causes of action, however characterized, must in fact
be failure to warn claims, and that they were all therefore
preempted under Mensing.
10
Although we agree that Mensing contemplates a more complete
analysis and that such an analysis would have been helpful for
our review, the method applied by the district court does not
constitute reversible error. Because our review is de novo, we
do not defer to the district court and may affirm the dismissal
of Gross’s complaint on any ground.
3.
Drager also argues that the district court erred by finding
each of Gross’s individual causes of action to be preempted by
the FDCA. Because each alleged cause of action logically
requires PLIVA to either change its labeling, change its design
or formulation, exit the market, or accept tort liability, the
underlying Maryland laws as applicable here are preempted.
a.
Gross’s complaint alleges that PLIVA’s metoclopramide
marketing was negligent because it failed to reasonably and
accurately inform the medical community, and by extension
patients, of the dangers of the drug. Although Drager concedes
on appeal that all failure to warn claims are preempted by the
FDCA’s labeling requirements under Mensing, he argues that the
complaint’s allegations of negligent testing, inspection, and
post-market surveillance survive because they are actually
premised on independent Maryland duties unrelated to labeling.
11
In Maryland, to state a cause of action for negligence in
the products liability context, the plaintiff “must allege and
prove (1) that the defendant was under a duty to protect the
plaintiff from injury, (2) that the defendant breached that
duty, (3) that the plaintiff suffered actual injury or loss, and
(4) that the loss or injury proximately resulted from the
defendant's breach of the duty.” Ga. Pac., LLC v. Farrar, 69
A.3d 1028, 1031-32 (Md. 2013). Contrary to Drager’s assertions,
it is not clear that Maryland law recognizes specific causes of
action for negligent testing, inspection, and surveillance. 1
More importantly, it is apparent from the nature of Gross’s
claim that any alleged failure by PLIVA to conduct adequate pre-
market testing or post-market observation of its drug is in
actuality merely a particular act or omission in an overall
negligent sale. Divorced from the context of an eventual sale
to the consumer, PLIVA could not owe any duty to that consumer
to perform any testing or inspection on its product, and there
could therefore be no cause of action for negligence. If we
1
Drager cites no support for his argument that it does.
His citation to Worm v. Am. Cyanamide Co. actually undermines
his contention; in that case we interpreted the plaintiff’s
negligent testing claim to allege a failure to warn cause of
action. 970 F.2d 1301, 1304 (4th Cir. 1992). Drager’s
citations to Restatement (Second) of Torts § 324A and Lucarelli
v. Renal Advantage, Inc., No. AW-08-2219, 2009 U.S. Dist. LEXIS
75506 (D. Md. Aug. 25, 2009), concern the Good Samaritan Rule
and are simply inapposite.
12
assume that under Maryland law there is a general duty to
protect consumers from injury based on the negligent marketing
and sale of a product, it is clear that a generic drug
manufacturer whose product is unreasonably dangerous as sold
could not satisfy that duty without changing its warnings,
changing its formulation, exiting the market, or accepting tort
liability. Therefore, Gross’s negligence claims are preempted
by impossibility.
b.
Gross’s complaint alleges that PLIVA’s metoclopramide was
defective in design as marketed due to an unreasonably dangerous
formulation, inadequate warnings and instructions, or both.
Drager maintains on appeal that PLIVA is strictly liable for
introducing its product into the stream of commerce in its
defective condition and that this claim is not preempted by the
requirements of the FDCA.
In Maryland, to state a claim for strict products
liability, a plaintiff must allege that:
(1) the product was in defective condition at the time
that it left the possession or control of the seller,
(2) that it was unreasonably dangerous to the user or
consumer, (3) that the defect was a cause of the
injuries, and (4) that the product was expected to and
did reach the consumer without substantial change in
its condition.
Gourdine v. Crews, 955 A.2d 769, 780 (Md. 2008) (quoting Phipps
v. Gen. Motors Corp., 363 A.2d 955, 958 (Md. 1976)). Gross’s
13
complaint alleges all of these facts and we must accept them as
true for purposes of this analysis.
However, Drager also concedes that PLIVA was authorized to
market metoclopramide with the labeling and formulation
specified by the FDA, that it was not permitted to change the
labeling, and that it was not permitted to change the
formulation. It is clear then, from Drager’s arguments, that he
is attempting to rely on a “stop selling” rationale. In effect,
he contends that although PLIVA was prohibited from altering its
metoclopramide to make it safer, it was only permitted, not
obligated, to sell the drug, and is therefore liable for
voluntarily introducing a defective product into the stream of
commerce. In other words, if PLIVA wanted to avoid liability,
it should have exercised its option to not sell unreasonably
dangerous metoclopramide. As discussed above, the stop selling
rationale is an impermissible means of avoiding preemption under
Bartlett.
Drager contends that Bartlett is not controlling because
Maryland assesses the unreasonableness of the danger of a
product using a consumer-expectations test while New Hampshire,
the state whose tort laws Bartlett interprets, uses a risk-
utility approach. To the extent that there is a difference in
14
approach between the two states, it is immaterial. 2 The Court in
Bartlett did not determine that the New Hampshire law was
preempted because it applied the risk-utility approach.
Instead, it concluded that there was no action that the
defendant could take under that approach to increase the safety
of its product without violating the restrictions of the FDCA.
We have no trouble concluding that the same is true under either
the risk-utility or the consumer-expectations approach in
Maryland. PLIVA cannot be required to stop selling its product,
but at the same time it is prohibited from making any changes to
the product itself or the accompanying warnings. Regardless of
the way in which Maryland assesses the unreasonableness of a
product’s risks, if PLIVA’s metoclopramide is unreasonably
unsafe, there is no apparent action that PLIVA can take in
compliance with FDCA restrictions to avoid strict liability. 3
2
It is not clear that there is any difference. Maryland
uses both approaches in different situations, and applies risk-
utility when a product has malfunctioned, which is arguably the
case here. Halliday v. Sturm, Ruger & Co., 792 A.2d 1145, 1153
(Md. 2002).
3
Drager argues that we should follow the Eighth Circuit and
remand the strict liability question to the district court
because of the alleged difference in approach between Maryland
and New Hampshire. In Fullington v. Pfizer, Inc., the Eighth
Circuit speculated that Arkansas law, which applies the consumer
expectations test, might provide “an opportunity, consistent
with federal obligations, to somehow alter an otherwise
unreasonably dangerous drug.” 720 F.3d 739, 746-47 (8th Cir.
2013). There is no such opportunity for PLIVA to simultaneously
(Continued)
15
c.
Gross’s complaint next alleges that PLIVA created and
breached express and implied warranties regarding the safety of
its metoclopramide by marketing it without sufficient warnings
in an unreasonably unsafe condition. This argument similarly
lacks merit.
First, although the Maryland Court of Appeals has not
explicitly ruled on this question, it appears that Maryland law
does not recognize causes of action for breach of implied
warranties of merchantability or fitness for a particular
purpose when the goods at issue are pharmaceuticals. See Rite
Aid Corp. v. Levy-Gray, 894 A.2d 563, 570-71 (Md. 2006).
However, even if such claims are cognizable, they are preempted
in the case of generic drug manufacturers.
When a seller is a merchant with respect to the kind of
good being sold, an implied warranty of merchantability, a
promise that a good is fit for its ordinary purpose, arises
automatically at the time of the sale. Id. at 570 n.5 (citing
Md. Code Ann., Com. Law § 2-314 (2002)). When a seller has
reason to know that a buyer is relying on his skill and judgment
comply with the restrictions of the FDCA and Maryland strict
products liability law. Because the existence of such an option
is a question of law, there is no reason to remand to make this
determination.
16
to select a good suitable for a particular purpose, an implied
warranty of fitness for that purpose arises automatically at the
time of sale. Id. at 570 n.4 (citing Md. Code Ann., Com. Law
§ 2-315 (2002)). We accept as true for purposes of this
analysis that PLIVA is a merchant of pharmaceuticals, that it
had reason to know of Gross’s particular purpose in purchasing
metoclopramide, and that as marketed its metoclopramide was
unreasonably dangerous when used as intended. On these facts,
PLIVA unavoidably created and breached these implied warranties
by selling metoclopramide. Because PLIVA was not permitted to
change its warnings or formulation, it could not have avoided
liability for breach of these implied warranties except by
exiting the market. Therefore, to the extent that implied
warranties of merchantability or fitness for a particular
purpose can arise in this context under Maryland law, they are
preempted by the requirements of the FDCA.
Drager argues that state law liability for breach of an
express warranty is not preempted by the requirements of the
FDCA because it is a violation of contract law and not tort. He
contends that manufacturers voluntarily elect to make certain
assertions about their products in warnings and promotional
materials and that as a result the manufacturers themselves, not
the law, impose the obligation to conform to those assertions.
Whatever the merits of this argument might be in general, it is
17
indisputable that the content of generic drug manufacturers’
product descriptions and other assertions is mandated by federal
law. Because PLIVA cannot change its written materials or the
formulation of its product to ensure that its metoclopramide
functions as expressly warranted, it cannot avoid liability for
breach of express warranty except by leaving the market.
Gross’s cause of action for breach of express warranties is
therefore preempted by the FDCA.
d.
Finally, Gross’s complaint alleges that, through its
promotional and warning materials, PLIVA made negligent
misrepresentations and fraudulently concealed information about
the safety of its product from consumers and medical
professionals. Drager’s contention that these claims survive
preemption is frivolous. Both causes of action are premised on
the content of statements made by the defendant to the
plaintiff. See Lloyd v. Gen. Motors Corp., 916 A.2d 257, 273
(Md. 2007) (reciting the elements of Maryland negligent
misrepresentation); id. at 274 (reciting the elements of
Maryland fraudulent concealment). Drager’s conclusory statement
that the duties imposed by these legal principles are unlike
state law obligations concerning warnings is unavailing.
Assuming that PLIVA’s representations are false or misleading
because its metoclopramide is unreasonably unsafe as marketed,
18
it has no authority to add or remove information from its
materials or to change the formulation of the product to make
its representations complete or truthful. Therefore, PLIVA’s
only remaining options are to leave the market or accept tort
liability. As a result, Gross’s misrepresentation and
fraudulent concealment claims are preempted by the FDCA.
IV.
For the foregoing reasons the district court’s denial of
Gross’s request to amend her complaint and its dismissal of her
state law tort causes of action are
AFFIRMED.
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