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Emley v. Wal-Mart Stores, Inc.

United States District Court, S.D. Indiana, Indianapolis Division

June 27, 2019

DONNA EMLEY, et al., Plaintiffs,
v.
WAL-MART STORES, INC., et al., Defendants.

          ENTRY ON MOTIONS FOR SUMMARY JUDGMENT

          Hon. William T. Lawrence, Senior Judge

         This cause is before the Court on the following motions: Defendant L. Perrigo Company's (“Perrigo”) Motion for Summary Judgment on the Basis of Preemption (Dkt. No. 85) and related motions for oral argument (Dkt. Nos. 87 and 101); Defendant Wal-Mart Stores, Inc.'s (“Wal-Mart”) Motion for Summary Judgment on the Basis of Preemption (Dkt. No. 88); Defendant Wal-Mart's [Second] Motion for Summary Judgment (Dkt. No. 120); Defendant Perrigo's [Second] Motion for Summary Judgment (Dkt. No. 122); and Defendant L.N.K. International, Inc.'s (“L.N.K.”) Motion for Summary Judgment (Dkt. No. 124). Because the Court does not find that oral argument would be helpful, the motions for oral argument are DENIED. Each of the remaining motions is ripe for review and the Court, being duly advised, rules as follows.

         I. SUMMARY JUDGMENT STANDARD

         Federal Rule of Civil Procedure 56(a) provides that summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” In ruling on a motion for summary judgment, the properly supported facts asserted by the non-moving party must be believed, and all reasonable inferences must be drawn in the non-movant's favor. Zerante v. DeLuca, 555 F.3d 582, 584 (7th Cir. 2009) (“We view the record in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor.”). However, a party who bears the burden of proof on a particular issue may not rest on his pleadings, but must show what evidence he has that there is a genuine issue of material fact that requires trial. Johnson v. Cambridge Indus., Inc., 325 F.3d 892, 901 (7th Cir. 2003). The non-moving party bears the burden of specifically identifying the relevant evidence of record, and “the court is not required to scour the record in search of evidence to defeat a motion for summary judgment.” Ritchie v. Glidden Co., 242 F.3d 713, 723 (7th Cir. 2001).

         II. BACKGROUND

         The relevant background facts of record, viewed in the light most favorable to the Plaintiffs, as the non-moving parties, are as follow. Additional facts are included throughout the Entry as relevant.

         On June 11, 2015, and again on June 12, 2015, Donna Emley took two pills from a bottle of Equate-brand acetaminophen because she was experiencing general muscle aches and cold symptoms. Dennis[1] had purchased a twin-back of Equate acetaminophen (the “Perrigo Product”) in November 2013 from a Wal-Mart near the Plaintiffs' home in Fort Wayne, Indiana.[2] He chose acetaminophen because Donna was undergoing treatment for colorectal cancer at the time and she had been advised by her oncologist to take acetaminophen for relief from headaches and other symptoms.

         On June 13, 2015, the Plaintiffs travelled to Kentucky for a planned vacation, during which they were to act as caretakers of a small farm. In the late afternoon or evening after arriving at the farm, Donna noticed a mild rash. The rash worsened overnight, and her eyes became itchy and watery. Early the next morning, the Plaintiffs drove to a nearby Wal-Mart store in Tennessee to purchase medication to help alleviate Donna's symptoms. Donna believed that she was suffering an allergic reaction, perhaps to something she had been exposed to on the farm, and that Benadryl would help. Donna waited in the car while Dennis went into the store, where he purchased Equate brand Severe Allergy and Sinus Headache medication (the “L.N.K. Product”), which contains acetaminophen. Donna took one dose of the L.N.K. Product immediately, and then took another dose approximately four hours later, per the package instructions.

         When her symptoms did not improve after her second dose of the L.N.K. Product, Donna went to the Gilbert Grave Urgent Care Center in Bowling Green, Kentucky on the afternoon of June 14, 2015. The physician she saw there sent her to the Bowling Green Medical Center, where she was admitted and remained hospitalized until June 19, 2015. She continued to receive acetaminophen during her treatment there.

         On June 19, 2015, Donna was transferred to the Vanderbilt University Medical Center, where she was diagnosed with Toxic Epidermal Necrolysis (“TEN”). At that time, she was no longer given acetaminophen. Donna remained hospitalized from June 19, 2015, until July 16, 2015, for treatment of TEN and related symptoms.

         III. PREEMPTION

         The Plaintiffs allege, and for purposes of this ruling the Court assumes, that the acetaminophen contained in the Perrigo Product and the L.N.K. Product caused Donna to develop TEN. The Plaintiffs further allege that the Products were defective because their label did not contain the following warning regarding the risk that acetaminophen can cause severe skin reactions (hereinafter referred to as “the Warning”):

         Allergy alert: Acetaminophen may cause severe skin reactions. Symptoms may include:

• skin reddening
• blisters
• rash

         If a skin reaction occurs, stop use and seek medical help right away.

         Each Defendant moves for summary judgment on the ground that the Plaintiffs' claims are preempted by federal law. Specifically, the Defendants argue that the claims are preempted because it would have been impossible for them to comply with both the state-law duties upon which those claims are based and the duties imposed on them by federal law. In other words, they argue that the Plaintiffs' claims against them are barred under the doctrine of impossibility preemption.

         A. Applicable Supreme Court Precedent

         The Defendants' preemption defense is based upon the fact that the Food and Drug Administration (“FDA”) regulates the content of warning labels on drugs pursuant to the Federal Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301 et seq. and related regulations. The Supreme Court has instructed that determinations regarding preemption “must be guided by two cornerstones of our pre-emption jurisprudence”:

First, the purpose of Congress is the ultimate touchstone in every pre-emption case. Second, in all pre-emption cases, and particularly in those in which Congress has legislated in a field which the States have traditionally occupied, we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.

Wyeth v. Levine, 555 U.S. 555, 565 (2009) (internal quotation marks, citations, and ellipses omitted).

         In Wyeth, the Supreme Court considered preemption as it applied to state-law failure-to-warn claims against the manufacturer of a drug being sold pursuant to an approved New Drug Application (“NDA”). Although “[t]he FDA's premarket approval of a new drug application includes the approval of the exact text in the proposed label, ” and “[g]enerally speaking, a manufacturer may only change a drug label after the FDA approves a supplemental application, ” the Court noted that the applicable regulations provided for a “changes being effected” (“CBE”) process which permitted a manufacturer “to make certain changes to its label before receiving the agency's approval.” Wyeth, 555 U.S. at 568. This includes changes made to “add or strengthen a contraindication, warning, precaution, or adverse reaction” or to “add or strengthen an instruction about dosage and administration that is intended to increase the safe use of the drug product.” 21 C.F.R. §§ 314.70(c)(6)(iii)(A), (C). Thus, the Court found that the manufacturer could have used the CBE process to add the warning in question to its label without prior approval from the FDA. And while “the FDA retains authority to reject labeling changes made pursuant to the CBE regulation in its review of the manufacturer's supplemental application, just as it retains such authority in reviewing all supplemental applications, ” the Court held that “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 Wyeth to comply with both federal and state requirements.” Wyeth, 555 U.S. at 571. Accordingly, impossibility preemption did not operate to bar the plaintiff's claims based on the NDA manufacturer's failure to include a particular warning on the drug's label.

         The Supreme Court reached the opposite conclusion in PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), which involved a drug being sold pursuant to an approved Abbreviated New Drug Application (“ANDA”). The ANDA process is a separate regulatory scheme that applies to generic versions of drugs that already have been approved by the FDA under the NDA process. The Supreme Court determined that the CBE process was not available to ANDA manufacturers; rather, the applicable regulations require that a generic drug being sold pursuant to an approved ANDA have the same label as the equivalent brand-name drug being sold pursuant to an NDA. PLIVA, 564 U.S. at 618 (citing 21 C.F.R. § 314.150(b)(10) (providing that FDA may withdraw approval of ANDA if labeling is no longer consistent with that of equivalent drug that was approved under NDA)). Because there was no mechanism for an ANDA manufacturer to change its label independently of the NDA manufacturer without violating federal law, “it was impossible for the [ANDA] Manufacturers to comply with both their state-law duty to change the label and their federal law duty to keep the label the same, ” id., and the plaintiffs' claims were preempted. The Court recognized that it made “little sense” from the plaintiffs' perspective that the question of whether a plaintiff could pursue a failure-to-warn claim depended upon whether the plaintiff was injured by a brand-name or generic drug, but noted that “‘it is not this Court's task to decide whether the statutory scheme established by Congress is unusual or even bizarre.'” Id. at 625 (quoting Cuomo v. Clearing House Assn., L.L.C., 557 U.S. 519, 556 (2009) (Thomas, J., concurring in part and dissenting in part)).

         B. The Monograph System

         Acetaminophen, the drug the Donna Emley took, was not approved pursuant to an NDA or an ANDA. Rather, it is manufactured and sold pursuant to the OTC Drug Monograph Review Process, which is an entirely separate regulatory system that applies to certain over-the-counter (“OTC”) drugs. As Defendant Perrigo explains in its brief:

This process was established in 1972 to address “resource challenges” facing the FDA following new legislation requiring the agency to evaluate the efficacy of all drugs on the market at the time. Rather than undertaking the impractical task of reviewing literally hundreds of thousands of individual OTC drug products already on the market, the Agency implemented a process of reviewing OTC drugs through rulemaking by therapeutic classes. In this way, the monograph process was developed to allow continued marketing of particular ingredients contained in OTC drug products already available on the market that were “generally recognized as safe and effective.” See 21 C.F.R. § 330.1; 21 C.F.R. § 330.10(a)(1)-(9).
The monograph review process involves several steps, including evaluation by FDA and independent experts of substantial data regarding the safety and efficacy of these ingredients, culminating in a determination of whether these ingredients can continue to be marketed as OTC drugs subject to the specific requirements set forth in the applicable monograph:
This process involves convening an advisory panel for each therapeutic class to review data relating to claims and active ingredients. These panel reports are then published in the Federal Register, and after FDA review, tentative final monographs for the classes of drugs are published. The final step is the publication of a final monograph for each class.

Dkt. No. 86 at 11-12 (footnotes and some citations omitted) (quoting “Draft Guidance: Marketed Unapproved Drugs - Compliance Policy Guide, ” § 440.100 at 12-13 (found at Dkt. No. 86-2)). The monograph establishes the conditions under which the drug(s) or category of drugs to which it applies “are generally recognized as safe and effective and not misbranded.” 21 C.F.R. § 330.10(a)(9). The final monograph “constitutes final agency action from which appeal lies to the courts.” 21 C.F.R. § 330.10(a)(11).

         C. Acetaminophen

         A tentative final monograph applicable to acetaminophen and other OTC internal analgesic products was published over thirty years ago. See “Internal Analgesic, Antipyretic, and Antirheumatic Drug Products for Over-the-Counter Human Use; Tentative Final Monograph, ” 53 Fed. Reg. 46204 (Nov. 16, 1988). To date, no final monograph applicable to acetaminophen has been issued.

         The tentative final monograph applicable to acetaminophen does not contain any warning relating to severe skin reactions such as the one suffered by Donna. In fact, in arriving at the tentative final monograph, the FDA rejected comments suggesting that such warnings be included, finding:

The agency believes that the warnings which the comments requested are not warranted at this time because there is insufficient evidence that these adverse effects are being caused by acetaminophen. However, if sufficient evidence is presented to warrant new warnings in the future, the agency will act accordingly.

Id. On August 1, 2013, the FDA issued a Drug Safety Communication with the purpose of “informing the public that acetaminophen has been associated with a risk of rare but serious skin reactions.” FDA Drug Safety Communication: FDA warns of rare but serious skin reactions with the pain reliever/fever reducer acetaminophen, found at https://www.fda.gov/drugs/drug-safety-and-availability/fda-drug-safety-communication-fda-warns-rare-serious-skin-reactions-pain-relieverfever-reducer (last visited June 26, 2019). At that time, the FDA stated its intention to

require that a warning be added to the labels of prescription drug products containing acetaminophen to address the risk of serious skin reactions. FDA will also request that manufacturers add a warning about serious skin reactions to the product labels of OTC acetaminophen drug products marketed under a new drug application and will encourage manufacturers of drug products marketed under the OTC monograph do the same.

Id. In November 2014, the FDA issued a document labeled “Draft-Not for Implementation” and entitled “Guidance for Industry: Recommended Warning for Over-the-Counter Acetaminophen-Containing Drug Products and Labeling Statements Regarding Serious Skin Reactions, ” (found at Dkt. No. 86-9), which was finalized in January 2017 (now found at https://www.fda.gov/media/90572/download) (last visited June 26, 2019) (the final version hereinafter referred to as “the Guidance”). The Guidance stated that the FDA “does not intend to object to the marketing of products containing the following warning language”:

Allergy alert: Acetaminophen may cause severe skin reactions. Symptoms may include: [bullet] skin reddening [bullet] blisters [bullet] rash If a skin reaction occurs, stop use and seek medical help right away.

Id. at 3. The Guidance further provided:

This guidance does not address alternative allergy warning language that may otherwise misbrand the product.
The recommended allergy warning should appear under the “Warnings” heading section of the Drug Facts label under the subheading “Allergy Alert, ” and, when included, must directly follow the liver warning (21 C.F.R. 201.326) on acetaminophen-containing drug products. FDA recommends that this warning be included on all packaging configurations.

Id. The Guidance also contained the following disclaimer:

This guidance represents the current thinking of the Food and Drug Administration (FDA or Agency) on this topic. It does not establish any rights for any person and is not binding on FDA or the public You can use an alternative approach if it satisfies the requirements of the applicable statutes and regulations. To discuss an alternative approach, contact the FDA office responsible for this guidance as listed on the title page.

Id. at 1.

         D. Preemption Principles Applied to OTC Drugs Marketed Pursuant to a Tentative Final Monograph

         Given the holdings in Wyeth and PLIVA, the question of whether the Plaintiffs' claims in this case are preempted hinges on whether the Defendants had the ability to unilaterally add the Warning at issue to the labels of their products prior to the issuance of the Guidance without violating federal law.[3] PLIVA, 564 U.S. at 620 (“The question for ‘impossibility' is whether the private party could independently do under federal law what state law requires of it.”). The Court finds that the applicable regulatory scheme did not prohibit them from doing so.

         The Defendants argue that the tentative final monograph and certain regulations provide specific warnings that they are required to include on their labels and that they are not permitted to include any additional warnings without FDA approval. However, 21 C.F.R. § 330.10(b) provides that “[a]ny product which fails to conform to an applicable monograph after its effective date is liable to regulatory action, ” and the effective date of a monograph is set forth in the final monograph, see 21 C.F.R. § 330.10(a)(9) (providing that “[t]he monograph shall become effective as specified in” the final order containing the monograph). A tentative final monograph has no “effective date, ” because it is simply a proposed rule. See Internal Analgesic, Antipyretic, and Antirheumatic Drug Products for Over-the-Counter Human Use; Tentative Final Monograph, 53 FR 46204-01 (Nov. 16, 1988) (“In order to conform to terminology used in the OTC drug review regulations (21 C.F.R. § 330.10), the present document is designated as a ‘tentative final monograph.' Its legal status, however, is that of a proposed rule.”). By its very terms, the tentative final monograph does not have the force of law; therefore, the Defendants cannot be in violation of federal law by failing to comply with it.

         Not surprisingly, then, the Defendants point to no applicable provision that provides for regulatory action for the failure to conform to a tentative final monograph.[4] Perrigo does, however, cite to a document that supports the contrary position-a draft guidance document issued by the FDA that provides:

generally products subject to an ongoing . . . OTC drug monograph proceeding (i.e., an OTC product that is part of the OTC drug review for which an effective final monograph is not yet in place) may remain on the market during the pendency of that proceeding and any additional period specifically provided in the proceeding (such as a delay in the effective date of a final OTC drug monograph). However, once the relevant . . . OTC drug monograph proceeding is completed and any additional grace period specifically provided in the proceeding has expired, all products that are not in compliance with the conditions for marketing determined in that proceeding are subject to enforcement action at any time without further notice (see, for example, 21 C.F.R. 310.6).

U.S. Department of Health and Human Services, Food and Drug Administration, Center for Drug Evaluation and Research, “Draft Guidance: Marketed Unapproved Drugs - Compliance Policy Guide, ” Sec. 440.100, Marketed New Drugs Without Approved NDAs or ANDAs (Sept. 19, 2011) (footnotes omitted) (found at Dkt. No. 86-2). In other words, the obligation to comply with “the conditions for marketing determined in [a monograph] proceeding” does not attach until a final monograph becomes effective. Consistent with this guidance, the Court finds no statutory or regulatory authority for the proposition that the Defendants would have been subject to regulatory enforcement based upon the failure to conform to the requirements of the tentative final monograph.

         Next, the Defendants argue that “[c]ontrolling regulations for monograph OTC products provide that a manufacturer is ‘liable to regulatory action' for deviating from the labeling mandated by the applicable monograph or other binding regulations.” See, e.g., Dkt. No. 86 at 31-32. For this proposition, the Defendants point to 21 C.F.R. § 330.1, which provides that:

An over-the-counter (OTC) drug listed in this subchapter is generally recognized as safe and effective and is not misbranded if it meets each of the conditions contained in this part and each of the conditions contained in any applicable monograph. Any product which fails to conform to each of the conditions contained in this part and in an applicable monograph is liable to regulatory action.

         However, “applicable monograph” in that regulation refers to a final monograph, not a tentative final monograph; to read it otherwise would contradict 21 C.F.R. § 330.10(b), which provides for regulatory action only after the effective date of a monograph. Thus, for acetaminophen there is no “applicable monograph.” The Defendants further argue that the following language in 21 C.F.R. § 330.10(c)(2) limits warnings to those set forth in the tentative final monograph:

Any other labeling under this subchapter and subchapter C et seq. of this chapter shall be stated in the exact language where exact language has been established and identified by quotation marks in an applicable OTC drug monograph or by regulation (e.g., § 201.63 of this chapter), except as provided in paragraphs (i) and (j) of this section.

         Again, however, the Court finds that “an applicable OTC drug monograph” refers to a final monograph, not a tentative one. And while certain label requirements, including warnings, applicable to acetaminophen are set forth in the regulations, the Court finds that the exact language requirement refers to the language used to convey each of the warnings required by the applicable regulations; it is not a requirement that only those warnings be included. The fact that additional warnings beyond those set forth in the regulations are permitted is, of course, demonstrated by the FDA's recommendation that the manufacturers of such products add the Warning.

         The Defendants also cite to 21 C.F.R. § 330.13(b)(2), which provides:

An OTC drug product covered by paragraph (b)(1) of this section which is marketed after the date of publication in the Federal Register of a proposed monograph but prior to the effective date of a final monograph shall be subject to the risk that the Commissioner may not accept the panel's recommendation and may instead adopt a different position that may require relabeling, recall, or other regulatory action. The Commissioner may state such position at any time by notice in the Federal Register, either separately or as part of another document; appropriate regulatory action will commence immediately and will not await publication of a final monograph. Marketing of such a product with a formulation or labeling not in accord with a proposed monograph or tentative final monograph also may result in regulatory action against the product, the marketer, or both.

         But it does not appear that acetaminophen is “[a]n OTC drug product covered by paragraph (b)(1), ” which is limited to OTC drug products that contain “[a]n active ingredient limited, on or after May 11, 1972, to prescription use” or “[a]n active ingredient at a dosage level higher than that available in an OTC drug product on December 4, 1975.” The fact that this provision expressly states that labeling not in conformance with a tentative final monograph may result in regulatory action for these limited categories of OTC drugs is consistent with the fact that such regulatory action will not be taken with regard to other OTC drugs.

         Taking into consideration the entire regulatory scheme under which the Defendants products are currently permitted to be marketed, the Court finds that, unlike the ANDA manufacturers in PLIVA, the Defendants would not have violated the law by the mere act of adding an additional warning to the label of their acetaminophen products. Of course, that does not mean that they could add any warning without consequence; the FDA had the ability to take regulatory action against them if it believed that the content of the warning was improper and warranted such action.[5] That, however, is no different than the situation that was present in Wyeth; an NDA manufacturer that utilizes the CBE process to add a warning may still be subject to regulatory action-the rejection of the new warning-if the FDA believes the new warning to be improper. That possibility is not sufficient to create preemption, however, unless the manufacturer shows by clear evidence that the FDA would not have approved the change, an argument the Defendants have chosen not to make here.

         The Defendants quite reasonably argue that there are policy reasons why uniformity of labeling is preferable and why the FDA would want to limit the warnings on OTC drugs to only those specifically required by the FDA in order to avoid the risks associated with overwarning consumers. However, the Court cannot rewrite the applicable regulatory scheme, even when that scheme has left the Defendants and other drug makers in an unfortunate state of limbo for decades.[6]

         Finally, Defendant Wal-Mart advances an additional reason why it believes the Plaintiffs' claims against it are preempted. Unlike Perrigo and L.N.K., Wal-Mart argues, it did not manufacture the drugs in question, but is merely the retailer that sold them to the Emleys. Wal-Mart asserts that “Courts have consistently held that, under the federal regulatory framework for the sale and labeling of OTC drugs, distributors, pharmacies, or others who merely sell a drug- but do not manufacture it-lack the power to change the drug's label.” Dkt. No. 89 at 4. However, each of the cases cited by Wal-Mart relied upon the fact that, under the relevant regulations, the CBE process found to preclude preemption in Wyeth can only be undertaken by the holder of the NDA. See In re Fosamax (Alendronate Sodium) Prod. Liab. Litig. (No. II), 2012 WL 181411, at *3 (D.N.J. Jan. 17, 2012) (“As a distributor of Fosamax, Watson has no power to change Fosamax labeling. That power lies with the applicant who filed the New Drug Application (NDA) seeking approval to market Fosamax. See 21 U.S.C. § 355(b); 21 C.F.R. § 314.70 (describing the Changes Being Effected or ‘CBE' regulation, which requires that ‘the applicant must notify FDA about each change in each condition established in an approved application.') (emphasis added).”); Brazil v. Janssen Research & Dev. LLC, 196 F.Supp.3d 1351, 1364-65 (N.D.Ga. 2016) (relying on In re Fosamax to reach the same conclusion); In re Lipitor (Atorvastatin Calcium) Mktg., Sales Practices & Prod. Liab. Litig., No. 2: 16-CV-0334, 2016 WL 7368203, at *2 (D.S.C. Nov. 1, 2016) (“As a result of the scheme set forth by the Federal Drug and Cosmetic Act (FDCA), a pharmacy also has no authority to unilaterally change a drug's label. That authority lies with the FDA and/or with Pfizer. See 21 C.F.R. § 314.70 (limiting label changes to those approved by the FDA and ‘Changes Being Effected' or ‘CBE' changes by the ‘applicant,' which is the manufacturer))”; Nelson v. Wal-Mart Stores, INC., No. 4:14CV4-RH/CAS, 2014 WL 12461056, at *2 (N.D. Fla. Mar. 26, 2014) (“As the seller of generic equivalents, Walmart is not free to change the labeling. See, e.g., PLIVA, Inc. v. Mensing, 131 S.Ct. 2567, 2577 (2011).”). None of these cases support Wal-Mart's claim in this case, which does not involve the CBE process.

         Impossibility preemption bars the Plaintiffs' claims against Wal-Mart only if Wal-Mart could not have changed the labels of the products without violating federal law. While Wal-Mart may not, as a practical matter, have had the ability to change the labels based upon its contractual agreement with the manufacturers, Wal-Mart has not pointed to any federal law that it would have been violating by doing so. Accordingly, impossibility preemption does not apply to the Plaintiffs' claims against Wal-Mart.

         For the reasons set forth above, the Defendants' motions for summary judgment on preemption grounds (Dkt. Nos. 85 and 88) and L.N.K.'s motion for summary judgment (Dkt. No. 124) as it relates to preemption are DENIED.

         IV. PERRIGO'S SECOND MOTION FOR SUMMARY JUDGMENT

         In its second motion for summary judgment (Dkt. No. 122), Perrigo asserts several reasons why it believes it is entitled to summary ...


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