In a class-action lawsuit filed by plaintiffs who were allegedly injured by a drug that had obtained Food and Drug Administration (FDA) approval, the defendant manufacturer would normally be shielded from liability by Michigan’s product liability statute because its drug had been approved by the FDA. Such immunity is lost under the statute’s “fraud exception,” however, if the manufacturer intentionally withheld from or misrepresented to the FDA information about the drug that would have caused the FDA to disapprove it. Plaintiffs attempted to preserve their claim against Warner-Lambert’s FDA-approved diabetes drug, Rezulin, by alleging such fraud.
In a similar case, Buckman Co. v. Plaintiffs' Legal Comm., 531 U.S. 341 (2001), the Supreme Court held that the Food, Drug and Cosmetic Act (federal law) preempts state “fraud-on-the-FDA” claims (claims in which the FDA would not have approved the product but for the fraud), as such claims “conflict with the FDA's responsibility to police fraud.” Although the federal district court held that the preemption found in Buckman applied to the claims in this case, the Second Circuit reversed, holding that plaintiffs’ claims were not preempted because they were traditional state tort law claims (such as claims of defective design and defective manufacturing), not claims based on “fraud-on-the-FDA.”
When it accepted the case for review, the Supreme Court agreed to decide two key issues: 1) whether a state court is preempted from finding fraud when a federal agency has found no fraud, as such a finding would interfere with the agency’s critical functions; and 2) whether a state court can step into the shoes of a federal agency and determine that the agency would not have approved a product if fraud had not occurred.
However, on March 3, 2008, just one week after the oral arguments in the case, the Supreme Court split 4 to 4 on these issues, resulting in a simple affirmance, without opinion, of the Second Circuit's decision.
In June of 2007, the NAM opposed congressional proposals that would eliminate FDA preemption relating to warnings and clinical trial requirements for drugs and medical devices. The proposals would permit states to hold manufacturers liable under a patchwork of state laws for failing to adopt warnings that the FDA specifically rejected. They will also allow judges and juries to substitute unscientific reasoning for the FDA’s expert scientific determinations, with a huge potential for conflicting results. This case, relating to assessing the adequacy and accuracy of FDA regulatory proceedings, could similarly lead to conflicting results on a state-by-state basis.