Cases to Watch

JAMES BECK, AUGUST T. HORVATH, WILLIAM JANSSEN, SARA KOBLITZ, LYNN C. TYLER &
ANNE WALSH
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As always, we polled our Top Cases chapter authors for their prognostications on which litigations, regulatory actions, and other developments currently in process have the potential to change the food and drug landscape. Some of the cases described here are appeals or other forms of continuation of important cases discussed in preceding chapters in this volume; others represent new issues that may result in important new rulings and precedents.

Genus Medical Technologies v. FDA[1]

This case, as explained in our 2020 Cases to Watch, asks the D.C. Circuit to limit FDA’s discretion in deciding whether to regulate a medical product—one that meets the statutory definition of a medical device—as a drug rather than a device. Looking at barium sulfate, which FDA does not dispute constitutes a device under the relevant statutory definition, FDA took the position that it could choose whether to regulate the device as a drug at will based on an overlap in their statutory definitions. Here, FDA did so in an effort to regulate all contrast agents, regardless of their mechanism of action, the same.

After undertaking the required regulatory process, Genus sued FDA arguing that the plain language of the statute, when analyzed in context and in accordance with the widely accepted tools of statutory interpretation, requires FDA to regulate any product that meets the definition of a device as a device. The district court held that FDA’s claimed discretion would render superfluous the device definition in the statute. FDA appealed, and the D.C. Circuit affirmed the district court’s decision relying on the long-accepted adage that specific statutory language supersedes general statutory provision. Thus, the D.C. Circuit directed FDA to treat products as devices if they meet the statutory definition of a device. This decision limits FDA’s typically broad discretion and precludes the agency from imposing significant regulatory hurdles and costs based on policy positions rather than the congressionally imposed risk-based regulatory scheme.

As of April 2021, the Department of Justice, on FDA’s behalf, is considering petitioning for a rehearing en banc. Given the significant implications of the case—specifically the limits on FDA discretion—the Department of Justice could also file a Petition for Certiori.

Judge Rotenberg Education Center v. FDA[2]

Can FDA use its banning authority to restrict the practice of medicine? Although FDA has long had the power to ban certain medical devices, the agency has only used its statutory banning authority three times. The first two bans were not challenged in court, but in Judge Rotenberg Education Center v. FDA, petitioners sued FDA to overturn its ban of electrostimulation devices when used to treat aggressive or self-injurious behaviors. On April 23, 2021, a three-judge panel from the U.S. Court of Appeals for the D.C. Circuit heard oral arguments from the parties. The court was focused on understanding why FDA’s action to ban the device when used for one purpose but not another did not run afoul of Congress’s prohibition against FDA doing anything to “limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship,” in other words, the practice of medicine. In the banning regulation, FDA explicitly permitted the banned devices to be used for other purposes, like smoking cessation. The court questioned how a ban of a specific use did not fall squarely into a restriction of a health care practitioner’s decision-making for how to treat a patient. This case is notable because of the novelty of FDA’s use of its banning authority and the implications on FDA’s ability to regulate the practice of medicine.

In re Zantac (Ranitidine) Products Liability Litigation[3]

In In re Zantac (Ranitidine) Products Liability Litigation,[4] the court held, first, that none of thirty-five jurisdictions would recognize innovator liability, the theory that seeks to hold branded drug manufacturers liable for defects in generic drug labeling where claims against the generic manufacturer are preempted. Second, with respect to the two jurisdictions, California and Massachusetts, that have recognized some variant of innovator liability, the court held that residents of those states were unable to obtain personal jurisdiction over the branded manufacturer because that manufacturer had no jurisdictional contacts in either state, since they were not alleged to have sold anything to plaintiff. In re Zantac has been appealed to the Eleventh Circuit, which can be expected to rule on these issues sometime in 2021.

Johnson & Johnson v. Ingham[5]

This is a series of lawsuits alleging ovarian cancer from the use of Johnson’s Baby Powder. Separate complaints filed by twenty-two different plaintiffs were consolidated for trial, at their request, before a common jury in Missouri State court. The claims that were to be tried together varied markedly, from patients in remission to patients who had died. Nonetheless, after the consolidated presentation, the common jury awarded each plaintiff $25 million in compensatory damages and imposed an additional $1.6 billion in punitive damages.

Defendant Johnson & Johnson sought review in a certiorari petition filed in March 2021. A decision on the petition is unlikely before Fall 2021. The appeal seeks review on three issues, including the constitutionality of both the punitive award and the exercise of personal jurisdiction. The lead issue, however, is what merits special attention by products litigators because of its potentially far-reaching effects across the inventory of products cases pending in both federal and state courts—does consolidation of different products liability claims pressed by different injured plaintiffs before a single jury implicate due process concerns under the federal Constitution, and if so, what is the proper analysis for assessing that constitutional fitness?

Clark v. Westbrae Natural, Inc.[6]

As reported in a chapter earlier in this volume, several U.S. district courts in the Second and Ninth Circuits have considered food labeling suits alleging that applying the flavor designator “vanilla” to a food such as ice cream or non-dairy milk, sometimes with additional material such as images of a vanilla flower or seed pod, implies to consumers that all of the vanilla flavoring in the product is derived from the vanilla plant, as opposed to some of it being from other flavors. One of the California cases, Clark v. Westbrae Natural, Inc.,[7] has been appealed to the Ninth Circuit Court of Appeals. Plaintiffs contest the district court’s findings that they did not adequately plead facts in support of their allegations that a reasonable consumer would conclude from viewing a typical vanilla product package that all of the flavoring in the product must come from the vanilla plant, and further contest the finding that they did not adequately plead a violation of FDA regulations.

In their arguments at the district court level in the various vanilla and related flavoring cases, plaintiffs have argued for a permissive interpretation of Williams v. Gerber Products Co.,[8] essentially maintaining that almost any allegation about consumer perceptions of advertising or of food labeling must be taken as true for purposes of a Rule 12 motion to dismiss. This interpretation has been undercut by more recent Ninth Circuit decisions such as Becerra v. Dr Pepper/Seven Up, Inc.,[9] which supported a district court’s duty to examine the plausibility of such allegations critically and with attention to context, even at the pleading stage. The outcome of this appeal will have implications for the approach that courts in the Ninth Circuit take to reviewing the plausibility of allegations of deceptive food labeling and other marketing materials at this stage of the case.

Seife v. U.S. Department of Health and Human Services[10]

In Seife v. U.S. Dep’t of Health and Human Servs., the district court entered summary judgment in favor of FDA and Sarepta Pharmaceuticals (“Sarepta”) that certain information from clinical trials sponsored by Sarepta was exempt from disclosure under the Freedom of Information Act as “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”[11] Four categories of information from two studies were at issue: (1) clinical study procedures; (2) clinical study results; (3) exploratory endpoints; and (4) unrelated adverse events.

The court applied the Supreme Court’s recent decision in Food Marketing Institute v. Argus Leader Media[12] that “confidential” in § 552(b)(4) means “customarily [and actually] kept private, or at least closely held, by the person imparting it.”[13] The Supreme Court also noted, but did not decide, that for this exemption to apply, it may be necessary that the information “was provided to the government under an assurance of privacy.”[14] In Seife, the district court found that both conditions were satisfied. Seife argued that the information was not “confidential” because Sarepta publicized it when submitting an application for market approval of the relevant drug to the European Medicines Agency (EMA) knowing that, regardless of the outcome, the EMA would publish the data.” The district court rejected this argument, however, stating that Seife provided no evidence that the EMA published information identical to the withholdings at issue.

The district court noted that Congress amended FOIA in 2016 to add an additional “foreseeable harm” requirement. Specifically, FOIA now provides that an agency “shall . . . withhold information . . . only if . . . (I) the agency reasonably foresees that disclosure would harm an interest protected by an exemption . . . ; or (II) disclosure is prohibited by law.”[15] The court found disclosure of the clinical trial information at issue was “prohibited by law,” namely, 21 C.F.R. §§ 20.61 and 314.430. The court also applied the “foreseeable harm” prong to some of the information at issue and found that it was satisfied. It noted that the pharmaceutical industry is highly competitive, that Sarepta’s competitors were attempting to develop a competing drug, and that disclosure of the information would help its competitors and harm Sarepta.

Seife has appealed the district court’s decision to the Second Circuit, where the case is pending under appeal number 20-4072.

 

**   We extend extra thanks to these contributing authors to other chapters of this volume who also suggested and summarized cases to watch for this chapter.

[1]    Docket No. 20-5026 (D.C. Cir. 2021).

[2]    No. 20-1087 (D. C. Cir.).

[3]    __ (11^th Cir.).

[4]    MDL No. 2924, __ F. Supp.3d __, 2020 WL 7866660 (S.D. Fla. Dec. 31, 2020).

[5]    No. 20-1223 (Sup. Ct.).

[6]    No. 21-15749 (9^th Cir.).

[7]    No. 3:20-cv-03221-JSC (N.D. Cal.).

[8]    552 F.3d 934 (9th Cir. 2008).

[9]    945 F.3d 1225 (9th Cir. 2019).

[10]  No. 20-4072 (2d Cir.).

[11]  5 U.S.C. § 552(b)(4).

[12]  139 S. Ct. 915 (2019).

[13]  Id. at 2363.

[14]  Id.

[15]  5 U.S.C. § 552(a)(8)(A)(i).