Petition for Writ of Certiorari — Hope Medical Enterprises, Inc., dba Hope Pharmaceuticals, Petitioner v. Fagron Compounding Services, LLC, et al.
Supreme Court briefJan 16, 2024
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NO. ___________
In the
Supreme Court of the United States
________________
HOPE MEDICAL ENTERPRISES, INC.
DBA Hope Pharmaceuticals,
Petitioner,
v.
FAGRON COMPOUNDING SERVICES, LLC; JCB
LABORATORIES, LLC; ANAZAOHEALTH CORPORATION;
COAST QUALIFY PHARMACY, LLC,
Respondents.
________________
On Petition for Writ of Certiorari
to the United States Court of Appeals
for the Ninth Circuit
________________
PETITION FOR WRIT OF CERTIORARI
________________
Joseph N. Akrotirianakis
Aaron Craig
KING & SPALDING LLP
633 W 5th Street
Suite 1600
Los Angeles, CA 90071
Matthew V.H. Noller
KING & SPALDING LLP
50 California Street
Suite 3300
San Francisco, CA 94105
Jeffrey S. Bucholtz
Counsel of Record
KING & SPALDING LLP
1700 Pennsylvania Ave. NW
Washington, DC 20006
(202) 737-0500
jbucholtz@kslaw.com
Counsel for Petitioner
January 16, 2024
QUESTION PRESENTED
Before Congress enacted the Food, Drug, and
Cosmetic Act, 21 U.S.C. § 301 et seq., the States had
the exclusive power to regulate drug sales within their
borders. Wyeth v. Levine, 555 U.S. 555, 566 (2009).
After the FDCA’s enactment, States continued to
exercise their historical power to regulate drug safety
by passing statutes that prohibit the in-state sale of
drugs that have not been approved under the FDCA
by the federal Food and Drug Administration. Until
recently, all courts had agreed that the FDCA does not
preempt such state statutes. E.g., Allergan, Inc. v.
Athena Cosmetics, Inc., 738 F.3d 1350, 1354–56 (Fed.
Cir. 2013).
The Ninth Circuit created a circuit split in Nexus
Pharmaceuticals, Inc. v. Central Admixture Pharmacy
Services, Inc., 48 F.4th 1040 (9th Cir. 2022), where it
held that the FDCA preempts state drug-approval
statutes even when there is no difference in the
requirements of state and federal law. In the decision
below, the Ninth Circuit followed Nexus to hold that
the FDCA preempts the enforcement of state drugapproval statutes against an unapproved drug that is
also undisputedly illegal under the FDCA.
The question presented is:
Whether the FDCA preempts state laws
prohibiting the in-state sale of unapproved drugs
whose sale is also prohibited as a matter of federal law
by the FDCA.
ii
RELATED PROCEEDINGS
Hope Med. Enters., Inc. v. Fagron Compounding
Servs., LLC, No. 22-55173, 2023 WL 4758454 (9th Cir.
July 26, 2023)
Hope Med. Enters., Inc. v. Fagron Compounding
Servs., LLC, No. 21-55165, 2021 WL 5860886 (9th Cir.
Dec. 10, 2021)
Hope Med. Enters., Inc. v. Fagron Compounding
Servs., LLC, No. 2:19-cv-07748, 2021 WL 4963516
(C.D. Cal. Oct. 26, 2021)
Hope Med. Enters., Inc. v. Fagron Compounding
Servs., LLC, No. 2:19-cv-07748, 2021 WL 753566 (C.D.
Cal. Jan. 25, 2021)
Hope Med. Enters., Inc. v. Fagron Compounding
Servs., LLC, No. 2:19-cv-07748, 2020 WL 3803029
(C.D. Cal. July 7, 2020)
iii
CORPORATE DISCLOSURE STATEMENT
Petitioner Hope Medical Enterprises, Inc., d/b/a
Hope Pharmaceuticals, is a privately owned
corporation. It has no parent corporation, and no
publicly held corporation owns 10% or more of its
stock.
iv
TABLE OF CONTENTS
Question Presented ..................................................... i
Related Proceedings ................................................... ii
Corporate Disclosure Statement ............................... iii
Table of Authorities .................................................. vii
Opinions Below ........................................................... 1
Jurisdiction ................................................................. 1
Constitutional and Statutory Provisions Involved ... 1
Statement ................................................................... 1
A. Legal background ......................................... 1
B. District court litigation .............................. 12
C. The Ninth Circuit’s decision ...................... 17
Reasons for Granting the Petition ........................... 18
I.
The decision below and Nexus create multiple
conflicts that this Court should resolve ............ 18
A. The Ninth Circuit’s rule conflicts with
decisions from the Federal, Fifth, and
First Circuits and the California
Supreme Court ........................................... 19
B. The Ninth Circuit’s rule conflicts with
this Court’s precedent ................................ 24
II. This case is an ideal vehicle to address an
important question about States’ power to
regulate drug safety within their borders ........ 31
Conclusion................................................................. 36
v
Appendix
Appendix A
Memorandum Opinion, Hope Med. Enters.,
Inc. v. Fagron Compounding Servs., LLC,
No. 22-55173 (9th Cir. July 26, 2023) ...... App-1
Appendix B
Findings of Fact and Conclusions of Law,
Hope Med. Enters., Inc. v. Fagron
Compounding Servs., LLC, No. 2:19-cv07748-CAS(PLAx) (C.D. Cal. Oct. 26,
2021) .......................................................... App-4
Appendix C
Redacted In Chambers Decision Granting
Plaintiff’s
Motion
for
Preliminary
Injunction, Hope Med. Enters., Inc. v.
Fagron
Compounding
Servs.,
LLC,
No. 2:19-cv-07748-CAS(PLAx) (C.D. Cal.
July 7, 2020)............................................ App-69
Appendix D
Order Denying Rehearing En Banc, Hope
Med. Enters., Inc. v. Fagron Compounding
Servs., LLC, No. 22-55173 (9th Cir. Oct. 2,
2023) ...................................................... App-130
Appendix E
Order Granting the Motion to Stay the
Mandate, Hope Med. Enters., Inc. v. Fagron
Compounding Servs., LLC, No. 22-55173
(9th Cir. Oct. 27, 2023) ......................... App-131
vi
Appendix F
Relevant Constitutional Provisions and Statutes
U.S. Const., art. VI, cl. 2
(U.S. Supremacy Clause) ...................... App-133
21 U.S.C. § 337 ...................................... App-134
21 U.S.C. § 353a .................................... App-135
21 U.S.C. § 353b .................................... App-140
21 U.S.C. § 355 ...................................... App-154
Cal. Bus. & Prof. Code § 17200 ............. App-278
Cal. Health & Safety Code § 111550 .... App-278
Conn. Gen. Stat. § 21a-110 ................... App-280
Conn. Gen. Stat. § 42-110b ................... App-281
Fla. Stat. § 499.023 ............................... App-283
Fla. Stat. § 501.203 ............................... App-283
Fla. Stat. § 501.204 ............................... App-285
Fla. Stat. § 501.211 ............................... App-285
S.C. Code Ann. § 39-5-20....................... App-287
S.C. Code Ann. § 39-23-70..................... App-287
Tenn. Code Ann. § 47-18-104 ................ App-292
Tenn. Code Ann. § 53-1-110 .................. App-312
vii
TABLE OF AUTHORITIES
Cases
Allergan, Inc. v. Athena Cosmetics, Inc.,
738 F.3d 1350 (Fed. Cir. 2013) ............ 10, 19, 20, 22
Arizona v. United States,
567 U.S. 387 (2012)................................................ 25
Asbell v. Kansas,
209 U.S. 251 (1908)................................................ 25
Athenex Inc. v. Azar,
397 F. Supp. 3d 56 (D.D.C. 2019) ........................ 6, 7
Azurity Pharms., Inc. v. Edge Pharma, LLC,
45 F.4th 479 (1st Cir. 2022)................... 6, 23, 24, 31
Bass v. Stryker Corp.,
669 F.3d 501 (5th Cir. 2012).................................. 22
Bates v. Dow Agrosciences LLC,
544 U.S. 431 (2005)................................................ 34
Buckman Co. v. Plaintiffs’ Legal Comm.,
531 U.S. 341 (2001).......................................... 28, 29
California v. ARC Am. Corp.,
490 U.S. 93 (1989).............................................. 5, 31
California v. Zook,
336 U.S. 725 (1949).......................................... 22, 25
Corley v. United States,
556 U.S. 303 (2009)................................................ 27
Eli Lilly & Co. v. Revive Rx, LLC,
2023 WL 8936731 (S.D. Tex. Dec. 27, 2023) ......... 32
Farm Raised Salmon Cases,
175 P.3d 1170 (Cal. 2008) .......................... 10, 20, 21
viii
Geier v. Am. Honda Motor Co.,
529 U.S. 861 (2000)................................................ 21
Gilbert v. Minnesota,
254 U.S. 325 (1920)................................................ 25
Hope Med. Enters., Inc. v. Fagron
Compounding Servs., LLC,
2021 WL 5860886 (9th Cir. Dec. 10, 2021) ............. 7
Hughes v. Bos. Sci. Corp.,
631 F.3d 762 (5th Cir. 2011)............................ 10, 22
Kansas v. Garcia,
140 S. Ct. 791 (2020)............................ 23, 24, 28, 34
Medtronic, Inc. v. Lohr,
518 U.S. 470 (1996)................................................ 26
Merrell Dow Pharms. Inc. v. Thompson,
478 U.S. 804 (1986).......................................... 29, 30
Nexus Pharms., Inc. v. Cent. Admixture
Pharm. Servs., Inc.,
48 F.4th 1040 (9th Cir. 2022) ......... 6, 11, 12, 19, 20,
23, 27, 30, 31, 32, 34
Novo Nordisk, Inc.
v. Brooksville Pharms. Inc.,
2023 WL 7385819 (M.D. Fla. Nov. 8, 2023) .......... 32
PhotoMedex, Inc. v. Irwin,
601 F.3d 919 (9th Cir. 2010).................................. 31
POM Wonderful LLC v. Coca-Cola Co.,
573 U.S. 102 (2014).................................... 23, 29, 30
Pom Wonderful LLC v. Coca-Cola Co.,
679 F.3d 1170 (9th Cir. 2012)................................ 29
ix
Riegel v. Medtronic, Inc.,
552 U.S. 312 (2008)................................................ 26
Spano ex rel. C.S. v. Whole Foods, Inc.,
65 F.4th 260 (5th Cir. 2023) .................................. 22
Thompson v. W. States Med. Ctr.,
535 U.S. 357 (2002).............................................. 5, 9
Va. Uranium, Inc. v. Warren,
139 S. Ct. 1894 (2019)............................................ 34
Williamson v. Mazda Motor of Am., Inc.,
562 U.S. 323 (2011)................................................ 21
Wyeth v. Levine,
555 U.S. 555 (2009)........... 2, 3, 9, 10, 21, 24, 25, 26,
27, 28, 30, 31, 32, 33, 34
Zyla Life Scis., LLC
v. Wells Pharma of Houston, LLC,
2023 WL 6301651
(S.D. Tex. Sept. 27, 2023) ...................................... 32
Constitutional Provisions
U.S. Const., art. VI, cl. 2 .......................................... 28
Statutes
21 U.S.C. § 337 ........................................................... 9
21 U.S.C. § 353a ................................................. 5, 6, 8
21 U.S.C. § 353b ........................... 5, 6, 7, 8, 14, 15, 16
21 U.S.C. § 355 ........................................................... 2
21 U.S.C. § 360k(a)(1)............................................... 26
28 U.S.C. § 1254 ......................................................... 1
x
Federal Food, Drug, and Cosmetic Act
(“FDCA”), Pub. L. No. 75-717,
52 Stat. 1040 (1938) ............................................. 2, 9
Drug Amendments of 1962,
Pub. L. No. 87-781, 76 Stat. 780 ................. 3, 10, 32
Drug Quality and Security Act,
Pub. L. No. 113-54, 127 Stat. 587 (2013) ................ 8
Alaska Stat. § 17.20.110(a)(1) .................................... 3
Ariz. Rev. Stat. § 32-1962 ........................................... 3
Ark. Code § 20-56-202(1)(E) ....................................... 3
Ark. Code § 20-56-215(1) ............................................ 3
Cal. Bus. & Prof. Code § 17200 .................................. 5
Cal. Health & Safety Code § 111550 ..................... 3, 4
Cal. Code Regs. tit. 16, § 1735.2 ................................ 9
Colo. Rev. Stat. § 12-280-131(1) ................................. 3
Conn. Gen. Stat. § 21a-110 .................................... 3, 4
Conn. Gen. Stat. § 42-110b ........................................ 5
Fla. Stat. § 499.023................................................. 3, 4
Fla. Stat. § 501.203..................................................... 5
Fla. Stat. § 501.204..................................................... 5
Fla. Stat. § 501.211..................................................... 5
Ga. Code Ann. § 26-3-10 ............................................. 3
10 Guam Code Ann. § 40117 ...................................... 3
Haw. Rev. Stat. § 328-17 ............................................ 3
Idaho Code § 37-128 ................................................... 3
xi
410 Ill. Comp. Stat. 620/17 ......................................... 3
Ind. Code § 16-42-3-7 .................................................. 3
Iowa Code § 126.12 ..................................................... 3
Kan. Stat. § 65-669a ................................................... 3
Ky. Rev. Stat. Ann. § 217.075 .................................... 3
Md. Code Ann., Health-Gen. § 21-223 ....................... 3
Mich. Comp. Laws § 333.7402(1) ............................... 3
Mo. Rev. Stat. § 196.105 ............................................. 3
Mont. Code Ann. § 50-31-311 ..................................... 3
N.C. Gen. Stat. § 106-135 ........................................... 3
N.D. Cent. Code § 19-02.1-16 ..................................... 3
N.J. Stat. Ann. § 24:6A-1............................................ 3
N.M. Stat. Ann. § 26-1-14........................................... 3
N.Y. Educ. Law § 6817(1)(a) ...................................... 3
Nev. Rev. Stat. § 585.490 ........................................... 3
Ohio Rev. Code Ann. § 3715.65 .................................. 3
Or. Rev. Stat. § 689.135(13) ....................................... 3
35 Pa. Cons. Stat. § 780-113(36) ................................ 3
P.R. Laws Ann. tit. 24, § 726...................................... 3
R.I. Gen. Laws § 21-31-16 .......................................... 3
S.C. Code Ann. § 39-23-70 .................................. 3, 4, 5
S.C. Code Ann. § 39-5-20 ............................................ 5
Tenn. Code Ann. § 47-18-104 ..................................... 5
Tenn. Code Ann. § 53-1-110 ................................... 3, 4
xii
Tex. Health & Safety Code Ann. § 431.114 ............... 3
Va. Code § 54.1-3421 .................................................. 3
Vt. Stat. Ann. tit. 18, § 4065 ...................................... 3
Wash. Rev. Code § 69.04.570 ..................................... 3
Wyo. Stat. Ann. § 35-7-118......................................... 3
Regulations & Rules
87 Fed. Reg. 4240 (Jan. 27, 2022) ................ 14, 15, 29
S. Ct. R. 10 ................................................................ 18
Other Authorities
Fagron North America,
Comment Letter on FDA Notice
Regarding List of Bulk Drug Substances for
Which There Is a Clinical Need Under
Section 503B of the FDCA (Sept. 29, 2020),
available at https://downloads.
regulations.gov/FDA-2018-N-32400256/attachment_1.pdf .......................................... 15
FDA,
Compounding Information for States
(Mar. 22, 2023), https://www.fda.gov/drugs/
human-drug-compounding/compoundinginformation-states..................................................... 8
xiii
FDA,
Guidance for Industry:
Evaluation of Bulk Drug Substances
Nominated for Use in Compounding
Under Section 503B of the Federal Food,
Drug, and Cosmetic Act (Mar. 2019),
https://www.fda.gov/media/121315/
download .................................................................. 7
FDA,
Memorandum of Understanding
Addressing Certain Distributions of
Compounded Drugs (Oct. 10, 2022),
https://www.fda.gov/drugs/human-drugcompounding/memorandumunderstanding-addressing-certaindistributions-compounded-drugs ............................ 8
Pew Charitable Trs.,
State Oversight of Drug
Compounding (Feb. 2018), available at
https://www.pewtrusts.org/en/research-andanalysis/reports/2018/02/state-oversight-ofdrug-compounding ................................................... 9
U.S. Br. as Amicus Curiae,
Athena Cosmetics, Inc. v. Allergan, Inc.,
576 U.S. 1054 (2015) (No. 13-1379),
2015 WL 2457643 ............................ 4, 10, 20, 28, 33
U.S. Br. as Amicus Curiae,
Albertson’s, Inc. v. Kanter,
555 U.S. 1097 (2009) (No. 07-1327),
2008 WL 5151069 ...................................... 10, 21, 33
PETITION FOR WRIT OF CERTIORARI
Petitioner Hope Medical Enterprises, Inc.,
respectfully petitions for a writ of certiorari to review
the judgment of the Ninth Circuit.
OPINIONS BELOW
The Ninth Circuit’s decision (App.1–3) is
available at 2023 WL 4758454. The Ninth Circuit’s
order denying rehearing en banc (App.130) is
unpublished, as is the Ninth Circuit’s order staying its
mandate (App.131–32). The district court’s post-trial
findings of fact and conclusions of law (App.4–68) are
available at 2021 WL 4963516. The district court’s
redacted order granting Hope’s motion for a
preliminary injunction (App.69–129) is available at
2020 WL 3803029.
JURISDICTION
The Ninth Circuit issued its decision on July 26,
2023, and denied rehearing on October 2, 2023. On
December 17, 2023, Justice Kagan granted Hope’s
application to extend the deadline for this petition
until January 16, 2024. This Court has jurisdiction
under 28 U.S.C. § 1254(1).
CONSTITUTIONAL AND STATUTORY
PROVISIONS INVOLVED
Relevant constitutional and statutory provisions
are reproduced in the Appendix.
STATEMENT
A. Legal background
1. The decision below all but eliminates States’
power to regulate the in-state sale of drugs that have
2
not been reviewed for safety or approved by any
government body. At the Founding, however, that
power belonged exclusively to the States. Wyeth v.
Levine, 555 U.S. 555, 566 (2009). In 1906 Congress
enacted its “first significant public health law,” which
“prohibited the manufacture or interstate shipment of
adulterated or misbranded drugs.” Id. Even then,
though, the federal government did not review or
approve drugs before sale. Id.
That changed in 1938 when Congress passed the
Food, Drug, and Cosmetic Act with its “provision for
premarket approval of new drugs.” Id. The premarket
approval requirement now appears in § 505 of the
FDCA and provides that “[n]o person” may “introduce
or deliver for introduction into interstate commerce
any new drug” unless FDA has first “approv[ed]” an
“application.” 21 U.S.C. § 355(a). The premarket
approval requirement “protect[s] the public health” by
“assur[ing] the safety, effectiveness, and reliability of
drugs.” Wyeth, 555 U.S. at 567 (cleaned up).
2. The FDCA, like the 1906 Act before it,
“supplemented” but did not override the “protection
for consumers already provided by state regulation.”
Id. at 566. While expanding FDA’s authority,
Congress still “took care to preserve state law.” Id. at
567. The original FDCA presumed that States would
regulate drug sales alongside the federal government.
See Federal Food, Drug, and Cosmetic Act (“FDCA”),
Pub. L. No. 75-717, ch. 675, § 304(d), 52 Stat. 1040,
1045 (1938) (providing that certain drugs “shall not be
sold or disposed of contrary to the provisions of this
Act or the laws of any State … in which sold”
(emphasis added)). And when Congress amended the
3
prescription-drug provisions of the FDCA in 1962, it
“added a saving clause, indicating that a provision of
state law would only be invalidated upon a ‘direct and
positive conflict’ with the FDCA.” Wyeth, 555 U.S. at
567 (quoting Drug Amendments of 1962, Pub. L. No.
87-781, § 202, 76 Stat. 780, 793). Congress has never
enacted an express-preemption provision for state
laws regulating prescription drugs. Id. at 574. State
and federal drug regulations have thus “coexiste[d]”
for the FDCA’s entire 85-year history. Id. at 581.
In particular, most States have enacted laws that
prohibit the in-state sale of a drug that has not
received premarket approval from FDA or from an
appropriate state agency. 1 And several States have
“act[ed] within [their] historic[al] purview to regulate
health and safety” by “authorizing private suits to
enjoin the intrastate distribution, sale, and marketing
1 Alaska Stat. § 17.20.110(a)(1); Ariz. Rev. Stat. § 32-1962; Ark.
Code §§ 20-56-202(1)(E), 20-56-215(1); Cal. Health & Safety Code
§ 111550; Colo. Rev. Stat. § 12-280-131(1); Conn. Gen. Stat.
§ 21a-110; Fla. Stat. § 499.023; Ga. Code Ann. § 26-3-10; Haw.
Rev. Stat. § 328-17; Idaho Code § 37-128; 410 Ill. Comp. Stat.
620/17; Ind. Code § 16-42-3-7; Iowa Code § 126.12; Kan. Stat.
§ 65-669a; Ky. Rev. Stat. Ann. § 217.075; Md. Code Ann., HealthGen. § 21-223; Mich. Comp. Laws § 333.7402(1); Mo. Rev. Stat.
§ 196.105; Mont. Code Ann. § 50-31-311; Nev. Rev. Stat.
§ 585.490; N.J. Stat. Ann. § 24:6A-1; N.M. Stat. Ann. § 26-1-14;
N.Y. Educ. Law § 6817(1)(a); N.C. Gen. Stat. § 106-135; N.D.
Cent. Code § 19-02.1-16; Ohio Rev. Code Ann. § 3715.65; Or. Rev.
Stat. § 689.135(13); 35 Pa. Cons. Stat. § 780-113(36); R.I. Gen.
Laws § 21-31-16; S.C. Code Ann. § 39-23-70; Tenn. Code Ann.
§ 53-1-110; Tex. Health & Safety Code Ann. § 431.114; Vt. Stat.
Ann. tit. 18, § 4065; Va. Code § 54.1-3421; Wash. Rev. Code
§ 69.04.570; Wyo. Stat. Ann. § 35-7-118; see also 10 Guam Code
Ann. § 40117; P.R. Laws Ann. tit. 24, § 726.
4
of an unapproved drug.” U.S. Br. as Amicus Curiae
16–17, Athena Cosmetics, Inc. v. Allergan, Inc., 576
U.S. 1054 (2015) (No. 13-1379), 2015 WL 2457643
(“U.S. Athena Br.”).
This case involves the drug-approval laws of five
States: California, Connecticut, Florida, Tennessee,
and South Carolina. California’s “Sherman Law”
provides that “[n]o person shall sell, deliver, or give
away any new drug” unless (1) “[a] new drug
application has been approved for it … under Section
505 of the [FDCA]” or (2) the California Department
of Health Services “has approved a new drug or device
application for that drug.” Cal. Health & Safety Code
§ 111550(a)–(b). Connecticut prohibits the sale of “any
new drug unless … an application with respect thereto
has been approved under Section [505] of the [FDCA].”
Conn. Gen. Stat. § 21a-110. Florida prohibits the instate sale of “any new drug unless an approved
application has become effective under s. 505 of the
[FDCA] or unless otherwise permitted by the
Secretary of the United States Department of Health
and Human Services.” Fla. Stat. § 499.023. Tennessee
prohibits the sale of “any new drug unless an
application with respect to that drug has become
effective under § 505 of the [FDCA].” Tenn. Code Ann.
§ 53-1-110. And South Carolina prohibits the sale of
“any new drug” unless the relevant state agency
approves the drug or “an application with respect
thereto has been approved … under § 505 of the
[FDCA].” S.C. Code Ann. § 39-23-70(a).
As part of the “long history of state common-law
and statutory remedies against … unfair business
practices,” California v. ARC Am. Corp., 490 U.S. 93,
5
101 (1989), these five States have also enacted
consumer-protection laws that allow private litigants
to sue based on violations of other state laws. Cal. Bus.
& Prof. Code § 17200; Fla. Stat. §§ 501.203, 501.204,
501.211; Tenn. Code Ann. § 47-18-104; S.C. Code Ann.
§§ 39-5-20, 39-23-70; Conn. Gen. Stat. § 42-110b. All
five States’ consumer-protection laws authorize suits
to enforce the States’ drug-approval laws. App.38, 40,
42–46 ¶¶ 24, 32, 38, 44, 50–51.
3. The FDCA contains an exception from § 505’s
premarket approval requirement for lawfully
“compounded” drugs. 21 U.S.C. §§ 353a, 353b.
Traditionally,
“compounding”
referred
to
a
pharmacist’s “combin[ing], mix[ing], or alter[ing]
ingredients to create a medication tailored to the
needs of an individual patient.” Thompson v. W. States
Med. Ctr., 535 U.S. 357, 360–61 (2002). The practice
of pharmacy, like other professions, was traditionally
the province of state, not federal, regulation, and until
the early 1990s “FDA generally left regulation of
compounding to the States.” Id. at 361–62.
If
not
appropriately
confined,
however,
“compounding” can become a fig leaf for the large-scale
manufacturing of unapproved drugs. “FDA eventually
became
concerned”
that
“pharmacists
were
manufacturing and selling drugs under the guise of
compounding, thereby avoiding the FDCA’s new drug
requirements.” Id. Following a 2012 “catastrophe”
involving compounding—“a mass outbreak of deadly
meningitis caused by contaminated compounded
drugs”—Congress revisited the FDCA’s compounding
provisions, amending § 503A and enacting § 503B.
Nexus Pharms., Inc. v. Cent. Admixture Pharm. Servs.,
6
Inc., 48 F.4th 1040, 1043 (9th Cir. 2022); 21 U.S.C.
§§ 353a, 353b.
Sections 503A and 503B impose requirements for
different kinds of compounding that, when satisfied,
exempt a drug from premarket approval under § 505.
Section 503A applies to traditional, patient-specific
pharmacy compounding, while § 503B—the provision
relevant here—governs “outsourcing facilities,” which
(unlike traditional compounders) may produce “‘large
quantities’” of standardized drugs, but only under
limited circumstances justifying reliance on such an
unapproved drug. App.17–18 ¶¶ 27–28 (quoting
Athenex Inc. v. Azar, 397 F. Supp. 3d 56, 59 (D.D.C.
2019)).
Among other restrictions, “[s]ection 503B
specifically limits the types of drugs that can be
compounded at outsourcing facilities” using bulk drug
substances (i.e., a drum of the active ingredient):
either (1) the “bulk drug substance” must “appear on
… a list established by [FDA] identifying bulk drug
substances for which there is a clinical need” for use
by outsourcing facilities (known as the “503B bulks
list”); or (2) the “drug compounded from such bulk
drug substance” must “appear[] on the drug shortage
list” created by FDA. App.18 ¶ 29 (cleaned up); 21
U.S.C. § 353b(a)(2).
A 503B facility cannot compound drugs “using
bulk drug substances” unless it satisfies one of these
two conditions. 21 U.S.C. § 353b(a)(2); see Azurity
Pharms., Inc. v. Edge Pharma, LLC, 45 F.4th 479, 501
(1st Cir. 2022); Athenex, 397 F. Supp. 3d at 60. In this
way, outsourcing facilities fill clinical gaps not met by
commercially available, FDA-approved drugs, but do
7
not displace FDA-approved drugs. See FDA, Guidance
for Industry: Evaluation of Bulk Drug Substances
Nominated for Use in Compounding Under Section
503B of the Federal Food, Drug, and Cosmetic Act
(“503B Bulk Drug Substance Guidance”), at 4–6 (Mar.
2019), https://www.fda.gov/media/121315/download.
To further ensure that outsourcing facilities’
unapproved drugs do not displace FDA-approved
drugs, § 503B also forbids the compounding of drugs
that are “essentially a copy” of approved drugs.
21 U.S.C. § 353b(a). Section 503B contains two
distinct “essentially a copy” provisions. The first
applies to compounded drugs made using a finished,
FDA-“approved drug” as the starting point. Id.
§ 353b(d)(2)(A). This is called “sterile-to-sterile”
compounding. Athenex, 397 F. Supp. 3d at 60. The
other “essentially a copy” provision applies to
compounded drugs that are made using “bulk drug
substance[s],” rather than starting from a finished,
FDA-approved
drug
product.
21
U.S.C.
§ 353b(d)(2)(B).
It is undisputed that only “bulk drug
compounding”—not sterile-to-sterile compounding—is
at issue in this case. Hope Med. Enters., Inc. v. Fagron
Compounding Servs., LLC, 2021 WL 5860886, at *1
(9th Cir. Dec. 10, 2021); see 9th Cir. Supp. Excerpts of
Record (“SER”)-33 ¶ 13. Compounding from bulk drug
substances poses greater threats to patients and the
integrity of the FDA-approval process than sterile-tosterile compounding, so Congress imposed greater
restrictions on it, including a broader “essentially a
copy” prohibition. 503B Bulk Drug Substance
Guidance at 4–6. A compounded drug is “essentially a
8
copy” of an FDA-approved drug if it contains “a bulk
drug substance that is a component of an approved
drug,” unless the 503B facility obtains a statement
from “the prescribing practitioner” attesting that the
compounded drug reflects a “change” to the copied
drug that “produces for an individual patient a clinical
difference.” 21 U.S.C. § 353b(d)(2)(B). These
attestations are known as “clinical difference”
statements. App.19 ¶ 31.
Even after Congress amended § 503A and added
§ 503B to the FDCA in 2013, compounding continues
to be actively regulated by the States. Section 503A
explicitly reflects States’ ongoing role in this area,
directing FDA to enter into a memorandum of
understanding with States regarding informationsharing and enforcement. 21 U.S.C. § 353a(b)(3)(B). 2
FDA recognizes States’ ongoing role with respect to
both 503A and 503B compounders. See FDA,
Compounding Information for States (Mar. 22, 2023),
https://www.fda.gov/drugs/human-drug-compounding/
compounding-information-states; see also Drug Quality
and Security Act, Pub. L. No. 113-54, § 107, 127 Stat.
587, 598 (2013) (requiring report on “the adequacy of
State and Federal efforts to assure the safety of
compounded drugs,” including “a review of the State
laws and policies governing pharmacy compounding”
and “enforcement of State laws and policies”). And
States continue to “regulate compounding practices as
2 See FDA, Memorandum of Understanding Addressing Certain
Distributions of Compounded Drugs (Oct. 10, 2022),
https://www.fda.gov/drugs/human-drug-compounding/memo
randum-understanding-addressing-certain-distributionscompounded-drugs.
9
part of their regulation of pharmacies.” W. States Med.
Ctr., 535 U.S. at 361; see, e.g., Cal. Code Regs. tit. 16,
§ 1735.2; Pew Charitable Trs., State Oversight of
Drug Compounding (Feb. 2018), available at
https://www.pewtrusts.org/en/research-and-analysis/
reports/2018/02/state-oversight-of-drugcompounding.
4. Although the FDCA contains no preemption
provision for state laws regulating prescription drugs,
it does limit the class of plaintiffs who have standing
to enforce it. The FDCA’s standing provision states
that all “proceedings for the enforcement, or to
restrain violations, of [the FDCA] shall be by and in
the name of the United States.” 21 U.S.C. § 337(a).
That provision reflects the fact “Congress did not
provide a federal remedy for consumers harmed by
unsafe or ineffective drugs in the 1938 statute or in
any subsequent amendment.” Wyeth, 555 U.S. at 574.
But § 337(a) is not a preemption provision. Most
obviously, it does not say anything about States’
authority to enact or enforce their own laws. It was
enacted in the same 1938 FDCA that, as discussed
above, presumed the coexistence of state and federal
drug regulations. Pub. L. No. 75-717, §§ 304(d), 307,
52 Stat. 1040, 1045–46. Indeed, Congress decided not
to create a private right of action under the FDCA
precisely because it “determined that widely available
state rights of action provided appropriate relief for
injured consumers” and “further consumer protection
by motivating manufacturers to produce safe and
effective drugs.” Wyeth, 555 U.S. at 574. Consistent
with that policy to preserve state drug regulations, the
1962 FDCA amendments added a saving clause that
10
disclaimed preemption absent a “direct and positive
conflict,” notwithstanding § 337(a). Id. at 567 (quoting
Pub. L. No. 87-781, § 202, 76 Stat. at 793). And this
Court has recognized that the FDCA contains no
preemption provision for prescription drugs—which is
no accident, given Congress’s enactment of express
preemption provisions applicable to over-the-counter
drugs, class III medical devices, and other products
covered by the FDCA. Id. at 574.
Section 337(a), therefore, does not prohibit States
from enacting their own laws that borrow or parallel
the FDCA’s requirements as a matter of state law.
E.g., Allergan, Inc. v. Athena Cosmetics, Inc., 738 F.3d
1350, 1354–56 (Fed. Cir. 2013), cert. denied, 576 U.S.
1054 (2015) (mem.); Hughes v. Bos. Sci. Corp., 631
F.3d 762, 774–75 (5th Cir. 2011); Farm Raised Salmon
Cases, 175 P.3d 1170, 1181–84 (Cal. 2008), cert. denied
sub nom. Albertson’s, Inc. v. Kanter, 555 U.S. 1097
(2009) (mem.). The United States agrees, as the
Solicitor General has explained in invitation briefs to
this Court. U.S. Athena Br. 8–17; U.S. Br. as Amicus
Curiae 8–20, Albertson’s, 555 U.S. 1097 (No. 07-1327),
2008 WL 5151069 (U.S. Albertson’s Br.). “Actions to
enforce state laws that impose requirements identical
to those under the FDCA are not actions to enforce the
FDCA itself.... [E]ven when state-law claims are
predicated on violations of the FDCA, they remain
state-law claims.” U.S. Albertson’s Br. 12–13.
5. The Ninth Circuit split from this authority in
Nexus. There, the plaintiff sued the defendant under
the consumer-protection statutes of California and
other States, alleging that the defendant violated
those States’ drug-approval laws by selling a drug that
11
had not been approved by FDA under § 505. See 48
F.4th at 1044. Although the defendant claimed its
drugs were exempt from premarket approval under
the FDCA’s compounding provisions, the plaintiff
alleged that the defendant did not lawfully compound
its drugs, such that their sale was equally prohibited
under state and federal law. See id.
The district court dismissed the plaintiff’s
complaint and the Ninth Circuit affirmed, holding
that § 337(a) preempted the plaintiff’s state-law
claims. Even though the plaintiff sought to enforce
state drug-approval statutes that mirrored the
FDCA’s requirements, the court held that § 337(a)
impliedly
preempts
“state
statute[s]
which
[themselves] rel[y] on the [FDCA].” Id. at 1046.
Because the conduct that violates state drug-approval
statutes also involves “noncompliance with FDA
requirements,” the court held that private
enforcement of those state statutes is in fact private
enforcement of the FDCA. Id.; see id. at 1049–50
(holding that enforcement of state drug-approval
statutes “would amount to litigation of the alleged
underlying FDCA violation” because the statutes
“say[] in substance ‘comply with the FDCA’”).
In addition—and although the plaintiff alleged
that the defendant’s drug sales equally violated both
state and federal law—the Ninth Circuit held that
state drug-approval statutes conflict with “FDA’s
exclusive enforcement authority.” Id. at 1048. Even
when conduct violates both state and federal law, the
court extended preemptive force to FDA’s
“enforcement discretion.” Id. It held that States may
not “facilitate enforcement” under state law “beyond
12
what the FDA has deemed appropriate” under federal
law. Id. 3
B. District court litigation
This petition follows a bench trial at which the
district court made numerous detailed findings of fact.
App.4–68. In their appeal below, respondents
(collectively, “Fagron”) did not challenge any of the
district court’s findings. See generally 9th Cir.
Opening Br. As the case comes to this Court, therefore,
those findings are undisputed.
1. Hope and Fagron are competitors in the
marketplace for drugs containing sodium thiosulfate.
App.5–6 ¶ 2. Hope sells “Sodium Thiosulfate
Injection,” an FDA-approved drug with sodium
thiosulfate as the active pharmaceutical ingredient.
App.19 ¶¶ 32–33.
Fagron owns and operates 503B facilities that, at
the relevant times, mass-produced and sold an
injectable sodium thiosulfate drug with the same
concentration of sodium thiosulfate as Hope’s Sodium
Thiosulfate Injection. App.20, 24 ¶¶ 34, 53. Fagron’s
drug has not received premarket approval from FDA
or any state agency. App.20 ¶ 35; App.34 ¶ 10. Fagron
claimed to be exempt from the FDCA’s premarket
approval requirement because it “compound[s]” its
drug. App.20 ¶ 36.
2. In this lawsuit, Hope alleged that Fagron
violated the unfair-competition laws of California and
four other States by selling unapproved drugs in
violation of each State’s drug-approval law. 9th Cir.
3 The plaintiff in Nexus did not file a petition for certiorari.
13
Excerpts of Record (“ER”)-652–57 ¶¶ 97–137. Hope’s
complaint alleged that all five States prohibit the sale
of new drugs absent “an application approved by FDA
under section 505 of the FDCA.” ER-638 ¶ 45. It
alleged that Fagron violated those laws “because [it]
ha[s] not obtained the approval of FDA (or any other
relevant regulatory authority)” for its “sodium
thiosulfate drugs.” ER-640 ¶ 55.
To head off Fagron’s defense that it was “exempt”
from state “drug-approval requirements,” Hope also
explained that Fagron did not satisfy the FDCA’s
compounding requirements. ER-634, 640–46. Hope’s
claims are thus based solely on Fagron’s violation of
state laws requiring pre-market approval by FDA or
state agencies, but only in circumstances where
federal law also independently prohibits the sale of
Fagron’s drug. ER-640 ¶ 55.
Shortly before trial, the parties jointly submitted
a proposed Pretrial Conference Order containing
various stipulated facts. SER-30. The parties
stipulated that Fagron “ha[s] not applied for FDA
approval of [its] compounded sodium thiosulfate
drug.” SER-32 ¶ 5. The parties also stipulated that
“sodium thiosulfate” is a “component” of both Hope’s
Sodium
Thiosulfate
Injection
and
Fagron’s
unapproved drug. SER-33 ¶¶ 10–11. Finally, the
parties stipulated that this case does not involve
sterile-to-sterile compounding because Fagron “ha[s]
always used bulk sodium thiosulfate and ha[s] never
compounded [its] sodium thiosulfate drug product
from a finished drug product.” Id. ¶ 13.
3. The district court held a bench trial and issued
a detailed decision, which concluded that Fagron’s sale
14
of its unapproved sodium thiosulfate drug violated the
five States’ consumer-protection and drug-approval
laws. In particular, the court found that Fagron’s drug
violated state drug-approval laws because it has not
“been approved by the FDA under FDCA Section 505.”
App.38–39 ¶ 25 (cleaned up); see App.40–46 ¶¶ 32, 38,
44, 51. The court also considered and rejected, with
extensive fact findings, Fagron’s defense that its drug
was exempt from premarket approval because it was
lawfully compounded under § 503B of the FDCA. See
App.33–37, 41–42, 44, 46, 48–56 ¶¶ 7–8, 11–19, 33, 39,
45, 52, 57, 61–73.
Despite its arguments at trial, Fagron has since
conceded that its sodium thiosulfate drug is not
exempt from premarket approval. It is undisputed in
this Court that Fagron cannot lawfully sell its drug
under either state or federal law without first
receiving FDA approval under § 505. That is true for
two independent reasons.
First, Fagron’s drug is not exempt from premarket
approval because it is undisputed that (a) sodium
thiosulfate has never appeared on FDA’s “503B bulks
list” of bulk drug substances for which there is a
clinical need for use by 503B facilities, and (b) Hope’s
Sodium Thiosulfate Injection has never appeared on
FDA’s drug shortage list. App.25 ¶ 57; 21 U.S.C.
§ 353b(a)(2).
Indeed, FDA has conclusively decided that sodium
thiosulfate will not appear on the 503B bulks list. 87
Fed. Reg. 4240, 4249–50 (Jan. 27, 2022). On Fagron’s
behalf, a lobbying group for compounders nominated
sodium thiosulfate for that list, arguing that there was
a clinical need for its sodium thiosulfate drug as an
15
alternative to Hope’s because Fagron’s drug was
potassium-free. See id. at 4249; D. Ct. Dkts. 285-5,
285-6, 285-11, 285-16; Fagron North America,
Comment Letter on FDA Notice Regarding List of
Bulk Drug Substances for Which There Is a Clinical
Need Under Section 503B of the FDCA (Sept. 29,
2020), available at https://downloads.regulations.gov/
FDA-2018-N-3240-0256/attachment_1.pdf. At trial,
Hope demonstrated that Fagron’s claims regarding
the presence or absence of potassium in the parties’
competing drugs were pretextual. E.g., App.26–27
¶¶ 61–63. And in January 2022, FDA issued a final
decision rejecting Fagron’s claim. FDA explained that
the potassium in Hope’s drug posed no threat to
patients and that Fagron’s contention that certain
patients had a clinical need for a potassium-free
alternative was baseless. 87 Fed. Reg. at 4249–50.
Given its finding of “no clinical need for compounding
from the bulk drug substance sodium thiosulfate,”
FDA decided not to place sodium thiosulfate on the
503B bulks list. Id. Fagron did not challenge FDA’s
decision and has conceded that, as a result of FDA’s
decision, the FDCA prohibits the sale of its
unapproved drug. ER-39; 9th Cir. Opening Br. 19, 31;
9th Cir. Opp. to Mot. to Stay Mandate 8. 4
4 Fagron has argued that it could use bulk sodium thiosulfate
between October 30, 2019 and July 31, 2020, while sodium
thiosulfate was on FDA’s “list of Category 1 substances that
[were] currently under evaluation” for the 503B bulks list. App.25
¶ 58 (cleaned up). While § 503B prohibits the use of a bulk drug
substance unless FDA has made an affirmative “clinical need”
finding for it, 21 U.S.C. § 353b(a)(2)(A)(i), FDA’s enforcement
policy is generally not to take action against 503B facilities for
using a bulk drug substance on the “Category 1” list while FDA
16
Second, Fagron’s drug is not exempt from
premarket approval because it is “essentially a copy”
of Hope’s Sodium Thiosulfate Injection. It is
undisputed that “a component” of Fagron’s drug is
bulk sodium thiosulfate, which is also “a component of
an approved drug,” namely, Hope’s Sodium
Thiosulfate Injection. 21 U.S.C. § 353b(d)(2)(B); see
App.34 ¶ 11; SER-33 ¶¶ 10–11. Yet Fagron sold its
unapproved drug without ever obtaining the
necessary “clinical difference” statements. 21 U.S.C.
§ 353b(d)(2)(B); App.27–30 ¶¶ 64–73; App.34–37
¶¶ 12–18. Fagron did not challenge on appeal the
district court’s finding that it never obtained clinical
difference statements, so that fact is established for
purposes of this petition.
4. After FDA made its final determination not to
place sodium thiosulfate on the 503B bulks list, Hope
moved the district court to amend its judgment to
reflect FDA’s decision. ER-183. In response, Fagron
“concede[d]” that FDA’s decision prevented it from
selling its drug under federal law without premarket
approval. ER-39.
The district court enjoined Fagron from
“distributing” its unapproved drug into the five States
evaluates whether a “clinical need” exists for its use under
§ 503B. App.25–26 ¶¶ 58, 60. Before October 30, 2019, however,
sodium thiosulfate did not appear on either the 503B bulks list
or the Category 1 list. App.26 ¶ 59. Fagron nonetheless used bulk
sodium thiosulfate to make its drug for years before that date.
Because Fagron’s drug was not even arguably “exempted from
the premarket approval requirement” at that time, either as a
matter of law or FDA enforcement policy, App.37 ¶ 19, the Court
need not consider FDA’s Category 1 policy here.
17
at issue unless (1) “bulk sodium thiosulfate appears
on” FDA’s 503B bulks list, (2) “the drug compounded
by [Fagron] from bulk sodium thiosulfate appears on
FDA’s ‘drug shortage’ list,” or (3) “bulk sodium
thiosulfate appears on FDA’s ‘Category 1’ list.” ER-3.
The court also preserved an earlier injunction
forbidding Fagron from selling its drug without
“clinical difference” statements. ER-3–4.
The district court’s injunction thus enforces state
consumer-protection and drug-approval laws only in
circumstances where state law is identical to federal
law—where Fagron’s drug is not exempt from
premarket approval under § 505. In this way, the
district court’s decision took off the table Fagron’s
contention that it would conflict with federal law to
enforce state drug-approval laws against drugs for
which federal law does not require FDA approval.
C. The Ninth Circuit’s decision
Fagron appealed the district court’s judgment. It
did not, however, challenge any of the court’s findings. It
argued exclusively that Hope’s claims were preempted
under Nexus. See generally 9th Cir. Opening Br.
The Ninth Circuit agreed with Fagron and
reversed based entirely on Nexus. App.1–3. The Ninth
Circuit did not question the district court’s finding
that state and federal law equally prohibit the sale of
Fagron’s unapproved drug. It simply held that, under
Nexus, FDCA § 337(a)’s “prohibition on private
enforcement and the doctrine of implied preemption
bar the suit.” App.3.
The Ninth Circuit denied rehearing, App.130, but
stayed its mandate pending this petition, App.131–32.
18
REASONS FOR GRANTING THE PETITION
The Court should grant certiorari to review the
Ninth Circuit’s rule regarding FDCA preemption. The
Nexus rule, which the Ninth Circuit held controlled
this case, conflicts with the decisions of other federal
courts of appeals and the California Supreme Court,
with the United States’ own views on FDCA
preemption, and with this Court’s precedent. Those
conflicts necessitate this Court’s review, and they are
particularly intolerable here given that the Ninth
Circuit’s approach guts States’ historical power to
regulate drug safety and fair competition within their
borders.
This case, moreover, provides the Court an
unimprovable vehicle to decide the important question
presented. As it comes to the Court, this case presents
a pure question of law unencumbered by any disputed
factual questions: Whether the FDCA preempts state
laws that prohibit the exact same conduct as the
FDCA. Because that question is important, subject to
multiple splits of authority, and presented cleanly here,
this is a classic case for certiorari. See S. Ct. R. 10.
I.
The decision below and Nexus create
multiple conflicts that this Court should
resolve.
Consistent with this Court’s precedent, decisions
of other federal and state courts of appeals—and
invitation briefs filed by the U.S. Solicitor General—
agree that the FDCA does not preempt state laws, like
the state drug-approval laws here, that borrow or
parallel the FDCA’s requirements. The Ninth Circuit’s
Nexus rule, which controlled the decision below,
19
conflicts with that authority by holding that the FDCA
preempts state laws that prohibit the in-state sale of
unapproved drugs that also cannot lawfully be sold
under federal law. Those conflicts amply justify this
Court’s review.
A. The Ninth Circuit’s rule conflicts with
decisions from the Federal, Fifth, and
First Circuits and the California
Supreme Court.
Nexus was the first decision in which a federal or
state appellate court held that the FDCA preempts
state drug laws that impose the same requirements as
the FDCA. Indeed, as Nexus itself acknowledges, other
appellate courts have rejected Nexus’s approach to
FDCA preemption.
The Ninth Circuit acknowledged in Nexus that its
decision created a circuit split with the Federal
Circuit’s decision in Athena. Nexus, 48 F.4th at 1049–
50. The plaintiff in Athena sued the defendant for
violating California’s Sherman Law, one of the state
drug-approval statutes at issue in this case and in
Nexus, by selling a drug that had not been approved
by FDA. 738 F.3d at 1353. The defendant argued that
§ 337(a) preempted the Sherman Law because it
“incorporates FDCA provisions” and thus “interferes
with the FDA’s discretionary authority.” Id. at 1355.
The Federal Circuit disagreed. “The fact that the
[Sherman Law] parallels certain FDCA provisions,”
the court held, “does not mean that it does not
implicate an historic state power that may be
vindicated” by state law. Id. The court also held that
the parallel nature of California’s drug-approval
20
statute meant it was “not an obstacle to realizing
federal objectives.” Id. at 1356.
Nexus openly rejected Athena’s holding and
rationale, and that acknowledged circuit split alone
justifies certiorari. 48 F.4th at 1049–50. But Nexus’s
disagreement with Athena further conflicts with the
view of FDCA preemption expressed in the Solicitor
General’s brief opposing the Athena defendant’s
petition for certiorari. The Solicitor General explained
“that the FDCA does not impliedly preempt [a] private
civil action … to enforce state drug pre-market
approval requirements that are substantively
identical to those imposed by the FDCA.” U.S. Athena
Br. 8. States may “authoriz[e] private suits to enjoin
the intrastate distribution, sale, and marketing of an
unapproved drug” because the FDCA does not
preempt state laws that “directly incorporate[] the
federal new-drug application regulations.” Id. at 9, 17.
Such state laws fall “within the State’s historic
purview to regulate health and safety, as well as to
protect against unfair competition,” a “role” the FDCA
“preserves … for the States.” Id. at 17 (citation
omitted). The Nexus rule directly conflicts with that
position on FDCA preemption.
For the same reasons, the Ninth Circuit’s rule
conflicts with the California Supreme Court’s decision
in Farm Raised Salmon. That decision held that
§ 337(a) did not preempt a private lawsuit to enforce
the Sherman Law’s food-labeling provisions, which
copy and incorporate the FDCA’s food-labeling
requirements. 175 P.3d at 1175–76, 1181–84. The
California Supreme Court rejected the argument that
the parallel nature of the state-law claims meant the
21
plaintiff was really suing under the FDCA itself: “That
the Sherman Law imposes obligations identical to
those imposed by the FDCA,” the court explained,
“does not substantively transform plaintiffs’ action
into one seeking to enforce federal law.” Id. at 1181.
The United States, as in Athena, endorsed this
reasoning before this Court, explaining that the
parallel nature of the state laws at issue did not justify
disregarding those state laws and treating the action
as one improperly brought under the FDCA: “Actions
to enforce state laws that impose requirements
identical to those under the FDCA are not actions to
enforce the FDCA itself.... [E]ven when state-law
claims are predicated on violations of the FDCA, they
remain state-law claims.” U.S. Albertson’s Br. 12–13.
The United States thus rejected the exact theory
of FDCA preemption that Nexus and the decision
below adopted. It is anomalous to hold—in the name
of protecting FDA’s authority—that the FDCA bars
States from enacting laws that parallel or incorporate
the FDCA when the United States has twice told this
Court that States retain that authority. See
Williamson v. Mazda Motor of Am., Inc., 562 U.S. 323,
336 (2011) (rejecting preemption argument where the
United States did not view state law as an obstacle,
because the relevant federal agency “is ‘uniquely
qualified’ to comprehend the likely impact of state
requirements” (quoting Geier v. Am. Honda Motor Co.,
529 U.S. 861, 883 (2000)); see also Wyeth, 555 U.S.
576–77 (explaining that the Court “attend[s] to an
agency’s explanation of how state law affects the
regulatory scheme” because agencies “have a unique
understanding of the statutes they administer and an
attendant ability to make informed determinations
22
about how state requirements may pose an ‘obstacle to
the accomplishment and execution of the full purposes
and objectives of Congress’”).
Nexus and the decision below also conflict with
Fifth Circuit cases holding that FDCA § 337(a) does
not preempt state-law claims that depend on proving
an FDCA violation. Spano ex rel. C.S. v. Whole Foods,
Inc., 65 F.4th 260, 263–65 (5th Cir. 2023); Bass v.
Stryker Corp., 669 F.3d 501, 514 (5th Cir. 2012);
Hughes, 631 F.3d at 774–75. It is thus wellestablished in the Fifth Circuit that § 337(a) does “not
prevent a State from providing a damages remedy for
claims premised on a violation of FDA regulations.”
Spano, 65 F.4th at 265 (citing Hughes, 631 F.3d at
775). When “a plaintiff can show that the FDAapproved processes and procedures were not followed,
and that the injury was caused by this deviation, the
plaintiff’s claim will be parallel” to rather than conflict
with the FDCA. Bass, 669 F.3d at 512.
In this case in particular, there is no possible
conflict between state and federal law. It is now
undisputed that Fagron’s drug cannot lawfully be sold
under either state or federal law. In these
circumstances, where state and federal law impose the
exact same requirements, there can be no conflict
between those laws. E.g., California v. Zook, 336 U.S.
725, 735 (1949) (finding “no conflict,” and therefore no
preemption, when a “state statute makes federal law
its own”); Athena, 738 F.3d at 1356. Nor is there any
potential conflict between Hope’s claims and FDA’s
authority to interpret or enforce the FDCA, because
Fagron concedes that FDA’s final decision not to place
sodium thiosulfate on the “503B bulks list” renders
23
Fagron’s drug illegal under the FDCA. There is no
“interpretation” of the FDCA involved in that decision,
App.3 (quoting Nexus, 48 F.4th at 1050), because there
is nothing to interpret—you just have to look at the
lists. And there is no risk of a court taking a different
position than FDA, since the lists reflect decisions that
FDA has already made. 5
The First Circuit recently reached the same
conclusion in a case arising under the Lanham Act.
Azurity, 45 F.4th at 499–502. The plaintiff there
claimed the defendant violated the Lanham Act by
representing that its compounded drug satisfied
FDCA § 503B even though it contained a bulk drug
substance that did not appear on the 503B bulks list.
Id. at 495. The defendant argued that § 337(a)
precluded that claim because it required adjudicating
whether it was complying with the FDCA, but the
First Circuit disagreed. It held that the plaintiff
sought “to enforce the Lanham Act, not the FDCA or
its regulations.” Id. at 500 (quoting POM Wonderful
LLC v. Coca-Cola Co., 573 U.S. 102, 117, 120 (2014)).
And “the adjudication of [the plaintiff’s] claim simply
require[d] a court to ascertain whether a particular
drug appears on either the [503B bulks list], or on the
drug shortage list,” a straightforward determination
that could not possibly “conflict” with “FDA policy
discretion.” Id. at 501–02 (cleaned up).
This case thus does not present any question concerning
whether substantively parallel state laws can nonetheless be
deemed to “conflict” with federal law based on the potential for
those laws to be interpreted or enforced in a way that a federal
agency disagrees with. Cf. Kansas v. Garcia, 140 S. Ct. 791, 806–
07 (2020); infra at 28.
5
24
That reasoning applies with full force to claims
like Hope’s. But as the decision below held, Nexus
requires preemption in the exact circumstances
Azurity held did not support preclusion. The Nexus
rule thus creates a split with the First Circuit as well.
B. The Ninth Circuit’s rule conflicts with
this Court’s precedent.
This Court’s precedent confirms that Nexus erred
by rejecting the majority approach to FDCA
preemption. That further supports this Court’s
review.
Because the FDCA has no express preemption
provision for prescription drugs, Wyeth, 555 U.S. at
574, Nexus and the decision below rest on implied
preemption. There are two types of implied
preemption: field preemption and conflict preemption.
See Kansas v. Garcia, 140 S. Ct. 791, 801 (2020). And
field preemption is a non-starter here, as this Court
made clear in Wyeth that the FDCA does not occupy
the field of prescription-drug regulation. 555 U.S. at
575. So the FDCA can preempt state drug-approval
statutes only if those statutes conflict with the FDCA,
either because it is “impossible” for defendants to
comply with both the FDCA and state drug-approval
statutes or because state drug-approval statutes
“create[]
an
unacceptable
obstacle
to
the
accomplishment and execution of the full purposes
and objectives of Congress.” Wyeth, 555 U.S. at 563–
64 (cleaned up); see Garcia, 140 S. Ct. at 806. It is
obviously possible for a defendant like Fagron to
comply with both the FDCA and state drug-approval
laws, and neither Nexus nor the decision below
suggested otherwise. Those decisions thus depend
25
entirely on
preemption.
implied
“purposes
and
objectives”
But those decisions never identify any actual
conflict between the FDCA’s requirements and state
drug-approval statutes. This Court has long
recognized that state statutes may borrow federal
regulatory
requirements
without
triggering
preemption. In Zook, for example, the Court upheld a
California statute prohibiting motor carriers from
selling transportation without a federal or California
permit. The Court held that when a “state statute
makes federal law its own” in this way, there is “no
possibility of [a] conflict” between state and federal
law, and thus no preemption. 336 U.S. at 735; accord
Gilbert v. Minnesota, 254 U.S. 325, 331 (1920); Asbell
v. Kansas, 209 U.S. 251, 256–58 (1908); cf. Arizona v.
United States, 567 U.S. 387, 402 (2012) (“a State may
make violation of federal law a crime,” unless federal
law occupies the field). Conflict preemption without a
conflict is an oxymoron.
There is no basis in this Court’s precedent to
adopt a different rule for the FDCA. To the contrary,
the Court held in Wyeth that the FDCA reflects an
intent to preserve rather than preempt state drug
laws. 555 U.S. at 573–81. There, the Court held that
state law “offers an additional, and important, layer of
consumer protection that complements FDA
regulation.” Id. at 579. That was true, the Court held,
even though the plaintiff’s state-law claims could
require or induce a drug manufacturer to put a
“stronger warning” on its label than the label
approved by FDA. Id. at 573–74. The long history of
coexistence between the FDCA and state drug
26
regulation convinced the Court that “Congress did not
intend FDA oversight to be the exclusive means of
ensuring drug safety and effectiveness.” Id. at 575.
In particular, the Court found it important that
Congress has never enacted an express preemption
provision for prescription drugs, something Congress
“surely would have” done if it “thought state-law suits
posed an obstacle to its objectives.” Id. at 574. Instead,
Congress “wrote a pre-emption clause that applies
only to medical devices.” Id. (cleaned up). And even
that preemption clause makes clear that state medical
device laws are not preempted if they impose the same
requirements as the FDCA; only state requirements
that are “different from, or in addition to” the FDCA’s
requirements are preempted. 21 U.S.C. § 360k(a)(1).
As a result, this Court has held that the express
preemption provision does not “prevent a State from
providing a damages remedy for claims premised on a
violation of FDA regulations; the state duties in such
a case ‘parallel,’ rather than add to, federal
requirements.” Riegel v. Medtronic, Inc., 552 U.S. 312,
330 (2008); accord Medtronic, Inc. v. Lohr, 518 U.S.
470, 495 (1996).
It necessarily follows that such “parallel” state
laws are not impliedly preempted either. If the FDCA
impliedly preempted all state laws regarding products
regulated under the FDCA, even state laws that
parallel the FDCA’s requirements, then the FDCA’s
express preemption provisions would serve no
purpose. See Corley v. United States, 556 U.S. 303, 314
(2009) (discussing the “basic interpretive canon[] that
a statute should be construed so that effect is given to
all its provisions, so that no part will be inoperative or
27
superfluous, void, or insignificant” (cleaned up)). And
it would undermine Congress’s decision to craft
express preemption provisions for some products but
not for prescription drugs to allow implied preemption
to nullify a broader set of state prescription-drug
laws—those that parallel federal law—than the laws
that Congress subjected to express preemption. Given
Wyeth’s holding that even non-parallel state-law
claims regarding prescription drugs generally do not
conflict with federal law, it would make no sense to
hold that parallel state-law claims pose such a conflict.
The Ninth Circuit’s contrary holding in Nexus and
the decision below reflects the same “untenable
interpretation of congressional intent” that Wyeth
rejected. 555 U.S. at 573. 6 Despite not identifying any
conflict between the requirements of state drugapproval statutes and the FDCA, the Ninth Circuit in
Nexus found a conflict between those state statutes
and “FDA’s exclusive enforcement authority.” 48 F.4th
at 1048. In fact, Nexus went so far as to hold that
FDA’s mere “enforcement discretion” has preemptive
force, such that States may not prohibit under state
law drug sales that also violate federal law, merely
because FDA might not elect to use its own resources
to take enforcement action against those illegal sales.
Id. (emphasis added). But Wyeth held both that FDA’s
authority over prescription drugs is not “exclusive”
and that FDA has no power under the FDCA “to preempt state law directly.” 555 U.S. at 575, 576. To the
contrary, because FDA “has limited resources to
6 Nexus even cited, with evident approval, academic criticism
of Wyeth’s holding. 48 F.4th at 1047 & n.48.
28
monitor the … drugs on the market,” the Court
concluded that Congress viewed state law as providing
a “complementary form of drug regulation.” Id. at 578.
In addition, this Court recently held that “the
possibility that federal enforcement priorities might
be upset” by enforcement of non-conflicting state law
“is not enough” for implied conflict preemption.
Garcia, 140 S. Ct. at 807. That is because “[t]he
Supremacy Clause gives priority to ‘the Laws of the
United States,’ not the criminal law enforcement
priorities or preferences of federal officers.” Id.
(quoting U.S. Const., art. VI, cl. 2).
Therefore, as the United States has explained,
“[n]o conflict with a supposed FDA position … can be
inferred from the absence of FDA enforcement or other
regulatory action.” U.S. Athena Br. 10. If a state-law
suit would require a court to reject an “affirmative
FDA decision” that was already made, that suit may
conflict with federal law. Id. at 10–11. So, for example,
if FDA has approved a drug, a plaintiff may not bring
a lawsuit challenging the approval on the ground that
the defendant defrauded FDA into granting approval.
Buckman Co. v. Plaintiffs’ Legal Comm., 531 U.S. 341,
347–48 (2001); see Garcia, 140 S. Ct. at 807
(recognizing that the claim in Buckman “threatened
serious disruption of the sensitive and highly technical
process of approving medical devices”); Wyeth, 555
U.S. at 656 n.3 (holding that Buckman applies to
“fraud-on-the-agency claims,” not “state regulation of
health and safety”). But this case is the opposite of an
attempt to use state law to challenge an FDA decision
to approve a drug—the whole point of Hope’s state-law
claims is that Fagron’s drug is unapproved. Nor has
29
FDA ever decided that Fagron’s unapproved drug was
exempt from premarket approval. To the contrary, the
only affirmative action FDA has taken with respect to
Fagron’s drug was to decide that it can’t lawfully be
compounded under § 503B. See 87 Fed. Reg. at 4249–
50. Hope’s lawsuit is, therefore, perfectly consistent
with federal law.
The FDCA’s standing provision, § 337(a), does not
alter this conclusion. Although that provision bars
private enforcement of the FDCA, see Buckman, 531
U.S. at 352, this Court has recognized that a claim
under a statute other than the FDCA does not
constitute private enforcement of the FDCA just
because the claim would require litigating whether
the defendant’s conduct violated the FDCA. See POM
Wonderful, 573 U.S. 102; Merrell Dow Pharms. Inc. v.
Thompson, 478 U.S. 804 (1986).
In POM Wonderful, this Court held that § 337(a)
does not preclude Lanham Act claims that are based
on FDCA violations. The Ninth Circuit had held—
consistent with the rule it later adopted in Nexus—
that “a Lanham Act claim may not be pursued if the
claim would require litigating whether [the
defendant’s] conduct violates the FDCA,” because that
would be an improper attempt “to enforce the FDCA
or its regulations.” Pom Wonderful LLC v. Coca-Cola
Co., 679 F.3d 1170, 1175–76 (9th Cir. 2012). This
Court unanimously reversed, holding that a suit “to
enforce the Lanham Act” is not a suit to enforce “the
FDCA or its regulations” even if it requires litigating
issues under the FDCA. 573 U.S. at 117. Although
POM Wonderful addressed preclusion of federal law,
similar “principles” apply to preemption of state law.
30
Id. at 111–12. Indeed, POM Wonderful relied on Wyeth
to hold that the “absence” of a “textual provision” in
the FDCA “disclos[ing] a purpose to bar unfair
competition claims” had “special significance because
the Lanham Act and the FDCA have coexisted since
the passage of the Lanham Act.” Id. at 113. The same
is true of the FDCA and state drug laws, which have
“coexiste[d]” for the FDCA’s entire history. Wyeth, 555
U.S. at 581. POM Wonderful thus compels the
conclusion that a suit to enforce state drug laws, even
if they incorporate or parallel the FDCA’s
requirements, is not a suit “to enforce the … FDCA.”
POM Wonderful, 573 U.S. at 117.
This Court’s decision in Merrell Dow supports the
same conclusion. There, the Court held that “the
presence of a claimed violation of the [FDCA] as an
element of a state cause of action” does not “confer
federal-question jurisdiction.” 478 U.S. at 814. That
necessarily means a suit to enforce a state law that
incorporates or parallels FDCA requirements is not a
suit to enforce the FDCA. If the parallel nature of a
state law justified looking through that state law and
treating a suit as one to enforce the FDCA itself, then
the suit would “arise under” the FDCA as “the law that
creates the cause of action.” Id. at 808 (quotation marks
omitted).
Nexus’s holding that state-law unfair-competition
suits to enforce state drug-approval statutes
constitute improper “enforcement” of the FDCA, 48
F.4th at 1048–50, thus conflicts with POM Wonderful
and Merrell Dow. Indeed, Nexus relied on a Ninth
Circuit Lanham Act decision that turned on the very
theory POM Wonderful rejected: that “exclusive
31
government enforcement authority under the FDCA”
precludes “private action[s] brought under the
Lanham Act” if they require litigating issues under
the FDCA. PhotoMedex, Inc. v. Irwin, 601 F.3d 919,
924–25 (9th Cir. 2010); see Nexus, 48 F.4th at 1048
(relying on PhotoMedex); Azurity, 45 F.4th at 502 n.11
(recognizing that POM Wonderful overruled
PhotoMedex). Nexus’s reliance on a Lanham Act case
that POM Wonderful overruled confirms that the
Ninth Circuit’s FDCA preemption rule is inconsistent
with POM Wonderful.
II. This case is an ideal vehicle to address an
important question about States’ power to
regulate drug safety within their borders.
These conflicts are particularly untenable given
the importance of the question presented. Since the
Founding, States have had power to regulate the instate sale of drugs—and in particular drugs that have
not been reviewed or approved by any governmental
body—for health, safety, and fair-competition reasons.
Wyeth, 555 U.S. at 566. States also have a “long
history” of regulating “unfair business practices.” ARC
Am., 490 U.S. at 101.
As this case demonstrates, Nexus nullifies those
historical state powers by holding that the FDCA bars
all claims under state drug-approval laws, even when
the state law prohibits the same conduct as the FDCA.
That is not conflict preemption under any recognized
definition. Instead, Nexus enacts a tacit form of field
preemption—a rule that the FDCA categorically
prohibits States from legislating with respect to
matters addressed by the FDCA. See Nexus, 48 F.4th
at 1047–48 & n.48 (citing article criticizing Wyeth and
32
arguing for field preemption of state drug laws).
Nexus’s rule, if applied nationwide, would invalidate
drug-approval laws enacted by most States, plus an
untold number of other state drug-safety laws. Supra
note 1. Indeed, Nexus is already having that effect, as
defendants across the country have begun arguing
that the FDCA preempts state drug-approval laws.
See, e.g., Novo Nordisk, Inc. v. Brooksville Pharms.
Inc., 2023 WL 7385819, at *2–3 (M.D. Fla. Nov. 8,
2023); Zyla Life Scis., LLC v. Wells Pharma of
Houston, LLC, 2023 WL 6301651, at *4 n.4 (S.D. Tex.
Sept. 27, 2023), appeal docketed, No. 23-20533 (5th
Cir. Oct. 31, 2023); Eli Lilly & Co. v. Revive Rx, LLC,
2023 WL 8936731, at *1 (S.D. Tex. Dec. 27, 2023).
That represents an extraordinary intrusion into
state authority. It was not until 1906 that the federal
government assumed any role in regulating drug
sales, and not until 1938 that Congress passed the
FDCA. Wyeth, 555 U.S. at 566. And if one thing about
the FDCA is clear, it is that it does not occupy the field
of drug safety. See id. at 575 (“Congress did not intend
FDA oversight to be the exclusive means of ensuring
drug safety and effectiveness.”). Congress itself
provided that the FDCA does not preempt the field by
enacting a saving clause in the 1962 amendments. Id.
at 567; see Pub. L. No. 87-781, § 202, 76 Stat. at 793.
And Congress has never enacted a preemption
provision for state regulation of prescription drugs.
Wyeth, 555 U.S. at 567, 574. As this Court held in
Wyeth, that history shows that Congress sought to
preserve non-conflicting “state rights of action”
alongside the FDCA and “to tolerate whatever tension
there is between them.” Id. at 574–75 (cleaned up). By
holding otherwise, the Nexus rule undermines States’
33
“historic purview to regulate health and safety” and
“to protect against unfair competition.” U.S. Athena
Br. 17.
This Court has previously recognized the
importance of this issue by inviting the Solicitor
General to file amicus briefs in Athena and Farm
Raised Salmon. The Solicitor General’s briefs in those
cases addressed the same question presented here and
argued that the FDCA does not preempt state drugapproval statutes. U.S. Athena Br. 8–17; U.S.
Albertson’s Br. 8–20. The Solicitor General
recommended denial, but only because the appellate
courts there had correctly rejected preemption, which
did “not conflict with any decision of this Court or a
federal court of appeals.” U.S. Albertson’s Br. 8; accord
U.S. Athena Br. 8–9 (recommending denial because
“[t]he court of appeals correctly held that the FDCA
does not impliedly preempt this private civil action
under California law to enforce state drug pre-market
approval requirements that are substantively
identical to those imposed by the FDCA,” a holding
that was “consistent with” the decisions of “lower
courts” and “this Court’s precedents”). Here, in
contrast, the Ninth Circuit erroneously found
preemption, which conflicts with Athena, Farm Raised
Salmon, and the Solicitor General’s briefs in those
cases on a tremendously important issue. That
decision cries out for this Court’s review.
Nexus and the decision below also highlight the
broader problems that Justices have identified with
implied “purposes and objectives” preemption. See,
e.g., Garcia, 140 S. Ct. at 807–08 (Thomas, J., joined
by Gorsuch, J., concurring) (arguing that the Court
34
“should explicitly abandon our ‘purposes and
objectives’ pre-emption jurisprudence” because it
“impermissibly rests on judicial guesswork about
‘broad federal policy objectives, legislative history, or
generalized notions of congressional purposes that are
not contained within the text of federal law’” (quoting
Wyeth, 555 U.S. at 587 (Thomas, J., concurring in the
judgment))); Va. Uranium, Inc. v. Warren, 139 S. Ct.
1894, 1907–08 (2019) (plurality op. of Gorsuch, J.,
joined by Thomas and Kavanaugh, JJ.) (questioning
doctrine of obstacle preemption because “the
Supremacy Clause” cannot “be deployed … to elevate
abstract and unenacted legislative desires above state
law”). Although the FDCA’s text expresses no intent
to preempt state laws regulating prescription drugs,
Nexus and the decision below found preemption based
on little more than “a freewheeling judicial inquiry
into whether a state statute is in tension with federal
objectives.” Bates v. Dow Agrosciences LLC, 544 U.S.
431, 459 (2005) (Thomas, J., concurring in the
judgment in part and dissenting in part) (cleaned up).
Even Nexus recognized this problem, see 48 F.4th at
1045 (“The notion that preemption may be ‘implied’ at
all seems oxymoronic, in light of the well-established
rule that a ‘clear expression’ of congressional intent is
required to overcome the ‘presumption’ against
implied preemption.”), before nonetheless proceeding
to eliminate a vast area of traditional state regulatory
authority.
This case, moreover, offers a perfect vehicle to
address the important question presented. Whether
the FDCA preempts state drug-approval statutes that
prohibit the exact same conduct as the FDCA is a pure
question of law that the Ninth Circuit decided on
35
purely legal grounds. And that question is presented
cleanly here. Fagron did not challenge (and the Ninth
Circuit did not question) any of the district court’s
post-trial findings, so there are no disputed factual
questions that could obstruct the Court’s review. And
because Fagron has conceded that it cannot lawfully
sell its drug under the FDCA, this case would not
require the Court to address the question whether
States may prohibit drug sales that the FDCA allows.
All this Court need decide is whether the FDCA bars
States from prohibiting the sale of unapproved drugs
whose sale the FDCA also prohibits. The Court will
never have a better vehicle for deciding that critical
question.
36
CONCLUSION
This Court should grant the petition for certiorari.
Respectfully submitted,
Joseph N. Akrotirianakis Jeffrey S. Bucholtz
Aaron Craig
Counsel of Record
KING & SPALDING LLP
KING & SPALDING LLP
633 W 5th Street
1700 Pennsylvania Ave. NW
Suite 1600
Washington, DC 20006
Los Angeles, CA 90071
(202) 737-0500
jbucholtz@kslaw.com
Matthew V.H. Noller
KING & SPALDING LLP
50 California Street
Suite 3300
San Francisco, CA 94105
(415) 318-1200
Counsel for Petitioner
January 16, 2024
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