Amicus Curiae Brief — Buckman Co. v. Plaintiffs' Legal Comm.

MOTION FILED | (e)

JUN 2 1999,

No. 98-1768

IN THE

Supreme Court of the United States

THE BUCKMAN COMPANY,

Petitioner,

Vv.

PLAINTIFF'S LEGAL COMMITTEE,

Respondent.

On Petition for Writ of Certiorari to the

United States Court of Appeals for the Third Circuit

MOTION FOR LEAVE TO FILE AND BRIEF FOR

AMICUS CURIAE MEDICAL DEVICE MANUFACTURERS

ASSOCIATION IN SUPPORT OF PETITIONER

Daniel G. Jarcho

Counsel of Record

Donald R. Stone

McKENNA & CUNEO, L.L.P.

1900 K Street, N.W.

Washington, D.C. 20006

(202) 496-7500

Counsel for Amicus Curiae Medical Device

Manufacturers Association

ger

MOTION FOR LEAVE

TO FILE AMICUS CURIAE BRIEF

Pursuant to Supreme Court Rule 37.2, the Medical

Device Manufacturers Association (“MDMA”) moves the

Court for leave to file the attached amicus curiae brief in

support of petitioner, The Buckman Company.! This case

addresses the scope of product liability exposure in the

medical device industry. As a national trade association

representing nearly 130 independent manufacturers of

medical devices, diagnostic products and health care

information systems, MDMA is well-qualified to inform the

Court of the great significance of this case for the medical

device industry and the consuming public.

As MDMA’s accompanying brief explains, direct

conflicts in the lower courts over the scope of preemption

have created a confusing pattern of tort liability exposure

from state to state that threatens to disrupt nationwide

availability of medical devices. In addition, the Third

Circuit’s holding that fraud on the agency claims escape

preemption would undermine the public health by deterring

beneficial “off-label” uses of medical devices and create

delays in the Food and Drug Administration’s premarket

clearance of critical new devices. Furthermore, such fraud

claims would allow private parties to seek remedies under

state law that would interfere with the Food and Drug

Administration’s unique responsibility to investigate and

punish fraud in its premarket clearance processes.

1 Counsel for petitioner consented to the filing of MDMA’s

brief, but counsel for respondent declined.

2

MDMaA respectfully submits that it has the perspective to

inform the Court about the significance of these issues that

arise from this case, and that MDMA’s brief would aid the

Court in its decision regarding The Buckman Company’s

petition for certiorari. Accordingly, MDMA requests the

Court to grant its motion to file the attached amicus curiae

brief.

Respectfully submitted,

Daniel G. Jarcho

Counsel of Record

Donald R. Stone

McKENNA & CUNEO, L.L.P.

1900 K Street, N.W.

Washington, D.C. 20006

(202) 496-7500

Counsel for Amicus Curiae Medical Device

Manufacturers Association

June 2, 1999

TABLE OF CONTENTS

INTEREST OF AMICUS CURIAE ..0.......:sessesesssseseseesesesnees |

SUMMARY OF ARGUMENT ............ccsssessssesessesessesseeeeees l

I. This Case Presents Important Public Health

Questions Because Claims for Fraud on the

Agency Would Undermine the FDA’s

Capacity to Make Critical New Medical

Devices Available Promptly for Patient

Tl crcccstntctestninensienteiaintatiinieniarstaaastsisaniaaaaamaaaaes 4

A. Fraud on the Agency Claims Would Delay

Premarket Clearance by Entangling FDA

Personnel i in Litigation Between Private

B. Fraud on the Agency Claims Would Delay

Premarket Clearance by Creating Incentives

to Burden the FDA With Needless

Submissions of Information....................c.0.0.000+. 9

Il. This Case Presents Important Public Health

Questions Because Claims for Fraud on the

Agency Would Undermine Valuable Off-Label

Uses of Medical Devices...........0.csecccccsscsessesssessesseosee 1]

A. Fraud on the Agency Claims Would

Undermine Innovation by Discouraging

Manufacturers Fron, Seeking Premarket

Clearance for Off-Label Uses ..............ccccccceeseseeees 12

B. Fraud on the Agency Claims Would Chill

Dissemination of Information Regarding

III. The Court Should Grant the Petition to Maintain

Nationwide Availability of Medical Devices by

Establishing Uniformity in an Important Area

of the Law Rife With Uncertainty and Conflict.......... 14

IV. The Court Should Grant the Petition to Prevent

Interference with the FDA’s Authority to Remedy

Fraud in its Premarket Clearance Processes................ 17

CONCLUSION ...00cccccsesecceccserecsessccsecssoscsecsesensessosssossssonoess 19

TABLE OF AUTHORITIES

FEDERAL CASES

Page

Connaught Labs., Inc. v. SmithKline Beecham,

7 F. Supp. 2d 477 (D. Del. 1998) ..........cccccccccsscsesserseeseees 7

Duvall v. Bristol-Myers-Squibb Co., 103 F.3d 324

EGE WOEED Aramaressnensnsecenenssnsonensmemrentecnnainneeneemmessnes 16

Exxon Shipping Co. v. Department of Interior,

a 6

Hines v. Davidowitz, 312 U.S. 52 (1941) ......ccccccecceeseeseeeeess 12

Houston Business Journal, Inc. v. Office of Comptroller

of Currency, 86 F.3d 1208 (D.C. Cir. 1996) ...............00+ 7

Martin v. Telectronics Pacing Sys., Inc., 105 F.3d

1090 (6th Cir. 1997), cert. denied,

Py Ss CPE excenenssenemensnsenetenesnememenmennsen 16

Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996) ............-000 5, 18

Mitchell v. Collagen Corp., 126 F.3d 902

(7th Cir. 1997), cert. denied, 118 S. Ct. 1300

CEREUS ‘ccastassennaninnntnstnnstunenactenemesnmimenemminnecgnesnsseemmennmemm 16

Oja v. Howmedica, Inc., 111 F.3d 782

GUE crsesensnesssnmnsnesreenmassmenemnetesmeennneesmnne 16

Papike v. Tambrands, Inc., 107 F.3d 737 (9th Cir.),

cert. denied, 118 S. Ct. 166 (1997) .ccccccccccscvcscssssssvccesee 16

iv

TABLE OF AUTHORITIES continued

Page

In re U.S. Bioscience Sec. Litig., 150 F.R.D. 80

GRA FO, BERS cocnesessscsessssnssnmenssssssssmssessnnsesssnsemesessemeced 6

United States ex rel. Touhy v. Ragen, 340 U.S. 462

ee 6

United States v. Cambra, 933 F.2d 752

GG, GGG D cccnscmsesssssneserssnnsmesssressmesnmemseemenns 19

STATUTES, RULES & REGULATIONS

21 U.S.C. §§ 331, 333(aX(2) (1994 & Supp. 1999).............. 19

ae Cease BD cccensnscnnnersssesemessencenssnementesnmanenss 15

Be GRE. © SEED ccecncscenrnseremmemsnmmmerenneses 11, 13

ae Ge BED crernsccsssesmnsesssnsmeremeememnenssemmanneneneel 8

ae Geiss © FO crccsssssenseereetnemeeemmnneael a

ae Cae © EES crcrnecernssesnnenmememmnannennied 4, 16

Be Gr aie BFAD ccscsccssssssssesseeensesemeememamemnmenenets 19

8 Ge BENS cerneresemseneermntemmnemennnen 5

FO FOE, TR, Ge GRRE ccscnsnssnrasesssscrsenssenenesemnsssene 18

FOG, Th, Cae FF. GD ccessserssssecesnssnnssnsesscessesensscsnsessenssnsasessssineses 7

Vv

TABLE OF AUTHORITIES continued

Page

MISCELLANEOUS

H.R. Conf. Rep. No. 105-399 (1997) ........cccccccccsessesseseseerees 13

H.R. Rep. No. 94-853 (1976) ........cccccsssssseeseeeees 13, 15, 17, 19

Sea TED ee EP ENTEEUIEED Cicesceitinetiedtisinteniidieensinsninniitintinitaiinii 13

FDA/CDRH Annual Report FY 1998 ......ccccccssscseseeseeeees 8,12

FF ED iccncsstencncnrsctisnenensnnenenteninenseniiiiel 8,11

Guidance on IDE Policies and Procedures

SEED CTU Sterincscscemnictibtnciibaieientanneineamsenmceneimnctmmel 8

Hearing Before the Subcomm. On Oversight &

Investigations of the House Comm. On Commerce

(Sept. 23, 1997) (statement of Michael A.

Friedman, Lead Deputy Commissioner, FDA) ............... 4

The New 510(k) Paradigm (Mar. 20, 1998) ..........cc0c0ccee0e0ee 11

IID cxissnsniniseneiteninenetnnietsipeenstesimenineniaes 11

Se Re TTD, sccorcsnansnesssnssemsntnnsommenineinetinaiatstes 11

I IIIIIIIID ssrrnrnssincesrescsenentniinsnammeteeusuneanmnes 11

TABLE OF AUTHORITIES continued

Page

James M. Beck & Elizabeth D. Azari, FDA, Off-Label

Use, and Informed Consent: Debunking Myths

and Misconceptions, 53 Food & Drug L.J. 71

COED cccssssesssesescesncescensesencsnssnscsnnssesenssssensecesemsesccosnesseeese 10

U.S. Sentencing Guidelines §§ 2N2.1(b); 2F 1.1 .........00000 19

BRIEF FOR AMICUS CURIAE

MEDICAL DEVICE MANUFACTURERS

ASSOCIATION IN SUPPORT OF PETITIONER

INTEREST OF AMICUS CURIAE

The Medical Device Manufacturers Association

(“MDMA”) is a national trade association based in

Washington, D.C. that represents nearly 130 independent

manufacturers of medical devices, diagnostic products and

health care information systems. MDMA seeks to improve

the quality of patient care by encouraging the development of

new medical technology and fostering the availability of

beneficial innovative products. To achieve these goals,

MDMaA represents its members’ collective interests before

the United States Congress, the Food and Drug

Administration (“FDA”), other federal agencies, and courts

that develop, implement or interpret policies that affect the

medical device industry. MDMA has a significant interest in

this case because it raises important product liability issues

with broad implications for the entire medical device industry

and the public health.!

SUMMARY OF ARGUMENT

The Court should grant the petition because it presents

issues of critical importance to the public health, and because

conflicting lower court decisions have created confusion and

1 No counsel for any party authored this brief in whole or

in part, and no person or entity other than amicus curiae and

its members made a monetary contribution to the preparation

or submission of the brief.

2

uncertainty regarding the scope of tort liability in the medical

device industry.

1. The Third Circuit held that the express preemption

provision of the Medical Device Amendments of 1976 does

not preempt state common law claims alleging fraud on the

FDA. This case presents important public health questions,

because if such claims are not barred by preemption, they

will undermine the FDA’s capacity to make critical new

medical devices available promptly for patient treatment.

Because most new medical devices cannot be marketed

without prior FDA clearance, delays in the clearance process

postpone availability of important therapies. Fraud on the

agency claims such as those preserved by the Third Circuit

would threaten delays in the FDA’s premarket clearance

process — amd create associated delays in device

availability — for two major reasons.

First, such claims would entangle agency personnel in

tort litigation between private parties. The claims at issue in

this case are premised upon the assertion that FDA product

clearance was obtained through fraud. The FDA officials

who granted clearance would be critical witnesses to the

alleged fraud, because their personal knowledge primarily

would determine whether a misrepresentation occurred, and if

so, whether it affected premarket clearance of a medical

device. Entangling FDA officials in tort litigation as

witnesses would divert them from their important product

clearance functions, thereby delaying the availability of

critical medical devices.

Second, fraud on the agency claims would create

incentives to burden the FDA with additional and

unnecessary submissions of information. If fraud on the

agency claims are preserved from preemption, as the Third

Circuit held, manufacturers will attempt to protect themselves

against fraud liability by submitting to the agency all

information that is even arguably relevant to product

3

clearance, to guard against later allegations that there were

material omissions in communications with the agency. The

resulting burden on the agency to review the information

submitted would further delay product clearances, with a

corresponding detrimental effect on the public health.

2. This case also presents important public health

questions because fraud on the agency claims would deter

“off-label” use of medical devices. The FDA and the medical

profession have long recognized that when the agency clears

a product for one use, it may well have important unapproved

uses as well. Cutting-edge therapies are frequently developed

through off-label uses of devices cleared by the FDA for a

different use. Fraud claims of the type at issue in this case —

which allege that the manufacturer illegally promoted off-

label uses — would deter companies from seeking FDA

clearance for such uses. In addition, such fraud claims would

deter dissemination of off-label use information to health care

practitioners, even through dissemination is permissible

under federal law.

3. Direct conflicts in the lower courts have created great

uncertainty whether the MDA preempt any tort claims, and if

so, whether fraud on the agency claims are preempted. As a

result, a confusing pattern of liability exposure exists from

State to state. The conflicts threaten to undermine nationwide

availability of critical medical devices, because device

manufacturers currently have a strong incentive to pick and

choose the states where they will and will not sell their

products. Only this Court can resolve the conflicts by

granting the petition.

4. Fraud claims of the type preserved by the Third

Circuit interfere with the FDA’s unique responsibility to

investigate and punish fraud in its premarket clearance

processes. The FDA has extensive authority to remedy such

fraud, and the proper role of a private party is to refer alleged

frauds for investigation by the agency, not to pursue

4

independent remedies for fraud under state law. The Court

should grant the petition to maintain the FDA’s authority to

remedy fraud on the agency.

ARGUMENT

I. This Case Presents Important Public Health

Questions Because Claims for Fraud on the Agency

Would Undermine the FDA’s Capacity to Make

Critical New Medical Devices Available Promptly for

Patient Treatment

The Third Circuit held that the express preemption

provision of the Medical Device Amendments of 1976

(“MDA”) does not preempt state common law claims

alleging fraud on the FDA. This case presents important

public health questions, because if such claims are not barred

by preemption, they will undermine the FDA’s capacity to

make critical new medical devices available promptly for

patient treatment. Federal law prohibits manufacturers from

distributing most new medical devices without prior

clearance from the FDA (see, e.g., 21 U.S.C. §§ 360e, 360(k)

(1994 & Supp. 1999)), and as a result, delays in premarket

clearance profoundly affect patients’ health by postponing

their access to innovative device therapies. The FDA has

recognized the importance of streamlining its premarket

clearance processes to “bring needed therapies to patients as

quickly as possible.” Hearing Before the Subcomm. On

Oversight & Investigations of the House Comm. On

Commerce (Sept. 23, 1997) (statement of Michael A.

Friedman, Lead Deputy Commissioner, FDA). Yet fraud on

the agency claims, such as those preserved from preemption

by the Third Circuit, would hamper the FDA’s ability to

provide prompt premarket clearance for devices that could

substantially improve the health of patients.

5

A. Fraud on the Agency Claims Would Delay

Premarket Clearance by Entangling FDA

Personnel in Litigation Between Private Parties

Until the Third Circuit’s decision in this case, most lower

courts had held (both before and after Medtronic, Inc. vy.

Lohr, 518 U.S. 470 (1996)) that the MDA preempt claims for

fraud on the FDA. See Pet. at 11-15. If such claims are

instead preserved from preemption, as the Third Circuit held,

they will increasingly cause delays in premarket clearance by

entangling FDA personnel in litigation between private

parties. Fraud claims such as those at issue here assert that

misrepresentations were made to FDA officials responsible

for premarket clearance decisions, who in turn authorized

marketing of a medical device in reliance on the

misrepresentations. These officials obviously would be

critical witnesses to the alleged fraud in a tort suit, because

their personal knowledge primarily would determine whether

a misrepresentation occurred, and if so, whether it affected

premarket clearance of a medical device.

Given their unique knowledge of the facts at issue in a

fraud on the agency claim, FDA officials would be important

witnesses for both the plaintiff and defendant. Indeed, in the

present case, plaintiffs claim that defendants misled agency

officials, yet defendants contend that their course of action

(now alleged to be fraudulent) was suggested by the FDA.

See Pet. at 17 n.8. For both parties, the witnesses who could

provide the best evidence to resolve factual disputes like this

one would be the FDA officials who reviewed and acted on

the manufacturer’s premarket clearance submissions.

Because they would be such important witnesses in fraud

on the agency claims, FDA officials would be vulnerable to

entanglement in tort litigation. Although the FDA, like other

agencies, has promulgated “housekeeping” regulations that

purport to restrict its obligation to respond to third party

subpoenas issued in litigation between private parties, see 21

6

C.F.R. § 20.1, those regulations do not guarantee the agency

any protection against involvement in tort suits. The

regulations themselves authorize testimony if the public

interest so requires. See id; In re U.S. Bioscience Sec. Litig.,

150 F.R.D. 80 (E.D. Pa. 1993) (enforcing subpoenas for

deposition testimony of FDA employees in private securities

litigation).

Furthermore, at least since the Ninth Circuit’s decision in

Exxon Shipping Co. v. Department of Interior, 34 F.3d 774

(9th Cir. 1994), the lower courts increasingly have cast

substantial doubt on the validity of such housekeeping

regulations. In Exxon, the Ninth Circuit held that five federal

agency heads could not rely on their agencies’ housekeeping

regulations to prevent subordinate employees from testifying

pursuant to third party deposition subpoenas. The Ninth

Circuit rejected the argument that this Court’s decision in

United States ex rel. Touhy v. Ragen, 340 U.S. 462 (1951)

permitted federal agencies to refuse to allow their employees

to respond to valid third-party subpoenas by invoking such

regulations. Exxon, 34 F.3d at 778.2 The court concluded

2 In Touhy, the Court held that an FBI official could not be

held in contempt for obeying an order by his superior — the

Attorney General — to refuse production of documents

pursuant to a third-party subpoena. Touhy therefore

addressed the question whether the Attorney General, as head

of an agency, had authority to “centraliz[e] determination as

to whether subpoenas duces tecum will be willingly obeyed

or challenged” by implementing housekeeping regulations

that “withdraw from his subordinates the power to release

department papers.” 340 U.S. at 467-68. The Court

expressly refused to reach the question whether the agency

(Footnote cont'd on next page)

7

that just like any other witness, a federal employee witness is

required to comply with a federal court subpoena under the

standards set forth in Fed. R. Civ. P. 45. dd. at 779.

Following Exxon, numerous other lower courts also have held

that government agencies — including the FDA — may not

rely on housekeeping regulations to withhold information

sought through third-party subpoenas. See, e.g., Houston

Business Journal, Inc. v. Office of Comptroller of Currency,

86 F.3d 1208, 1212 (D.C. Cir. 1996) (housekeeping

regulations do not authorize withholding subpoenaed

documents in conflict with Fed. R. Civ. P. 45); Connaught

Labs., Inc. v. SmithKline Beecham, 7 F. Supp. 2d 477 (D.

Del. 1998) (rejecting restrictions of FDA housekeeping

regv'ations and enforcing subpoenas for testimony of FDA

employees in patent litigation between private parties).

Once subpoenas were issued in a fraud case, the drain on

the time and resources of agency personnel required for

subpoena responses would be substantial. The scope of

relevant testimony and documents potentially would be quite

broad, because every communication between the

manufacturer and the FDA regarding premarket clearance

could be a source of evidence in a case alleging fraud on the

agency, and such communications are numerous; the FDA’s

review of premarket clearance submissions is a collaborative

process between the manufacturer and the agency, involving

frequent dialog over a period of months or even years.

(Footnote cont'd from previous page.)

itself had a “privilege against disclosure” (id. at 468, 469 &

n.9) allowing it to “refuse to produce government papers.”

Id. at 469.

For example, the agency has long encouraged early

meetings between manufacturers and FDA officials to

exchange information about a new device even before the

FDA has approved clinical studies that may be required for

eventual premarket clearance. See Guidance on IDE Policies

and _ Procedures at l (Jan. 20, 1998)

<http://www.fda.gov/cdrh>; Goals and Initiatives for the IDE

Programs IDE Mem. #D95-1, at 2 (July 12, 1995)

<http://www.fda.gov/cdrh/d951.htm1>. In 1997, Congress

endorsed a similar interactive process by amending the Food,

Drug, and Cosmetic Act to require the FDA, upon written

request, to meet with the applicant for a premarket approval

application (“PMA”) within 100 days after the PMA is filed.

21 U.S.C. § 360e(d)(3). The agency does not limit itself to

this required meeting and goes “beyond the [statutory]

requirements by encouraging ‘exploratory’ meetings very

early in the premarket review process and continued

interactions throughout the review process.” FY 2000 Budget

Request at 1 <http://www.fda.gov/oc/oms/ofm/budget/

devnctrtab.htm>. The FDA has agreed “to communicate with

each firm at least every four weeks subsequent to the 100-day

meeting.” FDA/CDRH Annual Report FY 1998 at 1

<http://www.fda.gov/cdrh/index.html>.

A fraud on the agency claim potentially would require

FDA personnel to respond to discovery concerning each of

these communications, thereby diverting substantial

resources from review of premarket clearance applications.

Distracting agency officials from their critical device review

functions would undertnine prompt clearance of promising

new therapies that could substantially improve the public

health.

9

B. Fraud on the Agency Claims Would Delay

Premarket Clearance by Creating Incentives to

Burden the FDA With Needless Submissions of

Information

If fraud on the agency claims are preserved from

preemption, as the Third Circuit held, they also will delay

premarket clearance by creating incentives to burden the

FDA with additional submissions of information.

Manufacturers would attempt to protect themselves against

fraud liability by submitting to the agency all information

that is even arguably relevant to product clearance, to guard

against later allegations that there were material omissions in

communications with the agency. See Pet. at 18.

These additional information submissions would be

unnecessary. For example, in the present case, the agency

had no need for additional information to determine whether

it had been defrauded. Only three months passed between the

premarket clearance application that plaintiffs allege revealed

defendants’ true intended use (spinal surgery) and the

application that plaintiffs allege fraudulently misrepresented

the intended use as for the long bones in the arms and legs.

Pet. App. at Sa. The FDA officials responsible for reviewing

these applications manifestly had full notice that the intended

use had been changed — and according to the petition had in

fact encouraged the change (Pet. at 17 n.8) — at a time when

it was well known at the agency that “[i}n practice, surgeons

often use orthopedic screws which FDA has cleared for other

purposes” in spinal surgery instead. See James M. Beck &

Elizabeth D. Azari, FDA, Off-Label Use, and Informed

Consent: Debunking Myths and Misconceptions, 53 Food &

Drug L.J. 71, 77 (1993) (citing FDA, Update on Pedicle

Screws).

would have a deleterious effect on the FDA’s product

clearance work. Once the information was submitted, it

10

would need to be reviewed by FDA personnel who already

have limited budgetary resources. Furthermore, in recent

years, the number of FDA employees in the Office of Device

Evaluation (“ODE”) — the office responsible for reviewing

premarket clearance applications — has steadily fallen. 1996

ODE Annual Report at 1; 1997 ODE Annual Report at 1;

1998 ODE Annual Report at 2, supra. Increasing the amount

of information for these officials to review would increase

product clearance times and delay the marketing of

innovative therapies for patient use.

The tort system would create this effect after FDA, both

on its own initiative and with Congressional urging, has made

great strides to reduce clearance times by diminishing the

information required to be submitted for agency review. See,

e.g., 21 U.S.C. §360c(aX3\C) (requiring the FDA to

consider “whether the extent of data that otherwise would be

required for approval of the application with respect to

effectiveness can be reduced through reliance on postmarket

controls”). For example, the FDA now requires submission

of less information for 510(k) applications regarding low risk

devices (because clearance decisions are based primarily on

descriptive information and a labeling review) than it does for

high risk devices (for which clearance decisions rely on

performance data). The New 510(k) Paradigm at 3 (Mar. 20,

1998) <http://www.fda.gov/cdrh/ode/paradS10.html>. The

agency also requires more information in a 510(k) application

seeking initial clearance for a device than it does for an

application seeking clearance for a change in a previously

marketed device. FY 2000 Budget Request at 2, supra. To

reduce submission requirements regarding 510k)

applications further, the FDA also permits manufacturers to

certify compliance with certain material and performance

standards in lieu of submitting information demonstrating

compliance. /d Because it has streamlined the submission

process, FDA review time for 510(k) applications during

ll

fiscal year 1998 was only half what it was only four years

earlier. FDA/CDRH Annual Report FY 1998 at 7, supra.

Fraud claims of the type preserved by the Third Circuit

would undermine this important progress, with a

corresponding detriment to the public health. In so doing,

such claims would “stand[] as an obstacle to the

accomplishment and execution of the full purposes and

objectives of Congress” (Hines v. Davidowitz, 312 U.S. 52,

67 (1941)) — a circumstance that this Court has long viewed

as giving rise to implied preemption of state law. This case

therefore presents the Court with an excellent opportunity to

address the federal-state balance in an area that directly

affects the public health.

Il. This Case Presents Important Public Health

Questions Because Claims for Fraud on the Agency

Would Undermine Valuable Off-Label Uses of

Medical Devices

This case also presents important public health questions

because fraud claims of the type at issue in this case would

undermine “off-label” uses of medical devices. Judge

Cowan’s dissent below explained that “[t]he FDA and the

medical community have long recognized the importance of

doctors’ off-label uses of medical products (uses not

indicated on the label or approved by the FDA).” Pet. App.

at 28a. Cutting-edge therapies are frequently developed

through off-label uses of devices cleared by the FDA for a

different use (see, e.g., id. at n.1), in part because medical

science innovation moves at a faster pace than the agency’s

review process. As the discussion below explains, fraud

claims of the type preserved by the Third Circuit would

create incentives that undermine off-label uses and their

related benefits to the public health.

12

A. Fraud on the Agency Claims Would Undermine

Innovation by Discouraging Manufacturers From

Seeking Premarket Clearance for Off-Label Uses

When it enacted the MDA, Congress intended to protect

innovations in device technology from being “stifled by

unnecessary restrictions” (H.R. Rep. No. 94-853 at 12

(1976)), thereby stimulating research and development of

“sophisticated, critically important medical devices.” S. Rep.

No. 94-33 at 2 (1976). Yet as Judge Cowan properly noted in

his dissent, the Third Circuit majority’s preservation of fraud

on the agency claims from preemption is “likely to hinder

technological growth” (Pet. App. 27a) by discouraging

manufacturers from seeking FDA premarket clearance for

off-label uses.

Because many medical devices have multiple uses, it is

not uncommon for a manufacturer to obtain premarket

clearance for one use and later seck clearance for a different

use. For example, a pain control device may be cleared by

the FDA to treat pain of one particular cause and

subsequently cleared for use to relieve pain of other causes,

just as in the present case, the same orthopedic device was the

subject of premarket clearance applications for use in two

different skeletal structures. The FDA finds multiple

applications for different uses of the same device

unremarkable and considers each application independently

on its merits. See, e.g., 21 U.S.C. § 360c(i)(1(E) (generally

resticting agency review of intended use to consideration of

the labeling submitted with 510(k) application). As Judge

Cowan explained, expanding the uses for medical devices in

this manner “will often be a very desirable source of progress

and innovation in medical products.” Pet. App. at 26a. It

therefore is not surprising that when Congress amended the

Food, Drug, and Cosmetic Act in 1997, it emphasized that it

wanted “to encourage that these new uses be included on the

product label.” H.R. Conf. Rep. No. 105-399 at 99 (1997).

13

If fraud on the agency claims such as those at issue in this

case were preserved from preemption, they would discourage

manufacturers from seeking clearance for new uses. In the

present case, the fraud claim rests on the premise that if the

manufacturer has filed separate applications seeking

clearance for two different uses of the same device, one must

represent the true intended use, and the other must be

fraudulent. Preserving such claims from preemption would

make manufacturers concerned that in seeking clearance for

new uses, they would render themzelves vulnerable to tort

claims for fraud relating to the clearance they received for the

original use. The manufacturers would, in the words of

Judge Cowan, consider themselves precluded, “via the

penalty of fraud liability, from seeking approval for another

use.” Pet. App. at 26a. Because preserving such fraud claims

from preemption would undermine the important public

health benefits that derive from innovative new uses of

medical devices, this case presents important issues worthy of

Supreme Court review.

B. Fraud on the Agency Claims Would Chill

Dissemination of Information Regarding Off-

Label Use

Fraud on the agency claims of the type at issue in this

case also would chill manufacturers’ dissemination of

information to health care practitioners regarding off-label

benefits. If a manufacturer were deterred from seeking FDA

clearance for the off-label use for the reasons described

above, federal law would prohibit the manufacturer from

affirmatively initiating dissemination of information

regarding that use. Federal law permits manufacturers to

initiate distribution of such information only if they submit

an application seeking clearance for the off-label use, certify

that they will submit such an application in the future, or

14

obtain an exemption from the agency. 21 U.S.C. § 360aaa-

3(a).

Furthermore, fraud on the agency claims would deter

manufacturers from disseminating off-label use information

even if they did apply for an appropriate clearance. Judge

Cowan was rightly concerned that following the Third

Circuit’s decision, a manufacturer might be exposed to fraud

liability for “secur[ing] approval for one use” and

“distribut[ing] materials on off-label uses in compliance with

the statute . . . while its primary purpose is to obtain approval

for the off-label uses.” Pet. App. at 30a n.3. Judge Cowan

properly perceived that in the hands of plaintiffs’ counsel,

off-label use information distributed by a manufacturer would

be cast as evidence of alleged fraud on the agency, even if its

dissemination was in full compliance with federal law. This

exposure would further chi!! distribution of information

regarding innovative therapics that benefit the public health.

Ill. The Court Should Grant the Petition to Maintain

Nationwide Availability of Medical Devices by

Establishing Uniformity in an Important Area of the

Law Rife With Uncertainty and Conflict

When it enacted the MDA, Congress concentrated

regulation of medical devices at the federal level, believing

that it could minimize uncertainty, promote uniformity, and

spur innovation that would not be “stifled by unnecessary

restrictions.” H.R. Rep. No. 94-853 at 12. One means of

achieving this goal of uniformity was the MDA express

preemption provision, which Congress intended to be a

“general prohibition on non-Federal regulation.” Jd. at 45. In

the wake of Medtronic, however, differing lower court

opinions have undermined this intended uniformity, leaving

the scope of the preemption provision — and the scope of tort

liability for medical device manufacturers — plagued by

uncertainty. The Court should grant the petition to clarify the

15

contours of the preemption provision and promote the

uniformity intended by Congress.

The MDA express preemption provision invalidates

certain state law requirements “establish[ed] or continue[d] in

effect with respect to a device intended for human use.” 21

U.S.C. § 360k. The Third Circuit held that fraud claims

concerning the bone screw at issue in this case were not

preempted because (inter alia) they did not establish “a state

‘requirement’ ‘with respect to’ that device.” Pet. App. 13a.

In so holding, the Court of Appeals appears to have joined

the Tenth Circuit in concluding that tort claims in general are

exempt from express preemption under section 360k. See

Oja v. Howmedica, Inc., 111 F.3d 782, 789 (10th Cir. 1997).

On this issue, the Third and Tenth Circuits are in direct

conflict with the Fourth, Sixth, Seventh and Ninth Circuits,

which hold that section 360k does encompass tort claims.

See Mitchell v. Collagen Corp., 126 F.3d 902, 912 (7th Cir.

1997), cert. denied, 118 S. Ct. 1300 (1998); Papike v.

Tambrands, Inc., 197 F.3d 737, 741 (9th Cir.), cert. denied,

118 S. Ct. 166 (1997); Martin v. Telectronics Pacing Sys.,

Inc., 105 F.3d 1090, 1097-98 (6th Cir. 1997), cert. denied,

118 S. Ct. 850 (1998); Duvall v. Bristol-Myers-Squibb Co.,

103 F.3d 324, 330 (4th Cir. 1996). The petition makes clear

that this conflict is magnified because in eight states within

these Circuits, the applicability of preemption to tort claims

differs depending upon whether a case is brought in state or

federal court. See Pet. at 23-24 & n.14 (citing cases).

Furthermore, as the Third Circuit recognized, its opinion

also established a direct conflict with the Seventh Circuit on

the specific question whether fraud on the agency claims are

preempted. See Pet. App. at 17a n5 (citing Mitchell, 126

F.3d 902). And even within the Third Circuit, the scope of

liability remains confused. The petition properly notes that

the state law fraud claims preserved by the Third Circuit

would impose a subjective test for determining the intended

16

use of a device, whereas federal law imposes a conflicting

objective test. See Pet. at 27.

The obvious effect of the conflicts described above is that

manufacturers currently face a pattern of differing tort

liability exposure from state to state. For example, in the

states of the Third Circuit, where manufacturers now may be

sued (in federal court) for fraud on the agency as a result of

the lower court’s opinion, the scope of potential liability is

extraordinarily broad. According to the Third Circuit, a

plaintiff may prevail on such a claim simply by proving that a

product clearance was obtained through fraud, and that the

product caused injury. Pet. App. at 9a (citing elements of

fraud cause of action), 18a (citing cases). The implication of

the Third Circuit’s analysis is that a manufacturer could be

held liable for any injury caused by its product, even if it was

not defective, and even if it was manufactured, designed and

distributed with reasonable care and adequate warnings.

Given the vast differences in liability exposure in

different jurisdictions, manufacturers of critical medical

devices currently have a strong incentive to pick and choose

the states where they will and will not sell their products.

The conflicts therefore threaten to undermine the nationwide

distribution of medical devices, leaving patients in some

states without therapies that would prolong and enhance their

lives. Nothing could be further from the result that Congress

intended from a unified federal regulatory system with state

interference proscribed by the preemption provision’s

“general prohibition on non-Federal regulation.” H.R. Rep.

No. 94-853 at 45.

As the petition notes, see Pet. at 20, the conflict on the

question whether any tort claims are preempted derives from

ambiguities in Medtronic, Inc. v. Lohr, and particularly from

the opinions signed by Justice Breyer, who joined the Court’s

opinion (which casts doubt on MDA preemption of tort

claims) but also authored a separate opinion emphasizing that

17

such preemption would not be “rare.” 518 U.S. at 508. And

the conflict on the specific question whether fraud on the

agency claims are preempted stems at least in part from the

fact that Medtronic did not address such a claim at all. See

Pet. at 14. The lower courts cannot resolve these conflicts on

their own. Only this Court can clarify the law in this

important area and re-establish certainty and uniformity

regarding product liability exposure for medical devices.

IV.The Court Should Grant the Petition to Prevent

Interference with the FDA’s Authority to Remedy

Fraud in its Premarket Clearance Processes

The discussion above explains that Congress intended the

MDA to establish a unified federal regulatory structure

immune from state interference. State common law fraud

claims such as those preserved by the Third Circuit would

allow tort plaintiffs to interfere with the FDA’s unique

authority to police fraud in its own processes. In the present

case, for example, the plaintiffs allege that the agency was

_ defrauded, even though the agency — with all relevant facts

before it — does not appear to agree. The Court also should

grant the petition to prevent such intermeddling with the

FDA’s unique responsibility to remedy fraud in its premarket

clearance processes.

Under federal law, the agency has extensive tools at its

disposal to root out and punish fraud in its premarket

clearance processes. The agency proceeds under its “fraud

policy” to investigate “acts such as submitting fraudulent

applications, making untrue statements of material facts, or

giving or promising bribes or illegal gratuities [that] may call

into question the integrity of some or all of the applicant’s

submissions to the agency.” 56 Fed. Reg. 46,191, 46,199

(1991). If fraud is uncovered, the FDA exercises its authority

“under applicable statutes and regulations, to refuse to

approve the application (in the case of a pending application)

or to proceed to withdraw approval (in the case of an

18

approved application).” Jd at 46,200. The FDA also refers

fraud cases for criminal prosecution by the Department of

Justice, because violation of the FDCA’s prohibitions with

“intent to defraud or mislead” is a felony. 21 U.S.C. §§ 331,

333(a)(2); see also United States v. Cambra, 933 F.2d 752,

755 (9th Cir. 1991) (FDCA felony provision prohibits fraud

on government enforcement agencies). The federal

Sentencing Guidelines include a sentencing enhancement for

FDCA felony violations involving fraud if the government

obtains a conviction. U.S.S.G. §§ 2N2.1(b)(1); 2F1.1.

In this regulatory scheme, with its “general prohibition on

non-Federal regulation” (H.R. Rep. No. 94-853 at 45), the

proper role of a private party is to refer alleged frauds to the

agency for investigation, not to act as a private attorney

general pursuing independent remedies under state law. For

example, the FDA’s “Citizens Petition” process allows any

person to request the agency to withdraw a product clearance

obtained through fraud. See 21 C.F.R. § 10.30. Respondent

is well aware of this process, having filed a Citizens Petition

(with 1,000 pages of supporting material) alleging fraud on

the agency and seeking withdrawal of one manufacturer’s

bone screw product clearance. Citizens Petition, FDA

Docket No. 98P-0623 (July 24, 1998). In addition, private

parties may bring alleged frauds to the attention of the agency

through contacts with FDA enforcement personnel. The

Court should grant the petition for certiorari to keep

responsibility for remedying fraud on the agency where it

properly belongs — in the hands of the FDA.

19

CONCLUSION

For the reasons set forth above, the court should grant the

petition for certiorari.

Respectfully submitted,

Daniel G. Jarcho

Counsel of Record

Donald R. Stone

McKENNA & CUNEO, L.L.P.

1900 K Street, N.W.

Washington, D.C. 20006

(202) 496-7500

Counsel for Amicus Curiae Medical Device

Manufacturers Association

June 2, 1999