Amicus Curiae Brief — Warner-Lambert Co. v. Kent

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ZEPY _ No. 06-1498 Shoes Count Ue

IN THE

Supreme Court of the United States

WARNER-LAMBERT COMPANY LLC and PFIZER INC.,

Petitioners,

Vv.

KIMBERLY KENT, ET AL.,

Respondents.

On Writ of Certiorari to the

United States Court of Appeals

for the Second Circuit

BRIEF OF WASHINGTON LEGAL FOUNDATION

AS AMICUS CURIAE IN SUPPORT OF PETITIONERS

Daniel J. Popeo Eric G. Lasker

Richard A. Samp Counsel of Record

Washington Legal Foundation James M. Sullivan

2009 Massachusetts Ave. N.W. Spriggs & Hollingsworth

Washington, DC 20036 1350 I Street N.W.

(202) 588-0302 Washington, DC 20005

(202) 898-5800

Dated: November 28, 2007

WiILSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, D. C. 20002

TABLE OF CONTENTS

Page

TABLE OF CITED AUTHORITIES ................ ili

INTEREST OF AMICUS CURIAE ............0.045: l

INTRODUCTION AND SUMMARY

ET ei eee cidteduseecescedseecnnees 2

TT (pict cchinh de penindaereeeey aieeees 3

I. THE FEDERAL PRESENCE IN’ THE

REGULATION AND APPROVAL OF

PRESCRIPTION DRUGS IS FAR MORE

SIGNIFICANT THAN THE FEDERAL

PRESENCE THAT LED THIS COURT TO

REJECT THE PRESUMPTION AGAINST

PREEMPTION IN BUCKMAN ................ 3

Il. THERE IS NO PRESUMPTION AGAINST

PREEMPTION WHERE A STATE LAW CLAIM

INTRUDES UPON A FEDERAL AGENCY’S

PRIMARY JURISDICTION ................. 10

Il. THERE IS NO PRESUMPTION AGAINST

IMPLIED CONFLICT PREEMPTION ......... 14

DET Whdeckes ben eesenstcaceusseeses 21

TABLE OF CITED AUTHORITIES

Page(s)

Cases:

Bates v. Dow AgroSciences LLC,

tek euieeseues sesso 1, 16, 17

Brown v. Hotel and Restaurant Employees and

Bartenders INT’L Union Local 54,

EEE eves ceancsencces 10, 11, 15, 20

Buckman Co. v. Plaintiffs’ Legal Comm. ,

EE wind cbecneeenscecescces passim

California v. ARC America Corp.,

CE 15

Chicago & Northwest Transp. Co. v. Kalo Brick

ee ES A ) ) re 20

CIBA Corp. v. Weinberger,

cies teed eseeseeecees 14

Cipollone v. Liggett Group, Inc.,

Need h say éah eee ees 15, 16

Conference of State Bank Supervisors v. Conover,

po 17

Crosby v. Nat'l Foreign Relations Trade Council,

EE 15

DeCanas v. Bica,

EE Se 15

Engine Mfrs. Ass'n v. S. Coast Air Quality

Mgmt. Dist., 541 U.S. 246 (2004) ................. 3

Far Eastern Conference v. United States,

ee 11

Fidelity Fed. Sav. and Loan Ass'n v. de la Cuesta,

i bo KMS oben 6c deca sa 15, 16

Florida Lime & Avocado Growers, Inc. v. Paul,

A Se 16

1V

Page(s)

Free v. Bland,

6 hsb os abs 40600-00802 66 15

Gade v. Nat’l Solid Wastes Mgmt. Ass'n,

rks dct wh nes eeseu awed 15

Geier v. Am. Honda Motor Co.,

PPE ED occ cece cccccsess 1, 8, 16, 17, 20

Gibbons v. Ogden,

yeh SS) | Crake a hae ae eee pera eae 14

Heckler v. Chaney,

es eed aeddeetedee dees 12

Hines v. Davidowitz,

ee ee teh eéséke bees eaceuen 16

Int'l Paper Co. v. Ouellette,

in coh 806) dak eeeeees 20

Irving v. Mazda Motor Co.,

136 F.3d 764 (11th Cir.),

cert. denied, 525 U.S. 1018 (1998) ............... 16

Kanter v. Warner Lambert Co.,

SP OEE POE occ ceccccscncccvence 3

Medtronic v. Lohr,

i ch cee cecus bee seccciecs 5, 8,17

Merck KGAA v. Integra Lifesciences I, Ltd.,

ee eet ets ehh sebccs vsesee 13

Penn. Employees Benefit Trust Fund v. Zeneca

Inc., 499 F.3d 239 (3d Cir. 2007) ................. 8

Rice v. Santa Fe Elevator Corp.,

EE 15

Rutherford v. United States,

S06 F.2d 1455 (10th Cir. 1966) ........... 000000, 14

Sandoz Pharms. Corp. v. Richardson-Vicks, Inc.,

SU PEI BED occ cccccccccccescess 13

Schering Corp. v. Heckler,

FO ee is We SUED ccc ccc cc ccecccecees 12

Page(s)

Sprietsma v. Mercury Marine,

8 re 16, 17

Tutoki v. Celebrezze,

oo eT EB PP 14

United States v. Locke,

i esas od bese nse dene Ree 1,4

Weinberger v. Bentex Pharms., Inc.,

>. 8 rer rere 13

Constitutional Provisions:

Re a 8S ae 17, 20

Statutes:

Food and Drug Administration Modernization Act

of 1997, S. Rep. 105-43, 1997 WL 394244 .......... 6

Food, Drug, and Cosmetic Act (FDCA),

Oe EL, 6.66 ct ceesenvvceeeeuns passim

Se EE 60-6. 66 esnnn450nee dee eu 6

ee ED i646: tin'n wn anes dknue ee 7

MICH. COMP. LAWS § 600.2946(5) .............. 12, 13

MICH. ComP. LAWS § 600.2946(5)(a) ............... 4

Page(s)

Regulations:

WO GPE BOIDS «oo... cccccccccccccccccecccccccs 7

EE Ee 7

sk reece enedsebsceeeees 7

Be es GREED occ ccccvcccccccccccces 7

rds dbedecececteseteonteees 6

ie veccevededececedbeutieseoes 6

i cer ides cee eens beesecceenéeues 7

21 CFR. § 314.81(b)(3) 2.0. ccc ccc eee eee 7

Ey 7

ees ee kee eeneteenceets 7

SEEN EA are 7

eee ieec ie thaneoecetiees 7

Other Authorities:

71 Fed. Reg. 3922 (Jan. 24, 2006) .................. 9

TT cates bande We ond cseveedceecs 18, 20

Page(s)

J.A. DiMasi, et al., The Price of Innovation:

New Estimates of Drug Development Costs,

22 J. Health Economics 151-85 (2003) ............. 6

The Records of the Federal Convention of 1787,

(M. Farrand ed., rev. ed. 1937) ............... 18, 19

Trends in FDA Drug Enforcement 2006: An Expert

Analysis of the Latest Warning Letters,

(FDAnews Management Report 2006) ............. 8

INTEREST OF AMICUS CURIAE

The Washington Legal Foundation (“WLF”) is a non-

profit, public-interest law and policy center based in

Washington, D.C., with supporters in all 50 states.’ WLF

devotes a substantial portion of its resources to defending free

enterprise principles, individual rights, a limited and

accountable government, and the proper use of our state and

federal judicial systems. To that end, WLF has frequently

appeared as amicus curiae in this and other federal courts in

cases involving preemption issues, to point out the economic

inefficiencies often created when multiple layers of

government seek simultaneously to regulate the same business

activity. See, e.g., Bates v. Dow Agrosciences LLC, 544 U.S.

431 (2005); Buckman Co. v. Plaintiffs’ Legal Comm. , 531 U.S.

341 (2001) Geier v. Am. Honda Motor Co., 529 U.S. 861

(2000); United States v. Locke, 529 U.S. 89 (2000).

WLIF is particularly concerned that individual freedom

and the American economy both suffer when state law,

including state tort law, imposes upon industry an unnecessary

layer of regulation that frustrates the objectives or operation of

specific federal regulatory regimes, such as the Federal Food,

Drug, and Cosmetic Act (FDCA) at issue here.

WLF has no direct interest, financial or otherwise, in the

outcome of this case. It is filing due solely to its interest in the

important preemption issues raised by this case.

' WLKF hereby affirms that no counsel for either party authored

any part of this brief, and that no person or entity other than amicus

curiae and its counsel provided financial support for the preparation and

submission of this brief. By blanket letters of consent, all parties have

consented to the filing of this brief.

2

INTRODUCTION AND SUMMARY OF ARGUMENT

In Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S.

341 (2001), this Court unanimously held that plaintiffs’ claims

that a medical device manufacturer secured FDA approval for

a § 510{k) medical device through fraud on the FDA were

impliedly preempted because such claims “inevitably conflict

with the FDA’s responsibility to police fraud consistently with

the Administration’s judgments and objectives.” Jd. at 350.

In so ruling, this Court rejected plaintiffs’ assertion that it

should apply a presumption against preemption to such claims,

explaining that “[pJolicing fraud against federal agencies is

hardly ‘a field which the States have traditionally occupied’”

and noting that “the relationship between a federal agency and

the entity it regulates is inherently federal in character because

the relationship originates from, is governed by, and terminates

according to federal law.” Jd. at 347.

Just six years after its clear ruling in Buckman, this Court

is again faced with the issue of whether fraud-on-the-FDA

claims are preempted. In its ruling below, the Second Circuit

rejected the core holding of Buckman and held that fraud-on-

the-FDA claims asserted by plaintiffs to meet the exception to

Michigan’s product liability statute are not preempted. The

Second Circuit reached this contrary result based in large part

on its holding that it should apply the very same presumption

against preemption this Court rejected. See Pet. App. 18a-19a.

WLIF files this amicus brief because the Second Circuit’s

confusion over the proper scope of a presumption against

preemption highlights the need for further guidance on the

3

issue by this Court.? While the claims here should be held

preempted even if a presumption applied, the arguments

contrary to a presumption against preemption here are in fact

far stronger than they were in Buckman, because the degree of

federal involvement in the approval of prescription drugs

dwarfs that at issue in the approval of § 510(k) medical

devices. More fundamentally, however, a presumption against

preemption is completely inapplicable here because plaintiffs’

fraud-on-the-FDA claims (1) intrude upon regulatory

determinations within the primary jurisdiction of FDA and (2)

conflict directly with federal law. WLF respectfully requests

that the Court clarify that no anti-preemption presumption can

be applied in such circumstances.

ARGUMENT

I. THE FEDERAL PRESENCE IN THE

REGULATION AND APPROVAL OF

PRESCRIPTION DRUGS IS FAR MORE

SIGNIFICANT THAN THE FEDERAL PRESENCE

THAT LED THIS COURT TO REJECT THE

PRESUMPTION AGAINST PREEMPTION IN

BUCKMAN

In applying a presumption against preemption, the

Second Circuit failed to recognize the longstanding, extensive

role that the federal government plays in the approval of the

safety and efficacy of prescription drugs. “[A]Jn ‘assumption’

of nonpre-emption is not triggered when the State regulates in

? As the Court has recently noted, the proper application of a

“presumption against preemption” is an issue “on which not all

Members of this Court agree.” Engine Mfrs. Ass'n v. S. Coast Air

Quality Mgmt. Dist., 541 U.S. 246, 256 (2004).

4

an area where there has been a history of significant federal

presence.” United States v. Locke, 529 U.S. 89, 108 (2000).

In rejecting any presumption against preemption in

Buckman, this Court focused on the federal interest in

maintaining control over the FDA regulatory process by which

medical device applicants secure approval for Section 510(k)

medical devices. As the Court explained, “the § 510(k)

process sets forth a comprehensive scheme for determining

whether an applicant has demonstrated that a product is

substantially equivalent to a predicate device.” Buckman, 531

U.S. at 348. Accordingly, the Court concluded that policing

fraud against the FDA in the Section 510(k) process “is

inherently federal in character because the relationship

originates from, is governed by, and terminates according to

federal law.” Jd. at 347.’

For prescription drug manufacturers pursuing a new drug

application (NDA), far more even than for manufacturers of

Section 510(k) devices, the manufacturers’ “dealings with the

FDA [a]re prompted by the [FDCA], and the very subject of

[the applicants’] statements [are] dictated by that statute’s

provisions.” /d. at 347-48. This Court recognized in Buckman

that the Section 510(k) process “lacks the . . . rigor” of FDA’s

premarket approval (PMA) review of Class III medical

devices, id. at 348, a process modeled after and substantially

> Like the fraud-on-the-FDA claims at issue in Buckman, under

the Michigan statutes, plaintiffs seeking to bring claims against a

prescription drug manufacturer must establish that the manufacturer

“[ijntentionally withholds from or misrepresents to the [FDA]

information concerning the drug that is required to be submitted under

the [FDCA]” and “the drug would not have been approved, or the

[FDA] would have withdrawn approval for the drug if the information

were accurately submitted.” Mich. Comp. Laws § 600.2946(5)(a),

reprinted at Pet. App. 42a.

5

identical to FDA’s NDA process for prescription drugs.* As

the Court previously had noted in Medtronic, Inc. v. Lohr:

The § 510(k) notification process is by no means

comparable to the PMA process; in contrast to the 1,200

hours necessary to complete a PMA review, the § 510(k)

review is completed in an average of only 20 hours. . . .

As one commentator noted: “The attraction of

substantial equivalence to manufacturers is clear.

Section 510(k) notification requires little information,

rarely elicits negative response from the FDA, and gets

processed very quickly.

518 U.S. 470, 478-79 (1996) (citations omitted).

Nevertheless, the Buckman Court rejected a presumption

against preemption because “to achieve its limited purpose, the

§ 510(k) process imposes upon applicants a variety of

requirements that are designed to enable the FDA to make its

statutorily required judgment as to whether the device qualifies

under this exception.” 531 U.S. at 348-49.

The requirements imposed by FDA on manufacturers of

prescription drugs and the corresponding scope of the federal

presence mandating the inapplicability of a presumption

against preemption here are far more detailed and substantial.

Like PMA-approved Class III medical devices, prescription

drugs are subject to perhaps the most extensive federal

regulatory scheme governing any consumer product. As the

* See Kanter v. Warner-Lambert Co., 99 Cal. App. 4th 780, 794

(2002) (“The substantial similarity between the premarket approval

process {for medical devices} and new drug application processes

compels the conclusion that the latter also establishes a federal

requirement with respect to labeling that can have preemptive effect.”).

6

United States Congress recognized a decade ago, the NDA

process is rigorous; new drug applications “typically run to

hundreds of thousands of pages,” and the process of securing

NDA approval for a prescription drug “takes an average of 15

years and costs in the range of $5(0 million.” Food and Drug

Administration Modernization Act of 1997, S. Rep. 105-43,

available at 1997 WL 394244, at *6. These costs have only

increased since. See Joseph A. DiMasi et al., The Price of

Innovation: New Estimates of Drug Development Costs, 22 J.

Health Economics 151-85 (2003) (calculating that total R&D

costs per new drug brought to market in the United States have

now reached $802 million).

A drug manufacturer seeking approval to market a

prescription drug is subject to specific FDA regulatory

determinations at every stage of the pre-approval development,

approval, labeling, marketing, and post-marketing approval

process. To obtain FDA approval of a prescription drug, a

pharmaceutical company must submit voluminous scientific

evidence to the agency in accordance with the statutory

requirements set forth in Section 355 of the Federal Food,

Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq.

Pursuant to a broad grant of regulatory authority under

the Act, FDA has enacted detailed regulatory reporting

requirements for New Drug Applications addressing, inter

alia, the format and organization of the application,

pharmacologic and toxicologic studies, clinical investigation

data, case reports forms, patent information, and marketing-

exclusivity issues. See 21 C.F.R. § 314.50. Once a drug has

received FDA approval, FDA continues to subject drug

manufacturers to extensive regulatory requirements mandating

frequent submissions of adverse drug experience reports, see

21 C.F.R. § 314.80, and regular submissions of new studies

and other information relevant to the continued approval of the

7

drug, see 21 C.F.R. § 314.81. FDA may also require Phase IV

post-marketing studies to gather additional information

regarding the drug’s safety, efficacy, or optimal use. See 21

U.S.C. § 356b. FDA retains continuing regulatory control

over the content and format of drug labels. See 21 C.F.R.

§ 201.57; see also 21 C.F.R. Part 201. FDA’s postmarketing

authority has been enhanced further through the recent

enactment of the Food and Drug Administration Amendments

Act of 2007, Pub. L. No. 110-85, §§ 901-21, 121 Stat. 823

(2007).

FDA also imposes strict regulatory requirements on drug

manufacturers in their direct communications with physicians.

See 21 C.F.R. § 200.5 (“mailing of important information

about drugs”); § 201.57 and Part 201 (labeling); Part 202

(“Prescription Drug Advertising”); Part 203 (“Prescription

Drug Marketing”). In seeking to market a drug to physicians,

pharmaceutical companies also are required to “submit

specimens of mailing pieces and any other labeling or

advertising devised for promotion of the drug product at the

time of initial dissemination of tHe labeling and at the time of

initial publication of the advertivement for a prescription drug

product.” 21 C.F.R. § 314.81(b)(3). If the company fails to

submit such information to the FDA, the agency “may

withdraw approval of the application and, thus, prohibit

continued marketing of the drug product.” Jd. § 314.81(d).

FDA comprehensively regulates the content and format

of prescription drug advertising, including requiring that the

advertisement “present a ‘true statement’ of information in

brief summary relating to side effects, contraindications, and

effectiveness,” id. § 202.1(e)(5), and _ prohibiting

advertisements that — as defined in detail in the regulations —

are or may be “false, lacking in fair balance, or otherwise

misleading,” id. § 202.1(e)(6) & (7). The FDA vigorously

monitors Grug company communications with the medical

community and takes regulatory action where it deems such

action is appropriate.° See also Penn. Employees Benefit Trust

Fund v. Zeneca Inc., 499 F.3d 239 (3d Cir. 2007) (holding

consumer fraud claims against prescription drug manufacturers

impliedly preempted); id. at 250 (Supreme Court opinions in

“Medtronic and Geier add to the preemption analysis by

suggesting that state laws are preempted when they frustrate

regulations that have been promulgated following a specific

inquiry into a particular area of agency authority”).

The federal presence here is also stronger than that in

Buckman because the federal government’s role in the

approval of prescription drugs substantially predates its role in

the regulation of medical devices. In discussing the competing

state and federal interests in the safety of Section 510(k)

medical devices in Lohr, this Court noted that “[dJespite the

prominence of the States in matters of public health and safety,

in recent decades the Federal Government has played an

increasing role in the protection of the health of our people.”

Lohr, 518 U.S. at 475. The Court explained, however, that the

FDA had not been authorized to regulate the approval of

medical devices until the enactment of the Medical Device

Amendments of 1976, some twenty years before. Jd. at 475-

76. In sharp contrast, FDA began regulating the approval of

prescription drugs with the enactment of the Food and Drug

Act of 1906. The federal government has thus played a central

role in ensuring the safety of prescription drugs for over one

hundred years.

* For example, in 2005, FDA issued 102 drug warning letters to

drug manufacturers in connection with promotional activity. See

Trends in FDA Drug Enforcement 2006: An Expert Analysis of the

Latest Warning Letters (FDAnews Management Report 2006).

9

The federal interest in maintaining control over the

relationship between FDA and prescription drug manufacturers

in the NDA process is substantial and would be significantly

impeded if courts could misuse a presumption against

preemption to allow fraud-on-the-FDA claims under the

Michigan statute. The substantial nature of the federal interest

in the disclosures to FDA as part of the regulation of

prescription drugs was clearly explained in January 2006,

when the FDA promulgated a Final Rule on labeling for

prescription drugs. Requirements on Content and Format of

Labeling for Human Prescription Drug and Biological

Products, 71 Fed. Reg. 3922 (Jan. 24, 2006).

In the preamble to this Final Rule, FDA warned that in

recent years, state law “product liability lawsuits have directly

threatened the [FDA’s] ability to regulate manufacturer

dissemination of risk information for prescription drugs in

accordance with the [FDCA].” Jd. at 3934. FDA explained

that “[s]tate law actions can rely on and propagate

interpretations of the [FDCA] and FDA regulations that

conflict with the agency’s own interpretations and frustrate the

agency’s implementation of its statutory mandate.” Jd. FDA

thus stressed that “[i]f State authorities, including judges and

juries applying State law, were permitted to reach conclusions

about the safety and effectiveness information disseminated

with respect to drugs for which FDA has already made a series

of regulatory determinations based on its considerable

institutional expertise and comprehensive statutory authority,

the federal system for regulation would be disrupted.” Jd. at

3969.

It cannot be disputed that “there has been a history of

significant federal presence” in the regulation and approval of

prescription drugs, a federal presence far more significant than

that which led this Court to reject a presumption against

10

preemption in Buckman. Whereas the Buckman Court

confronted the adverse consequences of fraud-on-the-FDA

claims only in the context of a limited Section 510(k) review,

in this case, the Court is faced with claims that would interfere

with scores if not hundreds of different FDA submission

requirements that are routinely imposed on drug manufacturers

during each stage of the multi-year NDA process and during”

FDA’s subsequent oversight of approved drugs. The Second

Circuit’s reliance on a presumption against preemption below

was in error, and this Court should so hold.

Il. THERE IS NO PRESUMPTION AGAINST

PREEMPTION WHERE A STATE LAW CLAIM

INTRUDES UPON A FEDERAL AGENCY’S

PRIMARY JURISDICTION

The Second Circuit’s reliance on a presumption against

preemption is also in error because it fails to account for the

fact that the questions that must be resolved under the

Michigan statute fraud on the FDA exception would require a

court to intrude upon the primary jurisdiction of FDA. A

presumption against preemption is not appropriate where it

would undercut the discretion and expertise entrusted by

Congress to the federal agencies, which this Court has

consistently protected. See, e.g., Buckman, 531 U.S. at 347-53

(no presumption against preemption given FDA’s primary

responsibility to police fraud against the Agency); Brown v.

Hotel & Rest. Employees & Bartenders Int'l Union Local 54,

468 U.S. 491, 502 (1984) (NLRB’s primary jurisdiction

protected by special “presumption [in favor] of federal

preemption [that] applies even when the state law regulates

11

conduct only arguably protected by federal law.”);° Far East

Conference v. United States, 342 U.S. 570, 574-75 (1952)

(action should be dismissed to afford agency with primary

jurisdiction opportunity to review in first instance).

The Court explained the need to not lightly intrude on a

federal agency’s primary jurisdiction over fifty years ago:

[I]n cases raising issues of fact not within the

conventional experience of judges or cases requiring the

exercise of administrative discretion, agencies created by

Congress for regulating the subject matter should not be

passed over. This is so even though the facts after they

have been appraised by specialized competence serve as

a premise for legal consequences to be judicially defined.

Uniformity and consistency in the regulation of business

entrusted to a particular agency are secured, and the

limited functions of review by the judiciary are more

rationally exercised, by preliminary resort for

ascertaining and interpreting the circumstances

underlying legal issues to agencies that are better

equipped than courts by specialization, by insight gained

through experience, and by more flexible procedure.

Far East Conference, 342 U.S. at 574-75.

Each of the two showings necessary to invoke the fraud

on the FDA exception in the Michigan products liability

statute requires a factfinder under state law to intrude upon

FDA’s primary jurisdiction:

* While Brown addressed a special preemption doctrine applicable

to matters within the primary jurisdiction of NLRB, the principles

behind the Court’s rejection there of any presumption against

preemption are equally applicable here.

12

First, the factfinder is required to determine that the drug

manufacturer has intentionally withheld from or

misrepresented information to the FDA concerning its drug

that is required to be submitted under the FDCA. See MICH.

ComP. LAWS § 600.2946(5), reprinted at Pet. App. 42a. But

as this Court recognized in Buckman, “the federal statutory

scheme amply empowers the FDA to punish and deter fraud

against the Administration, and . . . this authority is used by

the Administration to achieve a somewhat delicate balance of

statutory objectives” that “can be skewed by allowing fraud-

on-the-FDA claims under state tort law.” 531 U.S. at 348; see

also id. at 349 (“The FDA thus has at its disposal a variety of

enforcement options that allow it to make a measured response

to suspected fraud upon the Administration.”). Thus, for

example, this Court has held that courts may not review FDA

determinations whether to take enforcement action with regard

to prescription drugs. See Heckler v. Chaney, 470 U.S. 821

(1985). The Court explained that “an agency decision not to

enforce often involves a complicated balancing of a number of

factors which are peculiarly within its expertise” and that

“[t]he agency is far better equipped than the courts to deal with

the many variables involved in the proper ordering of its

priorities.” Jd. at 831-32; see also Schering Corp. v. Heckler,

779 F.2d 683, 685-86 (D.C. Cir. 1985) (decision by FDA

whether to exercise its enforcement authority “involve a

complex balancing of an agency’s priorities, informed by

judgments ‘peculiarly within its expertise,’ and they are

therefore ill-suited for judicial review”) (internal citation

omitted).

The unavoidable intrusion upon FDA’s primary

jurisdiction required for purposes of determining whether FDA

has been defrauded is particularly significant because of the

complexity of FDA regulations regarding the information that

should be provided to FDA by drug companies and FDA’s

13

discretion in many instances in determining whether or not

certain types of information should be submitted. Thus, “it

will not always be clear to parties setting out to seek FDA

approval for their new product exactly which kinds of

information, and in what quantities, it will take to win that

agency’s approval.” Merck KGaA v. Integra Lifesciences I,

Lid., 545 U.S. 193, 207 (2005); cf Sandoz Pharms. Corp. v.

Richardson-Vicks, Inc., 902 F.2d 222, 231 (3d Cir. 1990)

(“agency decisions are frequently of a discretionary nature or

frequently require expertise,” resulting in “administrative

agencies’ responsibility for interpreting and enforcing

potentially ambiguous regulations”).

Second, under Michigan’s fraud on the FDA exception,

the factfinder must determine that the drug would not have

been approved or would have had its approval withdrawn if

the information had been accurately submitted. See MICH.

ComP. LAWS § 600.2946(5), reprinted at Pet. App. 42a. This

Court has recognized FDA’s primary jurisdiction over the

NDA approval of prescription drugs. See Weinberger v.

Bentex Pharms., Inc., 412 U.S. 645, 654 (1973). “The

determination whether a drug is generally recognized as safe

and effective . . . necessarily implicates complex chemical and

pharmacoiogical considerations. Threshold questions within

the peculiar expertise of an administrative agency are.

appropriately routed to the administrative agency, while the

court stays its hand.” Jd.

Under the Michigan statute, plaintiffs must establish that

“the drug would not have been approved, or the [FDA] would

have withdrawn approval for the drug if the information were

accurately submitted.” MICH. COMP. LAWS § 600.2946(5),

reprinted at Pet. App. 42a. Thus, “an essential element of

proof... would be a showing that if the FDA had passed upon

[a prescription drug] according to statutory and constitutional

14

standards, it would have been approved or exempted.” Tutoki

v. Celebrezze, 375 F.2d 105, 107 (7th Cir. 1967). As the

United States Court of Appeals for the Seventh Circuit has

explained, “[t]his determination is a matter within the primary

jurisdiction of the FDA. /d. “The possible conflict of a

judicial determination of this question with a[n] ... FDA

determination on [the drug] strengthens our view that the

doctrine of primary jurisdiction should be applied.” Jd.; cf.

Rutherford v. United States, 806 F.2d 1455, 1461 (10th Cir.

1986) (“[T]he intent behind the [FDCA] was to give the

agency the primary jurisdiction to determine evidentiary

matters concerning drugs about which it has a special

expertise. See also CIBA Corp. v. Weinberger, 412 U.S. 640,

643-44 (1973).”).

By failing to recognize FDA’s primary jurisdiction over

both steps in the Michigan statute’s fraud on the FDA

exception, the Second Circuit erroneously hinged its opinion

on a presumption against preemption. No such presumption

applies here.

Ill. THERE IS NO PRESUMPTION AGAINST

IMPLIED CONFLICT PREEMPTION

Thirdly, the Second Circuit erred in relying on a

presumption against preemption because such presumption, if

ever appropriate, is not appropriate in cases giving rise to

implied conflict preemption. Rather, the sole question for the

courts in determining whether implied conflict preemption

applies is the existence of a conflict between federal and state

law.

The Court repeatedly has made clear that “‘[t}he relative

importance to the State of its own law is not material when

there is a conflict with a valid federal law, for the Framers of

15

our Constitution provided that the federal law must prevail.’”

Fidelity Fed. Sav. and Loan Ass'n v. de la Cuesta, 458 U.S.

141, 153 (1982) (principle that “state law is nullified to the

extent that it actually conflicts with federal law” is “not

inapplicable here simply because real property law is a matter

of special concern to the States”); Brown, 468 U.S. at 502-03

(same with respect to local interest in crime control). Indeed,

even where the State has a “compelling interest” in

preservation of its law, “under the Supremacy Clause, for

which our preemption doctrine is derived, any state law, . . .

clearly within a State’s acknowledged power, which interferes

with or is contrary to federal law, must yield.” Gade v. Nat'l

Solid Wastes Mgmt. Ass'n, 505 U.S. 88, 108 (1992) (internal

quotations and citations omitted); DeCanas v. Bica, 424 U.S.

351, 357 (1976) (“[E]}ven state regulation designed to protect

vital state interests must give way to paramount federal

legislation.”); Free v. Bland, 369 U.S. 663, 666 (1962)(same)

(citing Gibbons v. Ogden, 22 U.S. 1 (1824)).’

? Counsel has found no case in which the Court has relied on a

presumption against preemption in the face of an actual conflict

between state and federal law. In California v. ARC Am. Corp., 490

U.S. 93, 101-06 (1989), the Court suggested a presumption against

preemption, but any such presumption played no ascertainable part in

the Court's holding. See id. (mentioning presumption as something to

“overcome,” but finding no federal-state conflict for the presumption

to overcome); see also Crosby v. Nat'l Foreign Trade Council, 530 U.S.

363, 374 n.8 (2000) (deferring on question whether presumption against

preemption applies in context of implied conflict preemption). This

Court has, by contrast, applied a presumption against preemption in

cases involving express preemption, e.g., Cipollone v. Liggett Group,

Inc., 505 U.S. 504, 517-18 (1992), or field preemption, e.g., Rice v.

Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947). However, even in

preemption” has not been consistently applied and is not free from

controversy. It has been ignored in many recent express preemption

(continued...)

16

Such a federal-state conflict arises when “compliance

with both federal and state regulations is a physical

impossibility,” Fla. Lime & Avocado Growers, Inc. v. Paul,

373 U.S. 132, 142-43 (1963), or when state law “stands 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). E.g., de la Cuesta, 458 U.S. at 153.

“[Bjoth forms of conflicting state law are ‘nullified’ by the

Supremacy Clause, and [this Court] has assumed that Congress

would not want either kind of conflict.” Geier v. Am. Honda

Motor Co., 529 U.S. 861, 873 (2000) (internal citations

omitted). Thus, once a federal-state conflict is established,

preemption is “inescapable and requiv@s no inquiry into

congressional design.” Fla. Lime, 373 U.S. at 142-43; see also

Geier, 529 U.S. at 869 (“ordinary pre-emption principles . . .

instruct us to read statutes as pre-empting state laws (including

common-law rules) that ‘actually conflict’ with the statute or

federal standards promulgated thereunder’’).

As both the D.C. Circuit and Eleventh Circuit have

recognized, this Court’s teaching cannot coexist with a

presumption against preemption in implied conflict preemption

cases. See Irving v. Mazda Motor Co., 136 F.3d 764, 769

(11th Cir. 1998) (“When considering implied preemption, no

’(...continued)

cases, e.g., Sprietsma v. Mercury Marine, 537 U.S. 51, 63 (2002)

(relying on “natural{] read[ing]” of express preemption clause without

any mention of presumption), and squarely rejected as a guide to

interpreting express preemption clauses by at least two Members of this

Court, e.g., Cipollone, 505 U.S. at 544 (Scalia, J., joined by Thomas, J.,

concurring in the judgment in part and dissenting in part) (“Under the

Supremacy Clause, . . . our job is to interpret Congress’s decrees of pre-

emption neither narrowly nor broadly but in accordance with their

apparent meaning.”); Bates v. Dow Agrosciences LLC, 544 U.S. 431,

457 (2005) (opinion of Thomas, J.) (same).

17

presumption exists against preemption.”), cert. denied, 525

U.S. 1018 (1998); Conference of State Bank Supervisors v.

Conover, 710 F.2d 878, 882 (D.C. Cir. 1983) (“the

‘presumption [against preemption]’ inquiry is not relevant

here, for the only question before us is whether admittedly

conflicting regulations are valid”).*

Indeed, the Framers left no doubt that there can be no

presumption against preemption of conflicting state law, and

that federal law is supreme without need for a showing of a

Congressional preemptive intent, by placing that statement of

intent within the text of the Supremacy Clause. See US.

Const., art. VI, cl. 2 (“{T]he laws of the United Siates . . . shall

be the supreme Law of the Land . . . any Thing in the

* A close review of this Court’s recent preemption jurisprudence

in cases involving state tort law claims demonstrates that it is the

existence or non-existence of a conflict — rather than any presumption

— that has informed the Court’s rulings. See Bates, 544 U.S. 431 (2005)

(no express preemption of state tort law claims alleging inefficacy of

pesticide because EPA does not evaluate pesticide efficacy nor approve

pesticide labeling in that regard, but holding that fraud and failure-to-

warn claims might be preempted to the extent based on requirements

inconsistent with EPA regulation); Sprietsma, 537 U.S. 51 (2002) (no

implied preemption where federal coast guard had not taken position on

whether propeller guards should be required on motor boats); Buckman,

531 U.S. 341 (2001) (fraud-on-the-FDA claims impliedly preempted in

light of conflict with FDA regulatory authority); Geier, 529 U.S. 861

(2000) (state tort law claims for failure to install airbags impliedly

preempted due to conflict with federal law despite savings clause in

National Traffic and Motor Vehicle Act precluding finding of express

preemption); Lohr, 518 U.S. 470 (1996) (rejecting express preemption

of state tort law claims involving Section 510(k) medical device

because the generality of FDA requirements in approving such devices

did not provide basis for state-federal law conflict); see also id. at 504

(Breyer, J., in controlling concurrence, explaining that preemption

would be necessary if conflict existed).

18

Constitution or Laws of any State to the Contrary

notwithstanding.”) (emphasis added). During the

Constitutional Convention, the delegates specifically debated

whether the source of federal law supremacy should be an

affirmative assertion by Congress — i.e. some statement as

might be needed to rebut a presumption against preemption —

or the fundamental hierarchy between federal and state laws.

They decided on the latter and charged the courts to declare

conflicting state laws void without awaiting any statement of

preemptive intent by Congress. See id.; see also The

Federalist No. 78 (Alexander Hamilton) (“The interpretation

of the laws is the proper and peculiar province of the courts. .

[T]n regard to the interfering acts of a superior and

subordinate authority, . . . . it will be the duty of the judicial

tribunals to adhere to [the supreme law].”).

The Framers’ rejection of any presumption against

contlict preemption is made evident by the history behind the

drafting of the Supremacy Clause. Early in the Convention,

Governor Edmund Randolph proposed fifteen resolutions,

primarily drafted by James Madison, which became known as

the Virginia Plan. The sixth resolution dealt generally with the

affirmative powers of Congress — the functional equivalent

under the Virginia Plan of the Constitution’s Article I, Section

8. I The Records of the Federal Convention of 1787, at 21 (M.

Farrand ed., rev. ed. 1937). Among the powers allocated to

Congress under this resolution was the authority “to negative

all laws passed by the several States, contravening in the

opinion of the National Legislature the articles of Union.” See

id. In other words, under this proposal, Congress would be

required to declare whether conflicting state law would be

preempted.

In response to the Virginia Plan, William Patterson,

proposed nine alternative resolutions which became known as

19

the New Jersey Plan or the Small State Plan. The sixth of

Patterson’s resolutions was in substance and concept, if not in

form, similar to the current language of the Supremacy Clause.

See id. at 245. Patterson’s sixth resolution differed from

Randolph’s power to negative state laws in that the former was

not proposed as one of Congress’s affirmative powers. All

such powers under the Small State Plan were proposed in

Patterson’s second resolution. See.id. at 243. The supremacy

concept was instead offered as a separate resolution, distinct

from legislative powers and listed after the fifth resolution

establishing the federal judiciary. See id. at 244. That is, the

courts — not Congress — would determine whether there was a

preemptive conflict between federal and state law.

Resolution of the competing proposals came when the

Convention debated the report of the Committee of the whole

House. As he had done throughout the debates, see id. at 169

(June 8, 1787), 317 (June 19, 1787), James Madison warned

against the “propensity of the States to pursue their particular

interests in opposition to the general interest” and advocated

“the negative on the laws of the States as essential to the

efficacy & security of the Gen]. Govt,” 2 The Records of the

Federal Constitutional Convention of 1787, at 27 (M. Farrand

ed., rev. ed. 1937). Roger Sherman responded, “Such a power

involves a wrong principle, to wit, that a law of a State

contrary to the articles of the Union, would if not negatived, be

valid & operative.” Jd. Randolph’s proposal for a legislative

power to negative state laws was thereafter defeated by a vote

of three to seven. See id.

The Convention then immediately adopted by unanimous

consent an alternative proposal by Luther Martin which is in

substance similar to Patterson’s sixth resolution and in form

almost identical to the current Supremacy Clause. See id. at

28-29. Consistent with the structure of Patterson’s plan, the

20

adopted text that became the Supremacy Clause does not

mention any affirmative authority of Congress to repeal state

law, but rather made federal law supreme over conflicting state

law in all instances. See U.S. Const., art. VI, cl. 2; see also

The Federalist No. 78.

Conflict preemption cases thus represent the

paradigmatic operation of the Supremacy Clause to resolve

conflicts between state and federal law. In declining to find

preemption “[u]ntil and unless Congress states explicitly that

it intends invalidation of state common law claims,” Pet. App.

24a, the Second Circuit below contravened the fundamental

constitutional principles underlying implied conflict

preemption and departed from this Court’s unambiguous

teaching. See Geier, 529 U.S. at 884-85 (“[C]onflict pre-

emption . . . turns on the identification of ‘actual conflict,’ and

not on an express statement of preemptive intent. ... [T]he

Court has never before required a specific, formal agency [or

congressional} statement identifying conflict in order to

conclude that such a conflict in fact exists.”); Int'l Paper Co.

v. Ouellette, 479 U.S. 481 (1987) (“[I]t is not necessary for a

federal statute to provide explicitly that particular state laws

are pre-empted.”); Brown, 468 U.S. at 501 (“[e]ven in the

absence of such express language or implied congressional

intent to occupy the field, we may nevertheless find state law

to be displaced to the extent that it actually conflicts with

federal law”); Chicago & N.W. Transp. Co. v. Kalo Brick &

Tile Co., 450 U.S. 311, 317 (1981) (“[W]hen Congress has

chosen to legislate pursuant to its constitutional powers, then

a court must find local law pre-empted by federal regulation

whenever the ‘challenged state statute “stands as an obstacle

to the accomplishment and execution of the full purposes and

objectives of Congress.”””’) (citations omitted).

21

The Second Circuit’s application of a presumption

against preemption to avoid implied conflict preemption of

Respondent’s fraud-on-the-FDA claims was in error. No such

presumption exists against implied conflict preemption.

CONCLUSION

The Second Circuit’s rejection of this Court’s holding in

Buckman based on a misplaced “presumption against

preemption” highlights the need for further guidance from this

Court on the proper scope, if any, of such a presumption. For

the reasons set forth herein, WLF respecifully requests that this

Court make clear that no such presumption can be applied in

cases involving drug manufacturer regulatory submissions in

the approval and regulation of prescription drugs due to the

long-standing significant federal presence in that area. WLF

also requests that this Court confirm that no presumption

against preemption exists in cases intruding upon a federal

agency’s primary jurisdiction or in cases of implied conflict

preemption.

Respectfully submitted,

Daniel J. Popeo Eric G. Lasker

Richard A. Samp Counsel of Record

Washington Legal Foundation James M. Sullivan

2009 Massachusetts Ave. NW Spriggs & Hollingsworth

Washington, D.C. 20036 1350 I Street NW

(202) 588-0302 Washington, D.C. 20005

(202) 898-5800

November 28, 2007