New Jersey Intermediate Appellate Court Splits Pre-emption Rulings in Vioxx Case

June 9, 2008

On May 29, 2008, New Jersey’s intermediate appellate court stepped into the pre-emption fray and decided that state law failure-to-warn claims challenging the adequacy of prescription drug labeling are not pre-empted under the Food, Drug and Cosmetic Act (“FDCA”) whereas the fraud-on-the-FDA exception to statutory immunity for punitive damages is pre-empted. McDarby, et al. v. Merck & Co., Inc., ___A.2d ___, 2008 WL 2199871 (N.J.Super.A.D., 2008).

Affirming the award of compensatory damages awarded to Vioxx personal injury plaintiffs, the court ruled that state-law product liability claims based on violation of federal regulations are parallel claims and thus are not pre-empted by FDCA. Id. Central to the court’s reasoning was the post-market opportunity to provide stronger or additional warnings about cardiovascular risks associated with Vioxx via a “changes being effected” (CBE) supplement which the manufacturer could have implemented even before FDA approval. Thus, the manufacturer was not presented with a dilemma of either complying with federal regulations and being exposed to the jury verdicts in state tort actions or providing additional warnings and thereby violating federal law.

The McDarby court explicitly held that FDA’s statements in the 2006 “Preemption Preamble” of a final rule governing prescription drug labeling, 71 Fed. Reg. 3922, 3933-36 (Jan. 24, 2006), lack pre-emptive force in part based on (1) the presumption against pre-emption in fields traditionally occupied by states and (2) the conflict between the Preamble and long-standing FDA policy which, according to the Court’s analysis, permits state-law failure-to-warn claims except when there is actual conflict with federal regulation. The court declined to follow the reasoning of Colacicco v. Apotex, Inc., 432 F. Supp. 2d 514, 531–32 (E.D. Pa. 2006) as “unfounded deference to the Preamble’s preemption position.”

The punitive damage award in McDarby, however, was pre-empted. Subject to one significant exception, New Jersey’s Product Liability Act provides immunity from punitive damages if the drug or device was subject to premarket approval and was approved by the FDA. Punitive damages may be awarded in New Jersey when the plaintiff proves that the manufacturer knowingly withheld or misrepresented material information required to be submitted under FDA regulations. The McDarby court held that the requirement to prove fraud-on-the-FDA as prerequisite to awarding punitive damages was pre-empted under the reasoning of Buckman v. Plaintiffs’ Legal Comm., 531 U.S. 341 (2001).

The stage is set for the U.S. Supreme Court to decide next term whether and under what circumstances the federal regulatory scheme pre-empts state-law claims challenging the adequacy of FDA-approved labeling for prescription medicines. Levine v. Wyeth, 944 A.2d 179 (Vt. 2006) cert. granted __ U.S. __, 128 S. Ct. 1118 (U.S. Jan. 18, 2008) (No. 06-1249). A key issue in Levine, as in McDarby, is whether the manufacturer could have complied with FDA regulations as well as the requirements of a state claim imposing additional or stronger warnings.