Product Liability Update - April 7, 2015

First Circuit Holds State Law Claims Against Drug Manufacturer for Allegedly Misleading Efficacy Representations in FDA-Approved Label Preempted by Food, Drug and Cosmetic Act Because Plaintiffs' Requested Label Changes Were Not Based on Newly Acquired Information and Thus Manufacturer Could Not Have Made Them Without FDA Approval

In In re: Celexa and Lexapro Marketing and Sales Practices Litigation, 2015 U.S. App. LEXIS 2632 (1st Cir. Feb. 20, 2015), plaintiffs purchased a prescription antidepressant drug to treat their adolescent son's major depressive disorder but did not obtain the results they hoped for. Alleging that information in the drug's label had misled both their son's physician and them as to the drug's effectiveness, plaintiffs sued the manufacturer in the United States District Court for the Central District of California on behalf of themselves and all other Californians who purchased the drug for an adolescent from March 2009 to the present. Plaintiffs claimed defendant omitted material information about the drug's efficacy from the label in violation of California consumer protection laws, causing plaintiffs to spend money on a drug that was no more effective than a placebo. Plaintiffs sought an injunction ordering defendant to cease selling the drug under its current label and to seek approval from the United States Food and Drug Administration ("FDA") for a new, accurate label. The Judicial Panel on Multidistrict Litigation transferred the case to the United States District Court for the District of Massachusetts as part of an ongoing multidistrict litigation, and defendant moved to dismiss on the grounds that plaintiffs' claims failed under a safe harbor provision in the California consumer protection laws and were preempted by the Food, Drug, and Cosmetic Act ("FDCA"). The district court allowed the motion under California law without reaching the preemption issue.

On plaintiffs' appeal, the United States Court of Appeals for the First Circuit affirmed, but on preemption grounds and without reaching the California law issues. The court first described the lengthy process, under the FDCA and applicable regulations, by which a manufacturer must obtain FDA approval before selling a prescription drug. The manufacturer must submit a new drug application that includes, among other things, full reports of all clinical investigations that show whether the drug is effective in use and the proposed labeling. The FDA may approve the drug only if it determines there is "substantial evidence that the drug will have the effect it purports or is represented to have," and the proposed label is not "false or misleading in any particular." Following approval, the manufacturer cannot change the label without prior FDA approval except under 21 C.F.R. § 314.70(c)(6)(iii), the "changes being effected" or "CBE" regulation, which permits such unilateral changes only if they reflect newly acquired information and are intended to delete false or misleading information about indications for use or effectiveness, or to add or strengthen warnings about the drug's potential uses. Such newly acquired information may consist of data, studies or analyses not previously submitted to FDA if the information reveals "risks of a different type or greater severity or frequency than previously included in submissions to FDA."

Here, defendant had obtained FDA approval to sell the drug for treatment of major depressive disorder in adolescents based on the results of four clinical studies, two of which showed no efficacy and two of which found efficacy that was statistically significant but only barely. In approving the drug, FDA made a specific finding that the drug's label, which described the results of the four studies, was not false or misleading. Plaintiffs' complaint took issue with the FDA's allegedly low standards for approving antidepressants generally as well as the agency's conclusion that the drug was effective for major depression in adolescents. Under plaintiffs' claim, the only way for defendant to avoid liability would be to change the drug's label, which was prohibited by the FDCA—hence rendering the claims preempted—unless permitted by the CBE regulation. However, the only post-FDA approval information pleaded in plaintiffs' complaint was from two academic articles which, respectively, (1) evaluated the efficacy of antidepressant drugs generally and (2) criticized FDA's approval of defendant's drug. The first article did not specifically address anti-depressant efficacy for major depression in adolescents, while the second, much like plaintiffs' complaint, looked at the same information FDA had at the time of approval and merely offered a different conclusion than the agency had reached. Accordingly, neither article disclosed risks of a different type or greater severity or frequency than previously known to FDA, and defendant could not have used the CBE procedure to unilaterally change its label. Indeed, plaintiffs seemingly conceded as much by explicitly asking for an order directing defendant to seek FDA approval of a new label.

First Circuit Holds Notice of Removal Filed More than 30 Days After Service of Complaint Timely Under Class Action Fairness Act Because Defendant Did Not Have Sufficient Information Readily Obtainable from Plaintiffs' Papers to Determine Amount in Controversy Until Email from Plaintiffs' Counsel

In Romulus v. CVS Pharm., Inc., 770 F.3d 67 (1st Cir. 2014), the defendant pharmacy chain maintained a policy requiring its shift supervisors to remain on premises during rest or meal breaks when there were no other managerial employees on duty. A group of shift supervisors at defendant's Massachusetts stores filed a putative class action in Massachusetts Superior Court alleging defendant's refusal to pay them for such break time was a violation of Mass. Gen. Laws ch. 149, § 148, the Massachusetts Wage Act, and Mass. Gen. Laws ch. 151, §§ 1A and 1B, the Massachusetts Overtime Statute. In their complaint, plaintiffs sought unpaid wages and costs for the breaks, beginning in July 2008, but did not provide any information regarding the number of breaks at issue or the total amount of damages claimed.

During preliminary discovery, defendant produced electronic time and attendance data for all its Massachusetts shift supervisors. Using these data, plaintiffs' counsel calculated the total number of meal breaks when no other shift supervisors were on duty during a subset of the period from July 2008 to commencement of the action, and reported the number to defendant's counsel by email on January 18, 2013. On February 15, 2013, defendant filed a notice of removal, arguing the number of meal breaks reported in the email, if extrapolated over the entire period from July 2008 to commencement of the action, created a reasonable probability that the...