Summary
noting that a request for punitive damages "derives" from an underlying cause of action
Summary of this case from Snodgrass v. Bango Oil, LLCOpinion
No. 81024
03-04-2021
Lewis Roca Rothgerber Christie LLP and Daniel F. Polsenberg, Joel D. Henriod, and Abraham G. Smith, Las Vegas; Greenberg Traurig LLP and Tami D. Cowden, Eric Swanis, and Jason K. Hicks, Las Vegas; Greenberg Traurig LLP and Brian Rubenstein, Philadelphia, Pennsylvania; Hymanson & Hymanson and Philip M. Hymanson and Henry J. Hymanson, Las Vegas, for Petitioners. Wetherall Group, Ltd., and Peter Wetherall, Las Vegas; Glen Lerner Injury Attorneys and Glen J. Lerner, Las Vegas, for Real Parties in Interest.
Lewis Roca Rothgerber Christie LLP and Daniel F. Polsenberg, Joel D. Henriod, and Abraham G. Smith, Las Vegas; Greenberg Traurig LLP and Tami D. Cowden, Eric Swanis, and Jason K. Hicks, Las Vegas; Greenberg Traurig LLP and Brian Rubenstein, Philadelphia, Pennsylvania; Hymanson & Hymanson and Philip M. Hymanson and Henry J. Hymanson, Las Vegas, for Petitioners.
Wetherall Group, Ltd., and Peter Wetherall, Las Vegas; Glen Lerner Injury Attorneys and Glen J. Lerner, Las Vegas, for Real Parties in Interest.
The Honorable Abbi Silver, Justice, voluntarily recused herself from participation in the decision of this matter.
OPINION
By the Court, HARDESTY, C.J.:
This original petition for a writ of mandamus arises from lawsuits brought against generic drug manufacturers for selling single-patient-use 50 mL vials of propofol to ambulatory surgical centers despite an allegedly foreseeable risk that the centers would use them on multiple patients. The question presented to us is whether the plaintiffs’ state-law tort claims are preempted by federal drug regulations. Because we conclude that some, but not all, of the claims are preempted, we grant the petition in part and deny it in part.
FACTS AND PROCEDURAL HISTORY
Petitioners Teva Parenteral Medicines, Inc., Baxter Healthcare Corporation, and McKesson Medical-Surgical, Inc., manufacture and sell the generic drug propofol, also known by its brand name Diprivan. Propofol was approved for sale by the United States Food and Drug Administration (FDA) in 1989 for use as an anesthetic in outpatient and inpatient procedures. In this, the FDA has granted petitioners permission to manufacture and distribute generic propofol in three vial sizes: 20, 50, and 100 mL. The label on each vial clearly prescribes that it is for single-patient use.
Petitioners sold propofol to nonparty and now deceased Dr. Depak Desai for use at his endoscopy centers in Las Vegas. Despite warning labels to the contrary, Dr. Desai used petitioners’ 50 mL single-patient vials on more than one patient. Dr. Desai was criminally charged for reusing single-use injection syringes at his clinics and for using single-patient anesthesia vials on multiple patients. See Desai v. State , 133 Nev. 339, 340-41, 398 P.3d 889, 891 (2017). Due to Dr. Desai's criminal behavior, his patients received warning letters from the Centers for Disease Control and Prevention and the Southern Nevada Health District notifying them of a risk of possible infection with Hepatitis B, Hepatitis C, and HIV.
The parties do not dispute the criminal allegations surrounding Dr. Desai's misuse of 50 mL vials of propofol.
The real parties in interest (collectively, plaintiffs) are approximately 800 individuals who received the warning letters after being treated by Dr. Desai at his endoscopy clinics between 2004 and 2008. Plaintiffs obtained testing, and all tests came back negative. Plaintiffs sued petitioners to obtain compensation for the testing costs as well as pain and suffering associated with being tested and waiting for test results. Their complaints alleged the following claims: (1) strict product liability, (2) breach of implied warranty of fitness for a particular purpose, (3) negligence, (4) violation of the Nevada Deceptive Trade Practices Act, and (5) punitive damages. Specifically, plaintiffs alleged that petitioners knew or should have known that selling 50 mL vials of propofol, as opposed to the smaller 20 mL vials, to Dr. Desai's ambulatory surgical centers with high patient turnover was unsafe because it would entice use of each vial on multiple patients, which increases the risk of contamination of the vial and infection of patients. Plaintiffs asserted that a 20 mL dose of propofol is commonly used to induce anesthesia in a patient, making the larger 50 mL vial more likely to be misused for multi-dosing at an ambulatory surgical center.
Initially, three different lawsuits were filed in the Eighth Judicial District Court; those lawsuits have since been consolidated into one action in Department 8.
Petitioners filed a motion to dismiss in all three actions, alleging that under PLIVA, Inc. v. Mensing, 564 U.S. 604, 131 S.Ct. 2567, 180 L.Ed.2d 580 (2011), and Mutual Pharmaceutical Co. v. Bartlett, 570 U.S. 472, 133 S.Ct. 2466, 186 L.Ed.2d 607 (2013), plaintiffs’ claims must be dismissed because they conflict with federal law, specifically the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984) (codified as amended at 21 U.S.C. § 355 (1984) ), commonly known as the Hatch-Waxman Act. See FTC v. Actavis, Inc., 570 U.S. 136, 142, 133 S.Ct. 2223, 186 L.Ed.2d 343 (2013). After hearing arguments, the district courts summarily denied petitioners’ motions to dismiss, finding that plaintiffs’ claims are not preempted by federal law. Petitioners filed this instant writ petition.
DISCUSSION
Entertaining the petition
A writ of mandamus is available to compel the performance of an act that the law requires or to control an arbitrary or capricious exercise of discretion. NRS 34.160 ; Int'l Game Tech., Inc. v. Second Judicial Dist. Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008) ; see also Humphries v. Eighth Judicial Dist. Court , 129 Nev. 788, 791, 312 P.3d 484, 486 (2013). Writ relief is not available, however, when an adequate and speedy legal remedy exists. NRS 34.170 ; Smith v. Eighth Judicial Dist. Court, 107 Nev. 674, 677, 818 P.2d 849, 851 (1991). Although this court generally declines to consider writ petitions that challenge a district court's ruling on a motion to dismiss, this court will exercise its discretion to consider one when "an important issue of law needs clarification and considerations of sound judicial economy and administration militate in favor of granting the petition." City of Mesquite v. Eighth Judicial Dist. Court, 135 Nev. 240, 243, 445 P.3d 1244, 1248 (2019) (internal quotation marks omitted).
We conclude that whether the Hatch-Waxman Act preempts plaintiffs' state-law claims against a generic drug manufacturer is an important issue of law that needs clarification. Further, considerations of sound judicial economy and administration militate in favor of entertaining this petition because of the early stage of litigation and the vast number of plaintiffs involved in the consolidated action. Thus, we exercise our discretion to entertain the petition.
Preemption
Whether state-law claims are preempted by federal law is a question of law that this court reviews de novo, without deference to the findings of the district court. Nanopierce Techs., Inc. v. Depository Tr. & Clearing Corp., 123 Nev. 362, 370, 168 P.3d 73, 79 (2007). The Supremacy Clause of the United States Constitution provides that federal law supersedes, or preempts, conflicting state law. U.S. Const. art. VI, cl. 2 ; Crosby v. Nat'l Foreign Trade Council, 530 U.S. 363, 372, 120 S.Ct. 2288, 147 L.Ed.2d 352 (2000) ("A fundamental principle of the Constitution is that Congress has the power to preempt state law.").
There are two types of preemption—express and implied. Rolf Jensen & Assocs., Inc. v. Eighth Judicial Dist. Court, 128 Nev. 441, 445, 282 P.3d 743, 746 (2012). Express preemption occurs when Congress explicitly declares in the statute's language its intent to preempt state law. Id. If the statutory language does not expressly preempt state law, preemption may be implied if the federal law dominates a particular legislative field (field preemption) or actually conflicts with state law (conflict preemption). Id. (citing Nanopierce Techs., 123 Nev. at 371, 168 P.3d at 79-80 ).
Petitioners contend that conflict preemption applies here because the Hatch-Waxman Act imposes duties on them that conflict with the duties imposed under state tort law. Conflict preemption occurs where "it is impossible for a private party to comply with both state and federal requirements." Mensing, 564 U.S. at 618, 131 S.Ct. 2567 (internal quotation marks omitted). Petitioners argue that as generic drug manufacturers, they are unable to both comply with their duties under the federal drug regulations and avoid state-law tort liability. They rely on two decisions by the United States Supreme Court— Mensing and Bartlett —which they argue preclude plaintiffs’ claims.
Mensing and Bartlett
In Mensing, the plaintiffs sued generic drug manufacturers for failing to provide adequate warning labels on a generic drug that carried a risk of a severe neurological disorder with long-term use. Id. at 610, 131 S.Ct. 2567. The plaintiffs claimed that the manufacturers knew or should have known about the risk and that they had a duty under state law to adequately warn of it. Id. The Supreme Court found that the state-law claims were preempted because the manufacturers’ duty under state law conflicted with their duty under federal drug regulations. Id. at 618, 131 S.Ct. 2567. The Court explained that the Hatch-Waxman Act, which established an abbreviated process for FDA approval of generic versions of brand-name drugs, imposed a duty of "sameness" on the generic drug manufacturers. Id. at 612-13, 131 S.Ct. 2567. This duty requires manufacturers to demonstrate that their generic drugs are identical to the brand-name drug in active ingredients, safety, efficacy, and warning label. Id. at 612-13 & n.2, 131 S.Ct. 2567. By ensuring that their generic drug is equivalent to an FDA-approved brand-name drug, generic drug manufacturers can obtain FDA approval without undergoing the costly and lengthy clinical testing required for brand-name drugs, thereby expediting the introduction of low-cost generic drugs to the market. See id. at 612, 131 S.Ct. 2567.
The Mensing Court compared this federal-law duty of sameness to the state-law duty, concluding that "it was impossible for the [m]anufacturers to comply with both their state-law duty to change the label and their federal-law duty to keep the label the same." Id. at 618, 131 S.Ct. 2567. The Court reasoned that, because federal law requires generic drug labels to be the same as brand-name labels, any state-law duty that requires generic manufacturers to use safer labels conflicts with the federal "duty of sameness" and is preempted by federal law. Id. Further, the Court rejected the argument that the generic drug "[m]anufacturers [could have] asked the FDA for help" in strengthening the warnings and thereby defeating impossibility preemption. Id. at 620-21, 131 S.Ct. 2567. The Court stated that the "question for ‘impossibility’ is whether the private party could independently do under federal law what state law requires of it." Id. at 620, 131 S.Ct. 2567. "[W]hen a party cannot satisfy its state duties without the Federal Government's special permission and assistance, which is dependent on the exercise of judgment by a federal agency, that party cannot independently satisfy those state duties for pre-emption purposes." Id. at 623-24, 131 S.Ct. 2567.
Similarly, in Bartlett , the Court considered whether a state-law design-defect claim against a generic drug manufacturer was preempted by the Hatch-Waxman Act. 570 U.S. at 475, 133 S.Ct. 2466. The plaintiff succeeded on the claim at trial, and the First Circuit Court of Appeals affirmed the jury verdict, holding that the claim was not preempted because a generic manufacturer could simply stop selling the drug to avoid liability and thus comply with both federal and state law. Id. at 479, 133 S.Ct. 2466. The Supreme Court reversed and specifically rejected this "stop-selling rationale" as a way to avoid impossibility preemption. Id. at 475-76, 133 S.Ct. 2466. The Court determined that the state-law claim imposed a duty on the manufacturer to redesign the drug or strengthen the warning on its label, which was not possible under federal regulations. Id. at 486-87, 133 S.Ct. 2466. The Court concluded that "it [wa]s impossible for [the generic drug manufacturer] to comply with both state and federal law." Id. Thus, the state-law claim was preempted, and as explained by the Court, this preemption could not be avoided by the "stop-selling" theory: "Our pre-emption cases presume that an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability." Id. at 488, 133 S.Ct. 2466.
Read together, Mensing and Bartlett hold that the Hatch-Waxman Act imposes a duty of sameness on generic drug manufacturers that requires the labels and design of generic drugs to be the same as the corresponding brand-name drugs and precludes manufacturers from unilaterally altering the label or design of the drug. A state-law claim that imposes a duty on a generic drug manufacturer to alter either the label or the design of a generic drug, thus making it impossible for the generic drug manufacturer to avoid liability under state law without also violating its federal duty of sameness, is preempted. And preemption cannot be avoided simply because the manufacturer could have stopped selling the drug to avoid liability under state law.
Analysis of state- and federal-law duty
Petitioners contend that plaintiffs’ causes of actions are preempted under Mensing and Bartlett because each cause of action would impose a duty on petitioners to alter either the design or the formulation of the 50 mL vial, change its warning labels, or stop selling it altogether to avoid liability. In determining whether conflict preemption exists, we must first identify petitioners’ duties under state law and then determine whether those duties conflict with petitioners’ federal-law duties. See Bartlett , 570 U.S. at 480, 133 S.Ct. 2466. Plaintiffs asserted four causes of action in their complaints: strict product liability, breach of implied warranty, deceptive trade practice, and negligence. Plaintiffs conceded at oral argument that their claims for strict product liability and breach of implied warranty are essentially failure-to-warn claims and are thus preempted under Mensing and Bartlett. However, they argue that their causes of action for negligence and deceptive trade practice survive because they are not premised on the labeling or design of the drug.
Plaintiffs also alleged a claim for punitive damages in their complaints, but punitive damages is a remedy and not a separate cause of action. See Droge v. AAAA Two Star Towing, Inc., 136 Nev. Adv. Op. 33, ––– Nev. ––––, 468 P.3d 862, 881 (Ct. App. 2020) ("[P]unitive damages is a remedy, not a cause of action.").
As to the deceptive trade practice claim, plaintiffs alleged that petitioners made representations about the 50 mL vials that were false and omitted material facts. Plaintiffs did not identify in their complaints any representations made by petitioners other than those contained in the FDA-approved labeling. See NRS 598.0915(5), (7), (15) (providing, generally, that a person engages in a deceptive trade practice when he knowingly makes false representations); NRS 598.0923(2) (providing that a seller who "[f]ails to disclose a material fact" engages in a deceptive trade practice). As Mensing and Bartlett make clear, petitioners could not have rectified any alleged misrepresentation without violating federal law because they were required to adhere to the brand-name drug's labeling. Thus, this cause of action is preempted under Mensing and Bartlett .
Turning to plaintiffs’ negligence claim, plaintiffs alleged that petitioners owed them a duty "to distribute, market, and package the propofol in safe single use vials that are not conducive to multi-dosing." Plaintiffs further alleged that petitioners "knew, or in the exercise of reasonable care should have known, that packaging, marketing, and distributing propofol to high turnover ambulatory clinics ... in 50 ml vials, was ... likely to encourage or facilitate multi-dosing." Under plaintiffs’ negligence theory, petitioners had a duty under state law not to package, market, or sell 50 mL vials of propofol to Dr. Desai's ambulatory surgical clinics.
To the extent that plaintiffs’ negligence claim alleges that petitioners provided improper warnings or descriptions in the labeling and packaging of the 50 mL vials, such a claim is preempted, as it is clear Mensing and Bartlett that petitioners could not have unilaterally altered the labeling and packaging of the 50 mL vials under federal law. However, with respect to plaintiffs’ claim that petitioners had a duty not to sell the 50 mL vials, we conclude that this cause of action is not preempted, as petitioners have not demonstrated that it would be impossible to comply with state law without violating federal law. The theory of this cause of action is that petitioners knew or should have known that Dr. Desai's ambulatory surgical centers were misusing the 50 mL vials of propofol labeled for single-patient use by anesthetizing multiple patients, and thus petitioners should have stopped selling 50 mL vials and sold only 20 mL single-dose vials to those centers. Petitioners contend that, to avoid liability under this theory, they would have had to either stop selling the 50 mL vials to Dr. Desai's ambulatory surgical centers or alter the size of the 50 mL vials. And, petitioners argue, the first option is precluded by Mensing and Bartlett, and the second option is preempted by conflict.
As to the first option, petitioners’ duty to stop selling 50 mL vials of propofol to Dr. Desai's ambulatory surgical centers because petitioners allegedly knew that their vials were being misused, despite labels to the contrary, is not precluded by Mensing and Bartlett . Petitioners have not demonstrated that they have an absolute duty under federal law to continue selling 50 mL vials of propofol to clinics they allegedly know are misusing their product. Therefore, because petitioners’ alleged state-law duty to stop selling the 50 mL to clinics it knows are misusing its product does not conflict with any federal-law duty, we conclude that plaintiffs’ negligence cause of action is not preempted.
This conclusion is not affected by the Court's holding in Bartlett that "an actor seeking to satisfy both his federal- and state-law obligations is not required to cease acting altogether in order to avoid liability." 570 U.S. at 488, 133 S.Ct. 2466 (emphasis added). Though petitioners rely heavily on Bartlett in arguing that plaintiffs' liability theory, which would require them to stop selling the 50 mL vials, cannot be used to avoid preemption, their reliance is misplaced. In Bartlett , the Court held that where there is a conflict between state and federal law, preemption cannot be avoided by requiring the generic drug manufacturer to stop selling the drug. Id. This analysis is not applicable here where there is no conflict between state and federal law in the first instance.
In the alternative, we agree that a conflict might arise if petitioners were required to unilaterally alter the size of their FDA-approved vials to avoid liability under state law. However, plaintiffs are not asking petitioners to alter their vial size, and even if they were, plaintiffs' negligence cause of action would still not conflict with federal law. This is so because petitioners already obtained approval from the FDA to market a smaller, 20 mL vial size of propofol. Thus, unlike the generic drug manufacturers in Mensing, petitioners would not be required to make any unilateral changes to the drug's design to comply with state law. Rather, petitioners could satisfy a state-law duty to sell only the smaller, 20 mL vials of propofol to Dr. Desai's ambulatory surgical centers without violating their federal duty of sameness. Therefore, we hold that plaintiffs’ negligence claim is not preempted even if it required petitioners to change their vial size to 20 mL, because petitioners already have approval for that smaller vial size.
The Hatch-Waxman Act does not permit generic drug manufacturers to independently change a drug's strength, which includes a drug's vial size. See 21 U.S.C. § 355(j)(2)(A)(iii) (2018) (requiring the generic drug's "strength" to be equivalent to the brand-name drug); 21 C.F.R. § 314.3(b) (2020) (stating that a drug's "[s]trength" refers to "the amount of drug substance contained in, delivered, or deliverable from a drug product which includes ... [t]he total quantity of drug substance in mass or units of activity in a dosage unit or container closure").
For the reasons stated above, we conclude that plaintiffs’ negligence cause of action is not preempted by federal law and that plaintiffs’ request for punitive damages also survives to the extent it derives from the negligence cause of action. However, we conclude that the remainder of plaintiffs’ causes of action are preempted, and we thus grant the petition in part and deny the petition in part. The clerk of this court shall issue a writ of mandamus directing the district court to dismiss all of plaintiffs’ claims except their cause of action for negligence and their request for punitive damages.
We concur:
Parraguirre, J.
Stiglich, J.
Cadish, J.
Pickering, J.
Herndon, J.