E-Alert Case Updates

U.S. District Court in South Carolina decides Michigan Case in Favor of Preemption

In re: Lipitor (Atorvastatin Calcium) Marketing, Sales Practices and Products Liability Litigation
MDL No. 2:14-mn-02502-RMG (United States District Court for the District of South Carolina, Charleston Division, November 1, 2016)
by Marie Claire Langlois, Law Clerk
Semmes, Bowen & Semmes (www.semmes.com)

Available at http://www.scd.uscourts.gov/Records/caseInfo.asp with a PACER login

After transfer by the Judicial Panel on Multidistrict Litigation (JPML), the Fourth Circuit ruled on a case originally filed in Michigan state court. Plaintiffs filed two (2) actions alleging that Pfizer failed to disclose risks associated with Lipitor, one of them being that Lipitor caused the development of Type II diabetes. Defendants removed the actions to the US District Court for the Eastern District of Michigan, pleading diversity jurisdiction. Although at least one plaintiff in each case, and Defendant Meijer, Inc. Pharmacy (“Meijer”), were both residents of Michigan, negating complete diversity, defendants claimed in their removal that Meijer was fraudulently joined and should be dismissed. Plaintiff’s filed a motion to remand in both cases, which was still pending at the time of transfer to the JPML.

The fraudulent joinder doctrine allows a US district court to disregard citizenship of certain non-diverse defendants, in order to obtain jurisdiction, to whether a party should be dismissed for fraudulent joinder. Johnson v. Am. Towers, LLC, 781 F.3d 693, 704 (4th Cir. 2015). To establish that a non-diverse defendant has been fraudulently joined, the removing party must show either (1) that there is outright fraud in the plaintiff’s pleading of jurisdictional facts, or (2) that there is absolutely no possibility for a cause of action against the non-diverse defendant in that state’s courts. Id. Under option two, the removing party holds a heavy burden, and must show that “even after resolving all issues of law and fact in the plaintiff’s favor” the plaintiff would be unable to establish a claim. Id.

In meeting their burden, the removing defendants made four (4) arguments. First, they claimed that any causes of action against Meijer would be preempted by Federal Law under the holding in Pliva, Inc. v. Mensing, 131 S. Ct. 2567, 2571 (2011). Second, the defendants argued that Michigan’s seller immunity statute bars any claims against Meijer. Third, defendants allege that Meijer had no duty to warn plaintiffs of potential risks caused by Lipitor. And lastly, plaintiffs would be barred from bringing a claim against Meijer because of the learned intermediary doctrine.

Within two (2) short paragraphs, the court resolved the issue of preemption in the removing defendants’ favor. Citing PLIVA as authority, the court stated: “Even if it were possible to state a claim under state law against Meijer for labeling of a drug, any such claim would [be] preempted by federal law.” Because the Federal Drug and Cosmetic Act (FDCA) prevents a pharmacy from altering or changing a drugs warning in any way (that authority and responsibility only lies with the Food and Drug Administration or Pfizer), any state law that might speak to the contrary, would be in contradiction. Yet, the plaintiff’s claims were not limited to Lipitor’s labeling, and for that reason, the issue of preemption was not determinative for purposes of dismissal by fraudulent joinder. The court moved on to the three remaining arguments.

Under Michigan’s Seller Immunity Statute, a seller whom is not the manufacturer can only be liable for harm caused by a product if they either (1) failed to exercise reasonable care, or (2) fail to confirm to an express warranty. Mich. Comp. Laws Ann. § 600.2947(6). Because plaintiffs have plead claims involving negligence, negligent misrepresentation, breach of warranty, fraud and misrepresentation, and constructive fraud, they may be liable under this state statute. Additionally, while under Michigan state law “a pharmacist has no duty to warn the patient of possible side effects of a prescribed medication where the prescription is proper on its face and neither the physician nor the manufacturer has required that any warning be given to the patient by the pharmacist,” Stebbins v. Concord Wrigley Drugs, Inc., 416 N.W.2d 381, 387-88 (1987), a pharmacy may be liable if it voluntarily assumes a warning function that it was originally under no legal obligation to assume. Baker v. Arbor Drugs, Inc., 544 N.W.2d, 727, 731 (1996). Because the court had not yet reached a fact-finding state, it had no way of determining if Meijer assumed such responsibilities, leaving a possibility that the plaintiff’s could succeed against Meijer in state court.

Finally, the court analyzed defendant’s claims regarding the learned intermediary doctrine, which allows manufacturers and sellers to discharge their duty to warn by assuming “patients rely on physicians to evaluate the benefits and risks of using certain [prescription drugs] for a particular purpose.” Reaves v. Ortho Pharm. Corp. 765 F. Supp. 1287, 1289 (E.D. Mich. 1991). Although one federal court predicted that this doctrine would apply to Michigan state law, no state court has decided the issue affirmatively. Additionally, there is no guarantee that Michigan state courts would chose to avoid using this doctrine had the pharmacy made affirmative misrepresentations regarding their duty to warn to the consumers, as could be determined in this case upon remand.

Given that the fraudulent joinder doctrine requires the removing party to prove outright fraud or absolutely no possibility for a cause of action against the non-diverse defendant in a state court, and removing defendants in this case had not met that burden, the U.S. District Court refused to exercise jurisdiction over the claims, and granted plaintiff’s motion to remand. And yet this case still has significant purpose for defendants going forward because it affirmatively applies impossibility preemption to defense warning claims against a pharmacist.