Don’t roll your eyes at us the way a daughter does when her mother is about to tell a story about the mother’s college years for the sixth, seventh . . . OK 100th time.  Our regular readers are all well aware of our affinity for, involvement with (Bexis and Yeary) and therefore abiding interest in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).  So, even if beyond the usual scope of this blog, we can’t help but get excited when we see Buckman applied outside the context of the FDA. 

We have always strongly encouraged a reading of Buckman that was not statute specific and therefore supported the conclusion that agency fraud claims involving any federal agency should be preempted under the same rationale.  In fact, there are several decisions that say just that and Offshore Service Vessels, L.L.C. v. Surf Subsea, Inc., 2012 U.S. Dist. LEXIS 150103 (E.D. La. Oct. 17, 2012) – fraud-on-the-Coast Guard – is just the most recent to come to our attention. 

While not about drugs and devices, these cases do provide us an opportunity to remind everyone what Buckman – in its simplest form – was all about. 

  • First of all, “the relationship between a federal agency and the entity it regulates is inherently federal in character.”  Buckman, 531 U.S. at 347.  That means, among other things, that there’s no presumption against preemption, id., because such a presumption (assuming it exists at all) is enjoyed only by “traditional state tort law principles” and not “any sort of fraud-on-the-agency theory.”  Id. at 352.  See Offshore Service, 2012 U.S. Dist. LEXIS 150103 at *27.
  • Claims asserting fraud on the FDA inherently “conflict with, and are therefore impliedly pre-empted by” the “ample” powers the FDA has to combat fraud itself.  351 U.S. at 348.
  • Conflict preemption also arises because the “balance” among the regulatory objectives that the FDA seeks “can be skewed by allowing fraud-on-the-FDA claims under state tort law.”  Id.  One way the “balance” can be upset, is for tort claims to encourage regulated entities to supply more information than the FDA decides that it wants.  Id. at 348-49.  The FDA's "flexibility is a critical component of the statutory and regulatory framework.”  Id. at 349.  Offshore Service, at *27-28.
  • “State-law fraud-on-the-FDA claims inevitably conflict with the FDA’s responsibility to police fraud consistently with the [FDA's] judgment and objectives.  As a practical matter, complying with the FDA’s detailed regulatory regime in the shadow of 50 States’ tort regimes will dramatically increase the burdens facing potential applicants-burdens not contemplated by Congress in enacting the FDCA and the MDA.”  351 U.S. at 350; Offshore Services, at *28-29.
  • The increased administrative burden of particular concern in Buckman was “fear” of an entity’s FDA submissions being second-guessed (“judged insufficient”) by state juries, which creates “an incentive to submit a deluge of information that the Administration neither wants nor needs.”  351 U.S. at 351; Offshore Services, at *29.
  • “[F]raud claims [that] exist solely by virtue of the FDCA disclosure requirements” are different from claims involving “alleged failure to use reasonable care” that only happen to “parallel federal safety requirements.”  351 U.S. at 353; Offshore Services, at *30.
  • Finally, Buckman found “clear evidence that Congress intended that the MDA be enforced exclusively by the Federal Government.”  Id. at 352 (citing 21 U.S.C. §337(a)).

While all that was said in the context of the FDA, FDCA and MDA, courts since Buckman, like this most recent case involving the Coast Guard, have recognized that the rationale of Buckman preemption applies to any sort of fraud-on-the-agency theory because:  (1) the relationship of a federally regulated entity with its federal regulator is none of the states’ business, (2) state-law second-guessing of submissions to the federal agency “inevitably” encourages a “deluge” of unnecessary information that the agency neither wants nor needs, and (3) state-law claims with federal regulatory violations as a "critical element" “interfere with the [agency’s] role in making important regulatory decisions as intended by Congress.”  Offshore Service, at *45-46.  Indeed, in the case of the FDCA, such claims violate the statute’s express provision for “exclusive” federal enforcement.

So, we celebrate the continued expansion of Buckman beyond the FDA, in part because we enjoy its lasting vitality and in part because there are other agencies, such as the Drug Enforcement Agency, whose jurisdiction may touch upon our clients’ products.  If you find yourself needing to argue Buckman outside the context of the FDA, here are some more helpful cases to get you started:

Fraud on the Environmental Protection AgencyRamirez v. E.I. Dupont De Nemours & Co., 2010 WL 3529509 at *2 (M.D. Fla. Sept. 3, 2010); Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199, 1204-1206 (9th Cir. 2002); Beck v. Koppers, Inc., 2006 WL 2228910, at *1 (N.D. Miss. April 7, 2006); Hill v. Brush Engineered Materials, Inc., 383 F. Supp.2d 814, 822 (D. Md. 2005); Williams v. Dow Chemical Co., 255 F. Supp.2d 219, 232 (S.D.N.Y. 2003); Redelmann v. Alexander Chemical Corp., 2002 WL 34423377 (Ill. Cir. July 26, 2002).

Fraud on the Federal Communications CommissionMurray v. Motorola, Inc., 982 A.2d 764, 770 n.6 (D.C. 2009).

Fraud on the National Highway Traffic Safety Administration: Zavala v. TK Holdings Inc., 2004 WL 2903981, at *8 (Cal. App. Dec. 16, 2004); Zwiercan v. General Motors Corp., 2002 WL 31053838, 58 Pa. D. & C.4th 251, 266 (Pa. C.P. Philadelphia Co. 2002).

Fraud on the Occupational Safety & Health Administration: Hill, 383 F. Supp.2d at 822.

Fraud on the Federal Energy Regulatory Commission: Transmission Agency of Northern California v. Sierra Pacific Power Co., 295 F.3d 918, 932 n.10 (9th Cir. 2002).

Fraud on the Department of Energy: Morgan v. Brush Wellman, Inc., 165 F. Supp.2d 704, 722 (E.D. Tenn. 2001).

Fraud on the Health Care Financing Administration: McCall v. Pacificare, Inc., 21 P.3d 1189, 1199 n.9 (Cal. 2001) (dictum).