Because Bexis is updating chapter two (information-based claims) of his book, he has some ideas for some shorter lists of interesting cases. Here’s one.  What follows are all the cases Bexis knows about that have dismissed consumer fraud/protection claims because the conduct under attack fit within the language of the statute’s "safe harbor" for government regulated activity.

We use "regulated" advisedly. State consumer protection statutes vary widely on just how these safe harbors (and not every state has one) are phrased, and the statutory terminology makes a difference – as it should.   Some state’s statutes exempt conduct in "compliance" with relevant governmental oversight, which we’re taking to mean "FDA," regulations (Alabama, Colorado, Delaware, Georgia, Hawaii, Illinois, Maine, Minnesota, Nebraska, Nevada, Ohio, Oregon).   Other states exempt anything "permitted" by the relevant regulatory body (Arkansas, Connecticut, Indiana, Maine, Massachusetts, Montana, Nebraska, New Mexico, Ohio, Rhode Island, South Carolina, South Dakota, Utah, Wyoming).   Some states qualify their safe harbors with modifying adverbs, such as "specifically," "expressly," or "affirmatively" (Florida, Georgia, Idaho, Illinois, Indiana, Michigan, New Mexico, Ohio, Tennessee, Utah).  A broader formulation exempts anything that is government "regulated" (Alaska, Nebraska, Oklahoma).  A narrower formulation exempts only conduct "required" by the regulator (Florida, Idaho, Indiana, Ohio, Utah, Wyoming). Another variant is "authorized (with or without adjectives) (Illinois, Michigan, Tennessee, Virginia), or alternatively "authorized or approved" (Kentucky).  Then there are New York ("subject to and complies with"), Washington ("permitted, prohibited or regulated") and California (a common-law carve out for "business practices which the Legislature has expressly declared to be lawful in other legislation," see Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 973 P.2d 527, 542 (Cal. 1999)), which don’t follow anybody else’s pattern.  Finally, we have West Virginia, which didn’t need no stinkin’ safe harbors to exempt all FDA-approved products from its state’s consumer protection statutes.   White v. Wyeth, 705 S.E.2d 828 (W. Va. 2010).

To the extent that states show up more than once on these lists, they have either more than one statutory safe harbor or more than one definition for the safe harbor– see Bexis’ book for details (and all statutory citations).

Since we first mentioned the statutory safe harbor defense back May, 2007, the number of cases relying on these provisions to dismiss consumer fraud claims has burgeoned.   The earliest wasAmerican Home Products Corp. v. Johnson & Johnson, 672 F. Supp. 135 (S.D.N.Y. 1987) (applying New York law), which held that FDA approval of labels fit within the definition used in New York:

The rationale underlying the exemptive provisions of all of these [state consumer protection] statutes is the need for uniformity in the regulation of advertising and labeling and a deference to the expertise of the responsible regulatory agency. . . .   Where the FDA has explicitly endorsed the particular facet of the labeling which is claimed to be inadequate, there is presented a clear conflict between federal law pertaining to the marketing of drugs in interstate commerce as directed by the FDA and the local law.

Id. at 144-145.   Accord In re Fosamax Alendronate Sodium Products Liability Litigation, 2013 WL 1558697, at *7-8 (D.N.J. April 11, 2013) ("[the drug] is approved by the FDA, and therefore, this approval is a complete defense to a [New York law] claim");Cytyc Corp. v. Neuromedical Systems, Inc., 12 F. Supp.2d 296, 301 (S.D.N.Y. 1998) ("representations . . . that comport substantively with statements approved as accurate by the FDA cannot supply the basis for [plaintiff’s NY General Business Law] claims").

It took fifteen years for another jurisdiction to follow suit, that being Illinois.   The Seventh Circuit applied the state’s safe harbor to a drug-related consumer fraud claim in Bober v. Glaxo Wellcome PLC, 246 F.3d 934 (7th Cir. 2001).  Thus FDA-approved statements have been exempted from consumer protection/fraud liability:

The pharmaceutical industry is highly regulated, both at the federal level and internationally.  Technical requirements abound, and it is not only possible but likely that ordinary consumers will find some of them confusing, or possibly misleading as the term is used in statutes like Illinois’s CFA.   But, recognizing the primacy of federal law in this field, the Illinois statute itself protects companies from liability if their actions are authorized by federal law.

Id. at 941.  Since Bober, there have been several such rulings under Illinois consumer protection statutes.   In Turek v. General Mills, Inc., 662 F.3d 423, 427 (7th Cir. 2011), the plaintiff’s allegations failed to state a claim because the "representations on the packaging of the defendants’ [product] are specifically authorized by the federal statutes and regulations [all FDA] that we've discussed."   In Newman v. McNeil Consumer Healthcare, 2013 WL 7217197 (N.D. Ill. March 29, 2013), the plaintiffs’ "slight" evidence of noncompliance nonetheless failed:

[E]ven if a jury could so find, Plaintiffs have offered no evidence that the noncompliance at issue affected the FDA’s determinations and "specific authorization."   Plaintiffs’ theory − as it has been generously interpreted − is that the FDA’s specific authorization is inconsequential because the agency lacked or lacks vital information due to Defendants' noncompliance.  Therefore, Plaintiffs are obligated to provide evidence of noncompliance and explain how such noncompliance affected or is currently affecting the FDA's decision making . . . . Plaintiffs have failed to do so.

Id. at *8. Finally, while the plaintiff’s Illinois consumer fraud claim survived for other reasons in Scott v. Glaxo Smith Kline Healthcare, 2006 WL 952032 (N.D. Ill. April 12, 2006), the court noted that plaintiff would have a "very difficult burden to show that the statements were not specifically authorized" because industry was "highly regulated" by FDA.   Id. at *2 n.1.

Nor is it just federal courts that throw out consumer fraud cases based on FDA regulation placing a drug or device within a statutory safe harbor. In DePriest v. AstraZeneca Pharmaceuticals, L.P., 351 S.W.3d 168 (Ark. 2009), the Arkansas Supreme Court construed that state’s safe harbor – for "permitted" activity − as precluding consumer protection claims involving statements made in advertising for FDA-approved products:

Arkansas’s [statute] contains a safe harbor provision that specifically exempts conduct that is permitted under laws administered by a federal agency. . . .   [T]the FDA-approved labeling did, in fact, indicate that the approved dose of [the drug] was superior. . . . Therefore, because the advertising complied with the product's labeling . . . the challenged conduct is advertising that is "permitted under laws administered by ... [a] regulatory body ... of ... the United States"—in this case, the FDA.

The information included in the labeling of a new drug reflects a determination by the FDA that the information is not "false or misleading". . . .  By approving information to be included in the drug labeling, the FDA has determined that the information complies with its rules and regulations. Therefore, if the FDA labeling supports the statements made in advertising for an FDA-approved drug, the statements are not actionable under the [statute].

Id. at 176-77 (citations omitted).

A peculiar case is Prohias v. Pfizer, Inc., 490 F. Supp.2d 1228, 1233-1234 (S.D. Fla. 2007), involving claims made under Florida and Massachusetts consumer protection statutes.   The peculiarity is that in the midst of the period relevant to the purported class action, the defendant’s drug received FDA approval for marketing for the use in question. Before then, the use had been off label.   Id. at 1232. After (but not before) the FDA’s approval, the court held that the defendant’s drug marketing was protected by these statutes’ safe harbor provisions:

I conclude that the plaintiffs’ pre-July 2004 claims are not barred by the states’ respective safe harbor statutes. The safe harbor statutes of the consumer fraud acts of Florida and Massachusetts, which are applicable to [these] claims, respectively, only bar lawsuits challenging conduct which is specifically permitted by a federal or state regulatory scheme.

* * * *

In July of 2004, the FDA approved . . . [the drug for ] this indication. Accordingly, any advertisements . . . simply marketed an approved use for the drug. . . .   [B]because the claims made by [defendant] in the post-July 2004 advertisements were implicitly authorized by the FDA, the claims in the advertisements fall within the safe harbor provisions of the Florida and Massachusetts consumer fraud acts.

Id. at 1233-34.   The same ruling was reached under the Florida statute in state court litigation brought by a plaintiff with the same unusual name – bet there's a story there − against the marketing of another drug:

[The trial court ruled that] the conduct that Plaintiff challenges falls within the safe harbor of the Florida Deceptive and Unfair Trade Practices Act, because the promotional and advertising activity attacked in the Complaint is supported by the FDA-approved labeling . . . and thus is "specifically permitted" by federal law. . . .   We entirely agree with this ruling.

Prohias v. AstraZeneca Pharmaceuticals, L.P., 958 So.2d 1054, 1056 (Fla. App. 2007).   Accord Berenguer v. Warner-Lambert Co., 2003 WL 24299241, at *3-4 (Fla. Cir. July 31, 2003) ("the Florida Act provides that any administrative rules adopted under the Act "must not be inconsistent with rules and regulations of federal agencies"; statements tracking FDA-approved OTC labels are "required or specifically permitted by Florida law, and [the statute], thus, does not apply") (citation and quotation marks omitted).  Under these cases, once an indication has been subject to FDA approval, the product’s manufacturer is thereafter "specifically" allowed to market for that purpose, and its activities consistent with the approved labeling fall within a statutory safe harbor defined with this term.

Michigan’s safe harbor is likewise tied to conduct "specifically" authorized by a regulator.  A claim that a medical device (drugs are now immune in Michigan under other statutes) failed to provide its promised benefits fell within the safe harbor in Peter v. Stryker Orthopaedics, Inc., 581 F. Supp.2d 813 (E.D. Mich. 2008):

Here, the specific misconduct Plaintiff complains of is Defendant’s "failure to provide the promised benefits in connection with the transaction at issue."  The general transaction, however, is the sale of the [device].  [These] are medical devices, which are heavily regulated by the FDA.  In fact, the FDA specifically authorized Defendant to market the [device] at issue in this litigation.  Because Defendant was specifically authorized to sell the [device] at issue, even though Plaintiff alleges that the device was defective, the [statute] does not apply. Defendant is, therefore, entitled to summary judgment.

Id. at 816.  The same result was reached in an unpublished decision of the Court of Appeals of Michigan in Duronio v. Merck & Co., 2006 WL 1628516 (Mich. App. June 13, 2006):

[The statute] provides that the [it] does not apply to "[a] transaction or conduct specifically authorized under laws administered by a regulatory board or officer acting under statutory authority of . . . the United States."  The focus of this statutory provision is not the specific misconduct alleged by a plaintiff, but whether the general transaction is authorized by law.  The Food, Drug, and Cosmetic Act governs drug marketing, manufacturing, and distribution, and vests the FDA with powers to enforce regulations.  The regulations implementing the FDCA are extensive and detailed, and specifically regulate prescription drug advertising.  Because the general marketing and advertising activities underlying plaintiff’s [statutory] claim are authorized and regulated under laws administered by the FDA, the exemption . . . applies [and t]he trial court properly dismissed plaintiff's [statutory] claim.

Id. at *6-7.  See Alexander v. Del Monte Corp., 2011 WL 87286, at *2 (E.D. Mich. Jan. 11, 2011) ("where the FDA specifically authorizes the conduct at issue, the [statute] is inapplicable"; food packaging).  Thus, the FDA’s "specific authorization" to market the device in question is sufficient, without more to preclude any consumer fraud claims in Michigan (and probably other state statutes using the same language) pertaining to representations concerning that product.

Virginia’s safe harbor is for "authorized" conduct.  Several cases have applied this safe harbor in drug/device litigation.  The first was Hart v. Savage, 2006 WL 3021110, at *1 (Va. Cir. Oct. 19, 2006), a trial court order holding that because "the device at issue is a prescription medical device regulated by the [FDA]," the "sale of such a device is authorized by federal regulation and exempt from the Virginia Consumer Protection Act."   Id. at *1.   In Ball v. Takeda Pharmaceuticals America, Inc., ___ F. Supp.2d ___, 2013 WL 4040395, at *8-9 (E.D. Va. Aug. 8, 2013), reconsideration denied, 2013 WL 5503080 (E.D. Va. Oct. 1, 2013), the court similarly ruled:

The [statute], however, does not apply to federally regulated products.  The [statute] prohibits fraudulent practices in consumer transactions. But it does not apply to all transactions.  By its own terms, however, the [statute] does not apply to "[a]ny aspect of a consumer transaction which aspect is authorized under laws or regulations of . . . the United States, or the formal advisory opinions of any regulatory body or official of . . . the United States."   . . .  Since federal law regulates the very matters the plaintiff says violate the [statute], the plaintiff's [statutory] claim fails as a matter of law.

Id. at *8-9 (quoting Ali v. Allergan United States, 2012 WL 3692396 (E.D. Va. Aug. 23, 2012)).   Ali, of course, is the third Virginia case applying the safe harbor to allegations involving FDA-approved products, in this instance a device.   Ali held:

Plaintiffs’ [statutory] claim fails because it challenges conduct that is expressly excluded from the scope of the [statute].   Plaintiffs base their [statutory] cause of action on representations made by [defendant] about the [device] in advertisements and other marketing materials concerning the safety and effectiveness of the device.   Representations . . . in marketing materials for the device are authorized and regulated by the FDA under federal law.   The [statute], therefore, does not apply to it, and therefore no action challenging [defendant’s] marketing practices with respect to the [device] may be brought under the [statute].

Id. at *19.

In Arnett v. Mylan, Inc., 2010 WL 2035132 (S.D.W. Va. May 20, 2010), the court found an Oklahoma consumer fraud claim barred by that statute’s relatively capacious safe harbor for "regulated" activities:

A prescription pharmaceutical product may not be marketed in the United States unless and until the Food and Drug Administration ("FDA") has approved the sale of that product pursuant to the FDCA. . . .  [T]he simple language of section 754(2) focuses solely on whether there is regulation, not whether there is compliance. . . .   Clearly, the defendants’ marketing and distribution of the patch constitutes a transaction that is regulated by federal law.  Therefore, the plaintiffs' OCPA claim must fail in light of this statutory exception.

Id. at *3.  Obviously, if the statute’s safe harbor had specified "compliance," as a number of them do, the result would have been different.  In each case the plaintiff’s allegations need to be matched against the scope of the safe harbor provided by the statute.

Finally, the California judicially implied safe harbor has also been applied to FDA-approved conduct in drug/device cases – most recently … yesterday.  In In re Celexa & Lexapro Marketing & Sales Practices Litigation, 2014 WL 866571, slip op. (D. Mass. March 5, 2014), the California safe harbor protected the defendant from claims that it misrepresented the efficacy of a drug that the FDA had found "safe and effective" for the indication in question:

Where, as here, Congress has entrusted the FDA to determine 1) whether there is a substantial evidence of efficacy for a particular indication and 2) whether a proposed label is false or misleading in any way, and the FDA approves a label for a certain indication, the safe harbor provision applies to bar a claim that the label was false or misleading.

Celexaslip op. at 9. "[T]he prescription drug industry is subject to comprehensive regulations promulgated by the FDA." Id. at 10. "[W]here plaintiffs base their claims entirely on the marketing and sales of [the product] after the FDA approved [the defendant’s] application for an adolescent indication and a proposed label, the safe harbor applies to bar such claims."   Id. at 11.

Also, in Pom Wonderful LLC v. Coca-Cola Co., 2013 WL 543361 (C.D. Cal. March 13, 2013) – a different piece of this litigation than is now before the Supreme Court – the district court (on remand from the Ninth Circuit) granted summary judgment under California’s unfair competition law:

Under this doctrine, "[i]f the Legislature has permitted certain conduct or considered a situation and concluded no action should lie, courts may not override that determination."  This rule applies equally to actions by the California legislature and actions by the U.S. Congress. . . .   Here, Congress has explicitly allowed labeling that is not misleading, and granted FDA the authority to make such a determination. Defendant has complied with the relevant FDA regulations, and so, per the discussion above, is also compliant by extension with the FDCA. The Court therefore finds that California’s Safe Harbor [doctrine] provides a separate and independent basis for granting the Motion.

Id. at *5.   See In re PPA Cases2002 WL 35071721slip op.  at 15, 16, 17 (Cal. Super. Aug. 23, 2002) ("plaintiffs’ [statutory] claim is barred by the ‘safe harbor’ provision of the unfair competition law because [defendant] was permitted by state and federal law to sell its products without [the plaintiffs’] warning"; "[t]he very concept of a safe harbor requires that conduct undertaken pursuant to then-existing permission cannot later be subject to challenge"; "FDA approvals mean that defendants’ sales of [their] products were conducted within a ‘safe harbor’ that prevents retroactive condemnation of their conduct under [the statute]").

Finally, there is even hope for a similar implied safe harbor in New Jersey.   See New Jersey Citizen Action v. Schering-Plough Corp., 842 A.2d 174, 177 (N.J. Super. App. Div. 2003) (holding "not actionable" under New Jersey statute "the wording of the ads, to the extent that it is subject to FDA oversight").

Karin Kramer