Kobar ex rel Kobar v. Novartis Corp.

378 F.Supp.2d 1166

Rose Lynn KOBAR, by her Guardian and Conservator Melissa Ann KOBAR, Plaintiff, v. NOVARTIS CORPORATION; Novartis Pharmaceuticals Corporation, Novartis Consumer Health, Inc., Defendants.

No. CIV 010156PHXSRB.

United States District Court, D. Arizona.

June 3, 2005.

John H. Westover, Lawrence H. Lieberman (Cross & Lieberman, P.A.), Phoenix, AZ, David S. Shughart, Phoenix, AZ, and Barry A. MacBan, Tucson, AZ, for plaintiff.

Aton Arbisser, Jan E. Dodd, and William Stoddard (Kaye Scholer LLP), Los Angeles, CA, and Andrew M Federhar (Fennemore Craig), Tucson, AZ, for defendant.

ORDER

BOLTON, District Judge.

This case arises out of injuries that Plaintiff Rose Lynn Kobar sustained allegedly as a result of ingesting Tavist-D, a drug manufactured by Defendant Novartis Consumer Health, Inc. ("NCH") containing phenylpropanolamine ("PPA"). At issue is Defendant's motion for partial summary judgment on the issue of punitive damages (Doc. 185).

I. BACKGROUND

Tavist-D is a cold, cough and allergy medicine. One of its ingredients is PPA, a decongestant used in hundreds of commercially-available pharmaceuticals, including Dimetapp, Alka-Seltzer Plus and Contac. On April 1, 1979, Sandoz Pharmaceuticals, Inc. ("Sandoz") submitted to the Federal Food and Drug Administration ("FDA") a New Drug Application ("NDA") to use Tavist-D as a prescription drug. That application was approved on December 15, 1982.

On April 26, 1988, Sandoz filed an NDA with the FDA seeking permission to sell Tavist-D as an over-the-counter ("OTC") drug. The FDA granted permission on August 21, 1992. Between 1996 and 1999, the FDA approved three reformulations of Tavist-D.

On January 1, 1997, Sandoz merged with another pharmaceutical company, Ciba-Geigy Corporation, creating several new companies. One of the new companies, NCH, became responsible for the manufacture and sale of Tavist-D.¹

In December 1999, Plaintiff's boyfriend purchased for her a box of Tavist-D. On June 17, 2000, Plaintiff suffered a stroke, which she alleges was caused by her ingestion of Tavist-D. On December 22, 2000, Plaintiff filed an action in Maricopa County Superior Court in Phoenix, Arizona, seeking relief for her personal injuries based on theories of negligence, strict liability and breach of warranty. The complaint demanded punitive damages and named three defendants: NCH, Novartis Corporation, and Novartis Pharmaceutical Corporation, the latter two of which were dismissed in 2001.

On January 25, 2001, the action was removed to the United States District Court. Defendant filed a motion for partial summary judgment on the issue of punitive damages on February 22, 2005.

II. LEGAL STANDARDS AND ANALYSIS

A. A.R.S. § 12-701

Defendant argues that it is immune from liability for punitive damages in light of A.R.S. § 12-701 (1989), an Arizona statute which immunizes drug manufacturers and sellers from punitive damages:

A..... if the drug alleged to cause the harm either:

1. Was manufactured and labeled in relevant and material respects with the terms of an approval license issued by the federal food and drug administration under the food, drug and cosmetic act (21 United States Code § 301, et seq.) ... or

2. Is generally recognized as safe and effective pursuant to conditions established by the federal food and drug administration and applicable regulations, including packaging and labeling regulations.

B. Subsection A does not apply if the plaintiff proves, by clear and convincing evidence, that the defendant, either before or after making the drug available for public use, knowingly, in violation of applicable federal food and drug administration regulations, withheld from or misrepresented to the administration information known to be material and relevant to the harm which the plaintiff allegedly suffered.

1. A.R.S. § 12-701(A)

No material questions of fact remain with respect to whether Tavist-D satisfies Subsection A of A.R.S. § 12-701 (1998) ("Subsection A"). The FDA first approved Tavist-D on December 15, 1982 as a prescription drug, stating that "we ... have concluded that the drug is safe and effective for use as recommended in the submitted labeling." (Def.'s Statement of Facts, Ex. 8). On August 21, 1992, the FDA approved Tavist-D for use as an OTC drug, again granting Defendant's NDA and deeming Tavist-D "safe and effective." (Def.'s Statement of Facts, Ex. 9). The FDA also approved three reformulations of Tavist-D from 1996 to 1999, each time approving Defendant's supplemental NDA and describing Tavist-D as "safe and effective." (Def.'s Statement of Facts, Ex. 10-12.)

Plaintiff argues that because the FDA never published a finding either that it approved Tavist-D or that PPA is safe and effective. Tavist-D does not fall within the scope of Subsection A. Plaintiff is mistaken, for even assuming it is true that FDA approval can occur only though publication, the 1999 edition of the FDA's official publication, Approved Drug Products With Therapeutic Equivalence Evaluation, commonly known as the Orange Book, lists Tavist-D as an FDA-approved product. (Def.'s Statement of Facts, Ex. 13.) In order to be included in the Orange Book, a drug must be "the subject of an application with an effective approval that has not been withdrawn for safety and efficacy reasons." (Def.'s Statement of Facts, Ex. 13.) Accordingly, Tavist-D meets the requirements of Subsection A.

2. A.R.S. § 12-701(B)

Next, Defendant contends that Subsection B, which removes Subsection A's shield of immunity from punitive damages for drug manufacturers who procured FDA approval through fraud, is unconstitutional, for it conflicts with the Federal Food, Drug and Cosmetic Act ("FDCA"), 21 U.S.C. § 301, et seq. (1994 ed. and Supp. V), and is therefore impliedly preempted under the Supremacy Clause of the United States Constitution. The primary authority Defendant relies on is the United States Supreme Court's decision in Buckman v. Plaintiffs' Legal Committee, where the Court held that the FDCA, as amended by the Medical Device Amendments of 1976 ("MDA"), 21 U.S.C. § 301, et seq. (1994 ed. and Supp. V), impliedly preempted the plaintiff's state law fraud-on-the-FDA claim. 531 U.S. 341, 121 S.Ct. 1012, 148 L.Ed.2d 854 (2001).

a. Supremacy Clause

The Supremacy Clause provides that "[t]he Constitution and the Laws of the United States which shall be made in Pursuance thereof ... shall be the supreme Law of the Land." U.S. Const. art. VI, cl. 2. The effect of the Supremacy Clause is to invalidate state laws that "interfere with, or are contrary to" federal law. Hillsborough v. Automated Med. Labs., 471 U.S. 707, 712-13, 105 S.Ct. 2371, 2374-75, 85 L.Ed.2d 714 (1985) (quoting Gibbons v. Ogden, 22 U.S. (9 Wheat.) 1, 211, 6 L.Ed. 23 (1824)). In determining whether federal law preempts state law, a court's "sole task is to ascertain the intent of Congress." Cal. Fed. Savings & Loan Ass'n v. Guerra, 479 U.S. 272, 280, 107 S.Ct. 683, 689, 93 L.Ed.2d 613 (1987). If Congress says expressly that it wishes to preempt state law, "that is the end of the matter." Keams v. Tempe Technical Inst., 39 F.3d 222, 225 (9th Cir.1994). If Congress does not make its intent known expressly, courts may infer it. State laws are preempted if it appears that Congress "intended to occupy the entire field, leaving no room for the operation of state law". Even if that is not so, [courts] infer preemption ... if compliance with both state and federal law would be impossible, or state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." Id. (quoting California v. ARC Am. Corp., 490 U.S. 93, 100-01, 109 S.Ct. 1661, 1665, 104 L.Ed.2d 86 (1989)).

b. Buckman v. Plaintiffs' Legal Committee

In Buckman, the plaintiff sued the manufacturer of allegedly defective orthopedic bone screws under state tort law for making fraudulent representations to the FDA. Buckman, 531 U.S. at 343-44, 121 S.Ct. at 1015. Under the plaintiff's theory, had the defendant, a regulatory consultant retained by the manufacturer of the bone screws, not misrepresented certain material facts to the FDA, the FDA would not have approved the screws, and the plaintiff would not have been injured. Id. at 343, 121 S.Ct. at 1015. The Court held that the FDCA, as amended by the MDA, impliedly preempted the fraud-on-the-FDA claim. Id. at 348, 121 S.Ct. at 1017.

The first step in the Buckman Court's analysis was to decide whether to invoke the presumption against preemption, a presumption that exists out of deference to the "historic police powers of the States," particularly in matters of health and safety. Id. at 348, 121 S.Ct. at 1017; Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 2255, 135 L.Ed.2d 700 (1996) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230, 67 S.Ct. 1146, 91 L.Ed. 1447 (1947)). The Court opted against the presumption, as "[p]olicing fraud against federal agencies is hardly `a field which the States have traditionally occupied.'" Buckman, 531 U.S. at 347, 121 S.Ct. at 1017 (quoting Rice, 331 U.S. at 230, 67 S.Ct. at 1146). Instead, "the relationship between a federal agency and the entity it regulates is inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law." Buckman, 531 U.S. at 347, 121 S.Ct. at 1017.

Next, the Court turned to the question of preemption. It noted that "the federal statutory scheme amply empowers the FDA to punish and deter fraud against the Administration." Id. at 348, 121 S.Ct. at 1017. For example, the FDA has the power to require additional information from companies seeking approval of medical devices, 21 C.F.R. § 807.87(f) (2000), to investigate suspected fraud, 21 U.S.C. § 372 (2000); 21 C.F.R. § 5.35 (2000), to seek injunctive relief, 21 U.S.C. § 332 (1993), and civil penalties, 21 U.S.C. § 333(f)(1)(A) (2000), to pursue criminal prosecutions, ...