A federal district court in Kentucky held that the Supreme Court’s decision in Pliva v. Mensing has at least one procedural limit—its preemption defense doesn’t apply to a claim that a defendant in a generic drug labeling case was fraudulently joined to defeat the court’s diversity jurisdiction. In Mensing, the Court held that the federal Food, Drug, and Cosmetic Act preempts state law failure-to-warn claims against generic prescription drug manufacturers, but the Court did not decide whether the preemption defense extended to drug distributors and joinder issues.
In Freitas v. McKesson Corp., the plaintiffs alleged a failure to warn, negligent marketing and distributing of an unreasonably dangerous product, and defective design. In remanding the case to the California courts, the district court held that because the defense implicated the action’s merits against both diverse and nondiverse defendants, it was up to the state court to resolve whether preemption applies to a California drug distributor joined as a defendant. (In re Darvocet, Darvon, & Propoxyphene Prods. Liab. Litig., No. 2:11-md-2226-DCR, Freitas v. McKesson Corp., No. 2:12-50-DCR (E.D. Ky. filed July 2, 2012).)
The plaintiffs, six of whom are California citizens, filed suit in California state court against 18 manufacturers of propoxyphene, the generic equivalent of Darvocet and Darvon. The suit alleged that the companies “knowingly or negligently marketed, distributed, and sold defectively designed propoxyphene products without adequate warnings.” The plaintiffs also named San Francisco-based McKesson Corp., claiming that it knowingly distributed the defective drug to pharmacies.
The case was removed to the Northern District of California and several defendants moved to add the case to the Darvocet/Darvon MDL in the Eastern District of Kentucky. The plaintiffs moved for a remand, arguing that their joinder of McKesson, a California citizen, defeated the complete diversity required for federal subject matter jurisdiction. The district court in California stayed its action pending a ruling on the defendants’ MDL motions and the plaintiffs renewed their motion for remand with the Eastern District of Kentucky.
The drug manufacturers sought to overcome the complete diversity hurdle by arguing that Mensing preempted the plaintiffs’ claims against McKesson and that the plaintiffs had fraudulently joined McKesson to deprive the federal court of jurisdiction. Mensing resulted in the dismissal of all claims against generic drug manufacturers “in at least 50 cases,” they argued, noting that one federal court held that Mensing also applied to generic drug distributors. (See In re Fosamax (Alendronate Sodium) Prods. Liab. Litig., 2012 WL 181411 (D.N.J. Jan. 17, 2012).)
Matthew Sill of Edmond, Okla., cocounsel for the plaintiffs, countered that the defendants’ attempt to broaden Mensing preemption was meritless because the decision applied to drug manufacturers, not distributors. “Plaintiffs allege that McKesson knew the product it was distributing was unreasonably dangerous and defective, and continued to distribute [it],” Sill wrote in support of the motion for remand. “Federal law did not prohibit the distributor of propoxyphene products from complying with its duty under state law,” so “that state law duty does not conflict with federal law,” he concluded. Sill also cited a recent federal court decision holding that Mensing did not preempt strict liability design defect claims made under Illinois law against a prescription drug distributor.
Turning aside each defense argument, U.S. District Judge Danny Reeves remanded the case to the California Superior Court. He demurred on the parties’ differing interpretations of Mensing, finding the application of the preemption defense “inapposite” for a different reason: A denial of the motion for remand would prompt a Mensing preemption defense by other diverse and nondiverse defendants in the case, requiring a decision on common defenses that would impermissibly stray from the jurisdictional issue into the merits of the case.
“[I]f a plaintiff’s claims against diverse and nondiverse defendants suffer from the same alleged flaw,” Reeves observed, “that indicates not fraudulent intent in the nondiverse defendant’s joinder, but rather a problem with the plaintiff’s case overall.” He noted that “California courts are capable of deciding whether the plaintiffs’ claims against McKesson are preempted.”
Although he did not decide the Mensing issue, Reeves disputed the plaintiffs’ claim that the decision did not apply to defective design allegations. “This court and many others [have] found that Mensing does indeed bar such claims, at least where they amount to nothing more than repackaged allegations of failure to warn,” Reeves wrote. He also observed that “the majority of the plaintiffs’ claims expressly allege some form of failure to warn.”
Reeves dispatched the defendants’ alternative arguments that the claims against McKesson lacked factual support and were invalid under California law. Observing that the plaintiffs alleged injuries caused by propoxyphene and had evidence that they purchased the drug at pharmacies serviced by McKesson, Reeves cited numerous similar cases in which California courts had declined to find that McKesson had been fraudulently joined. “[T]he court is not inclined to deprive the plaintiffs of their chosen forum merely because it can,” Reeves wrote.
Sill said he was pleased with the ruling and the remand order. “We think the court was correct in not interfering with longstanding California precedents regarding the liability of prescription drug distributors,” he said.
Louis Bograd, senior litigation counsel with the Center for Constitutional Litigation in Washington, D.C., said the decision was significant as a guide to plaintiff attorneys in propoxyphene cases. “Judge Reeves’s decision on the remand order doesn’t reach the issue of whether Mensing provides distributors with the preemption defense,” said Bograd. “Rather, the decision is important because it provides plaintiffs with a roadmap for keeping propoxyphene cases in state court.”