A case pending in federal court could have implications for product liability lawsuits filed in state court against private label OTC manufacturers.

The lawsuit, L. Perrigo Co. v. Gaeta, raises the question of whether federal regulations pre-empt claims made under state laws on failure to warn. In the case pending in the 9th Circuit Court of Appeals, the parent of a child who suffered liver toxicity after taking store brand ibuprofen made by Perrigo Co. sued the firm for failing to warn about the potential problem.

While the circuit court decision almost certainly will be appealed to the Supreme Court, Philadelphia attorney Alan Klein says the impact from a decision, whichever party prevails, would be significant.

If the court decides in favor of Perrigo, “it puts American consumers out of court for a wide variety of medicines that they pick up in the drugstore,” said Klein, of the firm Duane Morris.

For manufacturers, however, a decision against Perrigo could raise the question of how much information private labelers must include in label warnings, he said.

Klein, who represents firms in product liability cases, noted the “tremendous practical problem” firms have with making label changes.

“I think most companies are very responsible about it and they try to do the best they can, but they don’t have a crystal ball,” he said.

“The bottom line is whether state law-based suits are going to trump the federal regulatory scheme for over-the-counter medicines,” he added.

Perrigo Appealed To Supreme Court

The 9th Circuit previously ruled for Gaeta and Perrigo appealed to the Supreme Court. But the high court Oct. 31 remanded the case back to the circuit court to reconsider in light of a decision the Supreme Court made in a separate case, Pliva v. Mensing, after the 9th Circuit’s ruling in L. Perrigo Co.

In Pliva, the high court said FDA regulations for Rx generics pre-empt claims that a manufacturer violated state labeling laws.

Justice Clarence Thomas, writing for the 5-4 majority, distinguished between labeling for generics and labeling for branded drugs. Generics must have labeling identical to their branded counterparts, but because a more difficult approval process is required for changes to generic labels, those FDA-approved labels are not pre-empted by state law, Thomas wrote.

The 9th Circuit considers L. Perrigo Co. not only in light of Pliva, but also the Supreme Court’s 2009 decision in Wyeth v. Levine. The court held FDA regulations do not pre-empt lawsuits for violations of state laws governing labeling of branded Rx drugs.

Klein explained that the question in L. Perrigo Co. is whether the Pliva decision applies to generic OTCs, which have labeling requirements similar to generic pharmaceuticals.

There is, however, one key difference, he said. Unlike rules governing generic prescription drugs, FDA’s regulations for OTCs have both a pre-emption clause – which says state laws cannot differ from federal ones – and a savings clause, which says the law does not modify liability under state product liability laws, he said.

The savings clause “implicitly says state product liability laws can continue and you can bring a suit against an OTC drug manufacturer under state law,” Klein said.

Contradictory Decisions In Similar Cases

Lawyers are “not quite sure how it’s going to play out,” he said, because precedent is contradictory.

The Federal Highway Safety Act has a similar provision and savings clause, he said, and the Supreme Court “has come down both ways on the issue.”

In Williamson v. Mazda Motor of America, the Supreme Court held federal regulations did not pre-empt a lawsuit claiming the auto manufacturer should have installed a different type of seat belt than the one required by a federal rule that was less stringent than a state law. But in Geier v. American Honda Motor Co., the court held that the pre-emption clause prohibited a plaintiff from suing Honda for failing to install an airbag.

The conflict between those rulings “doesn’t make it any easier to try to predict what’s going to happen,” Klein said.

Recent decisions in other courts found in favor of plaintiffs when they sue a brand name OTC manufacturers.

A California state court refused to dismiss a claim against Johnson & Johnson for failing to warn about the risk of Stevens-Johnson Syndrome on the label for Motrin.

And a U.S. district court in California recently decided FDA regulations of OTC homeopathic drugs do not pre-empt a lawsuit alleging false advertising under the state’s consumer protection law.

Private Label Ibuprofen From Long’s

The suit against Perrigo stems from a 2004 incident in which the minor son of the plaintiff, after having a mole removed, took Long’s Profen IB, private label ibuprofen sold at Long’s drugstore and manufactured by the private labeler.

Although the boy had no drug allergies, he eventually developed acute liver failure, which doctors determined was caused by ibuprofen toxicity. He underwent a host of medical procedures over the next few months, including liver transplant, dialysis, skin grafts and amputation of fingers and toes. He is now permanently disabled.

His mother sued Perrigo and Long’s in October 2005 in U.S. District Court for the Northern District of California, alleging breach of implied warranty, negligence, gross negligence, defective design and marketing defect. She also alleged violation of the California business and professions code against unfair competition.

Gaeta also alleged false advertising, claiming the defendants knowingly falsely claimed that the ibuprofen was more effective than acetaminophen “when they knew it was not,” that the drug had been tested adequately for use in dosages recommended for children and that it was safe for use by children.

She sought unspecified regular and punitive damages, which would have to be at least $75,000 to meet restrictions on the district court’s jurisdiction, the creation of a trust to re-take the profits Perrigo made from the ibuprofen and an end to the allegedly false advertising.

In its response, Perrigo emphasized that it complied with all FDA regulations and requirements regarding warnings and labeling. Long’s settled with Gaeta.

The district court in September 2008 entered a judgment in favor of Perrigo, but Gaeta appealed. In January this year, the 9th Circuit found in her favor, and Perrigo appealed to the Supreme Court.

Decision By 2013?

The 9th Circuit will require plaintiffs to re-brief and re-argue the case, Klein said, because it was decided without the Pliva generic Rx precedent. That process likely will take a year, he said.

“I guarantee you” the party that loses in circuit will appeal to the Supreme Court, Klein said, adding that if the high court decides to grant certiorari, the case would likely be resolved in 2013.

Case Against Perrigo Contests Pre-Emption Of Private Label OTC Liability

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