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Article: Supreme Court Hears Bartlett, Will Resolve Liability Questions for “Design-Defect” of Generic Drugs

May 01, 2013
Business Litigation Reports

In March, the U.S. Supreme Court held oral argument in Mutual Pharmaceutical Co. v. Bartlett, concerning whether design-defect claims against generic drug companies are preempted by federal law. Although the case addresses liability only for generic manufacturers, brand-name drug companies could also be affected by the ruling. If the Court holds that claims against generic companies are preempted, then brand-name companies would be the only defendants left standing. And, as the only viable defendants, plaintiffs’ lawyers could try to find new ways to hold brand-name companies liable, even for injuries caused by generic drugs.

Bartlett is a follow-up to the Court’s landmark ruling in PLIVA, Inc. v. Mensing, __U.S. __131 S. Ct. 2567 (2011), which also addressed federal preemption of claims against generic drug companies. In Mensing, the Court held, in a 5-4 decision, that products-liability claims based on labeling deficiencies were preempted by federal law. The Court noted that because federal law requires generic drug companies to use the same labels as brand-name manufacturers, it would be impossible for a defendant to comply with a judgment, based on a state-law claim, requiring it to change or enhance label warnings. “Thus, it was impossible for the Manufacturers to comply with both their state-law duty to change the label and their federal law duty to keep the label the same.” Id. at 2578.

Relying on Mensing, various courts have since dismissed state-law personal injury claims against generic drug companies. But, in Bartlett—the case now on appeal to the Supreme Court—the First Circuit distinguished Mensing and held that a particular type of state-law claim could survive federal preemption.

The plaintiff, Karen Bartlett, suffered from a rare side effect that caused severe burns over most of her body when she took a generic version of a drug called sulindac. She sued the drug’s manufacturer and prevailed at trial on strict-liability design-defect claim. The jury awarded her $21 million in damages.

The generic manufacturer appealed to the First Circuit. The First Circuit affirmed the judgment, holding that Mensing did not control the outcome because it applied only to failure-to-warn claims, not to the design-defect claim asserted by Ms. Bartlett. The First Circuit acknowledged that, just like the requirement that generic drug companies use the same label as the brand-name version of the drug, federal law requires them to design their generics to have precisely the same chemical composition as brand-name drugs. And, a successful design-defect claim would require the generic manufacturer to change the drug’s composition—prohibited by federal law.

Despite the apparent similarity to Mensing, the First Circuit held that the generic manufacturer could avoid the contradictory requirements of state and federal law by refraining from manufacturing the drug. The First Circuit recognized its holding conflicted with decisions of other courts, saying “this issue needs a decisive answer from the only court that can supply it.” The Supreme Court granted certiorari.

The Supreme Court held oral argument on March 19. Based on the Justices’ questions, it is difficult to predict what the Court will decide. But commentators have correctly suggested Ms. Bartlett’s attorneys face an uphill battle in persuading the five Justices in the majority in Mensing that Bartlett is distinguishable. The fact that a generic manufacturer could simply stop manufacturing a drug to avoid preemption does not distinguish the case from Mensing. The defendant there also could have stopped manufacturing the drug, yet the Supreme Court still held the state-law claim was preempted. Moreover, the vast majority of lower courts have held that claims just like Ms. Bartlett’s are preempted.

Whatever the outcome, the opinion in Bartlett will have implications for brand-name manufacturers. Should the Supreme Court rule that the design-defect claim is preempted, then it will have effectively protected generic drug manufacturers from all products liability claims. Such a holding would leave brand-name manufacturers as the only viable defendants in pharmaceutical products liability cases. A decision in Bartlett is expected in June.