30 Years Later, Preemption Is Still Unsettled

FDA and device firm attorneys have kept the nation’s courts busy for decades trying to decipher regulation language.

James G. Dickinson

June 1, 2009

11 Min Read
30 Years Later, Preemption Is Still Unsettled

Washington Wrap-Up

uc22_Wash_Wrap_up_Art.jpgIn this 30th anniversary year of MD&DI, the federal preemption provision in the Medical Device Amendments of 1976—an exceptional achievement of the device industry—is still unsettled.
No other FDA-regulated industry has been favored with such protection from state tort claims. Current efforts by Congress to revoke 21 USC 360k(a) would indicate that legal exceptions do not exist easily.
Ambiguously (Congress seldom writes anything explicitly), the provision reads that a state shall not “establish or continue in effect with respect to a device intended for human use any requirement . . . which is different from, or in addition to, any requirement applicable under [federal law] to the device, and . . . which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under” relevant federal law.
Not surprisingly, such language contains enough slack to have kept truckloads of lawyers busy for three decades; it has been the center of numerous, sometimes conflicting, court opinions ever since. What is a “requirement” that a state might establish or continue? Might it be a statute, a regulation, a jury verdict, a judge's opinion, or an FDA approval condition?
These questions slumbered for the first eight or nine years of the provision's existence, but by the late 1980s, device manufacturers were testing the provision's scope, asserting that it preempted state common law tort and products liability claims against them. And thus began an age of judicial uncertainty on the meaning of the language.
None of the lawyers I spoke to could recall any arguments to Congress that state torts should be included within the scope of the preemption language. The intent of the provision was, some lawyers felt, directed at state regulatory agencies and not at curbing the rights of injured plaintiffs. But, somewhat predictably, the looseness of the language was an invitation for defendants' revisionism.
Diverse court interpretations included a U.S. Supreme Court ruling in 1996 in Lohr v. Medtronic that products under 510(k)s enjoy the preemption protection only in certain narrow situations. But, perplexingly, the Court left the status of premarket approvals (PMAs) unaddressed. In that case, FDA filed an amicus brief against preemption, arguing that state requirements were incentives for device companies to comply with FDA requirements.
Significantly, the High Court majority said that Medtronic's argument that common law causes of action constitute a preempted state “requirement” was “implausible.”
In 2000, the Sixth Circuit U.S. Court of Appeals sealed the doubt about PMA coverage left by Lohr; it was decided in Kemp v. Medtronic that state court claims may be filed when they allege noncompliance with the requirements of a device's FDA approval. That covered only PMA devices, which are approved, and not 510(k) devices, which are merely “cleared.”
Legal hair-splitting on preemption under the Bush administration allowed FDA in 2001 to reverse its Lohr pro-preemption stand in Buckman v. Plaintiffs' Legal Committee. The plaintiffs alleged FDA fraud in a case involving off-label claims for AcroMed pedicle screws, and not design and manufacturing issues as in Lohr. The Supreme Court again sided with FDA, this time to agree that state tort claims are preempted, albeit for different reasons.
In Buckman, FDA's reason for apparently contradicting itself was that the agency believed private litigation in fraud cases would impede its work due to litigants' “discovery” demands. Such cases would likely cause the agency to lose its discretion to deal with fraud in its own way. Private litigation in GMP cases like Lohr would not bring such harassments.

In the George W. Bush era, Daniel Troy and FDA intervened in state tort and liability cases to assert FDA preemption.

Under FDA chief counsel Daniel Troy, the agency began an aggressive practice of intervening in every state tort and product liability case it could find, siding with defendant manufacturers to assert FDA preemption. FDA even tried to extend the device preemption provision to prescription drugs in 2006 by writing a new final rule preamble to revised labeling regulations, which asserted FDA preemption of all state tort drug labeling complaints. This new wrinkle was thrown out by the Supreme Court in Wyeth v. Levine in March of this year.

For medical device makers, decades of a shifting legal landscape seemed to settle comfortably in February 2008 when the Supreme Court decided Riegel v. Medtronic. The Court ruled sweepingly in favor of preemption in state tort claims challenging the safety and effectiveness of any FDA-approved device (leaving 510(k) devices uncovered by the decision).
Justice Antonin Scalia wrote for the eight-member majority:
State tort law that requires a manufacturer's catheters to be safer, but hence less effective, than the model FDA has approved disrupts the federal scheme no less than state regulatory law to the same effect. Indeed, one would think that tort law, applied by juries under a negligence or strict liability standard, is less deserving of preservation. A state statute, or a regulation adopted by a state agency, could at least be expected to apply cost-benefit analysis similar to that applied by the experts at FDA: How many more lives will be saved by a device which, along with its greater effectiveness, brings a greater risk of harm? A jury, on the other hand, sees only the cost of a more dangerous design, and is not concerned with its benefits; the patients who reaped those benefits are not represented in court.
This ringing proclamation of federal preemption was not to be the last word, however. The new congressional majority lost no time this year in introducing the Medical Device Safety Act of 2009, which would overturn Riegel v. Medtronic if passed. Sponsored by House Energy and Commerce chairman Henry Waxman (D–CA) and health subcommittee chairman Frank Pallone (D–NJ), the bill has companion legislation introduced in the Senate by Health, Education, Labor and Pensions Committee chairman Edward Kennedy (D–MA) and Senate Judiciary Committee chairman Patrick Leahy (D–VT).
Thus the dominant political forces are rising to extinguish federal preemption for medical devices.
FDA Breaks 30-Year Losing Streak
FDA's three-decade-long losing streak in federal court medical device cases came to an end in March 2009. The Eleventh Circuit Court of Appeals reversed sloppy legal reasoning by a federal judge in Florida last year in a case involving implantable custom devices. The appellate judges reversed two of four parts of the lower court's decision against FDA in U.S. v. Endotec Inc., Michael J. Pappas, and Frederick F. Buechel. They also remanded a third part for reconsideration consistent with their opinion. The fourth was decided for the company.
Before this, in the 33-year history of the Medical Device Amendments, FDA had not won a contested case against a medical device company. Agency lawyers object to this characterization of their track record because it ignores their far better record in uncontested cases (mainly consent decrees)—and it magnifies the importance of those relatively few and usually tiny companies that resist FDA demands to the point of going to court. Unlike the large companies that might quarrel with FDA on a certain position, these small device firms risk their very survival in the marketplace to pursue a legal challenge.
Nevertheless, judicial opinions generally establish significant principles of law that are intended to guide FDA's future enforcement behavior—but which, because the medical device victors have lacked major market power, seldom do. In other words, federal judges notwithstanding, FDA continues to do as it pleases in the medical device arena.
In Endotec, the primary question raised in FDA's appeal involved whether various ankle, knee, and jaw implants manufactured and distributed by Endotec qualified as “custom devices” exempt from FDA PMA requirements. FDA had asked the district court for a permanent injunction against the company and its officers, joint owners Pappas and Buechel, to stop them from manufacturing and distributing the devices without premarket approval. But the lower court sided primarily with the company, saying that its ankle and jaw implants, but not the knee implants, were exempt custom devices. (See the sidebar, “The Five Rules of Custom Devices.”)

In March, the three-judge appellate panel held that the jaw implant was indeed a custom device but that the ankle and knee implants were not. A fourth question, as to whether the company had violated investigational device exemption requirements, was referred back to the lower court for review consistent with the appellate opinion.

Because the lower court had given Endotec four out of five points, FDA's wins in this case rose from one to three in the appellate decision, with one still to be decided, and one for the company.
FDA has historically taken a restrictive view in applying the custom device criteria, so much so that the district court judge, 1983 Reagan appointee G. Kendall Sharp, said it was “so narrow as to make the definition useless.” FDA officials claimed in trial testimony that devices studied in clinical trials, devices used on more than one patient, devices available in different sizes, and devices having the same basic design as other available devices cannot be considered custom devices.
The appeals court decision didn't address broad-based criteria-related questions but only the specifics of the Endotec case. The judges said that because Endotec advertised its custom ankle devices, and because custom devices must meet all five criteria in the regulation, the company's products were not exempt from the PMA requirement. The judges also said that for the knee implants, Endotec failed to show that the district court had abused its discretion, failed to address the “special need” requirement, and advertised some of the knee implants. But for the jaw implants, the appellate court said, FDA failed to demonstrate an abuse of discretion by the district court in determining that it was a custom device. It was not generally available to or used by other doctors.
The appellate judges were scornful of Sharp's conclusion that for FDA to prevail in a custom device injunction case it must “demonstrate dangerousness or actual harm with respect to a medical device.” Sharp, they wrote, had misapplied a 1985 contact lenses judicial precedent to custom devices. They also said Sharp erred in relying on the conclusion that FDA's strict interpretation of procedural requirements results in technological innovation being stymied. And they concluded that the question of weighing the medical pros and cons of certain medical devices is best left to FDA rather than to the courts.
Like other recent medical device victors in cases against FDA, Endotec called for changes in CDRH enforcement policy. The firm said what others (e.g., Utah Medical Products, TMJ Implants, MyoTronics, et al.) have often said—that the agency is “out of touch with reality” and “arrogant” in its tactics to “shut the company down.”
“This is a huge victory because it allows me to do what I've been doing for 30 years, which is replacing ankles in patients who need it,” said Endotec's owner Buechel in a company press release. “When they take common sense and distort it and try to limit it, they overstep their bounds and become bureaucrats—ignoring the science underlying their regulatory authority.”
“For the first time in history, FDA has brought a suit on custom medical devices and lost,” said fellow owner and codefendant Pappas in the release. “This sends a powerful message to the industry not to fear FDA, or to be intimidated by its tactics. Power not only breeds corruption, it also breeds arrogance, and arrogance breeds stupidity.”
Significantly, the company has not commented on the appellate decision and continues to feature the overridden Sharp decision on its Web site.
Reviewing the case in her company's FDA Law Blog, Hyman, Phelps & McNamara attorney Jennifer Davis concluded accurately that
Simply based on the reversal of the lower court's decision regarding the status of Endotec's ankle devices, the agency will surely view this decision as a victory. The opinion also contains some agency-friendly language noting that it is ‘all the more necessary' to strictly and narrowly construe exemptions to a statutory scheme when the statute is one that addresses public health and safety.
Davis added, however, that the decision is not likely to “have a measurable impact on FDA's current cramped construction of the custom device exemption.”
Judicial opinions establish principles of law that are intended to guide FDA's future enforcement behavior.

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