Bexis had been on the road a lot lately – it seemsblogging attract speaking engagements – and at both the recent PLAC fallmeeting and the ACI’s FDA Boot Camp, speakers discussed the recent Supreme Courtdecision in FCC v. Fox Television Stations, Inc., 132 S. Ct. 2307(2012), as having implications for product liability actions involvingregulatory allegation claims. We’dparticularly like to thank Mike Walsh from Strassburger for sharing his thoughts (and some nice powerpoint slides) on this issue.
Fox Television is a Due Process case, andthe way Due Process intersects with product liability, at least in thiscontext, is whether there are Due Process constraints on plaintiffs ginning upFDA (or, indeed, other federal) regulatory violation claims based on weirdinterpretations by paid FDA “experts.”
Can you say “parallel violation” claims?
What do we learn from Fox Television? The case involved the regulation of purported“indecency” on television – no, it doesn't involve Quentin Tarantino movies, butrather a far more serious problem than blood-soaked megadeath. We mean “fleeting expletives.” On prime time, broadcasters can show as muchkilling as they want, but the actors can’t swear as they get killed (or about anythingelse). So the FCC has decreed – but notvery well, the Supreme Court held.
The FCC held that an unscripted f-bomb on live TVwas a no-no (ditto fleeting nudity (not the Superbowl wardrobe malfunction;that was another case)) and fined the TV networks. This was something of a regulatory flip-flop,so the networks sued alleging that their Due Process rights were violated bythe arbitrary and capricious actions of the FCC. The Supreme Court agreed, sort of.
It wasn’t so much the regulatory flip-flop that theCourt condemned, but the government’s failure to give notice of what wassupposedly illegal. “A fundamentalprinciple in our legal system is that laws which regulate persons or entitiesmust give fair notice of conduct that is forbidden or required.” Fox Television, 132 S. Ct. at 2371(lots of nifty cites and quotes omitted). This wasn’t just a free speech issue:
Even when speech is not at issue, the void for vaguenessdoctrine addresses at least two connected but discrete due process concerns: first, that regulated parties should know whatis required of them so they may act accordingly; second, precision and guidanceare necessary so that those enforcing the law do not act in an arbitrary ordiscriminatory way. When speech is involved, rigorous adherence to those requirements isnecessary to ensure that ambiguity does not chill protected speech.
Id. (emphasis added). But remember, in this context, that Sorrellv. IMS Health, Inc., 131 S.Ct. 2653, 2664 (2011), held that pharmaceuticaldetailing is First Amendment protected speech.
In Fox Television the FCC’s actual indecency“guidelines” (apparently not even amounting to regulations) limited enforcementto situations where a broadcast “dwells or repeats at length” on sex or cursing(but not blood and gore). However, theFCC informally adopted a “new policy” through a published “decision” that even“fleeting” references were violations. Id.at 2314-15.
Then it tried to apply that decisionretroactively. Id. at 2315.
The Supreme Court held that the government couldn’tdo that consistently with Due Process.
This regulatory history, however, makes it apparent thatthe Commission policy in place at the time of the broadcasts gave no notice. . . . The [agency’s] lack of notice . . .that its interpretation had changed . . . failed to provide a personof ordinary intelligence fair notice of what is prohibited. Thiswould be true with respect to a regulatory change this abrupt on any subject,but it is surely the case when applied to . . . the regulations inquestion, regulations that touch upon “sensitive areas of basic First Amendmentfreedoms.
Id. at 2381 (citations and quotation marksomitted) (emphasis added). Thus, Fox Television’sDue Process argument also applies to, say, the FDA.
The agency also argued that, because it didn’t fine thebroadcasters, they hadn’t been injured, and the case was moot. The Court held that “reputational” injury wasenough to support the constitutional violation:
[T]he due process protection against vague regulationsdoes not leave regulated parties at the mercy of [governmental] noblesseoblige. . . . [R]eputational injury provides further reason for grantingrelief. . . . [F]indingsof wrongdoing can result in harm to a broadcaster’s reputation . . .given that the challenged orders, which are contained in the permanent[administrative] record, describe in strongly disapproving terms the[plaintiff’s alleged conduct]. . . . [Government] sanctions on broadcasters forindecent material are widely publicized.
Id. at 2318-19. Everything that the Court said about the FCC’s orders could also be saidabout FDA warning letters and a variety of other adverse, informal, but publicly announced FDA enforcement actions - which are often featured prominently in plaintiffs' complaints.
We then add to Fox Television the Supreme Court’sdecision three days earlier in Christopher v. SmithKline Beecham Corp.,132 S.Ct. 2156 (2012), rejecting the Department of Labor’s reclassification ofpharmaceutical detailmen. The Court heldthat lack of prior notice was grounds not to defer to the government’s changedpolicy:
[Plaintiffs] invoke the [agency’s] interpretation ofambiguous regulations to impose potentially massive liability on respondent forconduct that occurred well before that interpretation was announced. To defer to the [this] interpretation . . .would result in precisely the kind of unfair surprise against which our caseshave long warned. . . . Ourpractice of deferring to an agency’s interpretation of its own ambiguousregulations . . . creates a risk that agencies will promulgate vagueand open-ended regulations that they can later interpret as they see fit,thereby frustrating the notice and predictability purposes ofrulemaking. . . . It is one thing to expect regulatedparties to conform their conduct to an agency’s interpretations once the agencyannounces them; it is quite another to require regulated parties to divine theagency’s interpretations in advance or else be held liable when the agencyannounces its interpretations for the first time in an enforcement proceedingand demands deference.
132 S. Ct. at 1367-68 (citations and quotation marks added) (emphasis added).
So what might these two recent Supreme Court casesdo for us?
What they tell us is that no federal agency,including the FDA, can change its interpretation of regulations that have morethan one possible interpretation (which would be almost all of them) withoutprior notice. That’s good because theFDA has been known to do that on occasion.
But better than that, consider plaintiffs and“parallel violation” claims, whether or not raised in the context of preemption (although non-identical claimsshould be preempted as well). The plaintiffs areessentially putting themselves – or, more properly, their experts − in theposition of the FDA (which they shouldn’t be allowed to do either). Thus, if plaintiffs make up unprecedentedinterpretations of FDA regulations, guidances, etc. and attempt to apply themretroactively to conduct that took place before the interpretation existed, wecould argue that it is constitutionally barred, under the Fox Televisionand Christopher precedents. Ifsuccessful the argument would apply to all product liability claims since, bytheir nature, they involve retroactive application of litigation inspiredexpert opinions to pre-litigation facts.
How much these arguments are worth, we can’tsay. There are a lot of other betterestablished defenses – Buckman preemption for one. But getting the defense bar thinking aboutnew defenses is one thing we like doing. So noodle it, dear readers, and perhaps there’s something here that mightbe worth considering in a case where a plaintiff’s expert is offering somenever-before-seen interpretation of an FDA regulation as the supposed standardof care.
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