Lower Court Case - In re Orthopedic Bone Screw Products Liability Litigation, 193 F.3d 781 (3rd Cir. 1999)
This case arises from a massive class action lawsuit over the use of a type of bone screws in the spine. The multidistrict litigation comprises more than 2,000 civil actions originally filed in approximately sixty of the ninety-four federal districts. In August 1994, the cases were consolidated in the Eastern District of Pennsylvania under 28 U.S.C. § 1407. All of the approximately 5,000 individual plaintiffs claim to have suffered physical injuries caused by defective orthopedic bone screw devices affixed to the pedicles of their spines during spinal fusion surgery. The devices, which are intended to stabilize the spine and achieve fusion of the vertebrae, consist of rods or plates that are screwed into the vertical axis of the lumbar spine. In most cases, plaintiffs allege the devices broke after being implanted in their spines. In some instances, plaintiffs have undergone surgery to have the devices removed; in others, the broken devices could not be removed. Plaintiffs' original claims, filed in early 1994, set forth causes of action based on both federal statutes and state law tort and contract principles. Generally, they named as defendants only the manufacturers and distributors of the bone screw devices. Subsequent actions named a broader array of defendants and stated additional theories of recovery. In particular, hundreds of so-called "omni" actions, first brought in October 1995, name as defendants the manufacturers, designers, and distributors of the devices; trade associations that conducted seminars on their use; regulatory consultants; and physicians who promoted the product. This case arises from an omni action.
The defendant is a consulting company that assisted the screws' manufacturer, AcroMed Corporation, in navigating the federal regulatory process for these devices. Plaintiffs say defendant made fraudulent representations to the Food and Drug Administration (FDA or Agency) in the course of obtaining approval to market the screws. Plaintiffs further claim that such representations were at least a "but for" cause of injuries that plaintiffs sustained from the implantation of these devices: Had the representations not been made, the FDA would not have approved the devices, and plaintiffs would not have been injured. Plaintiffs sought damages from defendant under state tort law. The issue before the Court is whether these "fraud on the FDA" cases are preempted by the specific language of the Medical Devices Amendments of 1976 (MDA), or by the more general regulatory preemption doctrine of federal occupation of the regulated field.
The FDA was only recently given the authority to regulate medical devices. The MDA was passed in 1976 after congressional hearings into various scandals in the medical devices industry. The regulating medical devices posed the classic regulatory dilemma - how do you deal with the existing products on the market. You cannot take them off the market because they are medically necessary, at least the ones that are effective and not dangerous. Reviewing all the existing devices for safety and efficacy will take years. If you let the existing devices stay on the market, but require all the new devices to go through a multi-year review process, you hand the existing manufacturers a monopoly and you stifle innovation for years. The MDA represents a congressional compromise to allow the regulation of devices without disrupting the existing market. The core of the MDA is a risk classification scheme that divides devices into three classes. Class I are very low risk devices, Class II are higher risk, and Class III are the highest risk. Class III includes life support devices and implantables, among others. New devices must go through premarket approval (PMA), which is analogous to the review process for new drugs. The intensity of the PMA process depends on the classification of the device, with Class III devices receiving very intrusive, time consuming, and expense review. Congress included section 510(k) in the MDA to deal with the monopoly problem. 510(k) allows devices that are substantially equivalent to devices on the market in 1976 to be approved with no PMA and only a showing of equivalence. The FDA may review the labeling of these devices and may inquire into the manufacturing practices of the constructor, but otherwise has little authority to review them for safety or efficacy.
The alleged fraud involved misleading the FDA about whether these devices were substantially equivalent to existing devices. Defendant initially applied for 510(k) status on the device as a whole. This was turned down, as was a subsequent amended 510(k) application. Defendant's next application triggered the fraud charge: "AcroMed and [petitioner] split the ... device into its component parts, renamed them `nested bone plates' and `[cancellous] bone screws' and filed a separate §510(k) application for each component. In both applications, a new intended use was specified: rather than seeking clearance for spinal applications, they sought clearance to market the plates and screws for use in the long bones of the arms and legs. AcroMed and Buckman claimed that the two components were substantially equivalent to predicate devices used in long bone surgery. The FDA approved the devices for this purpose in February 1986."
There are two keys to this fraud action. First, that the FDA was in fact fooled, and second, that the FDA does not have any authority to regulate medical practice. Thus defendants knew that if they devices were approved for long bone use, physicians could then legally use them for any other application, including as spinal fixation devices. This is termed "off label" use and is both legal and very prevalent. It does pose certain potential fraud issues in how the devices were promoted (which were brought in other lawsuits), but that is not at issue in this case. Plaintiff's argument is that this is fraud because the defendant knew that that device would be used for other purposes than were described in the 510(k), but defendant's argument is that it just engaged in classic administrative law practice: restate your application for a permit until it fits within the agency's guidelines, at which point they have to grant it. That there might be other uses was not fraud but routine FDA practice.
Such a claim, brought as a state law tort claims, raises difficult issues on the balance of power between a federal regulatory agency and 50 different state courts. In some circumstances Congress does create private rights of action as part of agency enforcement strategies, but this was not the case here. The only language in the MDA addressing this problem is preemption language prohibiting state requirements different from those imposed by the FDA. The circuit court did not find the MDA's preemption language persuasive and, reciting the usual presumption against preemption, allowed the plaintiff's state claims to go forward.
The United States Supreme Court began its analysis by noting that the states do not traditionally police fraud against federal agencies and that the relationship between an agency and that regulated entity "... is inherently federal in character because the relationship originates from, is governed by, and terminates according to federal law." This obviates the usual presumption against preemption of state law, leading to the court's holding:
"Given this analytical framework, we hold that the plaintiffs' state-law fraud-on-the-FDA claims conflict with, and are therefore impliedly pre-empted by federal law. The conflict stems from the fact that the federal statutory scheme amply empowers the FDA to punish and deter fraud against the Agency, and that this authority is used by the Agency to achieve a somewhat delicate balance of statutory objectives. The balance sought by the Agency can be skewed by allowing fraud-on-the-FDA claims under state tort law."
As the court explains in considerable detail, FDA regulation depends on a delicate balance between being a gatekeeper for dangerous devices while encouraging beneficial devices. The FDA has extensive mechanisms for detecting and punishing fraud. Allowing private definitions and enforcement of fraud would complicate the regulatory review by the FDA by changing the nature of the disclosures to the FDA and by acting as a barrier to the entry of new and perhaps beneficial devices into the market place. The court notes that this case does not involve a failure to comply with FDA requirements: the 510(k) was properly filed and met the FDA criteria. If there was fraudulent advertising or promotion, these can be attacked in traditional state products liability cases and do not depend on showing that the FDA was defrauded.
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