Antitrust Law Daily Wrap Up, ADVERTISING—W.D. Ky.: Pharmaceutical mislabeling claim did not raise federal issue, was remanded to state court, (Oct 18, 2013)

By Jody Coultas, J.D.

The federal district court in Louisville granted the Commonwealth of Kentucky’s motion to remand its Kentucky Consumer Protection Act (CPA) claims against Janssen Pharmaceuticals, Inc. back to state court (Commonwealth of Kentucky v. Janssen Pharmaceuticals, Inc., October 15, 2013, McKinley, J.). Contrary to Janssen’s contention, the claim did not raise a substantial federal question.

The Commonwealth alleged that Janssen knew that taking its antipsychotic medication Risperdal would increase the risks of diabetes, hyperglycemia, clinically significant weight gain, cerebrovascular adverse events, hyperprolactinemia, and other serious health conditions.

Janssen removed the action to federal court, arguing that the FDA’s control over prescription drug labeling gave rise to substantial federal questions.

In order for a state-law claim to implicate a significant federal issue, the state-law claim must necessarily raise a disputed federal issue, the federal interest in the issue must be substantial, and the exercise of jurisdiction must not disturb any congressionally approved balance of federal and state judicial responsibilities.

Disputed federal issue. Despite the involvement of an issue concerning the Food and Drug Administration (FDA) and the Food, Drug, and Cosmetics Act (FDCA), the court held that the federal issues were not substantial enough to justify removal to federal court. Although the Commonwealth never mentioned the FDA in its complaint, part of its proof will involve interpreting the FDCA’s provisions to determine whether Janssen actually misplaced certain risk information on Risperdal’s labels. However, the nature of the disputed federal issue was limited to whether Janssen complied with the FDCA’s labeling provisions in light of their knowledge concerning Risperdal’s various risks. That issue would be decided in the context of state law and whether compliance, or non-compliance, with the FDCA indicated unfair, false, deceptive, or misleading actions by Janssen.

Substantial federal interest. Whether the federal interest in the disputed issues depends on (1) whether the case includes a federal agency, and particularly, whether that agency’s compliance with the federal statute is in dispute; (2) whether the federal question is important (i.e., not trivial); (3) whether a decision on the federal question will resolve the case (i.e., the federal question is not merely incidental to the outcome); and (4) whether a decision as to the federal question will control numerous other cases (i.e., the issue is not anomalous or isolated).

The court held that the FDA was not involved in the dispute. The FDA’s actions were not an issue. Rather, the issue was whether the Risperdal’s labeling was deceptive, misleading, or false so as to violate Kentucky law. The fact that Janssen will raise the defense that they did not violate the CPA because the FDA deemed their conduct to comply with federal law did not actually involve the FDA in the suit.

The federal question was not important, according to the court. Certain FDCA provisions may be discussed, but any interpretation would be done in the context of state law. The Commonwealth sought civil consumer protection penalties and injunctive relief for the alleged concealment of risk information from Kentucky health care providers, pharmacies, and consumers. The labeling considerations were only raised as proof of the alleged KCPA violations.

A decision on the federal question would not resolve the case, according to the court. The question of whether Janssen complied with the FDCA with respect to placing certain risk information in the proper sections of Risperdal’s label will be resolved in the context of whether that conduct violated Kentucky law.

The federal interest was not substantial, according to the court. Regardless of whether Janssen was found to have misplaced certain risk information on Risperdal’s label, the FDA would continue to enforce its labeling standards and specifications.

Balance of responsibilities. Exercising federal jurisdiction over the Commonwealth’s action would upset the balance of judicial responsibilities, according to the court. Janssen argued that—in cases where a violation of federal labeling law is the entire basis of a state’s claims, as it is here—a district court’s exercise of jurisdiction would not open flood gates of litigation to federal courts. Several courts have emphasized that the Supreme Court has not recognized a federal remedy for FDCA violations and have noted that allowing such actions would upset the balance of judicial responsibilities. The proper jurisdictional question was whether Congress intended for the court to expand federal question jurisdiction to include claims involving federal prescription drug labeling law. Thus, this factor weighed against federal jurisdiction.

The case is No. 3:13-CV-00624-JHM.

Attorneys: Aaron Ament with Kentucky Attorney General and Fletcher V. Trammell (Bailey Peavy Bailey PLLC) for Commonwealth of Kentucky. Charles M. Pritchett, Jr. (Frost Brown Todd LLC) and Edward M. Posner (Drinker Biddle & Reath LLP) for Janssen Pharmaceuticals, Inc.

Companies: Janssen Pharmaceuticals, Inc.

Cases: Advertising StateUnfairTradePractices KentuckyNews