Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES NEWS: U.S. views sought on Athena Cosmetics petition, (Oct 6, 2014)

By Greg Hammond, J.D.

The U.S. Supreme Court has invited the Solicitor General to file a brief, expressing the views of the United States, involving issues raised in Athena Cosmetics, Inc.’s (Athena) petition for certiorari. Athena is seeking review of the U.S. Court of Appeals for the Federal Circuit’s finding that the Federal Food, Drug, and Cosmetic Act (FDCA) did not preempt claims under California’s Unfair Competition Law (UCL) (Athena Cosmetics, Inc. v. Allergan, Inc., Dkt. 13-1379).

Allergan, Inc. v Athena. Allergan, Inc. (Allergan) manufactures, markets, and distributes pharmaceutical, dermatological, and neurological products in the United States, including Latisse, a U.S. Food and Drug Administration (FDA) approved prescription drug that contains prostaglandin derivative and is used to create eyelash growth. Athena is a manufacturer and marketer of cosmetic products, including a line of RevitaLash products, some of which also contain prostaglandin derivative. Allergan filed suit against Athena, alleging unfair competition in violation of the UCL and the Health and Safety Code for marketing, selling, and distributing hair and eyelash growth products as cosmetics, without an FDA approved new drug application.

After determining that Athena’s eyelash growing RevitaLash products qualified as drugs, the federal district court in Santa Ana, California, issued a nationwide injunction, preventing Athena from selling those products. However, the Federal Circuit partially disagreed with the district court, finding that a nationwide injunction was an overbroad remedy, and narrowing the injunction to California.

Petition for certiorari. According to Athena’s petition for certiorari, the question presented is whether “the FDCA impliedly preempts a private state-law claim for unfair competition premised on a party’s purported failure to obtain FDA approval, where FDA itself has not imposed any such requirement.”

In support of its position, Athena set forth three reasons why the U.S. Supreme Court should grant its petition. First, according to Athena, the Supreme Court should grant the petition because the Federal Circuit’s decision created a direct circuit split among circuit courts. Specifically, unlike the Federal Circuit’s holding, Athena noted that the Second, Sixth, and Ninth Circuits, as well as various district courts, have held similar claims impliedly preempted under the FDCA. Second, because of the Federal Circuit’s decision and the subsequent split among Circuit and District Courts, Athena argues that there is a deep confusion regarding whether the FDCA bars private suits under state unfair-trade-practices statutes based on an alleged failure to obtain FDA approval. Lastly, Athena argues that its case raises issues of national importance that warrant the Court’s immediate attention. Specifically, Athena asserts that the Federal Circuit’s decision poses a threat to the uniformity and consistency of upholding the FDCA, and the decision further opens the door to a wave of novel and usurpative private lawsuits.

Attorneys: Steven A. Zalesin (Patterson Belknap Webb & Tyler LLP) for Athena Cosmetics, Inc. Mark A. Perry (Gibson Dunn & Crutcher LLP) for Allergan, Inc.

Companies: Allergan, Inc.; Athena Cosmetics, Inc.

News: StateUnfairTradePractices