In The. Supreme Court of the United States

Transcription

1 No In The Supreme Court of the United States September Term, 2017 Alice IVERS, Petitioner v. WESTERLY PHARMACEUTICAL, INC., Respondent. On Writ of Certiorari to the Supreme Court of the United States BRIEF FOR PETITIONER Team 2601 Attorneys for Petitioner

2 QUESTIONS PRESENTED I. Whether this Court s decisions in PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011), and Mutual Pharmaceutical, Co. v. Barlett, 133 S. Ct (2013), preempt the Petitioner s claims in this case? II. Whether attorney s fees are considered awardable costs under Federal Rule of Civil Procedure 41(d)? i

3 PARTIES TO THE PROCEEDINGS Petitioner, Alice Ivers, was the Plaintiff in the United States District Court for the District of Illinoza and Appellant/Cross-Appellee in the United States Court of Appeals for the Twelfth Circuit. Respondent, Westerly Pharmaceutical, Inc., was the Defendant in the United States District Court for the District of Illinoza and Appellee/Cross-Appellant in the United States Court of Appeals for the Twelfth Circuit. ii

4 TABLE OF CONTENTS QUESTION PRESENTED...i PARTIES TO THE PROCEEDINGS.. ii TABLE OF CONTENTS....iii TABLE OF AUTHORITIES.. iv OPINIONS BELOW.. 1 STATEMENT OF THE JURISDICTION....1 CONSTITUTIONAL AND STATUTORY PROVISIONS STATEMENT OF THE CASE...1 SUMMARY OF THE ARGUMENT....4 STANDARD OF REVIEW.. 6 ARGUMENT....6 I. THE TWELFTH CIRCUIT ERRED IN FINDING PREEMPTION AND THIS COURT SHOULD REVERSE ITS DECISION A. MS. IVERS HAS A LEGITIMATE CLAIM AGAINST WESTERLY.6 B. CONRESS DID NOT INTEND TO PREEMPT LEGITIMATE STATE CLAIMS AGAINST DRUG MANUFACTURERS UNDER THE FDCA AND HWA.8 1. This Court Reaffirmed Congress s Intent to Allow Legitimate State Claims Against Drug Manufacturers Mensing and Bartlett Preempted State Law Claims Only Because It Was Impossible to Comply with Both Federal and State Laws..14 II. THIS COURT SHOULD ADOPT THE SIXTH CIRCUIT S REASONING IN FULGENZI.16 A. FULGENZI ADEQUATELY RECONCILED WYETH WITH MENSING AND BARTLETT.16 B. WESTERLY IS LIABLE FOR ITS VIOLATION OF ILLINOZA STATE LAW BECAUSE NO PREEMPTION EXISTS.18 iii

5 1. It Was Not Impossible for Westerly to Comply with Both Federal and State Law Illinoza State Law Created No Obstacles for Westerly to Comply with Federal Law Ms. Ivers s State Law Claims Exist Even Without the FDCA and Are Therefore Not Preempted...21 III. IV. FINDING PREEMPTION HERE WILL PUT AMERICANS AT GREAT RISK OF HARM..22 THE TWELFTH CIRCUIT S AWARD OF COSTS UNDER FED. R. CIV. P. 41(D) IMPROPERLY INCLUDED ATTORNEY S FEES NOT PERMITTED UNDER THE RULE 23 A. AWARD OF ATTORNEY S FEES UNDER FED. R. CIV. P. 41(D) CONTRAVENES THE AMERICAN RULE THAT EACH SIDE PAYS THEIR OWN FEES...24 B. ATTORNEY S FEES ARE NOT INCLUDED IN COSTS UNDER RULE 41(D) BASED ON THE RULE S PLAIN LANGUAGE, PURPOSE, AND THE FEDERAL RULES OF CIVIL PROCEDURE AS A WHOLE The Plain Language of Rule 41(d) Does Not Permit an Award of Attorney s Fees Excluding Attorney s Fees From Rule 41(d) Still Preserves Its Purpose Deterring Forum Shopping and Vexatious Litigation Denying Attorney s Fees as Costs Under Fed. R. Civ. P. 41(d) is Consistent with the Structure and Intent of the Rule and the Federal Rules of Civil Procedure as a Whole 30 CONCLUSION..34 iv

6 U.S. SUPREME COURT CASES TABLE OF AUTHORITIES Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975)... 26, 29, 30 Bus. Guides, Inc. v. Chromatic Communs. Enters., 498 U.S. 533 (1991) Hall v. Cole, 412 U.S. 1 (1973)... 24, 25 Hardt v. Reliance Standard Life Insurance Co., 560 U.S. 242 (2010)... 24, 28 Hines v. Davidowitz, 312 U.S. 52 (1941) Huck v. Wyeth, Inc., 850 N.W.2d 353, 364 (Iowa 2014), cert. denied, U.S., 135 S.Ct. 1699, 191 L.Ed.2d 695 (2015) In re Reglan Litigation, 226 N.J. 315 (2016)... 7, 16, 18, 21 Key Tronic Corp. v. United States, 511 U.S. 809 (1994)... 25, 26 Marek v. Chesny, 473 U.S. 1 (1985)... 25, 31, 32 Marx v. Gen. Revenue Group, 568 U.S. 371 (2013) Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996)... 8, 9 Mut. Pharm. Co. v. Bartlett, 133 S. Ct (2013)... 14, 15 Nelson v. Adams USA, Inc., 529 U.S. 460 (2000) Park N Fly, Inc. v. Dollar Park and Fly, Inc., 105 S. Ct. 658 (1985) Pavelic & LeFlore v. Marvel Entertainment Group, 493 U.S. 120 (1989) PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011)... 6, 8, 9, 14, 15 Teva Pharms. USA, Inc. v. Superior Court, 217 Cal.App.4th 96, 158 Cal.Rptr.3d 150, , review denied, 2013 Cal. LEXIS 7909 (2013), cert. denied, U.S., 135 S.Ct. 1152, 190 L.Ed.2d 911 (2015) Wyeth, 555 U.S. 555 (2009)... 7, 8, 9, 10, 11, 12, 13, 14, 15, 19, 22 U.S. COURT OF APPEALS CASES Andrews v. America s Living Centers, LLC, 827 F.3d 306 (4th Cir. 2016)... 24, 27, 29, 30, 33 Esposito, 223 F.3d 497 (7th Cir. 2000)... 27, 33, 34 v

7 Evans v. Safeway Stores, Inc., 623 F.2d 121 (8th Cir. 1980)... 24, 27 Fulgenzi v. PLIVA, Inc., 711 F.3d 578 (6th Cir. 2013)... 9, 16, 17 Hensley v. Alcon Labs., Inc., 277 F.3d 535 (4th Cir. 2002) Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868 (6th Cir. 2000)... 23, 25, 27, 28, 29, 30, 31 Simeone v. First Bank Nat l Ass n., 971 F.2d 103 (8th Cir. 1992) United States v. Miller, 833 F.3d 274 (3rd Cir. 2016) U.S. DISTRICT COURT CASES Franzman v. Wyeth, Inc., 451 S.W.3d 676 (Mo. Ct. App.2014) In re Fosamax Prods. Liab. Litig., 965 F.Supp.2d 413 (S.D.N.Y.2013) Phelps v. Wyeth, Inc., 938 F.Supp.2d 1055 (D. Or.2013) STATUTES 21 C.F.R (e) U.S.C. 352(f) U.S.C (g) (2012) U.S.C. 360k(a) U.S.C U.S.C.S , Stat. 781, (c), 104(b) Drug Price Competition and Patent Term Restoration Act... 6 East Texas Code Annotated , 33 Federal Food, Drug, and Cosmetic Act... 6, 10 Illz Prod. Liability Act (1)... 6 The Hatch-Waxman Act... 6 vi

8 SECONDARY AUTHORITIES S. Brief 12-13, J. Moore, Federal Practice para [2], p.1709 (2d ed. 1972) Bara Fintel, et al., The Thalidomide Tragedy: Lessons for Drug Safety and Regulation, Science in Society, Northwestern University (July 28, 2009)... 10, 11 Duke J., et al., Consistency in the safety labeling of bioequivalent medications. Pharmacoepidemiol Drug Saf. (March 2013)... 8, 22 Eric Lindenfeld and Jasper L. Tran, Beyond Preemption of Generic Drug Claims, 45 SOUTHWESTERN LAW REVIEW 101, 103 (2015) Pub.L RULES Fed. R. Civ. P Fed. R. Civ. P. 37(a)(5)(A) Fed. R. Civ. P. 37(b)(2)(C) Fed. R. Civ. P. 37(c)(1)(A) Fed. R. Civ. P. 37(c)(2) Fed. R. Civ. P. 37(d)(3) Fed. R. Civ. P. 30(g)(2)... 27, 31 Fed. R. Civ. P Fed. R. Civ. P. 41(d)... 24, 27 Fed. R. Civ. P. 54(d)... 28, 31 Fed. R. Civ. P. 56(g)... 27, 31 Fed. R. Civ. P vii

9 OPINIONS BELOW The opinion of the United States District Court for the District of Illinoza (No CV) is unreported and is contained in the record. R. at 1-8. The opinion of the United States Court of Appeals for the Twelfth Circuit (No ) is also unreported and is set out in the record. R. at STATEMENT OF JURISDICTION The requirement of a formal statement of jurisdiction has been waived under rule 4(a)(i) of the Official Rules of the National Health Law Moot Court Competition. CONSTITUTIONAL AND STATUTORY PROVISIONS This case relies primarily on the Supremacy Clause of the United States Constitution, the Federal Food, Drug, and Cosmetic Act of 1938, 52 Stat (1938), and the Drug Price Competition and Patent Term Restoration Act, commonly known as the Hatch-Waxman Act, 21 U.S.C. 355(j)(2)(A) (2012). STATEMENT OF THE CASE Petitioner Alice Ivers seeks damages from Respondent Westerly Pharmaceuticals, Inc., ( Westerly ) for failure to warn under Illinoza state tort law. Ms. Ivers suffered from compulsive gambling and spending caused by Respondentmanufactured ropidope hydrochloride ( ropidope ). The Respondent corporation, having at least six months to comply with federal regulations, claims that federal law preempts the state action and seeks summary judgment. Westerly s failure to 1

10 update its warning label resulted in Ms. Ivers losing her entire life savings, her divorce, and led to serious emotional and life disruptions. As Ms. Ivers has Parkinson s disease, she will likely incur medical bills well into the future. In 1997, GlaxoCline, LLC patented ropidope. R. at 2. Shortly thereafter, the Federal Food & Drug Administration ( FDA ) approved marketing the new drug under the brand name Equip. Id. In 2008, GlaxoCline s patent for ropidope expired and Respondent submitted an Abbreviated New Drug Application ( ANDA ) to the FDA for approval to market an equivalent generic version. Id. The FDA approved Westerly s ANDA in Id. Per the Federal Food, Drug, and Cosmetic Act (FDCA) and subsequent amendments, commonly known as the Hatch-Waxman Act (HWA), Westerly used labeling that mirrored the then-current label for Equip. Id. However, in January 2011, GlaxoCline learned that its drug caused issues of impulse control, including but not limited to compulsive gambling and spending. R. at 2. It then submitted a Supplemental New Drug Application ( snda ) to the FDA requesting approval to add a warning of these side-effects to the Warnings and Precautions section of ropidope s package insert and associated labeling. Id. The FDA approved the changes and GlaxoCline added the warning to its Equip labels in June Id. Under FDA regulations, generic drugs must mirror their brand name counterparts. 21 C.F.R. S 314.7(c)(6)(iii)(A) (2016). Despite these regulations, Respondent did not change its label until approximately one year after GlaxoCline applied for its new label, and a full six months after it had changed it. R. at 2-3. The FDA provides a fast-track approach for generic drugs to update warning labels to comply with federal regulations called a Changes Being Effected ( CBE ) 2

11 notification. Westerly eventually submitted a CBE in January 2012, which was approved only one month later on February 1, Id. In February 2011, Petitioner Alice Ivers was diagnosed with Parkinson s disease. R. at 1. Ms. Iver s doctor prescribed ropidope and, beginning in March 2011, she began taking a daily dose of the generic form of the drug, manufactured by Westerly Pharmaceuticals, Inc. R. at 1. Shortly thereafter, in July 2011, Ms. Ivers developed compulsive spending and gambling behaviors. R. at 3. In order to pay for her newly acquired gambling behavior, she began using her retirement savings. Id. Although she won substantial sums of money, she felt compelled to spend it all on items she did not need. Id. By the end of 2012, her retirement savings were completely depleted. Id. Not only did the side-effects have adverse consequences on her finances, but it also damaged her relationships. Once her husband discovered that their retirement savings fund was depleted, he filed for divorce in November Id. (footnote 1). In January 2011, GlaxoCline requested approval from the FDA for a label change. Three months later, Ms. Ivers began taking ropidope. The the FDA approved GlaxoCline s label change in June One month later, in July 2011, Ms. Ivers developed the side-effects described in GlaxoCline s new warning label. These side-effects began for Ms. Ivers before GlaxoCline s implemented new warning label was put onto Respondent s generic version. As a result, she did not receive warning of the side-effects that Westerly knew of, or should have known of, at the time. On January 15, 2013, Ms. Ivers filed a Complaint against Westerly in United States District Court for the Western District of East Texas. R. at 5. On February 3

12 25, 2013, before Westerly filed its answer, Ms. Ivers filed a Notice of Voluntary Dismissal according to Federal Rule of Civil Procedure 41(a). Id. On September 15, 2015, Ms. Ivers filed a Complaint against Westerly in the state court of Illinoza asserting a products liability claim against Westerly under the Illinoza Products Liability Act seeking $500,000 in damages. R. at 1. Westerly removed the case to the United States District Court for the District of Illinoza on October 14, 2015, asserting diversity jurisdiction under 28 U.S.C and removal jurisdiction under 28 U.S.C R. at 1, 3. On November 2, 2015, Westerly filed its answer to the complaint and Motion for Judgment on the Pleadings and a Motion for an Award of Costs. R. at 3. The United States District Court for the District of Illinoza granted judgment on the pleadings in favor of Westerly and dismissed the complaint. R. at 8. The District Court ordered Ms. Ivers to pay certain costs, excluding attorney s fees, incurred by Westerly in defending the prior suit filed in, and dismissed from, the district court in the Western District of East Texas. R. at 7. The District Court held that attorney s fees are not included in cost per Rule 41(d). Ms. Ivers appealed to the United States Court of Appeals for the Twelfth Circuit. R. at 9. The circuit court affirmed the district court s dismissal of the Complaint. R. at 10. The circuit court also affirmed the district court s decision to award costs to Westerly under Federal Rule of Civil Procedure 41(d), and reversed the district court s decision to exclude attorney s fees from its award. Id. On July 17, 2017, this Court granted certiorari. R. at 23. SUMMARY OF THE ARGUMENT 4

13 Westerly is liable to Ms. Ivers for damages caused by its failure to warn of ropidope s known hazards. The Twelfth Circuit erred in finding that federal law preempted Ms. Ivers s claims. Congress did not expressly preempt state claims against drug manufacturers in the FDCA. In Wyeth v. Levine, this Court found that Congress enacted the FDCA with full intention to allow for state causes of action against drug manufacturers that failed to warn consumers about known sideeffects. Congress amended the FDCA with the HWA, which streamlined approval for generic drug manufacturers. The HWA imposed a duty of sameness requiring, in part, that generic manufacturers carry the same labels as their branded counterparts. In Mensing and Bartlett, this court found that state laws could not force generic drug manufacturers to violate this duty of sameness, and therefore any such state laws would be preempted. The Twelfth Circuit erroneously applied Mensing and Bartlett to this case, because it failed explore how Westerly failing in its duty of sameness would bear on the reasoning from Mensing and Bartlett. In so doing, the Twelfth Circuit failed to reconcile this Court s reasoning in Wyeth with it reasoning in Mensing and Bartlett. A growing number of state and federal courts, including the Sixth Circuit, have reached the opposite conclusion as the Twelfth Circuit. Because these other courts have correctly applied Mensing and Bartlett, this Court should adopt their reasoning and reverse the Twelfth Circuit. The district court did not award attorney s fees to Westerly, yet the Twelfth Circuit erroneously overruled its decision. The American Rule stipulates that each party pays its own attorney s fees. The only exceptions are for bad faith litigation and when the statute or rule explicitly provides for an award of attorney s fees. Rule 41(d) governs this case and provides for an award of costs to deter vexatious 5

14 litigation and forum shopping. The rule empowers district courts with discretion. Here, Ms. Ivers did not make her claim in bad faith. Costs should not include attorney s fees under Rule 41(d) because costs without attorney s fees still fulfills Rule 41(d) s purpose of deterring forum shopping and vexatious litigation, and the rule does not explicitly provide for attorney s fees. STANDARD OF REVIEW While the pleading standard does not require detailed factual allegations, it demands more than an accusation of harm. Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009). This Court makes an independent determination of the issues and does not give any weight to lower court decisions. U.S. v. First City Nat l Bank, 386 U.S. 361, 368 (1967). De novo review is appropriate and will tend to unify precedent. Ornelas v. U.S., 517 U.S. 690 (1997). Thus, this Court reviews a Judgment on the Pleadings de novo. ARGUMENT I. THE TWELFTH CIRCUIT ERRED IN FINDING PREEMPTION AND THIS COURT SHOULD REVERSE ITS DECISION. A. MS. IVERS HAS A LEGITIMATE CLAIM AGAINST WESTERLY. Ms. Ivers has a colorable claim against Westerly. The Illinoza Products Liability Act provides relief when a manufacturer s product was unreasonably dangerous due to...defective design... [or] failure to conform to an express warranty. Illz Prod. Liability Act (1). When Ms. Ivers s doctor prescribed her Westerly s generic version of ropidope, the drug had an outdated warning label. R. at 1, 3. In 1984, Congress amended the Federal Food, Drug, and Cosmetic Act (FDCA) when it enacted the Drug Price Competition and Patent Term Restoration 6

15 Act. 21 U.S.C. 355(j)(2)(A). These amendments, commonly called The Hatch- Waxman Act (HWA), streamlined the process for generic drug manufacturer s to receive FDA approval. Id. Under the HWA, generic drug manufacturers have a duty of sameness. PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011) (citing U.S. Brief 12-13, 20). This duty requires generic manufacturers to carry the exact same warning labels as their brand-name counterparts. See generally 21 U.S.C (g) (2012). Here, Westerly produced a generic version of ropidope, which GlaxoCline sells under the brand-name Equip. R. at Equip sought FDA approval to strengthen its label a full year before Westerly took action to update its own. R. at 2-3. While Westerly could not physically change its label until after FDA approval, the FDCA makes clear that drug companies are responsible to continually monitor the safety of their products. Wyeth, 555 U.S. 555, (2009) (quoting 73 Fed. Reg : Manufacturers continue to have a responsibility under Federal law... to maintain their labeling and update the labeling with new safety information. ) Although Westerly could not update its label until after GlaxoCline updated its label; it was still responsible to immediately warn patients about its product s known side-effects. Westerly s duty of sameness exists to ensure safety under the HWA. State laws provide a strong supplement to the fulfilling FDCA s purpose. Wyeth, 555 U.S. at 579 (stating that State tort suits uncover unknown drug hazards and provide incentives for drug manufacturers to disclose safety risks promptly. ). The HWA is an amendment of the FDCA. It follows that state claims, like Ms. Ivers s, serve to fulfill the HWA s purpose. In re Reglan Litigation, 226 N.J. 315, at (2016). Ms. Ivers should be allowed to present her evidence in a court of law. Preempting 7

16 her claim not only deprive her of a right guaranteed under her state s laws, but also frays the thread tying the HWA to the FDCA. Such harmful precedent provides little, if any, incentive for generic drug manufacturers to update their labels. Outdated generic drug labels are a pervasive problem in America; one study concluded that 77.9% of generic manufacturers produced labels differing from brand. Duke J., et al., Consistency in the safety labeling of bioequivalent medications. Pharmacoepidemiol Drug Saf. (March 2013). It is unlikely that generic drug companies will update their labels without a strong incentive. State court actions provide just such a strong incentive. Therefore, this Court should reverse the Twelfth Circuit s finding of preemption and remand this case for trial. B. CONGRESS DID NOT INTEND TO PREEMPT LEGITIMATE STATE CLAIMS AGAINST DRUG MANUFACTURERS UNDER THE FDCA AND HWA. Westerly s claims of preemption must meet an extremely high threshold to survive. Preemption arises under the Supremacy Clause of the United State Constitution, which states in relevant part that federal law shall be the supreme Law of the Land... any Thing in the Constitution or Laws of any State to the Contrary notwithstanding. Mensing, at 617 (citing U.S. Const., Art. VI, cl. 2.). Under the Supremacy Clause, federal law supersedes, or preempts, state law where (1) Congress has explicitly included preemptive language; and (2) where a court can reasonably find that Congress impliedly preempted state laws. Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996). Congress s purpose is the ultimate touchstone in every pre-emption case. Wyeth, 555 U.S. at 565, quoting Medtronic, Inc. v. Lohr, 518 U.S. 470, 485 (1996). Neither the Federal Food, Drug, and Cosmetic Act (FDCA) 8

17 nor the subsequent Hatch-Waxman Act (HWA) contain preemption clauses. Therefore, Westerly must meet a high burden to show preemption. R. at 12. When preemptive language is not present in a federal statute, courts apply a presumption against preemption, unless it is the clear and manifest purpose of Congress. Wyeth, 555 U.S., at 565 (citing Medtronic, Inc. v. Lohr, 518 U.S. 470, at 485 (1996)). This presumption against preemption applies with particular force in fields that States have traditionally regulated, such as health and safety. Medtronic, Inc. v. Lohr, 518 U.S. 470, at 485 (1996). As this case involves health and safety, it follows that there is a particularly strong presumption against preemption. There is no implied preemption here. Courts look for implied preemption where a statute does not include preemptive language. In seeking to determine implied preemption, courts look at the context, structure, and the reasons the statute exists. See Medtronic v. Lohr, 518 U.S. at When Congress includes preemptive language in one section of a statute, but excludes it in another, the traditional view is that Congress intended to exclude the language. Here, the FDCA explicitly preempts state law in sections pertaining to medical devices, while excluding such language from sections relating to drug manufacturers. Mensing, at 634 (citing Pub.L , 521, 90 Stat. 574, 21 U.S.C. 360k(a)) (SOTOMAYOR, dissenting opinion). Furthermore, this Court in Wyeth, established that Congress did not intend to occupy the field of drug regulation when it vested to the FDA the power to regulate prescription drugs. Wyeth, 555 U.S., at 582 (2009). Instead, this Court established that Congress intended state laws to supplement the FDA s regulation of drug manufactures. Wyeth, at 581. When viewed together, all of these 9

18 indicators set a high bar to find preemption. Here, there is a stronger presumption that Congress did not intend to preempt state law with either the FDCA or the HWA. Fulgenzi v. PLIVA, Inc., 711 F.3d 578, 585 (6 th Cir. 2013) (citing Wyeth, at : In addition, the Court found that 70 years of Congressional failure to enact an express preemption provision for prescription drugs despite the enactment of an express provision for medical devices to be powerful evidence that Congress did not intend to preempt state remedies). Congress fully intended to preserve citizens right to trial when it enacted the FDCA. This Court affirmed Congress s intent to preserve citizens right to a private cause of action in Wyeth v. Levine. See generally Wyeth, 555 U.S There, the Court found that Congress enacted the FDCA with full awareness of the traditional role that states played in protecting citizens from harm, and fully intended state court systems to bolster the goals of the FDCA. Id. at 581 ( Congress has repeatedly declined to pre-empt state law... far from preempting the right to a trial, Congress fully intended to preserve that right. ). The main goal of the FDCA is to protect Americans from harm. Before the FDCA, American citizens fell prey to a haphazardly regulated drug industry. Wyeth, at 566 ( In the 1930's, Congress became increasingly concerned about unsafe drugs and fraudulent marketing, and it enacted the [FDCA]. ) (citing FDCA, ch. 675, 52 Stat. 1040, as amended, 21 U.S.C. 301 et seq.). Since the inception of the FDCA, it has been a long process to regulate drugs adequately. Id. at 610 (noting that, in the context of drug regulation the FDA s 40-year-long effort to regulate the safety and efficacy of [the drug implicated in Wyeth]. ) When drug manufacturers fail to warn consumers about problems, it can lead to very serious outcomes. For example, in the 10

19 1950s, various companies marketed and sold thalidomide to American women to cure morning sickness. Bara Fintel, et al., The Thalidomide Tragedy: Lessons for Drug Safety and Regulation, Science in Society, Northwestern University (July 28, 2009). These companies sold the drug without adequate warnings and caused serious birth defects for millions of American babies, including babies born with flipper like limbs. Id. Without adequate warnings about known side-effects, doctors could not provide their patients with enough information to make educated decisions about their healthcare. Id. As a result of such practices, Congress enacted the FDCA to restrict false claims exaggerating benefits and understating risks. Wyeth, at 567 (citing 76 Stat. 781, (c), 104(b)). Congress affected this goal by requiring significant testing for the efficacy and safety of their products, and to produce accurate marketing materials and labels. Id. 1. This Court Reaffirmed Congress s Intent to Allow Legitimate State Claims Against Drug Manufacturers. In Wyeth v. Levine, a patient sued a brand-name drug manufacturer after experiencing harmful side-effects allegedly caused by the drug. Wyeth, 555 U.S. at The plaintiff in Wyeth claimed that the drug manufacturer had marketed its product with defective warning labels, violating its state duty to warn about harmful risks. Id. at Wyeth filed a motion for summary judgment arguing for both field preemption and conflict preemption. Id. The trial judge denied Wyeth s request, finding that neither field preemption, impossibility preemption, nor obstacle preemption applied. Id. The trial court noted that state law serves a compensatory function distinct from federal regulations. Id. at

20 Upon adverse decisions before both the trial court and on appeal Wyeth filed for and received a writ of certiorari to this Court. Id. at 563. Wyeth, like Westerly, argued the applicability of both impossibility and obstacle preemption. It claimed that state laws created substantial obstacles to fulling Congress s purposes and objectives, because [they] substitute[] a lay jury s decision about drug labeling for the expert judgment of the FDA. Id. at (citing Hines v. Davidowitz, 312 U.S. 52 (1941)). This Court rejected Wyeth s arguments, finding no preemption. In Wyeth this Court found that Congress fully intended for state tort actions to apply to drug manufacturers. Wyeth, 555 U.S Wyeth found that there was no obstacle preemption. Id. at ( Wyeth has not persuaded us that failure-to-warn claims like [plaintiff s] obstruct the federal regulation of drug labeling. ). Obstacle preemption occurs where state laws create significant obstacles to fulfilling the manifest purposes of Congress. Id. Because Congress enacted the FDCA with the express purpose to prioritize safety in drug manufacturing, this Court found that, contrary to defendant s claims, state laws actually promoted that purpose. Id. at 575. As such Wyeth made evident that Congress fully intended for the FDCA to preserve private causes of action under state law. Id. at 581. The Court reasoned that Congress understood that often, after a drug company releases a new product, it learns about new, and potentially dangerous, side-effects. Id. at 583. Though the FDCA imposed strict penalties for failing to warn consumers about these new side-effects, Congress understood that the federal government would be unable to police every single pharmaceutical product on the market. Id. at ( The FDA has limited resources to monitor the 11,000 drugs on the market... State tort suits uncover unknown drug hazards 12

21 and provide incentives for drug manufacturers to disclose safety risks promptly. ). The Court also found that Congress did not intend to displace private causes of action when it enlarged the FDA. Id. at 567 ( As it enlarged the FDA's powers to protect the public health and assure the safety, effectiveness, and reliability of drugs, Congress took care to preserve state law. ) The defendant in Wyeth also claimed impossibility preemption, because it could not physically comply with both state and federal laws. Id. at 581. Impossibility preemption exists where a party cannot comply with state law without violating federal law. Id. at 589. In Wyeth, defendants claimed that state laws imposing liability for faulty warning labels forced it to violate federal laws under the FDCA. 555 U.S. at 570. Defendant claimed that the FDCA required it to secure FDA approval for any label change it made before adding new warnings. R. at 4. This Court rejected that argument finding that Congress enacted the FDCA to bolster consumer protection against harmful products. Id. at 574. The Court looked at FDA regulations and determine that the changes being effected (CBE) process was intended to provide drug manufacturers a quick and immediate way to warn consumers about side-effects. Id. at 569. It found that the CBE process removed any claim of impossibility for defendant, because defendant could update its warning label immediately when it learned of a new hazard without first notifying the FDA. Id. Although the FDA could theoretically deny such a label change, the Court found it highly unlikely that the agency would deny stronger warnings. Id. at 570 ( the very idea that the FDA would bring an enforcement action against a manufacturer for strengthening a warning pursuant to the CBE regulation is 13

22 difficult to accept neither Wyeth nor the United States has identified a case in which the FDA has done so. ). The Court reasoned that the governing statutes indicated a clear purpose on behalf of Congress to prioritize safety above all else. Id. (citing 21 U.S.C. 352(f)). Wyeth exemplifies the extremely high threshold courts sets to find implied preemption. In Wyeth, this Court refused to find preemption without stronger reasons than a CBE process and evidence that Congress intended to displace state regulation when it created the FDA. As it stated [defendant s] cramped reading of the CBE regulation and its broad reading of the FDCA's misbranding and unauthorized distribution provisions are premised on a more fundamental misunderstanding. Wyeth suggests that the FDA, rather than the manufacturer, bears primary responsibility for drug labeling. Wyeth, at 570. Likewise, Westerly and the Twelfth Circuit s cramped reading of the CBE regulation and their broad reading of the HWA s duty of sameness requirement are also premised on a more fundamental misunderstanding. Wyeth, at 570. This position fails to grasp the burden that the FDCA which underscores every enactment in the HWA imposes onto drug manufacturers. The duty of sameness is at its core a duty of safety. Westerly violated this duty of safety and now seeks to dodge its responsibility. 2. Mensing and Bartlett Preempted State Law Claims Only Because It Was Impossible to Comply with Both Federal and State Laws. The Hatch-Waxman Act creates a duty of sameness for generic drug manufacturers. Mensing, 561 U.S. 604; Mut. Pharm. Co. v. Bartlett, 133 S. Ct (2013). This duty of sameness requires generic manufacturers to carry the exact same warning labels as their brand-name counterparts. Mensing, 561 U.S. at 618; 14

23 Bartlett, at Impossibility preemption exists where state laws require generic drug manufacturers to violate their duty of sameness. Mensing, 561 U.S. at 618. In Mensing, defendant carried the exact same warning label as its brand-name counterpart. Id. at 610. However, this brand-name label did not warn consumers of known side-effects. Id. Unlike in Wyeth, however, the Court found it could not hold generic companies liable for state laws that would force generic drug companies to carry different labels than their branded counterparts. Id. at In both Mensing and Bartlett there were strong dissents, warning of the potential dangers of finding preemption in such cases. See Id. at ; Bartlett, 133 S. Ct. at The Dissent argued that finding preemption exposed American consumers to a great risk of harm. See Mensing, 561 U.S. at ; Bartlett, 133 S. Ct. at However, the Court ultimately found that Congress s strict duty of sameness safeguarded against such harm. Mensing, 561 U.S. at 625; Bartlett, 133 S. Ct. at Finding preemption here, after Westerly violated its duty of sameness, cuts against this Court s underlying reasoning in Mensing and Bartlett. When state laws conflict with federal laws, the federal laws must prevail. Wyeth, 555 U.S. at 603 (citing the Supremacy Clause of the U.S. Const. Art. VI, cl. 2). In the case at bar, no such conflict existed. The Illinoza Products Liability Act did not require Westerly s generic drug, ropidope carry a different label than Equip, its brand-name counterpart. R. at 10. This key distinction made it not only possible for Westerly to comply with Illinoza state law, but demonstrates deference to the federal doctrine of sameness, in compliance with the HWA. As a result of Westerly s failure to mirror Equip s label for more than six (6) months, it distributed a product with a non-conforming, hence, defective label. The 15

24 defective label failed to warn consumers about a known unreasonably dangerous hazard. Id. In doing so, Westerly violated the Illinoza Products Liability Act section (1)(b) and (c), and became the proximate cause of Ms. Ivers s injuries. Id., at 3; 10. Unlike the state laws in Mensing and Bartlett, the ILPA did not require Westerly carry a different label than GlaxoCline s Equip. GlaxoCline had already received FDA approval to add compulsive behavior to its warning label, but Westerly simply failed to mirror the branded label. Id., at 10. II. THIS COURT SHOULD ADOPT THE SIXTH CIRCUIT S REASONING IN FULGENZI. A. FULGENZI ADEQUATELY RECONCILED WYETH WITH MENSING AND BARTLETT. A growing number of jurisdictions have applied Mensing and Bartlett when construing state law. See e.g. Fulgenzi v. PLIVA, Inc., 711 F.3d 578 (6th Cir. 2013). Contrary to the Twelfth Circuit, these courts have only found preemption when generic manufacturers actually fulfilled their duty of sameness. See e.g., In re Reglan, 226 N.J. at 340 ( listing several federal and states courts that have found that federal law does not preempt state law claims arising from the failure of generic drug manufacturers to update labeling to conform to that of the brand name. Citing In re Fosamax Prods. Liab. Litig., 965 F.Supp.2d 413, 417 (S.D.N.Y.2013); Phelps v. Wyeth, Inc., 938 F.Supp.2d 1055, (D.Or.2013); Teva Pharms. USA, Inc. v. Superior Court, 217 Cal.App.4th 96, 158 Cal.Rptr.3d 150, , review denied, 2013 Cal. LEXIS 7909 (2013), cert. denied, U.S., 135 S.Ct. 1152, 190 L.Ed.2d 911 (2015); Huck v. Wyeth, Inc., 850 N.W.2d 353,

25 (Iowa 2014), cert. denied, U.S., 135 S.Ct. 1699, 191 L.Ed.2d 695 (2015); Franzman v. Wyeth, Inc., 451 S.W.3d 676, 679 (Mo. Ct. App.2014)). The Sixth Circuit held in Fulgenzi that the legislative history of the FDCA and HWA, together with this Court s findings in Wyeth, demand a narrow application of Mensing and Bartlett. See Fulgenzi v. PLIVA, Inc., 711 F.3d at ( It is hard to see how permitting state tort suits to go forward against samenessviolating generic defendants frustrates federal policies where permitting suits against FDA-compliant branded defendants does not. ). Fulgenzi reasoned that [s]ince 1962, the FDCA has required... all new drugs... be shown safe and effective before being marketed... The [HWA] did not change this requirement. Id. In Fulgenzi, the Sixth Circuit found that Congress did not intend to preempt state claims against generic drug manufacturers that failed to meet their duty of sameness. Id. at The court in Fulgenzi, determined that the finding of impossibility in Mensing and Bartlett only applied when generic manufacturers fully complied with their duty of sameness. Id. at The Sixth Circuit also examined how the reasoning in Wyeth impacted the reasoning in Mensing. Id. at The Sixth Circuit and other jurisdictions have found that the longstanding presumption against preemption when viewed together with this Court s holding in Wyeth demand a finding of no preemption where generic manufacturers fail in their duty of sameness. Id. Applying Mensing and Bartlett, the Twelfth Circuit erroneously reasoned that Ms. Ivers s claims were preempted. It found that Illinoza state law required Westerly to change its label in violation of its federal duty of sameness. R. at

26 The Twelfth Circuit found no meaningful distinction between the claims preempted in Mensing and Bartlett, and Ms. Ivers s claims. R. at 13. The Twelfth Circuit erred in finding preemption here, because it stretched this Court s reasoning under Mensing and Bartlett too far. Further, it failed to explore the effects of FDA s approval of Equip s new label. Yet, the Sixth Circuit found that FDA approval on a brand name makes a huge difference. When the FDA approved Equip s label, it triggered Westerly s duty to simultaneously warn about the same side-effects. As such, in finding no material distinctions between the case here today and those in Mensing and Bartlett, the Twelfth Circuit erred. The HWA imposes a strict and ongoing duty on generic manufacturers to maintain the exact same warning labels as their branded counterparts at all times. This duty requires manufacturers to move swiftly so as to not expose already vulnerable patients to potentially lethal side-effects. In Wyeth, this Court determined that the duty to warn of known side-effects is very high for drug manufacturers. There, the Court found that, despite having to go through the FDA to comply with state regulations, Congress did not intend to preempt state laws with the FDCA, nor displace traditional state causes of action in creating the FDA. The same rules apply here. The streamlined CBE process that Westerly claims stood between it and state law compliance was not enough to safe harbor the defendant in Wyeth and it should not be enough to safe harbor Westerly. The New Jersey Supreme Court adopted Fulgenzi, noting that the Fifth Circuit s reasoning in Morris did not provide any detailed analysis or reasoning. Nor did it cite to any authority when it held only for generic drugs that [t]ort liability 18

27 does not arise for failure to attach an inadequate label. In re Reglan Litigation, 226 N.J. 315, 341, FN 10 (2016). B. WESTERLY IS LIABLE FOR ITS VIOLATION OF ILLINOZA STATE LAW BECAUSE NO PREEMPTION EXISTS. 1. It Was Not Impossible for Westerly to Comply with Both Federal and State Law. The facts here show that Westerly waited over half a year to change its warning labels. Such a delay is unacceptable. The FDA imposes a requirement to update the labels as soon as possible. In re Reglan, 226 N.J. at 333; see also 21 C.F.R (e) (requiring manufacturer to update label to include a warning as soon as there is reasonable evidence of an association of a serious hazard with a drug ). Yet, the FDA cannot ensure compliance given its limited resources and the 11,000 drugs it regulates. Wyeth, 555 U.S. at In fact, currently over 70% of generic manufacturers carry outdated labels. These outdated labels expose Americans to serious dangers. A finding of preemption here would give manufacturers very little incentive to fulfill their duties under the HWA. Alternatively, finding no preemption would work to deter delays and safeguard American consumers as both the FDCA and HWA intended. By failing to mirror Equip s label for six (6) months, Westerly not only violated multiple federal and state duties, but put patients in ill health at great risk of harm. Westerly had no federal laws preventing it from complying with state laws, and it was therefore not impossible for it to do so. The CBE process provided no realistic hurdles to comply and state law cannot be said to impose significant obstacles contrary to the purposes and intentions of Congress. Therefore, if Westerly had a valid reason for delaying in its duty, then it should present such 19

28 reasons for a fact finder to determine in court. Such considerations have no place at the appellate level. Westerly claims that by creating the FDA and subsequent regulations, Congress intended to impose a single standard for drug regulations. Yet this statement contradicts the Court s findings in Wyeth. Contrary to Westerly s possible slippery slope arguments, this Court found that state tort law acts as a strong deterrence from distributing faulty products to the several states. Despite its efforts to distinguish Congress s intentions under the HWA, the same logic applies here. In fact, Westerly and other generic drug manufacturers have an even easier standard to meet than the defendant in Wyeth. Although Wyeth found that branded drugs could theoretically be held liable under varying standards in each state, here Westerly must meet only one standard to receive blanket immunity from state law claims under Mensing and Bartlett: satisfy its federal duty of sameness. If it does so, then Westerly will have no need to litigate thousands of cases in all fifty states, as lobbyists from the generic drug industry claim. Eric Lindenfeld and Jasper L. Tran, Beyond Preemption of Generic Drug Claims, 45 SOUTHWESTERN LAW REVIEW 101, 103 (2015) ( Not only has [impossibility preemption in Mensing and Bartlett] done nothing to Combat the price of drugs, but it has also decreased incentives for generic manufacturers from engaging in thorough pre-market testing and studies, putting consumers of generic drugs at an increased risk of injury. ) 2. Illinoza State Law Created No Obstacles for Westerly to Comply with Federal Law. Under Illinoza Law It was Unreasonable for Westerly to Manufacture and Distribute Defective Drugs for Six Months Without Adequately Warning Patients of 20

29 Known Hazards. The Twelfth Circuit rejected the Sixth Circuit s holding in Fulgenzi on the grounds that it failed to adequately address reasonableness. R. at 16. However, other courts applying the Sixth Circuit s reasoning in Fulgenzi have held that a six (6) month delay was an unreasonable amount of time to update a label. See e.g. In re Reglan Litigation, 226 N.J. 315, 343 (finding it unreasonable when a generic drug manufacturer delayed updating [its] labelling... for six months because of the easy access to information about brand-name labeling changes and the time-sensitive need to make those changes.... ). When viewed collectively, state tort actions provide a long history of incentives for manufacturers of goods to warn consumers about defective products as soon as possible. Various courts have found that the Congress intended to accomplish the same goal in the FDCA and did not intend to negate those goals by amending it with the HWA. See e.g. In re Reglan Litigation, 226 N.J. at 340 ( A number of federal and state courts, like the Sixth Circuit in Fulgenzi, have found that federal law does not preempt state-law claims arising from the failure of generic drug manufacturers to update labeling to conform to that of the brand name. ). These tort laws often impose significant deterrence in the form of punitive damages to companies that fail in their duties. It certainly is possible that Westerly had very good reasons for failing to update its warning label for six months. Westerly may well have good enough reasons that would overcome the significant burden our nation s tort laws place upon manufacturers to show that such a delay was reasonable. However, this finding must be left to a jury to decide. Where, as here, drug manufacturer could access a website to view FDA announces about label 21

30 changes monthly, it is not unreasonable to expect such a change more rapidly than six months. Two months would be understandable. See Id. (identifying that the FDA s Office of Generic Drugs requires generic companies to check its monthly updates of brand-name label changes, and that a month delay to submit a CBE would be reasonable.) Of course, if extenuating circumstances caused delays, such questions of fact should be determined at the trial court level. In Re Reglan, 226 N.J. at 342 ( If the trial court determines that any defendant updated its labeling at the very earliest time possible... the state law claim would be preempted. ) 3. Ms. Ivers s State Law Claims Exist Even Without the FDCA and Are Therefore Not Preempted. Although the Twelfth Circuit makes note of the doomed fate that Ms. Ivers would find if she set forth claims under federal law, Ms. Ivers s claims do not depend upon federal laws and therefore do not threaten complete preemption either. R. at 15, n. 8. Instead, Ms. Ivers s claims exist on a parallel track of products liability, which has a long and steadfast role under state common law. Wyeth, 555 U.S. at 566. Regardless of how Westerly might attempt to characterize Ms. Ivers s claims, she would have had a colorable claim under state law even without the existence of the FDCA, HWA, or FDA. III. FINDING PREEMPTION HERE WILL PUT AMERICANS AT GREAT RISK OF HARM. Finding Preemption here unjustly deprives American citizens of their right to a fair trial. This Court detailed Congress s intent to provide plaintiff s a private cause of action under state law when it enacted the FDCA. See generally Wyeth, 555 U.S Finding preemption here today would frustrate that purpose, as it would miss an underlying purpose of the HWA: safety. See R. at 20 (MOTLEY, dissenting 22

31 opinion, describing the dual purposes and objectives of the HWA which balances the need for speed and cost-effectiveness... with the paramount concern for patient safety. ) (emphasis added). Today, nearly 80% of generic drugs carry outdated labels. Duke J., et al., Consistency in the safety labeling of bioequivalent medications. Pharmacoepidemiol Drug Saf. (March 2013). Each one of these labels risks lives. warning that Westerly s ropidope caused Impulse Control/ Compulsive Behaviors. It is not logical to presume that Congress intended to displace the protections it created with the FDCA. Congress imposed Ms. Ivers did not gamble her life savings away because she was having fun. She did it because Westerly s drug caused her to do it. Neither Ms. Ivers nor her doctor received any a strict duty of sameness onto generic drug manufacturers to protect Americans from the type of severe harm Ms. Ivers experienced. A duty of sameness does not mean a duty to eventually update a label; it carries with it an expectation that generic drug companies will act swiftly in the face of a new warning label. Westerly ruined Ms. Ivers s life. It caused her to spend hours squandering all of her money. It forced her to take time away from her family and loved ones, by stripping her of any ability to stop her impulses. She did not ask to take ropidope, her medical provider saw a need for it and instructed her to take it. He prescribed the medication, but had no warning from Westerly that its problem contained a known hazard. As a result, Ms. Ivers s impulse control issues went unrecognized as a side effect from July 2011 through R. at 3. If all of her claims are true, Ms. Ivers should be allowed to present her evidence in court, and not be stripped of justice because of Westerly s clever procedural arguments. 23

32 Finding preemption here would put Americans at great risk of harm. Such a holding would set bad precedent that risks creating a lot of stories like Ms. Ivers s, while providing generic drug companies little to no incentive to update the nearly 80% of outdated labels. IV. THE TWELFTH CIRCUIT S AWARD OF COSTS UNDER FED. R. CIV. P. 41(D) IMPROPERLY INCLUDED ATTORNEY S FEES NOT PERMITTED UNDER THE RULE. Many circuits are split on whether to include attorney s fees as costs under Fed. R. Civ. P. 41(d). For example, the Sixth Circuit held that Rule 41(d) does not include an award of attorney s fees because Congress did not explicitly provide for attorney s fees in Rule 41(d). Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868, 875 (6th Cir. 2000). Whereas, both the Fourth and Seventh circuits allow for an award of attorney s fees when the underlying statute provides for attorney s fees. Andrews v. America s Living Centers, LLC, 827 F.3d 306 (4th Cir. 2016); Esposito v. Piatrowski, 223 F.3d 497, 501 (7th Cir. 2000). In Evans v. Safeway Stores, Inc., the Eighth Circuit held, without explaining its reasoning, that the district court did not abuse its discretion when it awarded the defendant attorney s fees under Fed. R. Civ. P. 41(d). 623 F.2d 121, 122 (8th Cir. 1980). Rule 41(d) allows for costs to be awarded to the defendant when a plaintiff previously dismissed an action and then refiles an action against the defendant. Fed. R. Civ. P. 41(d). This Court should follow the Sixth Circuit and hold that Rule 41(d) does not permit an award of attorney s fees as costs, and as such, the district court did not abuse its discretion in withholding attorney s fees from Westerly s award of costs. Therefore, the district court s award of costs without 24

33 attorney s fees should be affirmed, and the Twelfth Circuit s decision to award attorney s fees should be vacated. A. AWARD OF ATTORNEY S FEES UNDER FED. R. CIV. P. 41(D) CONTRAVENES THE AMERICAN RULE THAT EACH SIDE PAYS THEIR OWN FEES. The American Rule is the bedrock principle that each party pays his own attorney s fees, win or lose, unless a statute or contract provides otherwise. Hardt v. Reliance Standard Life Insurance Co., 560 U.S. 242, 251 (2010). Thus, the allowance of attorney s fees is disfavored absent contractual or statutory authorization. Hall v. Cole, 412 U.S. 1, 4 (1973). Federal courts may award attorney s fees in their inherent power when the interests of justice so require. Id. at 4-5. This inherent power to award attorney s fees comes from the original authority of the chancellor to do equity in a particular situation. Id. at 5. Over time, exceptions to the American Rule have evolved from the court s inherent power to allow attorney s fees in certain situations. Marek v. Chesny, 473 U.S. 1, 8 (1985). A court s award of attorney s fees generally must fall within one of the exceptions to the American Rule. One such exception allows an award of attorney s fees to a successful party when the other party acted in bad faith, vexatiously, wantonly, or for oppressive reasons. Id. at 5 (quoting 6 J. Moore, Federal Practice para [2], p.1709 (2d ed. 1972)). Furthermore, the essential element in triggering the award of fees is therefore the existence of bad faith on the part of the unsuccessful litigant. Hall, 412 U.S. at 5. The underlying rationale of awarding attorney s fees for bad faith is punitive. Id. However, an award of costs under Fed. R. Civ. P. 41(d) does not require a finding of bad faith. Rogers, 230 F.3d at 874. An award of attorney s fees based on bad faith is already within the 25