Finally Fed Up with Private Plaintiffs Litigating over Empty Space, California Amends Slack Fill Law

Guest Commentary

By Robert S. Niemann, a Partner with Keller and Heckman LLP in the firm’s San Francisco, CA office, and Jill M. Mahoney, an Associate in the firm’s Washington, DC office.

Editor’s note: This blog is an update to the February 2, 2018 WLF Legal Backgrounder, “Litigating over Empty Space: Public and Private Plaintiffs Target Consumer Class Actions at “Slack Fill.”

Defendants of would-be “slack fill”¹ lawsuits may have found some reprieve from litigation in California. On September 19, 2018, California Governor Jerry Brown signed into law Assembly Bill 2632, which amends the state’s slack fill law² to provide manufacturers facing nonfunctional slack fill allegations with additional safe harbors. While specious slack fill lawsuits have been on the rise in recent years, the amendment is a step forward for the food manufacturing industry and demonstrates that California, the home to many slack fill suits,³ may also be growing tired of such claims.

HHS Drug Price Advertising Proposal Reveals Sweeping View of Government Power over Private Speech

Featured Expert Contributor, First Amendment

Megan Brown

Bert Rein

Steve Obermeier

By Megan Brown, a Partner with Wiley Rein LLP, with Bert Rein and Steve Obermeier, Partners with the firm.

Ed. Note: This is Ms. Brown’s inaugural post as the WLF Legal Pulse’s latest Featured Expert Contributor.

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The Department of Health and Human Services has proposed a new rule to “require direct-to-consumer (DTC) television advertisements of prescription drugs and biological products for which payment is available through or under Medicare or Medicaid to include the Wholesale Acquisition Cost (WAC, or ‘list price’) of that drug or biological product.”  Put more simply, if a drug company runs a TV ad, it will have to include the “list price” of the drug, even though that is not what consumers or insurers would pay.  The proposed rule’s stated goal is to ensure that “beneficiaries are provided with relevant information about the costs of prescription drugs and biological products so they can make informed decisions that minimize not only their out-of-pocket costs, but also expenditures borne by Medicare and Medicaid.”

FDA-Mandated Listing of Drug Prices in Ads Would Flunk Legal and Constitutional Tests

We’ve read with amusement the recent, overblown claims of some constitutional-law commentators and even U.S. Supreme Court justices that the First Amendment has been “weaponized” as a tool of deregulation. Of course, First Amendment challenges increasingly have become indispensable as politicians and regulators target more and more speech rather than regulate conduct directly.

Consider, for instance, the advertising-disclosure requirement floated last May as a part of the Department of Health and Human Services’ (HHS) blueprint to lower prescription drug prices. HHS asked the Food and Drug Administration (FDA) “to evaluate the inclusion of list prices in direct-to-consumer advertising.” The proposal appears to be under serious consideration. HHS Secretary Alex Azar has specifically invoked it when briefing the press and testifying before two Senate committees (here and here). And FDA Commissioner Scott Gottlieb indicated (in a May interview) that an agency working group will soon study the idea.

If that study includes a dispassionate legal and constitutional analysis, the working group should recommend that HHS scrub the list-price mandate from its policy blueprint. Not only does FDA lack the statutory authority to impose the mandate, but even if it could legally do so, the regulation cannot survive a First Amendment challenge.

Judge’s Deference to FDA’s Interpretation of “Added Sugar” Regulation Secures Win for Food-Labeling Suit Defendant

When judges defer to an administrative agency’s interpretation of its own rule, targets of government regulation normally lose out. Private enterprises and organizations like Washington Legal Foundation have been urging the U.S. Supreme Court to reconsider Auer v. Robbins, the precedent that unleashed this doctrine that allows the proverbial fox to guard the hen house. We also routinely criticize class action lawsuits alleging that true statements on food labels are unlawfully false, misleading, unfair, or illegal.

It is not without a sense of irony, then, that we applaud a July 30, 2018 Central District of California opinion in Wilson v. Odwalla, which relied on “Auer deference” in granting the defenant’s motion for summary judgment in a consumer class action suit. The district court faithfully applied Auer to reach the correct decision. The Food and Drug Administration rule at issue in Wilson is clearly ambiguous—a key factor in the Auer analysis.

‘Merck, Sharpe & Dohme v. Albrecht’: The Supreme Court’s Chance to Re-Open a Preemption Door the Third Circuit Tried to Close Forever

Featured Expert Contributor, Litigation Strategies

By Joe G. Hollingsworth, Partner, Hollingsworth LLP, with Stephen A. Klein, Partner, Hollingsworth LLP

*Ed. Note: This is Mr. Hollingsworth’s inaugural post as the WLF Legal Pulse’s newest Featured Expert Contributor. He is a nationally renowned courtroom advocate who specializes in trials and appeals and leads a practice group of seventy-five attorneys. 

No one ever said preemption should be easy.  But then there’s the U.S. Court of Appeals for the Third Circuit’s preemption decision last year in Merck, Sharpe & Dohme v. Albrecht, 852 F.3d 268 (3d Cir. 2017). 

Neither Reason nor Science Supports Class Actions against Diet Soda Makers

 

A Food Court Follies Analysis

No doubt, many a diet soda will be consumed this weekend. Will any of those consumers, though, purchase that soda—in reliance on the manufacturers’ devious use of “diet”—because they think it will assist in weight loss?

That impression is the basis of a number of copycat consumer class-action lawsuits filed in New York and California by the same lawyers on behalf of soda purchasers against Coca-Cola, PepsiCo, and Dr. Pepper Snapple Group. Four such suits have been dismissed, the most recent being Manuel v. Pepsi-Cola Co. in an pointedly written opinion by U.S. District Court for the Southern District of New York Judge Paul A. Engelmayer.

Update: Federal District Court Rejects Minority View on Pharma “Innovator Liability”

In a recent post, West Virginia’s High Court Rejects Novel Theory of “Innovator Liability”, WLF Senior Litigation Counsel Cory Andrews discussed a state court decision that declined liability on a pharmaceutical manufacturer for alleged harms caused by a drug it did not produce. In doing so, the West Virginia Supreme Court of Appeals parted company with the highest courts of two other states, California and Massachusetts, which earlier this year embraced the minority view that plaintiffs can recover damages from so-called branded pharmaceutical companies for harms allegedly caused by the generic copy of the the brand-name drug.

On May 21, a U.S. District Court for the District of Massachusetts judge overseeing a multidistrict litigation, In re: Zofran (Ondansetron) Products Liability Litigation, followed the majority view of innovator liability and dismissed three claims filed by plaintiffs who had only ingested the generic version of Zofran.

West Virginia’s High Court Rejects Novel Theory of “Innovator Liability”

Should the law recognize a plaintiff’s tort claims against a branded drug manufacturer when the drug that allegedly caused the plaintiff’s injuries was manufactured and sold by the defendant’s generic competitor? State and federal courts have been grappling with this novel question of “innovator liability” ever since the U.S. Supreme Court held, in Pliva and Bartlett, that such tort claims against generic manufacturers are preempted under federal law.

At bottom, innovator liability seeks to hold innovator drug manufacturers liable for injuries resulting from products they neither manufactured nor sold. Such “deep pocket jurisprudence,” as a recent Washington Legal Foundation paper by Shook Hardy & Bacon’s Victor Schwartz explains, marks a radical departure from long-settled principles of product liability premised on a naked policy decision that shifts financial responsibility onto a third party with the deepest pockets.

FTC Enforcement Powers Face Serious Challenge

The Federal Trade Commission (FTC) has long asserted broad authority to sue businesses for engaging in unfair or deceptive acts or practices.  But a recent federal court decision (Federal Trade Commission v. Shrire Viropharma Inc.) calls that authority into serious question.  If upheld on appeal, the decision could lead to major changes in the way FTC carries out its enforcement responsibilities.

The decision focused on § 13(b) of the Federal Trade Commission Act (FTCA).  That statute authorizes FTC to seek injunctive relief in federal court against anyone who “is violating, or is about to violate” a law enforced by FTC.  FTC has long contended that § 13(b) also authorizes actions against entities based on past violations, even in the absence of evidence that the entity “is about to” commit new violations.  A Delaware federal district judge’s rejection of that contention has thrown a monkey wrench into FTC’s enforcement apparatus.

No Matter the Cause, “Public Interest” Groups Merit No Shortcuts on Standing to Sue

To bring a lawsuit, a plaintiff must, before all else, demonstrate standing under the Constitution. Article III requires a plaintiff have “(1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)). Lujan and other U.S. Supreme Court decisions have clarified that cause-oriented organizations get no shortcuts; they must meet roughly the same standing requirements as individuals to bring lawsuits in federal court. A recent U.S. District Court for the District of Columbia decision, Environmental Working Group et al. v. Food and Drug Administration, exactingly applied those requirements to deny two environmental groups standing to sue, while at the same time signaling that D.C. Circuit organizational standing precedents should perhaps be reconsidered.