                                                                                                                           Opinions of the United
2007 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


8-17-2007

PA Empl Benefit v. Zeneca Inc
Precedential or Non-Precedential: Precedential

Docket No. 05-5340




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PRECEDENTIAL

    THE UNITED STATES COURT OF APPEALS
           FOR THE THIRD CIRCUIT

                  Case No: 05-5340

PENNSYLVANIA EMPLOYEES BENEFIT TRUST FUND
          on behalf of itself and all others
       similarly situated; JOSEPH MACKEN;
      COMMISSIONER LINDA A. WATTERS,

                          Appellants


                           v.

 ZENECA INC; ASTRAZENECA PHARMACEUTICALS
                    LP;

              _____________________

    On Appeal from the United States District Court
               for the District of Delaware
            District Court No.: 05-cv-00075
    District Judge: The Honorable Sue L. Robinson
                _____________________

                 Argued June 5, 2007
      Before: SMITH, COWEN, and SILER, Circuit Judges,*

                   (Filed: August 17, 2007)

Counsel:
Pamela S. Tikellis
A. Zachary Naylor
Chimicles & Tikellis
One Rodney Square
P.O. Box 1035, Suite 500
Wilmington, DE 19899

Barbara J. Hart
Christopher McDonald
Labaton, Sucharow & Rudoff
100 Park Avenue, 12th Floor
New York, NY 10017

Theodore M. Lieverman
Jeffrey L. Kodroff
Spector, Roseman & Kodroff
1818 Market Street, Suite 2500
Philadelphia, PA 19103

Steve W. Berman
Craig R. Spiegel (Argued)


  *
   The Honorable Eugene E. Siler, Senior Circuit Judge for the
United States Court of Appeals for the Sixth Circuit, sitting by
designation.

                               2
Hagens Berman Sobol Shapiro
1301 5th Avenue, Suite 2900
Seattle, WA 98101
       Counsel for Appellants

Jack B. Blumenfeld
Rudolph J. Scaggs, Jr.
Lisa K. Whittaker
Morris, Nichols, Arsht & Tunnell
1201 North Market Street
P.O. Box 1347
Wilmington, DE 19899

Mark E. Haddad (Argued)
Sidley Austin
555 West 5th Street, Suite 4000
Los Angeles, CA 90013
       Counsel for Appellee
                 _____________________

                 OPINION OF THE COURT
                  _____________________

SMITH, Circuit Judge.

      The Pennsylvania Employees Benefit Trust Fund, Joseph
Macken, and Linda Watters (“plaintiffs”) sued Zeneca, Inc. and
AstraZeneca Pharmaceuticals, L.P. (collectively referred to as
“Zeneca”) in the United States District Court for the District of
Delaware, asserting that Zeneca engaged in deceptive conduct


                               3
in the advertising of its new drug Nexium. Claim One alleged
unlawful advertising under the Delaware Consumer Fraud Act
(“DCFA”). The second claim alleged violations of the consumer
protection statutes of the 50 states for false, misleading, and
deceptive advertising. Claim Three alleged unjust enrichment,
and stated claims under Delaware common law for restitution,
disgorgement, and constructive trust. The fourth claim was for
negligent misrepresentation, and it alleged that the company
released misleading advertisements for the prescription drug
Nexium. The District Court dismissed the complaint with
prejudice.

        This appeal presents two principal questions: (1) whether
the DCFA exemption for advertising regulated by the Federal
Trade Commission applies to the facts of this case; and (2)
whether federal law preempts the plaintiffs’ state consumer
protection claims. The plaintiffs also assert that primary
jurisdiction was an improper basis for dismissal, that their unjust
enrichment claim was improperly dismissed on the ground that
they had not pled individual reliance, and that they should have
been allowed to amend their complaint. We will affirm the
judgment of the District Court.1


  1
    The District Court had diversity jurisdiction under 28 U.S.C.
§ 1332(d)(2) and (6), which confers federal jurisdiction over
class actions where “any member of a class of plaintiffs is a
citizen of a State different from any defendant” and the amount
in controversy exceeds $5,000,000. This Court has jurisdiction

                                4
                                 I.

       On February 11, 2005, the plaintiffs 2 filed a putative class
action against Zeneca, alleging that Zeneca’s marketing
campaign for Nexium 3 was deceptive because it misleadingly
advertised Nexium as an improvement on Prilosec. Nexium and
Prilosec are both proton-pump inhibitors, drugs that treat
gastroesophageal reflux disease (“GERD”) and erosive
esophagitis, conditions that are commonly known as acid reflux
disease and frequent heartburn. Prilosec was a profitable drug
for Zeneca, and had sales of $6 billion in 2000. The patent for
Prilosec was due to expire in 2001, at which point it would be
available for sale as the generic drug omeprazole. On February
14, 2001, Zeneca obtained approval from the Food and Drug
Administration (“FDA”) for final labeling on Nexium for



pursuant to 28 U.S.C. §§ 1291 and 1294.
    2
      On April 13, 2006, Zeneca filed a motion to dismiss the
appeal as to seven of the original ten plaintiffs on the ground
that the notice of appeal included only the Pennsylvania
Employees Benefit Trust Fund, Joseph Macken, and Linda
Watters. The three named plaintiffs contested the motion to
dismiss, which is now before us. Because of our disposition of
this case, we need not reach this issue. We will deny the motion
to dismiss as moot.
        3
      Nexium is the proprietary name for esomeprazole
magnesium.

                                 5
healing of erosive esophagitis, maintenance of healing of
erosive esophagitis, and treatment of symptomatic GERD (i.e.,
heartburn).

       One published clinical study of Nexium compared both
20 mg and 40 mg doses of Nexium to the approved 20 mg dose
of Prilosec. The data from this study showed that 40 mg of
Nexium had a statistically significant healing rate over 20 mg of
omeprazole. This study was among those used to obtain FDA
approval of Zeneca’s new drug application for Nexium. The
FDA later determined that Nexium should be approved at
recommended dosages of 20 mg or 40 mg once daily, for four to
eight weeks, for the healing of erosive esophagitis, and at 20 mg
for both maintenance of healing of erosive esophagitis and
symptomatic GERD.

       In their complaint, plaintiffs alleged that the large-scale
promotional campaign for Nexium, which included both
physician-directed marketing and direct-to-consumer
advertising, was misleading because it incorrectly represented
that Nexium was superior to Prilosec. The plaintiffs asserted that
a dose of 40 mg is not needed in most patients and a fair
comparison of 20 mg of Nexium to 20 mg of Prilosec would not
have proven Nexium to be superior. The plaintiffs also
contended that Zeneca initially sold Nexium at a price below
Prilosec in order to establish brand loyalty, but “then raised the
price of Nexium while the price of Prilosec dropped. [Nexium]
now sells for $4.09 per pill versus $0.67 per pill or less for

                                6
Prilosec.” On November 8, 2005, the District Court granted
Zeneca’s motion to dismiss for failure to state a claim.

        We review the grant of a motion to dismiss de novo,
accepting all well-pleaded allegations as true and drawing all
reasonable inferences in favor of the plaintiffs. In re Adams
Golf, Inc. Sec. Litig., 381 F.3d 267, 273 (3d Cir. 2004); In re
Alpharma Sec. Litig., 372 F.3d 137, 146 (3d Cir. 2004). Review
of the denial of leave to amend is for abuse of discretion. Hill v.
City of Scranton, 411 F.3d 118, 134 (3d Cir. 2005).

                                II.

The Application of the DCFA Exemption

        The first issue raised on appeal is whether FDA approval
of prescription drug labeling and regulation of advertising brings
the plaintiffs’ claims within the DCFA exemption of “any
advertising or merchandising practice” that is compliant with
Federal Trade Commission regulations. The purpose of the
DCFA is “to protect consumers and legitimate business
enterprises from unfair or deceptive merchandising practices in
the conduct of any trade or commerce in part or wholly within
this State.” 6 D EL. C ODE A NN. § 2512. The DCFA proscribes

       The act, use or employment by any person of any
       deception, fraud, false pretense, false promise,
       m isrepresentation, or the concealment,


                                7
       suppression, or omission of any material fact with
       intent that others rely upon such concealment,
       suppression or omission, in connection with the
       sale, lease or advertisement of any merchandise,
       whether or not any person has in fact been misled,
       deceived or damaged thereby....

6 D EL. C ODE A NN. § 2513(a). The exemption language in the
DCFA at issue states that “[t]his section shall not apply … [t]o
any advertisement or merchandising practice which is subject to
and complies with the rules and regulations, of and the statutes
administered by, the Federal Trade Commission….” 6 D EL.
C ODE A NN. § 2513(b)(2). The District Court concluded that all
of the advertising materials cited by the plaintiffs in their
complaint “are related to the safety and efficacy of Nexium, are
consistent with the FDA-approved labeling and, therefore, are
not actionable under the DCFA pursuant to 6 Del. C. §
2513(b)(2).”

       Plaintiffs argue that the exemption should be read more
narrowly than the District Court read it, and that, properly
construed, the exemption did not protect Zeneca’s conduct. In
particular, plaintiffs assert that (1) the exemption is limited to
conduct expressly approved by the FTC; (2) the FDA did not
explicitly approve Zeneca’s marketing campaign; and (3)
Zeneca’s marketing deviated from statements approved by the
FDA for Nexium’s label. Zeneca points to the broad
prohibitions in 15 U.S.C. §§ 45 and 52, which declare unlawful
unfair methods of competition and the dissemination of false

                                8
advertisements, as proof that prescription drug advertising is
subject to the statutes administered by the FTC.

       As a preliminary matter, we decline to read the DCFA
exemption to require that an advertisement or merchandising
practice must be expressly approved by the FTC in order to
qualify for the exclusion. The plain language of § 2513(b)(2)
requires only that the conduct be subject to and compliant with
rules and regulations created by the FTC and the statutes
administered by that agency. Accordingly, the lack of express
FTC approval of the Nexium marketing campaign is not a basis
for declaring the statutory exemption inapplicable.

        We are left, then, with the thornier question presented by
plaintiffs’ assertion that the exemption’s reach does not extend
to matters subject to FDA oversight. By congressional decree,
the FTC and the FDA originally shared jurisdiction over
prescription drug advertising. See Pub. L. No. 87-781, 76 Stat.
791-92 (1962) (codified as amended at 21 U.S.C. § 352(n)); see
also 15 U.S.C. §§ 45 and 52; 21 U.S.C. § 352(n) (removing any
“advertisement of a prescription drug, published after the
effective date of regulations issued under this paragraph
applicable to advertisements of prescription drugs,” from the
purview of the provisions of 15 U.S.C. §§ 52-57); 21 U.S.C. §
393(b)(1) (“The [FDA] shall ... promote the public health by ...
taking appropriate action on the marketing of regulated products
in a timely manner”). Because Congress gave the agencies
concurrent jurisdiction with respect to regulating prescription

                                9
drug advertising until the FDA promulgated regulations, the
FDA and FTC established their own interim division of
responsibilities.4 In the Working Agreement Between FTC and
Food and Drug Administration, 36 Fed. Reg. 18,539 (Sept. 16,
1971), the two agencies agreed that “[t]he Food and Drug
Administration has primary responsibility with respect to the
regulation of the truth or falsity of prescription drug
advertising.” This statement does not preclude FTC regulation
of prescription drug advertising, but rather notes the agencies’
mutual understanding that the FDA will take the lead in
regulating such activities, subject to the concurrent jurisdiction
of both agencies. The statement explicitly limits the FDA’s
primary responsibility to determining the veracity of the
advertising claims; it does not suggest that regulating technically
true, but potentially misleading, advertisements is the exclusive
domain of the FDA. Accordingly, this arrangement alone does
not remove the claims regarding Nexium advertising from the
purview of regulations and statutes administered by the FTC.
However, the FDA’s subsequent promulgation of regulations for
prescription drug advertising effectively eliminated the FTC’s
authority in this area.

       Even if Zeneca can show that the marketing was almost
identical to the specifically authorized labeling, the FDA is not


        4
        The FDA promulgated preliminary regulations on
prescription drug advertising in 1975. 40 Fed. Reg. 14106 (Mar.
27, 1975).

                                10
merely acting as the FTC’s proxy in regulating prescription drug
advertising. The FDA has responsibility for regulating the
advertising of prescription drugs that is independent of any
delegation from the FTC.5

       Although there is an affinity between FTC and FDA




  5
   In Sandoz Pharmaceuticals Corp. v. Richardson-Vicks, Inc.,
902 F.2d 222 (3d Cir. 1990), we summarized the division of
regulatory authority in this manner: “the FDA regulates the
labeling of OTC drugs while the FTC monitors the advertising
for these drugs.” Id. at 227. The facts and law at issue in Sandoz
are distinguishable and we need not follow its dicta in this case.
In Sandoz, the Court was concerned with the question of
whether a Lanham Act plaintiff needs to show only that the
defendant’s advertising claims of its own drug’s effectiveness
are inadequately substantiated under FDA guidelines, or whether
the plaintiff must also show that the claims are literally false or
are misleading to the public. Id. at 224, 229. The dispute in
Sandoz was also over the marketing of an over-the-counter drug.
OTC drugs and prescription drugs are subject to different rules
and regulations. Compare id. at 227 (“The FTC has the authority
under Sections 5 and 12 of the FTC Act, 15 U.S.C. §§ 45 & 52,
to find that an inadequately substantiated advertising claim
regarding a non-prescription drug is deceptive or misleading,
and thus illegal.”), with 21 C.F.R. § 202.1. Thus, our opinion in
Sandoz has little applicability to this case.

                                11
guidance 6 and the scope of the Federal Trade Commission Act
(“FTCA”) is broad, the reasoning of the District Court rests on
the premise that advertising that is based upon labeling approved
by the FDA falls within the DCFA exemption. This is an
unsupportable extension of the language of § 2513(b)(3).

       The distinction between labeling and marketing is
significant for regulatory purposes. Although there is often a
strong correlation between a drug’s labeling and marketing 7 ,

  6
    For example, Zeneca points to FDA guidance that expressly
permits drug manufacturers to describe newly approved drugs
as “new” for six months after their launch, see
http://www.fda.gov/cder/ddmac/FAQS.HTM (explaining that
“DDMAC [the Division of Drug Marketing, Advertising and
Communications] generally considers that ‘New’ is an accurate
description of the marketing phase for six months from the time
a product is initially marketed”), and the FTC’s similar opinion
that there is a “tentative outer limit for use of the claim [that a
product is ‘new’] ... [of] a period of time no longer than 6
months.” Permissible Period of Time During Which New
Product May Be Described as “New,” 32 Fed. Reg. 6023, 6023
(Apr. 14, 1967). The mere fact that the agencies have similar
interpretations only shows inter-agency consistency; it does not
show that the FTC was the regulating entity.
      7
      21 C.F.R. § 202.1(e)(4)(i)(a) (“The advertisement shall
present information from labeling required, approved, or
permitted in a new-drug application relating to each specific side
effect and contraindication in such labeling that relates to the

                                12
federal approval of labeling does not necessarily authorize
marketing practices. Labeling is defined as “all labels and other
written, printed, or graphic matter (1) upon any article or any of
its containers or wrappers, or (2) accompanying such article.” 21
U.S.C. § 321(m). It functions as “the primary mechanism
through which FDA and drug manufacturers communicate
essential, science-based prescribing information to health care
professionals.” Requirements on Content and Format of
Labeling for Human Prescription Drugs and Biologics;
Requirements for Prescription Drug Product Labels, 65 Fed.
Reg. 81082, 81082 (Dec. 22, 2000); see also 21 C.F.R.
§ 202.1(l)(2) (stating that material such as “[b]rochures,
booklets, mailing pieces, detailing pieces, file cards, bulletins,
calendars, price lists, catalogs, house organs, letters, [etc.] ...


uses of the advertised drug dosage form(s)....”); Requirements
on Content and Format of Labeling for Human Prescription
Drug and Biological Products, 71 Fed. Reg. 3922, 3960 (Jan. 24,
2006) (“[S]tatements made in promotional labeling and
advertisements must be consistent with all information included
in labeling under proposed § 201.57(c) to comply with current
§§ 201.100(d)(1) and 202.1(e).”); Professional Product
Labeling; Public Meeting, 60 Fed. Reg. 52196, 52196 (Oct. 5,
1995) (“The approved labeling serves as the basis for fulfilling
the requirement of the Federal Food, Drug, and Cosmetic Act ...
that prescription drug advertising include ‘information in brief
summary relating to side effects, contraindications, and
effectiveness.’ (section 502(n) of the Act (21 U.S.C.
§ 352(n)).”).

                                13
descriptive of a drug and references published (for example, the
‘Physicians Desk Reference’) for use by medical practitioners,
pharmacists, or nurses, containing drug information supplied by
the manufacturer, packer, or distributor of the drug and which
are disseminated by or on behalf of its manufacturer, packer, or
distributor are hereby determined to be labeling” (emphasis
added)).

        In contrast, advertisements are published in journals,
magazines, and newspapers, and are broadcast through media
such as television and radio. Advertisements also come in the
form of physician-directed pitches by sales representatives,
computer programs, and electronic media. See 21 C.F.R.
§ 202.1(l)(1). Although advertising may also serve as a
mechanism to distribute safety information about a drug, its
primary purpose–unlike labeling–is not to promote safety but
rather to promote market expansion. See, e.g., Agency
Information Collection Activities; Submission for Office of
Management and Budget Review; Comment Request;
Experimental Evaluation of Variations in Content and Format of
the Brief Summary in Direct-to-Consumer Print Advertisements
for Prescription Drugs, 72 Fed. Reg. 11889, 11889 (March 14,
2007) (“Although advertising of prescription drugs was once
primarily addressed to health professionals, increasingly
consumers have become a target audience, as DTC advertising
has dramatically increased in the past few years. ... Frequently,
sponsors print in small type, verbatim, the risk-related sections
of the approved product labeling (also called the package insert,

                               14
professional labeling, or prescribing information). This labeling
is written for health professionals, using medical terminology.”).
Zeneca has shown, through documentary evidence, that the FDA
approved its labeling. However, the plaintiffs contend that the
advertising differed sufficiently from the labeling such that it
cannot also be considered to have been approved by the FDA.

        Approval of a new drug application occurs “after [the
FDA] determines that the drug meets the statutory standards for
safety and effectiveness, manufacturing and controls, and
labeling....” 21 C.F.R. § 314.105(c) (emphasis added). The
Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 301, et
seq., requires that applicants for new drug applications submit
“[c]opies of the label and all labeling for the drug product,” 21
C.F.R. § 314.50(e)(2)(ii), and it specifically prohibits
misbranding of drugs. “A drug or device shall be deemed to be
misbranded ... if its labeling is false or misleading in any
particular.” 21 U.S.C. § 352(a); 21 C.F.R. § 1.21(a)(i)-(ii)
(“Labeling of a ... drug ... shall be deemed to be misleading if it
fails to reveal facts that are: (1) Material in light of other
representations made or suggested by statement, word, design,
device or any combination thereof; or (2) Material with respect
to consequences which may result from use of the article under:
(i) The conditions prescribed in such labeling or (ii) such
conditions of use as are customary or usual.”). The FDA may
refuse to approve an application on the grounds that “[t]he
proposed labeling is false or misleading in any particular.” 21
C.F.R. § 314.125(b)(6). Thus, to the extent that the advertising

                                15
statements regarding Nexium were consistent with statements
used in the labeling approved by the FDA, the FDA has
determined that they are not false or misleading.8

       The FDA’s Division of Drug Marketing, Advertising and
Communications advises drug makers on proposed advertising
and promotional labeling, in accordance with 21 C.F.R.
§ 202.1(j)(4). However, this review process is largely voluntary.



    8
    The FDA’s determination that a statement is not false or
misleading is, of course, distinct from a determination that the
presentation of that statement is not misleading. The regulations
provide that

        An advertisement may be false, lacking in fair
        balance, or otherwise misleading ... if it ... [f]ails
        to present information relating to side effects and
        contraindications with a prominence and
        readability reasonably comparable with the
        presentation of information relating to
        effectiveness of the drug, taking into account all
        implementing factors such as typography, layout,
        contrast, headlines, paragraphing, white space,
        and any other techniques apt to achieve emphasis.

21 C.F.R. § 202.1(e)(7)(viii). Through these regulations, the
FDA has gone beyond the mere supervision of veracity in
advertising statements to examine how the information is
presented.

                                 16
Id. (“Any advertisement may be submitted to the Food and Drug
Administration prior to publication for comment.”); but see 21
C.F.R. § 314.81(b)(3) (“The applicant shall submit specimens of
mailing pieces and any other labeling or advertising devised for
promotion of the drug product at the time of initial
dissemination of the labeling and at the time of initial
publication of the advertisement for a prescription drug
product.”). Section 352(n) of the FDCA exempts the content of
any advertisement from pre-release Secretarial scrutiny, except
in “extraordinary circumstances.” 21 U.S.C. § 352(n)(A).

       Whether Zeneca is correct in its assertion that the
complaint is fundamentally “based on” the labeling is a legal
question. The complaint attacks both the actual marketing tactics
used by Zeneca, as well as the studies upon which FDA
approval was based. To the extent that the complaint alleges that
Zeneca marketed Nexium as superior to Prilosec, those claims
of superiority might be actionable inasmuch as such
comparisons are not supported by the labeling and therefore
might be false or misleading. Although we need not decide this
question now, we note that the FDA’s regulations require
prescription drug advertisements to comport with approved
labeling. See, e.g., 21 C.F.R. § 202.1(e)(3)(iii) (“The
information relating to side effects and contraindications shall
disclose each specific side effect and contraindication ...
contained in required, approved, or permitted labeling for the
advertised drug....”); Thomas A. Hayes, Drug Labeling and
Promotion: Evolution and Application of Regulatory Policy, 51

                               17
F OOD & D RUG L.J. 57, 62 (1996) (explaining that, under the
regulations, “advertising claims may be based either on
substantial evidence or on substantial clinical experience,” but
the standard for labeling is substantial evidence); see 21 C.F.R.
§ 201.56(a)(3) (disallowing claims or suggestions of drug use on
labeling if there is a lack of substantial evidence).

       Congress expressly gave the FDA authority over
prescription drug advertising in the FDCA. The FDCA lists a
number of required elements of prescription drug advertising
and states that “no advertisement of a prescription drug,
published after the effective date of regulations issued under this
paragraph applicable to advertisements of prescription drugs,
shall with respect to the matters specified in this paragraph or
covered by such regulations, be subject to the provisions of
sections 52 to 57 of Title 15.” 21 U.S.C. § 352(n). Section 52 of
Title 15 declares unlawful the dissemination of false
advertisements. Subsection 352(n) of the FDCA was added in
1962. Pub. L. 87-781, § 131(a).

        The DCFA became law in 1965. See Brandywine
Volkswagen, Ltd. v. State Dept. of Community Affairs and Econ.
Dev., Div. of Consumer Affairs, 312 A.2d 632, 633 (Del. 1973)
(citing 55 Del.L., Ch. 46.). In enacting this statute, the Delaware
General Assembly expressed its intent “to protect consumers
and legitimate business enterprises from unfair or deceptive
merchandising practices.” 6 D EL. C ODE A NN. § 2512. The
legislature also explicitly declared its “intent ... that such

                                18
practices be swiftly stopped and that this subchapter shall be
liberally construed and applied to promote its underlying
purposes and policies.” Id. Reading the exemption in
§ 2513(b)(2) to exclude from the scope of the DCFA marketing
practices that are subject to the rules and regulations of the
FDA, and which are required to be based on labeling that is
expressly approved and required by the FDA, improperly
broadens the reach of the exemption beyond its explicit
limitation to practices that are compliant with FTC rules and
regulations. We will not rewrite the text of the exemption to
include regulation of activities that are not within the FTC’s
authority. Accordingly, we hold that the District Court erred in
ruling that the plaintiffs’ claims were not actionable under the
DCFA.

                              III.

Preemption

       The District Court further concluded that the Nexium
advertisements that complied with the FDA-approved labeling
were not actionable under the state consumer protection laws
because those laws were preempted by federal law. The District
Court correctly analyzed this issue under the rubric of implied
conflict preemption. Plaintiffs assert that the District Court’s
application of federal preemption is incorrect because there is
not an irreconcilable conflict between the state consumer fraud
laws and the FDCA. In particular, the plaintiffs argue that the

                              19
approval of Nexium’s labeling did not extend to an assertion of
Nexium’s superiority over Prilosec.

        Implied conflict preemption renders state law “without
effect” when, without “express congressional command,” state
law conflicts with federal law. See Cipollone v. Liggett Group,
Inc., 505 U.S. 504, 516 (1992). As the Supreme Court has
explained, “[t]his question is basically one of congressional
intent. Did Congress, in enacting the Federal Statute, intend to
exercise its constitutionally delegated authority to set aside the
laws of a State? If so, the Supremacy Clause requires courts to
follow federal, not state, law.” Barnett Bank of Marion County,
N.A. v. Nelson, 517 U.S. 25, 30 (1996). The Court has “found
implied conflict pre-emption ... where state law ‘stands as an
obstacle to the accomplishment and execution of the full
purposes and objectives of Congress.’” Sprietsma v. Mercury
Marine, a Div. of Brunswick Corp., 537 U.S. 51, 64-65 (2002)
(quoting Freightliner Corp. v. Myrick, 514 U.S. 280, 287 (1995)
(quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941))). Thus,
the question presented here is whether state consumer fraud laws
pose an obstacle to the FDA’s congressionally-mandated
regulation of prescription drug advertising.

        For purposes of this case, the critical characteristic of the
FDCA is that it regulates the safety of drugs. The FDCA states
that the mission of the FDA is to “(1) promote the public health
by promptly and efficiently reviewing clinical research and
taking appropriate action on the marketing of regulated products

                                20
in a timely manner; (2) with respect to such products, protect the
public health by ensuring that ... (B) human ... drugs are safe and
effective.” 21 U.S.C. § 393(b). Prior to the introduction of a new
drug, the FDA must find that the “drug is safe for use under the
conditions prescribed, recommended, or suggested in the
proposed labeling thereof.” 21 U.S.C. § 355(d) (explaining in
detail the seven-part test that the FDA uses in determining
whether to approve a drug); see also Grinspoon v. DEA, 828
F.2d 881, 887 (1st Cir. 1987). As part of this process, the FDA
must find that there is “substantial evidence that the drug will
have the effect it purports or is represented to have....” Id.
During the approval process, the Secretary may determine,
“based on relevant science, that data from one adequate and
well-controlled clinical investigation and confirmatory evidence
(obtained prior to or after such investigation) are sufficient to
establish effectiveness....” Id. (emphasis added). Such data and
evidence constitute “substantial evidence” under 21 U.S.C.
§ 355.

        Section 352(n) lists three items that prescription drug
advertising must include: (1) the actual name of the drug, if a
trade or brand name is used; (2) the ingredient list and
quantitative formula for each ingredient; and (3) a brief
summary of side effects, contraindications, and effectiveness.
The subsection is called the “brief summary” provision. It
requires a true statement of these three items in the brief
summary included in advertisements. The statute explains that,
to the extent that an advertisement complies with subsection (n)

                                21
in listing the three items, it is not subject to the false advertising
provisions of the FTCA. However, as noted above, § 352(n)
requires only pre-release approval of advertisements in
“extraordinary circumstances.”

       Pursuant to its regulatory authority over prescription drug
advertising, the FDA promulgated regulations that lay out the
specific requirements for advertising prescription drugs. See 21
C.F.R. § 202.1. In particular, the regulations stipulate that an
advertisement does not include a “true statement” if it is

       [F]alse or misleading with respect to side effects,
       contraindications, or effectiveness; or [i]t fails to
       present a fair balance between information
       relating to side effects and contraindications and
       information relating to effectiveness of the drug
       in that the information relating to effectiveness ...
       is not fairly balanced by a presentation of a
       summary of true information relating to side
       effects and contraindications of the drug ...; [or]
       [i]t fails to reveal facts material in the light of its
       representations or material with respect to
       consequences that may result from the use of the
       drug as recommended or suggested in the
       advertisement.

21 C.F.R. § 202.1(e)(5). The regulation includes an extensive,
but non-exhaustive, 20-factor list of reasons why “[a]n
advertisement for a prescription drug is false, lacking in fair


                                 22
balance, or otherwise misleading....” 21 C.F.R. § 202.1(e)(6)(i)-
(xx).9 The subsequent subsection explains the circumstances
under which “[a]n advertisement may be false, lacking in fair
balance, or otherwise misleading....” 21 C.F.R. § 202.1(e)(7)
(emphasis added). The regulations further state that
“[d]issemination of an advertisement not in compliance with this
paragraph shall be deemed to be an act that causes the drug to be
misbranded....” 21 C.F.R. § 202.1(j)(3). The FDA explains that
“[a]ny advertisement may be submitted to the Food and Drug
Administration prior to publication for comment,” but does not
require that manufacturers submit their ads for preapproval. 21
C.F.R. § 202.1(j)(4). However, the FDA does require
manufacturers to submit advertising specimens “at the time of


   9
     Subsection (e)(6)(ii) deems an advertisement misleading if
it “[c]ontains a drug comparison that represents or suggests that
a drug is safer or more effective than another drug in some
particular when it has not been demonstrated to be safer or more
effective in such particular by substantial evidence or substantial
clinical experience.” 21 C.F.R. § 202.1(e)(6)(ii). Although the
FDA did not explicitly approve Zeneca’s advertising, the FDA
did approve Nexium’s labeling, which included clinical studies
that showed statistically significant healing rates for 40 mg of
Nexium as compared to 20 mg of omeprazole. The regulations
explain that the clinical studies section “must discuss those
clinical studies that facilitate an understanding of how to use the
drug safely and effectively. Ordinarily, this section will describe
the studies that support effectiveness for the labeled
indication(s)....” 21 C.F.R. § 201.57(c)(15).

                                23
initial publication of the advertisement for a prescription drug
product.” 21 C.F.R. § 314.81(b)(3)(i) (requiring transmittal of
the advertisement with Form FDA-2253).

        The degree of discretion inherent in the regulations
demonstrates that the FDA envisioned itself occupying an
ongoing and extensive role in the supervision of prescription
drug advertising. See, e.g., 60 Fed. Reg. at 44210 (“In order to
carry out the public health protection purposes of the act, FDA:
... (3) monitors drug labeling and prescription drug advertising
to help ensure that they provide accurate information about drug
products.”); Direct-to-Consumer Advertising of Prescription
Drugs; Withdrawal of Moratorium, 50 Fed. Reg. 36,677, 36,677
(Sept. 9, 1985) (“FDA will continue to regulate prescription
drug advertising, regardless of its intended audience, in
accordance with section 502(n) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 352(n)) and the implementing
regulations (21 CFR Part 202).”). Furthermore, Congress shared
that vision. See 21 U.S.C. § 352(n); 21 U.S.C. § 393(b)(1).10


      10
        Congress did not always concede jurisdiction over
prescription drug advertising to the FDA. When the FDCA was
passed in 1938, Congress left the authority to police “unfair or
deceptive acts or practices in or affecting commerce” with the
FTC. Pub. L. No. 75-717, 52 Stat. 1040 (1938), as amended 21
U.S.C. § 301 et seq.; Wheeler-Lea Act, 52 Stat. 111, ch. 49
(1938) (amending section 5 of the FTCA, Pub. L. No. 63-203,
38 Stat. 717, 719 (1914) (prohibiting “unfair methods of

                              24
However, neither the language of the FDCA nor the regulations
explicitly preempt state consumer fraud law.

       The central tenet of preemption analysis is that “‘[t]he
purpose of Congress is the ultimate touchstone’” in determining
whether state law is preempted. Cipollone, 505 U.S. at 516
(quoting Retail Clerks v. Schermerhorn, 375 U.S. 96, 103
(1963)).11 However, the Supreme Court has long indicated that


competition in commerce”)). It was not until the 1962 Kefauver-
Harris Drug Amendments, which enacted section 502(n) of the
FDCA, that regulatory authority over prescription drug
advertising was transferred to the FDA. Pub. L. No. 87-781,
§ 131(a), 76 Stat. 791-92 (1962). For a more complete recitation
of the history of direct-to-consumer advertising, see Francis B.
Palumbo and C. Daniel Mullins, The Development of Direct-to-
Consumer Prescription Drug Advertising Regulation, 57 F OOD
& D RUG L.J. 423, 424-31 (2002).
      11
        The dissent correctly notes that “we start with the
assumption that the historic police powers of the States were not
to be superseded by the Federal Act unless that was the clear and
manifest purpose of Congress.” Rice v. Santa Fe Elevator Corp.,
331 U.S. 218, 230 (1947). The prevention of consumer fraud has
traditionally been within the purview of the states. This
historical preference does not foreclose the possibility of
preemption, where applicable. See, e.g., Gen. Motors Corp. v.
Abrams, 897 F.2d 34, 36 (2d Cir. 1990) (“While the protection
of consumers from unfair practices is a traditional state police
power function, federal laws and administrative regulations may

                               25
agency regulations are also a source of preemptive law. See,
e.g., Louisiana Public Serv. Comm’n v. FCC, 476 U.S. 355, 369
(1986) (“Pre-emption may result not only from action taken by
Congress itself; a federal agency acting within the scope of its
congressionally delegated authority may pre-empt state
regulation.”). In Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996),
the Court considered FDA regulations in the course of its
preemption analysis and noted that, under the regulations, “state
requirements are pre-empted ‘only’ when the FDA has
established ‘specific counterpart regulations or ... other specific
requirements applicable to a particular device.’” Id. at 498
(quoting 21 C.F.R. § 808.1(d)). While the Court emphasized
congressional intent in determining whether preemption was
appropriate, id. at 485-86, the Court also looked to the “statutory
and regulatory language” in evaluating “the allegedly pre-
empting federal requirement and the allegedly pre-empted state
requirement....” Id. at 500.

       Similarly, in Geier v. American Honda Motor Co., Inc.,
529 U.S. 861 (2000), the Court examined whether the National
Traffic and Motor Vehicle Safety Act of 1966, and a standard
promulgated under it by the Department of Transportation,
preempted a state common law tort action “in which the plaintiff
claims that the defendant auto manufacturer, who was in
compliance with the standard, should nonetheless have equipped


operate in tandem with–or even preempt–state law under the
Supremacy Clause....”).

                                26
a 1987 automobile with airbags.” Id. at 865. The Court
concluded that “the Act, taken together with FMVSS 208 [the
agency-promulgated standard], pre-empts the lawsuit.” Id.
(emphasis added). Both Medtronic and Geier suggest the sort of
confluence between congressional purpose and agency purpose
that had previously been recognized in Fidelity Federal Savings
and Loan Association v. de la Cuesta, 458 U.S. 141 (1982):

       Federal regulations have no less pre-emptive
       effect than federal statutes. Where Congress has
       directed an administrator to exercise his
       discretion, his judgments are subject to judicial
       review only to determine whether he has
       exceeded his statutory authority or acted
       arbitrarily. United States v. Shimer, 367 U.S. 374,
       381-82 (1961). When the administrator
       promulgates regulations intended to pre-empt
       state law, the court’s inquiry is similarly limited.

Id. at 153-54; see also Hillsborough County, Fla. v. Automated
Med. Labs., Inc., 471 U.S. 707, 713 (1985) (“[S]tate laws can be
pre-empted by federal regulations as well as by federal
statutes.”). Medtronic and Geier add to the preemption analysis
by suggesting that state laws are preempted when they frustrate
regulations that have been promulgated following a specific
inquiry into a particular area of agency authority. Leslie C.
Kendrick, FDA’s Regulation of Prescription Drug Labeling: A
Role for Implied Preemption, 62 F OOD & D RUG L.J. 227, 240-41
(2007).

                               27
        Following Medtronic and Geier, the Supreme Court
examined conflict preemption in Buckman Company v.
Plaintiffs’ Legal Committee, 531 U.S. 341 (2001). The Court
determined that fraud-on-the-FDA claims in state tort law were
preempted by the Medical Device Amendments, 21 U.S.C.
§ 360c, et seq. Id. at 348. The Court explained that “[t]he
conflict stems from the fact that the federal statutory scheme
amply empowers the FDA to punish and deter fraud against the
Administration, and that this authority is used by the
Administration to achieve a somewhat delicate balance of
statutory objectives.” Id. In so holding, the Court emphasized
the flexibility inherent in the statutory and regulatory
framework, and noted that such flexibility was necessary for the
FDA to pursue “difficult (and often competing) objectives.” Id.
at 349. The Court distinguished Medtronic, noting that “the
Medtronic claims arose from the manufacturer’s alleged failure
to use reasonable care in the production of the product, not
solely from the violation of FDCA requirements.” Id. at 352.
Because the “existence of these federal enactments [was] a
critical element in [the plaintiffs’] case,” the Court held that to
allow the claims to proceed “would exert an extraneous pull on
the scheme established by Congress....” Id. at 353. In the
plaintiffs’ claims against Zeneca under state consumer fraud
laws, the FDCA is not as clearly a “critical element,” because
plaintiffs may not need to show non-compliance with the FDCA
in order to prevail. However, allowing these claims to proceed
would unnecessarily frustrate the FDCA’s purpose and FDA
regulations, as the extent of agency involvement in regulating

                                28
prescription drug advertising is extensive and specific. See 21
C.F.R. § 202.1(e)(6)(i)-(xx) and (e)(7)(i)-(xiii); Draft Guidances
for Industry on Improving Information About Medical Products
and Health Conditions; Withdrawal; Availability, 69 Fed. Reg.
6308-01 (Feb. 10, 2004) (“FDA has responsibility under the
Federal Food, Drug, and Cosmetic Act (the act) for regulating
advertising for prescription drugs.”).

        An even stronger case for preemption occurs when FDA-
approved labeling is the basis for allegedly fraudulent
representations made in prescription drug advertising. The
essential affinity between advertising and labeling is clear in the
composition of the FDCA and its associated regulations. 21
U.S.C. § 321(n) (explaining criteria for “determining whether
the labeling or advertising is misleading”); 21 U.S.C. § 352(n)
(requiring that all advertisements include “the formula showing
quantitatively each ingredient of such drug to the extent required
for labels”); see, e.g., 21 C.F.R. § 202.1(a)(2) (“The order of
listing of ingredients in the advertisement shall be the same as
the order of listing of ingredients on the label of the product, and
the information presented in the advertisement concerning the
quantity of each such ingredient shall be the same as the
corresponding information on the label of the product.”); 21
C.F.R. § 202.1(e)(3)(ii) (“[W]hen an advertisement contains a
broad claim that a drug is an antibacterial agent, the
advertisement shall name a type or types of infections and
microorganisms for which the drug is effective clinically as
specifically as required, approved, or permitted in the drug

                                29
package labeling.”). Although labeling is often directed at
medical practitioners, the rules that govern labeling form the
basis for the advertising regulations. See Requirements on
Content and Format of Labeling for Human Prescription Drug
and Biological Products, 71 Fed. Reg. 3922, 3961 (Jan. 24,
2006) (“The purpose of prescription drug labeling is to provide
health care practitioners information necessary for safe and
effective use.”); Prescription Drug Advertising; Content and
Format for Labeling of Human Prescription Drugs, 44 Fed. Reg.
37,434, 37,460 (June 26, 1979) (“The use of quantitative
statements of safety or effectiveness is permitted in drug
advertisements when the representation has been approved as
part of the labeling....”). Accordingly, the purpose of protecting
prescription drug users in the FDCA would be frustrated if states
were allowed to interpose consumer fraud laws that permitted
plaintiffs to question the veracity of statements approved by the
FDA.

       Implied conflict preemption of state consumer fraud laws
is required in this setting because both the FDCA and FDA
regulations provide specific requirements for prescription drug
advertising. Congress specifically determined that “all ...
proceedings for the enforcement, or to restrain violations, of [the
FDCA] shall be by and in the name of the United States.” 21
U.S.C. § 337(a). The high level of specificity in federal law and
regulations with respect to prescription drug advertising is
irreconcilable with general state laws that purport to govern all
types of advertising. See, e.g., 21 U.S.C. § 352(n); 21 C.F.R.

                                30
§ 314.81(b)(3). Accordingly, the plaintiffs’ state consumer fraud
claims are preempted.12


  12
     Plaintiffs also assert that the District Court erred in utilizing
the doctrine of primary jurisdiction in dismissing their complaint
because they had no opportunity to argue the applicability of
primary jurisdiction to their claims. Although the plaintiffs are
correct that a district court may not dismiss a complaint on
grounds that the plaintiffs had no opportunity to address, see
Mortensen v. First Federal Savings and Loan Association, 549
F.2d 884, 893 n.18 (3d Cir. 1977), invocation of primary
jurisdiction was, at most, an alternative holding. Because “we
[can] affirm the district court on any basis which finds support
in the record,” any error that may have occurred is harmless and
does not require reversal. United States v. Maker, 751 F.2d 614,
627 (3d Cir.1984) (quoting Bernitsky v. United States, 620 F.2d
948, 950 (3d Cir. 1980)).
        Likewise, the plaintiffs’ unjust enrichment claims are
untenable as a result of our holding regarding the preemption of
the DCFA. The unjust enrichment claims do not rest on any
sounder footing than the fraud claims. Delaware defines unjust
enrichment as “the unjust retention of a benefit to the loss of
another, or the retention of money or property of another against
the fundamental principles of justice or equity and good
conscience.” Schock v. Nash, 732 A.2d 217, 232 (Del. 1999)
(quotation omitted). Because no fraud claim exists under the
DCFA due to the operation of preemption, there was no
deception by Zeneca cognizable in state law and therefore no
retention of money against the fundamental principles of justice
at issue in this case. See Bober v. Glaxo Wellcome PLC, 246

                                 31
                              IV.

Leave to Amend

       The decision whether to grant leave to amend is within
the discretion of the district court. Rolo v. City Investing Co.
Liquidating Trust, 155 F.3d 644, 654 (3d Cir. 1998). The
Supreme Court has explained that

       In the absence of any apparent or declared
       reason–such as undue delay, bad faith or dilatory
       motive on the part of the movant, repeated failure
       to cure deficiencies by amendments previously
       allowed, undue prejudice to the opposing party by
       virtue of allowance of the amendment, futility of
       amendment, etc.–the leave sought should, as the
       rules require, be ‘freely given.’

Foman v. Davis, 371 U.S. 178, 182 (1962). The District Court
did not rule on appellants’ request for leave to amend.

       The plaintiffs amended their complaint once in response
to a motion to dismiss dated March 31, 2005 that advanced the
same arguments presented in the motion to dismiss at issue here.


F.3d 934, 943 (7th Cir. 2001).
       We have considered the other arguments raised, and
conclude that they are without merit and compel no separate
discussion.

                              32
Plaintiffs had an opportunity to revise their complaint in
response to the renewed objections, but failed to cure the
deficiencies. Additionally, although the plaintiffs suggest that
some additional facts might be pled in order to cure the defects
of the complaint, amendment would be futile. In particular, the
plaintiffs state that they could allege that “in negotiations
between the FDA and AstraZeneca regarding Nexium labeling,
the FDA stated it would not approve any representations by
AstraZeneca that Nexium is more effective than Prilosec, and
AstraZeneca responded it would not make any such statement.”
This will not overcome the deficiencies in the complaint because
the advertisements are not subject to state consumer fraud law,
as explained in part III.

                                V.

        The DCFA exemption for advertisements or
merchandising practices which are subject to and compliant with
the rules and regulations of, and the statutes administered by, the
FTC, 6 D EL. C ODE A NN. § 2513(b)(2), does not preclude the
plaintiffs’ suit. The language of the exemption circumscribes the
federal agencies to which advertisers may look in seeking to
exclude their conduct from the prohibition of § 2513(a). The
FDA is not referenced in subsection (b)(2), nor does the FDA
act as a proxy for the FTC in its regulation of prescription drug
advertising. We therefore decline to read that section more
broadly than the Delaware General Assembly plainly drafted it.



                                33
        Although the DCFA exemption does not bar the
plaintiffs’ suit, their state consumer fraud claims are preempted
by federal law. By specifically excluding advertisements
covered by 21 U.S.C. § 352(n) and the regulations promulgated
thereunder from the scope of 15 U.S.C. § 52, Congress signaled
its intent to give the FDA exclusive authority to regulate
prescription drug advertising. The FDA has established specific
regulations regarding such advertising. To allow generalized
state consumer fraud laws to dictate the parameters of false and
misleading advertising in the prescription drug context would
pose an undue obstacle to both Congress’s and the FDA’s
objectives in protecting the nation’s prescription drug users.
Accordingly, the state consumer fraud laws are preempted by
the extensive federal legislative and regulatory framework. We
will affirm the judgment of the District Court.




                               34
Pennsylvania Employees Benefit Trust Fund, et al. v. Zeneca,
Inc., et al., No. 05-5340




Cowen, Circuit Judge, dissenting.




       The majority’s conclusion that the FDCA and the
implementing regulations displace the Delaware Consumer
Fraud Act and the consumer protection statutes of the fifty states
“ignore[s] the teaching of th[e] [Supreme] Court’s decisions
which enjoin seeking out conflicts between state and federal
regulation where none clearly exists.” Huron Portland Cement
Co. v. City of Detroit, Mich., 362 U.S. 440, 446 (1960).
Because the state laws do not “stand[] as an obstacle to the
accomplishment and execution of the full purposes and
objectives” of the federal law, Hines v. Davidowitz, 312 U.S. 52,
67 (1941), I respectfully dissent.




                                I.




       In areas of traditional state regulation, we start with “the

                               35
assumption that the historic police powers of the States were not
to be superseded by the Federal Act unless that was the clear and
manifest purpose of Congress.” Rice v. Santa Fe Elevator
Corp., 331 U.S. 218, 230 (1947); see also Medtronic, Inc. v.
Lohr, 518 U.S. 470, 485 (1996) (“[B]ecause the States are
independent sovereigns in our federal system, [it] ha[s] long
[been] presumed that Congress does not cavalierly pre-empt
state-law causes of action.”). The protection of consumers
against deceptive business practices is an area traditionally
regulated by the States. California v. ARC Am. Corp., 490 U.S.
93, 101 (1989) (“Given the long history of state common-law
and statutory remedies against . . . unfair business practices, it is
plain that this is an area traditionally regulated by the States.”
(footnote omitted)); Fla. Lime and Avocado Growers, Inc. v.
Paul, 373 U.S. 132, 146 (1963) (statute to “prevent the
deception of consumers” within scope of state’s police powers);
Plumley v. Commonwealth of Mass., 155 U.S. 461, 467 (1894)
(recognizing state’s power to “prevent[] deception or fraud in
the sales of property within their respective limits”). Similarly,
“[t]hroughout our history the several States have exercised their
police powers to protect the health and safety of their citizens.”
Medtronic, 518 U.S. at 475. As such, a presumption against a
finding of preemption clearly applies in this case. Applying the
presumption against preemption and general principles of
conflict preemption, I cannot agree with the majority’s finding
of preemption, as discussed below.




                                36
                               II.




                               A

                                .

         My first point of disagreement lies with the majority’s
heavy reliance upon the high level of specificity in the federal
regulations as a basis for a finding of preemption. While the
prescription drug advertising regulations are unquestionably
detailed and extensive, it is well-established that a preemption
inquiry “cannot be judged by reference to broad statements
about the ‘comprehensive’ nature of federal regulation.” Head
v. N.M. Bd. of Exam’rs in Optometry, 374 U.S. 424, 429-30
(1963) (citations omitted); English v. Gen. Elec. Co., 496 U.S.
72, 87 (1990) (“Ordinarily, the mere existence of a federal
regulatory scheme, even one as detailed as § 210, does not by
itself imply pre-emption of state remedies.”); Hillsborough
County, Fla. v. Automated Med. Labs., Inc., 471 U.S. 707, 718
(1985) (“[I]f an agency does not speak to the question of
pre-emption, we will pause before saying that the mere volume
and complexity of its regulations indicate that the agency did in
fact intend to pre-empt.”).13


    13
      Incidentally, the assertion that the mere “volume and
complexity” of agency regulations demonstrates an implicit

                               37
       Despite the volume and specificity of the federal
regulations, “state statutes, otherwise valid, must be upheld
unless there is found ‘such actual conflict between the two
schemes of regulation that both cannot stand in the same area,
[]or evidence of a congressional design to preempt the field.’”
Head, 374 U.S. at 430 (quoting Fla. Lime, 373 U.S. at 141); Fla.
Lime, 373 U.S. at 143 (finding “no inevitable collision between
the two schemes of regulation”).14 As discussed further below,
no such actual conflict has been demonstrated or found in this



intent to displace all state law in a particular area is a field
preemption argument, Geier v. Am. Honda Motor Co., 529 U.S.
861, 884 (2000), which was never raised in this case.
  14
     This is not an area of the law inherently requiring national
uniformity and ousting all related state law. As the Supreme
Court has explained, “every subject that merits congressional
legislation is, by definition, a subject of national concern. That
cannot mean, however, that every federal statute ousts all related
state law.” Hillsborough, 471 U.S. at 719. Thus while
prescription drug advertising merits national concern, Congress
has not taken drug advertising from a health and safety issue
into a field of inherently national concern. See id. at 720-22
(federal regulations governing collection of blood plasma do not
preempt local ordinances on the same subject matter). Indeed,
even the FDA has acknowledged that “regulation of drug
labeling will not preempt all State law actions.” See Labeling
Rule, 71 Fed. Reg. 3922, 3934 (Jan. 24, 2006) (to be codified
at 21 C.F.R. pts. 201, 314, 601) (emphasis added).

                               38
case.




                                B.




        My second point of contention is with the majority’s
statement, at least within the context of this case, that
Congress’s purpose of protecting prescription drug users would
be frustrated if plaintiffs were permitted to question the veracity
of statements approved by the FDA. It is undisputed that the
FDA has not approved the veracity of the particular
advertisements in question, and, as discussed in greater detail
below, plaintiffs are not attacking, directly or indirectly, the
labeling approved by the FDA.15

   15
      Even assuming arguendo that Congress wanted labeling
statements approved by the FDA to be immune to attack, that
federal interest would be served by preempting state law to the
extent that it afforded recovery to plaintiffs attacking the
labeling. Similarly, if Congress wanted advertisements approved
by the FDA to be immune to attack, that federal interest would
be served by preempting state law to the extent that it afforded
recovery to plaintiffs attacking the advertisements. Here,
plaintiffs are not attacking the labeling of Nexium. There is also
no record evidence that the FDA approved the Nexium
advertisements which they are challenging. Specifically, the

                                39
       The majority refers to the “essential affinity” between
advertising and labeling in support of its preemption finding.
Admittedly, in defining the scope and substance of certain
information to be included in drug advertisements, the FDA
regulations refer to the information required or permitted in the
approved labeling. See, e.g., 21 C.F.R. § 202.1(a)(1) (order of
listing of ingredients), (e)(3)(iii) (side effects and
contraindications), (e)(6)(xi) (conditions of drug use).
Consequently, a state-law claim, alleging that an advertisement
consistent with the approved labeling contains inadequate
disclosures or warnings regarding such matters as ingredients,
side effects, contraindications, and conditions of use, might
indirectly present a conflict with the FDA’s labeling
determination. That kind of case would present a more difficult
preemption question than the one presented here.




       In the instant case, on the other hand, plaintiffs claim that
advertisements of Nexium contain a false and misleading drug
comparison. The labeling of a prescription drug does contain or
require a showing of a drug’s superiority over other drugs on the



FDA has not determined the veracity of advertisements touting
Nexium’s effectiveness as “compared with Prilosec”and
indicating the benefits of Nexium in “efficacy in short-term
healing” and “system control” in head-to-head studies with
Prilosec.

                                40
market. Unsurprisingly, then, the FDA has not rendered an
official opinion approving or disapproving a claim of superiority
of Nexium over Prilosec.16 As a result, there is no risk that a
successful state-law claim, alleging that Nexium advertisements
contain false and misleading drug comparisons, would conflict
with the FDA’s approval of the statements in the Nexium
labeling.




       The FDA’s own prescription-drug advertising regulations
demonstrate as much. The regulations categorize as false and
misleading any advertisement that “[c]ontains a drug
comparison that represents or suggests that a drug is safer or
more effective than another drug in some particular when it has
not been demonstrated to be safer or more effective in such
particular by substantial evidence or substantial clinical
experience.” 21 C.F.R. § 202.1(e)(6)(ii). Unlike the labeling-
related provisions in the regulation, see, e.g., 21 C.F.R. §
202.1(a)(1), (e)(3)(iii), (e)(6)(xi), the false and misleading drug


   16
      To be sure, the approved labeling for Nexium reproduces
the results of clinical studies comparing the two treatments.
According to FDA guidelines, however, the Clinical Studies
section of labeling is intended to “facilitate an understanding of
how to use the drug safely and effectively.” Inclusion of the
clinical studies are not intended to serve as an implicit agency
determination about the superiority of one drug over another.

                                41
comparison provision does not turn on the approved labeling,
but on the existence of “substantial evidence or substantial
clinical experience.” 21 C.F.R. § 202.1(e)(6)(ii). The “essential
affinity” between advertising and labeling, therefore, does not
subsist in a claim attacking a statement of drug superiority in an
advertisement.




        In summary, because the FDA has not approved or
disapproved the veracity of the advertising statements that
plaintiffs challenge in this case, and plaintiffs’ particular
challenge does not question the veracity of any statements in the
labeling approved by the FDA, there is no likelihood that
plaintiffs’ claims would conflict with the FDA’s responsibility
in protecting prescription drug users. As stated by the late Chief
Justice Rehnquist, “merely identifying a purpose is not enough
[for conflict preemption]; it must also be shown that the state
law inevitably frustrates that purpose.” Jones v. Rath Packing
Co., 430 U.S. 519, 545 (1977) (Rehnquist, J., dissenting).
Emphasizing that point, he noted:




       We must also be careful to distinguish those
       situations in which the concurrent exercise of a
       power by the Federal Government and the States
       or by the States alone may possibly lead to

                               42
       conflicts and those situations where conflicts will
       necessarily arise. “It is not . . . a mere possibility
       of inconvenience in the exercise of powers, but an
       immediate constitutional repugnancy that can by
       implication alienate and extinguish a pre-existing
       right of (state) sovereignty.”




Id. (quoting The Federalist No. 32, p. 243 (B. Wright ed. 1961)).
Only if the purpose of the federal law cannot be
accomplished–if its operation must be frustrated and its
provisions be refused their natural effect–must the state law
yield to the regulation of Congress. Savage v. Jones, 225 U.S.
501, 533 (1912).




       While the majority has identified the congressional
purpose of protecting prescription drug users, it has not
articulated how the state law must inevitably frustrate that
purpose. There is certainly no “immediate constitutional
repugnancy” between an extra-agency finding that a claim of
drug superiority in an advertisement is false and misleading and
the congressional purpose of protecting prescription drug users.
Jones, 430 U.S. at 545 (Rehnquist, J., dissenting) (internal
quotations marks and citation omitted). As such, I cannot agree
with the majority’s finding of preemption on that basis.

                                43
                                C.




        My third concern relates to the majority’s finding that
Congress’s exclusion of prescription drug advertisements from
the scope of 15 U.S.C. § 52 signals a congressional intention to
preempt state consumer fraud laws. The text of 21 U.S.C. §
352(n) only excludes coverage under 15 U.S.C. § 52 and does
not purport to bar state-law tort actions. Nor does the legislative
history to § 352(n) indicate a congressional purpose to supplant
state-law actions. See English, 496 U.S. at 88. Most
importantly, the exclusion of prescription drug advertisements
from coverage under the federal statute does not approach the
required “clear and manifest” congressional purpose to preempt
state law. See Rice, 331 U.S. at 230.




                                D.




       Fourth, I disagree that the majority’s attempt to analogize
this case to Buckman Co. v. Plaintiffs’ Legal Committee, 531
U.S. 341 (2001), where the Supreme Court found preemption
based upon specific conflicts between certain FDA objectives
and state-law fraud-on-the-agency claims and the

                                44
interdependency between the state claims and FDCA
requirements. In Buckman, the Court found that the plaintiffs’
fraud-on-the-agency claims would have had the effect of
deterring beneficial off-label uses, despite the FDA’s objective
not to regulate the practice of medicine, and would have caused
a deluge of information concerning off-label uses, resulting in
administrative burdens and delays. Id. at 350-51. In addition,
the Court found that unlike the traditional state tort claims, the
fraud-on-the-agency claims existed solely by virtue of FDCA
disclosure requirements, which Congress had given the FDA the
exclusive responsibility to enforce. Id. at 352. For these
reasons, the Court held that the plaintiffs’ state-law claims were
preempted. Id. at 353.




        Unlike the claims in Buckman, plaintiffs’ claims here do
not exist by virtue of a violation of FDCA disclosure
requirements. The state consumer protection statutes at issue
existed long before the federal enactments. Moreover, the
majority does not identify any actual conflicts between the
federal regime and the state statutes. There is, for example, no
cited risk that the availability of state-law remedies would
conflict with a particular federal objective or a careful balancing
of interests that the federal government has achieved in policing
prescription drug advertising. For these reasons, the claims in
this case cannot be reasonably analogized to the claims in
Buckman, and, thus, the majority’s use of the reasoning in

                                45
Buckman to support its preemption finding is misguided.




                                E.




       Fifth, I disagree with the majority’s finding of
preemption to the extent it is based upon the presence of state-
law parameters for false and misleading advertisements. As
discussed below, the mere presence of state law standards would
not inevitably lead to a collision with the federal regime.




       As an initial matter, the majority characterizes plaintiffs’
claims as both interposing state-law standards and vindicating
federal requirements. Implicit in this dual characterization is,
necessarily, the recognition that the state standards and federal
requirements are not inconsistent. Yet, it is well-established that
the mere presence of state-law claims that parallel federal
requirements is not sufficient to support a preemption finding.
See Medtronic, 518 U.S. at 495 (“The presence of a damages
remedy does not amount to the additional or different
‘requirement’ that is necessary under the statute; rather, it
merely provides another reason for manufacturers to comply
with identical existing ‘requirements’ under federal law.”);

                                46
Cipollone v. Liggett Group, Inc., 505 U.S. 504, 529 (1992)
(“State-law prohibitions on false statements of material fact do
not create ‘diverse, nonuniform, and confusing’ standards.
Unlike state-law obligations concerning the warning necessary
to render a product ‘reasonably safe,’ state-law proscriptions on
intentional fraud rely only on a single, uniform standard:
falsity.”).




        On a number of occasions, the Supreme Court has upheld
state laws that provide remedies parallel to the remedies
provided by the federal law. See, e.g., Silkwood v. Kerr-McGee
Corp., 464 U.S. 238, 257 (1984) (“Paying both federal fines and
state-imposed punitive damages for the same incident would not
appear to be physically impossible. Nor does exposure to
punitive damages frustrate any purpose of the federal remedial
scheme.”); Hayfield N. R.R. Co. v. Chi. and N. W. Transp. Co.,
467 U.S. 622, 636 (1984) (“Although it may seem unfair to
allow a shipper a ‘second bite at the apple’ in state
condemnation proceedings . . . , that second opportunity does
not frustrate the purpose of the federal valuation scheme.”);
Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 484 (1974)
(“[T]he patent policy of encouraging invention is not disturbed
by the existence of another form of incentive to invention.”). As
explained by the Supreme Court, “state causes of action are not
pre-empted solely because they impose liability over and above
that authorized by federal law.” California, 490 U.S. at 105;

                               47
English, 496 U.S. at 89 (same). But see Capital Cities Cable,
Inc. v. Crisp, 467 U.S. 691, 706 (1984) (“Since the Oklahoma
law . . . compels conduct that federal law forbids, the state ban
clearly stands as an obstacle to the accomplishment and
execution of the full purposes and objectives of the federal
regulatory scheme.” (internal quotation marks and citation
omitted)); Franklin Nat. Bank v. New York, 347 U.S. 373, 378
(1954) (finding a “clear conflict” between federal law, which
authorized national banks to receive savings deposits but did not
specifically permit– much less require–advertising by such
banks, and New York law, which forbade them from using the
word “savings” in their advertising or business).




        The state statutory damages remedies for false and
misleading advertisements would not frustrate the federal policy
of protecting prescription drug consumers. The veracity of drug
advertisements is essential to the protection of consumers. As
stated in the legislative history to 21 U.S.C. § 352(n), “when a
doctor is misled his patient’s health is endangered.” S. Rep. No.
87-1744 (1962), reprinted in 1962 U.S.C.C.A.N. 2884, 2904.
Given that there are limitations to the FDA’s oversight over
prescription drug advertisements–both congressionally-imposed
limitations, such as the lack of authority to require preapproval,
21 U.S.C. § 352(n), and practical limitations attendant to the
sheer volume of drug advertisements in the media, see Donna U.
Vogt, CRS Report for Congress:                Direct-to-Consumer

                               48
Advertising of Prescription Drugs 20 (Congressional Research
Service, The Library of Congress 2005) (noting that in 2003
alone, the FDA received 38,000 advertisements from drug
sponsors)–the supplementation of state-law remedies would
seem to aid the FDCA’s objectives and purposes, not frustrate
them.




        For these reasons, I cannot agree that the mere presence
of state law standards for false and misleading advertisements
would present a conflict with the federal law.




                               F.




        Of final note, Congress’s failure to provide a private
remedy for persons injured by false and misleading
advertisements further convinces me that the state law remedies
are not preempted. As the Supreme Court stated in Silkwood,
“[i]t is difficult to believe that Congress would, without
comment, remove all means of judicial recourse for those
injured by illegal conduct.” 464 U.S. at 251; see also Bates v.
Dow Agrosciences LLC., 544 U.S. 431, 450 (2005) (“[I]t seems
unlikely that Congress considered a relatively obscure provision

                              49
like § 136v(b) to give pesticide manufacturers virtual immunity
from certain forms of tort liability.”).




        In addition, where the state law in question provides a
long available form of compensation, it would be expected that
Congress would express an intent to deprive injured parties of
that compensation even more clearly. See Bates, 544 U.S. at
449. Here, the long history of state consumer protection statutes
in this country (which, incidentally, were modeled after and
coexisted with the FTCA, the FDCA’s predecessor insofar as
prescription drug advertising is concerned) adds force to the
basic presumption against preemption. See id. at 449-50. That
presumption has not been rebutted in this case.




        In summary, because congressional intention to remove
all judicial recourse for parties injured by deceptive business
practices is far from clear, a finding of preemption is not
permitted under Supreme Court precedent.




                              III.




                               50
       Based upon the foregoing, I respectfully dissent, insofar
as the majority concludes that the state claims are preempted.17




   17
     Apart from my general disagreement with the majority’s
preemption analysis, I also disagree with the majority’s
summary conclusion that the FDA’s prescription drug
advertising regulations preempt the plaintiffs’ claims to the
extent based upon false and misleading presentations and
“detailing,” as it is not clear that the regulations apply to those
kinds of promotional activities.

                                51
