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October 2021

Major and Rare Preemption Victory for OTC Drug Manufacturer in California Proposition 65 Case

Gordon Rees Scully Mansukhani recently prevailed in federal preemption challenge to a Proposition 65 case in state court in Oakland, California. Partner Brian Ledger represented the manufacturer of a generic over-the-counter ("OTC") drug in this case. 

The Center for Environmental Health ("CEH") filed the Prop 65 case against four generic manufacturers, two brand name manufacturers, and two retailers of Ranitidine, the generic OTC equivalent of the heartburn medication Zantac.  Ranitidine contains N-nitrosodimethylamine ("NDMA"), which is listed by the state of California as a chemical that may cause cancer, pursuant to Prop 65.  Prop 65 generally requires that all consumer products containing a listed chemical under Prop 65 must include a cancer warning unless the defendant can prove that exposure to the chemical is below the "safe harbor” level. 

The Food Drug And Cosmetic Act ("FDCA") Preempted The California State Prop 65 Warning Requirements

The FDCA has an express preemption provision for OTC drugs such as Ranitidine, but also has an express exception for any "State requirement adopted by a State public initiative or referendum enacted prior to September 1, 1997." (21 USC 379r(d)(2).)  Proposition 65 is the only state enactment that falls within the exception.  The FDCA’s exclusion of Prop 65 from the FDCA's express preemption clause does not, however, exclude the application of impossibility preemption.  Impossibility preemption is when the requirements of a state law present a conflict that makes it impossible for compliance with both state and federal law.

The court sustained the generic OTC manufacturers' and retailers’ demurrers without leave to amend.  The court found that under the FDCA generic manufacturers have no ability to change their labels because of their duty of "sameness", which mandates that warning labels on generic OTC drugs be identical to the brand-name drug. PLIVA v. Mensing (2011) 564 US 604, 613.  Although a brand-name drug manufacturer can change its labeling without waiting for FDA approval, the revision must be a "major change" and there must be reasonable evidence of a causal association of the risk warned about with the drug.  The court did not find sufficient evidence of a risk from NDMA in Ranitidine to be able to find that the brand-name drug manufacturers should have added a Prop 65 warning.  Without such evidence, and given the brand-name drug manufacturers did not include a Prop 65 warning, federal law required the generic manufacturers to use the same warnings as the brand-name drug manufacturers; thus, it was impossible for the generic manufacturers to include any Prop 65 warning on the label.

CEH also argued that compliance with both state and federal requirements could have been achieved by including a Prop 65 warning in advertising, as opposed to labeling.  The court, however, ruled that a warning mandated by Prop 65 would be a "warning" under the FDCA and would be considered part of the "labeling" whenever transmitted to the consumer.  As stated by the court, "advertising" is no longer advertising when it is involuntary in nature.

Impact of Court's Ruling

Although companies doing business in California continue to grapple with the onerous provisions of Prop 65, and the many bounty hunter attorneys seeking to capitalize upon its plaintiff-friendly provisions, this ruling does provide hope for the future narrowing of the breadth of application for Prop 65, especially when federal requirements conflict with the Prop 65 mandates.

CEH has filed a notice of appeal. Gordon & Rees will continue to report regarding the developments as it proceeds through the appellate court and encourages Prop 65 defendants to contact Gordon & Rees for counsel in simliar matters.

Brian M. Ledger