Johnson & Johnson v. Fitch

• Citation: 315 So.3d 1017
• Decision Date: 01 April 2021
• Docket Number: NO. 2019-IA-00033-SCT,2019-IA-00033-SCT
• Court: United States State Supreme Court of Mississippi
• Parties: JOHNSON & JOHNSON and Johnson & Johnson Consumer Companies, Inc. v. Lynn FITCH, Attorney General of the State of Mississippi EX REL. STATE of Mississippi

315 So.3d 1017

JOHNSON & JOHNSON and Johnson & Johnson Consumer Companies, Inc.

v.Lynn FITCH, Attorney General of the State of Mississippi EX REL. STATE of Mississippi

NO. 2019-IA-00033-SCT

Supreme Court of Mississippi.

April 1, 2021

ATTORNEYS FOR APPELLANTS: MEADE W. MITCHELL, JOHN C. HENEGAN, ORLANDO R. RICHMOND, MARK A. DREHER, CHARLES A. BYRD, Ridgeland, PETER C. HARVEY, ERIN P. LANE

ATTORNEYS FOR APPELLEE: PATRICK C. MALOUF, TA'SHIA S. GORDON, TIMOTHY W. PORTER, LAUREL LI HARRIS, R. ALLEN SMITH, JR., Ridgeland, WENDY R. FLEISHMAN, PAULINA DO AMARAL, GEORGE W. NEVILLE, Jackson, DONALD L. KILGORE, Philadelphia, JACQUELINE H. RAY, Jackson

EN BANC.

COLEMAN, JUSTICE, FOR THE COURT:

¶1. The case sub judice case comes before the Court on interlocutory appeal. The appeal presents two questions of law concerning the validity of a cause of action brought by the Mississippi Attorney General under the Mississippi Consumer Protection Act, Mississippi Code Section 75-24-5. The first is whether the Act covers the State's claim, and the second is whether that claim is preempted by federal law. The Chancery Court of Hinds County denied the summary judgment motion made by Johnson & Johnson and Johnson & Johnson Consumer, Inc. Johnson & Johnson then filed an interlocutory appeal of the chancellor's decision, which the Court granted.

FACTS AND PROCEDURAL HISTORY

¶2. Johnson & Johnson is a New Jersey corporation and is one of the largest companies in the world. Johnson & Johnson is engaged in the business of, among other things, manufacturing, selling, and marketing consumer products that include talc. One of Johnson & Johnson's most popular products is Johnson's Baby Powder, which it has sold since the 1890s. Up until 2020, one of the primary ingredients of the popular product was talc.

¶3. Talc is a hydrous magnesium silicate, an inorganic mineral that is mined from the earth. Talc has been used in the manufacture of many goods, such as plastic, rubber, ceramics, and cosmetics. Talc is commonly known as talcum powder. For decades, talc has been at the center of controversy. During that time, many studies gave rise to claims of risk of cancer

associated with the use of products containing talc.

¶4. In 2014, the State commenced an action against Johnson & Johnson for what it alleged to have been unlawful, unfair, and deceptive business practices related to its cosmetic talcum powder products. The specific cosmetic products at issue are Johnson & Johnson's Johnson's Baby Powder and Shower to Shower. Specifically, the State alleged that Johnson & Johnson failed to warn of the risk of ovarian cancer

in women who used talc. In its complaint, the State relied on "numerous studies over the last several decades" that the State alleged "revealed a significant link between the use of talcum powders with an increased risk of ovarian cancer." The State's complaint sought, among other things, an injunction pursuant to the Consumer Protection Act to require Johnson & Johnson to warn of the hazards associated with talc use. The State further sought a civil penalty of up to $10,000 for each violation of the Act.

¶5. Johnson & Johnson then moved for summary judgment. Johnson & Johnson argued that the chancery court should grant summary judgment because the Act does not apply to the labeling of products regulated by the federal Food and Drug Administration. Additionally, Johnson & Johnson argued that even if the Act applies, summary judgment was still proper because federal law preempts the State's labeling claim. Johnson & Johnson heavily relied on the Administration's consideration of two citizen petitions, one from 1994 and another from 2008. Both petitions requested that the Administration to "require a cancer

warning on cosmetic talc products." After careful review, however, the Administration denied both citizen petitions because it "did not find that the data submitted presented conclusive evidence of a causal association between talc use in the perineal area and ovarian cancer."

¶6. On December 18, 2018, the chancery court denied Johnson & Johnson's motion for summary judgment. While the chancellor acknowledged Johnson & Johnson's substantive arguments, the chancellor ultimately denied summary judgment because of the existence of factual disputes regarding Johnson & Johnson's knowledge of a link between talc and ovarian cancer

and Johnson & Johnson's failure to disclose the risks. Johnson & Johnson now appeals the chancellor's denial of its summary judgment motion.

STANDARD OF REVIEW

¶7. An appellate court in Mississippi applies a de novo standard of review when it reviews a trial court's grant or denial of summary judgment. WW, Inc. v. Rainbow Casino-Vicksburg P'shi, L.P., 68 So. 3d 1290, 1292 (¶ 6) (Miss. 2011) (quoting Anderson v. Alps Automotive, Inc. , 51 So. 3d 929, 931 (¶ 11) (Miss. 2010) ). Courts must apply a de novo standard when considering "[m]atters of statutory interpretation[.]" Chandler v. McKee , 202 So. 3d 1269, 1271 (¶ 5) (Miss. 2016) (citing Wallace v. Town of Raleigh , 815 So. 2d 1203, 1206 (¶ 7) (Miss. 2016) ). Finally, the issue of preemption is a question of law, that is a "legal one for the judge, not a jury," Merck Sharp & Dohme Corp. v. Albrecht , ––– U.S. ––––, 139 S. Ct. 1668, 1679, 203 L.Ed. 2d 822 (2019), and a court reviews a question of law under a de novo standard of review. Debrow v. State , 972 So. 2d 550, 552 (¶ 6) (Miss. 2007) (citing Biglane v. Under the Hill Corp. , 949 So. 2d 9, 14 (¶ 17) (Miss. 2007) ).

DISCUSSION

¶8. The State commenced its lawsuit against Johnson & Johnson pursuant to the Mississippi Consumer Protection Act. Miss. Code Ann. § 75-24-5 (Rev. 2016). The Act prohibits acts that constitute "unfair or deceptive trade practices in or affecting commerce[.]" Miss. Code Ann. § 75-24-5(1) (Rev. 2016). The State argues that by failing to include warning labels on cosmetic talc products, Johnson & Johnson violated the Act by engaging in impermissible "unfair or deceptive trade practices." In response, Johnson & Johnson argues that the State's labeling claim is excluded from the Act and that federal law preempts such a claim. Specifically, Johnson & Johnson argues that since the Act is modeled after the Federal Trade Commission Act, and since the federal Act excludes the regulation of labels, then the Act must also exclude the regulation of labels, and the State's claim is barred. Additionally, Johnson & Johnson contends the federal Food, Drug, and Cosmetic Act (FDCA) preempts the State's labeling claim.

I. The Mississippi Consumer Protection Act governs the State's labeling claim.

¶9. Johnson & Johnson argues that the Act excludes the regulation of labels. Johnson & Johnson first contends that the Mississippi Legislature modeled the Act after the Federal Trade Commission Act. Johnson & Johnson points to Mississippi Code Section 75-24-3(c), which provides that "[i]t is the intent of the Legislature that in construing what constitutes unfair or deceptive trade practices that the courts will be guided by the Federal Trade Commission and the federal courts to Section 5(a)(1) of the Federal Trade Commission Act ( 15 USCS 45(a)(1) ) as from time to time amended." Miss. Code Ann. § 75-24-3(c) (Rev. 2016) (emphasis added). Thus, since the words "guided by" are included in the Section 75-24-3(c), Johnson & Johnson argues that "this Court must construe the Act in accordance with its federal ‘parent’ statute," the Federal Trade Commission Act.

¶10. Next, Johnson & Johnson argues that the Federal Trade Commission Act explicitly excludes the regulation of labels on cosmetics. Johnson & Johnson contends that the Federal Trade Commission Act defines "[u]nfair or deceptive act or practice" to include "[t]he dissemination or causing to be disseminated of any false advertisement [.]" 15 U.S.C. § 52(b) (emphasis added). Johnson & Johnson then provides the Federal Trade Commission Act's definition of false advertisement as "an advertisement, other than labeling , which is misleading in a material respect[.]" 15 U.S.C. § 55(a)(1) (emphasis added). By defining unfair or deceptive trade practices to include false advertising and then by defining false advertising to exclude labeling, Johnson & Johnson argues that the definitions exclude labeling from the Federal Trade Commission Act's reach, and since labeling is beyond the Federal Trade Commission Act's reach, Johnson & Johnson argues that it is also beyond the Act's reach.

¶11. As previously noted, Section 75-24-3(c) references 15 U.S.C. § 45(a)(1). The State, however, contends that Johnson & Johnson does not cite 15 U.S.C. § 45(a)(1) to argue the Federal Trade Commission Act excludes labeling from unfair or deceptive trade practices. Instead, the State argues that Johnson & Johnson erroneously cites the Federal Trade Commission Act's separate false advertising prohibition against labeling found in 15 U.S.C. §§ 52(b) and 55(a)(1). The State argues that "[t]he FTC Act's false advertising prohibition does not include labeling, but that limit explicitly applies only ‘For the purposes of sections 52 to 54,’ not § 45(a)(1), the section in which the Act instructs courts to be ‘guided’ by." See 15 U.S.C. § 55.

¶12. In construing what constitutes unfair or deceptive trade practices, the Act requires that courts be "guided by the interpretations given by the Federal Trade Commission and the federal courts[.]" Miss. Code Ann. § 75-24-3(c). Here, the State argues that Johnson & Johnson misconstrues the Act's rule of construction. While the Act provides that courts will be "guided by" the Federal Trade Commission Act, the State contends that "guided by" does not mean that courts are bound by or limited by the federal Act.

¶13. Recently, in Watson Laboratories, Inc. v. State , 241 So. 3d 573 (Miss. 2018), the Court addressed a similar issue involving the interpretation of Section 75-24-3(c). In Watson , the State brought a consumer protection action against prescription drug...