Eli Lilly and Co. v. Marshall

Decision Date03 February 1993
Docket NumberNo. D-2003,D-2003
Citation850 S.W.2d 155
PartiesELI LILLY AND COMPANY and Dista Products Company, a Division of Eli Lilly and Company, Relators, v. The Honorable John MARSHALL, Judge, Respondent.
CourtTexas Supreme Court
Dissenting Opinion by Justice Doggett

April 14, 1993.

Mark E. Smith, Robert G. Hogue, Dallas, Joe C. Freeman, Jr., Atlanta, GA, Wade C. Smith, Dallas and John L. Hill, Houston, for relators.

Paul L. Smith and William V. Dorsaneo, III, Dallas, for respondent.

OPINION

CORNYN, Justice.

Today we consider a second mandamus arising out of a products liability suit against the manufacturer of the antidepressant drug Prozac. 1 Eli Lilly and Company, the manufacturer, seeks to compel the Honorable John Marshall, Respondent, to set aside his order requiring it to disclose certain information rendered confidential by federal regulation and sanctioning it for its failure to do so. Concluding that the trial court did not apply the proper legal standard, and that appeal is not an adequate remedy, we conditionally grant the writ.

Michael Hays Biffle committed suicide six days after he began taking Prozac. His family and estate filed suit against Lilly and sought production of, among other things, various documents that Lilly had submitted to the federal Food and Drug Administration (FDA) to secure approval to market Prozac. The request for production included any adverse reaction or drug experience reports, which are submitted by physicians and other health care providers to report post-approval possible 2 adverse reactions to a drug. The FDA uses this information to monitor clinical reactions to a drug to assess the terms and conditions of FDA approval or to consider whether to recall its approval entirely. 21 U.S.C. § 355(e). Although submission of a report to the manufacturer is voluntary by the health care provider, the manufacturer must submit any such reports it receives to the FDA. 21 U.S.C. § 355(k)(1). According to federal regulation, the FDA must keep confidential the identities of the patient and of the person or institution that reported the adverse reaction. 21 C.F.R § 314.430(e)(4)(ii) (1991). 3 The present dispute concerns the identity of the reporters of possible adverse reactions to Prozac.

On October 23, 1991, following a hearing on the Biffles' motion to compel and Lilly's motion for a protective order based in part on the regulations at issue, the trial court ordered Lilly to produce the adverse reaction reports with only the patients' names redacted. When the Biffles' attorney arrived at Lilly's headquarters to inspect the documents, he found, among other alleged instances of noncompliance with the discovery order, that the names and addresses of the reporters had been redacted as well. Lilly's proffered explanation for its noncompliance is that its lawyers expected that maintenance of reporter and patient anonymity would be agreed upon by the parties. The Biffles, however, moved for sanctions, and following another hearing the trial court ordered Lilly to disclose the identity of the reporters and to pay the travel and copy expenses of the Biffles' attorney, and ruled that failure to comply would result in a default judgment in favor of the Biffles.

We first address the propriety of mandamus relief. Mandamus will issue only to correct a clear abuse of discretion when there is no adequate remedy by ordinary appeal. Walker v. Packer, 827 S.W.2d 833, 839 (Tex.1992). Although this court may not substitute its judgment for that of the trial court with regard to fact issues, Johnson v. Fourth Court of Appeals, 700 S.W.2d 916, 918 (Tex.1985), we accord the trial court's analysis and application of the appropriate law far less deference. Walker, 827 S.W.2d at 840. When the undisputed facts and the applicable law permit of but one lawful decision, this court is called on to ensure that decision is reached. Id. We will exercise our mandamus jurisdiction in a case, such as we conclude this to be, in which an ordinary appeal could not cure the error presented. Id. at 843.

Lilly contends that the federal regulations establishing confidentiality preempt the trial court's order compelling disclosure of the reporters' identities. It also contends that revealing the identities of reporters would destroy the voluntary reporting system that is essential to post-approval monitoring of Prozac and thus jeopardize the vital public interest in the free flow of adverse reaction reports essential to assessing the long-term safety of this and other FDA-approved drugs. The Biffles, on the other hand, contend that the FDA regulations apply only to the FDA, that the regulations themselves permit disclosure under proper court order, 4 and that the regulations were not meant to and do not preempt Texas law of tort or discovery.

The FDA has filed a statement of interest with this court. 5 While disclaiming any interest in the merits of this lawsuit, the FDA emphasizes the importance of post-approval reporting because certain kinds of problems, particularly those arising from long-term use, would not come to the attention of the FDA otherwise, or at least not in the volume reported under the current system. 6 If not assured confidentiality, the FDA contends, reporters would probably not report possible adverse reactions because of fear of entanglement in litigation and potential violation of the physician-patient privilege. 7 Finally, although conceding that the regulations themselves apply only to the FDA, the FDA asserts that the public policy interest the regulations embody are of sufficient importance to preempt any disclosure that would undermine the FDA's post-approval monitoring system.

The genesis of federal preemption is Article VI, clause 2 of the United States Constitution: "the Laws of the United States ... shall be the supreme law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." Federal law may preempt state law in several ways. When acting within constitutional limits, Congress may preempt state law by so stating in express terms. Hillsborough County, Fla. v. Automated Medical Labs., Inc., 471 U.S. 707, 713, 105 S.Ct. 2371, 2375, 85 L.Ed.2d 714 (1985). Alternatively, Congress' intent to preempt state law may be inferred from its complete and comprehensive regulation of an area. Finally, even if Congress has not completely displaced state regulation, state law is preempted to the extent it actually conflicts with federal law. English v. General Elec. Co., 496 U.S. 72, 78-79, 110 S.Ct. 2270, 2274-75, 110 L.Ed.2d 65 (1990); NCNB Tex. Nat'l Bank v. Cowden, 895 F.2d 1488, 1494-95 (5th Cir.1990).

Regulations have the same preemptive effect as statutes. Hillsborough County, 471 U.S. at 713, 105 S.Ct. at 2375; Fidelity Fed. Savings and Loan Ass'n v. De la Cuesta, 458 U.S. 141, 153, 102 S.Ct. 3014, 3022, 73 L.Ed.2d 664 (1982). Moreover, federal law preempts conflicting judicial action as well as conflicting statutes and regulations. Wisconsin Dept. of Indus., Labor and Human Relations v. Gould Inc., 475 U.S. 282, 286, 106 S.Ct. 1057, 1060, 89 L.Ed.2d 223 (1986); Texas Employers' Ins. Ass'n v. Jackson, 820 F.2d 1406, 1412 (5th Cir.1987); Macmillan v. Redman Homes, Inc., 818 S.W.2d 87, 95 (Tex.App.--San Antonio 1991, writ denied).

When determining if a state law actually conflicts with federal law, the question presented is whether compliance with both state and federal law is impossible, or whether the state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691, 699, 104 S.Ct. 2694, 2700, 81 L.Ed.2d 580 (1984); Hines v. Davidowitz, 312 U.S. 52, 67-68, 61 S.Ct. 399, 404, 85 L.Ed. 581 (1941); Jackson v. S.P. Leasing Corp., 774 S.W.2d 673, 678 (Tex.App --Texarkana 1989, writ denied). Lilly and the FDA urge that just such a conflict is presented here: by compelling disclosure of what the regulations promise will remain confidential, the trial court's order stands as an obstacle to the effective operation of the FDA's reporting system, and they argue, will effectively destroy it.

Although no court has expressly determined that the FDA regulations "preempt" disclosure, the courts of four other states have had occasion to consider the discoverability of reporters' identities. In Newsom v. Breon Laboratories Inc., the Supreme Court of Tennessee held that in permitting disclosure of the identities of reporters, the lower courts erred in not considering the burdens on the parties or the reporters' expectations of confidence. 709 S.W.2d 559, 560 (Tenn.1986). The court determined that disclosure of the names and addresses of twelve out of approximately 400 reporters would be "sufficient to satisfy plaintiffs' interests." Id. Citing Newsom, the Louisiana Supreme Court ordered a trial court to amend its protective order so as to delete reporters' identities, but "[reserv[ed] to plaintiffs the right to apply for disclosure in a particular case upon showing of relevance." Wesley v. Rye, 490 So.2d 272 (La.1986). Striking a similar balance between the parties' burdens and needs, a New York appellate court also ordered redaction of reporters' identities. Stahl v. Rhee, 136 A.D.2d 539, 523 N.Y.S.2d 159, 160 (1988). Noting the public policy reasons in support of redaction, the court found that "at least at this juncture, ... the identities of the reporting sources are not material and necessary to the prosecution of the plaintiffs' case." Id. Lilly has also successfully obtained protective orders masking reporters' identities in trial courts in Kentucky and Texas. Fentress v. Shea Communications, No. 90-CI-06033 (Jefferson Cir.Ct., Ky. March 29, 1991); Morris v. Eli Lilly & Co., Inc., No. 240, 313-401 (Probate Court No. 2, Harris County, Tex. Sept. 4, 1991).

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