Murphy v. SmithKline Beecham Animal Health Group

• Decision Date: 21 September 1995
• Docket Number: Civ. A. No. 95-1002-DES.
• Citation: 898 F. Supp. 811
• Parties: Roger MURPHY, Plaintiff, v. SMITHKLINE BEECHAM ANIMAL HEALTH GROUP, A Pennsylvania Partnership and its Partners; SmithKline Beecham Corporation, a Pennsylvania Corporation; Norden Laboratories, Inc., a Delaware Corporation; Adams Pharmaceutical, Inc., a Florida Corporation; and Beecham, Inc., a Tennessee Corporation, Defendants.
• Court: U.S. District Court — District of Kansas

898 F. Supp. 811

Roger MURPHY, Plaintiff, v. SMITHKLINE BEECHAM ANIMAL HEALTH GROUP, A Pennsylvania Partnership and its Partners; SmithKline Beecham Corporation, a Pennsylvania Corporation; Norden Laboratories, Inc., a Delaware Corporation; Adams Pharmaceutical, Inc., a Florida Corporation; and Beecham, Inc., a Tennessee Corporation, Defendants.

Civ. A. No. 95-1002-DES.

United States District Court, D. Kansas.

September 21, 1995.

COPYRIGHT MATERIAL OMITTED

Gregory L. Bauer, Bauer, Pike, Pike & Johnson, Chtd., Great Bend, KS, James A. Davis, Davis & Associates, P.C., Fremont, NE, for plaintiff.

Carol A. Beier, Foulston & Siefkin, Wichita, KS, Scott A. Smith, Janell M. Gabor, Popham, Haik, Schnobrich & Kaufman, Minneapolis, MN, for defendants.

MEMORANDUM AND ORDER

SAFFELS, District Judge.

This matter is before the court on the defendant's motion for summary judgment (Doc. 13).

I. BACKGROUND

The plaintiff, Roger Murphy ("Murphy"), is a resident of the state of Kansas engaged in the cattle feeding business. The defendant, SmithKline Beecham Corporation ("SmithKline"), is a Pennsylvania corporation, and is the successor-in-interest to SmithKline Beecham Animal Health Products, Adams Veterinary Research, Inc., Norden Laboratories, Inc., and Beecham, Inc.

Murphy alleges that from on or about October 1993, until about January 1994, he injected his cattle with vaccines manufactured by the defendant. The vaccines at issue in this case, BoviShield 4 and BoviShield 4 + L5, were licensed by the United States Department of Agriculture ("USDA") in 1988. The plaintiff asserts that the vaccines were defective and that, as a result, the vaccines induced or failed to prevent debilitating and mortal infections and diseases in the plaintiff's cattle. Specifically, the plaintiff states claims of breach of implied warranty, false advertising, fraudulent misrepresentation, negligence, and failure to warn of dangers associated with use of the vaccines.

II. DISCUSSION

A court shall render summary judgment upon a showing that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). When addressing a motion for summary judgment, the court must view the facts in the light most favorable to the nonmovant and allow the nonmovant the benefit of all reasonable inferences to be drawn from the evidence. See, e.g., United States v. O'Block, 788 F.2d 1433, 1435 (10th Cir.1986). The court's function is not to weigh the evidence, but merely to determine whether there is sufficient evidence favoring the nonmovant for a finder of fact to return a verdict in that party's favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986). Essentially, the court performs the threshold inquiry of determining whether a trial is necessary. Id. at 250, 106 S.Ct. at 2511.

The defendant argues that the plaintiff's state law claims are pre-empted by federal law. Specifically, SmithKline argues that USDA, through its Animal and Plant Health Inspection Service ("APHIS"), has pre-empted state law with regard to animal vaccines. According to the defendant, Congress granted APHIS pre-emptive authority in the Virus-Serum-Toxin Act ("VSTA"), 21 U.S.C. §§ 151-159. Therefore, while the court gives the benefit of all factual inferences to the plaintiff, a finding by the court that the plaintiff's claims are pre-empted by federal law would entitle the defendant to judgment as a matter of law.

The Supremacy Clause of the United States Constitution states that "the Laws of the United States which shall be made in Pursuance" of the Constitution "shall be the supreme Law of the Land." U.S. Const. art. VI, cl. 2. The phrase "Laws of the United States" encompasses both statutes and statutorily authorized regulations. City of New York v. FCC, 486 U.S. 57, 63, 108 S.Ct. 1637, 1642, 100 L.Ed.2d 48 (1988). Therefore, a federal agency acting within its congressionally delegated authority may effectively preempt state law. Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 369, 106 S.Ct. 1890, 1899, 90 L.Ed.2d 369 (1986).

To determine whether an agency may properly displace state law, one must "examine the nature and scope of the authority granted by Congress to the agency." Id. at 374, 106 S.Ct. at 1901. It is not necessary, however, that Congress expressly authorize an agency to pre-empt state law. Fidelity Fed. Sav. & Loan Ass'n v. de la Cuesta, 458 U.S. 141, 154, 102 S.Ct. 3014, 3023, 73 L.Ed.2d 664 (1982). For example, where Congress empowered the FCC to "make such rules and regulations and prescribe such restrictions and conditions ... as may be necessary to carry out the provisions" of the communications laws, the Supreme Court held that the FCC had acted within its statutory authority when it pre-empted state standards governing television signals. City of New York, 486 U.S. at 66-67, 108 S.Ct. at 1643-44 (quoting 47 U.S.C. § 303(r)).

In order to decide whether the plaintiff's state law claims are pre-empted by federal law, the court must conduct a three-step analysis. First, has Congress authorized APHIS to pre-empt state law? If so, has APHIS acted to pre-empt state common law? Finally, if APHIS regulations do pre-empt state common law, do the regulations pre-empt the causes of action asserted by the plaintiff?

1. Did Congress authorize APHIS to pre-empt state law?

21 U.S.C. § 154 provides as follows:

The Secretary of Agriculture is hereby authorized to make and promulgate from time to time such rules and regulations as may be necessary to prevent the preparation, sale, barter, exchange, or shipment as aforesaid of any worthless, contaminated, dangerous, or harmful virus, serum toxin, or analogous product for use in the treatment of domestic animals....

In 21 U.S.C. § 159, Congress found that "regulation of the products and activities as provided in VSTA is necessary to prevent and eliminate burdens on interstate and foreign commerce and to effectively regulate such commerce."

The United States Supreme Court has held that similar broad congressional grants bestow upon administrative agencies the authority to promulgate regulations preempting state law. As noted above, the Supreme Court held in City of New York that Congress' mandate that the FCC "from time to time, as public convenience, interest, or necessity requires, shall— ... (f) Make such rules and regulations and prescribe such restrictions and conditions ... as may be necessary to carry out the provisions" of the communications laws authorized the FCC to pre-empt state standards governing television signals. City of New York, 486 U.S. at 66-67, 108 S.Ct. at 1643-44 (quoting 47 U.S.C. § 303(r)). Similarly, the Court concluded in de la Cuesta that where Congress had provided that the Federal Home Loan Bank Board was "authorized, under such rules and regulations as it may prescribe, to provide for the organization, incorporation, examination, operation, and regulation" of federal savings and loan associations, the Board properly pre-empted state restrictions on due-on-sale practices. de la Cuesta, 458 U.S. at 160, 170, 102 S.Ct. at 3026, 3031 (quoting 12 U.S.C. § 146(a)(1)). The Court held that the language of § 146 placed no limits on the Board's authority to regulate the lending practices of federal saving and loans. Id. at 161, 102 S.Ct. at 3026.

In the only reported case construing VSTA, the United States District Court for the Central District of Illinois held that Congress authorized USDA, through APHIS, to pre-empt state laws. Lynnbrook Farms v. Smithkline Beecham Corp., 887 F.Supp. 1100, 1104 (C.D.Ill.1995). The court found that the language in 21 U.S.C. §§ 154 and 159 is no less broad than that interpreted in City of New York, in which the Supreme Court found that Congress had empowered the FCC to pre-empt state law. City of New York, 486 U.S. at 66-67, 108 S.Ct. at 1643-44.

Murphy concedes that Congress has provided APHIS with some pre-emptive power, but argues that APHIS lacks authority to pre-empt state tort claims absent an "express preemption provision" in VSTA itself. The plaintiff points to Section 4(b) of Executive Order No. 12,612:

Where a Federal statute does not preempt State law ..., Executive departments and agencies shall construe any authorization in the statute for the issuance of regulations as authorizing preemption of State law by rule-making only when the statute expressly authorizes issuance of preemptive regulations or there is some other firm and palpable evidence compelling the conclusion that the Congress intended to delegate to the department or agency the authority to issue regulations preempting State law.

Exec.Order No. 12,612, 52 Fed.Reg. 41,685 (1987), reprinted in 5 U.S.C. § 601 note.

Executive Order No. 12,612, however, does not operate to invalidate an agency's pre-emption of state law. Rather, the order serves only as a guideline for executive agencies. This intent is manifested by section 8 of the order, entitled "Judicial Review": "This Order is intended only to improve the internal management of the Executive branch, and is not intended to create any right or benefit, substantive or procedural, enforceable at law by a party against the United States, its agencies, its officers, or any person." See also State of Kan. ex rel. Todd v. United States, 995 F.2d 1505, 1511 (10th Cir.1993) (judicial review is not available for an agency's alleged violation of Executive Order No. 12,612). Furthermore, the Supreme Court has held that "a pre-emptive regulation's force does not depend on express congressional authorization to displace state law." City of New York, 486 U.S. at 64, 108 S.Ct. at 1642 (quoting de la Cuesta, 458 U.S. at 154, 102 S.Ct. at 3023).

We therefore agree with the holding in Lynnbrook Farms, and conclude that VSTA allows APHIS to pre-empt state law. We therefore proceed to the next step of our analysis, i.e., determining...