Tulsa Cancer Inst., PLLC v. Genentech, Inc. (In re MDL 2700 Genentech Herceptin (Trastuzumab) Mktg. & Sales Practice Litig.)

• Decision Date: 29 May 2020
• Docket Number: No. 19-5035,19-5035
• Citation: 960 F.3d 1210
• Parties: IN RE: MDL 2700 GENENTECH HERCEPTIN (TRASTUZUMAB) MARKETING AND SALES PRACTICE LITIGATION. Tulsa Cancer Institute, PLLC, an Oklahoma Professional Limited Liability Company, n/k/a Oklahoma Cancer Specialists Management Company, LLC; Oklahoma Oncology & Hematology, Inc., an Oklahoma Corporation, d/b/a Cancer Care Associates; State of Oklahoma ex rel. Board of Regent for the State of Oklahoma; Florida Cancer Specialists, P.L., a Florida Professional Limited Liability ; Hematology-Oncology Associates of Central New York, P.C., a New York Professional Corporation; Virginia Cancer Institute, a Virginia Commonwealth Professional Corporation; Tennessee Oncology, PLLC, a Tennessee Professional Limited Liability Corporation; North Shore Hematology Oncology Associates, P.C., a New York Professional Corporation; Texas Oncology, P.A., a Texas Professional Association; Cancer Care Network of South Texas, P.A. ; Virginia Oncology Associates, P.C.; Minnesota Oncology Hematology, P.A.; Comanche County Memorial Hospital, on behalf of itself and all others similarly situated; Northwest Cancer Specialists, P.C., an Oregon professional corporation, d/b/a Compass Oncology; Oncology and Hematology Associates of Southwest Virginia, Inc., d/b/a Blue Ridge Cancer Care; Shenandoah Oncology, PC ; Plaintiffs - Appellants, v. Genentech, Inc., a California Corporation, Defendant - Appellee, and Roche Holding AG ; Roche Holding Ltd.; Roche Holdings, Inc., Defendants. American Medical Association; Oklahoma State Medical Association ; Public Justice, P.C.; Chamber of Commerce of the United States of America; Pharmaceutical Research And Manufacturers of America; National Association of Manufacturers; Biotechnology Innovation Organization ; Product Liability Advisory Council, Inc., Amici Curiae.
• Court: U.S. Court of Appeals — Tenth Circuit

960 F.3d 1210

IN RE: MDL 2700 GENENTECH HERCEPTIN (TRASTUZUMAB) MARKETING AND SALES PRACTICE LITIGATION.

Tulsa Cancer Institute, PLLC, an Oklahoma Professional Limited Liability Company, n/k/a Oklahoma Cancer Specialists Management Company, LLC; Oklahoma Oncology & Hematology, Inc., an Oklahoma Corporation, d/b/a Cancer Care Associates; State of Oklahoma ex rel. Board of Regent for the State of Oklahoma; Florida Cancer Specialists, P.L., a Florida Professional Limited Liability ; Hematology-Oncology Associates of Central New York, P.C., a New York Professional Corporation; Virginia Cancer Institute, a Virginia Commonwealth Professional Corporation; Tennessee Oncology, PLLC, a Tennessee Professional Limited Liability Corporation; North Shore Hematology Oncology Associates, P.C., a New York Professional Corporation; Texas Oncology, P.A., a Texas Professional Association; Cancer Care Network of South Texas, P.A. ; Virginia Oncology Associates, P.C.; Minnesota Oncology Hematology, P.A.; Comanche County Memorial Hospital, on behalf of itself and all others similarly situated; Northwest Cancer Specialists, P.C., an Oregon professional corporation, d/b/a Compass Oncology; Oncology and Hematology Associates of Southwest Virginia, Inc., d/b/a Blue Ridge Cancer Care; Shenandoah Oncology, PC ; Plaintiffs - Appellants,

v.Genentech, Inc., a California Corporation, Defendant - Appellee,andRoche Holding AG ; Roche Holding Ltd.; Roche Holdings, Inc., Defendants.

American Medical Association; Oklahoma State Medical Association ; Public Justice, P.C.; Chamber of Commerce of the United States of America; Pharmaceutical Research And Manufacturers of America; National Association of Manufacturers; Biotechnology Innovation Organization ; Product Liability Advisory Council, Inc., Amici Curiae.

No. 19-5035

United States Court of Appeals, Tenth Circuit.

FILED May 29, 2020

Matthew W.H. Wessler, Gupta Wessler, Washington, DC (David L. Bryant, Amelia A. Fogleman, Steven J. Adams, Adam C. Doverspike, James Wesley Scott Pebsworth, GableGotwals, Tulsa, Oklahoma, attorneys for Appellants Cancer Care Network of South Texas, P.A., Florida Cancer Specialists, P.L. Hematology-Oncology Associates of Central New York, P.C., Minnesota Oncology Hematology, P.A., North Shore Hematology-Oncology Associates, P.C., Northwest Cancer Specialists, P.C.; Oklahoma Oncology & Hematology, Inc., Oncology and Hematology Associates of Southwest Virginia, Inc., Shenandoah Oncology, PC, Tennessee Oncology, PLLC, Texas Oncology, P.A., Tulsa Cancer Institute, PLLC (now known as Oklahoma Cancer Specialists Management Company, LLC), State of Oklahoma ex rel. Board of Regents for the State of Oklahoma, Virginia Cancer Institute Inc., Virginia Oncology Associates, P.C.; James D. Sill, Matthew J. Sill, Kathryn Eidson Griffin, Tara Tabatabaie, Christopher J. Bergin, Simone Fulmer. Fulmer Sill PLC, Oklahoma City, Oklahoma, attorneys for Appellant Comanche County Memorial Hospital; and Janaki Hannah Nair, Elias Meginnes & Seghetti, P.C., Peoria, Illinois, attorneys for Appellant, Oncology-Hematology Associates of Central Illinois, P.C., with him on the briefs), appearing for Appellants.

Alicia J. Donahue, Shook, Hardy & Bacon, L.L.P., San Francisco, California (Paul W. Schmidt, Covington & Burling LLP, New York, New York; James P. Muehlberger, Shook, Hardy & Bacon, L.L.P., Kansas City, Missouri; Emily Ullman, Covington & Burling LLP, Washington, DC; and William W. O’Connor, Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C., Tulsa, Oklahoma, with her on the briefs), appearing for Appellees.

Jack R. Bierig and Catherine M. Masters, Schiff Hardin LLP, Chicago, Illinois, filed a brief for Amici Curiae American Medical Association and Oklahoma State Medical Association.

Leah M. Nicholls, Public Justice, P.C., Washington, DC, filed a brief for Amicus Curiae Public Justice, P.C.

K. Lee Marshall, Bryan Cave Leighton Paisner LLP, San Francisco, California; Timothy J. Hasken and Samuel E. Hofmeier. Bryan Cave Leighton Paisner LLP, St. Louis, Missouri, filed a brief for Amici Curiae Pharmaceutical Research and Manufacturers of America, National Association of Manufacturers, and Biotechnology Innovation Organization.

Daryl Joseffer and Tara S. Morrissey, United States Chamber Litigation Center, Washington, DC; Jeremy M. Bylund, Jeffrey S. Bucholtz, Marisa C. Maleck, and Gabriel Krimm, King & Spalding LLP, Washington, DC, filed a brief for Amicus Curiae Chamber of Commerce of the United States of America.

Galen D. Bellamy, Meghan Frei Berglind, and Eric L. Robertson, Wheeler Trigg O’Donnell LLP, Denver, Colorado, filed a brief for Amicus Curiae Product Liability Advisory Council, Inc.

Before BRISCOE, McHUGH, and MORITZ, Circuit Judges.

BRISCOE, Circuit Judge.

This appeal arises from a group of fourteen diversity cases that were consolidated by the Judicial Panel on Multidistrict Litigation and transferred to the Northern District of Oklahoma. The plaintiffs in all fourteen cases are cancer

treatment providers who purchased multi-dose vials of Herceptin, a breast cancer drug, from defendant Genentech, Inc. (Genentech). Plaintiffs alleged that Genentech violated state law by failing to ensure that each vial of Herceptin contained the labeled amount of the active ingredient, and by misstating the drug concentration and volume on the product labeling. After the cases were consolidated, Genentech moved for summary judgment, arguing that plaintiffs’ claims were pre-empted by federal law. The district court agreed with Genentech and granted summary judgment in its favor. Plaintiffs now appeal. Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we reject the district court’s conclusion that plaintiffs’ claims are pre-empted by federal law, and we consequently reverse its grant of summary judgment in favor of Genentech and remand for further proceedings.

I

Factual background

a) Genentech and Herceptin

Defendant Genentech is a California corporation with its principal place of business in San Francisco, California. Genentech manufactures, markets and distributes a prescription drug with the brand name of Herceptin

© (hereinafter Herceptin ). Herceptin is a biological product (or biologic) used to treat breast cancer tumors that overexpress the HER2 protein.¹ The overexpression of HER2 causes breast cancer tumors to grow and spread faster. Herceptin targets the HER2 protein and, in doing so, helps to slow or stop the growth of breast cancer tumors.

b) Federal regulation of biologics

Congress, by way of the Public Health Service Act (PHSA), expressly regulates biological products such as Herceptin

. 42 U.S.C. § 262. Generally speaking, the PHSA provides that "[n]o person shall introduce or deliver for introduction into interstate commerce any biological product unless ... a biologics license ... is in effect for the biological product" and "each package of the biological product is plainly marked with ... the proper name of the biological product contained in the package," "the name, address, and applicable license number of the manufacturer of the biological product," and "the expiration date of the biological product." 42 U.S.C. § 262(a)(1). The PHSA directs the Secretary of Health and Human Services to oversee the approval of biologic licenses, outlines the standards for the approval of such licenses, and authorizes the Secretary to "establish, by regulation, requirements for the approval, suspension, and revocation of biologics licenses." Id. § 262(a)(2)(A). The Secretary has, in turn, delegated that authority to the United States Food and Drug Administration (FDA).

Consequently, a manufacturer of a biologic must file with the FDA a biologics license application (BLA). 21 C.F.R. § 601.2(a). FDA approval of a BLA "constitute[s] a determination that the ... product meet[s] applicable requirements to ensure ... safety, purity, and potency." Id. § 601.2(d). FDA approval also results in the issuance of a biologics license.

"The Federal Food, Drug, and Cosmetic Act" (FDCA), which applies to prescription drugs, likewise "applies to a biological product subject to regulation under" the PHSA. 42 U.S.C. § 262(j). This includes the FDCA’s labeling requirements. Id. ; see also id. § 262(a)(2)(D).

Section 352 of the FDCA, which is entitled "Misbranded drugs and devices," states, in pertinent part, that "[a] drug or device shall be deemed to be misbranded ... [i]f its labeling is false or misleading in any particular." 21 U.S.C. § 352(a)(1). Section 352 goes on to state, in pertinent part, that a drug or device shall be deemed misbranded "[i]f in package form unless it bears a label containing ... (2) an accurate statement of the quantity of the contents in terms of weight, measure, or numerical count: Provided , That under clause (2) of this paragraph reasonable variations shall be permitted ... by regulations prescribed by the Secretary." Id. § 352(b).

FDA regulations implemented under the FDCA require, in part, that "[f]or each batch of drug product, there shall be appropriate laboratory determination of satisfactory conformance to final specifications for the drug product, including the identity and strength of each active ingredient, prior to release." 21 C.F.R. § 211.165(a). "Drug products failing to meet established standards or specifications and any other relevant quality control criteria shall be rejected." Id. § 211.165(f). FDA regulations outline in detail how a manufacturer is to test each lot of a biologic product in terms of potency, sterility, purity, and identity. Id. §§ 610.10, 610.12, 610.13, 610.14.

FDA regulations also address, in detail, the labeling of prescription drugs, including biologics. In particular, FDA regulations require "[t]he label of a prescription ... drug in package form" to "bear a declaration of the net quantity of contents." 21 C.F.R. § 201.51(a). "The declaration of net quantity of contents shall express an accurate statement of the quantity of contents of the package." Id. §...