No. 17-230

In The

Supreme Court of the United States

--------------------------------- ---------------------------------

ALICE IVERS,

Petitioner,

v.

WESTERLY PHARMACEUTICAL, INC.,

Respondent,

--------------------------------- ---------------------------------

On Writ of Certiorari From The

United States Court of Appeals

For the Twelfth Circuit

--------------------------------- ---------------------------------

BRIEF FOR RESPONDENT

--------------------------------- ---------------------------------

TEAM 2602

Counsel for Respondent

i

QUESTIONS PRESENTED

I. Whether this Court’s decisions in PLIVA v. Mensing, 564 U.S. 604 (2011),

and Mutual Pharmaceutical v. Bartlett, 133 S. Ct. 2466 (2013), preempt the

Petitioner’s claims in this case?

II. Whether attorney’s fees are considered awardable “costs” under Federal

Rule of Civil Procedure 41(d) when a plaintiff changes forum jurisdictions

following an adverse ruling in the first forum?

ii

TABLE OF CONTENTS

QUESTIONS PRESENTED ........................................................................................... i

TABLE OF AUTHORITIES .......................................................................................... v

OPINIONS BELOW ...................................................................................................... 1

STATEMENT OF THE CASE ....................................................................................... 1

SUMMARY OF THE ARGUMENT .............................................................................. 5

STANDARD OF REVIEW ............................................................................................. 7

ARGUMENT AND AUTHORITIES ............................................................................. 8

I. THE TWELFTH CIRCUIT CORRECTLY HELD THAT THE FDCA

PREEMPTS PETITIONER’S CLAIMS UNDER THE ILLINOZA PRODUCTS

LIABILITY ACT. ........................................................................................................ 8

A. The Twelfth Circuit correctly held that it was “impossible” for Westerly

to simultaneously comply with both state and federal labelling requirements. .. 8

i. Federal law and the FDA are the national authorities for drug

safety standards. ...................................................................................... 9

ii. State law claims alleging failure-to-warn or label design defects

are preempted by federal law. ............................................................... 11

iii. Illinoza’s “reasonableness” requirement conflicts with the FDCA’s

requirement of “sameness.” ................................................................... 16

iv. Petitioner’s claims are further preempted because the duties

imposed by the Third Restatements of Torts, Federal law and the FDA

are the national authorities for drug safety standards. ....................... 18

B. The Illinoza Products Liability Act is an obstacle to achieving the

objectives of the FDCA and Hatch-Waxman Act. ............................................... 20

i. The objective of the Hatch-Waxman Act is to create a streamlined

Abbreviated New Drug Application process, making low-cost generic

drugs more readily available to the public. ........................................... 21

iii

ii. The Illinoza Products Liability Act impedes Hatch-Waxman’s

intent to provide the public with affordable medications. .................... 24

C. Petitioner is not permitted to use Illinoza products liability claims as

an end-run around preemption. ........................................................................... 27

i. Petitioner’s attempt to use state claims to enforce Westerly’s

compliance with the FDCA violates this Court’s holding in Buckman.

27

ii. The Fifth Circuit correctly held that a failure-to-update claim

“sounds exclusively in federal law.” ....................................................... 32

D. Westerly complied with all statutory and regulatory duties to update

its ropidope label. .................................................................................................. 34

i. Westerly is entitled to safe harbor because it satisfied all label

update requirements prescribed by the FDCA and Hatch-Waxman Act.

34

ii. Westerly’s actions were “reasonable” under Illinoza Products

Liability Law. ......................................................................................... 36

II. ATTORNEY’S FEES ARE AWARDABLE COSTS UNDER FED. R. CIV. P.

41(d). ......................................................................................................................... 37

A. The Court should adopt the holdings of the Fourth and Seventh

Circuits that attorney’s fees are awardable costs under Rule 41(d). ................. 38

i. The Fourth and Seventh Circuits have persuasively held that

attorney’s fees are awardable based on abusive conduct or when

permitted by an underlying statute. ..................................................... 39

ii. This Court should reject the holding of the Sixth Circuit in Rogers

v. Wal-Mart, as the circuit court erroneously relied on the absence of

an express award of attorney fees in Rule 41(d). .................................. 42

iii. The Sixth Circuit’s holding in Rogers v. Wal-Mart Stores, Inc. is

distinguishable from the present case. .................................................. 45

iv. Awarding attorney’s fees under Rule 41(d) would only chill bad

faith litigation. ........................................................................................ 45

B. The Twelfth Circuit properly awarded attorney’s fees to Westerly. .... 46

i. Petitioner’s vexatious litigation and forum shopping justify the

award of attorney’s fees.......................................................................... 47

iv

ii. East Texas state law expressly permits the award of attorney’s

fees as a component of costs. .................................................................. 48

CONCLUSION ............................................................................................................. 49

APPENDIX A ............................................................................................................... 50

v

TABLE OF AUTHORITIES

United States Supreme Court Cases

Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240 (1975) ............ 37, 38

Buckman Co., v. Plaintiff’s Legal Comm., 531 U.S. 341 (2001) ......................... passim

Byrd v. Blue Ridge Rural Elec. Co-op., Inc., 356 U.S. 525 (1958) .............................. 40

Chambers v. NASCO, Inc., 501 U.S. 32 (1991) ..................................................... 36, 37

Christianburg Garment Co. v. Equal Employment Opportunity Commission, 434

U.S. 412 (1978) ......................................................................................................... 47

Crosby v. National Foreign Trade Council, 530 U.S. 363 (2000) ................................. 8

Erie R. Co. v. Tompkins, 304 U.S. 64 (1938) ............................................................... 40

F.D. Rich Co., Inc. v. United States ex rel. Indus. Lumber Co., 417 U.S. 116 (1974) 39

Farmer v. Arabian Am. Oil Co., 379 U.S. 227 (1964) ................................................. 45

Fidelity Fed. Sav. & Loan Ass’n v. de la Cuestra, 458 U.S. 141 (1982) ....................... 8

Food and Drug Admin. v. Brown & Williamson Tobacco Corp., 120 S. Ct. 1291

(2000) .......................................................................................................................... 9

Freightliner Corp. v. Myrick, 514 U.S. 280 (1995) ........................................................ 8

Geier v. Am. Honda Motor Co., Inc., 529 U.S. 861 (2000) ............................................ 8

Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178 (2017) .................... 36, 45, 46

Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010) ................................. 37

Hines v. Davidowitz, 312 U.S. 52 (1941) ........................................................... 9, 20, 30

Marek v. Chesny, 473 U.S. 1 (1985) ...................................................................... 40, 43

Maryland v. Louisiana, 451 U.S. 725 (1981) ................................................................ 8

Medtronic v. Lohr, 518 U.S. 470 (1996) .................................................................. 9, 15

Mutual Pharmaceutical v. Bartlett, 133 S. Ct. 2466 (2013) ..................... 10, 11, 13, 14

Pierce v. Underwood, 487 U.S. 552 (1988) .................................................................... 7

PLIVA v. Mensing, 564 U.S. 604 (2011) .............................................................. passim

Riegel v. Medtronic, Inc., 552 U.S. 312 (2008) ............................................................ 25

Salve Regina College v. Russell, 499 U.S. 225 (1991)................................................... 7

Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 135 S. Ct. 831 (2015) ..................... 7

Wyeth v. Levine, 555 U.S. 555 (2009) ...................................................................... 9, 14

vi

Circuit Court Cases

Andrews v. America’s Living Centers, LLC, 827 F.3d 306 (4th Cir. 2016)38, 39, 40,

41

Chieftain Royalty Company v. Enervest Energy Institutional Fund XIII-A, L.P., 861

F.3d 1182 (10th Cir. 2017) ................................................................................. 40, 41

Davis v. USX Corp., 819 F.2d 1270 (4th Cir. 1987) .................................................... 42

Drager v. PLIVA, 741 F.3d 470 (4th Cir. 2014) .......................................................... 17

Farmer v. Arabian Am. Oil Co., 324 F.2d 359 (2nd Cir. 1963) .................................. 45

Fulgenzi v. PLIVA, 711 F.3d 578 (6th Cir. 2013) ................................................. 32, 33

Guarino v. Wyeth, LLC, 719 F.3d 1245 (11th Cir. 2013) ............................................ 19

Hutchison v. Staton, 994 F.2d 1076 (4th Cir. 1993) ................................................... 45

In re Darvocet, 756 F.3d 917 (6th Cir. 2014) .............................................................. 19

Johnson v. Teva Pharmaceuticals USA, Inc., 758 F.3d 605 (5th Cir. 2014) ............. 31

Lashley v. Pfizer, Inc., 750 F.3d 470 (5th Cir. 2014) ...................................... 14, 15, 31

LeCompte v. Mr. Chip, 528 F.2d 601 (5th Cir. 1976) ................................................. 43

Morris v. PLIVA, Inc., 713 F.3d 774 (5th Cir. 2013) ...................................... 14, 19, 31

Rogers v. Wal-Mart Stores, Inc., 230 F.3d 868 (6th Cir. 2000) ................ 41, 42, 44, 46

Simeone v. First Bank Nat’l Ass’n, 971 F.2d 103 (8th Cir. 1992) .................. 39, 40, 45

Federal District Court Cases

Loreto v. Procter & Gamble Co., 737 F. Supp. 2d 909 (S.D. Ohio 2010) .................... 31

Robinson v. Neslon, No. 98-10802-MLW, 1999 WL 95720 (D. Mass. Feb. 18, 1999) 46

State Court Cases

In re Reglan Litig., 142 A.3d 725 (N.J. 2016) ....................................................... 33, 35

Constitutional Provisions

U.S. CONST. art. VI, cl. 2 ................................................................................................ 8

Statutes and Session Laws

21 U.S.C. § 301 ............................................................................................................... 9

vii

21 U.S.C. § 321 ............................................................................................................... 9

21 U.S.C. § 333 ................................................................................................. 25, 28, 34

21 U.S.C. § 337 ....................................................................................................... 25, 28

21 U.S.C. § 355 ..................................................................................................... passim

E. Tex. Code Ann. § 12-12-12 ................................................................................ 46, 47

Federal Food, Drug, and Cosmetic Act of 1938, Pub. L. No. 75-717, 52 Stat. 1040 .. 20

Pure Food and Drugs Act of 1906, Pub. L. No. 59-384, 34 Stat. 768 ......................... 20

Rules

Fed. R. Civ. P. 41 ......................................................................................................... 43

Regulations

21 C.F.R. § 127 ........................................................................................... 10, 16, 24, 33

21 C.F.R. § 314.50 ........................................................................................................ 10

21 C.F.R. § 314.94 ................................................................................................ passim

21 C.F.R. § 320.1 .................................................................................................... 13, 15

Abbreviated New Drug Application Regulations – Final Rule, 57 Fed. Reg. 17950

(Apr. 28, 1992) .......................................................................................................... 34

Secondary Sources

Advisory Committee’s Notes on the 1983 Amendment to Rule 11, 28 U.S.C.App., p.

575 ............................................................................................................................ 37

Br. for the United States as Amicus Curiae in Supp. of Pet’r. at 24, Buckman Co. v.

Plaintiffs’ Legal Comm., 531 U.S. 341 (2001) (No. 98-1768) .................................. 26

Correspondence from Jay P. Lefkowitz to Clerk, U.S. Supreme Court, PLIVA, Inc. v.

Mensing, 564 U.S. 604 (2011) .................................................................................. 12

Division of Generic Drugs, Policy, and Procedure Guide 8-89, Changes in the

Labeling of ANDs Subsequent to Revision of Innovator Labeling, Aug. 21 1989,

July 2013 FDA Guidance at p. 13............................................................................ 35

FDA Guidance for Industry, “Revising ANDA Labeling Following Revision of the

RLD Labeling,” p. 1-2 (May 2000) ........................................................................... 34

Federal Trade Commission, Generic Drug Entry Prior to Patent Expiration: An FTC

Study 4 (July 2002), available at https://www.ftc.gov/sites/default/files/

viii

documents/reports/generic-drug-entry-prior-patent-expiration-ftc-

study/genericdrugstudy_0.pdf ................................................................................. 21

Generic Drug Savings and Access in the U.S., Association for Accessible Medicine at

5, https://www.accessiblemeds.org/ sites/default/files/2017-07/2017-AAM-Access-

Savings-Report-2017-web2.pdf ................................................................................ 22

H.R. Rep. No. 98-857, pt. 1, at 14-15 (1984), reprinted in U.S.C.C.A.N. 2647, 2647

.......................................................................................................................... passim

How did the Federal Food, Drug, and Cosmetic Act come about?, U.S. FOOD & DRUG

ADMINISTRATION,

https://www.fda.gov/AboutFDA/Transparency/Basics/ucm214416.htm ................ 21

Julie Dohm, Expanding the Scope of the Hatch-Waxman Act's Patent Carve-Out

Exception to the Identical Drug Labeling Requirement: Closing the Patent

Litigation Loophole, 156 U. Pa. L. Rev. 151 (2007) .......................................... 35, 36

Laura Robinson, Analysis of Recent Proposals to Reconfigure Hatch-Waxman, 11 J.

Intel. J. Prop. L. 47, 52 (2003) ........................................................................... 20, 21

Matric Global Advisors, Estimated Cost of FDA’s Proposed Generic Drug Labeling

Rule: Updated for 2017–2024 (July 2016), http://getmga.com/wp-

content/uploads/2017/02/GenericDrug Labeling.pdf .............................................. 24

OFFICE OF MGMT. & BUDGET, A NEW FOUNDATION FOR AMERICAN GREATNESS (2017),

https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.

pdf ............................................................................................................................. 23

Restatement of Torts, Third: Products Liability § 6(d) (1998) ................................... 18

Richard G. Frank, The Ongoing Regulation of Generic Drugs, 357 New Eng. J. Med.

1993 (2007) ............................................................................................................... 22

1

OPINIONS BELOW

The opinion of the United States District Court for the District of Illinoza

(No. AM-15-450-CV) is unreported and is contained in the record. R. at 1-8. The

opinion of the United States Court of Appeals for the Twelfth Circuit (No. 17-1620)

is also unreported and is set out in the record. R. at 9-23.

CONSTITUTIONAL AND STATUTORY PROVISIONS

This case involves Article VI, clause 2 of the United States Constitution, the

Food, Drug, and Cosmetic Act, and the Hatch-Waxman Act. Also at issue are the

Illinoza Products Liability Act, the East Texas Products Liability Law, and the East

Texas Code Annotated § 12-12-12, which are set out in the record. R. at 3, 22.

STATEMENT OF THE CASE

Westerly Pharmaceutical, Inc., (“Westerly”) is a generic drug manufacturer

providing Americans with low-cost medicines that are identical to their high-priced

name-brand counterparts. R. at 1-2. Before any prescription drug can be marketed

in the United States, it must receive approval from the Food and Drug

Administration (“FDA”). R. at 4. The federal Food, Drug, and Cosmetic Act

(“FDCA”), imposes strict standards on companies seeking to manufacture and sell

new drugs to consumers. R. at 4. Included in these standards are how branded and

generic drugs must be labelled and what warnings generic drug packing must

contain. R. at 12. Once a new drug’s patent expires, Title 21 U.S.C. § 355(j) of the

FDCA—as amended by the Hatch Waxman Act—permits a generic manufacturer to

sell its drugs after an abbreviated review by the U.S. Food and Drug Administration

2

(FDA). R. at 4. Under the abbreviated review, a generic manufacturer must show

that its drug is the bioequivalent of the branded drug and that its label will mirror

the branded drug’s label as required by 21 U.S.C. § 355(j)(2)(A)(iv)-(v). R. at 4.

A generic manufacturer has no discretion what to include in its label and is

not allowed to alter the contents of its label unilaterally. R. at 5. A generic

manufacturer may only update the contents of its drug’s label after the branded

drug has updated its own. R. at 5. A generic manufacturer’s only duty is it to ensure

that its label is the same as that of the branded drug’s. R. at 14.

In 1997, GlaxoCline, LLC (“GlaxoCline”) patented the drug ropidope

hydrochloride (“ropidope”) which helps treat symptoms of Parkinson’s disease. R. at

2. GlaxoCline received approval from the FDA to market ropidope as a new drug

and began selling it under the brand name Equip. R. at 2. After GlaxoCline’s

patent expired in 2008, Westerly submitted the required Abbreviated New Drug

Application (“ANDA”) to the FDA seeking approval to begin providing a more

affordable, bioequivalent generic version to the public. R. at 2. In 2009, the FDA

approved Westerly’s ANDA with the condition that its labeling mirror the then-

current label for Equip. R. at 2. Westerly followed FDA regulations and made its

drug’s label exactly match that of Equip’s ®. R. at 2.

In January 2011, GlaxoCline submitted a Supplemental New Drug

Application (“sNDA”) to the FDA requesting approval of proposed changes to its

labeling. R. at 2. The sNDA sought to add a new paragraph under the “Warnings

and Precautions” section:

3

5.6 Impulse Control/Compulsive Behaviors

Reports suggest that patients can experience intense urges to gamble,

increased sexual urges, intense urges to spend money, binge or

compulsive eating, and/or other intense urges, and the inability to

control these urges while taking one or more of the medications,

including EQUIP, that increase central dopaminergic tone and that are

generally used for the treatment of Parkinson’s disease . . . . In some

cases, although not all, these urges were reported to have stopped

when the dose was reduced or the medication was discontinued.

Because patients may not recognize these behaviors as abnormal, it is

important for prescribers to specifically ask patients or their caregivers

about the development of new or increased gambling urges, sexual

urges, uncontrolled spending, binge or compulsive eating, or other

urges while being treated with EQUIP. Physicians should consider

dose reduction or stopping the medication if a patient develops such

urges while taking EQUIP.

R. at 2. Five months later, the FDA approved the request and GlaxoCline

implemented the label change. R. at 2. Under the FDCA and Hatch-Waxman Act,

Westerly was powerless to independently alter its ropidope label until GlaxoCline

updated Equip’s. R at 5. After GlaxoCline received approval for its label update,

Westerly followed federal regulations and filed a Changes Being Effected (CBE)

with the FDA in January 2012, notifying the FDA that it would be modifying the

labels to include the newly-approved changes to match that of Equip. R. at 2-3, 14.

One month later, Westerly updated its ropidope labels. R. at 3.

Doctors diagnosed Petitioner Alice Ivers (“Petitioner”) with Parkinson’s

disease one month after GlaxoCline had submitted the proposed label changes to

the FDA. R. at 1. As part of Petitioner’s daily treatment, she began taking

Westerly’s affordable generic form of the drug in March 2011. R. at 1. This was

three months before the FDA approved the label change for GlaxoCline’s Equip. R.

at 1. One month after the label change by GlaxoCline in June 2011, Petitioner

4

allegedly developed some of the side-effects described in the added warning

paragraph including compulsive spending and gambling behaviors. R. at 3. Ms.

Ivers states she felt compelled to spend money on charitable gifts and at antique

auctions. R. at 3. During the next seventeen (17) months, Petitioner depleted her

retirement savings. R. at 3. For ten (10) of those months, Westerly’s label for its

generic version included the updated warning.

Petitioner, a resident of Cardozo, Illinoza, first filed a Complaint against

Westerly, a Texas corporation, in the United States District Court for the Western

District of East Texas on January 15, 2013. R. at 5. Petitioner asserted a claim

under East Texas Products Liability Law and alleged that Westerly unreasonably

failed to update its ropidope label. R. at 5, 11. Less than one month later, the Fifth

Circuit Court of Appeals issued its opinion in Morris v. PLIVA, Inc., 713 F.3d 774,

777 (5th Cir. 2013), which was adverse to Petitioner’s position. R. at 5. Within

eleven (11) days, Petitioner voluntarily dismissed her case against Respondent. R.

at 5.

Thirty-one (31) months later, Petitioner filed the instant Complaint in

Illinoza state court based on the same facts and legal theories under the Illinoza

Products Liability Act (“IPLA”). R. at 1. Ms. Ivers does not contend nor has ever

claimed that Westerly did not update its ropidope label to match that of Equip®. R.

at 14. On October 14, 2015, Westerly timely and properly removed the case to the

United States District Court for the District of Illinoza. R. at 1. Less than three

weeks later, Westerly filed an answer to the complaint, a Motion for Judgment on

5

the Pleadings, and a Motion for an Award of Costs. R. at 3. The district court ruled

in favor of Westerly on the Motion for Judgment on the Pleadings stating that

Petitioner’s state-law claims were preempted by federal law. R. at 5. Although the

district court awarded $876.52 in costs based on its discretion, the court held that

Fed. R. Civ. P. 41(d) (“Rule 41(d)”) did not allow attorney’s fees as awardable costs.

R. at 6-7.

On January 14, 2016, Petitioner appealed to the United States Court of

Appeals for the Twelfth Circuit disputing the decision to dismiss the case and the

award of any costs. R. at 11. The next day, Westerly filed a timely cross-appeal

contesting the districts court’s decision to not award attorney’s fees as costs. R. at

11. The Twelfth Circuit affirmed the judgment on the pleadings and held that

Petitioner’s claims were preempted under both “impossibility” and “obstacle”

preemption. R. at 12. The court further affirmed the award of $876.52, but also

included Westerly’s attorney’s fees as costs, increasing awarded costs to $4,318.52.

R. at 11, 18. Petitioner then filed this writ of certiorari which was granted on July

17, 2017. R. at 23.

SUMMARY OF THE ARGUMENT

All state law failure-to-warn and design-defect claims against generic

manufacturers are preempted by the FDCA. Under this Court’s holdings in PLIVA

v. Mensing, 451 U.S. 725, 746 (2011) and Mutual Pharmaceutical v. Bartlett, 133 S.

Ct. 2466, 2473 (2013), state law claims that require generic manufacturers to

strengthen their labels are preempted by the federal duty of “sameness.” Petitioner

6

claims that Westerly violated the IPLA by failing to strengthen its ropidope label

reasonably. This is exactly the type of claim that is preempted under both Mensing

and Bartlett.

Even if it is found that Petitioner’s claims are not preempted under Mensing

and Bartlett, they should still be preempted as they stand as an obstacle to

achieving the purpose and intent of the FDCA, as amended by the Hatch-Waxman

Act (“HWA”). Congress enacted the HWA to remove the stringent approval

requirements that have been placed on generic manufacturers so they could bring

their low-cost drugs to market faster. Under the HWA, generic manufacturers must

ensure that their drug matches their branded counterpart in all material facets.

This is a generic manufacturer’s sole duty under the HWA. The IPLA, however,

imposes a reasonableness duty upon generic manufacturers to ensure that their

drug’s label matches their branded counterpart. As Petitioner’s IPLA claims impose

additional duties upon Westerly not contemplated by the HWA, they contravene the

very reason Congress enacted the HWA.

Although Petitioner couches her claims under Illinoza state law, the

substance of her claims is rooted in federal law. Petitioner’s failure-to-warn and

design-defect claims are an attempt to enforce the federal labelling duties against

Westerly. The federal duty to update is an essential element in the Petitioner’s

claims. This Court held in Buckman Co. v. Plaintiff’s Legal Comm., 531 U.S. 341,

353 (2001), that when an essential element of a state law claim is premised on

7

federal law, it is preempted. As Petitioner’s claims are preempted, this Court should

affirm the Twelfth Circuit’s judgment on the pleadings in favor of Westerly.

Petitioner previously filed a similar claim against Westerly based on the

same basic underlying facts. Following a precedential, adverse decision in that

jurisdiction by the Fifth Circuit Court of Appeals, Petitioner voluntarily dismissed

the action only to file a second Complaint in Illinoza state court—beyond the reach

of the unfavorable Fifth Circuit ruling. Using Rule 41(d), Respondent sought

recovery of all costs for defending the first action including attorney’s fees.

Rule 41(d) permits the recovery of “all or part of the costs of that previous

action.” The intent of the rule is to deter vexatious or bad faith litigation and forum

shopping. Under Rule 41(d), attorney’s fees are awardable costs when based on a

party’s misconduct or when permitted by an underlying statute. Petitioner’s actions

are exactly the type of conduct Rule 41(d) was designed to chill. Further, the

applicable East Texas state law clearly provides that attorney’s fees are considered

a component of costs that can be awarded by the court.

STANDARD OF REVIEW

Any factual determinations by the lower court are reviewed on a “clearly

erroneous” standard. Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 135 S. Ct.

831, 836 (2015). The standard used for appellate review of questions of law is de

novo. Salve Regina College v. Russell, 499 U.S. 225, 231 (1991). Matters of a court’s

discretion are reviewed under the “abuse of discretion” standard. Pierce v.

Underwood, 487 U.S. 552, 558 (1988).

8

ARGUMENT AND AUTHORITIES

I. THE TWELFTH CIRCUIT CORRECTLY HELD THAT THE FDCA

PREEMPTS PETITIONER’S CLAIMS UNDER THE ILLINOZA PRODUCTS

LIABILITY ACT.

The Supremacy Clause of the Constitution provides that federal law “shall be

the supreme Law of the land . . . Laws of any State to the Contrary

notwithstanding.” U.S. CONST. art. VI, cl. 2. State law that conflicts with federal

law is preempted. Maryland v. Louisiana, 451 U.S. 725, 746 (1981). Congress can

expressly preempt state law when the matter is within its authority. Geier v. Am.

Honda Motor Co., Inc., 529 U.S. 861, 883-86 (2000). Even in the absence of express

language, state law is still preempted if Congressional intent to do so can be

implied. Id. Preemption is implied when it is “impossible for a private party to

comply with both state and federal law,’ or when ‘state law stands as an obstacle to

the accomplishment and execution of the full purposes and objectives of Congress.”

PLIVA v. Mensing, 564 U.S. 604, 634 (2011). This Court should find that

Petitioner’s claims are preempted as a result of both implied and conflict

preemption.

A. The Twelfth Circuit correctly held that it was “impossible” for

Westerly to simultaneously comply with both state and federal

labelling requirements.

The FDCA made it impossible for Westerly to comply with the duties imposed

by the IPLA. In Freightliner Corp. v. Myrick, this Court held that when state and

federal law conflict, it is impossible for the party to adhere to both state and federal

requirements. 514 U.S. 280, 287 (1995). “[S]tate law is naturally preempted to the

extent of any conflict with a federal statute.” Crosby v. National Foreign Trade

9

Council, 530 U.S. 363, 372 (2000). Therefore, when the two laws conflict, the state

law is preempted and nullified. Fidelity Fed. Sav. & Loan Ass’n v. de la Cuestra, 458

U.S. 141, 153 (1982).

In deference to federalism, a number of courts have applied a presumption

against preemption when the issues concern matters that states have traditionally

occupied, such as health and safety. Medtronic v. Lohr, 518 U.S. 470, 485 (1996).

This Court has held, however, that when the issue is inherently federal in

character, a presumption against preemption is not warranted. Buckman Co., v.

Plaintiff’s Legal Comm., 531 U.S. 341, 347 (2001). When Congress grants a federal

agency police power over a field, the presumption shifts, and preemption is

presumed. See Id.; Hines v. Davidowitz, 312 U.S. 52, 66 (1941).

In the present case, the IPLA requires Westerly to perform duties in direct

conflict with the FDCA, as amended by the HWA. Since the issue is inherently

federal in nature, the Petitioner’s state law claims are preempted. Buckman, 531

U.S. at 347.

i. Federal law and the FDA are the national authorities for drug safety

standards.

It is well-settled that Congress granted the FDA sole authority to regulate

the prescription drug industry in the United States. Food and Drug Admin. v.

Brown & Williamson Tobacco Corp., 120 S. Ct. 1291, 1297 (2000) (citing 21 U.S.C.

§§ 321(g)-(h)). The mission of the FDA is to provide for the protection of “the public

health by ensuring that . . . human and veterinarian drugs are safe and effective.”

In response to the growing concern that prescription drugs were unsafe and

10

fraudulently marketed, Congress enacted the FDCA in 1938. Wyeth v. Levine, 555

U.S. 555, 566 (2009)(citing 21 U.S.C. § 301 et seq.). Under the FDCA, Congress

empowers the FDA to regulate the sale, manufacture, and labelling of prescription

drugs. 21 U.S.C. § 355(a).

The FDCA demands compliance by both branded and generic drug

manufacturers. See 21 U.S.C. §§ 355(a)-(h)(2)(viii). A drug must have FDA approval

before it can be sold in the U.S. Id. For new brand name drugs, a manufacturer

must submit a new drug application (“NDA”) with both clinical and nonclinical

studies for FDA review. 21 U.S.C. § 355 (b)(1)(A); 21 C.F.R. § 314.50(d)(2). Generic

drug manufacturers are similarly policed, and are required to submit an ANDA

which must include adequate information to show that its drug it identical to the

branded drug in all material respects. 21 U.S.C. § 355 (j)(2)(A). The FDA has

discretion to either approve or deny the respective applications. 21 U.S.C. § 355(d);

21 U.S.C. §355(j)(4(G).

Under the FDCA and FDA regulations, the duties and obligations of branded

and generic drugs are vastly different. Branded drugs must ensure that their labels

are accurate and adequate. PLIVA v. Mensing, 564 U.S. 604, 613 (2011)(citing 21

U.S.C. §§ 355(b)(1), (d)). In contrast, a generic manufacturer is not able or required

to ensure the accuracy or adequacy of its label. A generic manufacturer’s only duty

is to make sure that its warning label matches that of the branded drug. Id. (citing

21 U.S.C. §§ 355(j)(2)(A)(v), (j)(4)(G); 21 C.F.R. §§ 314.94(a)(8), 127(a)(7)). This is

commonly referred to as a generic manufacturer’s duty of “sameness,” which is

11

based on the FDCA’s requirement that a generic drug must mirror or be the same

as its branded counterpart’s label. See id. at 613.

ii. State law claims alleging failure-to-warn or label design defects are

preempted by federal law.

State law product liability claims alleging that a generic manufacturer’s label

failed to warn or is defectively designed are preempted by the FDCA. Mensing, 564

U.S. 604; Mutual Pharmaceutical v. Bartlett, 133 S. Ct. 2466, 2473 (2013). In

Mensing, this Court plainly held that state law failure-to-warn claims against

generic manufacturers were preempted by FDCA and FDA regulations that require

a generic drug to be the mirror image of its branded counterpart. See 564 U.S. at

624. Similarly, in Mutual Pharmaceutical v. Bartlett, this Court held that state law

design defect claims against a generic manufacturer’s label were preempted by the

same laws and regulations. 133 S. Ct. at 2479. Allegations that a generic

manufacturer violated state-law duties by failing to alter its FDA mandated

warning label, are preempted.

This Court in Mensing preempted all state law failure-to-warn claims against

generic manufacturers in a practically identical set of facts as the present case. 564

U.S. at 613, 617-20. The respondents in Mensing alleged that a generic

manufacturer failed to provide an adequate warning label on its product. Id. at 610.

The respondents took the petitioner’s generic version of the drug metoclopramide,

and later claim they developed side effects from its use. Id. The underlying products

liability law of Minnesota and Louisiana required a generic manufacturer that “is or

12

should be aware of its product’s danger to label that product in a way that renders it

reasonably safe.” Id.

If the allegations were true, both Minnesota and Louisiana laws demanded

that the generic manufacturer use a safer label than what was used at the time the

drugs were consumed. Id. at 611. Although the branded drug received approval

from the FDA some years earlier to update its label, the Court was fully aware that

the generic manufacturer did not update its label to match that of branded drug’s

subsequent FDA-approved label. Correspondence from Jay P. Lefkowitz to Clerk,

U.S. Supreme Court, PLIVA, Inc. v. Mensing, 564 U.S. 604 (2011).

After examining the Supremacy Clause, this Court found that the clause

“indicates that a court need not look further than ‘the ordinary meanin[g]’ of federal

law, and should not distort federal law to accommodate conflicting state law.”

Mensing, 564 U.S. at 623. This Court made plain the nature and extent of federal

preemption. “[T]he Supremacy Clause therefore suggests that federal law should be

understood to impliedly repeal conflicting state law. Further, the provision suggests

that courts should not strain to find ways to reconcile federal law with seemingly

conflicting state law.” Id. at 622. When the ordinary meaning of the federal statute

inhibits a party from doing what the state law requires, courts should find

preemption. Id. at 623.

In Mensing, this Court thus held that “it was not lawful under federal law for

the manufacturers to do what state law required of them”—update its label

unilaterally. Id. at 617. The federal duty of sameness only requires that the generic

13

drug’s label match the label of the branded drug. Id. at 618. Minnesota and

Louisiana law demanded an updated label. Id. at 611. If, however, the generic

manufacturer changed its label independently, it would have violated the federal

duty of sameness. Id. at 618. The only action the generic manufacturer could take

unilaterally was to ask the FDA for help, which “is not a matter of state law

concern.” Id. at 624. “Thus, it was impossible for the Manufacturers to comply with

both their state-law duty to change the label and their federal law duty to keep the

label the same.” Id. at 618Error! Bookmark not defined..

The Court recognized the unfortunate hand the respondents were dealt. Id.

at 625. If the respondents had taken the branded drug, their suits would not be

preempted. Id. However, since the respondents’ pharmacists gave them the generic

version, federal law preempts their claims. Id. Although it was clear that the FDCA,

as amended by the HWA, treats generic drugs significantly different than branded

drugs, “it is the special and different, regulation of generic drugs that allow the

generic drug market to expand, bringing more quickly and cheaply to the public.”

Id. at 626. Though the Court recognized this disparate treatment, it still

nevertheless held that any state law duty that requires a generic manufacturer to

update its label unilaterally is preempted by federal law. See id. at 623-24.

In Mutual Pharmaceutical Co., Inc. v. Bartlett, this Court expanded its

holding in Mensing and held that state law design-defect claims that require a

generic manufacturer to strengthen its label are preempted by federal law. 133 S.

Ct 2466, 2479 (2013). This Court was asked to decide whether a state law design-

14

defect claims requiring a generic manufacturer to ensure that its products were not

unreasonably dangerous by either changing the drug’s design or changing its label,

were preempted. Id. at 2474. This Court swiftly dispensed with the redesign theory

of liability, finding it would have required the generic manufacturer to violate the

provisions of the FDCA which mandate that generic drugs have the same

ingredients as its branded counterpart. Id. at 2475 (citing 21 U.S.C. §§

355(j)(2)(A)(ii)–(v) and (8)(B); 21 C.F.R. § 320.1(c)). This Court further found that

the state-law duty to strengthen the label to cure the defect was preempted under

Mensing. Id. This Court has all but resolved the question of a generic

manufacturer’s liability under state law, stating, “[a]s [Mensing] made clear, federal

law prevents generic manufacturers from changing their labels.” Id.

A number of courts interpreting the holdings in Mensing and Bartlett have

found that state law claims that turn on the adequacy of labeling are “construed as

failure-to-warn claims,” and are preempted. Lashley v. Pfizer, Inc., 750 F.3d 470,

474 (5th Cir. 2014); Morris v. PLIVA, Inc., 713 F.3d 774, 776 (5th Cir. 2013). The

plain language in Mensing and Bartlett supports this assertion. “Accordingly, we

hold that state-law design-defect claims that turn on the adequacy of a drug’s

warnings are preempted by federal law under [Mensing].” Bartlett, 133 S. Ct. at

2470. No different result may otherwise be reached under the Supremacy Clause.

There is no exception for generic drug manufacturers that fail to

simultaneously update their labels to match those of the branded drugs. This Court

made clear that generic manufacturers receive extra protection from state law

15

liability under the HWA. This Court previously decided in Wyeth v. Levine, that a

brand name manufacturer remains liable under a state law failure-to-warn claim as

the HWA does not prevent the brand name manufacturer from complying with the

state law. 555 U.S. 555, 572-73. Had the respondents in Mensing taken the branded

drug, “Wyeth would control and their lawsuits would not be pre-empted. But

because pharmacists, acting in full accord with state law, substituted

generic metoclopramide instead, federal law pre-empts these lawsuits.” Mensing,

564 U.S. at 625. Viewed in context, this Court established an either-or outcome for

liability purposes: if a branded drug was taken, state law claims are not preempted;

if a generic drug was taken, state law claims are preempted.

As Petitioner clearly took a generic prescription drug, her claims are

preempted in accord with this Court’s holdings in Mensing and Bartlett. As the

record shows, after Petitioner’s doctor prescribed her ropidope, her pharmacist

chose to fill Petitioner’s prescription with the generic form of the drug. See R. at 1.

The decision of Petitioner’s pharmacist to fill her prescription with a generic drug

removed any legal avenue for Petitioner to successfully assert her claims under

Illinoza law.

Petitioner’s design-defect claim can easily be dispensed with to the extent it

alleges a composition defect, as the federal duty of sameness requires a drug to be

identical in composition to its branded counterpart. 21 U.S.C. §§ 355(j)(2)(A)(ii)–(v)

and (8)(B); 21 C.F.R. § 320.1(c). Petitioner has not alleged a composition defect nor

has she alleged that the physical content of Westerly’s ropidope was in any way

16

different than that of Equip®. The Twelfth Circuit correctly held that Petitioner’s

design-defect claim as it relates to labelling should be treated as failure-to-warn

claim, and is therefore preempted under Mensing. See Lashley, 750 F.3d at 474; R.

at 11, 15. As such, all of Petitioner’s claims are preempted.

iii. Illinoza’s “reasonableness” requirement conflicts with the FDCA’s

requirement of “sameness.”

In a preemption analysis, the “purpose of Congress is the ultimate

touchstone.” Medtronic, Inc., v. Lohr, 518 U.S. 470, 485-86 (1996). A “[p]re-emption

analysis requires [courts] to compare federal and state law.” Mensing, 564 U.S. at

611. Here, the facts are clear. At issue is a claim against Westerly, a generic

manufacturer. A generic manufacturer, like Westerly, only has a single duty under

the present scheme of the FDCA: ensure that its drug label is the same as that of

the branded drug. 21 U.S.C. §§ 355(j)(2)(A)(v), (j)(4)(G); 21 C.F.R. §§ 314.94(a)(8),

127(a)(7)). Alternatively, Illinoza’s Products Liability Act § 1998-4(1) is clearly

preempted as it imposes additional compliance duties on generic drug

manufacturers by requiring their label updates to be done reasonably. R. at 3. This

added duty conflicts with a generic drug manufacturer’s sole federal duty of

“sameness.” Westerly is only required to show that it complied with the federal duty

of sameness, not that it acted reasonably. Reasonableness is purely a matter of

state law which has no grounds to operate in this particular federal regulatory

scheme.

Under the IPLA, a generic drug must ensure that its label is “adequate” and

“accurate”. Id. (Which is nearly identical to the duties the HWA requires brand

17

name manufacturers to perform. 21 U.S.C. §§ 355(b)(1), (d)). However, under the

HWA, generic manufacturers cannot be required to conduct clinical trials.

Therefore, a generic drug manufacturer cannot ensure that its label is adequate and

accurate because it does not possess complete safety information. The HWA and the

corresponding FDA regulations were implemented to allow generic drug

manufacturers to bypass stringent procedural requirements that branded drugs

were required to follow. H.R. Rep. No. 98-857, pt. 1, at 14-15 (1984), reprinted in

U.S.C.C.A.N. 2647, 2647. The objective was to distribute their low-cost drugs more

quickly, all to benefit the general public. Id. Any additional duty imposed on generic

manufacturers other than the duty of sameness runs afoul with expressed

Congressional intent.

Moreover, as the Twelfth Circuit held, the IPLA’s reasonableness standard

does not account for the federally mandated process generic drugs must go through

to change their labels. R. at 15. The IPLA does not parallel the FDCA and its

amendments. Instead the ILPA imposes distinct additional duties on generic

manufacturers, despite Congressional action to the contrary. Compare R. at 3 with

H.R. Rep. No. 98-857, pt. 1, at 14-15 (1984), reprinted in U.S.C.C.A.N. 2647, 2647. If

the IPLA merely supplemented the FDCA, an argument could be made that its

provisions were parallel. Such is not the case. Under the IPLA, generic

manufacturers face liability when they comply with the whole of federal law. If a

generic manufacturer, like Westerly, complies with all duties imposed by the FDCA

and updated its label properly, a state jury could still find the generic manufacturer

18

liable if it determined the generic manufacturer’s actions were not reasonable by

state law standards. Under the FDCA, a generic manufacturer may not be required

to accept state law liability for simply complying with federal law. See Drager v.

PLIVA, 741 F.3d 470, 476 (4th Cir. 2014). As a result, the Twelfth Circuit correctly

held that the Illinoza state law duty of reasonableness inevitably conflicts with the

federal duty of sameness, and is preempted. R. at 15.

iv. Petitioner’s claims are further preempted because the duties imposed by

the Third Restatements of Torts, Federal law and the FDA are the

national authorities for drug safety standards.

To the extent that this Court does not find that all of the Petitioner’s claims

are preempted under Mensing and Bartlett, they are preempted due to Illinoza’s

general adherence to the Restatement of the Law, Third, Products Liability

(“Restatement”). Although Illinoza has not explicitly articulated its standard for

reasonableness in the prescription drug labeling context, it customarily follows the

Restatement. R. at 15, n.7. The Restatement defines the failure to warn as follows:

A prescription drug or medical device is not reasonably

safe due to inadequate instructions or warnings if

reasonable instructions or warnings regarding foreseeable

risks of harm are not provided to:

(1) prescribing and other [healthcare] providers who are

in position to reduce the risks of harm in accordance with

the instructions or warnings; or

(2) the patient when the manufacturer knows or has

reason to know the [healthcare] providers will not be in a

position to reduce the risks of harm in accordance with

the instructions or warnings.

19

Restatement of Torts, Third: Products Liability § 6(d) (1998). The Restatement

employs a “reasonableness” test to determine when a failure-to-warn is

unreasonable. Id. The Restatement requires a manufacturer to notify prescribing

physicians when foreseeable risks associated with taking the manufacturer’s drug

are not provided on the drug’s label. As discussed herein, this unilateral action is

preempted under Mensing. “[I]f generic drug manufacturers, but not the brand-

name manufacturer, sent [letters to doctors], that would inaccurately imply a

therapeutic difference between the brand and generic drugs and thus could be

impermissibly ‘misleading.’” Mensing, 564 U.S. at 615.

The Fifth, Sixth, and Eleventh Circuits have all interpreted this holding to

mean that even when a branded drug has updated its label, a generic manufacturer

is barred by the federal duty of sameness from sending a warning letter to

prescribing physicians if the branded drug manufacturer has not done so. Morris,

713 F.3d at 777; Guarino v. Wyeth, LLC, 719 F.3d 1245, 1249 (11th Cir. 2013); In re

Darvocet, 756 F.3d 917, 933 (6th Cir. 2014). “Under federal law, the inquiry is

whether the brand-name manufacturer sent out a warning, not whether the

proposed warning . . . contains substantially similar information as the label.”

Morris, 713 F.3d at 777. All three circuits held that the failure to communicate a

warning to a doctor was preempted, as it was impossible to simultaneously comply

with both the federal duty of sameness and the state law duty to warn. Id.;

Darvocet, 756 F.3d at 933; Guarino, 756 F.3d at 1249.

20

In the present case, GlaxoCline did not submit a letter to doctors or patients

concerning the foreseeable risks associated with taking Equip®. If Westerly had

sent letters to doctors or patients regarding its warning label in order to comply

with Illinoza law, it would have violated the federal duty of “sameness.” Just as the

circuits above, this Court should find that Petitioner’s claims are barred under

“impossibility” preemption.

B. The Illinoza Products Liability Act is an obstacle to achieving

the objectives of the FDCA and Hatch-Waxman Act.

Even if this Court were to hold that it is technically possible to comply

simultaneously with both the FDCA and the IPLA, the IPLA is still preempted

because it acts as an “obstacle” to achieving the intent and objectives of the FDCA.

State law, as here, is an “obstacle” when it acts as an impediment to achieving the

full purposes and objectives of a federal law. See Hines v. Davidowitz, 312 U.S. 52,

67 (1941). Wherein this Court stated, “[a]nd where the federal government, in the

exercise of its superior authority in [a] field, has enacted a complete scheme of

regulation . . . states cannot, inconsistently with the purpose of Congress, conflict or

interfere with, curtail or complement, the federal law, or enforce additional or

auxiliary regulations.” Id. at 66-67 (emphasis added). Accordingly, this Court

should find that the Twelfth Circuit correctly held that imposing the IPLA’s

reasonableness duty on generic manufacturers would frustrate the objectives of the

HWA, and is thereby preempted. R. at 16.

21

i. The objective of the Hatch-Waxman Act is to create a streamlined

Abbreviated New Drug Application process, making low-cost generic

drugs more readily available to the public.

Before Congress enacted the HWA, the process required in order to approve

generic drugs took years to complete. See Laura Robinson, Analysis of Recent

Proposals to Reconfigure Hatch-Waxman, 11 J. Intel. J. Prop. L. 47, 52 (2003). A

quick look at federal legislative history reveals that over the century, Congress

intended prescription drug standards and regulations to be provided under federal

law. See Pure Food and Drugs Act of 1906, Pub. L. No. 59-384, 34 Stat. 768,

repealed by Federal Food, Drug, and Cosmetic Act of 1938, Pub. L. No. 75-717, 52

Stat. 1040. Appalled that the prescription marketplace included a myriad of legal

but dangerous drugs, Congress saw the need for stringent standards that would

apply across the country to protect the public and enacted the FDCA. How did the

Federal Food, Drug, and Cosmetic Act come about?, U.S. FOOD & DRUG

ADMINISTRATION,

https://www.fda.gov/AboutFDA/Transparency/Basics/ucm214416.htm. In the early

1980s, Congress recognized the need to amend the FDCA as much of the public did

not have access to affordable prescription drugs. As a result of the rigorous approval

process for generic drug, branded drugs could maintain higher prices due as a result

of lack of competition in the marketplace. Federal Trade Commission, Generic Drug

Entry Prior to Patent Expiration: An FTC Study 4 (July 2002), available at

https://www.ftc.gov/sites/default/files/documents/reports/generic-drug-entry-prior-

patent-expiration-ftc-study/genericdrugstudy_0.pdf. Under the existing prescription

22

drug laws, generic drugs had to go through the same clinical studies as branded

drugs before gaining FDA approval, and could not began the clinical studies until

the branded drug’s patent expired creating lengthy delays. See e.g. Laura J.

Robinson, Analysis of Recent Proposals to Reconfigure Hatch-Waxman, 11 J. Intel.

Prop. L. 47, 52 (2003). As a result, many Americans were without the financial

means to purchase necessary prescription drugs.

In response to the rising costs of brand name prescription drugs, Congress

enacted the Drug Price Competition and Patent Term Restoration Act of 1984, Pub.

L. No. 98-417, 98 Stat. 1598 (Sept. 24, 1984), commonly known as the Hatch-

Waxman Act, to amend the FDCA and streamline the pathway so that more generic

manufacturers could bring their drugs to market faster. H.R. Rep. No. 98-857, pt. 1,

at 14-15 (1984), reprinted in U.S.C.C.A.N. 2647, 2647. Congress desired generic

manufacturers to be free from the multitude of requirements and standards that

prevented the public from accessible prescription drugs. Id. Under the revised

process, after a branded drug’s patent expire, all the generic manufacturer is

required to do is submit an ANDA. The ANDA had to demonstrate that the generic

version is a replica of a branded drug in all material respects. 21 U.S.C. §

355(j)(2)(A). This provision allows generic manufacturers to avoid proving that its

product is safe and effective because it is the bioequivalent of a branded drug. This

allows generic manufacturers to take advantage of the branded drug’s already

rigorous approval process. 21 U.S.C. § 355(b)(1) et seq.

23

The HWA achieved its goal. Before the Act was implemented, 81% of all

prescriptions were filled by branded drugs. Richard G. Frank, The Ongoing

Regulation of Generic Drugs, 357 New Eng. J. Med. 1993 (2007). Today, 89% of

prescriptions are filled by generic drugs. Generic Drug Savings and Access in the

U.S., Association for Accessible Medicine at 5, https://www.accessiblemeds.org/

sites/default/files/2017-07/2017-AAM-Access-Savings-Report-2017-web2.pdf.

Generic drugs provided patients and consumers savings of $253 billion in 2016, and

$1.67 trillion over the past decade. Id. The savings are especially felt by individuals

on Medicare or Medicaid: “every Medicare enrollee saved an average of $1,883,

while every Medicaid enrollee saved and average of $512.” Id. Also, since Medicare

and Medicaid patients were able to buy generics, the federal government saved

approximately $114.9 billion. Id. (The projected discretionary budgets for the FY

2018 for the Education Department, HUD, and Department of Justice is $106.6

Billion. OFFICE OF MGMT. & BUDGET, A NEW FOUNDATION FOR AMERICAN GREATNESS

(2017),

https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pd

f).

Perhaps the most shocking statistic from the data is that, although generic

drugs account for 89% of the prescriptions filled, they account for only 26% of the

costs. Id. at 33. While branded drugs make up only 11% of the market, they account

for $217.8 billion more in costs. Id. Because of the streamlined regulations and

24

duties, the HWA met its purpose and effect, providing millions of Americans access

to life-saving drugs they would not otherwise be able acquire.

ii. The Illinoza Products Liability Act impedes Hatch-Waxman’s intent to

provide the public with affordable medications.

The IPLA’s duty to make label updates reasonably, stands as an obstacle to

achieving the intent and objectives of the HWA. Initially, as with impossibility

preemption, to conduct obstacle preemption analysis courts must compare the

federal and state law. Mensing, 564 U.S. at 611. The ANDA process required by the

HWA was implemented to allow the public the ability to purchase low-cost generic

drugs earlier. H.R. Rep. No. 98-857, pt. 1, at 14-15 (1984), reprinted in U.S.C.C.A.N.

2647, 2647. Conversely, the purpose of the Illinoza Products Liability Act § 1998-

4(1), is to impose liability on a drug manufacturer when its product is

“unreasonably dangerous due to (a) manufacturing defect, (b) defective design, (c)

inadequate instructions or warnings, or (d) failure to conform to express warranty.”

See R. at 3. If this Court allows generic manufacturers to be sued when they are

unable to update one of their drugs at the same moment as the branded drug, state

law juries have the power to eliminate the crucial benefits created by the HWA.

The only duty Congress intended generic manufacturers to adhere to is the

duty of sameness. See Mensing, 564 U.S. at 613 (citing 21 U.S.C. §§ 355(j)(2)(A)(v),

(j)(4)(G); 21 C.F.R. §§ 314.94(a)(8), 127(a)(7)). If Westerly is required to follow

Illinoza’s reasonableness standard, it would also to be required to adhere to every

state’s reasonableness standard. As soon as a branded drug updated its label,

Westerly would have to ensure that its label update satisfied at least fifty-one (51)

25

standards. As label updates cannot be instantaneous, Westerly and other generic

manufacturers would constantly be stuck in court. Any allegation that a generic

manufacturer did not update its label reasonably or within a reasonable amount of

time would survive motions to dismiss and summary judgment.

As court costs and attorney fees amass upon the generic manufacturers like

Westerly, the burden will inevitably be felt by the consumer and the federal

government when the generic manufacturer is forced to raise its prices in order to

remain viable. The obstacle Congress intended to be removed would breathe new

life. Researchers predict that if generic drug manufacturers become liable for state

law failure-to-warn claims, in 2017, it would cost patients an additional $5.6 billion

a year in 2017 ($8.6 billion by 2024) to receive their medications. Matric Global

Advisors, Estimated Cost of FDA’s Proposed Generic Drug Labeling Rule: Updated

for 2017–2024 (July 2016), http://getmga.com/wp-

content/uploads/2017/02/GenericDrug Labeling.pdf. And since jury standards vary

by jurisdiction coupled with the fact there will be a new jury for each case, Westerly

and other generic manufacturers will never know whether they have complied with

state law when they make a label update.

The addition of innumerable state law requirements would counteract the

very reason Congress enacted the HWA: to make a streamlined, less costly path for

generic manufacturers to efficiently bring their drugs to the public. See R. at 15.

One additional standard would frustrate the intent of the HWA, let alone fifty (50)

or more, and therefore should be preempted.

26

Allowing state law to determine “reasonableness” undermines the FDA’s

discretion to punish drug manufacturers who violate federal laws. The FDA is

clearly in a better position than a jury to determine if a label change by a generic

manufacturer is reasonable. Riegel v. Medtronic, Inc., 552 U.S. 312, 315 (2008);

Buckman, 531 U.S. at 348. This Court agreed when it held that “the FDCA leaves

no doubt that it is the Federal Government rather than private litigants who are

authorized to file suit for noncompliance.” Buckman, 531 U.S. at 349, n.4. This

understanding is furthered by the plain language of the statute: “[A]ll such

proceedings for the enforcement, or to restrain violations, of this chapter shall be by

and in the name of the United States.” 21 U.S.C. § 337(a). Congress gave the FDA

broad enforcement power to regulate the sale and marketing of prescription drugs,

which includes, seizures, injunctions, civil penalties, and criminal sanctions. 21

U.S.C. § 333 et seq.

The United States, on behalf of the FDA, argued that state law claims based

on a violation of the FDCA undermines the enforcement power of the FDA in three

ways: (1) it would “permit juries in different States to reach judgments that differ

from [the] FDA's” about whether generic manufacturers violated federal law, and

could potentially “impose massive liability, when [the] FDA would not find any

misconduct”; (2) it would “distort the penalty scheme established by the statute”

because, although the FDCA grants a wide range of possible remedies,

compensatory relief is not among them; and (3) it would interfere with the FDA’s

discretion to decide which of the statutory remedies to pursue that in the “FDA’s

27

judgment best fit the violation and overall purpose of the Act.” Br. for the United

States as Amicus Curiae in Supp. of Pet’r. at 24, Buckman Co. v. Plaintiffs’ Legal

Comm., 531 U.S. 341 (2001) (No. 98-1768). As there is a strong federal interest in

allowing the FDA to choose for itself when a violation of the FDCA has occurred,

there would be an imminent conflict if state law claims based on a violation of the

FDCA were permitted against generic manufacturers like Westerly. Therefore, as

the Twelfth Circuit appropriately held, allowing claims of this nature would “run

afoul of obstacle preemption.” R. at 15.

C. Petitioner is not permitted to use Illinoza products liability

claims as an end-run around preemption.

Petitioner’s Illinoza products liability claims are nothing more than federal

failure-to-update claims in disguise. If an “essential element” of a state law claim is

premised on federal law, it is preempted. Buckman, 531 U.S. at 353. When a court

conducts a preemption analysis, it looks past the form of the claim, and bases its

holding on the substance of the claim. Id. As Petitioner’s claims rest solely on

whether Westerly violated the federal duty to update its ropidope label, it is

unequivocally an essential element of Petitioner’s state law claims, and therefore

preempted.

i. Petitioner’s attempt to use state claims to enforce Westerly’s compliance

with the FDCA violates this Court’s holding in Buckman.

Petitioner’s claims are preempted by this Court’s holding in Buckman as

Petitioner relies on the federal duty of sameness—not traditional state tort law—as

a basis for her claims. See Buckman, 531 U.S. at 353. In Buckman this Court was

28

called upon to decide whether state law fraud-on-the-FDA claims were impliedly

preempted by federal law. Id. at 348. At issue was the FDCA, as amended by the

Medical Devices Amendments of 1976 (“MDA”), which regulates the sale and

approval process for medical devices. Id. at 343. As such, the MDA established a

clearly defined and comprehensive regulatory scheme to determine when medical

devices are suitable for the marketplace. Id. at 348. The federal scheme gave

exclusive power to the FDA to punish and deter fraud. Id. The FDA must use its

punishment power to balance the statutory objectives of the FDCA. Id.

The respondent alleged that the petitioner made fraudulent representations

to the FDA to gain approval to allow the company to markets its product. Id. at 344.

In Buckman, this Court held that the “existence of these federal enactments is a

critical element” in the respondent’s claims, preempting petitioners state law fraud-

on-the-FDA claims. Id. at 353. The Court reasoned that as the FDA has sole

enforcement authority, “[s[tate-law fraud-on-the-FDA claims inevitably conflict with

the FDA’s responsibility to police fraud consistently with the Administration’s

judgment and objectivities.” Id. at 350, 352. Complying with fifty (50) state tort

regimes would add burdens that were not contemplated by Congress when it

enacted both the FDCA and later, the MDA. Id. at 350. The added compliance

burdens would discourage future applicants from seeking approval because it would

expose the company to a wide range of unpredictable civil liability claims. Id. Even

when the FDA determined that no violation had occurred, state court juries could

still impose liability. Id. at 351.

29

This Court held that the respondent’s claims “existed solely by virtue of the

FDCA” and its amendments, not traditional state tort law, and are therefore

preempted. Id. at 353. The FDCA, as amended by the MDA, required the petitioner

to make representations to the FDA before gaining marketplace approval. Id. at

347. “[T]he relationship between a federal agency and the entity it regulates is

inherently federal in character because the relationship originates from, is governed

by, and terminates according to federal law.” Id. at 347. Therefore, as the

relationship between the FDA and the petitioner was federal in nature, this Court

held that there was no presumption against preemption because policing fraud

against the FDA is not “a field that States have traditionally occupied.” Id.

Essentially, in the present case, Petitioner is asking this Court to hold

Westerly liable for not updating its ropidope label simultaneously to that of Equip®,

which under Buckman is expressly preempted. Similar to the statutory scheme

present in Buckman, the FDCA, as amended by the HWA, enacted a comprehensive

scheme to regulate the sale and marketing of prescription drugs. Mensing, 564 U.S.

at 612. The FDCA grants the FDA sole authority to punish generic manufacturers

when they do not comply with the federal duty of “sameness.” 21 U.S.C. § 337(a); 21

U.S.C. § 333 et seq. Similar to the repercussions listed in Buckman, if state law

failure-to-update claims are allowed generic manufacturers may exit the market for

fear of state law imposed liability, even when the FDA has found no violation.

Further, the additional fifty (50) state tort law regimes would add additional

30

compliance burdens that were not contemplated by Congress, and would thwart the

streamlined intent Congress intended for the HWA to achieve.

Also, comparable to Buckman, Petitioner would not have a claim if the

Hatch-Waxman Act did not exist, therefore her claims exist solely by virtue of the

federal law. Petitioner alleges that Westerly failed to update its ropidope label

within a reasonable time after Equip® updated its label. R. at 15. However, the

whole causal chain that Petitioner bases her claim on is part of a FDCA’s federal

scheme: (1) if the FDCA, as amended by the HWA, did not require GlaxoCline to

submit an sNDA to the FDA for approval when it learned of new potential side

effects of Equip®; (2) if the FDA did not approve the sNDA; and (3) if GlaxoCline did

not update Equip’s® label, the duty of sameness would never have attached to

Westerly’s ropidope label and Petitioner would be without a basis for her failure-to-

update claims. The only allegation Petitoner levied against Westerly it that its

ropidope label was not updated reasonably, which sounds exclusively in federal law.

R. at 5. If the violation of the federal duty of sameness is removed from Petitioner’s

complaint, there is not a single allegation that Westerly violated any Illinoza tort

law duty it owed to the Petitioner. The record is completely devoid of any other

allegation or basis that would give rise to failure-to-warn or design-defect claims.

The federal duty of sameness is not only a critical element in Petitioner’s allegation,

but it is the critical element.

As in Buckman, the relationship between the FDA and Westerly “is

inherently federal in character because the relationship originates from, is governed

31

by, and terminates according to federal law.” Buckman, 531 U.S. at 347. Westerly

submitted its ANDA to the FDA because of federal requirements. See R. at 12. After

GlaxoCline updated its label, Westerly submitted a Changes Being Effected (“CBE”)

notification to the FDA to comply with FDA regulations. See 21 C.F.R. §

314.94(a)(8)(iv). Under Illinoza law, there is not a duty of “sameness” under its tort

regime. The IPLA is concerned with a drug’s safe use and the adequacy of a drug’s

label. R. at 3. The HWA, however, eliminated a generic manufacturer’s duty to

ensure that its drug’s labels were adequate and reasonably safe. As such, Westerly

and other generic manufacturers do not update their labels to match the branded

drug’s label because of state law duties—they do it solely because of the HWA.

Further, Petitioner is sure to argue that when the issue concerns a matter of

health and safety there is a presumption against preemption. However, the federal

government has regulated the sale and manufacturing of prescription drugs for

more than a century. The heart of Petitioner’s claim attempts to regulate the

relationship between Westerly and the FDA, and therefore, there is not a

presumption against preemption. See Buckman, 531 U.S. at 347; Hines v.

Davidowitz, 312 U.S. 52, 66 (1941). Conversely, as the relationship is inherently

federal in nature, it creates a presumption of preemption. Buckman, 531 U.S. at

347; Hines, 312 U.S. at 66.

For Petitioner to assert a plausible state law claim, the state law duty must

exist totally apart from the federal framework. See Loreto v. Procter & Gamble Co.,

737 F. Supp. 2d 909 (S.D. Ohio 2010). Petitioner’s claims fail this test. The claims

32

are entirely dependent on the federal scheme. Therefore, as Petitioner’s claims run

afoul of this Court’s holding in Buckman, they are preempted.

ii. The Fifth Circuit correctly held that a failure-to-update claim “sounds

exclusively in federal law.”

The Fifth Circuit held in Morris v. PLIVA, that a state law failure-to-warn

claim based on federal labelling obligations, “sounds exclusively in federal (not

state) law, and is preempted.” 713 F.3d 774, 778 (5th Cir. 2013). The Fifth Circuit

reaffirmed its position in Lashley v. Pfizer, Inc., 750 F.3d 470 (5th Cir. 2014), and

Johnson v. Teva Pharmaceuticals USA, Inc., 758 F.3d 605 (5th Cir. 2014).

Petitioner’s claims are indistinguishable from Morris, Lashley, and Teva, and

therefore should be preempted.

Identical to the present case, the plaintiffs in the above cases sued generic

manufacturers under state law products liability theories. Morris, 713 F.3d at 775-

76; Lashley, 750 F.3d at 472-73; Johnson, 758 F.3d at 610. The plaintiffs based their

claims on the generic manufacturer’s failure to update their drugs’ labels as

required by the HWA. Morris, 713 F.3d at 776; Lashley, 750 F.3d at 472-73;

Johnson, 758 F.3d at 610. Although, the plaintiffs couched their claims in state tort

law, the Fifth Circuit looked past the form to the substance of the claims and held

that failure-to-update claims are exclusively in the domain of federal law, and are

preempted. Morris, 713 F.3d at 777; Lashley, 750 F.3d at 475; Johnson, 758 F.3d at

472-73.

Likewise, although Petitioner couches her claims in state law theories of

liability, the substance of her claims and the only allegation made in her pleadings

33

is that Westerly failed to update its label as required by the federal duty of

sameness. Petitioner’s claims only sound in federal law, and therefore just as the

Fifth Circuit held, her claims are preempted.

Notwithstanding the holding by the Fifth Circuit, the Sixth Circuit held that

failure-to-update claims were not preempted by federal law. Fulgenzi v. PLIVA, 711

F.3d 578 (6th Cir. 2013). Although, the Sixth Circuit recognized that the plaintiff’s

claims could be an attempt “to enforce a federal-law violation through state

litigation,” the court held that the plaintiff’s suit was not “premised on [a] violation

of federal law, but rather on an independent state duty.” Id. at 587. The Fulgenzi

court’s attempt to divorce the federal duty of sameness from the plaintiff’s state law

claims is based on flawed reasoning. First, the court states that the federal duty of

sameness is not a “critical element” in the plaintiff’s claims. Id. A jury would not

need to know that a generic manufacturer breached the federal duty of sameness for

it to be liable under a plaintiff’s state law claims. Id. However, the court then

admits that the generic manufacturer’s “violation of the federal duty of sameness is

essential to [the plaintiff’s] case—but only to avoid preemption under Mensing. Id.

The court seems to indicate that if the federal duty of sameness had not been

violated, the plaintiff’s claims would have been preempted under Mensing. This

statement clearly shows that the plaintiff’s claims rested on the duty of sameness,

for without it the claim would be preempted. How could it be essential for the

plaintiff to base her claim on the violation of the federal of sameness, but the same

duty is not a critical element in her claim? This holding defies all logic. If it’s

34

essential to bring the claim, the federal duty of sameness is obviously a critical

element of the claim.

Further, the court again contradicts itself when it stated that the generic

manufacturer’s alleged state tort law breach, is based on the “same act”—not

updating its label as required by federal law—"but the legal basis is different.” Id.

This statement shows that state tort law liability for failure-to warn is based on,

and not independent from, the generic manufacturer’s failure to update its label.

The Fulgenzi court had previously admitted that the duty to update a generic label

is based on a federal duty. Id. at 580. As in the present case, neither the Fulgenzi

court nor the plaintiff, alleged any breach of a state law duty not based on the

federal duty of sameness. The court indicated that the duty to update a generic

label is an element of plaintiff’s failure-to-warn claim. Id. at 587. But as argued

above, and as stated by the Fulgenzi court itself, the duty of sameness is a federal

duty. Therefore, as the reasoning for the holding in Fulgenzi is flawed, it should not

be followed by this Court.

D. Westerly complied with all statutory and regulatory duties to

update its ropidope label.

i. Westerly is entitled to safe harbor because it satisfied all label update

requirements prescribed by the FDCA and Hatch-Waxman Act.

Westerly should not be held liable under Illinoza state law since it complied

with all applicable federal duties to update its ropidope label. In re Reglan Litig.,

142 A.3d 725, 728 (N.J. 2016). The HWA imposes a single duty on generic

manufacturers: ensure that your drug’s label matches the branded drug’s label. 21

35

U.S.C. §§ 355(j)(2)(A)(v), (j)(4)(G); 21 C.F.R. §§ 314.94(a)(8), 127(a)(7)). Westerly

complied. R. at 15. Although the FDA has a vast array of enforcement tools it could

have levied against Westerly, the FDA refused to impose any sanctions or penalties

against Westerly. 21 U.S.C. § 333. Neither the FDCA nor the FDA has imposed a

timeframe for generic manufacturers to update their drug’s label after its branded

counterpart updated its label. In fact, the FDA rejected a thirty-day (30) deadline

for generic manufacturers to update their labels during the notice and comment

period for regulations that implemented the HWA. See Abbreviated New Drug

Application Regulations – Final Rule, 57 Fed. Reg. 17950, *17961 (Apr. 28, 1992).

The FDA has only offered nonbinding guidance. Id. The FDA simply advised that

updates should be done at the earliest time possible. Id.

Further, the FDA does not have mandated procedures for notifying generic

manufacturers that the brand-name manufacturer updated its product’s label. A

generic manufacturer must thoroughly examine the FDA’s website to find out about

label updates. See FDA Guidance for Industry, “Revising ANDA Labeling Following

Revision of the RLD Labeling,” p. 1-2 (May 2000). As Westerly has not been

sanctioned by the FDA for failing to update its ropidope label, the logical conclusion

is that the FDA thought Westerly’s update complied with the laws and regulations

at issue.

Petitioner is likely to argue that the IPLA does not conflict with the FDCA,

but merely bolsters it. Yet how can state tort law bolster federal prescription drug

law if it imposes liability for complying with the federal law it is allegedly

36

bolstering? Simply put, it can’t. Petitioner is attempting to use state law tort duties

as a means to impose a deadline on the federal duty of sameness. The Supremacy

Clause prevents this action. Petitioner’s claims are preempted.

ii. Westerly’s actions were “reasonable” under Illinoza Products Liability

Law.

In the event that this Court finds that Petitioner’s claims are not preempted,

her claims should still be dismissed as Westerly’s actions were reasonable. It is

clearly impossible for a generic manufacturer to update its label simultaneously

with a branded drug—some lag time will occur. Reglan, 142 A.3d at 741. The FDA

also recognized that generic labels cannot be updated immediately and further

stated that changes to a printed label “requires more time.” See Division of Generic

Drugs, Policy, and Procedure Guide 8-89, Changes in the Labeling of ANDs

Subsequent to Revision of Innovator Labeling, Aug. 21 1989, July 2013 FDA

Guidance at p. 13. In the present case Westerly had to learn of Equip’s® update,

then prepare, produce, and implement all new labels for its version of ropidope.

Westerly would then have had to notify the FDA of its changes. Then Westerly must

pack the drugs and wait for pharmacies to place new orders for the drug. As under

Mensing, Westerly is prohibited from sending letter to doctors alerting them that a

new label is available for its drug. 564 U.S. at 615.

There are additional practical concerns that Westerly must consider before

updating any label. For example, a brand name drug may have patented a portion

of its label. See Julie Dohm, Expanding the Scope of the Hatch-Waxman Act's

Patent Carve-Out Exception to the Identical Drug Labeling Requirement: Closing

37

the Patent Litigation Loophole, 156 U. Pa. L. Rev. 151 (2007). If they had, the

generic drug would face patent infringement claims if it went ahead and updated its

generic label. Id. at 152. To prevent this outcome, the generic manufacturer would

have to petition the FDA to allow it not to include the patented portion of label—

which would naturally delay the update of the label.

A generic manufacturer must also consider financial and moral obligations. If

the updated label contains notifications of serious side effects, doctors may be

hesitant to proscribe the drug. The generic manufacturer would have to study the

brand name manufacturer’s findings and determine if it wanted to continue to sell

the drug anymore. Also, if the drug can cause an abundance of serious side effects,

it may expose the generic manufacturer to additional design defect claims. Finally,

although the FDA has approved branded drug’s content and labels, a generic

manufacturer may not wish to manufacture drugs that cause certain side effects.

All of these justifiable reasons take time to consider. As such, six months is clearly a

reasonable amount of time to give a generic manufacturer to update its label to

match its branded counterpart. Therefore, Petitioner’s IPLA claims fail because

Westerly’s actions were reasonable.

II. ATTORNEY’S FEES ARE AWARDABLE COSTS UNDER FED. R. CIV. P.

41(d).

This Court has long recognized that federal courts enjoy “inherent powers” to

effect efficient final determinations of the cases before them. Goodyear Tire &

Rubber Co. v. Haeger, 137 S. Ct. 1178, 1186 (2017). Included within that power is

the capacity to administer penalties when parties “abuse[ ] the judicial process.” Id.

38

(quoting Chambers v. NASCO, Inc., 501 U.S. 32, 44-45 (1991)). Although Congress

can limit the court’s use of its inherent power through statute and rule, the

applicable rules “build upon and expand the equitable doctrine permitting the court

to award expenses, including attorney’s fees, to a litigant whose opponent acts in

bad faith in instituting or conducting litigation.” Chambers, 501 U.S. at 48 (quoting

the Advisory Committee’s Notes on the 1983 Amendment to Rule 11, 28 U.S.C.App.,

p. 575). However, when the rules provide an adequate channel to sanction

misconduct the court should “rely on the [r]ules rather than the inherent power.” Id.

at 50.

At issue is not whether the Court can award attorney’s fees to Respondent,

for it plainly has the inherent power to do so. Rather, the question before the Court

is whether Fed. R. Civ. P. 41(d) (“Rule 41(d)”) provides an independent mechanism

for such an award. The Circuit Courts are split on the issue. Westerly urges the

Court to adopt the position of the Fourth and Seventh Circuits, which holds that

attorney’s fees are awardable under Rule 41(d).

A. The Court should adopt the holdings of the Fourth and Seventh

Circuits that attorney’s fees are awardable costs under Rule

41(d).

The “American Rule” governing the award of attorney’s fees is the “bedrock

principle . . . [that] [e]ach litigant pays his own attorney’s fees, win or lose, unless a

statute or contract provides otherwise.” Hardt v. Reliance Standard Life Ins. Co.,

560 U.S. 242, 252-53 (2010). Courts may also award attorney’s fees when a party

disobeys a court order or acts “in bad faith, vexatiously, wantonly, or for oppressive

39

reasons.” Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 259

(1975). Such awards are “unquestionably assertions of inherent power in the courts

to allow attorneys’ fees in particular situations, unless forbidden by Congress.” Id.

i. The Fourth and Seventh Circuits have persuasively held that attorney’s

fees are awardable based on abusive conduct or when permitted by an

underlying statute.

In Andrews v. America’s Living Centers, LLC, the Fourth Circuit held that

Rule 41(d) permits the award of attorney’s fees as a component of costs when

authorized by the underlying statute, or when the plaintiff’s conduct was

“undertaken in bad faith, vexatiously, wantonly, or for oppressive reasons.” 827

F.3d 306, 314 (4th Cir. 2016).

The facts in Andrews closely resemble the facts here. The petitioner in

Andrews filed suit against the respondents under the Fair Labor Standards Act. Id.

at 308. After the respondents moved to dismiss under Fed. R. Civ. P. 12(b)(6), the

petitioner responded, incorporating in her response a motion to amend her

complaint. Id. The magistrate judge applied local rules, prohibiting inclusion of a

motion within a response to another motion. Id. The magistrate noted that the

petitioner had missed the deadline to amend the complaint without leave of the

court or written consent from the respondents. Id.

The petitioner filed a motion to amend her complaint but, facing the

possibility of dismissal under Fed. R. Civ. P. 12(b)(6) if her motion to amend was

denied, she voluntarily withdrew her complaint under Fed. R. Civ. P. 41(a)(1). Id. at

308-09.

40

As in the case at bar, the petitioner in Andrews filed yet another lawsuit after

dismissing the first. Upon the petitioner’s filing of a second complaint, the

respondents filed a motion to stay the proceedings and for costs under Rule 41(d)—

including $25,437.75 for “attorneys’ fees and other expenses . . . incurred in

defending the first action.” Id. at 309. The magistrate awarded fees to the

respondents and the district court affirmed, “finding that an award of attorneys’

fees was proper under Rule 41(d) and that [petitioner’s] conduct amounted to

vexatious litigation, for which fees could be recovered.” Id.

The Fourth Circuit examined Rule 41(d) and found that it “does not explicitly

permit attorneys [sic] fees.” Id. The court recognized that the purpose of Rule 41(d)

is “to serve as a deterrent to forum shopping and vexatious litigation.” Id. (quoting

Simeone v. First Bank Nat’l Ass’n, 971 F.2d 103, 108 (8th Cir. 1992)). When the

court looked to other jurisdictions, it found a split among its sister circuits. Id. at

310. The Eighth and Tenth Circuits allowed attorney’s fees as awardable costs

under Rule 41(d)—but did so without explanation. Id. The Sixth Circuit excluded

attorney’s fees from awardable costs because Rule 41(d) does not expressly

authorize such recovery. Id. The Seventh Circuit took the middle ground, holding

that Rule 41(d) allows the inclusion of attorney’s fees as costs when the original

claim is based on a statute that permits such recovery. Id. The Seventh Circuit

added that attorney’s fees are also recoverable when the plaintiff “acted in bad

faith, vexatiously, wantonly, or for oppressive reasons.” Id. at 311 (quoting F.D.

Rich Co., Inc. v. United States ex rel. Indus. Lumber Co., 417 U.S. 116 (1974)).

41

The Fourth Circuit joined with the Seventh Circuit, holding that attorney’s

fees are awardable under Rule 41(d) when justified by a plaintiff’s misconduct or

when the statute underlying the original claim provides for attorney’s fees. Id. The

court reasoned that its holding “[struck] the right balance between upholding the

American Rule and furthering the goal of Rule 41(d) to deter forum shopping and

vexatious litigation on the part of the plaintiff.” Id.

This Court should affirm the interpretation of Rule 41(d) as adopted by the

Fourth and Seventh Circuits. First, the purpose of Rule 41(d) is “to serve as a

deterrent to forum shopping and vexatious litigation.” Id. at 309 (quoting Simeone,

971 F.2d at 108). Bare awards of costs would likely have little or no chilling effect

on such litigation. However, sanctions like the award of attorney’s fees for such

misconduct would give the Rule “teeth” to carry out those aims. Id.

Second, attorney’s fees are awardable where, as here, the underlying statute

upon which the original action is based permits such an award. Id. at 310-11; see

Marek v. Chesny, 473 U.S. 1, 9 (1985) (finding attorney’s fees awardable under Fed.

R. Civ. P. 68 when the underlying statute permits). When a federal court holds

jurisdiction over a claim based on diversity status, it must apply state substantive

law. Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938). The federal court “must

respect the definition of state-created rights and obligation by the state courts.”

Byrd v. Blue Ridge Rural Elec. Co-op., Inc., 356 U.S. 525, 535 (1958). Thus, federal

courts are thereby sometimes required “to apply state law that, in other contexts,

might be deemed matters of procedure.” Chieftain Royalty Company v. Enervest

42

Energy Institutional Fund XIII-A, L.P., 861 F.3d 1182, 1187 (10th Cir. 2017). One of

the primary aims of the Erie Doctrine is to discourage forum-shopping. Id. Thus,

“when there is no contrary federal rule of civil procedure” the federal courts are

required to “conform . . . to state rules even of form and mode.” Id.

Rule 41(d) does not provide any conflicting language restricting the award of

attorney’s fees as a component of costs. As such, attorney’s fees must be awardable

under Rule 41(d) when state law defines costs as including attorney’s fees. Andrews,

827 F.3d at 310.

ii. This Court should reject the holding of the Sixth Circuit in Rogers v.

Wal-Mart, as the circuit court erroneously relied on the absence of an

express award of attorney fees in Rule 41(d).

An absence of an express award of attorney’s fees in Rule 41(d) does not

preclude the award of such fees. In a contrary decision, the Sixth Circuit in Rogers

v. Wal-Mart Stores, Inc. held that attorney’s fees are not awardable under Rule

41(d) because “the rule does not explicitly provide for them.” 230 F.3d 868, 874 (6th

Cir. 2000). The plaintiff in that case filed a negligence claim against defendant

alleging just less than $1 million in damages. Id. at 870. The defendant timely

removed the action to federal court based on diversity with an amount in

controversy exceeding $75,000. Id. Almost one year later, the parties stipulated to

dismissal and the court dismissed the case without prejudice. Id.

As in Andrews v. America’s Living Centers, LLC, several months after the

dismissal, the plaintiff filed a second complaint against defendant based on the

same underlying facts. Id. In an apparent attempt to avoid diversity, damages in

43

this second action were pled as being less than $75,000. Id. The defendant

thereafter moved for an award of costs and fees under Rule 41(d) based on the

previously-dismissed claim. Id.

The Rogers court indicated that Congress usually included express language

when it intended for attorney’s fees to be awardable and did not want to “conflate”

costs and such fees. Id. Despite the absence of an explicit grant to award fees in

Rule 41(d), the court recognized that attorney’s fees may be awardable if an intent

to do so is manifested in the statute or rule. Id. at 875. Although the Sixth Circuit

acknowledged that Rule 41(d) was not clear on the issue, noting that “several other

courts allowed such awards,” the court found the lack of express language most

persuasive, declining to award attorney’s fees. Id.

This Court should adopt the holding from the Fourth Circuit in Andrews and

in doing so, reject the Sixth Circuit’s holding in Rogers as flawed. The Sixth

Circuit’s requirement that a rule, regulation, or statute contain express language

when awarding attorney’s fees is contradicted throughout its decision. First, the

court acknowledges that Fed. R. Civ. P. 41(a)(2) allows such an award without the

allegedly-required language. Rogers, 230 F.3d at 875. Fed. R. Civ. P. 41(a)(2)

permits a plaintiff to dismiss an action by court order “on terms that the court

considers proper.” The rule’s goal is to “allow voluntary dismissals unless the

parties will be unfairly prejudiced.” Davis v. USX Corp., 819 F.2d 1270, 1273 (4th

Cir. 1987). A dismissal under Rule 41(a)(2) requires a court order which grants the

court license to impose conditions to balance against possible prejudice against

44

defendants. Id. Such conditions are not limited to “payment of costs, expenses and

fees” but may include “the imposition of other terms designed to reduce

inconvenience to the defendant.” LeCompte v. Mr. Chip, 528 F.2d 601, 603 (5th Cir.

1976). Thus, contrary to its holding, the Sixth Circuit’s interpretation of Rule

41(a)(2) permits the imposition of attorney’s fees without reliance upon a

requirement of express language.

Second, the Sixth Circuit’s reliance on express language when facing

ambiguity is misplaced given this Court’s decision in Marek v. Chesny. In Marek,

this Court held that “all costs properly awardable in an action are to be considered

within the scope of Rule 68 ‘costs.’” 473 U.S. 1, 9 (1985). This Court stated that

because Congress was cognizant of the differing uses of “costs,” the absence of a

definition was likely not accidental. Id. at 8-9. The Marek Court found that the

authors of the rule were “fully aware” of the court’s ability to awards attorney’s fees.

Id. at 8. The Court reasoned that “the most reasonable inference is that the term

‘costs’ in Rule 68 was intended to refer to all costs properly awardable under the

relevant substantive statute or authority.” Id. at 9 (emphasis added). The language

in Rule 41(d) mirrors that of Rule 68 by including that the court may order “the

plaintiff to pay all or part of the costs.” Fed. R. Civ. P. 41(d)(1) (emphasis added).

Thus, an interpretation that Rule 41(d) includes attorney’s fees as awardable costs

is consistent with this Court’s decision in Marek.

Coupled with the directive in Fed. R. Civ. P. 1 that the rules “should be

construed, administered, and employed by the court and the parties to secure the

45

just, speedy, and inexpensive determination of every action and proceeding,” this

Court should reasonably conclude that Rule 41(d) permits the award of attorney’s

fees.

iii. The Sixth Circuit’s holding in Rogers v. Wal-Mart Stores, Inc. is

distinguishable from the present case.

The underlying facts in Rogers are markedly different from the facts in the

present case because the defendant’s efforts combating the first claim were entirely

applicable to the second claim. Despite the plaintiff’s attempts to cap her claimed

damages at $75,000, the Sixth Circuit held that applicable “state law would have

allowed plaintiff to recover damages in excess of what she prayed for . . . given her

previous demands and representations.” 230 F.3d at 873. Thus, the defendant was

exposed to the same amount of possible damages in both actions. However, the

plaintiff filed both her first and second claim in Tennessee state court. Id. at 870. As

such, the state and federal forums involved in the dispute did not change.

In the present case, Petitioner filed her initial claim in the United States

District Court for the Western District of East Texas. R. at 5. After voluntarily

dismissing her action she filed her second claim in Illinoza state court—a change

from both federal to state venue and from one circuit to another. R. at 1. As such,

Respondent’s legal efforts defending the first claim were not wholly transferrable to

the second. Thus, Petitioner’s actions and the effects on Respondent are materially

distinct from Rogers.

iv. Awarding attorney’s fees under Rule 41(d) would only chill bad faith

litigation.

46

The public policy behind the American Rule is to “ensure that access to the

courts be not effectively denied those of moderate means.” Farmer v. Arabian Am.

Oil Co., 379 U.S. 227, 237 (1964) (Goldberg, J., concurring) (quoting Farmer v.

Arabian Am. Oil Co., 324 F.2d 359, 365 (2nd Cir. 1963) (Smith, J., dissenting)).

However, awarding attorney’s fees in cases where a party has acted in bad faith

would only discourage already unwanted litigation. See Hutchison v. Staton, 994

F.2d 1076, 1081 (4th Cir. 1993) (“When a court imposes fees on a plaintiff who has

pressed a ‘frivolous’ claim, it chills nothing that is worth encouraging.”). Given that

the purpose of Rule 41(d) is to deter “forum shopping and vexatious litigation,”

awarding attorney’s fees in such cases accomplishes both the goals of the Rule and

serves public policy by chilling undesirable action. Simeone v. First Bank Nat’l

Ass’n, 971 F.2d 103, 108 (8th Cir. 1992).

B. The Twelfth Circuit properly awarded attorney’s fees to

Westerly.

Applying the Fourth and Seventh Circuit’s interpretation of Rule 41(d),

Petitioner’s misconduct and the language included in the underlying statute of her

original claim justify an award of attorney’s fees. When assigning sanctions such as

the award of attorney’s fees, the court’s penalty must be compensatory and not

punitive in nature. Goodyear Tire & Rubber Co. v. Haeger, 137 S. Ct. 1178, 1186

(2017). Thus, courts must only do so to the extent that it makes the wronged party

whole. Id. This Court’s test for “using its inherent sanctioning authority (and civil

procedures) [is] to establish a causal link—between the litigant’s misbehavior and

legal fees paid by the opposing party.” Id. (parenthetical in original). The proper

47

test for this type of causality is the “but-for” test: whether the injured party would

have incurred the costs but-for the abusive party’s misconduct. Id. at 1187.

Petitioner’s misconduct is clear: following the Fifth Circuit’s adverse, binding

decision in Morris v. PLIVA, Inc., she voluntarily dismissed her action only to file a

virtually identical claim beyond the reach of the Morris precedent. R. at 5. Even the

Sixth Circuit in Rogers acknowledged that Rule 41(d) was designed to prevent

forum shopping “especially by plaintiffs who have suffered setbacks in one court and

dismiss to try their luck somewhere else.” 230 F.3d 868, 874 (quoting Robinson v.

Neslon, No. 98-10802-MLW, 1999 WL 95720, at *2 (D. Mass. Feb. 18, 1999). Equally

as clear, the state law that served as the basis for Petitioner’s original claim

includes attorney’s fees as a component of costs. E. Tex. Code Ann. § 12-12-12.

i. Petitioner’s vexatious litigation and forum shopping justify the award

of attorney’s fees.

Petitioner’s blatant attempt to escape the adverse confines of the Morris

decision clearly meets the definition of “forum shopping” as discussed by the Sixth

Circuit in Rogers. Petitioner suffered a setback, dismissed her claim, and refiled in

another jurisdiction to “try [her] luck somewhere else.” Rogers, 230 F.3d at 874.

Thus, Respondent would not have borne the costs of defending against Petitioner’s

first claim but-for her misconduct. Further, the very goal of forum shopping is to

alter the legal playing field so that arguments applying in one jurisdiction do not

apply in another. Finally, Respondent’s claim for an award of legal fees is not moot

since the legal work to defend against Petitioner’s first action are wholly

inapplicable to the second.

48

Further, this Court has held that a finding of vexatious litigation does not

require a party’s “subjective bad faith . . . [as] a necessary prerequisite to a fee

award against him.” Christianburg Garment Co. v. Equal Employment Opportunity

Commission, 434 U.S. 412, 421 (1978). Even so, Petitioner’s conspicuous forum

shopping meets this higher threshold for awarding attorney’s fees.

ii. East Texas state law expressly permits the award of attorney’s fees as a

component of costs.

Petitioner’s initial claim rested on state law that clearly defines attorney’s

fees as awardable costs. Rule 41(d) does not contain any language limiting the

award of attorney’s fees as costs. As such, state law governs the issue. The original

Complaint was based on the East Texas Products Liability Law which is subject to

E. Tex. Code Ann. § 12-12-12. That Section includes language establishing

attorney’s fees as “part of the costs of the action.” E. Tex. Code Ann. § 12-12-12.

Thus, state law provides a definitive answer that attorney’s fees are a component of

costs in this action.

Petitioner will likely claim that attorney’s fees are not awardable because the

applicable state law does not expressly allow defendants to recover costs. Such an

argument would be misplaced. The Court does not need to look to East Texas state

law to find that costs are awardable to a defendant—Rule 41(d) firmly establishes

that courts are permitted to award costs to defendants. Instead, E. Tex. Code Ann. §

12-12-12 provides the Court an affirmative answer to whether relevant state law

includes attorney’s fees as an awardable component of costs.

49

CONCLUSION

Based on the foregoing arguments and authorities, the Court should affirm

the Twelfth Circuit’s dismissal of the Complaint as preempted, the award of $876.52

in costs to Westerly, and the holding that attorney’s fees are awardable costs under

Rule 41(d).

Respectfully Submitted,

______________________________

Team 2602

Counsel for Respondents

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APPENDIX A

East Texas Code Annotated § 12-12-12

(a) In actions for personal injury, where plaintiff’s claim for damages exceeds

twenty-five thousand dollars ($25,000) and includes a written demand for

fees, there shall be taxed and allowed to the plaintiff, as a part of the costs of

the action, a reasonable amount to be fixed by the court as attorney’s fees.