In the world of pharmaceutical litigation, a familiar strategy by plaintiffs is to target a local pharmacy as the diversity-destroying pawn to be tossed into the path of the drug manufacturer's removal efforts. Plaintiffs in these circumstances rarely intend in good faith to pursue the local pharmacy. Rather, they usually discard the pharmacy once removal has been deterred. Some plaintiffs will even tip their hand and candidly propose to dismiss the pharmacy in exchange for the drug manufacturer's stipulation to forgo removal.
Drug manufacturers facing this "hostage" situation can seek some refuge in the rule of fraudulent joinder. The rule provides: "[O]ne exception to the requirement of complete diversity is where a non-diverse defendant has been 'fraudulently joined,'" in which case the court disregards that defendant and recognizes complete diversity. Morris v. Princess Cruises, Inc., 236 F.3d 1061, 1067 (9th Cir. 2000). Fraudulent joinder exists "[i]f the plaintiff fails to state a cause of action against a resident defendant, and the failure is obvious according to the settled rules of the state." McCabe v. General Foods Corp., 811 F.2d 1336, 1339 (9th Cir. 1987).
Though establishing an "obvious failure" of the claims against the pharmacy can seem like a daunting task at first glance, drug manufacturers should be aware of how much firepower the fraudulent joinder rule packs. First, the "defendant seeking removal is entitled to present the facts showing the joinder to be fraudulent." McCabe, 811 F.2d at 1339 (citation omitted). "'[F]raudulent joinder claims may be resolved by 'piercing the pleadings' and considering summary judgment-type evidence such as affidavits and deposition testimony.'" Morris, 236 F.3d at 1068 (quoting Cavallini v. State Farm Mutual Auto Ins. Co., 44 F.3d 256, 263 (5th Cir. 1995). Thus, drug manufacturers have far more latitude to make their case than they would in a 12(b)(6) motion.
Second, courts are cognizant of the fact that non-diverse defendants often are named merely for tactical reasons. As the court in Ayoub v. Baggett, 820 F. Supp. 298, 300 (S.D. Tex. 1993) stated: "[G]iven the relative financial positions of most companies versus their employees, the only time an employee is going to be sued is when it serves a tactical legal purpose, like defeating diversity."
Third, and most importantly, courts have made good use of the fraudulent joinder rule in numerous pharmaceutical cases. See, e.g., In re Rezulin Products Liability Litigation, 133 F. Supp. 2d 272, 289 (S.D.N.Y. 2001) (local pharmacies and salespeople held fraudulently joined in prescription drug action against manufacturers); Negrin v. Alza Corp., 1999 WL 144507 at *5 (S.D.N.Y. Mar. 17, 1999) (local pharmacy held fraudulently joined in prescription drug case against manufacturer); Strickland v. Brown Morris Pharmacy, Inc., 1996 WL 537736 at *2 (E.D. La. Sept. 20, 1996) (local pharmacy held fraudulently joined in over-the-counter drug case against manufacturer); see also Johnson v. Parke-Davis, 114 F. Supp. 2d 522, 525–26 (S.D. Miss. 2000) (resident sales representatives held fraudulently joined in action against prescription drug manufacturer).
As these cases demonstrate, the key to negating the claims against the local pharmacy lies in the learned intermediary doctrine, the foundation of current drug and medical device products liability law in most jurisdictions. The learned intermediary doctrine provides that the duty to warn about a prescription drug's known and reasonably scientifically knowable medical risks runs from the manufacturer to the physician (the "learned intermediary") and then, from the physician to the patient. See Brown v. Superior Court, 44 Cal. 3d 1049, 1061–62 n.9 (1988); Davis v. Wyeth Laboratories, Inc., 399 F.2d 121, 130 (9th Cir. 1968). Thus, it is the physicians who, with their medical training and knowledge of the patient's condition, prescribe the appropriate drug treatment and communicate the relevant risks to the patient. See Brown, 44 Cal. 3d at 1061–62. Conversely, the patient looks to the physician, not the manufacturer, for this function. Id.
Plaintiffs intent on destroying diversity tend to sweep the local pharmacy into causes of action that inherently are directed at the drug manufacturer. Thus, the pharmacy often will face the same claims for strict liability, negligence, and fraud that are premised on a general duty to warn about a drug's known or reasonably scientifically knowable risks. However, this fundamentally goes beyond the pharmacist's ordinary, and, in many jurisdictions, statutory, duty to correctly fill a prescription and provide certain limited warnings such as the dangers of alcohol consumption or motor vehicle operation while taking certain medications.
Here is the point of vulnerability where drug manufacturers can aim their fraudulent joinder argument. Though a general duty to warn is well established as to the drug manufacturer, such duty does not exist on the part of the pharmacist because it is irreconcilable with the learned intermediary doctrine. Consequently, courts in learned intermediary jurisdictions have consistently rejected pharmacist liability premised on a general duty to warn.
In re Rezulin, 133 F. Supp. 2d at 289, is a prime example. In a blatant attempt to destroy diversity jurisdiction, the Rezulin plaintiffs joined local pharmacies on the theory that they failed to warn about the dangers of the diabetes drug, Rezulin. The court canvassed decisions from jurisdictions across the country and concluded that the alleged duty to warn was inconsistent with the learned intermediary doctrine and should be rejected. See id. at 288–99. As the court there stated: "Almost every state confronted with the question has declined to impose on pharmacists a duty to warn of intrinsic dangers of prescription drugs for precisely this reason." Id. See also id. at 289 nn.55, 56 (surveys of jurisdictions rejecting pharmacists' duty to warn, including Illinois, Texas, Georgia, Pennsylvania, Kansas, Washington, Michigan, Indiana, and Florida); Negrin, 1999 WL 144507 at *5 (pharmacy held fraudulently joined in prescription drug case; motion for remand denied); Strickland, 1996 W.L. 537736 at *2 (pharmacy held fraudulently joined in action involving over-the-counter medication; motion for remand denied).
Other courts similarly have noted the virtual universal rejection of a general duty to warn on the pharmacist. See McKee, 113 Wash. 2d at 712 ("A majority of other jurisdictions that have addressed the issue have likewise refused to impose a duty to warn on the pharmacist"); Morgan, 30 S.W.3d at 461 ("A majority of courts considering this question have held that a pharmacist has no such duty when the prescription is proper on its face and neither the physician nor the manufacturer has required that the pharmacist give the customer any warning").
There are several compelling reasons why a general duty to warn on the pharmacist cannot coexist with the learned intermediary doctrine. First, imposing a general duty to warn on the pharmacist would undermine the physician-patient relationship by putting the pharmacist in a position to second-guess the physician's learned medical judgment. See Jones, 602 F. Supp. at 402–02 ("[p]lacing these duties to warn on the pharmacist would only serve to second guess every prescription a doctor orders in an attempt to escape service").
As courts recognize, this ultimately would harm the patient's medical treatment. "To impose a duty to warn on the pharmacist . . . would be to place the pharmacist between the physician who, having prescribed the drug presumably knows the patient's present condition as well as his or her complete medical history, and the patient. Such interference in the patient-physician relationship can only do more harm than good." Ramirez, 628 F. Supp. at 88.
Further, as the Washington Supreme Court stated in McKee, 113 Wash. 2d at 716: "The duty . . . urge[d] would result in the pharmacist second guessing numerous prescriptions to avoid liability. This would not only place an undue burden on pharmacists, but would likely create antagonistic relations between pharmacists and physicians." "Moreover, unnecessary warnings to the patient could cause unfounded fear and mistrust of the physician's judgment, jeopardizing the physician-patient relationship and hindering treatment." Id. at 717.
Indeed, a general duty to warn on the pharmacist would harm the common, and essential, practice by physicians of prescribing drugs for "off-label" use. As the court explained in Washington Legal Foundation v. Henney, 202 F.3d 331, 332–33 (D.C. Cir. 2000): "[N]either Congress nor the FDA has attempted to regulate the off-label use of drugs by doctors and consumers. A physician may prescribe a legal drug to serve any purpose that he or she deems appropriate, regardless of whether the drug has been approved for that use by the FDA." See also Buckman Co. v. Plaintiffs' Legal Committee, 531 U.S. 341, __, 121 S. Ct. 1012, 1019 n.5 (2001) (citation omitted) ("Off-label use is widespread in the medical community and often is essential to giving patients optimal medical care, both of which medical ethics, FDA, and most courts recognize").
Requiring pharmacists to indiscriminately warn patients about a drug's suspected side effects without an intimate knowledge of the patient's particular condition and drug treatment would seriously undermine the essential and socially beneficial practice of off-label use. Second, pharmacists, in many situations, do not possess the training necessary to meaningfully warn about a drug's medical risks. "Neither the manufacturer nor pharmacist has the medical education or knowledge of the medical history of a patient which would justify a judicial imposition of a duty to intrude into the physician-patient relationship." McKee, 113 Wash. 2d at 712. "Proper weighing of the risks and benefits of a proposed drug treatment and determining what facts to tell the patient about the drug requires an individualized medical judgment based on knowledge of the patient and his or her medical condition . . . . It is apparent that a pharmacist would not be qualified to make such a judgment as to materiality." Id.; see also Eldridge v. Eli Lilly & Co., 138 Ill. App. 3d 124, 127, 485 N.E.2d 551, 553 (1985) (to fulfill duty to warn, "the pharmacist would have to interject himself into the doctor-patient relationship and practice medicine without a license"). And, in jurisdictions where pharmacists also fill prescriptions for other health care professionals like dentists, podiatrists, and optometrists, a general duty to warn would require pharmacists to essentially practice, not only medicine, but these other professions as well. This is a compelling policy argument against opening Pandora's Box with a general duty to warn.
Third, requiring pharmacists to provide warnings to patients would impose on the pharmacist a duty greater than that placed on the drug manufacturer. "Holding that the pharmacist has a duty to warn the patients directly of the potential hazards when the manufacturer does not have that duty would be to impose that greater duty." Ramirez, 628 F. Supp. at 87; see also Carlin, 13 Cal. 4th at 1116 (drug manufacturer has no duty to warn the patient under the learned intermediary doctrine). This would create an incongruous result that is inconsistent with the learned intermediary doctrine. In sum, a general duty to warn on the pharmacist is an impracticable proposition that, for good reason, has been rejected in most learned intermediary jurisdictions. It should be noted that, depending on the particular allegations in the case, some courts may be wary of letting the pharmacist off the hook. See, e.g., Kohl v. American Home Products Corp., 78 F. Supp. 2d 885, 893 (W.D. Ark. 1999) (pharmacist may be liable under Arkansas law for failure to provide labeling information supplied by the manufacturer or failure to detect inaccurate labeling information). And some courts may reject a fraudulent joinder argument where the local defendant is the physician rather than the pharmacist. See, e.g., Ritchie v. Warner-Lambert Co., 2001 WL 527501 at *2 (E.D. La. May 1, 2001).
Nonetheless, the foregoing decisions should prove valuable to drug manufacturers engaged in a diversity jurisdiction battle in a learned intermediary state. Their sage guidance can supply powerful ammunition for a fraudulent joinder argument and may generate enough "bang" to wipe out a motion for remand.