Remembering Stengel and Celebrating the Arizona Supreme Court

Those familiar with his legend know that Hall of famer Casey Stengel managed the New York Yankees in their mid-century heyday and, for a short time at their inception, the New York Mets.  But he also is remembered as one of baseball’s great characters.

One story about Stengel was told by the great broadcaster Curt Gowdy.  He was having a beer with Stengel at a bar in Cleveland.  Stengel received his beer and quickly downed it in one long gulp, leading Gowdy to ask why he drank it so fast.  Stengel said he drank beer that way ever since “the accident.”

Intrigued, Gowdy asked Stengel, with keen journalistic anticipation, to tell him about “the accident.”

One imagines Gowdy at this point mentally taking out his pad and removing the pencil from behind his ear to document an apparent insight into Stengel’s personality and perhaps his managerial philosophy, stemming from a traumatic, scarring event in Stengel’s past.

Stengel ordered another beer, looked Gowdy in the eye, and described the accident in a single sentence fragment.  It seems someone had once knocked over his beer.

Or something like that.

This story comes to mind because the Arizona Supreme court yesterday at long last issued its own reaction to a Stengel accident.  In Conklin v. Medtronic Inc., the Court rejected the Ninth Circuit’s erroneous interpretation of Arizona common law, and its consequential controversial preemption decision, in Stengel v. Medtronic Inc., 704 F.3d 1224 (9th Cir. 2013) (en banc).  The Arizona Supreme Court held that there is no claim for failure to report safety issues to the FDA under Arizona law; therefore, such a claim would be based entirely on federal law and is impliedly preempted.

[Disclosure:  The author filed an amicus brief supporting preemption in Stengel, in the Ninth Circuit and in the Supreme Court, and filed an amicus brief supporting preemption in Conklin.]

Stengel (the case), you may recall, adopted a narrow view of implied preemption under Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001).  Buckman held that claims seeking to enforce solely federal requirements governing medical devices are impliedly preempted, because only the federal government has authority under the Medical Device Amendments Act (MDA) to enforce its federal requirements.  In contrast, claims that seek to enforce independent state law requirements are not.

The combined effect of express and implied preemption is to create a “narrow gap” through which plaintiffs may plead.  To avoid preemption, the conduct alleged must violate federal requirements (because claims based on different or additional state law requirements are expressly preempted by the MDA), but also must violate a preexisting, independent and substantially identical state tort duty.

The District Court in Stengel denied a motion to amend that sought to allege failure-to-warn claims based on the manufacturer’s supposed failure to timely and adequately report adverse events (AERs) to the FDA.  The District Court concluded such claims were impliedly preempted, and the Ninth Circuit agreed and affirmed, finding that the alleged duty arose solely from the federal regulations.  The Ninth Circuit granted rehearing en banc and reversed the panel decision, essentially holding that a failure to report AERs to the FDA was actionable under Arizona common law, and therefore was a parallel claim (avoiding express preemption) and not an attempt to enforce a wholly federal obligation (avoiding implied preemption).

The core problem, however, was that there was no Arizona law holding that a manufacturer has a duty to warn a consumer by reporting a safety issue to a federal agency.  The Ninth Circuit’s  adventurous approach to predicting or interpreting state law is anathema under ErieStengel had improperly widened the “narrow gap” between express and implied preemption by using its expansive interpretation of Arizona common law as a wedge.  Of course, the sole ultimate arbiters of whether there was a duty to report adverse events to the FDA under Arizona common law would be the Arizona courts, if given the opportunity.

Conklin gave the Arizona courts that opportunity.  Plaintiffs presented a failure to report theory, Medtronic sought to dismiss on preemption grounds, and the stage was set for a Stengel showdown.  The Maricopa County Superior Court dismissed the claim as preempted and unsupported by Arizona law.  Division One of the Arizona Court of Appeals reversed.  The appellate court followed Stengel, holding that Arizona law imposes a duty to report adverse events to the FDA as part of the continuing duty to warn.  Therefore, the claim was neither expressly nor impliedly preempted.

All eyes turned to the Arizona Supreme Court, which accepted the case for review.

It turns out the Ninth Circuit was wrong.  The Arizona Supreme Court concluded that there was no claim under “traditional” Arizona tort law for failure to submit AERs to the FDA.  Thus, the claim sought to enforce a requirement imposed only by federal law, and was preempted by Buckman.  The Court found no need to address the express preemption issue.

The Court assumed for its analysis that AERs may be viewed as warnings, though it also made fairly clear that they shouldn’t be, with a series of parenthetically enhanced citations explaining that AERs are nothing more than anecdotal observations.  Citing its recognition of the learned intermediary doctrine, the Court observed that Arizona law requires the manufacturer to warn a learned intermediary (“prescribers and other healthcare providers”).  But the FDA is not a learned intermediary – it has no obligation to relay the information derived from an AER to the patient/plaintiff.  Accordingly, manufacturers cannot breach their duty to warn by failing to warn the FDA.  And there was no Arizona authority otherwise requiring manufacturers to warn a federal agency. The Court cited a 2017 Illinois case reaching the same conclusion under that state’s law.  The Court also rejected the notion that such a duty could be extrapolated from the continuing duty to warn based on post-sale receipt of safety information.

The Court addressed Stengel directly, declining to follow it because its holding was based on unsupported premises, i.e., a misreading of Arizona tort law.

So, as Casey might see it, the Ninth Circuit’s “accident” has now been cleaned up, and going forward the courts should proceed with more caution to avoid further tragedy.

I suppose this calls for a toast.