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IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
September 2010 Term
STATE OF WEST VIRGINIA EX REL.
DARRELL V. MCGRAW, JR., ATTORNEY GENERAL,
Plaintiff Below, Appellee
JOHNSON & JOHNSON and
JANSSEN PHARMACEUTICA PRODUCTS, L.P.,
Defendants Below, Appellants
Appeal from the Circuit Court of Brooke County
The Honorable Martin J. Gaughan, Judge
Civil Action No. 04-C-156
REVERSED AND REMANDED
Submitted: September 15, 2010
Filed: November 18, 2010
Rebecca A. Betts, Esq.
Debra C. Price, Esq.
Allen, Guthrie & Thomas, PLLC
Charleston, West Virginia
Darrell V. McGraw, Jr., Esq.
Frances H. Hughes, Esq.
Chief Deputy Attorney GeneralRobert A. Goldberg, Esq.
Special Assistant Attorney General
Charleston, West Virginia
Barry Hill, Esq.
Special Assistant Attorney General
Wheeling, West Virginia
Attorneys for Appellee
Stephanie D. Taylor, Esq.
Attorney for Amicus Curiae Product Liability Council, Inc.
Johnny Knisely, Esq.
Goodwin & Goodwin, LLP
Charleston, West Virginia
Attorney for Amicus Curiae Pharmaceutical Research and Manufacturers of America
Forrest Roles, Esq.
Mark A. Carter, Esq.
Dinsmore & Shohl LLP
Charleston, West Virginia
Attorneys for Amicus Curiae Washington Legal Foundation
The Opinion of the Court was delivered PER CURIAM.
JUSTICE MCHUGH disqualified.
JUDGE ABOULHOSN sitting by temporary assignment.
SYLLABUS BY THE COURT
1. Appellate review of a partial summary judgment order is the same as
that of a summary judgment order, which is de novo. Syl. Pt. 1, West Virginia Department
of Transportation, Division of Highways v. Robertson, 217 W. Va. 497, 618 S.E.2d 506
2. 'A motion for summary judgment should be granted only when it is
clear that there is no genuine issue of fact to be tried and inquiry concerning the facts is not
desirable to clarify the application of the law.' Syllabus Point 3, Aetna Casualty & Surety Co.
v. Federal Insurance Co. of New York, 148 W. Va. 160, 133 S.E.2d 770 (1963). Syl. Pt. 2, Ramey v. Contractor Enterprises, Inc., 225 W. Va. 424, 693 S.E.2d 789 (2010).
3. Collateral estoppel will bar a claim if four conditions are met: (1) The
issue previously decided is identical to the one presented in the action in question; (2) there
is a final adjudication on the merits of the prior action; (3) the party against whom the
doctrine is invoked was a party or in privity with a party to a prior action; and (4) the party
against whom the doctrine is raised had a full and fair opportunity to litigate the issue in the
prior action. Syl. Pt. 1, State v. Miller, 194 W. Va. 3, 459 S.E.2d 114 (1995).
4. For issue or claim preclusion to attach to quasi-judicial determinations
of administrative agencies, at least where there is no statutory authority directing otherwise,
the prior decision must be rendered pursuant to the agency's adjudicatory authority and the
procedures employed by the agency must be substantially similar to those used in a court.
In addition, the identicality of the issues litigated is a key component to the application of
administrative res judicata or collateral estoppel. Syl. Pt. 2, Vest v. Board of Education,
193 W. Va. 222, 455 S.E.2d 781 (1995).
The State of West Virginia, by its Attorney General, Darrel V. McGraw, Jr.,
(the State), sued Appellants Johnson & Johnson and Janssen Pharmaceutica Products, L.P.
(jointly the Appellants) under the West Virginia Consumer Credit and Protection Act, W.
Va. Code §§ 46A-1-101 to -139 (2006)
(Consumer Protection Act). The State asserts that
the Appellants communicated false and misleading information to healthcare providers in
West Virginia regarding two pharmaceutical drugs manufactured and distributed by the
Appellants. The Circuit Court of Brooke County, West Virginia, entered partial summary
judgment in favor of the State on the primary issue of whether certain statements and
omissions contained in the Appellants' communications were false and misleading.
Following a bench trial on the remaining issues, the circuit court entered final judgment in
favor of the State and assessed a civil penalty of $4,475,000 against the Appellants.
On appeal, the Appellants argue that the circuit court erred in entering partial
summary judgment against them because, in so doing, the circuit court treated two informal
and advisory warning letters issued by the federal Food and Drug Administration (FDA)
as legal determinations that the parties are precluded from relitigating. Alternatively, the
Appellants contend that the circuit court's reliance on those warning letters is preempted by
federal law and violates their First Amendment free speech rights. The Appellants
additionally raise several assignments of error relating to the evidence considered at the
bench trial and the circuit court's method of assessing the civil penalty. Having considered
the briefs of the parties, (See footnote 1)
oral argument, and the record in this case, the Court concludes that
the circuit court erred in finding that the Appellants' communications to healthcare providers
were false and misleading as a matter of law. The circuit court's order entering partial
summary judgment is therefore reversed, and the case is remanded for further proceedings
consistent with this opinion.
Janssen Pharmaceutica Products L.P. (Janssen), a pharmaceutical company,
is a subsidiary of Johnson & Johnson. At issue in this case are representations Janssen made
to healthcare providers in West Virginia concerning two of its drugs: Risperdal, an
antipsychotic drug used to treat schizophrenia, and Duragesic, a narcotic pain relief
medication that is administered through a patch worn on the patient's skin. Both drugs have
been approved by, and their distribution is regulated by, the FDA.
Risperdal, known generically as risperidone, is among a class of antipsychotic
drugs known as atypical antipsychotics. Atypical antipsychotics are linked as a class
because they significantly reduce the occurrence of certain side-effects, called
extrapyramidal side-effects, that plagued the earlier generation of antipsychotic drugs. In
1993, the FDA approved Risperdal for use in managing various psychotic disorders,
In the late 1990s, research emerged indicating an increased risk of
hyperglycemia and Type II diabetes among patients taking atypical antipsychotics. At the
request of the FDA, Janssen provided it with clinical data on Risperdal that, Janssen asserts,
indicated that Risperdal was not associated with alterations in glycemic control. In
addition, Janssen undertook its own studies regarding the issue by convening a panel of
twenty-five experts. That panel unanimously agreed that convincing evidence existed to
show that risperidone's effect on glucose metabolism was lower than other atypical
In the summer of 2003, several new studies were released concerning the
connection between atypical antipsychotics and hyperglycemia. The studies indicated that
the risk of diabetes mellitus (chronic hyperglycemia) was increased among patients using
atypical antipsychotics as compared to other classes of antipsychotics. However, other
studies suggested differences among the drugs within the class of atypical antipsychotics.
The Appellants contend that these studies indicated that the risk posed by Risperdal was less
than the risk posed by certain other atypical antipsychotics, and no greater than the risk posed
by typical antipsychotics.
Following the release of these various studies, the FDA directed all
manufacturers of atypical antipsychotics, as a class, to add a warning to their drug package
insert labels regarding the increased risk of hyperglycemia, diabetes mellitus and
ketoacidosis, a serious complication of diabetes that can lead to a coma or death. In addition,
the FDA determined that all patients treated with atypical antipsychotics should be monitored
for hyperglycemia. After receiving this directive, Janssen responded to the FDA that it did
not believe a warning was necessary for Risperdal. Nevertheless, despite its disagreement,
Janssen cooperated with the FDA's request and developed a new warning label that, after
some modifications, the FDA approved.
On November 10, 2003, Janssen mailed the revised warning label to
prescribers of Risperdal, including healthcare providers in West Virginia, along with a cover
letter. The cover letter explained that the FDA had requested that all manufacturers of
atypical antipsychotic drugs include a warning with their product regarding an increased risk
for hyperglycemia and diabetes mellitus. The letter then states:
Hyperglycemia-related adverse events have infrequently been
reported in patients receiving RISPERDAL. Although
confirmatory research is still needed, a body of evidence from
published peer-reviewed epidemiology research suggests that
RISPERDAL is not associated with an increased risk of diabetes
when compared to untreated patients or patients treated with
conventional antipsychotics. Evidence also suggests that
RISPERDAL is associated with a lower risk of diabetes than
some other studied atypical antipsychotics.
(Footnotes omitted). The letter omits any mention of the need to monitor patients receiving
atypical antipsychotics for symptoms of hyperglycemia. Janssen addressed this letter with
the salutation Dear Healthcare Provider.
Later that same month, the FDA contacted Janssen and requested that it send
out a formal letter to healthcare providers, known as a Dear Doctor or Dear Healthcare
Provider letter (DHCP letter), informing them of the revised label. DHCP letters are used
in the pharmaceutical world to timely advise healthcare professionals of changes in drug
labeling and risks associated with drugs. In response, Janssen sent the FDA a copy of its
November 10, 2003, letter (the Risperdal DHCP letter), which it had already disseminated
to the healthcare community, suggesting that the letter was sufficient to meet the FDA's
Several months later, in April 2004, the Director of the FDA's Division of
Drug Marketing, Advertising and Communications (DDMAC) issued a warning letter
to Janssen. In that warning letter, DDMAC stated that it found the information contained in
Janssen's Risperdal DHCP letter to be false and misleading in violation of sections 502(a)
and 201(n) of the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. §§ 352(a) & 321(n).
Specifically, DDMAC asserted that the Risperdal DHCP letter failed to disclose material
information regarding the addition of the new warning to the drug's product labeling, (See footnote 2)
minimized potential risks associated with hyperglycemia-related adverse events, and
misleadingly claims that Risperdal is safer than other atypical antipsychotics.
Furthermore, DDMAC noted that the DHCP letter fails to recommend regular glucose
control monitoring to identify diabetes mellitus as soon as possible. DDMAC concluded
its warning letter by requesting that Janssen cease to distribute the Risperdal DHCP letter,
and provide a plan of action to disseminate accurate and complete information to the
audience(s) that received the violative promotional materials.
Janssen responded to DDMAC by indicating that it disagreed with DDMAC's
findings, and asserting that its statements contained in the Risperdal DHCP letter were
scientifically correct. Nevertheless, on July 21, 2004, after several rounds of modifications
by the FDA, Janssen voluntarily distributed another DHCP letter, entitled IMPORTANT
CORRECTION OF DRUG INFORMATION (the Risperdal corrective letter), which
informed healthcare providers that Janssen had received a warning letter from the FDA. In
addition to reciting DDMAC's concerns with the Risperdal DHCP letter, the Risperdal
corrective letter also set forth the material information concerning the increased risk of
diabetes and hyperglycemia that had been left out of the original letter. Following Janssen's
dissemination of the Risperdal corrective letter, DDMAC closed the matter without taking
any further action.
The second drug at issue in this case, Duragesic, delivers a continuous dose of
fentanyl, a narcotic pain medication, through a patch applied to a patient's skin. Duragesic
was approved by the FDA in 1991 to treat chronic pain.
In August 2003, Janssen began distributing a file card, or small color
booklet, containing promotional information on Duragesic. Around this same time, Janssen
sales representatives made calls to physicians delivering a message consistent with that
contained in the file card. Physicians in West Virginia received both file cards and phone
Among other things, the file card contains information regarding Duragesic's
alleged benefits over other pain medications, including claims that Duragesic reduces certain
common side-effects and that Duragesic is comparatively less susceptible to being abused
than other pain medications. The file card repeatedly directs the reader to [p]lease see
important safety information, including Boxed Warning, and the final two pages of the file
card contain an FDA-mandated boxed warning regarding instances in which Duragesic is
Shortly after Janssen began distributing the Duragesic file card, it sent a copy
to the FDA pursuant to 21 C.F.R. § 314.81(b)(3)(i), which requires submission of
promotional labeling to the FDA at the time of initial dissemination. On September 2, 2004,
DDMAC sent a warning letter to Janssen stating that the Duragesic file card makes false or
misleading claims about the abuse potential and other risks of the drug, and includes
unsubstantiated effectiveness claims for Duragesic in violation of section 502(a) of the
Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 352(a). Specifically, DDMAC cited the
following representations contained in the file card: (1) Janssen's claim that Duragesic has
a lower potential for abuse compared to other narcotics, based on its low rate of mentions
in the Drug Abuse Warning Network (DAWN) database; (See footnote 3)
(2) Janssen's claim that
Duragesic has a favorable side-effect profile (fewer gastrointestinal side-effects, low rates
of constipation, vomiting and nausea, and fewer problems for patients with cancer); and (3)
Janssen's improved patient outcome claims relating to the drug's effectiveness (implying that
patients taking Duragesic will experience improved social and physical functioning, or
improved work activity). With regard to each of these claims, DDMAC indicated that the
research relied upon by Janssen to make the claim was insufficient or inappropriate.
In the warning letter, DDMAC concluded that the file card thus misbrands
Duragesic in violation of the [Federal Food, Drug and Cosmetic] Act. 21 U.S.C. § 352(a).
It requested that Janssen immediately stop distributing the cards and submit a plan for
disseminating corrective information.
Janssen responded to DDMAC by contesting the assertions contained in the
warning letter, and submitting detailed references to the medical literature that it believed
supported its assertions. Despite its disagreement, however, Janssen also complied with
DDMAC's requests, and in February 2005, it sent a corrective DHCP letter (the Duragesic
corrective letter). Once again, Janssen titled its letter IMPORTANT CORRECTION OF
DRUG INFORMATION, and informed the reader of the FDA's warning letter and its
assertions. On the back of the corrective letter, Janssen provided the standard warning
information required to be distributed with Duragesic. With the issuance of this corrective
letter, the FDA closed the matter.
II. PROCEDURAL HISTORY
In August 2004, the State sued the Appellants in the Circuit Court of Brooke
County, West Virginia, alleging violations of the Consumer Protection Act. The Act makes
it unlawful to engage in unfair methods of competition and unfair or deceptive acts or
practices in the conduct of any trade or commerce in West Virginia. W. Va. Code § 46A-6-
The State alleged that, as part of their commercial activities in West Virginia,
the Appellants repeatedly and willfully issued deceptive and misleading communications to
healthcare providers regarding Risperdal and Duragesic. The State's allegations pertaining
to Risperdal are based entirely on the statements and omissions contained in Janssen's
Risperdal DHCP letter and are the same statements and omissions relied on by DDMAC in
the Risperdal warning letter. Similarly, the State's allegations pertaining to Duragesic are
based on the Appellants' statements and omissions in the Duragesic file card and, again, are
the same statements and omissions relied on by DDMAC in its Duragesic warning letter.
In its complaint, the State sought an injunction preventing the Appellants from
disseminating deceptive and misleading information in West Virginia in the future, and
sought monetary damages as provided for by the Consumer Protection Act. Specifically, the
State sought a $5,000 civil penalty for each alleged violation, i.e. each deceptive and
misleading communication willfully made to a healthcare provider in West Virginia.
In the spring of 2008, the parties filed cross-motions for partial summary
judgment. On August 19, 2008, the circuit court entered an opinion and order denying the
Appellants' motion and granting the State's motion. The circuit court found that, based on
the FDA's prior determinations, the Appellants had, as a matter of law, made false and
misleading statements with respect to Risperdal and Duragesic in violation of the Consumer
Protection Act. After denying a motion to reconsider filed by the Appellants, the circuit
court conducted a bench trial on the remaining issues in the case: whether the Appellants'
false and misleading statements were made repeatedly and willfully, as required under the
Consumer Protection Act for the assessment of a civil penalty, and if so, the number of
violations that occurred and the appropriate penalty amount for each violation.
At the bench trial, conducted on September 8, 2009, the State presented no
witnesses, stipulated to the competency of the Appellants' witnesses and waived its right to
cross-examine them, stipulated to the admissibility of the Appellants' exhibits, and submitted
a written brief in lieu of opening and closing arguments. The Appellants submitted exhibits
and expert witness testimony via affidavit. The Appellants argued that their evidence
showed that their statements were not actually false or misleading and, therefore, that they
had not willfully disseminated false and misleading information.
On February 25, 2009, the circuit court entered a final order with findings of
fact and conclusions of law. In that order, it reaffirmed its prior ruling that the statements
were false and misleading as a matter of law, and ruled that the Appellants had made those
statements repeatedly and willfully. The circuit court then found that each Risperdal DHCP
letter and Duragesic file card sent by the Appellants to healthcare providers in West Virginia,
as well as each phone call made by the Appellants' representatives, constituted a separate
violation of the Consumer Protection Act. Based on the evidence presented, the circuit court
concluded that the Appellants had committed 4,450 violations of that Act and, after applying
a five-part test to determine the appropriate penalty amount, it assessed a $5000 penalty for
each phone call and a $500 penalty for each item mailed. Thus, the circuit court assessed a
total civil penalty of $4,475,000 against the Appellants.
II. STANDARD OF REVIEW
Appellate review of a partial summary judgment order is the same as that of
a summary judgment order, which is de novo. Syl. Pt. 1, W. Va. Dept. of Transp., Div. of
Highways v. Robertson, 217 W. Va. 497, 618 S.E.2d 506 (2005). 'A motion for summary
judgment should be granted only when it is clear that there is no genuine issue of fact to be
tried and inquiry concerning the facts is not desirable to clarify the application of the law.'
Syllabus Point 3, Aetna Casualty & Surety Co. v. Federal Insurance Co. of New York, 148
W. Va. 160, 133 S.E.2d 770 (1963). Syl. Pt. 2, Ramey v. Contractor Enters., Inc., 225 W.
Va. 424, 693 S.E.2d 789 (2010).
As previously noted, the Consumer Protection Act makes it unlawful to engage
in unfair methods of competition and unfair or deceptive acts or practices in the conduct of
any trade or commerce . . . . W. Va. Code § 46A-6-104. To enforce the provisions of this
Act, the attorney general may bring a civil action to restrain a defendant from engaging in
such unfair or deceptive acts. Id. at § 46A-7-107. If the attorney general can prove that a
defendant has engaged in a course of repeated and willful violations of the Act, then a court
may assess a civil penalty of no more than five thousand dollars for each violation. Id. at
The Act defines trade or commerce as the advertising, offering for sale, sale
or distribution of any goods or services that directly or indirectly affects West Virginia
citizens. Id. at § 46A-6-102(6). In defining unfair methods of competition and unfair or
deceptive acts or practices, the Act sets forth a non-exhaustive list of prohibited activities,
which includes, in relevant part:
(E) Representing that goods or services have . . . characteristics,
. . . uses, [or] benefits . . . that they do not have . . . ;
. . .
(H) Disparaging the goods . . . of another by false or misleading
representation of fact;
. . .
(L) Engaging in any other conduct which similarly creates a
likelihood of confusion or of misunderstanding;
(M) The act, use or employment by any person of any deception,
fraud, false pretense, false promise or misrepresentation, or the
concealment, suppression or omission of any material fact with
intent that others rely upon such concealment, suppression or
omission, in connection with the sale or advertisement of any
goods or services, whether or not any person has in fact been
misled, deceived or damaged thereby;
(N) Advertising, printing, displaying, publishing, distributing or
broadcasting . . . any statement or representation with regard to
the sale of goods . . . which is false, misleading or deceptive or
which omits to state material information which is necessary to
make the statements therein not false, misleading or deceptive;
Id. at §§ 46A-6-102(7)(E), (H), (L), (M) & (N). (See footnote 4)
In the instant case, neither party disputes that the Appellants engaged in
commerce in West Virginia, as defined by the Consumer Protection Act. The questions
before the circuit court, therefore, were (1) whether the Appellants engaged in unfair or
deceptive acts or practices when Janssen disseminated the Risperdal DHCP letter and the
Duragesic file card to healthcare providers in West Virginia and, if so, then (2) whether
Janssen's distribution of these materials constituted a course of repeated and willful
violations. See W. Va. Code § 46A-6-104; W. Va. Code § 46A-7-111(2). In granting the
State's motion for partial summary judgment, the circuit court ruled that the first question
could be decided as a matter of law, while the second question was an issue of fact to be
decided at trial. It then ruled, as a matter of law, that Janssen's statements and omissions in
the Risperdal DHCP letter and the Duragesic file card were false and misleading and, thus,
constituted unfair or deceptive acts or practices. See W. Va. Code § 46A-6-104.
In reaching this conclusion, the circuit court relied on federal law. Initially, it
noted that the Consumer Protection Act does not contain specific guidelines for determining
whether a representation is misleading in the context of communications between a
prescription drug companies and physicians. Under the Consumer Protection Act, however,
courts [are to] be guided by the interpretation given by the federal courts to the various
federal statutes dealing with the same or similar matters. W. Va. Code § 46A-6-101(1). (See footnote 5) The circuit court, therefore, looked for guidance from the Federal Food Drug and Cosmetic
Act, 21 U.S.C. §§ 301 to -399 (FDCA), the federal law governing the labeling and
advertising of prescription drugs.
Among other things, the FDCA prohibits the misbranding of any drug in
interstate commerce. 21 U.S.C. § 331(b). As relevant to this case, a drug is considered
misbranded if its labeling is false or misleading in any particular. Id. at § 352(a). The
term labeling is construed broadly to encompass not only the label affixed to a drug
container, but also other material accompanying the drug, including advertisements. Kordel
v. U.S., 335 U.S. 345, 350 (1948); 21 U.S.C. § 321(m) (2009); 21 C.F.R. § 202.1(l)(2)
As the agency charged with enforcing the FDCA, the FDA has promulgated
regulations that set forth specific standards for prescription drug labeling and advertising. See 21 U.S.C. § 371. Under these regulations, advertisements include, among other things,
letters and file cards containing drug information which are disseminated by or on behalf
of [the drug] manufacturer. 21 C.F.R. § 202.1(l)(2). The FDA's regulations provide that
[a]ll advertisements for any prescription drug . . . shall present a true statement of
information in brief summary relating to side effects, contraindications . . . and
effectiveness. Id. at § 202.1(e)(1).
An advertisement does not satisfy the requirement that it present
a true statement of information in brief summary relating to
side effects, contraindications, and effectiveness if:
(i) It is false or misleading with respect to side effects,
contraindications, or effectiveness; or
(ii) It fails to present a fair balance between information
relating to side effects and contraindications and
information relating to effectiveness of the drug . . . ; or
(iii) It fails to reveal facts material in the light of its
representations or material with respect to consequences
that may result from the use of the drug as recommended
or suggested in the advertisement.
Id. at § 202.1(e)(5).
To assist in determining whether the information contained in an advertisement
is false or misleading, the FDA promulgated extremely specific and detailed guidelines. 21
C.F.R. §§ 202.1(e)(6) & (7). For example, an advertisement is false or misleading if it
[c]ontains a representation or suggestion, not approved or permitted for use in the labeling,
that a drug is better, . . . safer, has fewer, or less incidence of, or less serious side effects or
contradindications than has been demonstrated by substantial evidence . . . . Id. at
§ 202.1(e)(6)(i). Similarly, an advertisement may be false or otherwise misleading if it
[c]ontains favorable information or conclusions from a study that is inadequate in design,
scope, or conduct to furnish significant support for such information or conclusions, or if
it [u]ses the concept of 'statistical significance' to support a claim that has not been
demonstrated to have clinical significance or validity, or fails to reveal the range of variations
around the quoted average results. Id. at §§ 202.1(e)(7)(i) & (ii).
In the instant case, the circuit court concluded that the question of whether the
Appellants' statements or omissions in their communications to West Virginia healthcare
providers were false or misleading under the Consumer Protection Act should be determined
by reference to the federal regulations governing whether drug advertisements are false and
misleading under the FDCA. (See footnote 6) Rather than considering this question to be an issue of fact for
determination by a fact finder, however, the circuit court held that the issue could be decided
as a matter of law on summary judgment.
In concluding that the statements and omissions at issue are false and
misleading as a matter of law, the circuit court relied on the FDA's communications with
Janssen regarding the two drugs. Specifically, the circuit court reasoned that, in issuing the
warning letters, the FDA had determined that certain statements and omissions contained in
the Risperdal DHCP letter and the Duragesic file card were false and misleading in violation
of the FDCA. The circuit court ruled that the warning letters sent by the FDA were not
informal or advisory by [sic] rather required [Janssen to take] mandatory action. It found
that Janssen could have administratively appealed the FDA's determination but chose not to
do so. Instead, Janssen acquiesced to the FDA's demands by issuing the respective
corrective letters. Thus, the circuit court reasoned, Janssen waived its opportunity to contest
the FDA's characterization of its representations. Finally, the circuit court concluded that
the contents of the corrective letters_which simply restated the allegations contained in the
warning letters_constituted mandatory FDA action and the FDA's official judgment as to
the matters addressed in the letters, because the FDA had directed Janssen to issue those
letters and because the letters became part of the drugs' official labeling once they were
mailed to healthcare providers and made public on the FDA's website. (See footnote 7)
In other words, the circuit court found that, through the warning letters and
corrective letters, the FDA had issued an official determination that certain statements and
omissions in the Risperdal DHCP letter and the Duragesic file card were false and misleading
under the FDCA. Because the circuit court had already decided that it should look to the
FDCA to determine whether a statement regarding a prescription drug is false and misleading
under the Consumer Protection Act, it ruled that it would give deference to the FDA's
findings and actions pertaining to the communications at issue. Consequently, because the
FDA had determined that the Appellants' statements and omissions were false under the
FDCA, the circuit court ruled, as a matter of law, that the same statements and omissions
were false and misleading under the Consumer Protection Act.
The Appellants contend that the circuit court erred by giving preclusive effect
to DDMAC's determination that their Risperdal and Duragesic statements were false and
misleading. They point out that, pursuant to the FDA's own guidelines, warning letters are
merely informal and advisory and do not constitute a final judgment of the FDA. The
Appellants further assert that, despite the circuit court's finding to the contrary, they did not
have the ability to administratively appeal the allegations contained in those warning letters
and, thus, were never afforded the opportunity to defend against the FDA's informal
determinations. This Court agrees. (See footnote 8)
The doctrine of collateral estoppel, or issue preclusion, (See footnote 9) forecloses the
relitigation of 'issues that were actually litigated in an earlier suit even though the causes of
action [in the former and subsequent proceedings] are different.' Peters v. Rivers Edge
Mining, Inc., 224 W. Va. 160, 177, 680 S.E.2d 791, 808 (2009) (quoting Mellon-Stuart Co.
v. Hall, 178 W. Va. 291, 298-99, 359 S.E.2d 124, 131-32 (1987)). Specifically, the doctrine
of collateral estoppel will bar the relitigation of an issue, thereby giving preclusive effect to
the prior determination of that issue, if four conditions are met:
(1) The issue previously decided is identical to the one presented
in the action in question; (2) there is a final adjudication on the
merits of the prior action; (3) the party against whom the
doctrine is invoked was a party or in privity with a party to a
prior action; and (4) the party against whom the doctrine is
raised had a full and fair opportunity to litigate the issue in the
Syl. Pt. 1, in part, State v. Miller, 194 W. Va. 3, 459 S.E.2d 114 (1995). Here, no preclusive
effect can be given to the FDA's determination that the statements and omissions in the
Risperdal DHCP letter and Duragesic file card are false and misleading, because the FDA
did not render a final adjudication on the merits on this issue, nor did the Appellants have
an opportunity to fully and fairly litigate the question. See id.
Although collateral estoppel may be applied to quasi-judicial determinations
of administrative agencies, this Court has always been wary of so doing. See Page v.
Columbia Natural Res., Inc., 198 W. Va. 378, 393, 480 S.E.2d 817, 832 (1996) ([W]e are
of the opinion that only rarely, if at all, will administrative proceedings provide the same full
and fair opportunity to litigate matter as will a judicial proceeding . . . .). Consequently, the
Court has held that,
[f]or issue or claim preclusion to attach to quasi-judicial
determinations of administrative agencies, at least where there
is no statutory authority directing otherwise, the prior decision
must be rendered pursuant to the agency's adjudicatory
authority and the procedures employed by the agency must be
substantially similar to those used in a court. In addition, the
identicality of the issues litigated is a key component to the
application of administrative res judicata or collateral estoppel.
Syl. Pt. 2, Vest v. Bd. of Educ., 193 W. Va. 222, 455 S.E.2d 781 (1995). A review of the
FDA's determinations in the instant case clearly indicates that neither of these prongs are met
A close examination of the FDA's actual determinations is required in
considering their sufficiency under Vest. Here, the FDA's determinations that Janssen had
violated the FDCA were issued in the form of warning letters. Pursuant to the FDA's
Regulatory Procedures Manual, a warning letter is
a correspondence that notifies regulated industry about
violations that FDA has documented during its inspections or
investigations. Typically, a Warning Letter notifies a responsible
individual or firm that the Agency considers one or more
products, practices, processes, or other activities to be in
violation of the Federal Food, Drug, and Cosmetic Act (the Act),
its implementing regulations and other federal statutes. Warning
Letters should only be issued for violations of regulatory
significance, i.e., those that may actually lead to an enforcement
action if the documented violations are not promptly and
adequately corrected. A Warning Letter is one of the Agency's
principal means of achieving prompt voluntary compliance with
FDA Regulatory Procedures Manual, Exhibit 4-1 at § 4.1 (March 2004). The purpose of
warning letters is to give the recipient an opportunity to take voluntary and prompt
corrective action before [the FDA] initiates an enforcement action. FDA Regulatory
Procedures Manual § 4-1-1. The letters, therefore, are informal and advisory. Id. They
communicate the FDA's position on a matter, but do not commit the agency to taking
enforcement action. Id.
Importantly, the FDA does not consider Warning Letters to be final Agency
action on which it can be sued. Id. Rather, if a recipient of a warning letter fails to comply
with the requested corrective actions, the FDA can, but is not obligated to, proceed with an
enforcement action by requesting that the Department of Justice initiate a civil suit seeking
an injunction or seizure of products, or a criminal suit seeking penalties, including fines and
imprisonment. See 21 U.S.C. §§ 332-34. (See footnote 10) Therefore, under the FDA's own regulations, its
determination that a drug company has violated the FDCA, when stated in a warning letter,
is not a final agency action or decision on that issue.
Clearly, in issuing warning letters, the FDA is not acting pursuant to any
adjudicatory authority, nor does it employ any due process procedures similar to those
accorded defendants in courts of law. See Vest, 193 W. Va. 222, 455 S.E.2d 781, Syl. Pt. 2.
Rather, in issuing a warning letter, the FDA, acting pursuant to its regulatory authority,
attempts to remedy a perceived violation through informal means. No hearing is provided
prior to the issuance of the letters, nor is the recipient notified of the alleged violations.
Indeed, the purpose of the warning letters is to provide such preliminary notification, thereby
giving the alleged violator an opportunity to resolve the problem in an informal manner
before actual adjudication takes place. Accordingly, the warning letters cannot be considered
quasi-judicial determinations by the FDA and, thus, are not subject to collateral estoppel
under West Virginia law.
This conclusion is further supported by the findings of federal courts from
around the country, which have similarly held that FDA warning letters do not constitute
adjudications on the merits. In a federal case considering false advertising claims under the
Lanham Act, 15 U.S.C. § 1125, the district court found that FDA warning letters did not
constitute a final determination of whether a drug company had engaged in misbranding. Schering-Plough Healthcare Prod., Inc. v. Schwarz Pharma, Inc., 547 F. Supp. 2d 939, 947
(E.D. Wis. 2008). In so holding, the district court summarized other federal court holdings
on this matter:
Indeed, several courts have recognized that letters such as those
cited here do not constitute an official agency determination. See Herman, 150 F.3d at 662 (An agency action is not final if
it is only 'the ruling of a subordinate official,' or 'tentative.' The
core question is whether the agency has completed its
decisionmaking process, and whether the result of that process
is one that will directly affect the parties.) (quoting Franklin v.
Massachusetts, 505 U.S. 788, 796-97, 112 S.Ct. 2767, 120 L.
Ed. 2d 636 (1992)); see also Dietary Supplemental Coalition,
Inc. v. Sullivan, 978 F.2d 560, 562-63 (9th Cir. 1992) ('[T]he
type of informal letter issued by the FDA . . . does not constitute
. . . formal or final agency action . . . .' ) (quoting Biotics
Research Corp. v. Heckler, 710 F.2d 1375, 1377 (9th
Cir.1983)), cert. denied, 508 U.S. 906, 113 S. Ct. 2333, 124 L.
Ed.2d 245 (1993); Genendo Pharmaceutical N.V. v. Thompson, 308 F. Supp. 2d 881, 885 (N.D . Ill. 2003) (statements of agency
officials below the Commissioner do not rise to the level of
final agency action_even when they are contained in warning
letters or other official regulatory correspondence.); Summit
Tech. Inc., 922 F. Supp. at 306 (regardless of any warning
letters that the FDA may have sent to defendants, it is clear that
the FDA has not completed this investigation.).
Id. Thus, federal district courts from around the country agree that warning letters are not
final agency action.
Moreover, in Wyeth v. Levine, ___ U.S. ___, 129 S. Ct. 1187 (2009), the
United States Supreme Court recently noted that because [the Food, Drug and Cosmetic
Act] contemplates that federal juries will resolve most misbranding claims, the FDA's belief
that a drug is misbranded is not conclusive. Id. at 1198 (emphasis added). Because the
FDA issues warning letters prior to any adjudication of an alleged violation, such letters, by
their nature, simply set forth the FDA's belief that an FDCA violation has occurred and are
not conclusive. See id. In the instant case, therefore, the FDA's positions, as set forth in the
Risperdal and Duragesic warning letters, were not a final adjudications on the merits by that
agency, but rather informal and advisory notifications to Janssen that the FDA believed that
Janssen's communications violated the FDCA.
While the lack of a final adjudication on the merits is, by itself, sufficient to
prevent the application of issue preclusion to the FDA's determinations, such application is
rendered even more egregious because the Appellants did not have the opportunity to fully
and fairly litigate the issue. Indeed, the circuit court clearly erred in finding that Janssen
could have, but chose not to, formally appeal the findings in those letters. Specifically, in its
summary judgment order, the circuit court indicated that Janssen could have institute[d]
administrative proceedings to challenge the Warning Letter on scientific, First Amendment,
or other grounds. For this proposition, the circuit court cited to 21 C.F.R. § 10.33 which
states: [t]he Commissioner may at any time reconsider a matter . . . on the petition of an
interested person. Id. at § 10.33(a). That regulation then continues: [a]n interested person
may request reconsideration of part or all of a decision of the Commissioner . . . . Id. at
§ 10.33(b). In this case, however, the warning letters were not a decision of the
Commissioner. Rather, the warning letters were issued by the Director of DDMAC, not the
Commissioner. Therefore, this regulation is inapplicable, as there is no decision of the
Commissioner for which Janssen could request reconsideration. See id.
Furthermore, because warning letters do not constitute final agency action,
they are not susceptible to judicial review and, thus, Janssen could not have initiated a civil
lawsuit to challenge the validity of the letters. See FDA Regulatory Procedures Manual § 4-
1-1 (FDA does not consider Warning Letters to be final Agency action on which it can be
sued.). Without a final agency action, recipients of warning letters cannot sue the FDA
because they cannot establish a sufficiently imminent injury and, as such, their claims are not
ripe. Biotics Research Corp. v. Heckler, 710 F.2d 1375, 1378 (9th Cir. 1983).
Accordingly, the circuit court erred in giving preclusive effect to the FDA's
determinations that Janssen had violated the FDCA through its statements and omissions in
the Risperdal DHCP letter and the Duragesic file card. The FDA's belief that such violations
occurred did not constitute a final adjudication on the merits and Janssen did not have the
opportunity to fully and fairly litigate those issues. See Vest, 193 W. Va. 222, 455 S.E.2d
781, Syl. Pt. 2.
In sum, the FDA's belief, as expressed in the warning letters and subsequent
corrective letters, that Janssen violated the FDCA is not sufficient to establish, as a matter
of law, that the Appellants' communications to healthcare providers were actually false and
misleading in violation of the Consumer Protection Act. It is fundamental that every
defendant is entitled to defend themselves against allegations of misconduct. See Syl. Pt. 3, In re Charleston Gazette FOIA Request, 222 W. Va. 771, 671 S.E.2d 776 (2008) ('The due
process of law guaranteed by the State and Federal Constitutions, when applied to procedure
in the courts of the land, requires both notice and the right to be heard.' Syllabus Point 2, Simpson v. Stanton, 119 W. Va. 235, 193 S.E. 64 (1937).). Whether Janssen's statements
and omissions in the Risperdal DHCP letter and the Duragesic file card are actually false and
misleading under the FDCA, and thus constitute unfair or deceptive acts or practices under
the Consumer Protection Act, is a question of fact to be decided by a finder of fact. The
State, therefore, must present evidence that Janssen's specific statements and omissions do,
in fact, violate the relevant laws, and the Appellants are entitled to present evidence to the
For these reasons, the Court reverses the order granting partial summary
judgment entered on August 19, 2008, vacates the final order entered on February 25, 2009, (See footnote 11)
and remands the action to the Circuit Court of Brooke County, West Virginia, for further
proceedings consistent with this opinion.
Reversed and Remanded.
The Court also acknowledges the contributions of the three amici curiae in this case,
Pharmaceutical Research and Manufacturers of America, the Product Liability Advisory
Counsel, Inc., and Washington Legal Foundation, each of which filed a brief in support of
As the circuit court recognized in its summary judgment order, federal law distinguishes
between a drug label and drug labeling. A label pertains solely to the information
placed directly on a drug package, 21 U.S.C. § 321(k), while
[l]abeling is defined by statute as all labels and other
written, printed, or graphic matter (1) upon any article or any of
its containers or wrappers, or (2) accompanying such article.
21 U.S.C § 321(m). Thus, labeling embraces advertising or
descriptive matter that goes with the package in which the
articles are transported, Kordel v. United States,
335 U.S. 345,
350, 69 S.Ct. 106, 93 L.Ed. 52 (1948), in addition to any label
that may be placed directly on a pill bottle.
Colacicco v. Apotex Inc.
, 521 F.3d 253, 258 n. 1 (3d Cir. 2008), vacated on other grounds
___ U.S. ___, 129 S. Ct. 1578 (2009). Labeling that accompanies a drug is not limited to
materials physically transported with the drug, but rather includes all literature used in the
sale of food and drugs, whether or not it is shipped into interstate commerce along with the
article. V. E. Irons, Inc. v. U.S.
, 244 F.2d 34, 39 (1st Cir. 1957), cert. denied
, 77 S. Ct. 1383
DAWN is a national public health surveillance system that monitors and compiles data from
drug-related emergency room visits. DAWN is operated by the federal Substance Abuse and
Mental Health Services Administration, a division of the federal Department of Health and
Human Services, which is required by federal law to collect the DAWN data.
In a 2005 amendment to West Virginia Code § 46A-6-102, the Legislature changed the
numbering and lettering of the relevant subsections, without changing their substance.
Although the State filed this case before this amendment, the Court here cites to the
subsections as they are currently designated.
As set forth by the Legislature, the purpose of the Consumer Protection Act is to
complement the body of federal law governing . . . unfair, deceptive and fraudulent acts or
practices in order to protect the public and foster fair and honest competition. W. Va. Code
§ 46A-6-101(1). To this end, the Legislature directs courts to be guided by the
interpretation given by the federal courts to the various federal statutes dealing with the same
or similar matters. Id.
Courts are to liberally construe the Act so that its beneficial
purposes may be served. Id.
While concluding that it should look to the FDCA for guidance, the circuit court
acknowledged that, typically, only the United States is entitled to enforce an action under the
FDCA. 21 U.S.C. § 337(a). As such, claims brought to enforce violations of the FDCA by
any party other than the United States are generally preempted. See Buckman Co. v.
Plaintiffs' Legal Comm.
, 531 U.S. 341, 344 (2001). A cause of action brought under a state
statute, such as the Consumer Protection Act, however, is not an action to enforce the FDCA
so long as it is premised on conduct that would give rise to liability under traditional
common law principles. In re Bayer Corp. Combination Aspirin Prods. Mktg. and Sales
, 701 F. Supp. 2d 356, 369 (E.D. N.Y. 2010). On the other hand, if a
defendant's conduct would not expose it to liability but for the FDCA, 'then the plaintiff is
effectively suing for a violation of the FDCA (no matter how the plaintiff labels the claim),
and the plaintiff's claim is thus impliedly preempted under Buckman
v. KV Pharm. Co.
, 2010 WL 59125, at *3 (E.D. Mo. January 5, 2010)).
In the instant case, the State alleges that the Appellants disseminated false and
misleading drug information to healthcare providers, an area traditionally subject to state law
liability. The State is not simply alleging that the Appellants violated the FDCA by, for
example, failing to provide the mandated warning information required by the FDA in
Risperdal labeling. Rather, the State maintains that this alleged failure resulted in false and
misleading information actually being disseminated to providers in West Virginia. Thus,
the State's claims are not federally preempted by the FDCA and, in fact, the case provides
an instance in which [t]he FDCA and the state law consumer protection statutes serve
complementary, though somewhat overlapping, roles. In re Bayer Corp.,
701 F. Supp. 2d
The circuit court stated in a footnote, without further explanation, that although it was
granting preclusive effect to the FDA corrective letters in this case, such letters may not
necessarily be preclusive in all cases.
The Appellants additionally challenge the circuit court's entry of partial summary judgment
on federal preemption and free speech grounds. The Court's decision on issue preclusion,
however, renders consideration of the Appellants' alternative arguments unnecessary.
Recently, this Court noted that the doctrine of collateral estoppel is often more
descriptively referred to as 'issue preclusion.' State ex rel. Taylor v. Janes
, 225 W. Va.
329, ___, 693 S.E.2d 82, 88 (2010) (citing Yeager v. U.S.
, ___ U.S. ___, 129 S. Ct. 2360,
2367 n. 4 (2009)).
Since the events at issue in this lawsuit, Congress has authorized an additional enforcement
mechanism in cases concerning direct-to-consumer advertising. Specifically, the Secretary
of Health and Human Resources, which oversees the FDA, is now allowed to assess civil
money penalties for direct-to-consumer advertisements that are false or misleading without
instituting a lawsuit. See
21 U.S.C. § 333(g) (2009). The statute, however, guarantees
certain procedural safeguards, including written notice and an opportunity for a hearing, to
protect the entities against which a penalty is being assessed. Id.
at § 333(g)(2).
Because the circuit court erred in granting the State's motion for partial summary judgment,
this Court need not reach the assignments of error pertaining to alleged evidentiary errors
during the bench trial and alleged errors in assessing the civil penalty.