supremacy clause Archives

No Supremacy Clause Preemption Where State Statute Doesn’t Conflict With Federal

The US Court of Appeals for the Fifth Circuit explained that ordinarily, when state law contradicts with federal law, the state law may be preempted by the federal law under the US Constitution’s Supremacy Clause. However, under Supreme Court precedent, state unfair-competition laws that accurately mirror the relevant provisions of federal law are not subject to preemption. Zyla Life Sciences, LLC v. Wells Pharma of Houston, LLC, Case No. 23-20533 (5th Cir. April 10, 2025) (Oldham, Ho, Duncan, JJ.)

Under the federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., no one may sell any new drug without prior approval from the US Food and Drug Administration (FDA). Because compounded drugs are not new but are merely remixed versions of existing drugs, registered compounding facilities are allowed to sell compounded drugs as long as they satisfy additional criteria specified in the FDCA. Six states mirror federal law by making it illegal to sell any new drug without FDA approval and provide for suit under traditional state unfair-competition law if a party sells drugs in violation of these state laws.

Zyla and Wells Pharma are competitors. Zyla sells FDA-approved suppositories containing indomethacin, a drug used to treat various ailments such as rheumatoid arthritis. Wells Pharma sells compounded indomethacin suppositories that are not FDA approved, but Wells Pharma is a registered compounding facility and thus satisfies at least one provision of the exemption. Zyla, seeking to enjoin Wells Pharma from manufacturing and selling its compounded suppositories in the six states mirroring the FDCA, filed suit under those states’ unfair-competition laws. Wells Pharma moved to dismiss under Fed. R. Civ. Pro. 12(b)(6), arguing that the state laws were preempted. After the district granted the motion, Zyla appealed.

The issue before the Fifth Circuit was whether the state laws conflict with the FDCA by incorporating it. As the Court explained, a state triggers implied “[o]bstacles-and-purposes preemption . . . when state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.” Here, (quoting the California statute) the six state statutes at issue bar selling a “new drug” that has not been approved “under Section 505 of the [FDCA].” The Fifth Circuit, citing the 1949 Supreme Court decision in California v. Zook as controlling, concluded that where there is no conflict in statutory terms between the state and federal statutes, there is no preemption. Both a state and the federal government may regulate the same conduct – whether a state has provided an additional remedy in state law is irrelevant – and the FDCA itself permits states to regulate conduct related to drug safety and effectiveness concurrently with the federal government.

The Fifth Circuit reversed the district court’s order granting Wells Pharma’s motion to dismiss and remanded the case.

FDCA’s Exclusive Enforcement Provision Reigns Supreme over State Laws

In its first occasion to interpret § 353b of the Federal Food, Drug, and Cosmetic Act (FDCA), the US Court of Appeals for the Ninth Circuit relied on the “implied preemption doctrine” to affirm a district court’s case dismissal for failure to state a claim under Fed. R. Civ. P. 12(b)(6). Nexus Pharmaceuticals, Inc. v. Central Admixture Pharmacy Services, Inc., Case No. 20-56227 (9th Cir. Sept. 13, 2022) (Kleinfeld, Nelson, VanDyke, JJ.)

Nexus developed and trademarked Emerphed, a US Food & Drug Administration (FDA) approved ready-to-use ephedrine sulfate in a vial. Central Admixture operates a network of compounding pharmacies and sells ephedrine sulfate in ready-to-use syringes without FDA approval, because compounding pharmacies do not need FDA approval. Compounding happens when ingredients in medicines are combined, mixed and altered for individual patients. Under 21 U.S.C. § 353b, drug compounding by “outsourcing facilities” is allowed without FDA approval, but the FDCA excludes compounded drugs that are “essentially a copy of one or more approved drugs.”

The FDCA contains an exclusive enforcement provision prohibiting private enforcement, stating that proceedings to enforce or restrain violations of the FDCA, which includes the compounding statute, must be by and in the name of the United States. To avoid the FDCA’s bar on private enforcement, Nexus alleged that Central Admixture violated the laws of several states in which it sells Emerphed, all of which prohibit the sale of drugs not approved by the FDA. Nexus argued that Central Admixture’s ephedrine sulfate was “essentially a copy” of Emerphed and therefore was excluded from the outsourcing facilities exception. The district court disagreed and dismissed the state law claims under the implied preemption doctrine. The district court explained that all of Nexus’s claims depended on the determination of whether Central Admixture’s ephedrine sulphate was “essentially a copy” of Emerphed, and that the “plain text of the [FDCA] left that determination in the first instance to the FDA and its enforcement process.” Nexus appealed.

The Ninth Circuit explained that the Supremacy Clause of the US Constitution is the “source of preemption doctrine, which invalidates state laws that are contrary to federal statutes,” but noted that there is no clear sorting of case law and no rigid formula to determine when state law runs contrary to federal law. Therefore, the Court relied on several controlling cases regarding the statute governing FDA approval of medical devices, not drugs. Medical device cases are distinguishable because the medical device statute includes an express preemption clause prohibiting states from imposing any safety or effectiveness requirement different from or in addition to those imposed by federal law. In explaining these cases, the Court noted that the claims that were allowed to go forward did not rely on noncompliance with FDA requirements (as Nexus did), but rather on traditional tort law duties. The purported violation of a state law that substantively says “comply with the FDCA” is not a traditional common law tort. The Court also explained that these cases taught that despite a presumption against implied preemption, [...]

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