Shrinking A Safe Harbor To Fit A Consumer Protection Class

In Hall v. Walgreens Boot Alliance, Inc., the Supreme Court of Washington considered a certified question from the Northern District of Illinois on an issue of Washington state law.  No. 102829-6, 2025 Wash. LEXIS 145 (Wash. Mar. 20, 2025).  The underlying case, a proposed consumer protection class action, involves the labeling of a certain over-the-counter cough syrups.  We have seen several cases like this, most often when they have been decided on preemption.  For quite some time, in posts on a wide range of cases, we have pushed two related propositions:  1) a proper preemption analysis should usually start with determining if the asserted state law claim is cognizable as stated before dealing with preemption; to do otherwise invites reverse engineering a non-preempted claim beyond the scope of state law; and 2) when a federal court is sitting in diversity, the Erie doctrine requires that the court not substitute its judgment on what it thinks the state law show be.  Taken together, these propositions favor the use of certified questions to first determine whether state law would provide the relief plaintiffs seek if not for the possibility of preemption.  So, we think it made sense for the Northern District of Illinois to ask the Supreme Court of Washington to determine how the safe harbor in the Washington consumer protection act applied to plaintiffs’ OTC drug labeling claims before deciding if those claims are preempted.  We wish it did not take three years to get this far, but, like arithmetic and assembling items shipped in pieces, the order of operations matters.  Because the actual decision from the Supreme Court of Washington is so obviously wrong, we will have to take solace in the order of operations.  That and how this claim is even more obviously preempted, which seems like the logical next step.

The term “safe harbor” has been applied to a number of things in the legal and real world.  For a long time, fights over off-label promotion turned on compliance with FDA’s safe harbors about when and how requested off-label use information could be shared.  State consumer protection acts, which can be worded so broadly as to make all sorts of benign conduct actionable, also often include their own safe harbors on when conduct that has been blessed by a governmental entity in some form or fashion is deemed, well, safe.  When the artist formerly known as Bexis put together a list of these provisions eleven years ago, we/he had this to say about the Washington law that would become the focus in Hall:

Some state’s statutes exempt conduct in “compliance” with relevant governmental oversight, which we’re taking to mean “FDA,” regulations (Alabama, Colorado, Delaware, Georgia, Hawaii, Illinois, Maine, Minnesota, Nebraska, Nevada, Ohio, Oregon).   Other states exempt anything “permitted” by the relevant regulatory body (Arkansas, Connecticut, Indiana, Maine, Massachusetts, Montana, Nebraska, New Mexico, Ohio, Rhode Island, South Carolina, South Dakota, Utah, Wyoming).   Some states qualify their safe harbors with modifying adverbs, such as “specifically,” “expressly,” or “affirmatively” (Florida, Georgia, Idaho, Illinois, Indiana, Michigan, New Mexico, Ohio, Tennessee, Utah).  A broader formulation exempts anything that is government “regulated” (Alaska, Nebraska, Oklahoma).  A narrower formulation exempts only conduct “required” by the regulator (Florida, Idaho, Indiana, Ohio, Utah, Wyoming). Another variant is “authorized (with or without adjectives) (Illinois, Michigan, Tennessee, Virginia), or alternatively “authorized or approved” (Kentucky).  Then there are New York (“subject to and complies with”), Washington (“permitted, prohibited or regulated”) and California (a common-law carve out for “business practices which the Legislature has expressly declared to be lawful in other legislation,” see Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 973 P.2d 527, 542 (Cal. 1999)), which don’t follow anybody else’s pattern.

With all due respect to the grouping in the prior post, the safe harbor in the Washington consumer protection act, although really poorly written, appears to differentiate based on which governmental entity is providing oversight for the challenged activity.  It starts off by saying that the chapter does not apply to “actions or transactions otherwise permitted, prohibited or regulated under laws administered by the insurance commissioner of this state, the Washington utilities and transportation commission, [strangely missing conjunction] the federal power commission.”  Revised Code of Washington 19.86.170 (emphasis added; conjunction not supplied).  It continues, without punctuation or numbering, with “or actions or transactions permitted by any other regulatory body or officer acting under statutory authority of this state or the United States.”  Id. (emphasis added;strange ending colon converted to a period).  Then follow a number of exceptions and exceptions to exceptions that appear inapplicable to the apparent catchall for a federal regulator unless the “actions and transactions [are] in connection with the disposition of human remains.”  The certified question in Hall was whether, under this murky safe harbor, “labeling as ‘non-drowsy’ an over-the-counter antitussive containing dextromethorphan hydrobromide an ‘action[ ] … permitted by … [a] regulatory body … acting under statutory authority … of … the United States’ such that this labeling decision falls within the statutory safe harbor?”  We are not sure this is the right question, but it is not really the question the Supreme Court of Washington answered.

The question of Washington law really was what is required for a safe harbor based on a non-enumerated federal agency such as FDA.  The question of application and implication to the underlying proposed class, which was reserved by the Northern District of Illinois, was whether FDA’s actions with regard the labeling of the OTC cough syrups met the proper safe harbor standard.  A brief detour to Hall’s allegations about the products and FDA’s role is required.  We say brief in part because the opinion clearly presented any incomplete, plaintiff-friendly view of FDA’s role; the concurrence has a somewhat more thorough examination of monographs, as well as the history of the consumer protection act and its safe harbor provision.  A deep dive into monographs and OTC drug regulation in general is beyond our scope here, but we can say that the regulatory scheme applicable to plaintiffs’ theory is more involved than whether the applicable monograph directly says products with the particular active ingredient at issue in the case can be labeled “nondrowsy.”  2025 Wash. LEXIS 145, *3.  The putative class rep bought “one of these over-the-counter cough medicines”—presumably one labeled as “nondrowsy” although the class allegations cover multiple products with and without the designation—allegedly became “unexpectedly drowsy,” and sued because “drowsiness is a known side effect of medicines containing dextromethorphan hydrobromide.”  Id. at *2.  This case, of course, has all the hallmarks of a lawyer-driven litigation with no real aim but to force a settlement over a non-issue than produced no injuries.  The angle the lawyers like is that the FDA monograph requires OTC cough syrups with diphenhydramine to come with a drowsiness warning, but does not say if the ones without diphenhydramine can identify themselves as nondrowsy.

For the Supreme Court of Washington in Hall, the safe harbor was interpreted narrowly to help to “accomplish [the statute’s] beneficial purposes of protecting the consumer.”  Id. at *5.  That led it to read the statutory provision “actions or transactions permitted” as requiring that “an agency must take ‘overt affirmative actions specifically to permit the actions or transactions engaged in’ by the person or entity involved in a Consumer Protection Act complaint.”  Id. at *7 (emphasis added and internal citation omitted).  Noting that the statute states that specified regulatory entities are covered by the safe harbor based on actions they “permitted, prohibited or regulated,” the difference in phrasing for other regulatory entities means “that the legislature intended the statutory safe harbor for activities regulated by nonenumerated agencies to be limited to actions or transactions expressly permitted by the agency.”  Id. at *8-9.  One problem with this analysis is that states that wanted to make a safe harbor be tied to actions “specifically,” “expressly,” or “affirmatively” permitted by a regulatory agency, such as Florida, Georgia, Idaho, Illinois, Indiana, Michigan, New Mexico, Ohio, Tennessee, and Utah per our old post, actually used those adjectives in the drafting of their own safe harbor provisions.  Interpreting “permitted” to mean the exact same thing as “specifically permitted,” “expressly permitted,” and “affirmatively permitted” does not make much sense, especially when it comes to a regulatory scheme as complicated as applies to monograph OTC drugs.

Hall went a step further and concluded that “[a]s FDA has not specifically permitted labeling these over-the-counter drugs nondrowsy, that activity falls outside the statutory safe harbor.”  Id. at *10.  We can quibble with that conclusion, but it also clear that removing the work “specifically” from standard—that is, making the standard match the statute—should lead to the opposite conclusion.  This is certainly not the first time that a court has contracted its safe harbor to allow a dubious consumer protection case about a drug to proceed.  Here, however, the issue of whether the state law claim is preempted by the FDCA is still alive.  Consumer protection claims are not saved from express preemption under 21 U.S.C. §379r, and the plaintiffs’ claim is Hall is clearly based on a state requirement that is “different from or in addition to, or that is otherwise not identical with” federal requirements.  We would say that means express preemption is a slam dunk, but even dunks get blocked sometimes.