Press Releases

AdvaMed Asks U.S. Supreme Court to Review Arbitrary and Excessive Punishments Resulting From Lack of Clarity in State Law

WASHINGTON, D.C. – The Advanced Medical Technology Association (AdvaMed) asked the U.S. Supreme Court to review and reverse a California appeals court’s decision imposing over $300 million in penalties on a medical device manufacturer.

The issue in this case is whether California’s Unfair Competition Law (UCL) and False Advertising Law (FAL) satisfy the fair notice requirements of the U.S. Constitution’s due process clause by informing the public of what conduct constitutes a violation. As applied today, California’s arbitrary enforcement of broad consumer protection laws harms both businesses and consumers.

In the case at hand, the California trial court found that Johnson & Johnson subsidiary Ethicon committed 153,351 UCL violations and 121,844 FAL violations. The trial court reached this finding based in part on counting each printed piece of marketing material that it estimated was ordered to California, and each brochure requested to be sent to California – regardless of whether such materials were actually delivered, read, relied-upon, or resulted in any demonstrable harm.  The trial court judge, recognizing the wide discretion permitted under California law, then imposed a penalty of $1,250 for each violation, resulting in over $300 million in civil penalties against Ethicon.

AdvaMed believes excessive punishments resulting from vague UDAP statutes will stifle innovation and inevitably harm patients in need of innovative products or treatments.

“A broad interpretation of the UCL and similar statutes will have far-reaching, detrimental consequences on companies, consumers, and the public. Companies and consumers alike rely on sensible laws that appropriately reward innovation while deterring unjustified risks,” said Pat Fogarty, Deputy General Counsel & Senior VP of Legal at AdvaMed. “Vague statutes, without limiting principles, will deter innovation.”

Read a copy of the AdvaMed amicus brief. Sean Burke of Duane Morris LLP served as Counsel of Record on behalf of AdvaMed.

# # #

AdvaMed is the world’s largest medical technology association, representing device, diagnostics, and digital technology manufacturers that are transforming health care through earlier disease detection, less invasive procedures, and more effective treatments.