Opinion ID: 210965
Heading Depth: 3
Heading Rank: 1

Heading: The California Unfair Competition Law Claim

Text: 27 The district court noted that the gravamen of Optivus's California unfair competition law claim was that IBA marketed a medical device that had not been approved by the Food and Drug Administration (FDA) as evidenced by a letter from the FDA to IBA. Unfair Competition Claims Order, slip op. at 23. Although the court determined that Optivus could validly bring such a claim under California law so long as [the claim] is not related to the requirements of the medical device, but is instead related to, for example, false advertising, the court ultimately concluded that the FDA letter was not a final determination and that Optivus must first exhaust administrative remedies before it could pursue the California unfair competition law claim. See id., slip op. at 25 (If Optivus is going to bring suit on the basis of FDA action, that suit must be based on a final agency determination and not an interim letter.). 28 Optivus argues that the district court erred in dismissing the California unfair competition law claim as non-justiciable based on a failure to exhaust administrative remedies, contending that there is no administrative process that Optivus could have exhausted before filing suit. IBA counters that the California unfair competition law claim is based on a FDA regulatory letter to IBA, that the letter was not a final determination, and that the court was correct in concluding that the administrative process must be exhausted before a California unfair competition law claim can proceed based on such a letter. Alternatively, IBA argues that we should affirm summary judgment because no private right of action exists to enforce the Federal Food, Drug, and Cosmetics Act (the Act). In reply, Optivus argues that a final FDA determination is not needed to prove that IBA violated the Act and that precedent in California establishes that a California unfair competition law claim can be based on a regulatory violation that could not be directly enforced by a private right of action. 29 As support for its conclusion that Optivus must first exhaust administrative remedies, the district court cited Biotics Research Corp. v. Heckler, 710 F.2d 1375 (9th Cir.1983), Dietary Supplemental Coalition, Inc. v. Sullivan, 978 F.2d 560 (9th Cir.1992), and Estee Lauder, Inc. v. United States Food & Drug Administration, 727 F.Supp. 1 (D.D.C. 1989). We find these cases inapposite to Optivus's California unfair competition law claim. All three cases involve situations in which the plaintiffs sought judicial review of an FDA action that the court concluded was not final. See Biotics Research, 710 F.2d at 1376, 1378; Dietary Supplemental, 978 F.2d at 562, 563-64; Estee Lauder, 727 F.Supp. at 1, 4-6. In such a situation, one seeking to contest the agency's determination must exhaust all administrative remedies before seeking review. Biotics Research, 710 F.2d at 1377. 30 Here, Optivus is not seeking to contest an agency determination; rather, it is claiming that IBA engaged in unfair competition under California law by marketing a medical device without FDA approval. In that respect, Optivus is not before an agency and has no administrative remedy to exhaust. While the significance of the FDA letter is an issue to be determined in assessing whether California unfair competition law has been violated, the determination of that issue does not require the exhaustion of an administrative remedy. We therefore conclude that the district court erred in dismissing the California unfair competition law claim for failure to exhaust administrative remedies. 31 We also find IBA's alternative argument unpersuasive. Although the Act provides that no private right of action exists to redress alleged violations of the Act, 21 U.S.C. § 337, the California Supreme Court has interpreted California unfair competition law such that a private plaintiff may bring [an unfair competition law] action even when `the conduct alleged to constitute unfair competition violates a statute for the direct enforcement of which there is no private right of action.' Kasky v. Nike, Inc., 27 Cal.4th 939, 950, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002) (quoting Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553, 565, 71 Cal. Rptr.2d 731, 950 P.2d 1086 (1998)). Accordingly, we reverse the district court's dismissal of this claim. 2