Parallel State Adoption of Federal Law Does Not Trigger Obstacles-and-Purposes Preemption

Introduction

In Zyla Life Sciences, L.L.C. v. Wells Pharma of Houston, L.L.C., 23-20533 (5th Cir. Apr. 10, 2025), the Fifth Circuit clarified that a state does not run afoul of implied obstacles-and-purposes preemption when it adopts a federal standard outright into its own statutes. Plaintiff–Appellant/Cross-Appellee Zyla Life Sciences, LLC (“Zyla”) markets FDA-approved indomethacin suppositories nationwide. Defendant–Appellee/Cross-Appellant Wells Pharma of Houston, LLC (“Wells Pharma”) sells compounded indomethacin suppositories that lack FDA approval but comply with certain federal compounding exemptions. Zyla sued under six state unfair-competition statutes that mirror the Federal Food, Drug, and Cosmetic Act’s (“FDCA”) premarket-approval requirement for new drugs. Wells Pharma moved to dismiss, arguing these parallel state laws are impliedly preempted. The district court granted that motion. On appeal, the Fifth Circuit reversed, holding that California v. Zook (336 U.S. 725 (1949)) controls: when a state “makes federal law its own,” there can be no obstacles-and-purposes conflict.

Summary of the Judgment

The Court of Appeals reaffirmed the three-tiered preemption framework derived from the Supremacy Clause: express vs. implied preemption; within implied, field vs. conflict; within conflict, impossibility vs. obstacles-and-purposes. The central issue was obstacles-and-purposes preemption: does a state law that incorporates the FDCA by reference stand as an obstacle to Congress’s objectives? Relying on California v. Zook, the panel held that identical state and federal requirements cannot conflict—“the state statute makes federal law its own.” Thus, six state statutes mirroring 21 U.S.C. § 355 (the FDCA’s premarket-approval provision) are not impliedly preempted. The Court reversed the dismissal, vacated the denial of leave to amend, and remanded for further proceedings.

Analysis

1. Precedents Cited

California v. Zook (336 U.S. 725 (1949)) – States may adopt federal law verbatim without creating conflict preemption: “no conflict in terms … for the state statute makes federal law its own.”
Philadelphia v. New Jersey (430 U.S. 141 (1977)) & Tafflin v. Levitt (493 U.S. 455 (1990)) – reaffirming the Supremacy Clause as the source of preemption and the residual sovereignty of the states absent direct conflict.
Kansas v. Garcia (589 U.S. 191 (2020)) – distinguishes express from implied preemption, and cautions that overlapping federal and state statutes do not, by themselves, create conflict.
Hines v. Davidowitz (312 U.S. 52 (1941)) – defines obstacles-and-purposes conflict: state law standing as an obstacle to accomplishing Congress’s objectives.
Wyeth v. Levine (555 U.S. 555 (2009)) – FDCA does not preempt state tort claims for inadequate drug labeling; Congress’s concurrent federal/state scheme implies no obstacle to state regulation.
Buckman Co. v. Plaintiffs’ Legal Committee (531 U.S. 341 (2001)) – state claims that police fraud on a federal agency intrude on uniquely federal enforcement discretion and are preempted.
Houston v. Moore (18 U.S. (5 Wheat.) 1 (1820)) – an early, non-precedential opinion that erroneously held parallel criminal statutes conflict; later repudiated by Congress and subsequent Supreme Court doctrine.

2. Legal Reasoning

The panel’s reasoning unfolds in several steps:

Supremacy Clause Framework: All preemption flows from the Supremacy Clause. Absent contradiction, states retain full concurrent power to regulate.
Zook Controls: A state law that duplicates federal law cannot conflict with it. When a statute “makes federal law its own,” there is “no possibility” of obstacle or contradiction.
Rejection of Expanded Federal-Only Enforcement: Wells Pharma’s appeal to federal enforcement discretion (21 U.S.C. § 337) mistakenly conflates federal enforcement powers with exclusive federal regulatory authority. States have long supplemented or paralleled federal criminal and civil remedies.
Refutation of Houston’s Logic: The 1820 Houston v. Moore opinion, which purported that “two distinct wills” cannot coexist, was never a binding precedent, was disavowed by Congress in 1825, and conflicts with modern doctrine affirming concurrent state/federal regulation.
Wyeth Consistency: Under Wyeth, Congress’s silence on preempting state tort law regarding drug safety confirms that it did not view parallel regulation as an obstacle. If divergent state tort standards pose no conflict, identical standards pose none.
Limits of Buckman: Buckman’s preemption of “fraud-on-the-FDA” claims turned on the uniquely federal character of policing fraud against the agency, not on mere incorporation of federal standards into a state statute.

3. Impact on Future Litigation

This decision fortifies the principle that states may adopt federal regulatory regimes wholesale—criminal, civil, licensing, or safety—without inviting implied preemption so long as they mirror federal text. It curtails district-court creativity in inferring broad preemptive purposes from agency enforcement structures, and reinforces dual sovereign remedies for regulated conduct. Going forward:

Parallel statutes in other regulated fields (environment, securities, immigration, etc.) are less vulnerable to preemption challenges.
State tort and unfair-competition claims predicated on federal standard violations retain vitality where states have incorporated federal requirements verbatim.
Courts must apply Zook before inferring implied obstacles-and-purposes preemption wherever state law “makes federal law its own.”

Complex Concepts Simplified

Supremacy Clause: The U.S. Constitution’s Article VI clause that federal law overrides conflicting state law, but does not automatically void identical state enactments.
Express vs. Implied Preemption: Express preemption occurs when Congress explicitly states its intent to override state law. Implied preemption arises by necessary implication, either because Congress fully occupied a regulatory field (field preemption) or because state law conflicts with federal purposes (conflict preemption).
Obstacles-and-Purposes Conflict: A form of conflict preemption that invalidates state laws if they “‘stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’”
Federal Incorporation: When a state statute adopts federal law text by reference—e.g., “no person may do X unless authorized under 21 U.S.C. § 355”—it creates identical duties and penalties at state law.

Conclusion

Zyla Life Sciences v. Wells Pharma cements the longstanding rule that a state law which “makes federal law its own” cannot be preempted under the obstacles-and-purposes doctrine. By reversing the district court’s dismissal, the Fifth Circuit reaffirmed that identical parallel requirements serve to reinforce, not undermine, Congress’s objectives. This decision preserves robust state authority to supplement federal regulation through identical or complementary statutes, ensuring that regulated entities remain accountable to both sovereigns without creating untenable conflicts.