The "Maximum Strength" Trap: Second Circuit Puts the Brakes on Creative Pleading in OTC Labeling Cases

The Split Decision That Isn’t a Victory for Anyone

The Second Circuit’s July 30 ruling in the nationwide decongestant litigation is a masterclass in why federal preemption doctrine remains the most reliable shield—and the most frustrating sword—in consumer class actions. The panel held that most state-law claims targeting over-the-counter decongestants were preempted under the Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. § 301 et seq., but allowed claims tied to the phrase “maximum strength” to proceed. Consumers, meanwhile, lacked standing for a civil RICO claim under 18 U.S.C. § 1961 et seq. This isn’t a win for plaintiffs or defendants. It’s a reminder that the battleground in labeling cases has shifted from “what does the label say” to “what does the FDA allow you to say.”

Why “Maximum Strength” Survived—and Why That Matters

The court’s preemption analysis turned on the FDA’s regulatory framework for OTC drugs. Under the FDCA, state-law requirements that are “different from or in addition to” federal requirements are expressly preempted. 21 U.S.C. § 379r(a). The panel found that most of the challenged claims—alleging that the decongestants were ineffective or mislabeled—would have imposed requirements beyond those mandated by the FDA. But the “maximum strength” claims survived because the FDA’s monograph system doesn’t regulate the use of that specific phrase. That’s a narrow exception, but it’s a critical one. It means plaintiffs can still plead around preemption by targeting marketing language that falls outside the FDA’s explicit oversight.

For defense counsel, this ruling is a warning: the days of blanket preemption motions are over. Courts are increasingly willing to parse the FDA’s regulatory scheme to identify gaps where state-law claims can survive. The Second Circuit’s decision aligns with the Ninth Circuit’s approach in Bell v. Publix Super Markets, Inc., 982 F.3d 468 (7th Cir. 2020), where the court allowed claims to proceed based on labeling statements that were not directly regulated by the FDA. The trend is clear: preemption is no longer a get-out-of-jail-free card. It’s a fact-intensive inquiry that requires a deep dive into the FDA’s monographs, guidance documents, and enforcement history.

The RICO Standing Problem

The panel’s rejection of the civil RICO claim is equally significant. The court held that the consumers lacked standing because they couldn’t show a concrete injury tied to the alleged racketeering activity. This is a straightforward application of TransUnion LLC v. Ramirez, 594 U.S. 413 (2021), which tightened the standing requirements for statutory violations. But it’s also a signal that courts are growing skeptical of efforts to repackage consumer fraud claims as RICO violations. The RICO statute was designed to target organized crime, not to provide a federal forum for every state-law labeling dispute. The Second Circuit’s decision reinforces that principle and should give pause to plaintiffs’ lawyers who see RICO as a shortcut to treble damages.

What This Means for Practice

For plaintiffs’ counsel, the takeaway is simple: focus on the gaps in FDA regulation. If a labeling claim can be framed as targeting a statement that the FDA hasn’t explicitly addressed, it has a better chance of surviving a motion to dismiss. But be prepared for a fight. Defendants will argue that any claim that touches on the safety or efficacy of an OTC drug is preempted, and they’ll have plenty of support in the case law. The key is to draft complaints that are surgical in their focus, avoiding broad allegations that could trigger preemption.

For defense counsel, the ruling underscores the need to engage early with the FDA’s regulatory framework. A motion to dismiss based on preemption is still a powerful tool, but it’s not enough to simply cite the FDCA and walk away. You need to show that the specific claims at issue would impose requirements that are “different from or in addition to” those mandated by the FDA. That means digging into the monographs, the guidance documents, and the enforcement history. It also means being prepared to argue that the “maximum strength” exception is a narrow one that doesn’t apply to the facts of your case.

The Bigger Picture

The Second Circuit’s decision is part of a broader trend in consumer class actions. Courts are increasingly unwilling to let plaintiffs use state-law claims to second-guess the FDA’s regulatory decisions. But they’re also unwilling to let defendants use preemption as a blunt instrument to kill meritorious claims. The result is a more nuanced, fact-intensive approach to preemption that rewards careful pleading and thorough briefing. For lawyers on both sides, the message is clear: the devil is in the details, and the details are in the FDA’s regulatory scheme.