Constitutional Law

An Examination Of High Court's Preemption Cases: Will Federal Law Protect Business Interests?

by Allison Zieve, staff attorney at Public Citizen, a national non-profit public interest organization. She argued both of the product liability preemption cases heard by the Supreme Court last term, Riegel v. Medtronic, Inc. and Warner-Lambert Co. v. Kent, and she was cert-stage co-counsel in Wyeth v. Levine.

Federal regulation has long had a role in products liability cases.  Traditional state tort law, and the current law in most states, allows a manufacturer who is alleged to have sold a defective product, to use compliance with federal standards or regulations as non-dispositive evidence that the product was not defective or that the manufacturer acted non-negligently.  In this way, traditional tort law recognizes that federal approval and compliance with federal requirements may play an important role in product liability cases.

Over the past 20 years or so, manufacturers have argued with increased frequency that regulatory approval or compliance is not only a defense on the merits—not only evidence that the product was not defective or that the label was adequate—but an immunity to liability.  Beginning about 6 years ago, federal regulatory agencies began making the same argument—that federal approval or compliance with federal standards preempts state-law damages claims as a threshold matter, regardless of whether a product has caused injury, whether the company or the consumer was at fault, the nature of the injury, or the extent of damages.

This Term, the Supreme Court has heard two cases that ask whether state-law damages claims are preempted by federal law.  In October, the Court heard argument in Good v. Altria, which asked whether the Federal Cigarette Labeling and Advertising Act expressly preempts claims that cigarette companies misled consumers by using terms such as “light” and “low tar, or whether the actions of the FTC impliedly preempt such claims.  And earlier this month, the Court heard argument in Wyeth v. Levine, which asks whether FDA regulation preempts damages claims brought by patients injured by drugs.  As we await the Court’s decisions, several points warrant mention.

First, underlying the implied preemption debate is the relationship between regulation and tort claims.  This relationship is complementary.  The possibility of being held liable for injuries caused by their products creates an invaluable incentive to companies to make sure that their products are as safe and effective as they can be before they bring them to market, to revise labels to warn of newly discovered hazards and to remove devices from the market when experience shows that they pose too great a risk to patients.  Lawsuits also provide the sole means for patients injured by harmful devices to seek compensation—a particularly important function in a nation without national health or disability insurance.  Lawsuits by injured consumers can have other positive effects as well.  For example, a lawsuit over a defective heart valve led to the creation of a fund that not only provided compensation to patients, but paid for research to try to determine whether explant surgeries were worth the risk and helped to spur legislation to improve medical device regulation. Lawsuits involving certain bone screws brought to light information about the safety of these devices that the FDA had not seen before. Individual suits over injuries caused by the pain reliever Vioxx helped to change public perception and medical journal practices about the publication of industry-funded studies. 

Second, Wyeth, as well as last Term’s case Riegel v. Medtronic, Inc., shows the problem of according judicial deference to federal agencies on the question whether damages claims are preempted.  These cases make clear that an agency’s pro-preemption positions are directed more by the interests of political staff than by regulatory expertise and experience.  Thus, in prior Administrations, the FDA agreed that lawsuits by injured patients against drug and device manufacturers did not interfere with the agency’s regulation of those industries.  Under the Bush Administration, the FDA has consistently argued for very broad preemption.  A recent report from the House Oversight and Government Reform Committee highlights the fact that the agency’s about-face was not triggered by regulatory concerns.  The report summarizes (and attaches) emails and memos from FDA’s career staff discussing the agency’s pro-preemption position and regulatory changes intended to bolster that position.  The emails show that the agency’s experts disputed the notion that lawsuits interfered with FDA regulation, but were overruled by the political staff.

If an agency says “no” to preemption, that is worth considering because an agency would surely not say that state law was not interfering with federal regulation if in fact it were.  For example, in Good, the FTC says that the state-law claims do not pose an obstacle to the agency’s activities.  But courts should consider an agency’s pronouncement that there is preemption with considerable skepticism.  For example, in Wyeth, the FDA says that product liability lawsuits impede federal regulation but does not offer examples of instances in which the government’s ability to do its job has actually been impeded by a lawsuit—although lawsuits and regulation have co-existed for 70 years.

Finally, Good appears likely to be decided on express preemption grounds—that is, decided on the basis of a specific provision in the statute that addresses warning on cigarette labels—and thus will have a smaller impact on ongoing preemption battles.  Wyeth, however, has the potential for significant impact on preemption jurisprudence.  My sense is that the drug companies and the Bush Administration are overreaching.  I expect that the Court will not want to wipe out a very large category of cases, but will say that if Congress thinks that state-law claims interfere with the federal regulatory scheme that Congress created, then Congress should be the branch to say so.

Full post as published by ACS Blog on November 07, 2008 (boomark / email).