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Supreme Court Rules Against Legal Shield on Drug Labeling

With a 6-to-3 majority, the Supreme Court ruled on Wednesday that juries may award damages for harm from unsafe drugs, even when the manufacturers have satisfied federal regulations.
The Court in Wyeth v. Levine held that the labeling approval by the FDA does not preempt state laws or shield companies from legal damages as part of liabilty claims. Therefore, Wednesday's decision is considered a major setback for major business groups that had hoped to build a barrier against injury lawsuits seeking billions of dollars. Pharmaceutical companies were especially disappointed by the decision.
In Wyeth v. Levine, the Court upheld a jury verdict of $6.7 million in favor of a musician from Vermont whose arm had to be amputated after she was injected with an anti-nausea drug. The manufacturer, Wyeth, argued that its compliance with the Food and Drug Administration's labeling requirements should immunize it from lawsuits.
In the majority, Justice Stevens was joined by Justices Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg, and Steven G. Breyer. Justice Clarence Thomas voted with the majority, but did not adopt Justice Stevens's reasoning.
Justice Stevens noted that Congress could have required pre-emption in the case, but it had not. He added, "Evidently it determined that widely available state rights of action provided appropriate relief for injured customers."
Justice Samuel A. Alito wrote for the dissenters, stating that the court is turning ordinary injury suits into a "frontal assault on the F.D.A.'s regulatory regime from drug labeling." Chief Justice John G. Roberts and Justice Antonin Scalia, joined Justice Alito in the dissent. Alito wrote that the juries see only the "tragic accident" before them and "are ill-equipped to perform F.D.A's cost-benefit-balancing functions. The agency, by contrast, Alito continued, "has the benefit of the long view" and conveys its warning with one voice."
Drug companies had hoped that the Vermont case would establish broader protections. They relied on what might be implied from federal regulatory standards and policies -- in this case, the drug agency's authority to approve drug labels.
The Supreme Court has been sympathetic to in recent years to arguments that federal law should pre-empt state injury suits. Last year, in Riegel v. Medtronic, an eight-justice majority of the court ruled that many state suits concerning injuries caused by medical devices were barred by the express language in a federal law. Wednesday's decision addressed implied pre-emption, a different legal standard.
The ruling may have significant implications beyond drug manufacturing, as many companies have sought tighter federal regulations in recent years to shield themselves from litigation.Producers of diverse goods, such as antifreeze, fireworks, popcorn, cigarettes and light bulbs have all sought to shield themselves from litigation behind federal oversight. After Wednesday's decision, those efforts are most likely to succeed if they are based on express language in a Congressional statute, or a specific regulatory action that makes compliance with state requirements impossible.
Source: New York Times, Financial Times and Wall Street Journal

Full post as published by Fastcase Legal News on March 05, 2009 (boomark / email).