Agencies' Rules Quietly Enable Tort Reform

Paula Lawlor , a legal consultant on roof-crush accidents, said there are an estimated 1,000 cases filed annually involving roofs that collapse in rollovers, resulting in 27,000 injuries or fatalities. A number of those cases are for vehicle damage alone, but some are cases where juries called for substantial awards to plaintiffs.

For example, a jury in 2003 awarded $19.6 million to a passenger in a Chevy S-10 Blazer that rolled over, leaving the plaintiff a quadriplegic. GM is appealing.

Another NHTSA proposal issued June 22 also would preempt some lawsuits as part of a measure stipulating the number of seatbelts auto manufacturers would have to install in the rear of vehicles.

NHTSA's recent proposal to change fuel-economy standards, meanwhile, includes language that prohibits states from setting fuel-economy rules. California issued standards limiting greenhouse gases from vehicles, saying the state has authority to set air-pollution standards. The auto industry has sued, claiming the state is interfering with federal fuel-economy rules.

The FDA has taken a different approach. The agency has intervened in cases brought by individuals against drug and medical-device manufacturers that involve differing interpretations of FDA rules.

The trend became noticeable under the tenure of former FDA general counsel Daniel E. Troy , now a partner at Sidley Austin Brown and Wood . "I was in this to fight FDA's battles, and everything we did was with [support of] career folks, politicals at FDA and Health and Human Services, and Justice," Troy said. "It's highly problematic for a state court to come along and say, 'No, no, no. You should have done something else.' "

The Office of the Comptroller of the Currency issued a broad rule in 2004 determining that state law protecting consumers from abusive lenders was preempted by the National Bank Act. It also eliminated the authority of state attorneys general to enforce state laws over national banks and their subsidiaries, such as mortgage companies.

The OCC and a coalition of banks that it regulates filed suit in June against New York Attorney General Eliot L. Spitzer, who asked in April to review the records of a number of banks regarding interest rates on home mortgage loans.

"OCC has become the kingpin regulator for national and state banks," said Edmund Mierzwinski, consumer program director for U.S. PIRG .

Legal experts predict more controversy when Congress realizes the impact of the provisions and more cases come up against the preemptions.

"I think the plaintiff's bar will fight a holy war over this," said Lammi of the Washington Legal Foundation. "And Congress jealously guards its preemption authority."

Douglas A. Kysar , a law professor at Cornell University and a scholar with the Center for Progressive Reform , said these moves are "back-door tort reform."

He said preemption overlooks one benefit of tort law: "Tort law is not just about trying to change standards; it's to compensate people for their injuries," he said.