By James Copland
From the Manhattan Institute
Saturday, March 15, 2008 12:00 AM
To preempt or not to preempt: that is the question with which the U.S. Supreme Court is wrestling in 2008. In a series of cases -- two recently decided and one scheduled for argument this fall -- the court has been looking at whether state lawsuits, filed on behalf of individuals allegedly injured by pharmaceutical drugs and medical devices, interfere with the Food and Drug Administration's federal regulatory scheme. To the extent the answer is "yes," many tort claims against drugs and devices could be preempted, since federal law is supreme over that of that states.
The court's first FDA preemption decision of 2008, last month's Riegel v. Medtronic, was called "the most momentous Supreme Court product liability decision in some time" by law professor Michael Krauss of George Mason University. Charles Riegel and his wife had sued medical manufacturer Medtronic, claiming that a Medtronic-made catheter that ruptured during Mr. Riegel's heart surgery was defectively designed and labeled under New York law.
Medtronic argued that whatever the law of New York, the FDA had approved the device's design and labeling -- the very question at issue -- under its extensive premarket approval process. And the Medical Device Amendments of 1976 specifically states that once a device has gone through that approval process, states may not "establish or continue in effect ... any requirement ... which is different from, or in addition to, any requirement applicable under [federal law] to the device."
With such explicit preemption language, the Supreme Court found it easy to determine, by a viote of 8 to 1, that the Riegels' state tort claim was barred by federal law. The decision will not apply to all medical devices but rather only those that, like the catheter, are "Class III" devices subject to the FDA's most rigorous testing procedures. Also, individuals can still sue if they can show that the device was manufactured in noncompliance with the design approved by the FDA, or if the FDA determines that the company committed fraud in the application process.
In its second major preemption case, Warner Lambert v. Kent, the Supreme Court last week deadlocked 4 to 4 (Chief Justice John Roberts had recused himself). The court simply let the lower court decision stand without any written decision or even an indication of where each justice stood.
Court watchers interested in preemption are therefore anxiously awaiting a case scheduled for this fall, Wyeth v. Levine, which promises to define the scope of preemption doctrine for FDA-approved products apart from the medical devices covered in Riegel. Levine involves a state "failure-to-warn" claim: Wyeth's FDA-approved label noted the risk of Levine's injury, but the plaintiff argues that the label could have been stronger or more specific and that the FDA's label was merely a "floor."
Thus, the court must decide whether Levine's claim is preempted by the FDA's extensive review and approval of pharmaceutical labeling. The case is more difficult than Riegel in part because the Food, Drug and Cosmetic Act contains no express preemption provision, so the court can reject Levine's failure-to-warn claim only if it determines that the federal regulatory scheme preempts such lawsuits. How the justices will rule in Levine is anyone's guess.
The so-called "presumption against preemption" is rooted in concerns over federalism, but in this context, such concerns are misplaced. The marketing and sale of pharmaceuticals and medical devices clearly is a part of interstate commerce, the core object of the federal regulatory power, and Congress has established an exhaustive regulatory process through the FDA. It's hardly news that state courts could interfere with such a scheme: In the 81st Federalist Paper, Alexander Hamilton observed that "the prevalency of a local spirit" could bias state courts in national commercial cases, a prediction since amply confirmed by academic empirical research.
The Supreme Court should also resist the temptation to follow the lead of Justice Ruth Bader Ginsburg, who in her dissent in Riegel argued that Congress never intended to override state tort law, the Medical Device Amendments' preemption language notwithstanding. Ginsburg may actually be right, but a focus on "legislative history" misses the point, as NYU law professor Catherine Sharkey noted at an American Enterprise Institute forum last month: Congress is intentionally vague in passing such laws, as a necessary precondition for logrolling the votes needed for the statutes' passage. The statute's language and structure should govern, and if Congress truly has an interest in weakening the FDA's regime by permitting state-level tort lawsuits, it can still do so by changing the law -- as trial-lawyer-allied Democrats like Sen. Edward M. Kennedy (D-Mass.) and Rep. Henry A. Waxman (D-Calif.) are, alarmingly, threatening.
However the court rules in Levine, the implications for business, the lawsuit industry and the American consumer are huge. Consider that Merck spent upwards of $1 billion defending against Vioxx claims before recently reaching a partial settlement agreement for more than $5 billion, while the estimated tab for Wyeth over its recalled diet drug combination Fen-Phen is $21 billion. Although business's gain in Levine would obviously be the lawyers' loss, it should be the average consumer's gain as well, since eliminating massive tort exposure would encourage companies to develop more life-saving products. The FDA carefully weighs not only the costs and benefits of new drugs, but also overwarning vs. underwarning in its label approval process, since overwarning about drug dangers can obfuscate the most significant risks and deter life-saving pharmaceutical uses.
As Justice Stephen Breyer suggested during oral argument in Kent, it makes little sense that a jury of 12 lay people, looking only at the costs to an injured individual, could override the FDA's considered judgment. Any sensible federalist would agree.
James Copland is the director of the Center for Legal Policy at the Manhattan Institute. He owns shares in pharmaceutical companies.