Following up on President Obama’s memorandum to Executive Branch agencies to reject the principle of pre-emption, some reporting and commentary (and earlier posts here and here).

Rosario Palmieri, National Association of Manufacturers (NAM) Vice President for Infrastructure, Legal and Regulatory Policy, commented:

The President’s May 20 memorandum to executive branch agencies instructing them to reject the principle of federal pre-emption is troubling. Manufacturers sell products into a national market, and a single, national regulatory standard helps ensure predictable treatment in the courts. It’s unwise to replace a regulatory system based on objective science and agency experts with a 50-state patchwork of often arbitrary jury decisions.

The President’s memo undermines these principles. The litigation industry is thrilled at the prospect of bringing more lawsuits and finding venues where frivolous suits stand a better chance of success. But there’s nothing in the President’s memo that helps create jobs or stimulates the economy.

The manufacturing sector continues to face hard times during this recession. The President’s new regulatory principles do nothing to make those times any easier.

The Blog of Legal Times took note. Earlier BLT post here.

The Wall Street Journal’s Law blog is awash in irony in its coverage, “On Preemption, the Left and the Right Enter Bizarro World.”

Washington Post news story, “Obama Curtails Bush’s Policy of ‘Preemption‘”Their allies Public Citizen are gratified, “Obama memo on pre-emption is good for consumers.”

The usual celebrators of regulation at OMBWatch are surprisingly restrained in their praise, “Obama Issues Memo on Preemption Practices.”

We’re still marveling at the chumption — that’s chutzpah and gumption, and somebody’s a chump — of the White House celebrating national standards on Tuesday for vehicle emissions and then condemning them on Wednesday for regulation of commerce.

The Wall Street Journal comments on “drug labeling by jury verdict” in an editorial, “Pre-empting Drug Innovation“:

Juries are presented with tragic plaintiffs who were injured, not the unknown patients who are helped, by a product. Hence, they tend to focus on risks more than overall benefits. By contrast, federal regulators are tasked to take the long view and factor in the interests of all potential users of a drug. Just as importantly, “the FDA conveys its warning with one voice,” writes Justice Alito, “rather than whipsawing the medical community with 50 (or more) potentially conflicting ones.”

A consequence of this ruling is an almost-certain spike in product-liability suits aimed at drug companies. Merck’s Vioxx litigation has already cost the company $4 billion, and Eli Lilly has paid out more than $1 billion to settle suits related to the antipsychotic drug Zyprexa. A legal standard that said the FDA, not a state tort jury, is responsible for regulating warning labels would have given both drug companies a stronger position in these lawsuits.

Yesterday’s ruling will expose drug companies to a kind of double innovation jeopardy. They typically spend $1 billion on research and development to bring a drug to market, with an 11% success rate on average. But they endure that burden on the understanding that FDA approval will give them a period to sell that drug with patent protection and that FDA approval provides some protection from lawsuits. Now they will have to contemplate paying up front — and paying later, even if the tragic mistake in applying the drug is someone else’s. Wyeth is a dream come true for the plaintiffs bar.

Ten years from now, when somebody dies because no drug was available to treat his illness, well, who will know? But that’s a result that can be anticipated thanks to a legal system that punishes innovation.

Catching up …(earlier posts here):

In this key pre-emption case, Wyeth v. Levine, arguing for Wyeth was the former solicitor general, Seth P. Waxman of Wilmer Hale, and representing the Justice Department as amicus was Deputy Solicitor General Edwin S. Kneedler. (DOJ’s amicus brief is here.) Representing Diana Levine was David C. Frederick of David C. Frederick, Kellogg, Huber, Hansen, Todd, Evans & Figel. News coverage:

Adam Liptak of the New York Times did a nice job providing legal context and framing the issues:

Several justices appeared open to the idea that pre-emption could follow from the F.D.A.’s approval of a drug label – but only if drug companies remained subject to lawsuits if they failed to disclose new information about potential risks. There was much discussion of what information should be considered new.

 

Other justices seemed prepared to allow pre-emption – but only if the drug agency had considered the particular risk before approving the label.

 

Given the justices’ interest in those refinements, the court seemed unlikely to rule broadly on the larger issues in the case: whether the agency and other federal regulators set minimum safety standards that states are free to augment or whether they make judgments about the optimal balance between risks and benefits that states must follow.

Ted Frank of the American Enterprise Institute also summarized the issues well in August in the D.C. Examiner, “As even Clinton appointee Justice Stephen Breyer pointed out in a February 8-1 Supreme Court decision about medical devices, if we are to have meaningful safety regulation, those standards should be determined by federal regulators, not by untrained juries who hear only the sad stories of side effects in hindsight without considering the larger policy issues.”

On Monday morning, the U.S. Supreme Court hears oral arguments in Wyeth v. Levine, a major case dealing with pre-emption, that is, whether federal rules governing such products as medical devices or prescription drugs take precedent over state regulation. Generally speaking, businesses support the principle of pre-emption because a national regulatory regime — one that includes a single safety standard — provides for consistent legal treatment and predictability in costs.

Trial lawyers and self-proclaimed consumer activists dislike pre-emption because, they contend, state enforcement can encourage safer products and injured parties should not lose access to the state courts. Preemption also limits the number of venues where the trial lawyers can cash in on outrageous jury verdicts, it reduces the opportunity to play “Jackpot Justice.”

(The Wyeth case actually deals with drug labeling. The NAM’s Legal Beagle summary of the case is here; and earlier Shopfloor.org posts here.)

Anyway, a review of the news coverage previewing Monday’s oral arguments. Now, we haven’t read the articles yet in order to test a thesis: Just in time for Tuesday’s election, the articles will feature references to a “pro-business Supreme Court,” framed in the context of court appointments by the next President. So here goes…

• Marketplace Radio, “Product liability case closely watched“
• Bloomberg, “One-Armed Musician, Wyeth Clash on Patient Lawsuits“
• Associated Press, “Amputee awaits high court, wants musical glow back“
• Legal Times, “High Court Case Turns Political Spotlight on Pre-emption“
• Wall Street Journal, “In Drug Case, Justices to Weigh Right to Sue“
• Reuters, “PREVIEW-Drugmakers seek lawsuit limits at top US court“

Nope! (He said, cheerfully acknowledging error.) The stories all play the issue straight, not trying to fit the issue into a predetermined line about Obama v. McCain’s court appointments needed to fix the one-sided, anti-consumer Supreme Court.

Included in several is a very silly comment from a Fordham law professor , Ben Zipursky, commenting on the effect of a ruling in of Wyeth: “That effectively would cut off virtually all pharmaceutical liability for prescription drugs.”

The coverage does acknowledge a legitimate political angle, though, that is, Congressional Democrats have supported legislation to allow state lawsuits. Rep. Henry Waxman’s House Oversight Committee last week released a “report” on FDA career staffers objecting to the agency’s support for pre-emption. Because apparently some people believe mid-level agency staffers should have determine regulatory policy, no matter the results of an election.

Walter Olson has a post at Point of Law on pre-emption, with many links, including to several examining the Waxman document.