Tag: Preemption

Mixed Messages on Preemption

The U.S. Supreme Court today issued an 8-0 opinion in Williamson v. Mazda, one the major cases dealing with federal preemption before the court this session.

The opinion written by Justice Breyer holds that a federal regulation that gave automakers a choice between installing a lap-belt only or a lap-belt and shoulder harness system for rear-seat passengers did not create federal preemption, and thus people hurt in accidents can sue manufacturers in state courts. As Justice Breyer wrote:

The question presented here is whether this federal regulation pre-empts a state tort suit that, if successful,would deny manufacturers a choice of belts for rear inner seats by imposing tort liability upon those who choose to install a simple lap belt. We conclude that providing manufacturers with this seatbelt choice is not a significant objective of the federal regulation. Consequently, the regulation does not pre-empt the state tort suit.

The National Association of Manufacturers had joined other business groups in an amicus brief on behalf of Mazda. The brief argued that traditional preemption analysis is a settled and vital component of our nationwide system of health, safety and economic regulation, rooted in the Constitution’s structure and the understanding of the Founders.

Congress should speak explicitly to endorse preemption when it means to. However, as the brief argued, it’s not always practical for Congress to legislate distinctly and in adequate detail as to when federal law should and should not displace state law, and it is therefore necessary for the courts to interpret conflict preemption expansively.

That argument did not win the day today.

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Manufacturers Watching Preemption Cases at Supreme Court

The October term of the U.S. Supreme Court  opens today, and Marcia Coyle of the National Law Journal previews the session, “On the High Court’s Fall Docket, Few Blockbusters — but Plenty to Watch.” Among the issues of importance in business cases is federal preemption, that is, whether federal regulation of items in interstate commerce supersedes state regulation and litigation in state courts.

Four pre-emption challenges, including: two involving torts, Williamson v. Mazda Motor (auto safety standards) and Bruesewitz v. Wyeth (National Childhood Vaccine Injury Act); one restricting employers hiring undocumented aliens (Chamber of Commerce v. Whiting), and one challenging class action arbitration waivers (AT&T Mobility v. Concepcion).

The National Association of Manufacturers last week joined other business groups in filing an amicus brief in Williamson v. Mazda Motors. As our Manufacturing Law Center entry summarizes, preemption analysis is a settled and vital component of our nationwide system of health, safety and economic regulation:

This case involves whether an automobile manufacturer may be sued in state court for installing lap-only seatbelts in certain rear seating positions when the National Highway Traffic Safety Administration (NHTSA) specifically rejected such a requirement and gave manufacturers the freedom to choose either a lap-only or a lap/shoulder seatbelt configuration. The agency was delegated the authority to establish a coordinated national safety program, by issuing standards that take into account safety as well as the availability of technology and economic costs. It chose to offer manufacturers two design options, but this lawsuit would require a jury to re-examine the same safety, technological feasibility and cost-effectiveness issues that NHTSA balances under its rulemaking authority.

A copy of the amicus brief is available here. Joining the NAM in the brief are the Grocery Manufacturers Association, Lawyers for Civil Justice, and the American Tort Reform Association.

Coyle previously addressed the preemption issue in the article, “Big names, high stakes in quartet of pre-emption cases,” noting that new Justice Kagan will recuse herself because she argued three of the four cases as solicitor general for the Obama Administration. The Washington Post highlights the Kagan recusals in its court story today.

The trial lawyers’ trade association, the American Association for Justice, has lobbied extensively against federal preemption in Congress and Executive Branch agencies. The AAJ is pleased with its successes in expanding the venues for its product liability lawsuits.

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OIRA Position is No ‘Czar’ and Sunstein Understands Regulation

The resignation of the White House’s green jobs adviser, Van Jones, for his radicalism and outrageous statements has been accompanied by a serious outbreak of anti-czardom, i.e., criticism of the Obama Administration for creating “czars” with great authority but no accountability. The fervor is most fearsome among the blogospheric right, and Glenn Beck on Fox has been impassioned on the topic.

It’s a good, legitimate issue, but too much of the criticism about czars has been indiscriminate and wrong. As Jonah Goldberg writes at National Review Online’s The Corner:

Politico has a report up that conservatives, flush with victory over Van Jones, are going to go after other czars. One problem, the three people it lists as next on the conservative list aren’t actually czars.

Cass Sunstein, President Obama’s nominee to head the Office of Information and Regulatory Affairs (OIRA) in the Office of Management and Budget, is a prime example of this misrepresentation.  Nominee. He was nominated. He has to be confirmed by the U.S. Senate.

People who protest czars say the White House creates these ad hoc positions to evade the confirmation process. (Van Jones, for example.) But that doesn’t apply in the case of Sunstein, who underwent a confirmation hearing before the Senate Homeland Security and Government Affairs Committee on May 12 and was reported out on May 20. (Committee news release.) Cloture has been filed and we can expect a Senate floor vote this week.

And the head of OIRA is anything but an ad hoc position. The office is a statutory one within the Office of Management and Budget, created by Congress in the 1980 Paperwork Reduction Act to bring additional accountability to the writing of Executive Branch regulations. Here’s the language — it’s Chapter 35, paragraph 3503. OIRA serves important oversight and coordination duties as Congress specified in law.

So, the czarist critique of Sunstein is just wrong. One can certainly oppose his confirmation on the merits, but the efforts to paint him as a far-out animal rights, anti-gun or organ-harvesting extremist are only tangentially related to reality.  Sunstein’s prepared statement and testimony at his confirmation hearing addressed the first two issues persuasively, and this post today by Glenn Reynolds points out how Sunstein’s positions have been misrepresented on organ donation.

Sunstein was a respected law professor at the University of Chicago for many years before going to Harvard. (White House bio.) In his numerous books and writings, he has written some provocative things, but nothing beyond the pale (or remotely as offensive as Jones’ statements). There should be room for thinkers in government.

On the matter of regulation, he’s top-notch. In his book, “Laws of Fear: Beyond the Precautionary Principle,” Sunstein against against the incoherence of the precautionary principle, which holds that products or practices must be proved safe before they can be allowed into the marketplace. This Boston Globe column by Sunstein, “Throwing precaution to the wind,” summarizes his arguments well. Note:

The simplest problem with the precautionary principle is that regulation might well deprive society of significant benefits, and even produce a large number of deaths that would otherwise not occur. In some cases, government regulation eliminates the “opportunity benefits” of a process or activity, and thus threatens to cause preventable deaths.

Indeed, Sunstein’s appreciation for cost-benefit analysis has brought him of criticism from “consumer activists” who would love to overregulate economic activity into paralysis. The trial-lawyer backed groups are suspicious of him on the issue of federal preemption. Those are signs of his merit in our book.

So Cass Sunstein will not be a White House czar, he’s gone through a thorough confirmation hearing and approval by the Senate Homeland Security and Government Affairs Committee, and his writings show him to be a supporter of regulatory reason and the benefits of the free market.

Those attributes make him a poor target for the political attacks du jour. But they would make him a good head of the Office of Information and Regulatory Affairs.

UPDATE (7:38 p.m.): Welcome Instapundit readers, and thanks, Glenn. (And don’t miss his earlier post on the Sunstein nomination.)

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Attacking Preemption, the Opposite of Health Care Reform

A Forbes column by noted Chicago law professor Richard Epstein, writing about H.R. 1346 and S. 540, the Medical Device Safety Act, “A Sickly Medical Device Safety Act.” Epstein analyzes both Wyeth v. Levine and Riegel v. Medtronic as basically malpractice cases that were exploited and turned into cash-seeking legislation against the drug and medical device industries, respectively.

Judges constantly state that product liability law is supposed to make manufacturers bear the full costs of their product defects. But they have crafted bizarre, upside-down rules that make drug companies and device makers bear the full costs of the mistakes of downstream actors whose actions take place outside of their control. Fix state tort law, and you can forget about federal preemption. But with loopy tort law a fixture at the state level, Congress has to act. It should let the MDSA die. And it should restore parity by offering the same statutory protection to drug manufacturers that it now supplies to device manufacturers.

Elsewhere in the world of preemption, the Heritage Foundation has posted the video of its panel discussion last week, “Hurting or Helping Consumers? Destroying Federal Preemption One Industry at a Time.

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Pre-emption Chumption

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.

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Preemption, How Times Change…Quickly

On Tuesday President Obama led a White House event hailing the adoption of a national standard on fuel efficiency. From the transcript:

The goal is to set one national standard that will rapidly increase fuel efficiency — without compromising safety — by an average of 5 percent each year between 2012 and 2016, building on the 2011 standard my administration set shortly after taking office.

A series of major lawsuits will be dropped in support of this new national standard.

On Wednesday, President Obama issued a memo to the Executive Branch agencies announcing his Administration’s opposition to a national standard for the regulation of products. We predict: A series of major lawsuits will be drummed up as a result of this new, 50-state, inconsistent standard.

Is that what commentators mean by pragmatic?

UPDATE (10:35 a.m.): From BusinessWeek, “Obama Regulatory Review Could Spur Product Lawsuits

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Obama Memo: Let the Lawsuits Flow, Jobs Flee

Wall Street Journal, “Shift Toward State Rules on Product Liability

WASHINGTON — In a sweeping order Wednesday, President Barack Obama called for a rollback of Bush administration regulations designed to protect companies from product-liability lawsuits in state courts.

The memo didn’t name specific industries but it could affect a wide range of consumer products subject to both federal and state regulation.

Companies have long complained about having to deal with 50 different state rulebooks, and the Bush administration aggressively took up the issue. It encouraged federal agencies to issue rules pre-empting state laws and declared that a single federal standard held sway.

The presidential memo is here.

The trial lawyers have long made the elimination of federal preemption a top priority, and they are delighted. From the American Association for Justice, the lawsuit lobby.

WASHINGTON, DC—“On behalf of the thousands of people whose cases have been affected by complete immunity preemption, we are heartened by the Presidential Memo released today.

The Obama Memo on regulatory preemption makes clear that the rule of law will once again prevail over the rule of politics.  The memo overturned actions taken by Bush administration bureaucrats who were influenced by powerful, well-connected corporations who wanted to re-write and re-interpret Congressional legislation, undermine the Constitutional system of checks and balances and put the public at risk and compromise laws designed to give Americans basic rights to hold wrongdoers accountable.

You have to admire the message discipline — or is it chutzpah? — developed through years of legal training and courtroom arguments: AAJ’s spokeslawyers put on the news release equivalent of a straight face and condemn corporations for promoting the “rule of politics.” This from one of the most powerful political forces and sources of campaign contributions in the nation, including contributions to the presidential candidates.

Here’s the problem. Manufactured goods are sold in national and international commerce, and federal regulations provide a measure of legal consistency and predictability. When product liability lawsuits devolve into the state courts, lawyers will soon identify the venues where juries and judges are moved not by the law or the facts, but by the desire to redistribute wealth. As the American Tort Reform Association identifies them, Judicial Hellholes.

A few plaintiffs win big, lawyers cash in, and jobs-creating manufacturers are punished for creating products demanded by the public.

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Preemption and Medical Devices: Saving Lives

One of the witnesses at the House Energy and Commerce subcommittee hearings on medical devices and federal preemption (see earliers posts) was a woman whose pacemaker had malfunctioned, causing her great distress, surgery and continued medical problems. In a similar fashion, Diana Levine became the public image of the preemption issue as it relates to labeling of medicines; a musician, she had lost her arm after an anti-nausea medication was improperly administered intraveneously.

The ones damaged have compelling stories, used by advocates (and trial lawyers) to promote a cause. We should certainly listen to them. But how about those saved? As the columnist Michael Kinsley noted in his testimony yesterday, “Lawsuits focus on the victim of some medical product. By their nature, they undervalue the benefit that same product has brought to other users, or even to the victim herself.”

So we note with appreciation this news release from AdvaMed, the Advanced Medical Technology Association, which organized remarks in Washington by a group of patients who had benefitted from medical devices. From “Patients Call for Continued FDA Preemption Authority“:

“Without my medical device, I would not be here today,” said Laura Doud of Arlington, Virginia, who received life-saving implantation of cardiac resynchronization therapy with defibrillation in 2004 after suffering almost fatal viral cardiomyopathy. “If the proposed legislation were passed, would the lawsuits facing inventors and manufacturers prevent devices like mine or future medical innovations from ever making it to patients like me?

And then there’s Olivia Vervaeke, a senior from Detroit, Michigan, graduating this week from the University of Notre Dame, born with a congenital heart defect that severely worsened in high school. Olivia required an implantable cardioverter defibrillator (ICD) in 2005.

“This device saved my life,” said Olivia Vervaeke, who is graduating from college on Sunday, May 17 but took a break from wrapping up her final days at Notre Dame to come to Washington to tell her story. “I can run five miles a day now; I could never do that before.”

The news release includes testimonials from other people helped by medical devices, and although they did not testify at the committee, their experiences need to be heard. Replacing a consistent, predictable and expert-based FDA regulatory system for medical devices with 50 different state systems determined by juries would discourage the innovation that helped save these people’s lives.

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On Medical Devices, FTC Regulator is Claiming Policy Wisdom

We’ve been watching the hearing by the House Energy and Commerce Subcommittee on Health on H.R. 1346, the Medical Device Safety Act.

The first witness was David Vladeck, listed and introduced as J.D, Professor of Law, Georgetown University Law Center. He testified, vehemently, against federal preemption, criticizing the Supreme Court ruling in Riegel v. Medtronic.

Vladeck’s views don’t surprise us; he’s a hard-core advocate of expanded regulation, regards business as nemesis, and made a career out of suing people. Before coming to Georgetown, he was with Public Citizen Litigation Group for decades.

Thing is, Vladeck was announced on April 14 as the new director of the Bureau of Consumer Protection in the Federal Trade Commission. (FTC news release, Washington Post article.)

Even if he hasn’t started work at the FTC yet [see UPDATE below], do we really want our regulators — and the FTC is a regulatory agency — commenting on policy matters? You have a regulator declaring he holds little respect for the Supreme Court’s opinion on preemption and that members of Congress who believe in FDA preemption are wrong and ill-informed. That’s an improper role for a regulator.

In addition, the FTC has a large regulatory portfolio involving health care competition. While not the regulatory agency in charge of medical devices, the FTC has dealt with the industry. Won’t Vladeck’s appearance and testimony give people in the health care industry grounds to suspect they won’t get a fair shake?

All in all, a strange and imprudent appearance before the committee.

UPDATE: According to the Federal Leadership Directory (the Yellow Book):

Director David C. Vladeck

Career Senior Executive Service (SES) Appointment

Note: David C. Vladeck has been appointed Director of the Bureau of Consumer Protection, with an effective date still to be announced. More information will be provided as it becomes available.

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The Medical Device Litigation Act, a Hearing

Balanced story in today’s Cleveland Plain Dealer on a House committee hearing scheduled this afternoon on H.R. 1346, the Medical Device Safety Act. This is the bill that would end what’s called “preemption,” the federal liability protection for FDA-approved medical devices, opening the gates wide for product liability suits in state courts.

The bill comes in response to the Supreme Court’s ruling in Riegel v. Medtronic, and has long been a priority of the trial lawyers at the American Association for Justice.

The Plain Dealer’s headline represents the pro-lawsuit arguments, “Patients injured by faulty medical devices want laws to hold manufacturers accountable,” and the story leads with the claims of the injured party. Still, the Plain Dealer provides space for manufacturers and others to comment on innovation-stifling effects of the legislation.

“This bill does not in any way improve patient safety,” said Steris spokesman Stephen Norton. “It will, however, restrict patient access to essential medical technologies, produce a chilling effect on medical innovation, create more lawsuits, and ultimately result in higher health-care costs for all Americans.”

And from Medtronic spokesman Rob Clark:

“When you regulate through litigation, which is the recipe the Medical Device Safety Act is aimed at, it places decisions in the hands of a 12-person jury that’s only looking at one particular patient, and one particular situation and not evaluating the safety and efficacy and risk benefit of that device for everyone,” Clark said.

Washington Post columnist Michael Kinsley, who is testifying at today’s House Energy and Commerce subcommittee hearing, made that important point last year when commenting on the high-profile preemption case, Wyeth v. Levine.

The flaws of litigation as a method of making important government decisions are well rehearsed. It is ungodly expensive: The lawyers typically cost more than even the most worthy plaintiff ever gets. It is arbitrary: The same issues get litigated again and again, usually with a different result each time. Most people who suffer never sue and get nothing. While the FDA has scientists, the courts have jurors, for whom ignorance of the subject at hand is not merely the norm but a virtual requirement. And because trials occur only when a risk has gone wrong, they inevitably overemphasize the risk and undervalue the benefit.

The Subcommitte on Health holding the hearing is chaired by Rep. Frank Pallone (D-NJ), sponsor of the bill, so the agenda is clear enough. We trust that agenda allows space for the argument that undermining preemption will create a chaotic, expensive and capricious regulatory system ruled not by medical experts and the disinterested FDA but by juries in the 50 different states. And that’s a regulatory regime that does not serve the public.

For more on the hearing, see our post at Point of Law.com, “Medical Device Safety Act hearing, the PR angle.” It’s an interesting witness list.

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