I’ve got a new post up at Cato at Liberty on three important decisions for the business community decided today at the Supreme Court, two on employment law and one on pharmaceutical pre-emption: Vance v. Ball State on liability for supervisorial harassment, University of Texas Southwestern v. Nassar on mixed-motive retaliation, and Mutual v. Bartlett (more) on design default preemption for a generic drug. (& welcome Coyote, Point of Law, SCOTUSBlog, Taegan Goddard/WonkWire readers)
A WSJ editorial and news coverage have called attention to a case from the Alabama high court holding Pfizer liable for a drug it didn’t produce, namely a generic knockoff of its acid reflux drug Reglan. Michael Greve agrees that it’s daffy to allow such suits, but traces the problem to the U.S. Supreme Court’s popular (at least with the media) 2009 decision in Wyeth v. Levine, okaying state tort actions over federally approved labels — and cautions that any victories for regulated business on the issue of federal-state preemption tend to be temporary at best. More: Coyote, FedSocBlog.
After the quarter-century disgrace that is Proposition 65 litigation — run by and for lawyers’ interests, with no discernible benefit to the health of the citizenry — you’d think California voters would have learned a thing or two. But unless poll numbers reverse themselves, they’re on the way to approving this fall’s Proposition 37, ostensibly aimed at requiring labeling of genetically modified food, whose main sponsor just happens to be a Prop 65 lawyer. I explain in a new piece at Daily Caller. More coverage: Western Farm Press; Hank Campbell, Science 2.0; Ronald Bailey, Reason (& Red State).
More: defenders of Prop 37 point to this analysis (PDF) by economist James Cooper, arguing that 37 is drafted more narrowly than 65 in ways that would avert some of the potential for abusive litigation. And from Hans Bader: would the measure be open to challenge as unconstitutional, or as federally preempted?
The media and legal academy largely applauded the Supreme Court’s 2009 ruling on preemption, but Michael Greve deems its outcome “irresponsible and not even minimally rational”:
Under the Federal Food Drug and Cosmetics Act (FDCA), drugs sold in the United States require an FDA-approved label—the elaborate, incomprehensible (to laymen) sheets you find inside every package. Every sentence is dictated by FDA requirements, down to the font and letter size. Violations of these requirements, and the sale of drugs without the label or a different label, are subject to very severe penalties. The statutory scheme operates to the explicit exclusion of any state regulatory (administrative) scheme. What Wyeth asks us to believe is that state juries may nonetheless hold drug manufacturers liable, for accidents caused by use in direct contravention of the federal label, on the grounds that the federally required label was inadequate. Meticulous compliance with federal requirements doesn’t preempt “failure to warn” liability under state common law.
James Beck explains and Orac has some strong views as well (“I’m afraid Justice Sotomayor borders on the delusional when she blithely proclaims that courts are so good at efficiently disposing of meritless product liability claims.”) More: Kathleen Seidel and footnotes.
P.S. But preemption does not carry the day in an automotive case, Williamson v. Mazda.
As we have seen in earlier coverage, automakers will get sued over some kinds of accident if they decide to use laminated glass, and sued over others if they decide to use nonlaminated glass. Now Ted at Point of Law has details of another case, this one against Ford, in which the South Carolina Supreme Court held that NHTSA regulations resolved the issue at hand and should not be second-guessed by tort litigation. Unfortunately, as Ted notes, the trial bar and its allies in the Obama administration are doing their best to weaken the preemption defense, which would open up maximum scope for sued-if-you-do, sued-if-you-don’t litigation of this sort.
I may have a new job as what David Lat calls the “Class Action Avenger” and a new blog to go with it, but that doesn’t mean I won’t be speaking about more general legal reform issues. A Heritage Foundation panel on preemption, featuring Kyle Sampson, former NHTSA and DOT general counsel Jeffrey Rosen, and myself is now viewable online. It’s only fair to note that I cribbed a lot from Michael Greve’s Bradley Lecture on federalism (video), which I can’t recommend enough.
The plaintiff’s bar scores a big victory with a White House policy reversal on preemption. [Business Week].
Now that its settled that every jury should be a new regulator deciding in hindsight whether label warnings should have been stronger, some who worry about the future of the drug business are inclined to feel nauseous. Resist that feeling, points out emergency room blogger White Coat: should your condition grow so severe as to call for medical attention, the arsenal of antiemetic treatments available to doctors keeps dwindling under the legal pressure.
P.S. More: Throckmorton’s Other Signs. And, from before the decision, from Yale-affiliated neurologist Peter McAllister in the Providence Journal.
After the Wyeth v. Levine argument, I worried that the Supreme Court might decide the case on such narrow grounds that it would do little good to confront the problem of trial-lawyer abuse. I now see I wasn’t nearly pessimistic enough.
We can put the nail in the coffin in the idea that this is a pro-business Supreme Court: the 6-3 Wyeth v. Levine decision is the worst anti-business decision since United States v. Von’s Grocery, 384 U.S. 270 (1966). Justice Thomas’s confused concurring opinion is especially disappointing, as it declares an abdication of the Supreme Court’s appropriate structural role to prevent individual states from expropriating the gains from interstate commerce.
Sell your pharmaceutical stocks now, because the Supreme Court just declared it open season on productive business. One should now fear the coming decision in the as-yet-to-be-briefed Clearinghouse v. Cuomo, and the effect that is going to have on an already battered banking economy, as well.
Beck and Herrmann have first thoughts, but are likely to be relatively quiet thereafter.
Update, as Walter points out in the comments, see also Andrew Grossman’s post at Point of Law, and the earlier coverage at that site by numerous authors, dating back to when the case first began making headlines.
Contrary to the suggestion of Justice Thomas, Dan Fisher, this is not a “victory for federalism” by any stretch of the imagination: federalism is a two-way street, and permitting states to impair interstate commerce through a litigation tax upsets the federalist structure of the Constitution. See, e.g., Epstein and Greve.
The Supreme Court rejected (h/t Beck/Herrmann) tobacco companies’ argument that the FTC’s use of the Cambridge Filter Method standard of measuring tar and nicotine impliedly preempted lawsuits against the tobacco companies for advertising their cigarettes using data from the Cambridge Filter Method standard of measuring tar and nicotine. The fact that the federal government disavowed preemption lends another data point in support of Professor Catherine Sharkey’s argument that the Court tends to defer to the Solicitor General’s position on preemption disputes. Justice Thomas’s dissent, which would undo the unworkable Cipollone plurality, appears to me to be the stronger argument, but it didn’t carry the Kennedy Five.
The fact pattern is the subject of numerous multi-billion dollar lawsuits against tobacco companies alleging that their sales of light cigarettes are fraudulent. The light-cigarette consumer fraud litigation still suffers from constitutional flaws relating to due process in aggregate litigation, but these remain to be resolved.