Chronicling the high cost of our legal system
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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.
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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.
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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.
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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.
The Chicago lawprof discusses the pending Supreme Court case on implied pre-emption:
…it is folly to act as if the private lawsuits attacking FDA warnings just backstop a porous and lax FDA. Often those lawsuits add an unwanted deterrent against the sale of desperately needed drugs. That risk is multiplied by hyperventilated state tort law that, in many instances, is lopsidedly pro-plaintiff.
(”Wyeth v. Levine Could Endanger Your Health”, Forbes, Nov. 11). Much more on the debate at Point of Law here, here, here, etc.
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Gary Charbonneau had a gambling history, including substantial wins, which devolved into compulsive gambling in 2002. He blames this on his Parkinson’s disease medication, Mirapex, which he started taking in 1997. Mirapex changed its warning label to include reports of a correlation while Charbonneau was taking the drug; Charbonneau’s doctor kept prescribing the drug. Nevertheless, Charbonneau was able to persuade a jury that the failure to warn was what was responsible for his $200,000 gambling losses (much of which came from gambling illegally) and resulting marital troubles. The jury verdict even awarded $8 million in punitive damages, giving a whole new meaning to jackpot justice (though one would expect the trial court to reduce this substantially). The only press coverage of this lawsuit, aside from a handful of blogs (Pharmalot; TortsProf; InjuryBoard), is in an op-ed I wrote for today’s Examiner about the case and about how a Supreme Court case and Congressional legislation could affect it. (Theodore H. Frank, “Jackpot justice gets new meaning,” DC Examiner, Aug. 19).
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You may recall a manufactured dispute over the former West Virginia Justice Richard Neely’s quote in The Product Liability Mess:
As long as I am allowed to redistribute wealth from out-of-state companies to in-state plaintiffs, I shall continue to do so. Not only is my sleep enhanced when I give someone else’s money away, but so is my job security, because the in-state plaintiffs, their families and their friends will re-elect me.
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I’m proud to be part of the amicus brief in Wyeth v. Levine filed by leading economists John E. Calfee, Ernst R. Berndt, Robert Hahn, Tomas Philipson, Paul H. Rubin, and W. Kip Viscusi. It provides an excellent explanation why FDA preemption is good for consumer safety and health policy, and why failure-to-warn litigation by trial lawyers hurts consumer safety. (You may notice that none of the public-policy arguments against preemption you see in the blogosphere fairly address these economic arguments.)
For everything you could possibly want to know about the Wyeth v. Levine case, do see Beck & Herrmann’s roundup of their excellent posts on the subject, and keep an eye out for their discussion of the top-side briefs undoubtedly coming soon.
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If you’re looking for the most strained use of Martin Luther King, Jr., as a metaphor, look no further than a non sequitur at Bizarro-Overlawyered, where Kia Franklin calls on King’s memory as an argument against preemption. The historically minded will note the irony of invoking King’s name in a defense of states’ rights to subvert federal principles of uniform treatment. For more on preemption, see Greve and Epstein, POL March 2006, and POL on last week’s cert grants in preemption cases.
We’ll talk about King, too, but relate it to something he actually said: “I have a dream that my four children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.” See posts Jan. 2007 and Dec. 2006, Heriot @ POL, Jan. 2006, and POL on the Akaka bill. As Chief Justice Roberts noted (and was criticized for noting) in the last term, “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race.”
(And update: don’t forget October 2006 on school discipline. Or October 2005 on why the great documentary “Eyes on the Prize” still isn’t available on DVD to the general public.)
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The latest AEI Liability Outlook explores my take on the tort reform implications of October Term 2006.
My latest Liability Outlook for AEI is about the Ford Explorer rollover litigation and what it says about products liability litigation in the US in general:
It went generally unnoticed last November when the California Supreme Court refused to review an intermediate court’s decision in Buell-Wilson v. Ford Motor Co. But then again, it went generally unnoticed when a jury awarded an arbitrary $368 million in damages in that case, when the trial judge reduced that verdict to an arbitrary $150 million judgment, and when an intermediate appellate court reduced that figure to an arbitrary $82.6 million (which, with interest, works out to over $100 million). Products liability verdicts have become so run-of-the-mill that even nine-digit verdicts and their aftermath receive only local or specialty press coverage, with cursory national coverage. But Buell-Wilson demonstrates much that is wrong with the current liability regime, including the fact that the media is so jaded by litigation abuse that a $368 million verdict is barely newsworthy.
I have a related letter to the editor in the Jan. 1 Legal Times. See also POL Dec. 13, OL Dec. 12, OL Jun. 3, 2004.
Point of Law Volokh