The Bush Administration is making a final push to accommodate bosses in Corporate America who have been working hard for years in their attempt to destroy the civil justice system and thereby protect corporate wrongdoers. The years under the Bush Administration have been very bad for consumers. The current Administration’s effort –if successful – could lead to a complete destruction of consumer rights. The name of the tort reform game in the last days of this Administration is “federal preemption.” “Federal preemption” means that where a federal agency has acted – and sometimes even when it hasn’t, if the area is within the agency’s federal regulatory sphere – states are barred from taking stronger action, or any action at all, and consumers are barred from pursing lawsuits under state law, where virtually all personal injury, defective product, consumer fraud and other consumer protection law has developed over many decades. That’s something as anti-American as anything the tort reformers have done thus far. When you consider how weak and ineffective federal regulation has been by agencies such as the Food and Drug Administration, the National Highway Transportation Safety Administration, the U.S. Consumer Protection Safety Commission, and the Federal Aviation Administration, you see the ¬¬fallacy in federal preemption.

I will first take a look at the FDA because the inept performance by that agency is a classic example of why preemption is bad for the American people. The following are some specific examples of how truly bad the FDA performance has been:

• Liver problems forced Pfizer to withdraw its diabetes drug Rezulin from the U.S. market in 2000.
• Bayer pulled Baycol in 2001 because it caused muscle damage in patients.
• Of course, the most prominent of all the drugs that had to be withdrawn for safety reasons was Vioxx, which as we all know, was pulled by Merck & Co. in 2004 because it was causing heart attacks and strokes.

These and several other unsafe drugs all received approval by the FDA. If preemption is allowed, no person who is injured as the result of using these drugs will be allowed to file a lawsuit based on state product liability laws. A family who had a family member die as the result of a bad drug – even if it could be proved that the same drug had killed hundreds or even thousands – would not be able to file a lawsuit in a state court. That is the ultimate in protecting corporate wrongdoers and punishing their innocent victims.

The U.S. Supreme Court will soon hear a case that all Americans should become knowledgeable about because they have a vested interest in the outcome (Wyeth v. Levin, No. 06-1249). Those who realize that trusting Corporate America and federal agencies hasn’t protected the public health and safety should hope and pray that the High Court will do the right thing in this case and reject federal preemption. The case before the Court involves Diana Levine, a professional pianist, who lost her right arm eight years ago because a drug company failed to warn of a known hazard. The prescription drug Phenergan had been administered through this woman’s vein for a migraine headache. Ms. Levine filed a lawsuit against the manufacturer, Wyeth, alleging the company was aware that an arterial reaction was a risk in the intravenous technique that was used, but failed to mention it on the drug’s warning label. She received a $6.8 million judgment in her trial in a state court.

The issue before the U.S. Supreme Court in the Levine case is whether the existence of federal regulation regarding drug labeling by the FDA prohibits states from allowing victims to file state law product liability lawsuits in state courts. The High Court, in reviewing the case, must decide whether a regulatory agency can ignore Congress and actually ignore the constitutional rights of individual citizens. The case will not be heard by the Court until sometime during its 2009 term, which does not begin until October of 2008. It’s very clear that Congress never intended for preemption to become the law of the land in cases of this sort. There is nothing in any act of Congress that provides for federal preemption in cases like the Levine case.

For at least the past 15 years, the bosses in Corporate America have been pushing hard, and so far unsuccessfully, for Congress to adopt legislation that would literally destroy state court systems. Now they contend it’s unfair to allow claimants to bring lawsuits in state courts, arguing that those claims should be exclusively federal matters. That is patently absurd when you put the issue in its proper perspective. The states have the right under the U.S. Constitution to establish and maintain a court system that provides a forum in which violations of state law can be litigated by victims of wrongdoing. In addition, a citizen of the United States has a right under the Constitution to a trial by jury – a basic right that often times is totally ignored.

The record of federal regulatory agencies is awful when it comes to protecting the public on safety and health issues. Clearly, the threat of civil litigation gives corporations a powerful incentive to make products that are safe for use. Suddenly, federal agencies, under pressure from the Bush Administration, have become very aggressive in unilaterally declaring that their regulations preempt state law. Such declarations often flout or even contradict the intent of Congress, which is the traditional standard of whether federal statutes or federal agency regulations override state law. In at least one instance the federal agency has snuck in preemption language after the proposed regulation was published for public comment. Traditionally, citizens of a state have had the right to pursue remedies in that state’s courts where a wrongful act violates state tort law. Historically, any decision that would alter that has always been within the sole purview of Congress.

The reality is that preemption affects more than just drugs and medical devices that fall under the FDA. It will also affect products of all sorts. The following are clear examples of how other federal agencies, at the direction of the Bush Administration, have attempted to protect corporations that commit wrongful acts that injure or kill innocent victims:

• Auto safety (2005): The National Highway Traffic Safety Administration promulgates rules on seat belts, roof-crush resistance and rear-object detection systems - and attempts to preempt state tort law in the preambles to those rules.
• Mattress safety (2006): The Consumer Product Safety Commission promulgates new flammability standards for mattresses that it predicts could save 270 lives a year. But, the Commission made a last-minute addition to the rule that attempts to preempt state tort law. This was the first such move in the Commission’s 33-year history.
• Chemical plants (2006): The Department of Homeland Security issues new rules on chemical-facility safety that give state and local communities the responsibility for emergency response and clean-up - but attempts to preempt states from adopting and enforcing their own stricter laws to prevent accidents in the first place.
• Railroad safety (2006): The Federal Railroad Administration issued a rule that effectively grants immunity from state lawsuits to railroad companies in the event of a commuter train derailment. This came just four days after Congress approved a measure that preserved the right of victims to sue railroad companies in such instances.
• The Airline Industry (2008): Let’s assume that the Federal Aviation Agency decided to issue a rule that gave commercial airlines immunity from lawsuits in the event of a crash of an airplane owned by a commercial airline. We have seen recently how poor a job the FAA has done in regulating the industry. Surely, we wouldn’t want federal preemption to apply in cases where airlines ignored the safety and welfare of passengers.

Preemption is a very bad thing for consumers because it takes away their rights and protects corporate wrongdoers. If the U.S. Supreme Court ignores tradition and established legal principles to allow preemption, persons who are injured or families who lose a family member will have no place to go for relief. In such an event, there will be no reason for a corporate manufacturer to put safe products on the market. You can imagine what would happen if there was no threat of a lawsuit when corporate marketing executives consider safety issues. If the High Court rules against the American people, it will then be up to Congress to remedy the situation and make it right.

So, the bottom line is that the FDA says you can’t sue the maker of drugs or medical devices for injury if they meet agency standards; the CPSC says you can’t sue a mattress maker if your mattress bursts into flames despite meeting CPSC standards; and carmakers making vehicles with weak roof structures would get similar protection from lawsuits brought by people injured or by the families of those killed in rollovers under NHTSA’s roof crush standards. Most Americans have no concept of federal preemption and don’t realize that it will be bad for them if it is upheld by the U.S. Supreme Court.

Those who are pushing federal preemption claim that Article 6 of the U.S. Constitution (The “Supremacy Clause”) supports their position. But, this article has no application to the preemption issue unless Congress mandates it. In areas where there is no federal law, federal courts must defer to laws of the state where a lawsuit is filed. That well-defined legal principle includes product liability litigation. A developing body of judicial opinion could place new limits on the rights of those who buy or use products. It also could mean the savings of billions of dollars by companies insulated from lawsuits by the shield of preemption.

The assertions by federal regulatory agencies that their rules override state product-liability laws are clearly contrary to law. It’s significant that the agencies’ claims are found in statements in the introductions to their rules, not in the rules themselves. There is no way to justify a federal agency making law that would preclude a state law claim being filed in a state court. That is even more true when the preemption language is found in the preamble to a rule.

One example of what this means to the average person is found in NHTSA’s proposals for new SUV-rollover rules. Attorneys General from 26 states asked the organization in 2005 to drop lawsuit protection from the rules, which could go into effect as early as July 1st. As pointed out, state governments and the federal government will have to cover millions of dollars in health care costs, which they will pass along to taxpayers — costs that, by all rights, should be the responsibility of manufacturers. But, even in the face of strong opposition, NHTSA hasn’t dropped the preemption provision. Senator Patrick J. Leahy of Vermont pointed out at hearings last fall that federal agencies have issued at least a dozen rules to shield drug and other product manufacturers from liability. All of this was done under explicit direction from the Bush Administration, and it was done quietly with little, if any, fanfare.

We were heavily involved in lawsuits in federal court against Merck & Co. and know first-hand how federal preemption, had it been allowed, would have affected this litigation. In suits claiming the painkiller Vioxx caused heart attacks or strokes, Merck & Co.’s defense included the FDA’s claim that its approval of the label warning protected the company. A federal judge correctly rejected that defense and has since approved the $4.8 billion settlement involving Vioxx. Had Merck really believed that its preemption defense was valid, the drug company would never have agreed to this settlement. The settlement is headed toward completion, and as they say, “the proof is in the pudding.”

While preemption is being quietly pushed by the Bush Administration and some of the bosses in Corporate America, it has the potential of literally destroying the states’ civil justice systems. This is as un-American as it gets because a citizen of any state has the right under the U.S. Constitution to have these type cases litigated in the courts of his or her state. The U.S. Supreme Court should follow what has been an established legal principle and reject federal preemption. Unless Congress acts and authorizes preemption, a federal agency shouldn’t be allowed to sneak it into a rule or standard or into the preamble to a rule or standard. It’s sort of like the sneak attack on Pearl Harbor that triggered World War II. If our Supreme Court puts its stamp of approval on this attack on consumer rights, it will wake a “sleeping giant,” the American people!

Source: Washington Times, Insurance Journal and Associated Press

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