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Regulatory Compliance and Presumptions

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On the TortsProf blog, I�ve mentioned the consistent surprise students express at the lack of a regulatory compliance defense. In fact, in my Products Liability course, I have assigned an essay on what each student thinks is wrong about the law as it stands; both times I�ve assigned it, roughly a fourth of the students have expressed frustration with the fact that compliance with regulation and $3.00 will get you a skinny vanilla chai tea latte but not much more, at least formally, in front of a jury. (They don't usually reference chai tea, though.)

Their concern comes, I think, from two sources. First, it�s a feeling of sympathy for the defendants. The case that typically is cited is one in the Owen et al. casebook I use, Metzgar v. Playskool, 30 F.3d 459 (3d Cir. 1994), in which an infant choked to death on a small play block that was in compliance with all relevant regulations (which were seemingly comprehensive). The block set in question, which had been sold for years, had never caused choking before. Yet summary judgment for the defendant was reversed. In class, students often discuss the tough position in which the manufacturer finds itself, complying with all regs but still potentially on the hook, without their compliance even getting them a thumb on the scale.

The second source of concern is that the lack of a defense fails to give any deference to the agencies that are supposed to have expertise in their respective area, whether the FDA, CPSC, NHTSA, or anything else. Even if they occasionally make mistakes, the thinking goes, they�re going to be right far more often than they�re going to be wrong.

Those concerns are tempered, naturally, by recognition of the substantial risk of capture, politically-motivated decisions, of or mere incompetence by the agency, and so outright preemption is rarely appealing to the students. (For similar reasons, I�m not ready to endorse preemption, at least with the agencies we have today.)

So what other options are there? I have a fairly nascent idea that I�m working on putting into article form this summer, but let me run through its current outlines and welcome your feedback (comments are open on the TortsProf blog).

The first part of the idea is that qualified agency determinations (�qualified� defined below) would, if challenged in litigation, be entitled to a presumption of correctness. The jury would be told that the agency�s determination was presumed correct, and that, in order to find contrary to the determination, the jury would have to find the relevant facts by clear and convincing evidence. Thus, the one nominally neutral person in the courtroom would tell the jury that agencies are presumed to do their job.

(This presumption would only come into play if the jury is being asked to directly reject the agency determination; thus, in some consumer expectations jurisdictions, for example, an agency risk/utility determination may not be directly challenged.)

Those of you who have been involved in patent law may be thinking this presumption sounds familiar, and indeed it is based on the presumption of validity in patent litigation. I published a piece in the final issue of the Minnesota Intellectual Property Review pointing out the disjunction between according the Patent Office a presumption of validity and giving the FDA none.

The first step of this proposal, then, is expanding that PTO/FDA observation beyond the FDA context to all agencies. In the MIPR article, I do acknowledge the problems with giving what is at best an iffy Patent Office deference, but that�s beyond the scope of this post except to note that the FDA and most other safety agencies are, in my view, less iffy.

But what about the hostility to science that I mentioned on the first day of posting here? What if the agency determination was contrary to (for example) the recommendation of career scientists, or was demonstrably politically motivated? Or if it simply was a dumb decision ignoring the consensus of experts? Well, that�s where the second part of my idea comes in.

In order for the agency determination to be �qualified� such that the presumption applies, its proponent (in most cases the defendant) would have to qualify the agency determination much the way that the parties qualify expert testimony. In essence, the proponent would have to justify the methodology followed by the agency as if the agency was an expert witness, by means of a Daubert showing, for example.

After all, the purpose for offering the approval or other agency action showing that an expert reached the conclusion that the product was, for example, safe and effective. If the agency relied on a methodology that would be rejected if followed by a litigation expert, its conclusions should carry no presumption.

Obviously this is not a final concept. Open questions remain:

  • To what, precisely, would the presumption attach? (If a product was last blessed by the relevant agency in 2000, is it still presumed to be safe in 2006?)

  • How, procedurally, would you �qualify� an agency determination? (Do experts testify about what the agency did? How much evidence can you get of the agencies� methodologies?)

  • If the agency determination is based on a flawed methodology, should it be excluded entirely or just not given any deference?

  • How would it intersect with the APA and related regulatory law?

It may be that the qualification process would ultimately add more complication than it would be worth in terms of placing a check on according deference to egregiously mistaken agency determinations � especially since such determinations, if all that egregious, would probably be rejected under any standard.

Back when I wrote the MIPR piece, I spoke with a number of people from the plaintiffs� bar in pharmaceutical cases. Interestingly, most said that, while they wouldn�t welcome it, they also didn�t think it would make much of a difference in the genuinely mass torts, because such cases don�t become mass torts without evidence that could satisfy either a preponderance or a clear and convincing evidence standard. Without some jury research, I can�t imagine how to test that assertion, and I'm not sure of its effect in other contexts either.

But even if it only had an effect on cases at the margins, it would give concrete form to something that most people would acknowledge: In the vast majority of product safety decisions made by the various regulatory agencies, the agencies get it right. The career scientists and other experts and, yes, even the political appointees, generally do their jobs well, and that should be accorded some recognition � with a safety valve for when they don�t.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.