Recently in Preemption Category

Gregory Conko, a senior fellow at the Competitive Enterprise Institute, a Washington D.C.-based think tank, asked an important question in a piece published on our sister blog Medical Progress Today. Who should be liable when a patient is injured by a generic drug?

In a case called Conte v. Wyeth, a California Intermediate Appellate Court in San Francisco held that, since plaintiffs can't sue a generic manufacturer for negligent failure to warn, then they should be able to sue the innovator manufacturer who had some control over the contested labeling -- even if the patient didn't take the innovator's product, and even if the innovator is no longer manufacturing the off-patent drug and therefore no longer keeping its labeling up to date.

Conko tackles the "reasonably foreseeable" theory that emerged from the Conte decision and discusses the potential implications that the broad adoption of such tort theory can have on innovation. While the analysis doesn't call for a particular legal solution, Conko provides insight into a potential Supreme Court issue.

We've previously discussed a series of lawless cases in Nevada against Teva Pharmaceuticals and Baxter Healthcare over the misuse of propofol by the Desert Shadow Endoscopy Center, whose ludicrously unsanitary practices caused dozens of cases of hepatitis C: May 19, 2010; May 24, 2010; ; June 17, 2010; March 4. The culpable doctor and entities are bankrupt, so lawyers have been going after the deep pocket, aided by judges that refuse to apply federal law barring such lawsuits or to permit the corporate defendants to defend themselves by letting juries know the real facts of the case. As we noted in November, procedural shenanigans have promoted the scheduling of a case involving a plaintiff-friendly judge making improper rulings while staying a related case in another courtroom where the judge is following the law.

Over the last week, a jury in the Sacks v. Endoscopy Center of Southern Nevada LLC case found the pharmaceutical defendants liable again: $20 million in "compensatory" damages, and $162 million in punitive damages. A third jury awarded $14 million in compensatory damages to another plaintiff, and is considering punitives. None of the press or blog coverage adequately indicates how scandalous and abusive these verdicts are. [LVRJ; Reuters/Frankel; AP/WaPo; Pharmagossip; Pharmalot]

(I'll be at UNLV Law in February discussing the propofol litigation.)

A Health Affairs study (summarized by Reason) puts to rest the hoary claim that Medicare is more "efficient" than privately administered insurance programs: even without the high corporate executive pay and advertising of private insurance, Medicare's administrative expenses per enrollee are higher than private insurance. And that's before we get into the fact that Medicare underspends on fraud prevention, losing tens of billions a year that way.

Medicaid will get only more expensive if the Supreme Court affirms a Ninth Circuit decision in a pending case, Douglas v. Independent Living Center of Southern California. The Ninth held that Medicaid providers could sue states over their Medicaid reimbursement policies and ask for courts to adjudicate disputes over whether the states were complying with federal law—though the federal law has no such provision for private action. If so, that's a one-way ratchet for increased costs to state and federal taxpayers, with outlays being decided by judges even more unanswerable to voters than the existing regulatory mechanisms. Oddly, the Chamber of Commerce finds itself in the position of supporting an implied cause of action, arguing that one can enforce the Supremacy Clause in any preemption situation. It seems to me that the Solicitor General's brief has the better of the argument in suggesting that Ex parte Young-style suits are limited to cases where plaintiffs are claiming immunity under federal law to state regulatory action, rather than a broad cause of action to resolve inter-governmental disputes. It's hard to see where the Chamber's limiting principle is: if parties can sue states in an implied cause of action to force compliance with the parties' preferred statutory and regulatory construction, why can't parties sue other private parties in Buckman style claims over alleged regulatory non-compliance? So, yes, I'm siding with the Obama administration against the Chamber of Commerce. More: NYT, NCLC resource page; ABA resource page. The case will be argued at the start of the term on October 3.

Plaintiffs have filed a long-shot petition for rehearing in PLIVA v. Mensing. Beck explains why it's a dumb petition.

In two major decisions today that will interest the readers of this site, the Supreme Court held that the class alleging gender discrimination against Wal-Mart was improperly certified in Wal-Mart v. Dukes and that the EPA's governance of carbon-dioxide regulation under the Clean Air Act displaced the federal common law public nuisance suit brought by various states and municipalities in AEP v. Connecticut. The holding in both cases was unanimous, though not without underlying disagreement. In Dukes, the justices split 5-4 over whether to dismiss the suit outright (the majority decision) or whether to remand for further consideration as a 23(b)(3) class action (Justice Ginsburg's position, joined by Justices Breyer, Kagan, and Sotomayor). In AEP, the justices split 4-4 on whether the plaintiffs had standing to sue (presumably the same split as in Massachusetts v. EPA), and Justice Alito wrote separately, joined by Justice Thomas, to emphasize that his decision rested on the assumption that the Clean Air Act applied to carbon dioxide emissions (the position he rejected in Massachusetts v. EPA) (Justice Sotomayor, who was involved in the suit below, recused).

Those who didn't see our earlier discussion on Dukes, which pulled in various thinkers and practitioners, should check it out now and compare with the actual decision. The Manhattan Institute also wrote a fair amount on the AEP global-warming-as-public-nuisance case in last fall's Trial Lawyers, Inc.: Environment.

Josh Blackman summarizes Dukes here and AEP here. Walter Olson assesses Dukes here. And as Blackman notes, the Dukes decisions, both majority and dissent, are replete with citations to our dear departed friend Richard Nagareda's published writings, both The Preexistence Principle and the Structure of the Class Action, 103 Colum. L. Rev. 149, 176, n. 110 (2003) and Class Certification in the Age of Aggregate Proof, 84 N. Y. U. L. Rev. 97, 131-132 (2009).

The American Association for Justice has filed its first quarter lobbying disclosure form with the Clerk of the House, reporting $850,000 in lobbying expenses for the period, down from the $910,000 reported in the fourth quarter of 2010. The report filed with the House Clerk's Office indicates continued lobbying on familiar issues, such as:

• Notice pleadings in federal courts (Iqbal/Twombly)
• Preemption of state causes-of-action involving drug manufacturers
• Various bills to restrict pre-dispute arbitration provisions in contracts.
• S. 623/H.R. 592 (Sunshine in Litigation Act of 2011); relating to the use of protective orders, sealing of cases, and disclosure of discovery information in federal civil cases. (See earlier POL post.)

In light of the new Republican control of the U.S. House, the trial lawyers are also lobbying some new issues and pieces of legislation. These jumped out at us:

• H.R. 966/S. 533 (Lawsuit Abuse Reduction Act of 2011); to amend Rule 11 of the Federal Rules of Civil Procedure to make sanctions mandatory.
• S. 299/ H.R. 10 (Regulations From the Executive in Need of Scrutiny Act of 2011); to provide that major rules of the executive branch shall have no force or effect unless a joint resolution of approval is enacted into law.
• H.R. 1 (Full-Year Continuing Appropriations Act); specific interest in House Amdt. 85 to defund the Equal Access to Justice program, and House Amdt.159 to defund the the Consumer Product Safety Commission Product Safety Database.
• H.R. 887(no short title); to direct the Secretary of the Interior to submit a report on Indian land fractionation, and for other purposes, specific interest in the modification of attorney's fees. (This is a post-Cobell piece of legislation from Rep. Don Young (R-AK).

The GOP House has also elicited an increased level of lobbying against federal medical liability reform, specifically, H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act and malpractice reforms generally. The AAJ continues to go outside its own lobbying shop to pay Patton Boggs to work the health care issue, among others, to the tune of $130,000 for the quarter, as well as Forscey and Stinson, $50,000.

The AAJ has also added another lobbying firm to handle medical liability and health care issues, Van Heuvelen Strategies, LLC. Bob Van Heuvelen is the former chief of staff to Sen. Kent Conrad (D-ND), who is not seeking reelection in 2012.

Leonard Leo discusses at the Congressional Civil Justice Caucus Academy Educational Briefing on Medical Liability Reform.

Opponents of federal medical liability reform, that is Democratic politicians and trial lawyers, commonly make two arguments against Congressional action along the lines of the current H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare Act: 1. Liability reform ignores "the real issue", that of medical errors and patient safety, and 2. Federal legislation is an attack against the states, their laws, courts and prerogatives.

The first is an attempt to change the subject, deflecting attention away from the costs of defensive medicine and putting the onus on doctors and insurance companies instead of trial lawyers.

The second serves a political purpose, appealing to federalism-minded House Republicans, especially new members aligned with the Tea Party. There's another advantage, too: The argument has legal and constitutional merit.

Unfortunately, supporters of national medical liability reform rarely engage the federalism issue. Until, that is Wednesday's hearing in a House Energy and Commerce subcommittee, "The Cost of the Medical Liability System Proposals for Reform, including H.R. 5, the Help Efficient, Accessible, Low-cost, Timely Healthcare (HEALTH) Act of 2011." In testimony on behalf of the Health Coalition on Liability and Access, Dr. Troy M. Tippett argued that activist state courts had overturned reasonable tort reforms enacted by legislatures, and health care fell under the Commerce Cause. From Dr. Tippett's prepared statement:

Enacting a federal statue, we believe, is the most effective avenue available to rein in judicial activism, address the medical liability crisis and ensure patient access to health care. H.R. 5 would level the playing field for doctors, hospitals, patients and attorneys, provide needed consistency to the system and eliminate the patchwork of protections in favor of a federal framework based on fairness and common sense.

There is plenty of legal justification for moving in this direction -- some that goes as far back as James Madison and his persuasive arguments in support of the Commerce Clause. This important provision gives Congress the ability to regulate interstate commerce (a definition which the health care industry clearly meets) when done in the public interest. In a 2003 report, the Congressional Research Service (CRS) confirmed this view, concluding that Congress has the authority to enact tort reform legislation generally, under its power to regulate interstate commerce.4 This legal logic has already been applied to an earlier medical dilemma when Congress passed the National Vaccine Injury Compensation Program, a federal program that preempts state court tort awards to protect vaccine manufacturers from bankruptcy in the face of extreme state tort jury awards. A precedent has been set, and we believe now is the time for Congress to act by passing federal medical liability legislation that protects doctors, patients and the states.

But vaccines are sold into interstate commerce and already regulated by the FDA. How is a doctor botching a procedure similar?

Eric Lasker reviews the recent Supreme Court preemption jurisprudence for WLF:

While the Court went to great lengths in Bruesewitz and Williamson to explain its opinions on narrow grounds, the lack of any clear bright line preemption rule in those cases leads inevitably to the conclusion that success in preemption litigation will turn in the first instance on which party succeeds in defining the narrative through which a court will view its analysis. In Bruesewitz, for example, the Court's detailed grammatical dissection of the NCVIA's express preemption provision could not hide the fact that both sides' proposed statutory interpretations rendered parts of the statutory language superfluous. See Bruesewitz, 2011 WL 588789 at *7. The majority opinion may have had the better of this interpretive argument, but it is difficult to credit either side's view that Congress clearly expressed its intent through the at-best inartfully-worded express preemption provision. It is likewise difficult to believe that the important public health goals specifically furthered by preemption of vaccine design defect claims did not guide the Court in reaching the proper statutory interpretation conclusion. Even more so, in Williamson, the Court's determination that the implied preemption decision turns on the "significance" of the federal regulatory decision at issue sets the stage in future preemption cases for battles over whether the policies underlying particular regulatory decisions are sufficiently (or insufficiently) significant.

The Senate Judiciary Committee is taking another run at the most controversial of President Obama's judicial nominees, holding a confirmation hearing this Wednesday on Goodwin Liu to serve on the Ninth Circuit.

Liu, a professor and associate dean at UC Berkeley (Boalt Hall), has been nominated three times: Feb. 24, 2010, Sept. 13, 2010, with the nominations expiring with Senate recesses; and this Jan. 5. Ed Whelan has written extensively on Liu's shortcomings at National Review Online.

On the House side, the Judiciary Subcommittee on Courts, Commercial and Administrative Law holds what could be a very informative hearing Monday, "The Administrative Procedure Act at 65 - Is Reform Needed to Create Jobs, Promote Economic Growth and Reduce Costs?" Witnesses:

• Susan Dudley, Director, Regulatory Studies Center, The George Washington Institute of Public Policy. Dudley is the former head of the Office of Information and Regulatory Affairs in the Bush Administration.


• Jeffrey A. Rosen, Esq., Kirkland & Ellis LLP, one of the nation's top experts on federal preemption.


• Peter L. Strauss, Betts Professor of Law, Columbia Law School