Federal Regulations Don’t Block State Lawsuits

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Plaintiffs can claim manufacturer could have done more to prevent injury

by J. Craig Smith
Connecticut Law Tribune

December 6, 2010

In Wyeth, the U.S. Supreme Court made clear that implied federal preemption does not apply to every case in which the federal government promulgates a regulation. Wyeth v. Diana Levine, 129 S. Ct. 1187, 173 L.Ed. 2d 51 (2009). This is especially true where federal regulations can be seen as creating a “floor” rather than a “ceiling” regarding standards that protect the public. When plaintiffs allege a defect that could be remedied by higher design or production standards than federal law requires, the familiar defense of “federal preemption” may no longer work to deny plaintiffs a forum for a state lawsuit.

Federal Preemption

Article VI of the U.S. Constitution provides the basis for federal preemption, stating that the laws of the United States “shall be the supreme Law of the Land.” Federal regulations have preemptive effect equal to that of federal laws. Fidelity Federal Savings & Loan Association v. de la Cuesta, 485 U.S. 141, 153 (1983). While any state law that conflicts with federal law is “without effect,” there is a heavy presumption against federal preemption of common law tort claims. Cipollone v. Liggett Group Inc., 505 U.S. 504, 516 (1992).

This presumption is nowhere stronger than under circumstances in which the states exercise their authority relating to their citizens’ public health and safety. “In the absence of compelling congressional direction,” courts will not infer that “Congress ha[s] deprived the States of the power to act.” New York Tel. Co. v. New York State Dep’t of Labor, 440 U.S. 519, 540 (1979) (internal quotation marks omitted). Indeed, the “historic police powers of the States [are] not to be superseded by … Federal Act unless that [is] the clear and manifest purpose of Congress.” Cipollone v. Liggett Group, 505 U.S. at 516. The party asserting preemption has the difficult burden of overcoming the presumption against preemption. “The conflict standard for preemption is strict... federal preemption cannot be premised on ‘unwarranted speculations’ as to Congress’s intent… (internal citation omitted).’” Affordable Housing Foundation Inc. v. Silva, 469 F.3d 219, 236 (2007).

“Whether federal law pre-empts a state law establishing a cause of action is a question of congressional intent.” Hawaiian Airlines Inc. v. Norris, 512 U.S. 246, 252, (1994). To ascertain congressional intent with respect to preemption, courts must look to “the text and structure of the statute at issue.” CSX Transportation Inc. v. Easterwood, 507 U.S. 658, 664 (1993).

Preemption may be expressly stated in the statute or implied in the statute’s structure and purpose. Federal law impliedly preempts state law when either (1) the scope of the statute shows congressional intent to occupy a field exclusively, or (2) state law is in actual conflict with federal law. Implied conflict preemption, when state law presents an actual conflict with federal law, can arise in one of two ways: either when it is (1) impossible for a person to comply with both state and federal requirements (field preemption) or, (2) when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress” (conflict preemption). Hillsborough County v. Automated Medical Labs Inc., 471 U.S. 707, 713 (1985).

The Impact of Wyeth

The Wyeth v. Diana Levine case involved drug labeling, but has implications in many other fields. In Wyeth, the U.S. Supreme Court ruled that plaintiff’s state law negligence and strict liability claims were not preempted by the Federal Food and Drug Administration’s labeling requirements. The plaintiff sued the drug manufacturer for failing to adequately warn of risks associated with the use of the drug Phenergan by injection.

After losing at the trial court, the Wyeth pharmaceutical company appealed, asserting that state tort suits were impliedly preempted by the FDA regulation of drug labels. Wyeth argued that the state lawsuit was impliedly preempted because: (1) it was impossible for the company to comply with the state law and federal law; and (2) recognition of the state tort action would create an obstacle to the accomplishment of a Congressional purpose. The Supreme Court rejected both theories.

The court began by rejecting the notion of impossibility of compliance with state and federal law. Wyeth argued that because the FDA retains the authority to approve drug labels, it would have been impossible for the company to have complied with its duty to submit new warnings to the FDA and also comply with the rule created by the state tort suit which would have required it to alter the warning on the Phenergan bottle without FDA approval. The Supreme Court found that because Wyeth failed to prove that the FDA would have rejected a strengthened warning, it could not prove impossibility. The court assumed “that the historic police power of the States were not to be superseded by … [a] Federal Act unless that was the clear and manifest purpose of Congress,” and found no evidence of congressional intent to outlaw state tort suits.

The Wyeth court also decided against implied preemption based on the frustration of a congressional purpose. The court rejected an FDA claim found in the preamble to the regulation on drug labeling, that the regulation created “both a ‘floor’ and a ‘ceiling’” regarding labeling requirements for drugs. Looking to the purpose of the regulation, the Supreme Court found that “[s]tate tort suits uncover unknown drug hazards and provide incentives for drug manufacturers to disclose safety risks promptly. They also serve a distinct compensatory function that may motivate injured persons to come forward with information.”

Thus, the court reasoned, the purposes of the FDA, rather than being obstructed, were furthered by state tort suits that sought to enhance safety, since the ultimate goal of the drug labeling regulations was safety. The Wyeth decision followed a line of cases regarding other federal regulatory schemes. See, e.g., Geier v. American Honda Motor Co., 529 U.S. 861 (2000)(automobile defects).

Conclusion

The conclusion to be drawn is simply that preemption is no longer a guaranteed method to deprive a plaintiff of their day in court under state product liability laws. Just because the federal government regulates an area does not necessarily mean that a plaintiff cannot make a claim if a product manufacturer could have done more to prevent an injury. Much depends on the specific defects that the plaintiff alleges, so careful drafting is a must.