Obama Asks Federal Agencies to Review Preemption

President Obama recently ordered federal agencies to perform a comprehensive review of all regulations released in the past ten years to determine if federal "preemption" was improperly implemented in any of these regulations. 

President Obama's order represents yet another major departure from the policies/philosophy of the Bush Administration.  The Bush Administration encouraged federal agencies to add preemption language to their respective regulations.  This position was grounded in the policy that plaintiffs were being given too many opportunities to circumvent federal laws and bring state law tort claims against corporations. 

Although "next step" guidance has yet to be provided to federal agencies, and specific industries have yet to be fingered as prime offenders, the Obama order could have a significant impact on the life sciences industry. 

This order comes on the heels of the Supreme Court's decision in Wyeth v. Levine, where the Supreme Court determined that state law tort claims against pharmaceutical companies were not preempted by FDA approval of those companies' drugs.  The Obama order may have the effect of widening the gateway provided by the Supreme Court to sue pharma companies, and may further have the effect of opening the gateway against medical device companies and other players in the industry. 

This Life Sciences segment of the SZDHealthLawScan has kept a close eye on preemption cases in the industry, and we will provide ample commentary on the effects of President Obama's recent order. 

H.R. 1346 May Overturn Riegel v. Medtronic

House Energy and Commerce Committee's Health Subcommittee held hearings on May 12, 2009 that could lead to the overturning of the Supreme Court decision in Riegel v. Medtronic, Inc., which established that state law tort claims against medical device manufacturers are expressly preempted by federal law.

The hearings are the first step in the legislative process for H.R. 1346, known as the Medical Device Safety Act of 2009. This bill would amend 21 U.S.C. § 360k by adding a new subsection (c) that, as proposed to the subcommittee, reads, "No Effect on Liability Under State Law- Nothing in this section shall be construed to modify or otherwise affect any action for damages or the liability of any person under the law of any State."

Currently, subject to a few exemptions, Section 360k(a) prohibits states from establishing or continuing "in effect with respect to a device intended for human use any requirement – (1) which is different from, or in addition to, any requirement applicable under this chapter to the device, and (2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this chapter."

Based on its interpretation of Section 360k, the Supreme Court in Riegel held that the Food and Drug Administration's (FDA) pre-market approval process for medical devices preempted state law tort claims against medical device manufacturers.

Now, H.R. 1346 seeks to overturn the Riegel decision by incorporating language into Section 360k that parallels the language contained in another preemption statute that the Supreme Court has already acknowledged as preserving states' product liability actions.  According to the Supreme Court in Wyeth v. Levine, Section 379r of Title 21 of the United States Code preempts "certain state requirements concerning over-the-counter medications and cosmetics but expressly preserved product liability actions." Section 379r parallels Section 360k by also prohibiting states from establishing or continuing a requirement that is "different from, in addition to, or that is otherwise not identical with," a requirement established under a number of enumerated federal statutes. However, unlike Section 360k, Section 379r preserves certain state law claims with language that is almost identical to that of H.R. 1346: "Nothing in this section shall be construed to modify or otherwise affect any action or the liability of any person under the product liability law of any State."

Therefore, should H.R. 1346 become law, it would lay the foundation for overturning Riegel v. Medtronic. As a result, medical device manufacturers would once again join pharmaceutical drug manufacturers, which recently lost their own argument for preemption, in facing state law tort claims. See also, "The Supreme Court Decides Wyeth v. Levine" on the Supreme Court's decision that the FDA's pre-market approval of pharmaceutical drugs does not preempt state law tort claims.

The Supreme Court Decides Wyeth v. Levine

On March 4, 2009, in Wyeth v. Levine, No. 06-1249, the United States Supreme Court upheld, by a 6-3 vote, the Vermont Supreme Court's holding in favor of a patient who argued that the Food and Drug Administration's (FDA) approval of a pharmaceutical drug's label warnings did not impliedly preempt state failure-to-warn claims.

The Plaintiff, Diana Levine, sued Wyeth, the manufacturer of a drug that a physician's assistant had incorrectly administered causing gangrene to develop in her arm. While the drug's label contained warnings about certain techniques related to the methods of administration, the physician's assistant had used an FDA-approved method. Levine asserted state failure-to-warn claims arguing that the FDA-approved label warnings inadequately warned about the dangers associated with the particular method the physician's assistant had used. A Vermont state court denied Wyeth's motion for summary judgment asserting that federal law preempted the state law claims, and a jury found for Levine. After the Vermont Supreme Court affirmed, the United States Supreme Court granted Wyeth's petition for certiorari.

Writing for the majority, Justice John Paul Stevens rejected Wyeth's two major arguments. Wyeth first argued that the state claims were preempted because it was impossible for a drug manufacturer to comply with both the state law and the federal labeling duties. Wyeth claimed that only the FDA could change the labels. However, Stevens concluded that the "changes being effected" (CBE) regulation provided Wyeth with the means to satisfy both the state and federal duties because the CBE regulations permitted Wyeth to unilaterally add a stronger warning about IV-push administration without prior FDA approval.

Wyeth also argued that compliance with a state-law duty to provide a stronger warning about IV-push administration would obstruct the purposes and objectives of federal drug labeling regulation, which Wyeth unsuccessfully argued, was to leave such decisions to the FDA, an "expert agency." However, Stevens focused on the lack of a federal remedy for consumers harmed by inadequate warnings and the lack of an express preemption provision. He then concluded, "Evidently, [Congress] determined that widely available state rights of action provided appropriate relief for injured consumers."

In rejecting Wyeth's second argument, Stevens dismissed similar Bush Administration arguments from the FDA and the Department of Justice (DOJ). In addressing the FDA's claim of preemption in its 2006 preamble, which the Court saw as "revers[ing] the FDA's own longstanding position, Stevens wrote that the claim "does not merit deference" because it lacked "thoroughness, consistency, and persuasiveness." Likewise, in a footnote, Stevens dismissed the DOJ's amicus brief as "similarly undeserving of deference." Instead, he deferred to tradition: "it appears that the FDA traditionally regarded state law as a complementary form of drug regulation."

Writing for the dissent, Justice Samuel Alito argued that juries are "ill-equipped" to perform the FDA's role in deciding whether a prescription drug's label is adequate. Additionally, while Alito also did not defer to the FDA's 2006 preamble, he did defer to the FDA's labeling decisions. He argued that the only relevant question was whether the "State had upset the regulatory balance struck by the federal agency." As precedent for this proposition, Alito looked to the Court's decision in Geier v. American Honda Motor Co., 529 U. S. 861 (2000), which he concluded "compels" the preemption of state law in the present case. There, the Department of Transportation (DOT) had permitted car manufacturers to choose from a "menu" of passive restraints in cars. As a result, a plaintiff's state law claim against a car manufacturer for not choosing a certain passive restraint was preempted because it would upset the balance of DOT's regulatory scheme. Alito analogized this menu of passive restraints to the drug label's options for methods of administration. As in Geier, where DOT concluded that the menu options were safe, so too the FDA had decided, through its labeling decisions, that the drug label's options were safe and Levine's state law claims should be preempted.