[Corp. Watch] Supremes: Corporations can't always hide from states behind compliant Feds

[Corporation Watch]

No Legal Shield in Drug Labeling, Justices Rule

  By Adam Liptak

(NY Times, March 5) -- In a major setback for business groups that had  
hoped to build a barrier against injury lawsuits seeking billions of  
dollars, the Supreme Court on Wednesday said state juries may award  
damages for harm from unsafe drugs even though their manufacturers had  
satisfied federal regulators.

	The ruling could have significant implications beyond drug  
manufacturing. Many companies have sought tighter federal regulation  
in recent years in part to shield themselves from litigation.

	The court, by a 6-to-3 vote, upheld a jury verdict of $6.7 million in  
favor of a musician from Vermont whose arm had to be amputated after  
she was injected with an anti-nausea drug. The drug's manufacturer,  
Wyeth, had argued that its compliance with Food and Drug  
Administration (FDA) labeling requirements should immunize it from  
lawsuits.

	Pharmaceutical companies were especially disappointed by Wednesday's  
decision. Ronald Rogers, a spokesman for Merck, said, "We believe  
state courts should not be second-guessing the doctors and scientists  
at the FDA."

	Merck was hit with several huge damage awards over its painkiller  
Vioxx before agreeing to a $4.85 billion settlement in 2007. Allowing  
juries to make determinations about drug risks, Rogers said, would  
cause "mass confusion."

	The Supreme Court has been sympathetic in recent years to arguments  
that federal law should pre-empt state injury suits. In a case last  
year called Riegel vs. Medtronic, an eight-justice majority of the  
court ruled that many state suits concerning injuries caused by  
medical devices were barred by the express language in a federal law.

	Wednesday's decision addressed "implied pre-emption", a different  
legal standard. Drug companies and other businesses, supported by the  
Bush administration, had hoped the Vermont case would establish  
broader protections.

	They relied not on express language in a statute enacted by Congress,  
as in the Riegel case, but on what might be implied from federal  
regulatory standards and policies -- in this case, from the drug  
agency's authority to approve drug labels.

	Producers of goods as different as anti-freeze, fireworks, popcorn,  
cigarettes and light bulbs have sought to take refuge behind federal  
oversight in recent years to fend off litigation.

	After Wednesday's decision, those efforts are most likely to succeed  
if they are based on express language in a Congressional statute or a  
specific regulatory action that makes compliance with state  
requirements impossible.

	"This narrows the playing field," for implied pre-emption arguments,  
Mark Herrmann, a corporate defense lawyer in Chicago, said of the  
decision. "This does not eliminate the playing field."

	Catherine Sharkey, a law professor at New York University, said the  
decision does mean that "there is certainly a thumb on the scale  
against the more aggressive arguments for implied pre-emption."

	Justice John Paul Stevens, writing for the majority in Wyeth vs.  
Levine, said Congress could have required pre-emption in the case but  
had not. "Evidently," he said, "it determined that widely available  
state rights of action provided appropriate relief for injured  
consumers."

	Justice Stevens noted that Congress did adopt just such an express  
pre-emption provision for medical devices in the law at issue in the  
Riegel case.

	Until a recent change in policy under the Bush administration,  
Justice Stevens wrote, the drug agency had welcomed state injury suits  
as a useful complement to federal regulation.

	But in "a dramatic change in position" in 2006, Justice Stevens said,  
the agency reversed that long-standing policy, not withstanding its  
"limited resources to monitor the 11,000 drugs on the market."

	The agency's new position, Justice Stevens wrote, "is entitled to no  
weight." He was similarly dismissive of a brief supporting Wyeth filed  
by the Justice Department under former President Bush, saying it was  
"undeserving of deference."

	Justice Stevens was joined by Justices Anthony Kennedy, David Souter,  
Ruth Bader Ginsburg and Stephen Breyer. Justice Clarence Thomas voted  
with the majority but did not adopt Justice Stevens'
  reasoning, saying instead that he objected generally to "far- 
reaching implied pre-emption doctrines" that "wander far from the  
statutory text."

	Justice Samuel Alito, writing for the three dissenters, said the  
court had done an about-face, "turning yesterday's dissent into  
today's majority opinion" and turning ordinary injury suits into a  
"frontal assault on the FDA's regulatory regime for drug labeling."

	"This case illustrates," Justice Alito said, "that tragic facts make  
bad law."

	The case began in 2000, when Diana Levine, suffering from migraine  
headaches, visited a clinic. She was given injections of Demerol for  
the pain and Wyeth's drug Phenergan for nausea.

	If Phenergan is exposed to arterial blood, it can cause swift and  
irreversible gangrene. For that reason, it is usually administered by  
intramuscular injection or intravenous drip. This time, a physician's  
assistant used a third method, injecting the drug into what she  
thought was a vein, a method known as "IV push."

	In the following weeks, Levine's hand and forearm turned black, and  
they were amputated in two stages. She settled a lawsuit against the  
clinic and went to trial against Wyeth, claiming its warnings against  
IV-push administration were not strong enough.

	She greeted Wednesday's decision with elation. "Next to getting my  
hand back," she said of the Supreme Court, "it's the least they could  
have done and the best they could have done."

	Bert Rein, a lawyer for Wyeth, said the company had "fully complied  
with federal law in its labeling of Phenergan," adding that the FDA is  
"in the best position to weigh the risks and benefits of a medicine."

	Justice Alito said Wyeth had provided ample notice about the risk of  
gangrene in "six separate warnings," some of them "in boldfaced font  
and all-capital letters," on the drug label the FDA had approved.

	Justice Alito, writing for himself, Chief Justice John Roberts and  
Justice Antonin Scalia, added that juries see only the "tragic  
accident" before them and "are ill-equipped to perform the FDA's cost- 
benefit-balancing function." The agency, by contrast, he wrote, "has  
the benefit of the long view" and "conveys its warnings with one voice."

	"After today's ruling," he said, "parochialism may prevail."