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Federal Preemption/Corporate Immunity
LEGISLATION TO HALT CORPORATE IMMUNITY FROM LAWSUITS HAS LINGERED IN CONGRESSIONAL COMMITTEES; EVEN THOUGH PASSAGE IS DOUBTFUL, CONSUMERS HAVE OPPORTUNITIES TO SPEAK UP FOR RIGHTS OF VICTIMS SEEKING JUSTICE
For several years now, there has been a dangerous under-the-radar movement to reward corporations that put profit before safety by granting them complete immunity from state laws that protect citizens. Legislation to stop what is called "corporate immunity" was introduced in the U.S. Congress in 2008 and again in 2009, but it remained stalled in House and Senate committees. Proponents are not optimistic about the bill's chances in the Congress elected in November 2010, but they have not given up hope. Unless this legislation is passed, innocent victims of unsafe products can be deprived of their rights to pursue justice. . . and negligent corporate wrongdoers will get off scot-free.
At issue is what is called "federal preemption," which pits the power of the federal government, including agencies such as the Food and Drug Administration, against states' rights to protect their citizens with stricter safety standards. The principle of preemption is part of the balance our Founding Fathers intended between the roles of the federal and state governments; it is embedded in our Constitution, and in our legal system. But in the case of the current trend, federal preemption is much more than a matter of principle. Its devastating human impact is in eliminating the right of victims of corporate wrongdoing to file lawsuits for recovery under state laws.
We might more accurately call this "complete corporate immunity," because federal preemption allows big manufacturers and distributors of defective products to escape responsibility for their negligence or misconduct . . . regardless of the extent or severity of the harm they have caused.
Unfortunately, a U.S. Supreme Court ruling in 2008 supported the principle of preemption when applied to some medical devices - a temporary setback for victims of defective medical products seeking justice through the tort system. Since then, however, there has been some good news.
Application of federal preemption to health and safety products has made the FDA the protector of corporate America, not the American people.
The tentacles of federal preemption are reaching out to strangle several areas of consumer protection, including state laws related to credit and identity theft, railroad safety in the transport of hazardous materials, automobile manufacturers' liability for rollovers, and environmental safeguards. A case in point is the lawsuit against The Boeing Company mentioned above, in which Boeing claimed (unsuccessfully) that FAA safety standards supersede all state products liability and negligence laws.
Some of the most egregious recent examples of creeping corporate immunity are the FDA's attempts to establish federal preemption by inserting preemptive language in the preambles of health and safety regulations.
Shockingly, just days following President Obama's inauguration, preemption opponents got wind of the FDA's plan to publish a final rule on labeling of over-the-counter medicines, a rule which contained especially onerous preemption language. Fortunately, key Congressional and Presidential staff members were able to put a stop to this last-minute farewell "gift" from the Bush Administration.
The FDA has been criticized widely for questionable investigative practices, lax oversight, and inadequate research in support of many of its approvals. Consumer advocates call the agency's behavior outrageous, given that the FDA's job is to promote citizen safety - not deny it. Even when the agency does its job, however, just because it approves a health or medical product doesn't mean that product is actually safe or effective. We can name countless products that have gained FDA approval and later, after serious illnesses, injuries and even deaths, have been recalled.
An aggressive, multi-million-dollar lobbying effort has fueled the preemption campaign - with help from Bush Administration officials.
Flying in the face of logic and Congressional intent, corporate immunity proponents contend that once a federal agency has approved a product such as a drug or medical device, lawsuits against manufacturers and distributors are prohibited. No matter how lethal these products prove to be, no matter how many people are killed or maimed, no matter how many families suffer, state safety standards and judicial processes are tossed out the window.
Origins of the preemption assault on victims of unsafe medical devices and pharmaceuticals can be traced to Bush Administration support and to aggressive lobbying by the big corporations that make up the multi-billion- dollar healthcare industry. Beginning in about 2005, several federal agencies stealthily sneaked preemptive language into their preambles. Preambles normally are simply summaries of the agency's interpretation of a regulation.
Most Americans do not realize that the U.S. Constitution empowers only the Congress to make decisions about preempting state law. Legal scholars and institutions, including the American Association for Justice, believe these regulatory preambles to be unconstitutional because they have not been voted upon by Congress and, in some cases, are in direct contradiction to Congressional dictates.
Yet some trial courts have embraced federal agencies' preemption arguments . . . creating a crisis that leaves victims no recourse, and shakes the very foundations of our civil justice system.
In 2008, the U.S. Supreme Court got into the act by voting for preemption, ruling that the manufacturer of an FDA-approved medical device cannot be sued.
In a chilling decision, in February 2008 the U.S. Supreme Court sided with a medical device manufacturer, Medtronic, Inc., against a plaintiff whose Medtronic-made balloon catheter had ruptured, causing a heart block that required emergency surgery.
In Riegel v. Medtronic, Inc., the Court said that Congressional legislation called the Medical Device Amendments of 1976 delegated to the FDA regulatory power over the design, manufacturer, and sale of medical devices. Justice Scalia cited a section of the legislation that bars states from imposing on medical devices "any requirement which is different from, or in addition to, any requirement applicable under this chapter." The Court voted 8-1 that state law claims regarding medical devices are barred when the manufacturer complied with the federal agency's requirements.
As a result of this Supreme Court decision, already many courts have rejected the claims of people seriously injured by defective medical devices, and manufacturers remain unfettered in their disregard for the safety of their products. In just one example, a Minnesota U.S. District Court dismissed the cases of nearly 1,500 heart patients who had been harmed by Medtronic defibrillators containing defective Sprint Fidelis leads.
The Medical Device Safety Act of 2009, if passed by both houses of Congress in 2010, would have, in effect, overturned these destructive decisions and restored to Americans their right to seek justice in state courts.
However, another U.S. Supreme Court decision in March 2009 has affirmed the rights of victims of unsafe pharmaceuticals. This could bolster the case for families devastated by dagerous medical devices.
In a 6-3 decision on March 4, 2009, the U.S. Supreme Court upheld a Vermont jury's verdict making a drug manufacturer accountable for the devastating injuries suffered by Diana Levine. In addition to affirming Ms. Levine's recovery, the Supreme Court majority opinion stated that FDA oversight of drug labeling does not prevent injured victims from filing consumer liability lawsuits against drug companies in state courts.
While this decision does not address federal premption in cases involving medical devices, nonetheless, it is helpful to the core argument against federal preemption and the issue of corporate immunity.
In Wyeth v. Levine, plaintiff Wyeth Pharmaceuticals sought to overturn a Vermont jury's award of $7.4 million to Ms. Levine, whose arm developed gangrene and had to be amputated after she was given an anti-nausea drug manufactured by Wyeth. (For a personal account of her traumatic experience, see Ms. Levine's website at www.armedwithavoice.net.) Wyeth argued that the drug's label had been approved by the FDA, and that the pharmaceutical company could not be sued in state court because FDA law preempts state lawsuits on labeling.
Included in the Wyeth arsenal of arguments was a reference to the FDA Amendments Act of 2007, which not only granted the FDA new leverage in the area of labeling, but specifically excluded a provision that would have allowed patients to sue drug companies in state courts for failure to update drug labels. Unfortuntely for innocent victims of mislabeling, the Bush Administration had threatened to bury the bill if the Democrat-supported provision had been included, so the amendments became law.
Some members of the U.S. Congress are seizing the opportunity to halt federal preemption of state consumer protection laws, and to restore the constitutional rights of victims of corporate wrongdoing.
The U.S. Supreme Court's 2008 decision in the Medtronic case drew immediate criticism, and even outrage, among some members of Congress. Strongly disagreeing with Medtronic's position, U.S. Senator Edward M. Kennedy of Massachusetts and Rep. Henry A. Waxman of California had written in their Amicus Brief:
The language of Section 360k (of the Medical Device Act) and its legislative history demonstrate that Congress did not intend to preempt state tort suits.
Yet in a highly partisan Congress, in the midst of a Presidential election, the Medical Device Safety Act introduced in June 2008 languished and died.
The Medical Device Safety Act of 2009 was introduced in both the U.S. Senate and House of Representatives, and numerous co-sponsors lined up in support. The two bills, S. 540 (in the Senate) and H.R. 1346 (in the House of Representatives), were identical in
Federal preemption/corporate immunity efforts are an unprecedented assault on states' rights and an attempt to destroy our civil justice system, court by court, victim by victim. We must not let that happen!
Even though the Medical Device Safety Act of 2009 was stalled in House and Senate committees, sponsors continued to seek co-sponsors in both houses. You can help by persuading your member of Congress and your two Senators to get on board. Then, when S. 540 and H.R. 1346 move through the committee process to a vote, your help is even more important. Passage will require significant grassroots support to counter the influence of corporate campaign contributions and lobbyists whose interest is profit, not justice.
Numerous consumer advocates, justice-related organizations, academic institutions, and professional associations are stepping forward to make sure that our justice system continues to work for us, not for greedy corporations. The Medical Device Safety Act of 2009 was endorsed by the National Conference of State Legislatures, the New England Journal of Medicine, the American Bar Association, AARP, the Center for Justice & Democracy, the Consumer Federation of America, Public Citizen, and the National Research Center for Women & Families.
But even this broad and diverse coalition cannot do it alone.
To learn more about the status of the Medical Device Safety Act of 2009 and how you can help persuade your Congressional delegation to co-sponsor and vote for the bills, click on the "Speak Out" page of this website.
Congressional action on federal preemption/corporate immunity could take many more months - even years. In the meantime, however, President Obama's post-inaugural stay of pending rules included staying many that contained preemption language. President Obama is seen by many constitutional experts as a proponent of a growing trend toward "progressive federalism" - that is, greater collaboration between federal and state governments.
All of these are hopeful signs for restoring the balance of individual liberty and common good envisioned by our Founding Fathers.