Could the problem with Federalism be the States? As Milton
Friedman observed, “The problem with capitalism is capitalists.
The problem with socialism is socialism.” The problem with
Federalism cannot be Federalism because the benefits of a
federally structured government are easy to see; citizens can
choose between high-tax, high-service, nanny States like
Maryland, and low-tax, lower service options. One recent example
of citizens’ ability to choose is Rush Limbaugh’s response to New
York’s proposed increase in the taxation of high incomes, which
was to think about moving out of New York.
So, the problem must be the States. For all of their ability to
operate as laboratories of democracy, they are frequently prone
to disappoint. One recent example of that disposition is their
reluctance to limit their protection of local interests even
where such limitation might serve the larger common good. That
reluctance was expressed in a friend-of-the-court brief that 47
States joined in Wyeth v. Levine arguing that their
juries, not the Food and Drug Administration, should be the final
judges of the adequacy of a drug manufacturer’s warning of the
potential dangers of its product.
Levine’s forearm was amputated after a physician’s assistant
injected her with Phenergan, an effective anti-nausea drug.
Levine received the injection after she returned to the hospital
for the second time in a day complaining of a severe migraine
headache. Unfortunately, as the result of the injection, the drug
entered an artery, and gangrene resulted. Wyeth warned against
the danger of gangrene if Phenergan were injected into or made
its way into an artery, but did not specifically say that the
drug should not be injected. Levine settled with the doctor and
physician’s assistant, then sued Wyeth, and a Vermont jury
awarded damages of $7.4 million, which were reduced to reflect
the amount of the settlement.
In March 2009, the Supreme Court rejected Wyeth’s contention that
federal law barred Levine’s claim. The FDA had approved Wyeth’s
warning, but the Court said that the FDA’s action was not the
final word. Federal law could have, but does not, expressly
preempt state court lawsuits. The Court rejected the argument
that it was impossible for Wyeth to comply with both federal and
state law, noting that federal regulations permit Wyeth to “add
or strengthen” its warning without getting prior FDA approval.
The Court also gave short shrift to the preamble of a 2006 FDA
regulation governing the content and format of prescription drug
labels. In that preamble, the FDA declared that its action
established “both a ‘floor’ and a ‘ceiling’” and operated to
preempt certain state-law claims, like Levine’s failure-to-warn
claim. The Court concluded that, for several reasons, that
preamble was entitled to no weight.
In a concurring opinion, Justice Thomas objected to the whole
idea of implied preemption, suggesting that, if Congress wants to
preempt State lawsuits, it should say so expressly. That notion
sounds appealing. But, as Michael Greve points out, the States
have an incentive to circumvent Federal law, and there is no way
that Congress can foresee the “myriad ways” in which they can do
so. For example, in another case from last term, Altria Group
v. Good, the Court said that, while state law claims “based
on smoking and health … with respect to the advertising or
promotion of any cigarettes the packages of which are labeled in
conformity” with federal law and regulations are preempted,
claims based on more general state law duties, like a duty not to
deceive the buyers of products, are not. The result is to turn
the lawyers loose to argue that the labeling of “light” and “low
tar” cigarettes is deceptive to state court juries.
Wyethinvolves a warning, and warnings are generally
easier to modify than products. Even so, if, as the Vermont
Supreme Court put it, “federal labeling requirements create a
floor, not a ceiling, for state regulation,” how does Wyeth know
where the ceiling is? In his dissent, Justice Alito notes that,
in the trial, Levine’s attorney told the jury that Wyeth’s
warning should have said, “Do not use this drug intravenously,”
and her expert witness said, “I think the drug should be labeled,
‘Not for IV use.”” Whatever ceiling Vermont established can be
trumped by a jury in another State which concludes that an even
more specific warning is needed. Thus, Wyeth’s warning and the
use of Phenergan are at the mercy of juries and courts in the 50
States.
The effect will be to discourage the use of Phenergan, an
effective anti-nausea drug, even though, when properly injected,
Phenergan gets to work faster than it does when given in other
ways. Remember that Levine needed relief quickly More generally,
allowing state tort laws to second-guess FDA actions can
discourage investment in the development of new drugs and, by
forcing the removal of existing drugs from the market or some
uses, make drugs less available. Those drugs that are available
will be more expensive. Finally, drug warnings will become so
detailed and lengthy that they warn of everything and nothing,
discouraging some proper uses.
Instead of simply turning the issue over to juries, the States
should consider a legislative solution. Michigan did precisely
that in 1996 when it enacted an FDA Shield Law which provides
that, with certain exceptions, drugs approved by the FDA that are
approved by and in compliance with FDA requirements cannot be
found to be “defective or unreasonably dangerous” in a state-law
tort action. The Michigan law bars recovery of both compensatory
and punitive damages. Other States have enacted other laws that
limit liability for punitive damages for FDA-approved drugs,
create a rebuttable presumption that an FDA-approved drug warning
is adequate, or expressly call for the FDA approval to be
considered in determining whether a manufacturer has acted
reasonably. Significantly, the protection that these laws provide
is conditioned on the manufacturer’s good faith.
If the States want to insist on an end to implied preemption,
they should limit the effects of their tort systems. Rather than
being part of the problem, they should be part of the
solution.
