Overruled


Battle Lines Being Drawn
February 10, 2009, 11:38 am
Filed under: Ian | Tags: , , ,

When I write about cases where the Supreme Court says that medical device manufacturers are immune to accountability when their defective devices injure or kill someone, or that employer-provided health plans can illegally refuse to pay for lifesaving treatments and get away with it, I tend to describe the issue in two words: “corporate accountability.”  Corporations, like children, need to be taught that there are consequences for their actions, or they will grow up to be delinquents.

But, of course, it is a bit of an oversimplification to say that Court decisions which place corporate profits over the health of ordinary Americans occur because most of the justices don’t believe in corporate accountability.  The rule of law is the law of rules, as they say.  Judges can’t simply make crap up when they decide cases, they have to root even the most ideological decision in established doctrines.  For this reason, corporate interests are increasing relying on a doctrine called “preemption” to shield themselves against having to comply with the law.

To begin with the basics, the United States is governed not only by the federal government, but by fifty state governments which regulate affairs within each state’s borders.  Because the Constitution declares that Acts of Congress are the “supreme Law of the Land,” however, the federal government has the power to “preempt” state laws which conflict with its objectives. State laws which are preempted by Congress essentially cease functioning.

In addition to this distinction between federal and state law, and equally important distinction is the one between regulations which prevent a company from harming people in the first place, and other laws which sanction the company after its actions actually cause harm.  Let’s say a drug company makes a drug that is supposed to prevent heart attacks, but which actually causes fatal liver failure in many of the people who take it.  The law is supposed to offer two shields that protect patients from this very dangerous drug.  First, the FDA is supposed to test the drug before it reaches the market—and, in a perfect world, the FDA will discover its poisonous side-effect and keep the drug from ever being sold in the first place.

We don’t live in a perfect world, however, so the law is supposed to provide another shield protecting patients: state tort law.  If the FDA is asleep at the switch.  Or if its tests just don’t discover the drug’s dangerous side-effect until it is too late, then people who are injured by the drug (or their families) can sue to drug company and be compensated for the injury they suffered.  Because the drug company gets hit where it hurts—in its bottom line—they have a strong incentive to pull the drug off the market immediately.

So, in summary, the FDA is supposed to keep bad drugs off the market.  Because the FDA is run by imperfect human beings, however, they can’t catch anything.  State tort law provides the safety value which makes sure that if the FDA goofs, more people don’t have to suffer until it gets its act in gear.

None of this is controverisal.  What is controversial, however is the radical view of preemption currently being advanced by the business community.  In a recent blog post, business superlawyer Bert Rein offers a suprisingly candid confession of the business community’s goals:

Whether a savings clause would succeed in overriding implied Constitutional preemption – as one failed to do in Geier – is a difficult question. Nevertheless, future preemption litigation would be complicated by such an expression of Congressional intent, even one that glosses over the fact that the real issue in preemption is not whether a legal remedy exists for the plaintiff, but what standard (a priori federal regulatory or ex post common law) will be used to evaluate the defendant’s conduct.

Here, Rein presents the law as a choice between two mutually exclusive options.  Businesses can be regulated by regulations which tell them in advance not to behave a certain way (“a priori federal regulation) or by lawsuits which tell them that they screwed up after the fact (“ex post common law”). But it is not possible for them to be regulated by both. In Rein’s world, once the federal government decides to regulate drug companies, or medicial device manufacturers, or health insurers, state tort claims against those companies simply vanish.  Preemption of state laws is simply assumed.

Needless to say, there is nothing in the Constitution which says that Congress automatically preempts state tort law whenever it regulates an industry—indeed the Supreme Court has long said that there should be a presumption against preemption of state law.  In Rein’s world, however, we can’t have the FDA unless we give up the safety value consumers have always relied on to take poisonous products off the market.

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[…] however, corporate interests have taken the line that the mere presense of a federal law eradicates any vaguely similar state laws.  In Wyeth, the defendant makes an anti-nausea drug which, if injected into an artery, causes […]

Pingback by Corporate Accountability Cases Worth Watching « Overruled

[…] federalism docket has focused largely on claims by corporations asking the Justices to misread federal law to preempt state law, not by parties trying to take a bite out of federal power.  Just like William Rehnquist came of […]

Pingback by American Right Ditches States, Embraces Corporations « Overruled




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