Agencies "Ruling" Out Tort Lawsuits - The Preemption Doctrine Explained  Sun May 18, 2008

This is the third in a series on the usurpation of power that has taken place in the federal administration agencies. They are taking away the right to sue pharmaceutical companies for serious injuries caused by dangerous drugs, among other things. The first part  described the basic problem.

To remind readers: This is huge

This is an action on the level of Congress' outlawing all state laws on this issue, something that I doubt they would do. This is why this court interpretation of the FDA's action here would seem to be an unconstitutional delegation of legislative power.

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The follow ups explain legal issues that, I hope, will help everyone understand just how bad this is in terms of having no basis in law as it was known in the US pre- the Bush administration.

The second part  explained the operation of the Administrative Procedure Act and why, I would argue, these decisions violate the APA and the unconstitutional delegation doctrine.

In a third post I explained a bit about torts.

In this post, I will try to explain the third key doctrine the federal agencies and the courts are using to take away the right to sue for tortious injuries - preemption. This doctrine is so important to these cases that in Colacicco v. Apotex, Inc., No.06-5148 (3d Cir. Apr. 8, 2008) - the case I discussed in explaining the APA in the second part- the majority begins its decision by saying:

The issue before us is one of preemption, an area of the law that need delicately balance federal interests and those of the states. It harks back to the very beginning of our republic, and has continued to occupy us ever since. Preemption is not a doctrine that lends itself to a black-letter rule. One size does not fit all. The decision must be based on the circumstances presented in the particular situation.

Clear?

I know it sounds like a bunch of platitudes, but within the platitudes is the concept of preemption, one that has the power to take away the key to the courthouse door.

The Basics

The doctrine of preemption is grounded in the Supremacy Clause in Art. VI of the US Constitution:

This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.

In short, when there is federal law in conflict with a state law, the federal law trumps the state law. Put another way, it preempts the state law. The preemption doctrine was created by the Supreme Court, a history that is discussed in the Colacicco case on page 15, bu the majority.
http://www.ca3.uscourts.gov/...

Sounds simple, but it has its own complexities, and understanding those complexities is key to getting what is happening in these cases . . . and why it should not be happening. Why it is contrary to established preemption law.

Here are some of the concepts I will cover: what all can be a law, congressional intent, and types of preemption.

What can be a law

This will be brief. In our system, laws can take many forms. They can be federal and state statutes, federal and state judicial decisions, administrative regulations, among other things. All of these can come into play in connection with preemption.

But here we are concerned with just the preamble (that is, the introductory language) of a federal administrative regulation and whether it can preempt state statutes or judicial decisions.

Congressional intent

Preemption is not supposed to happen willy-nilly. It requires finding that Congress intended to preempt state laws in an area. Or at least that is what the norm has been until these agency preambles.

It would be nice if Congress would just say in every statute: "We intend to preempt state law in any area covered by this law." Or we do not intend to preempt state laws in this area. When Congress clearly states that something is preempted, this is called express preemption.

Sometimes Congress does state its intent in this way, and that is very helpful. But unfortunately, sometimes Congress is vague, so that leaves it to the courts to interpret whether preemption exists and the scope of it. If the courts find there is preemption, this is implied preemption. It is the court interpretation of what Congress' intent was as to preemption, when Congress was vague.

OSHA is a good example. Congress actually included preemption section, but it is so vague, we have yet to get a clear ruling from the Supreme Court as to what it means. The most recent decision, and it was awhile ago, had no majority for preemption or no preemption and for whether there was express or implied preemption.

Types of preemption

Now, add to this a new difficulty. There are several ways preemption can apply to affect state laws. And this can be the case whether or not preemption is express or implied.

So first, bear in mind, that in our country,  we basically run two parallel legal systems - state and federal. When a federal law conflicts with a state law, the federal law trumps / preempts because it is the supreme law of the land. But also remember that whether and how much of a conflict or of preemption there is depends on Congress' intent.

But how do we know when there is a conflict?

This may sound like a silly question, but let me give you an example to illustrate the problem. Let's say that Congress passes a federal law that says anyone who violates this law will be subject to a fine of $100. And let's say that there is a state law that covers a similar area and that says anyone who violates the state law will be fined $200. Is there a conflict?

Or, let's say that Congress passes a federal law that says anyone who violates this law will be subject to a fine of $200. And let's say that there is a state law that covers a similar area and that says anyone who violates the state law will be fined $100. Is there a conflict?

In the first case, the state is topping up the federal law. It may be making the federal law more effective, you might say. But what if Congress meant that the perfect fine was where it set it. It is easier to think that in the second case, the state law might undermine Congress' intent.

This is conflict preemption, and this is just one problem that occurs in interpreting Congress' intent. In fact, this issue of conflict preemption was part of the dispute among the Justices when they failed to agree on the nature of OSHA preemption.

A second kind of preemption is field preemption. Field preemption exists when Congress has enacted legislation that occupies the whole area and to such an extent that no state legislation can exist without upsetting the delicate balance created by Contress. The best example is preemption under the National Labor Relations Act.

By the way, in the Colacicco decision, starting on p.15, the majority reviews these types of preemption.

I think now you can understand what the court majority meant when it began its decision by saying:

Preemption is not a doctrine that lends itself to a black-letter rule. One size does not fit all. The decision must be based on the circumstances presented in the particular situation.

States have rights too
There is an important brake on preemption that recognizes that states have rights too, and federal law does not always trump. Among those rights are to make laws and decide cases in areas of traditional state regulation, for example, property law, criminal law, and tort law.

In the dissent, you will find on p.43 this quote:

"In areas of traditional state regulation, we assume that a federal statute has not supplanted state law unless Congress has made such an intention clear and manifest."

So what sort of preemption do we have with these administrative preambles?

Great question.

First, we have NO statement of congressional intent to allow federal agencies to preempt state laws by using their preambles.

Second, since there is no congressional intent to preempt, the only source for such preemption seems to be action by the agencies themselves. But if this is the case, then we have an unconstitiutional delegation of power to the agencies, an issue that I discussed in the prior post on this subject.. As I discussed there, certain decisions by law must be made by Congress. The decision to preempt state law belongs to Congress. It is not supposed to be within the power of administrative agencies to make this sort of decision.

Until now under the Bush Administrative Procedure Act, which is not available for public view.

So back to the Colacicco case

Here are some excerpts from the decision dealing with preemption. I hope now you can follow the discussion going on between the majority and dissent.

The majority says that this is a case of conflict preemption. (p.18): "whether the plaintiffs’ state law claims conflict with the federal scheme."

Here is the core part of the majority decision discussing whether the agency preamble should preempt a state tort case based on harm caused by a drug.

The FDA has taken the position, both in the preamble to the 2006 amendments revising the drug labeling regulations and in its amicus brief in the Colacicco case, that plaintiffs’ claims are preempted as a result of the actions taken by the FDA pursuant to its regulatory authority. The preamble specifically states that preemption applies to "claims that a [manufacturer] breached an obligation to warn by failing to include a statement in labeling or in advertising, the substance of which had been proposed to FDA for inclusion in labeling, if that statement was not required by FDA at the time plaintiff claims the [manufacturer] had an obligation to warn." 71 Fed. Reg. 3922, 3936 (Jan. 24, 2006). The FDA explains in the amicus brief that "the basis for federal preemption is not the [labeling] guidelines themselves . . ., but rather FDA’s repeated determinations prior to October 2003 that there was insufficient scientific evidence of an association between adult use of SSRI and suicide or suicidality to permit a warning on the labeling for those drugs . . . ." Br. for the United States as Amicus Curiae at 28.

We would ordinarily be leery of an agency’s view of what is essentially a legal issue, but we note that in Geier the Supreme Court recently addressed the weight to be given to an agency’s position on preemption. The Court "place[d] some weight" on a Department of Transportation interpretation, as set forth in an amicus brief, of a rule that it had promulgated. Geier, 529 U.S. at 883. The Court considered that Congress had delegated the agency "authority to implement the statute; the subject matter is technical; and the relevant history and background are complex and extensive." Id. The Court stated that the agency was "‘uniquely qualified’ to comprehend the likely impact of state requirements." Id. (quoting Lohr, 518 U.S. at 496). The Court also noted the consistency of the agency’s position over time, id., and the coherence of the agency’s views, id. at 885. Although the Court did not rely solely on the agency’s position, it noted that "a specific expression of agency intent to pre-empt, made after notice-and-comment rulemaking" was not necessary to find conflict preemption.

pp.37-38

Here is another important excerpt:

The Supreme Court has recently acknowledged the FDA’s expertise in the context of the medical devices covered by the MDA. It stated, "[b]ecause the FDA is the federal agency to which Congress has delegated its authority to implement the provisions of the Act, the agency is uniquely qualified to determine whether a particular form of state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,’ and, therefore, whether it should be pre-empted." Lohr, 518 U.S. at 496 (citing Hines, 312 U.S. at 67). Justice Breyer, concurring in that decision, also noted that the Court has "suggested that, in the absence of a clear congressional command as to pre-emption, courts may infer that the relevant administrative agency possesses a degree of leeway  to determine which rules, regulations, or other administrative actions will have pre-emptive effect." Id. at 505 (Breyer, J., concurring) (emphasis added) (citing cases). Of course, the FDA is equally expert, if not more so, with respect to regulation of drugs, with which it has had a longer experience than with medical devices.

p.40

This is all, really, nonsense, or at least serious overreaching. In my opinion, the dissent has the better analysis.

The dissent's decision begins:

The majority opinion describes these cases as situations calling for preemption: the expert agency, the Food and Drug Administration ("FDA"), consults scientific data to generate the optimal warnings (not too lax, not too alarmist) for drug labels—and state tort lawsuits would disrupt this fine system. But there is an important contrary view that has prevailed until recently: state tort law complements FDA provisions on drug warnings, in part by eliciting more information than the FDA would glean otherwise from pharmaceutical manufacturers. This contrary view has, I believe, the better argument in terms of legal doctrine on preemption, congressional intent, and the history of state tort law alongside federal law. Although the majority opinion is well-crafted and responsibly narrow, I would not move even the short distance my colleagues go toward preemption of state-law torts. I thus respectfully dissent.

The dissent argues that the majority "under-emphasizes congressional intent as the 'ultimate touchstone of pre-emption analysis.'" He also points out that the majority is relying on cases that involved express preemption as a basis for finding that the (at-best) implied preemption that exists in this case is sufficient to preempt state tort law.

We should be asking whether Congress intended to preempt. In our cases, we have no statutory preemption provision to interpret that relates to drug labeling in the Food, Drug and Cosmetic Act ("FDCA"). This fact should push us to hold the presumption against preemption in place, as we lack the best kind of evidence of congressional intent: statutory text.

There is much more in this 58 page opinion. I leave you to read the rest. It's actually a pretty exciting read, both for the impact and, I hope, for the debate about preemption. I hope that now you can appreciate the latter.

I will end with the dissent's conclusion, which, I think, you can now fully appreciate, even if you knew nothing about preemption before.

To review the history of this issue, the FDA has for over three-quarters of a century viewed state tort law as complementary to its warning regulations. Only for the last two
years has it claimed otherwise. This "sea change" in the FDA’s conception of the relationship
between federal and state law has not appeared in a regulation subject to notice and comment, but in a preamble to a regulation. With this background, I believe courts should fear to tread where Congress has not given us a clear statement. Because I see sound legal and policy reasons to hold that the presumption against preemption is not overcome, I would allow the plaintiffs’ suits to go forward. I respectfully dissent.

So should we all dissent!