Preemption of State-Law Tort Claims: Change of Heart in Federal Agencies?

Guest Commentator

Kelly Savage Day, Sedgwick, Detert, Moran & Arnold LLP

Federal preemption of state tort law has quickly become one of the most significant, high-profile issues facing plaintiffs and defendants alike.  The reason is simple.  When a plaintiff’s cause of action conflicts with a federal statute, then the claim fails and the case concludes.  Approximately 350 federal statutes contain express preemption provisions, half of which were enacted within the last decade. fn1  And courts have concluded that hundreds of other statutes preempt state-law claims under the implied preemption doctrine.  Not surprisingly, there has been a marked increase in the use of this defense and in attempts by plaintiffs to avoid it.

The continuing viability of a preemption defense has been called into sharp dispute by many commentators in part because of several recent United States Supreme Court decisions, which have been interpreted as reflecting a growing anti-preemption stance. fn2  While preemption issues continue to advance in the courts, the issue has also drawn the attention of the executive branch.

2009 Presidential Memorandum on Preemption.  In May 2009, President Obama issued his Presidential Memorandum on Preemption announcing his Administration’s policy on preemption.  The Memorandum, which is not law, but merely a statement of Administration policy provides:  “[P]reemption of State law by executive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the States and with a sufficient legal basis for preemption.” fn3  In that Memorandum, the Administration condemned the practice of “preemption by preamble” and called on all federal agencies to review previous regulations and decisions attempting to exert preemptive authority issued within the last ten years to ensure that such statements are justified under traditional legal principles. 

ACUS Draft Report on Federal Agency Preemption of State Law.  In the wake of these events, the Administrative Conference of the United States (ACUS), a newly reestablished government advisory panel, recently released a draft report on federal agency preemption of state law.  The report (a) sets forth best practices for federal agencies when addressing preemption-related issues and (b) offers a detailed evaluation of agency compliance with the Presidential Memorandum on Preemption.

Notably, several agencies have changed their previous pro-preemption position. fn4  This policy shift has been most pronounced at the National Highway Traffic Safety Administration (NHTSA).  NHTSA has abruptly changed course in three rulemakings in which it had previously found preemption necessary to protect public safety.  Perhaps even more significant, NHTSA argued against preemption in the Williamson v. Mazda case currently pending before the Supreme Court.  Like NHTSA, the Consumer Product Safety Commission (CPSC) has also experienced a shift in its preemption position.  CPSC has adopted an extremely cautious view on offering its interpretive gloss on preemption of state law. fn5 

Future Implications.  Courts have concluded that hundreds of statutes preempt state-law claims under the implied preemption doctrine.  Agency interpretations of preemption have often been outcome determinative in these cases. fn6  Given several agencies’ recent reversal of their previous positions on preemption of state-law claims, defendants should anticipate increased tort litigation and continued opposition to any effort to assert a preemption defense.

Notes

1. Kelly Savage, Has California Provided a New End-Run Around Preemption, WLF Legal Opinion Letter, available at http://www.wlf.org/upload/05-02-08savage.pdf

2. The United States Supreme Court has decided a flood of preemption cases in recent years and will continue to clarify its position on preemption this term in at least two cases.  In the first, Bruesewitz v. Wyeth, the Court will determine whether the National Childhood Vaccine Injury Act of 1986 preempts design defect claims against vaccine manufacturers.  The Court will also decide whether compliance with a motor vehicle safety standard preempts state common law liability in Williamson v. Mazda Motor of Am., Inc.  The Court has also requested the Acting Solicitor General’s opinion regarding certiorari in Mensing v. Wyeth, a generic drug preemption case.  In the past few years, the Court has issued preemption decisions in (1) Cuomo v. Clearing House Ass’n, 129 S. Ct. 2710 (2009) (holding that the National Banking Act does not preempt a state attorney general’s action to enforce state fair lending laws against a national bank); (2) Wyeth v. Levine, 129 S. Ct. 1187, 1191 (2009) (holding that FDA approval of warnings on a brand-name drug’s label did not provide a complete defense to state tort claims); (3) Altria Group, Inc. v. Good, 129 S. Ct. 538, 551 (2008) (holding  that a state fraud claim against a cigarette manufacturer was not preempted by federal law); (4) Desiano v. Warner-Lambert & Co., 467 F.3d 85, 87 (2d Cir. 2006) (holding that federal law did not preempt a state tort law providing a “fraud-on-the-FDA” exception to state immunity for drug manufacturers whose drugs are approved by the FDA), aff’d by an equally divided court, Warner-Lambert Co. v. Kent, 128 S. Ct.1168 (2008); and (5) Riegel v. Medtronic, Inc., 128 S. Ct. 999, 1011 (2008) (holding that a federal statute regulating medical devices preempts state tort law when the device at issue had received FDA pre-market approval).

3. Memorandum for the Heads of Executive Departments and Agencies (May 20, 2009), 74 Fed. Reg. 24, 693 (May 22, 2009), available at http://www.gpo.gov/fdsys/pkg/FR-2009-05-22/pdf/E9-12250.pdf#page=1.

4. Other agencies including the Environmental Protection Agency (EPA) and the Federal Trade Commission (FTC) have consistently refrained from preemption.

5. Other agencies’ positions have proved more difficult to evaluate.  For example, “[t]here is, at best, subtle evidence from the regulatory record and intervention in pending litigation from which to infer that [the Food and Drug Administration (FDA)] has revised its preemption policy under the new Administration.”  At the Office of the Comptroller of the Currency (OCC), the recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act has precluded any developments in the rulemaking or litigation position of the Agency.

6. But see Wyeth v. Levine, where the United States Supreme Court looked with particular disdain upon the FDA’s inclusion of its statement of preemptive intent in the preamble to the drug labeling rule.

3 thoughts on “Preemption of State-Law Tort Claims: Change of Heart in Federal Agencies?

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