The “Wyeth discount”: More Preemption Horror in the Offing?

Wyeth v. Levine, No. 06-1249, has been on the U.S. Supreme Court’s docket for a very long time. It took nearly a year for the Court to decide it would take the case. At issue is the Bush administration’s extensive and largely successful efforts to accomplish by bureaucratic fiat what it couldn’t do via the standard legislation route–tort “reform.” Wyeth is back in the news because of SCOTUS’s recent order setting the case for oral argument on November 3, 2008.

I’ve discussed and ranted about the Supremacy Clause and the effects of federal preemption on the availability of state law tort remedies here, here, here and here, among other places. Wyeth probably has more destructive potential than all the cases mentioned in those other entries combined.

Diana Levine received injections of Phenergan, a product of major pharmaceutical manufacturer Wyeth, to treat severe nausea resulting from a migraine headache. The last injection, delivered by a method called an “IV push,” was inadvertently pumped into an artery, a big fat no-no with Phenergan. The resulting gangrene led to the amputation of Levine’s hand and forearm.

Ms. Levine filed suit against the health care center that administered the injections. After that claim settled, she filed a product liability lawsuit in a Vermont state court against Wyeth. The case centered on the adequacy of the warnings Wyeth provided on Phenergan’s label. Levine’s experts said that the warnings should have prohibited IV push use of the drug entirely and mandated use of safer options such as intramuscluar injection or administration via hanging IV bag. Wyeth’s experts said that the existing label, which allowed use of the IV push while warning against accidental arterial injection, was perfectly adequate.

A jury found in Levine’s favor and awarded $7.4 million in compensatory damages ($2.4 million in economic damages, $5 million in noneconomic damages). After adjusting the verdict upward to reflect prejudgment interest and downward to reflect Levine’s settlement with the health care center, the trial court entered judgment for $6,744,000.

Wyeth argued to the trial judge both before and after the verdict that the case should be dismissed outright on federal preemption grounds. Pursuant to the federal Food, Drug and Cosmetics Act (“FDCA”) and implementing regulations adopted by the federal Food and Drug Administration (“FDA”), the FDA approved the existing Phenergan label and declined to approve a more extensive warning label that the company proposed later on. The FDA’s approval of the label, Wyeth claimed, precludes any state law tort claim based on allegedly inadequate warnings.

The trial judge rejected the argument twice, and the Vermont Supreme Court affirmed on October 27, 2006. Levine v. Wyeth. It took quite some time, but SCOTUS finally decided to hear Wyeth’s appeal on January 18, 2008.

Broadly speaking, there are three ways that federal law can trump (preempt) state law. One way is express preemption, in which Congress comes right out and says that a particular federal statute preempts state law. The recently decided Riegel v. Medtronic, Inc., 552 U.S. ____ (2008 ) was such a case. The problem in express preemption cases generally boils down to figuring out what in the goat-blowing hell Congress was babbling about when it passed that horrifically ambiguous preemption clause.

The second type of preemption is “field preemption.” No, that has nothing to do with farming or the Chevy Camaro, which Camaro owners view as a badass muscle car but all right-thinking people view as a “field car.” Field preemption occurs where a federal statutory or regulatory scheme is so broad and pervasive as to support an inference that Congress intended to occupy the entire field and leave the states no room to regulate on the subject at issue, or where the subject of federal legislation is so dominantly a matter of federal concern that Congressional action is presumed to displace state law. Field preemption finds no support whatsoever in the text or history of the Supremacy Clause, so the decisions applying the doctrine tend to be quite clusterfuckish.

Finally we have conflict preemption. The FDCA contains no express preemption provision, and Wyeth stipulated that the federal statute wasn’t intended to “occupy the field” of drug regulation. The dispute in Wyeth was over the applicability of conflict preemption.

As the name implies, conflict preemption involves determining whether there is an actual conflict between federal and state law. A tort defendant can get off the hook by showing that either (1) it’s impossible to comply with both the federal and state regulations, or (2) the state common law tort at issue stands in the way of accomplishing Congress’ full purposes and objectives. Wyeth claimed that both tests mandated a finding of conflict preemption in this case.

The Vermont Supreme Court disagreed, relying in large part on the FDA regulation codified at 21 C.F.R. § 314.70(c)(6), which generally allows drug manufacturers to change a drug’s label without going through the usual FDA approval process if the manufacturer determines that existing warnings are inadequate to protect the public, despite FDA approval of the existing warnings. The Vermont court sided with the “nearly unanimous” view of other courts that, given the leeway allowed by § 314.70(c), state law failure to warn claims are not in “conflict” with federal law. There’s nothing in FDCA or the implementing regulations that renders it impossible to comply with both the FDA approval process and state tort law standards regarding adequacy of product warnings.

Before the Bushits took over the federal government, the FDA always took the position that federal law does not preempt state law failure to warn claims. That changed when the Bushits were unable to get Congress to put an express preemption provision in the FDCA. After that, the FDA changed its tune and issued a statement to the effect that the courts have gotten it all wrong up to now and that the availability of state tort law remedies presents a serious risk to the FDA’s ability to enforce labeling requirements.

The Wall Street Journal‘s writeup on the case is here, and Pharmalot’s latest article is here. SCOTUSblog has links to the many briefs filed in the Supreme Court here.

As expected, there has been a veritable shitload of amicus curiae (“friend of the Court”) briefs filed by people and organizations who aren’t parties to the case but have a substantial interest in the outcome. Supporters of Ms. Levine include forty-seven state attorneys general, the entire editorial board of the New England Journal of Medicine and a bunch of constitutional and administrative law scholars. Wyeth’s supporters feature the usual crop of tort “reform” whores, including the Bushit Justice Department and the U.S. Chamber of Commerce.

The WSJ article linked above quotes one prominent plaintiffs’ lawyer as calling this “back door tort reform.” Well, yes and no. It’s “back door” in the sense that it occurs behind the scenes without the illumination that comes through the standard legislative process, but it’s entirely “front door” in terms of brute effectiveness and Bushit administration strategy.

One thing’s for sure: as the WSJ article rightly notes, drug manufacturers and their allies are giddy with girlish glee over the Supreme Court’s decision to take this case. With a clear majority of the Court in favor of using federal preemption as an instrument of tort “reform,” the odds of a decision that will instantly vaporize a vast number of meritorious tort claims are good.

In the meantime, lawyers trying to settle product liability cases against drug manufacturers now, before such cases join the Choir Invisible, are being met with hardball negotiating tactics:

Some drug companies are telling plaintiffs’ lawyers that if they settle their cases now, they won’t pay as much to the plaintiffs as they would have six months ago, before the Supreme Court announced that it would hear the Wyeth case. A lawyer negotiating a settlement with one drug maker said company executives told him it wants “the Wyeth discount.”

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