October 15, 2007
Sharkey on Preemption
Catherine Sharkey (NYU) has just posted an article on SSRN titled "The Fraud Caveat to Agency Preemption." The article, which looks very interesting and timely, can be downloaded here. Here is the abstract
The “fraud caveat” is ubiquitous in key debates on the regulatory role of tort law: Even the most ardent supporters of either the state-based regulatory compliance defense to tort claims against product manufacturers, or the more powerful wholesale federal preemption of state tort law by administrative regulations, concede that fraud changes the equation. State legislatures that have adopted regulatory compliance provisions immunizing prescription drug manufacturers whose drugs were approved by the FDA from liability for damages (either entirely or just for punitive damages) have, without exception, included the fraud caveat. And courts interpreting these immunity statutes echo the caveat mantra. The fraud caveat remains an undertheorized but highly revealing and consequential aspect of regulatory preemption debates.
In Warner-Lambert Co. LLC v. Kent (No.06-1498), the U.S. Supreme Court is poised to answer the question whether Buckman Co. v. Plaintiffs' Legal Committee preempts statutory fraud exceptions to drug manufacturer immunity statutes. The question raises a narrow doctrinal issue, but one that hits a raw federalism nerve, with correspondingly wide reverberations in products liability preemption jurisprudence. A satisfactory resolution of the doctrinal issue - relying upon the FDA to police fraud in the first instance, but enlisting private litigants on the remedial and enforcement end - provides the seeds of a more generalizable model of agency-court cooperation for the regulation of nationally regulated products, such as medical devices and pharmaceuticals. This institutional approach gives primacy to the agency to decide, in the first instance, the extent to which state law requirements would encroach upon its regulatory scheme, but reserves room for private litigant enforcement of federally determined standards.
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