Mass Tort Litigation Blog

Skadden Analysis of 2013 Potential Developments in Global Litigation

Skadden has issued a useful analysis of upcoming cases to watch and potential developments for 2013 in class actions and product liability.  The analysis includes contributes by Skadden's John Beisner, J. Russell Jackson, and Jessica Miller.

BGS

Brunet on AT&T (and the NYTimes Coverage of the case)

Edward Brunet, an eminent civil procedure scholar and expert on arbitration, sent the following to me regarding the recent NY Times coverage of the AT&T Mobility case:

            Adam Liptak’s excellent treatment of the AT&T Mobility oral argument would  have been even better if he had just used this word:  FEDERALISM..

            The case and context of this case scream out unforgivable breaches of federalism policy.  Both the Times coverage and oral argument undervalue federalism theory

            The dispute is not one about state regulation of class action arbitration.  Rather, the case concerns a dispute of state contract interpretation and asks simply whether the cell phone contract’s ban on class actions is unconscionable.  This is a state contract law issue, traditionally left to the state because of respect  for state common law regulation.  There is very little federal contract law.  Alternatively, the issue presented is one of consumer protection, a subject matter also left to state regulation. This litigation involves a double dose of federalism deference to the states based on questions of contract law and consumer protection

            This analysis appears to have been understood by Justice Scalia who nicely asked whether the Supreme Court would “tell the State of California what it has to consider unconscionable?”

            There exists a textual basis to reach the same result for the respondent.  Under section 2 of the FAA the courts are to treat arbitration agreements as enforceable, except when matters of state contract law require a contrary result.  The end of the prior sentence, termed the “savings clause of the FAA,” should control this case.  Essentially section 2 requires that a court enforce as written agreements to arbitrate unless some rule of state contract doctrine(e.g., adhesion , covenant of good faith and fair dealing, unconscionablity, or lack of mutuality) requires the opposite result. Here the California Supreme Court offered what should have been the last word on the subject  Its ability to do so advances federalism values in a collaborative manner not unlike the interactive federalism notions set forth by Professor Robert Shapiro.

            This case has nothing to do with preemption despite the efforts of AT&T”S counsel to twist the case out of context.  There is no difference between California’s law of unconcionability and federal law presented.  Indeed, there is no relevant federal conflicting norm involving unconscionability.  That should have been the end of the matter but kudos to AT&T counsel for a great job of (mis)framing the issue here to try to take advantage of a lame and disappointing group of arbitration preemption decisions.  The Casarotto opinion of Justice Ginsburg  used a strange preemption approach by asking whether arbitration had been “singled out” for special treatment and failed to follow a more conventional “obstacle” test used several years earlier by Chief Justice Rehnquist in the Volt decision.  Under either test the respondent should prevail here  The interpretation of the contract ban on class actions fails to single out arbitration and represents little threat to the FAA.

            Readers who want more should consult the following: Brunet, The Minimal Role of Federalism and State Law in Arbitration, 8 Nev. L.J. 326 (2007) (arbitration symposium), Brunet, Speidel, Sternlight & Ware, Arbitration Law in America: A Critical Appraisal (Cambridge 2007); Robert Schapiro, Monophonic Preemption, 102 Nw. L. Rev.(2007).

* * * *

I am a big fan of both Brunet and Schapiro's work.  ADL

Fall 2009 Newsletter for ABA Mass Torts Litigation Committee

The newsletter is now available and includes articles on Lone Pine orders, public nuisance law, federal preemption, sophisticated user and sophisticated intermediary defenses, the Fake Bad Scale Test, and document review.

BGS

Richard Epstein on Preemption and the Medical Device Safety Act

Richard Epstein (Chicago & NYU) discusses them both in his recent Forbes column.

BGS

Rollback of Preemption Under Obama Administration

Discussed by Carter Wood at Point of Law.

BGS

Third Circuit Rejects FDA Preemption for Snapple Consumer Fraud Suit

More from Allison Frankel's short article in Am Law Daily.  Here's the opinion.

UPDATE:  The Consumer Advertising Law Blog has analyzed the opinion (H/t Point of Law).

BGS

Kyle Logue on Coordinating Sanctions in Torts

Kyle D. Logue (Michigan) has posted to SSRN his article, Coordinating Sanctions in Torts.  Here's the abstract:

This Article begins with the canonical law-and-economics account of tort law as a regulatory tool, that is, as a means of giving regulated parties the optimal ex ante incentives to minimize the costs of accidents. Building on this regulatory picture of tort law, the Article asks the question how tort law should coordinate with already existing non-tort systems of regulation. Thus, for example, if a particular activity is already subject to extensive agency-based regulation, regulation that already addresses the negative externalities or other market failures associated with the activity, what regulatory role remains for tort law? Should tort law in such cases be displaced or preempted? The answer is: It depends. Sometimes, even in the presence of overlapping non-tort regulation, there is a regulatory role that tort law can play, sometimes not. 

For one example, if the non-tort regulatory standard is already “fully optimizing,” in the sense that the regulatory standard (a) sets both an efficient floor and an efficient ceiling of conduct and (b) is fully enforced by the regulatory authority, then tort law arguably should be fully displaced in the sense that no tort remedy should be available for harms caused by such an activity. If, however, the regulatory standard is only “partially optimizing” (for example, it is only an efficient minimum or efficient floor or it is only partially enforced), then tort law continues to have an important regulatory role to play. 

This framework can be used to explain such tort doctrines as negligence per se and suggests circumstances in which there should be a corollary doctrine of non-negligence per se. It also helps to explain recent federal preemption cases involving overlapping tort and regulatory standards. Finally, the framework produces insights for how tort law might efficiently be adjusted to coordinate with overlapping social norms, which are also considered within the L&E tradition to be a form of regulation.

BGS

Jason C. Miller on Michigan's Regulatory Compliance Defense

Jason C. Miller of University of Michigan has posted to SSRN his Note, When and How to Defer to the FDA: Learning from Michigan's Regulatory Compliance Defense, 15 Mich. Telecomm. & Tech. L. Rev. 565 (2009).  Here's the abstract:

Should FDA approval of a drug affect products liability litigation? This remains one of the most debated questions in the law. Although the Supreme Court recently held that state tort law is not forced to defer to the FDA's finding that a drug is safe through preemption, states remain free to defer to the FDA by providing a regulatory compliance defense in state substantive law. Michigan made exactly such a choice in enacting the only complete defense for FDA-approved drugs. Compliance with FDA regulations conclusively establishes a lack of products liability under Michigan law. With preemption seemingly off the table after Wyeth v. Levine, advocates of greater deference to the FDA may use Michigan as a model for legislation in other states. Much can be learned from examining Michigan's law. 

Michigan's regulatory compliance defense properly recognizes that an FDA-approved drug carrying an FDA-approved label should not be considered defective. However, the statute's absolute immunity provides no compensation for injured parties in any circumstance, including situations where the FDA process has failed to protect consumers. This Note examines the question of FDA approval in state tort actions, discusses Michigan's answer to that question, and offers a proposal that would block most private actions against FDA-approved drugs (as Michigan has done), but would allow a state attorney general to bring suits in certain circumstances. The state attorney general model detailed in this Note stakes out a middle ground in the debate over the significance of FDA approval. The proposal recognizes the primacy of the FDA, but also recognizes the need for a back-up that can provide deterrence and compensation in the few cases that slip through the FDA's regulatory cracks.

BGS   

Bernstein on Implied Reverse Preemption

Anita Bernstein (Brooklyn Law) has recently posted an intriguing article in SSRN entitled "Implied Reverse Preemption."    Here is the abstract:

When they apply the doctrine of preemption, courts refuse to hear claims for personal injury on the ground that adjudication of these claims would be inconsistent with a regulatory scheme. Finding that federal law preempts personal injury in those cases where Congress has not made this declaration overt is an inference about congressional purpose and intent. Because what Congress meant to do does not appear in the words of a statute, implied preemption can be more accurately understood as "inferred preemption."

Current preemption law asymmetrically assumes that Congress sometimes intends to preempt tort liability yet never intends to abandon this kind of preemptive design once undertaken. This assumption is inaccurate, as a study of one exemplar - consumer product safety regulation - reveals. Because old inferences of preemption can grow obsolete and inaccurate after Congress has moved in a different direction, the judge-made doctrine of implied preemption calls for a complementary doctrine of implied reverse preemption.

An elegant idea.  ADL

The Advance and Retreat of Pre-emption

Was going through some old issues of the ABA Journal and found this interesting article from the May issue -- Business Downturn: As the market tumbles, so does the corporate pre-emption defense, by David G. Savage.  Here's an excerpt:

For much of the decade, business lawyers and the Bush administration insisted state liability laws and state regulation amounted to a costly nuisance and a drag on the economy. They said uniform national regulation of business made more sense, and they urged the Supreme Court to limit lawsuits and to pre-empt state regulations.

For years those arguments were winners. Last year, Riegel v. Medtronic barred most lawsuits against the makers of medical devices. Lawyers for the Bush administration and device makers said state jurors should not be permitted to second-guess Food and Drug Administration regulators once they have approved a device as safe and effective.

BGS

Robert Rabin on Conflicting Conceptions of Tort Preemption

Professor Robert Rabin (Stanford) has posted on SSRN his article, Territorial Claims in the Domain of Accident Law: Conflicting Conceptions of Tort Preemption, Brook. L. Rev. (forthcoming 2009).  Here's the abstract:

Beginning in 1992, with the landmark decision in Cipollone v. Liggett Group, Inc., the U.S. Supreme Court has decided a burgeoning number of preemption cases, squarely challenging the continuing vitality of tort in many domains of accident law. Cipollone addressed the preemption question in an atypical context. The case did not involve competing claims to territorial authority between a regulatory regime and state tort law. Rather, Cipollone involved a challenge to the continuing viability of tort in the face of statutory directives mandating explicit industry conduct; more specifically, the explicit warnings required in the 1969 version of the cigarette labeling act.

In this article, I begin by revisiting Cipollone to reassess what it has to offer as a foundation for setting the boundaries of regulatory containment of the tort system. Next, I discuss three leading cases from the series of efforts by the Supreme Court to grapple with express preemption clauses in a variety of regulatory schemes. Against this backdrop, I then explore the circumstances under which it might be justified to imply preemption despite the absence of an express provision, with particular reference to the recent Supreme Court decision in Wyeth v. Levine, addressing preemption in the context of FDA regulation of prescription drugs. A concluding note ties the strands together.

BGS

Douglas Smith on Preemption After Wyeth v. Levine

Douglas Smith (Kirkland & Ellis) has posted on SSRN his article, Preemption After Wyeth v. Levine, Ohio St. L.J. (forthcoming 2009).  Here's the abstract:

This Article addresses the Supreme Court’s recent preemption decision in Wyeth v. Levine. In Wyeth, the Court held that the Food and Drug Act did not preempt a state law tort suit alleging that the labeling for an anti-nausea medication, Phenergan, failed to adequately warn about the risks associated with IV-push administration of the drug. Already, Wyeth has been interpreted by some as sounding the death knell for the preemption doctrine in the context of pharmaceutical products. However, a careful analysis of the Court’s decision indicates that this is far from the case. The majority underscored that its decision was a 'narrow' one based largely on the facts and circumstances before it. In particular, the Court made a point of noting that the record was devoid of evidence that the particular risks at issue had actually been considered by the FDA and that the defendant had thus failed to show that there was an actual conflict between FDA regulation and the state law tort suit. The majority’s analysis therefore suggests that state law tort suits based on an alleged failure to warn are preempted in cases in which the FDA has specifically considered the particular risks at issue and has determined that the pharmaceutical product’s labeling adequately warns of those risks. I argue that the ruling thus construed has significant benefits. As the Court has repeatedly recognized, there is an inherent tension between the congressional establishment of a federal regulatory regime for the labeling of pharmaceuticals and medical devices by experts at the FDA and allowing a jury of ordinary citizens with no specialized expertise to render their own judgment regarding, and in effect overrule, such expert determinations. As several members of the Court have noted, there is a potential danger in allowing these expert decisions to be undermined by state court juries. Moreover, such an outcome may have undesirable indirect effects, such as raising the prices of pharmaceutical products to satisfy state court judgments that are not warranted based on the best available scientific evidence and the potential confusion and inconsistency that may result with juries in fifty-two separate jurisdictions imposing different standards concerning what constitutes appropriate labeling. The Court’s decision properly balances these competing considerations.

BGS

Tobacco, the FDA, and Preemption

Op-ed in today's Wall Street Journal -- Tobacco and the Tort Bar, by Mark H. Berlind.  Here's an excerpt:

Congress is on the verge of passing sweeping legislation that would empower the Food and Drug Administration (FDA) to regulate tobacco products. Antitobacco activists are cheering, while some tobacco companies are raising the specter of First Amendment violations. Lost in the debate is the fact that this bill will continue to allow consumers to sue manufacturers that fully comply with the FDA's content and labeling rules.

...

Today's legislation would impose strict limits on tobacco advertising and labeling, mandate stronger warning labels, and require advance FDA approval of any reduced-risk claims. It would also empower the FDA to change cigarettes' content to make them less addictive and lethal.

However, in a little-noticed provision, the bill also expressly provides that "no provision of this chapter . . . shall be construed to modify or otherwise affect . . . the liability of any person under the product liability law of any State." In other words, the regulatory regime that the legislation would establish can't protect companies from tort liability -- even if they rigorously follow every FDA rule.

BGS

Wyeth v. Levine in the Blogosphere

Scotusblog's summary is linked here. The folks at Drug and Device Law have posted their reactions.  For a counterpoint, you might want to check out Public Citizen's statement on the opinion. 

ADL

Wyeth v. Levine -- Supreme Court Finds No Preemption

I'm sure we'll have more posts about this on the blog, but here's today's opinion, hot off the presses: Download Wyeth_v_Levine_US_Sup_Ct.pdf

BGS

Supreme Court Decides Wyeth v. Levine

I haven't had a chance to read the opinion yet, but wanted to broadcast the news as soon as possible.  The Supreme Court has decided Wyeth v. Levine and in a 6-3 opinion, rejected Wyeth's preemption claim.  The Associated Press report is available here through the New York Times.

ECB

ABA Section of Litigation Annual Conference

The ABA's Section of Litigation will have its Annual Conference on April 29 to May 1, 2009 at the Atlanta Marriott Marquis in Atlanta, Georgia.  Program topics include Causation and Injury in Toxic Torts -- An Examination of Modern Causation Principles in Toxic Tort Litigation; Enemy of the State -- The Challanges of Civil Litigation with States and Municipalities; and Preemption in Product Liability Litigation.

BGS

Eric Lasker on Wyeth v. Levine Oral Argument

Eric Lasker (Spriggs & Hollingsworth) has published Oral Argument in Wyeth v. Levine Marks Change in Drug Litigation Preemption Debate in the February 2009 issue of Engage.

BGS

Roderick Hills and Catherine Sharkey on Preemption

The Fall 2008 NYU Law School magazine includes A Presumption Against Preemption, by Professor Roderick Hills (NYU), and A Model for Products Liability Preemption, by Professor Catherine Sharkey (NYU).  (Scroll down the .pdf link to page 60 for the Hills piece, and page 63 for the Sharkey piece.)

BGS

Should Chief Justice Roberts Excuse Himself from Wyeth?

Tony Mauro, from the Legal Times, points out that Chief Justice John Roberts owns Pfizer stock and questions whether Roberts should recuse himself from the Wyeth case now that Pfizer is acquiring Wyeth.  Here's an excerpt:

Chief Justice John Roberts Jr. owns Pfizer stock that has prompted his recusal in previous cases. The outcome of the Levine case is likely to affect Wyeth's value, and in turn Pfizer's.

On Feb. 4, Wyeth's lawyer before the Court, Seth Waxman of Wilmer Cutler Pickering Hale and Dorr sent a letter to the clerk of the Supreme Court informing the Court of the pending transaction. But Waxman told the Court that because of pending stockholder approvals and other matters, the transaction will not be completed until July 31 at the earliest -- weeks after the end of the Court term, by which time its decision would have been released. As a result, Waxman said he does not believe the pending takeover "warrants amendment of the corporate disclosure statement" submitted by Wyeth when Wyeth petitioned the Court last year. That disclosure statement is ordinarily the way justices are informed about parent companies and subidiaries that lets them know if recusal is required.

ECB