Two decisions on product liability pre-emption cases handed down by the U.S. Supreme Court last month—one finding in favor of pre-emption, the other against—serve as the latest end-zones for the complex field of compliance with federal safety regulations.
In theory, product liability pre-emption is straightforward: A manufacturer can be shielded from state tort lawsuits if it adopts safety standards by a federal agency, since federal rules pre-empt state rules. In practice, that rarely stops plaintiff lawyers from trying anyway, with disputes then spilling into federal court to decide what lawsuits are or aren't allowed by pre-emption.
The high court's first recent case, Williamson v. Mazda Motors of America, stems from a lawsuit filed against Mazda by the family of a woman who died in a car accident, allegedly due to injuries caused by a defective seatbelt design. Lawyers for Delbert Williamson alleged that his wife likely would have survived had Mazda installed lap-and-shoulder seatbelts in the rear seats of its vehicles.
Mazda argued that federal auto safety regulations established in 1989 intentionally gave carmakers a choice about which belts to install in certain rear seats, and that state tort liability would undermine that choice. But the U.S. Supreme Court disagreed in a 8-0 decision (Justice Elena Keegan recused) handed down Feb. 23, reversing a California appeals court ruling and allowing the lawsuit against Mazda to proceed.
Jim Huston, a partner with law firm Morrison Foerster, says the Williamson decision is shocking because the court came to the opposite conclusion when it decided the essentially identical 2000 landmark case of Geier v. American Honda. In that decision, the court found that federal safety standards pre-empted automakers from having to install airbags, in place of another safety restraint mechanism.
On the heels of Geier, legal experts say, auto manufacturers became comfortable with the idea that if they met all federal safety standards, then they would automatically be pre-empted from state tort liability. The Mazda decision throws that theory out the window. “The landscape is much less clear now,” says Rebecca Baden, an associate with law firm Crowell & Moring.
In Williamson, the court reasoned that the federal regulations giving automakers a choice among different safety restraints wasn't a “significant regulatory objective,” but rather was based on cost concerns. In contrast, the 1984 federal regulation at issue in Geier—also giving manufacturers a choice among safety restraints—was specifically meant to foster technological development (airbags were in their infancy at the time)and reduce injuries, and mandate cost-efficient safety measures.
Because the regulations at issue in Williamson didn't “stand as an obstacle” to the purposes and objective of federal law, as they would have in Geier, state tort liability couldn't be pre-empted in this case, the court ruled.
In a concurring opinion, Justice Sonia Sotomayor further emphasized: “The mere fact that an agency regulation allows manufacturers a choice between options is insufficient to justify implied pre-emption.” In other words, a safety regulation that doesn't compel companies to adopt a more costly safety standard, but merely allows it, can't be used as a shield to product liability.
Justice Clarence Thomas also wrote a separate concurrence, disagreeing with the court's need to analyze the purpose of the regulation. He cited the National Traffic and Motor Vehicle Safety Act, which expressly includes a clause that states: “Compliance with a motor vehicle safety standard prescribed under this chapter does not exempt a person from liability at common law.” Thomas opined that no further analysis was necessary.
“Manufacturers may be exposing themselves to tort liability if they make a design choice other than the maximum prescribed standard.”
—Steve Benesh,
Partner,
Bracewell & Giuliani
The decision means that manufacturers will need to consider lawmakers' intent when they created the policy at issue if they want to prevail on a defense of implied pre-emption. “It's not going to be an easy call” and something courts will continue to struggle with, says Dan Campbell, a partner at law firm Crowell & Moring.
That analysis will involve an examination of the statute's history, any statements by the agency about its objectives in creating the regulation, and any expressed views by the agency about the law's pre-emptive effect, says Steve Benesh, a partner with law firm Bracewell & Giuliani. “Those seeking implied pre-emption better do their homework, because we now know these are the types of issues that federal courts will be delving into,” he says.
The decision also stresses the need for automakers to think carefully about what safety devices to install in their vehicles. “Manufacturers may be exposing themselves to tort liability if they make a design choice other than the maximum prescribed standard,” Benesh says.
“Don't choose a cheaper design route if the possible ramifications are injury or death,” Huston warns. “You will be held responsible.”
The Williamson decision is already having ramifications in lower courts. In light of Williamson, the Supreme Court on Feb. 28 ordered the South Carolina Supreme Court to reconsider its ruling in Priestner v. Ford Motor Co., in a case challenging whether defective windows are preempted by federal law. “For those challenging federal preemption, a fertile new battleground over lawmakers' intent appear to have been opened up,” Benesh says.
Opposite Direction
The high court took a different tack on Feb. 22 with another decision about pre-emption, ruling that “express pre-emption” cases—where a federal statute explicitly pre-empts state law—are not as problematic as implied pre-emption cases.
In Bruesewitz v. Wyeth, the Court ruled 6-2 that the only way to win compensation for alleged vaccination injuries is through a special “vaccine court” established under the National Childhood Vaccine Injury Act of 1986. That law explicitly stated: “No vaccine manufacturer shall be liable in a civil action for damages arising from a vaccine-related injury or death.”
COURT OPINIONS
What follows are brief excerpts from the court opinions in Williamson v. Mazda Motors and Bruesewitz v. Wyeth:
Williamson v. Mazda Motors of America
In Geier, the regulation's history, the agency's contemporaneous explanation, and its consistently held interpretive views indicated that the regulation sought to maintain manufacturer choice in order to further significant regulatory objectives. Here, these same considerations indicate the contrary. We consequently conclude that, even though the state tort suit may restrict the manufacturer's choice, it does not “stan[d] as an obstacle to the accomplishment . . . of the full purposes and objectives” of federal law. Thus, the regulation does not pre-empt this tort action. The judgment of the California Court of Appeal is reversed.
Bruesewitz v. Wyeth
Manufacturers are generally immunized from liability for failure to warn if they have complied with all regulatory requirements (including but not limited to warning requirements) and have given the warning either to the claimant or the claimant's physician. They are immunized from liability for punitive damages absent failure to comply with regulatory requirements, ‘fraud,' ‘intentional and wrongful withholding of information,' or other ‘criminal or illegal activity.' And most relevant to the present case, the [National Childhood Vaccine Injury] Act expressly eliminates liability for a vaccine's unavoidable, adverse side effects: ‘No vaccine manufacturer shall be liable in a civil action for damages arising from a vaccine-related injury or death associated with the administration of a vaccine after October 1, 1988, if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings.'”
Sources: Williamson v. Mazda; Bruesewitz v. Wyeth.
The decision stems from a lawsuit filed against drug-maker Wyeth by the parents of a girl who suffers from a seizure disorder and serious developmental delay allegedly caused by toxins in a vaccine she received as an infant. After being rejected by the vaccine court for lack of proof that the drug caused the injuries, the couple filed a product liability lawsuit in state court. But the Philadelphia-based Third Circuit Court of Appeals held that the Vaccine Act pre-empts all design defect claims, a decision that the Supreme Court upheld.
The Supreme Court found that to the extent there was “proper manufacture and warning, any remaining side effects, including those resulting from design defects, are deemed to have been unavoidable.”
“It is clear from both Bruesewitz and Williamson that manufacturers need to comply with all federal regulatory requirements—whether requirements on product design, manufacturing, or product labeling and warnings—in order to claim pre-emption in product liability suits,” says Larry Ebner, a partner with McKenna, Long & Eldridge.
While the two decisions are leading some to conclude that the Supreme Court's approach to pre-emption in product liability is unpredictable, that's not necessarily the case, Benesh says. “Where pre-emption is clear and express, as in Bruesewitz, the court will uphold it,” he says. “On the other hand, where federal laws do not appear to have a significant regulatory objective, as in Williamson, the court is unlikely to find implied pre-emption.”
Greater clarity—or lack thereof—is expected on March 30, when the high court is expected to hear oral arguments in three consolidated cases: Actavis v. Demahy, Actavis Elizabeth v. Mensing, and Pliva v. Mensing. The cases are a follow-up to the court's 2009 decision in Wyeth v. Levine.
In Levine, the Court held that state product liability claims based on inadequate labeling of branded prescription drugs did not conflict with, and were not pre-empted by, the Food and Drug Administration's authority under the Federal Food, Drug, and Cosmetic Act to regulate drug labeling.
In the consolidated cases, the question before the Supreme Court is whether Levine applies to claims against generic drug makers as well, as three circuit courts have now held.
“The continuing lesson to be gleaned from the Supreme Court's product liability pre-emption decisions,” Ebner says, “is that federal preemption defenses based on a particular federal regulatory scheme not only must be carefully crafted and argued, but also most probably will stand or fall on their own.”
No comments yet