Supreme Court to Rule on Consumer Lawsuit Preemption

Published January 1, 2009

The U.S. Supreme Court has been asked to determine whether the federal government can protect drug companies from being sued in state courts.

The case, Wyeth v. Levine, involves Diana Levine, a Vermont musician whose arm was amputated after drug company Wyeth Pharmaceuticals’ anti-nausea drug, Phenergan, was administered improperly by a nurse’s assistant, a mistake the court concluded resulted in the loss of her arm to gangrene.

Levine sued Wyeth, alleging misleading instructions on the label, and was awarded $6.8 million in a decision upheld by the Vermont Supreme Court. Wyeth subsequently appealed that decision to the U.S. Supreme Court, pointing out it had complied with the Food and Drug Administration’s guidelines on how to label its drug.

Conflicting Rules

The case coincides with the Bush administration’s attempts to implement a single set of federal rules governing product liability litigation to preempt conflicting state laws and guidelines, saving manufacturers and distributors of consumer products such as pharmaceuticals from having to keep track of 50 different states’ litigation rules and to avert a new multitude of product liability lawsuits.

The fundamental problem is that drug companies cannot focus on creating new, quality drugs if they have to satisfy a variety of conflicting state laws and court decisions, said Ilya Shapiro, editor-in-chief of the Cato Institute’s Supreme Court Review.

“Companies spend a lot of money researching and developing new drugs and conducting the repeated trials and tests required for FDA approval,” Shapiro said. “If they have to deal with every state’s laws, there will be fewer new drugs made—which defeats the purpose of the FDA.”

Deterrence to Drug Development

Peter Pitts, a pharmaceutical expert at the Center for Medicine in the Public Interest, agreed, saying, “The Food and Drug Administration is a government agency. If you allow its decisions to be overturned by state-level courts, you deter development of high-risk drugs. Why should we develop drugs and go through the process if the FDA is only a list of suggestions rather than a federal list of what the drug is?”

“Every time you sue, the court has to decide which laws apply,” said Bob Levy, chairman of the Cato Institute. “Is it the law where the manufacturer resides? Is it the law where the plaintiff resides? Is it the law of the state where the suit is filed?”

With a single set of rules, Levy noted, “it isn’t hard to identify.” Fifty different sets of laws, by contrast, are “great for plaintiffs and harsh for companies,” he said.

If the Supreme Court upholds preemption in Wyeth, which Pitts expects it to do, there will be a single federal standard to which all like cases must adhere

Elisha Maldonado ([email protected]) writes from California.