Alan Morrison

Re-Balancing the Tort Debate: The Role for the New Congress

Since New Gingrich and his Contract With (On) America swept in the class of 1994, Congress, and since 2000, the Executive Branch, have vigorously entered the liability debate, always on the side of the defendants. With a new Congress in January, and with only so many committees able to focus on Iraq, there is plenty of work to re-balance the debate and start work on repairing the damage. So long as George W. Bush is in the White House, even if victim friendly legislation made it through Congress, his near-certain vetoes could not be overridden, but there is still much that can and should be done.

First and most important, Congress has the power to investigate what the agencies have been doing and make their efforts to help big business public. A major area is preemption of state tort remedies by federal action and, more importantly, federal inaction. The most egregious example is what the Food and Drug Administration has tried to do to eliminate tort claims based on failure to warn. For decades plaintiffs have sued drug companies on claims that the information on drug labels, even though approved by FDA, did not adequately disclose the risks from the product. Some claims were successful, others were not, but the outcomes were determined by the applicable facts and the state laws on which the claims were based. Until 2001.

Daniel Troy had done considerable work for the drug industry before he became FDA’s Chief Counsel, and he saw an opportunity to help his former clients in his new job. Since the FDA approves all drug labeling, why should state courts go behind those decisions, made by an expert agency, especially when it will be juries that will be, in effect, second guessing the FDA? It did not matter to this new use of federal preemption that FDA regulation and state law failure to warn claims had co-existed for decades with no apparent difficulty, nor did it matter that the drug laws made no mention of preemption of any kind, whereas the medical device amendments, also administered by FDA, has a specific, albeit limited, statutory authorization for preemption. And to make matters worse, FDA did not issues rules with explicit preemption provisions in them, but went through two back doors: filing amicus briefs in support of drug companies and inserting preemption language in a preamble to a rule, where it could be challenged, if at all, only with great difficulty.

FDA is not the only agency that has been trying to use preemption as, in effect, a “get out of jail free” card for companies accused of tortious conduct. The National Highway Traffic Safety Administration has done something similar with its passive restraint rule, and more recently is trying to use preemption in other areas as well, as are other agencies. Perhaps surprisingly, the Supreme Court has been much better in knocking down bogus preemption arguments than have the lower federal courts, but there is only so much the Court can do. What is needed is a thorough review of all agency claims of preemption, initially in the tort area, but then more generally. A hearing on the subject would inquire into the role of industry in moving preemption ahead, the extent to which agencies are claiming preemption, and whether they are doing so openly, with full opportunity for public input, or whether these decisions are made behind closed doors where the public, as well as the states whose citizens have their rights to sue placed in jeopardy, are kept in the dark.

Another area that ought to concern the Congress, and that affects virtually everyone, is the reliance by agencies on advisory committees which are heavily tilted in favor of industry, including members who have substantial financial connections with companies whose profits may be helped or hurt by what the agency decides. Of particular concern are the so-called “technical” committees that make recommendations (almost always followed by the agency) on whether a specific product should be approved for marketing. Most agencies have quite liberal rules (and even they are waived) on what personal financial connections will cause a committee member to be disqualified, and they need to be reviewed by Congress. In addition, the federal advisory committee act is supposed to ensure that all advisory committees are balanced in terms of the viewpoints of the committee as a whole, but that requirement is often honored in the breach, and courts have been very reluctant to enforce this mandate. Hearings on these two-related subjects would be helpful in understanding how and why regulation that protects consumers and prevents injuries has been cut-back so much in the last six years, and hence why suits for money damages are even more important than before.

These are only two of the many subjects that never make it into the popular press, but that Congress should investigate. Even if no changes in the applicable laws can be enacted until there is a different President, sunlight can go a long way toward slowing down the hidden effort to do tort reform through administrative action.

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Posted at 9:14 AM, Dec 12, 2006 in
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