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High Court Aims To Alter Product Liability Landscape

Date

February 26, 2008

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7 minutes

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By Jacqueline Bell,

Tuesday, Feb 26, 2008 — At the end of this Supreme Court term, the terrain of product liability litigation is likely to have shifted significantly, as the high court tackles the question of whether government regulation can effectively shield manufacturers from state tort claims.

Already the high court seems to be leaning in the direction of answering that question in the affirmative.

“There’s a pattern I think that has emerged from this term of the court that suggests they’re taking a pretty broad view of preemption principles. If that continues, it has substantial implications for product liability litigation at least with respect to very heavily regulated products,” said J. David Prince, law professor at William Mitchell College of Law.

Two cases this term are aimed directly at this question of preemption: Riegel v. Medtronic and Warner-Lambert v. Kent.

In Riegel v. Medtronic the court handed down a decision last week, determining 8-1 that companies whose medical devices have undergone a rigorous review process by the U.S. Food and Drug Administration cannot be sued under state law claims.

“I think that’s going to have a significant impact on medical device product liability claims,” said Prince, who noted that the decision in Riegel v Medtronic would quickly eliminate any pending cases that fall squarely under the courts ruling. “Any of those cases in the system will just get booted out.”

According to Prince, medical device liability cases involving design defect claims or allegations that the manufacturer failed to adequately warn patients about the potential risks will be difficult to bring after Riegel. “The only kinds of cases that I would rely on surviving Riegel are cases in which the device just wasn’t manufactured properly,” said Prince.

If a device was not made according to the specifications approved by the FDA, an injured plaintiff could claim that the device that harmed him was not the device approved by the FDA.

“Presumably those are rare cases. That suggests to me in medical devices litigation that Riegel is going to have a pretty broad impact,” said Prince.

Still, some defense attorneys wondered whether Riegel v. Medtronic would in fact deter plaintiffs attorneys from pursuing this type of litigation.

“One can never underestimate the creativity of the plaintiffs bar to recast claims in a way that will still be permitted under Riegel,” said David Geiger, head of the product liability and complex tort practice group at Foley Hoag LLP.

In any case, the Supreme Court’s decision applies only to medical devices that have gone through a premarket approval process at the FDA, said Kurt Stitcher, partner at Levenfeld Pearlstein LLC.

“Very few Class III medical devices — the type of complex, expensive devices that pose the greatest risk of serious injury to a consumer, should they malfunction — actually go through the PMA process, however,” said Stitcher.

Only 32 Class III medical devices were granted premarket approval by the FDA in 2005. More than 3,100 such devices were approved that same year under the 510(k) process, in which the FDA determines whether a device is substantially equivalent to another device exempt from premarket approval.

Significantly, the high court’s ruling does not say preemption would apply to suits alleging state law claims against medical devices approved under the less stringent 510(k) process.

“The overwhelming majority of medical devices that come on the market do not go through PMA. Devices that just go through the 510 (k) do not have preemption. There will be no effect on the vast majority of devices that are out there and thus the vast majority of injuries,” said David Geiger, partner at Foley Hoag.

The high court’s decision in Riegel could also inspire renewed attention from Congress. A few lawmakers have also threatened to pursue legislation to “correct” the court’s decision in Riegel v. Medtronic, as Senator Edward M. Kennedy (D-Mass.) said last week.

“In enacting legislation on medical devices, Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices. Congress obviously needs to correct the court’s decision. Otherwise, FDA approval will become a green light for shoddy practices by manufacturers,” said Kennedy.

Another case aimed at questions of preemption is Warner-Lambert Co. v. Kent, which considers whether FDA approval of a drug makes a pharmaceutical company immune to state law claims that it defrauded the FDA during the drug approval process.

The Supreme Court heard oral arguments in that case Monday, and several court watchers said many justices seemed to be leaning in the direction of blocking “fraud on the FDA” claims.

“The Warner Lambert arguments signaled to me that there’s a fairly strong chance the Supreme Court is going to find that the Food, Drug and Cosmetics Act and the regulations combined do have preemptive effect. The court seems to be on that path these days,” said Prince.

In any case, several product liability experts predicted that any decision in Warner-Lambert Co. v. Kent is likely to have a limited impact on product liability litigation, as a 6-year-old Supreme Court case, Buckman v. Plaintiffs’ Legal Committee, has already addressed a similar question.

But others caution the case has the potential to significantly impact the FDA regulatory process, should the justices decide to allow those fraud claims.

“If the court were to affirm the Second Circuit’s ruling against implied preemption, we could expect drug manufacturers to flood the FDA with data during the approval process in order to defeat a plaintiff’s later argument that the manufacturer had somehow “defrauded” the FDA,” said Stitcher. “Such an inundation of information could distract the FDA from its regulatory duties and render the whole process more expensive and both less efficient and less likely to serve the ends of protecting the public against dangerous pharmaceuticals.”

Yet another preemption case the court plans to take up next term, Wyeth v. Levine, is casting a long shadow over the current crop of cases. In oral arguments Monday in Warner-Lambert v. Kent, attorneys and justices alike noted that many broad preemption questions were more likely to be addressed in that upcoming case.

Wyeth v. Levine centers on whether FDA drug-labeling approval preempts state law claims, and many argue it has the greatest potential of the three preemption cases to radically affect pharmaceutical product liability litigation.

“The biggest is yet to come in Wyeth v. Levine,” said Geiger. “It has the most sweeping potential for preemption of claims.”

Another Supreme Court case that has caught the attention of product liability experts is Exxon Shipping Co. v. Baker, which is scheduled for oral arguments Wednesday.

The high-profile case centers on a $2.5 billion punitive damages award in the Exxon Valdez spill. The Supreme Court has agreed to take up the question of whether an award of that size is appropriate.

As the Supreme Court perhaps pointedly queried when it agreed to hear the case: “Is this $2.5 billion punitive damages award, which is larger than the total of all punitive damages awards affirmed by all federal appellate courts in our history, within the limits allowed by (1) federal maritime law or (2) if maritime law could permit such an award, constitutional due process?”

ExxonMobil argues that it should not pay punitive damages because it has already spent more than $3.5 billion — including compensatory payments, cleanup payments, settlements and fines — to deal with the spill.

In the context of the other preemption cases on the high court’s docket, Stitcher noted that the Exxon case could be interesting, since Exxon has argued that the Clean Water Act does not allow for punitive damages.

“The Baker case may wind up being yet another in a series of “implied preemption” decisions from the Supreme Court this term. Otherwise, given the court’s recent history with respect to punitive damages, we can expect approval of the single-digit punitive damages ratio, $2.5 billion, on which the Ninth Circuit settled,” said Stitcher.

Other high court observers say the Exxon case has the potential to impact product liability cases, but only if the court addresses the question broadly.

“There’s the potential for the court to say something in the maritime law context that could be carried over into the product liability law context. But I think they’re more likely to stay away from the constitutional law issues,” said Geiger.

The cases in the U.S. Supreme Court are Riegel et ux. v. Medtronic Inc., case number 06-0179; Warner-Lambert Co. LLC et al. v. Kent et al., case number 06-1498; Wyeth v. Levine, case number 06-1249; Exxon Shipping Co. v. Baker, case number 07-0219.

–Additional reporting by Erin Coe and Sara Stefanini


Filed under: Litigation

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