States' Rights Flipflop

Posted by Barbara O'Brien at 6:10 PM on May 31, 2009.

If Judge Sonia Sotomayor is confirmed and seated on the Supreme Court, a hot-button issue that may confront her is that of preemption.

The Bush Administration used a doctrine of implied preemption as legal cover to shield corporations from personal injury liabilities and undermine state health, safety and environmental laws. Simply, the Bushies decided they could just enter a clause into a federal regulation, and poof! State laws they didn’t like went bye-bye.

But recently a Supreme Court decision, and more recently an executive order by President Barack Obama, have tempered this federal intrusion into state legislation. And, naturally, some fire-breathin’, states’ rights lovin’, champions-of-individual-liberty conservative think tanks are very unhappy about it.

Tort Reform by Stealth

As explained by the Center for Progressive Reform:

“For eight years the Bush administration sought to accomplish tort reform by stealth and indirection with several agencies proclaiming in preambles to regulations that the regulations preempted state tort law. These agencies included the National Highway Traffic Safety Administration, the Federal Railroad Administration, the Consumer Product Safety Commission, and most notably the Food and Drug Administration.”

In U.S. law, “preemption” refers to the fact that federal law usually supersedes state laws. Article VI, section 2 of the Constitution says,

“This Constitution, and the laws of the United States which shall be made in pursuance thereof; and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges in every state shall be bound thereby, anything in the Constitution or laws of any State to the contrary notwithstanding.”

There are two kinds of preemption, express and implied. Express preemption occurs when a federal statute specifically says its provisions overrule state laws.

But in some circumstances where federal law seems to be stepping on a state’s toes, a court might decide preemption is implied. If, for example, Nebraska passed a law that allowed minor children to purchase liquor, federal law that prohibits selling liquor to a minor would supersede the state law, and it would still be illegal for minor children to purchase liquor in Nebraska. In other words, where state and federal law conflict with each other, the federal law preempts the state law. It should be noted that usually there’s no conflict if state law is more restrictive than federal law.

The other kind of implied preemption is a bit hazier and occurs when the federal law is said to “occupy the field.” For example, there has come to be an implied understanding that the feds “occupy the field” regarding immigration law.

Preemption by Preamble

During the Bush Administration, several federal agencies practiced what came to be called “preemption by preamble.” This means agencies revised a host of regulations by adding preemption language into the preambles. Most of this language was aimed at protecting corporations from state consumer protection and tort laws, making them exempt from liability if their products harmed someone.

Some argued that this practice amounted to nullification of state law by federal fiat. The Bushies didn’t seem to care. “Tort reform” — or, it should be called, “the right-wing conspiracy to manipulate public opinion and fool people into giving up their 7th Amendment rights,” had been a priority for George W. Bush since he first campaigned to be governor of Texas in 1994.

In brief, the word “tort” refers to personal injury. If Sally did something that caused John to be injured, John can sue Sally for damages. Tort law is vast and complicated, and one can always find details to criticize. Certain situations present difficult issues, such as mesothelioma resulting from decades-past asbestos exposure, that are difficult to determine fairly.

However, as documented in my series on tort reform and health care, for years the Right has spread misinformation about tort to build public support for laws that are designed to block injured people from seeking justice in court. And Bush Administration appointees apparently were ordered to use federal regulation to strip citizens of rights where states were unwilling to do so.

The term “preemption by preamble” was coined by Catherine Sharkey of the New York University School of Law. In a 2007 paper published in the DePaul Law Review, Sharkey noticed two parallel trends: Agencies were assuming expansive discretion to interpret a preemptive scope in their regulations to protect corporations. But when it came to private, individual rights, suddenly the same expansive discretion did not apply. In the case of personal rights, the agencies’ hands “are tied by judicial tether,” Sharkey said.

In October 2008 Deepak Gupta wrote for USLaw.com:

“[T]he administration’s first attempts to preempt state-law protections consisted of amicus briefs on behalf of corporations in civil justice cases. After only mixed success, the administration then shifted strategies, targeting regulatory agencies in charge of product safety oversight. Beginning in 2005, carbon copy statements claiming that federal agency rules preempt state law began surfacing in the preambles of agency regs, and in some cases in the body of the final rules themselves.”

Alicia Mundy wrote in the Wall Street Journal (October 15, 2008) that Bush administration officials were spending their last weeks in office revising federal rules to block product-safety lawsuits by states and consumers:

“The administration has written language aimed at pre-empting product-liability litigation into 50 rules governing everything from motorcycle brakes to pain medicine. The latest changes cap a multiyear effort that could be one of the administration’s lasting legacies, depending in part on how the underlying principle of pre-emption fares in a case the Supreme Court will hear next month.”

For example, one regulation issued by the Department of Transportation limited the number of seatbelts car makers can be forced to install and prohibited suits by injured passengers who didn’t get to wear one.

See also “Get Out of Jail Free” by the American Association of Justice.

Wyeth v. Levine

What the Bush Administration did is being undone, however. In March of this year the U.S. Supreme Court struck down an attempt to nullify state tort laws that apply to pharmaceutical products. In April 2000, Diane Levine of Vermont was given a dose of Phenergan, an anti-nausea drug manufactured by Wyeth. The drug was administered through an “IV-push” method. There was a warning in the fine print of the FDA approval label that this method could cause gangrene if the drug entered an artery. This happened to Levine, and she lost part of an arm as a result.

Levine sued Wyeth for damages under state law, saying the drugmaker had failed to provide adequate warning of a known danger of its drug. But Wyeth pointed to a statement that had been inserted into the preamble to a 2006 regulation on the format and content of prescription drug labels. The FDA preamble stated that “FDA approval of labeling . . . preempts conflicting or contrary State law.” The label had been FDA approved, Wyeth argued, so state law was preempted and Wyeth was protected from liability.

The Vermont trial judge and the Supreme Court of Vermont didn’t buy this argument, however, and Wyeth took the case to the Supreme Court. On March 4, 2009 in Wyeth v. Levine (555 U.S___, No. 06-1249), a majority of the justices decided that a federal regulation bearing the force of law could preempt state law, but language inserted into a regulation’s preamble by an agency did not carry the force of law.

President Obama’s Memo

On March 10, President Obama sent a memo on preemption to the heads of departments and agencies. “The purpose of this memorandum is to state the general policy of my Administration that preemption of State law by executive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the States and with a sufficient legal basis for preemption,” the memo states.

The memo makes these provisions:

1. Federal regulations may not declare an intention to preempt state law “except where preemption provisions are also included in the codified regulation”; in other words, where there is a clear statutory requirement of preemption.
2. Heads of departments should not add preemption provisions to regulations “except where such provisions would be justified under legal principles governing preemption.” This cites a pre-Bush Administration executive order as a guide.
3. Heads of departments and agencies must review the past ten years of regulations and delete preemption language that does not conform to provisions 1 and 2.

The Right: Oh No!

Alicia Mundy and Brent Kendall report on reaction to the President’s preemption memo in the Wall Street Journal (May 21, 2009):

“‘One thing we know is you can’t sue your way into an economic recovery,’ said Bryan Quigley of the U.S. Chamber of Commerce. “Allowing for more lawsuits will not create more jobs, except maybe for plaintiffs lawyers.”

If the argument that nullifying state laws creates jobs seems a bit, well, odd, be advised that one of the Right’s long-term arguments in favor of “tort reform” is that reducing product liability creates jobs. As I’ve argued elsewhere, there is no evidence tort reform creates jobs or grows the economy that cannot be explained by other factors.

The right-wing Heritage Foundation weighed in on preemption in January 2009, as President Obama was about to take office:

“Reversing the trend toward preemption in closely regulated industries will increase legal uncertainty, undermine the ability of federal regulators to protect the public, and impose a massive burden on businesses across the economy. To prevent these consequences, you should oppose legislation that would reverse preemption and instruct your appointees that, as a matter of policy, your Administration will not reverse agency positions on preemption and will continue to intervene in legislation where federal regulatory power is inappropriately called into question by state laws.”

In other words, returning to the preemption standards that prevailed through most of the 20th century will create chaos and is just too radical. Right.

Finally, we get to Michael S. Greve, writing for the right-wing American Enterprise Institute, reacting to the Levine decision:

Contrary to its recent reputation of being “probusiness,” the Supreme Court, in its Wyeth v. Levine decision, has gutted “federal preemption,” one of the few remaining protections against state interference in the national economy. By ruling that the pharmaceutical company Wyeth is liable for not including a stronger warning on a drug label than the Food and Drug Administration (FDA) required, the Court allows local juries and regulators to preempt federal regulators–which are better equipped to deal fairly with national industries. The Wyeth decision will prove disastrous for the American economy.

One of Greve’s arguments is that “Because it is so easy to circumvent express preemption, leaving it to Congress to specifically preempt state laws is ineffective.” Oh no; faceless federal government bureaucrats who are accountable only to the White House are the only ones qualified to preempt state laws.

You can’t make this up. Well, you can, but only if you’re an extreme right-winger.

Barbara O'Brien is the owner/proprietor of The Mahablog. She writes about Buddhism for About.com and and now blogs on behalf of the Mesothelioma and Asbestos Awareness Center on their new mesothelioma blog. She has guest blogged at the Take Back America Conference and for Crooks and Liars.