The U.S. Supreme Court recently held, in Wyeth v. Levine, that a state-law products liability claim was not preempted by FDA approval for the marketing of a drug and its label. The drug in question, Phenergan, is used to treat nausea and is administered intravenously. If Phenergan inadvertently enters a patient’s artery, rather than a vein, it causes irreversible gangrene. After suffering such gangrene and subsequent amputation of her hand resulting from such an injection, Diane Levine sued Wyeth relying on common law negligence and strict liability theories, alleging that the labeling of the drug was defective because, although it warned of the danger of gangrene, it failed to instruct clinicians not to use the IV-push method of administration. Wyeth argued that Levine’s claims were preempted by federal law because the drug’s label had been approved by the FDA.
Justice Stevens, writing for a 6-3 majority, found no direct conflict between state and federal law that would make it impossible to both comply with FDA labeling requirements and strengthen the Phenergan warnings. The mere fact that the FDA had approved Phenergan’s label did not establish that it would have prohibited a change strengthening the warnings. Because the FDA had not considered and rejected stronger warnings regarding the dangers of IV-push administration, Wyeth could have unilaterally strengthened those warnings. Neither would complying with state law obstruct the purpose of federal drug-labeling regulation. The failure of Congress to provide a federal remedy for consumers harmed by unsafe drugs indicated that it determined that state-law actions provided appropriate relief. The court also noted that manufacturers have access to information superior to that of the FDA regarding the risks of their drugs. State tort suits uncover unknown hazards and provide incentives for manufacturers to disclose safety risks promptly.
Senate Bill Would Limit Protective OrdersSenators Herb Kohl, D.-Wis., and Lindsey Graham, R.-S.C., recently introduced the “Sunshine in Litigation Act of 2009.” The proposed bill, S. 537, would require courts to weigh the “public interest in the disclosure of potential health or safely hazards” against the privacy interests of the parties to litigation. A protective order could be issued only if a court makes findings of fact that a protective order would not restrict the disclosure of information relevant to the protection of public health and safety, or that the public interest in such disclosure is outweighed by a “specific and substantial interest” in maintaining confidentiality. In addition, the court would have to find that the requested protective order is no broader than necessary to protect the privacy interest asserted.
As quoted in the Congressional Record, Mr. Kohl asserts that the bill is necessary to “curb the ongoing abuse of secrecy orders in the Federal courts,” particularly with respect to product liability litigation. He cites confidentiality agreements included in the settlement of multiple lawsuits regarding the alleged tread separation of Bridgestone and Firestone tires as an example of such “abuse,” and argues that such agreements led to numerous additional deaths and injuries that could have been prevented had protective orders not been issued. According to Mr. Kohl, the proposed legislation would not prohibit secrecy agreements or place an undue burden on judges, but simply require that “where the public interest in disclosure outweighs legitimate interests in secrecy, courts should not shield important health and safety information from the public.”
Limits on Punitive Damages?
In 2007, the U.S. Supreme Court held in Philip Morris v. Williams, 127 S. Ct. 1057, 1065 (2007) that the Constitution’s Due Process Clause bars punitive damages for injuries inflicted by a defendant on non-parties, reversing a judgment for punitive damages awarded by an Oregon state court. On remand, the Oregon Supreme Court unexpectedly reinstated the $79.5 million punitive damages award against the cigarette maker. The U.S. Supreme Court again granted certiorari (for the third time in the case) and heard oral argument, but then dismissed the case on the grounds that certiorari had been “improvidently granted.” Thus, after 10 years of litigation, the Supreme Court left the punitive damages award (now $150 million with interest) intact.
Does the U.S. Supreme Court’s about face indicate that the Court has modified its stance on punitive damages? The answer likely is no. The unusual result in Philip Morris turns almost entirely on a peculiar aspect of Oregon state law. In its 2007 opinion, the U.S. Supreme Court held that the Oregon Supreme Court had applied the wrong constitutional standard in rejecting Philip Morris’ appeal from the trial court’s denial of its proposed instruction on punitive damages. On remand, the Oregon Supreme Court determined that it did not need to revisit the constitutional issue, because an independent state law basis existed for upholding the verdict. Specifically, the Oregon Supreme Court found that Philip Morris’s three-and-a-half page long proposed instruction contained numerous misstatements of Oregon law, and that under Oregon’s “clear and correct in all respects” rule, a trial court’s refusal to give a proposed instruction could not be reversed unless the proposed instruction was “altogether free from error.”
The U.S. Supreme Court’s dismissal of the appeal leaves intact the limitations on punitive damages established in Philip Morris, State Farm, and Gore v. BMW. It does, however, suggest that in proposing instructions, defendants must carefully consider state law requirements in addition to constitutional considerations.
Dorsey in the News
Federal Court Decision Could Limit Class Action Exposure for Product Liability Defendants
Dorsey & Whitney LLP was recently involved in obtaining a federal court decision that could limit class action exposure for product liability defendants. Dorsey is local liaison counsel for the German and US Bayer defendants in the Baycol Products Liability Litigation (MDL 1431), a multi-district action venued in Minnesota federal district court before Chief Judge Michael Davis. Judge Davis was recently asked to enjoin members of a putative class that he had refused to certify from relitigating the matter in state court. The Court had previously denied federal certification of a West Virginia economic loss class and entered summary judgment against the named plaintiff, George McCollins. Keith Smith and Shirley Sperlazza, members of the putative McCollins federal court class, then sought certification of the same class in West Virginia state court. Judge Davis granted Bayer Corporation’s motion to enjoin Mr. Smith and Ms. Sperlazza from relitigating class certification. The Court held that as adequately represented members of the putative McCollins class, plaintiffs were held to be subject to the jurisdiction of the District Court and bound by its final judgment denying class certification. Judge Davis therefore held that it had the authority under the All Writs Act and the relitigation exception to the Anti-Injunction Act to enjoin Mr. Smith and Ms. Sperlazza from seeking state court class certification. Mr. Smith’s and Ms. Sperlazza’s appeal to the United States Court of Appeals for the Eighth Circuit is currently pending.