Death Knell To Federal Preemption Restores Citizen Rights

In a reversal to years of Bush administration moves to concentrate federal power at the expense of citizen and states’ rights, President Barack Obama Wednesday called for sweeping changes to federal pre-emption that shields companies from lawsuits over their dangerous and defective products.

The changes came in a memo from the White House and are expected to impact the oversight of consumer products and drugs that fall under both state and federal regulation.

Under federal pre-emption, a drug manufacturer could claim a lawsuit, filed over a defective drug, was pre-empted or shielded beause the drug received approval from the federal Food and Drug Administration (FDA). 

That authority would supersede a product-liability lawsuit filed in state court, a stance aggressively promoted by the Bush administration, which encouraged federal agencies to issue rules that pre-empted state laws.

The president’s memo did not name specific industries that would be affected.  He did say that federal preemption could be claimed by a federal agency and department when there is “sufficient legal basis for pre-emption.” 

President Obama urged agencies to review their federal pre-emption language created over the past decade. 

“From our Nation’s founding, the American constitutional order has been a Federal system, ensuring a strong role for both the national Government and the States,” the memo says underscoring that federal and state law have historically worked concurrently to safeguard the public.

In March, the notable case of Diana Levine struck down the notion of federal pre-emption as a shield for drug makers. 

After Levine argued successfully, that drug maker Wyeth, failed to adequately warn about its antinausea drug phenergen, eventually causing her to lose her arm, Wyeth challenged the ruling to the U.S. Supreme Court.

The Court sided with the lower court that Wyeth failed to contain a sufficient warning label on phenergan and that it could not seek protection under federal pre-emption. 

The White House memo is expected to have a wide-ranging impact on the auto industry, NHTSA and drug manufactures who’ve all sought protection under federal pre-emption.

California’s attorney general, Jerry Brown, predicts it will also impact the banking industry.

"This directive is a very positive sign that the federal government will get out of the way and let state attorneys general defend their citizens from predatory lending, dangerous products, and environmental hazards," he said to the Wall Street Journal.

The Obama memo was not welcome news for the U.S. Chamber of Commerce which represents American industries. 

"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 to the Wall Street Journal.

"Allowing for more lawsuits will not create more jobs, except maybe for plaintiffs’ lawyers." 

The American Association for Justice (AAJ), a group of trial lawyers, says this directive allows consumers to hold wrongdoers accountable.

“The Obama memo on regulatory preemption makes it clear that the rule of law will once again prevail over the rule of politics,” Les Weisbrod, president of AAJ said in a statement.

Citizens are still pre-empted from filing lawsuits over defective medical devices. AAJ and other citizens groups are targeting passage of the Medical Device Safety Act of 2009, which would lift restrictions on product-liability lawsuits over defective medical devices   #