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Dems Readying Liability Legislation Dems Readying Liability Legislation

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NJ Daily

Dems Readying Liability Legislation

June 4, 2008

Democrats rankled by a recent Supreme Court decision shielding medical device companies from state liability lawsuits plan to unveil legislation to reverse the ruling, the first of many expected efforts to chop away at federal rules that restrict consumers' ability to sue.

House Energy and Commerce Health Subcommittee Chairman Frank Pallone, D-N.J., and House Oversight and Government Reform Chairman Henry Waxman will introduce legislation before the Independence Day recess that would explicitly state that FDA regulation does not trump medical device patients' ability to seek damages under state law, a Pallone spokesman said.

The two were spurred to act after the Supreme Court ruled in February that patients injured by defective medical devices cannot sue for damages in state courts if the FDA approved the marketing of the product.

 

The justices found that the 1976 Medical Device Amendments pre-empted the right of injured patients to sue for damages in state courts against the most complicated or high-risk devices that undergo FDA's strictest approval process. Justices are in various stages of weighing pharmaceutical preemption cases.

Moreover, the issue has revved up the long-standing rivalry between trial lawyers and big-business lobbying groups, this time over the issue of how far can federal regulatory agencies go in preempting states on all sorts of consumer and product liability laws.

With Democrats in control of Congress, the trial bar senses an opportunity to play offense after having to fend off attacks during 12 years of Republican control.

Trial lawyers have started to target issues on a case-by-case basis where they sense that preemption has run amok to the detriment of consumers who are unable to seek redress in the courts. They contend that pre-emption does not allow corporations to be held fully accountable for faulty products in the same way that the threat of a massive lawsuit does.

Their first legislative bid will be on the recent Supreme Court ruling in favor of Medtronic Inc., which produced a heart catheter at the center of the case. The device burst during a 1996 angioplasty.

"It basically threw out all the medical device cases in the country based on the wrong supposition that compliance with the device act constituted preemption of state tort law remedies," said Linda Lipsen, senior vice president for public affairs for the American Association for Justice, the primary lobbying group for trial lawyers.

Democrats came down on the side of the trial lawyers and immediately blasted the Supreme Court's decision. Senate Health, Education, Labor and Pensions Chairman Edward Kennedy, Pallone and Waxman all said Congress never intended when it passed the 1976 medical device law to give medical device manufacturers blanket immunity.

Democrats attempted last summer to preserve patients' right to sue despite FDA regulation in legislation that would have given the agency additional drug and device oversight authority. Republicans quickly squashed the effort after billing it as a gift for trial lawyers.

Given the dwindling legislative calendar this year, particularly with the November elections looming, any measure introduced will have to fight for time on the floor. It is likely to frame the debate for the 111th Congress, particularly if Democrats add to their legislative majorities in the House and Senate and especially if a Democrat wins the White House.

"Patients hurt by defective drugs and medical devices would no longer have the ability to seek compensation for their injuries. This doctrine is known as preemption," Waxman said during a hearing last month on issue. "The result is that one of the most powerful incentives for safety -- the threat of liability -- would vanish."

The U.S. Chamber of Commerce's Institute for Legal Reform is fighting efforts to deny preemption, noting that federal law should trump state statutes when there are inconsistencies between the two. It further argues that preemption allows companies that conduct business in different states one set of rules for compliance, instead of a hodgepodge of laws that stifle growth.

"I think they have articulated for a long time the weakening preemption at the federal level," said Lisa Rickard, president of the institute. "They have highlighted this in their magazines and their conferences," she said, referring to the American Association for Justice.

Opponents rely on an old standby: bashing the trial bar. At the urging of business leaders, Republicans targeted trial lawyers when they were in control, passing legislation that limited class-action suits and restricted bankruptcy filings.

They argue that preemption is narrowly tailored in response to high court damages that threaten to wreak havoc on the medical and pharmaceutical fields as well as other sectors.

"Current preemption policy is nothing novel or radical, but a dynamic response to an increasingly litigious environment that undermines the effectiveness of the long-established FDA regulatory system," said House Oversight and Government Reform ranking member Tom Davis.

The trial bar argues that the Bush administration has instituted the preemption strategy to an unprecedented degree, noting that since 2005 federal agencies have issued 51 different rules that have preempted state law. The FDA and the National Highway Traffic Safety Administration issued most of the rules, but they also came from smaller agencies such as the Federal Railroad Administration.

For example, NHTSA is in the process of finalizing a rule before the end of the month that would institute new requirements for car roofs in an attempt to reduce injuries and death from rollover crashes, where 10,000 people die annually and another 24,000 are seriously injured.

A preliminary rule would allow preemption of state law on product liability suits if carmakers met the NHTSA standard.

One critic, David Vladeck, a Georgetown University law professor, said that he is concerned with NHTSA's position given that the federal statue it operates under contains a "savings clause" that says compliance with the agency's standard does not exempt a business from liability on the state level.

The Senate Commerce Consumer Affairs Subcommittee will hold a hearing on the proposal today.

"If they don't succeed in the legislature, they will go to the regulatory process," Lipsen said of the business lobbyists. "They are asking these regulatory agencies when they address rules on safety that if you are injured by one of these products, your case is pre-empted. ... It's really a whack-a-mole process."

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