Supreme Court Update: Bruesewitz v. Wyeth LLC (09-152), Williamson v. Mazda Motor of America, Inc. (08-1314), Walker v. Martin (09-996) and Order List

March 7, 2011 Supreme Court Update


Greetings, Court fans!

Since returning from break, the Court has issued thirteen new decisions (3 this morning), as well as several order lists. We're a bit backlogged due to Kim's recent move, but we're going to catch up quickly!

This Update will cover all of the orders and three of the decisions – Bruesewitz v. Wyeth LLC (09-152), finding that federal law bars state tort suits against vaccine manufacturers alleging that a vaccine was defectively designed; Williamson v. Mazda Motor of America, Inc. (08-1314), concluding that federal law does not bar state tort suits against auto manufacturers alleging that the manufacturers should have installed lap-and-shoulder belts; and Walker v. Martin (09-996), holding that failing to comply with California's time limit for filing state habeas petitions constitutes an independent and adequate ground for rejecting a federal habeas petition.

Bruesewitz v. Wyeth LLC (09-152) pits the image of children harmed by defectively designed vaccines against the specter of a public without access to vaccines because manufacturers have withdrawn from the market under the weight of tort liability. The National Childhood Vaccine Injury Act of 1986 ("NCVIA") established a no-fault compensation system for persons claiming they were injured by vaccines. Hannah Bruesewitz developed seizures after receiving a vaccination as a baby. Her parents filed a petition under NCVIA, but their claims were denied. They then brought suit alleging that the vaccine had been defectively designed. The district court found their claims preempted by the NCVIA, and the Third Circuit affirmed.

The Court agreed, in a 6-2 decision (Justice Kagan did not participate). NCVIA bars civil actions premised on "injury or death associated with the administration of a vaccine . . . if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings." Writing for the Court, Justice Scalia reasoned that the statute deemed side effects to be "unavoidable" if they occurred despite proper manufacturing and adequate warnings. In other words, tort suit could not be premised on a claim of design defect. Otherwise, the NCVIA's prohibition against civil suits for unavoidable side effects would be of little value, since a plaintiff could almost always argue that a different design would have avoided the side effect. The Court rejected the dissent's argument that the term "unavoidable" was a term of art that incorporated comment k to the Restatement (Second) of Torts § 402A. Comment k exempts manufacturers from strict liability for "unavoidably" unsafe products, based on a case-specific showing that the product was "quite incapable of being made safer for [its] intended … use." The Court saw no reason to believe that Congress meant to import comment k into NCVIA simply by using the common term "unavoidable." The Court was also persuaded by the NCVIA's "structural quid pro quo": vaccine manufacturers funded an informal, efficient compensation program for vaccine injuries in exchange for avoiding costly tort litigation and "the occasional disproportionate jury verdict."

In a concurring opinion, Justice Breyer stressed the public policy reasons for preempting design defect suits. Vaccines work only when they are widely available and administered. Breyer would give significant weight to the Department of Health and Human Services' view – supported by over 20 leading public health organizations – that permitting design defect lawsuits could lead to a recurrence of the crisis that precipitated NCVIA, namely withdrawals of vaccines or vaccine manufacturers from the market.

Justice Sotomayor, joined by Justice Ginsburg, penned a vigorous dissent. In their view, NCVIA's preemption clause requires manufacturers to demonstrate that the vaccine was free from manufacturing and labeling defects and that any side effects were otherwise "unavoidable." Otherwise, Congress could have left out the clause with the term "avoidable" and simply preempted suits "arising from a vaccine-related injury or death associated with the administration of a vaccine after October 1, 1998, if . . . the vaccine was properly prepared and was accompanied by proper directions and warnings." The legislative history of NCVIA and the tax legislation that funded NCVIA's compensation program the following year indicated Congress's intent to codify the principles of comment ­k in the statute. Thus, manufacturers should have to demonstrate that, given the present state of human skill and knowledge, there was no feasible alternative design that would have eliminated the adverse side effects of the vaccine without compromising its cost and utility. In the dissenters' view, the "traditional incentive and deterrence functions served by state tort liability" are necessary to ensure that vaccine manufacturers adequately take account of scientific and technological advancements.

In an interesting juxtaposition to Bruesewitz, in Williamson v. Mazda Motor of America, Inc. (08-1314), the Court gave the green light to state tort suits against auto manufacturers who chose to install lap belts rather than lap-and-shoulder belts on rear inner seats. The National Traffic and Motor Vehicle Safety Act of 1966 contains an express preemption clause: "no State" may "establish, or…continue in effect…any safety standard" "which is not identical to the Federal standard." But the Act also comes with a savings clause: "[c]ompliance with" a federal safety standard "does not exempt any person from any liability under common law." In an earlier case, Geier v. American Honda Motor Co. (2000), the Court found that the Federal Motor Vehicle Safety Standard 208 ("FMVSS 208") nevertheless preempted state tort suits seeking to hold manufacturers liable for not installing airbags, on conflict preemption principles.

The case at hand began with a car accident in which the passengers wearing lap-and-shoulder belts survived, but a passenger wearing a lap belt did not. The decedent's estate sued Mazda in California state court, arguing that Mazda should have installed lap-and-shoulder belts on all the seats. Relying on Geier, the court dismissed the suit as preempted by FMVSS 208. In what was likely a surprise to the California court – and several others that have reached the same result – the Court reversed, almost unanimously. (Justice Thomas concurred in the judgment only, and Kagan did not participate.) Writing for the Court, Justice Breyer explained that Geier had concerned an earlier version of FMVSS 208, which required manufacturers to install passive restraint devices such as airbags or automatic seatbelts, but allowed them to choose which types of devices to install. The Court had been persuaded that giving manufacturers a choice was a significant objective of the federal regulation. The Department of Transportation had explained that having a mix of different devices on the road would lead to better information about their comparative effectiveness. On behalf of the agency, the Solicitor General had argued that tort suits that insisted upon the use of airbags would conflict with the federal objective. By contrast, in the case at hand, the regulatory history on lap belts vs. lap-and-shoulder belts did not indicate that the agency wanted to preserve choice in order to spur research or development. And here, the Solicitor General relayed the agency's view that its regulation did not preempt the suit. Justice Sotomayor wrote a separate concurrence to stress her view that "the mere fact that an agency regulation allows manufacturers a choice between options is insufficient to justify implied pre-emption; courts should only find pre-emption where evidence exists that an agency has a regulatory objective … whose achievement depends on manufacturers having a choice between options.

Justice Thomas concurred in the judgment only. He would have started and ended with the Act's savings clause, which provides that compliance with a federal safety standard does not exempt any person from any liability under common law. He criticized the Court's reliance on purposes-and-objective pre-emption as "wholly illegitimate." The fact that the Court reached opposite conclusions in cases as similar as Geier and the one at hand revealed the "utterly unconstrained nature" of this type of preemption analysis. In Thomas' view, the only difference between the two cases was the majority's "psychoanalysis" of the regulators.

Our last case for this morning, Walker v. Martin (09-996), continues the string of reversals for the Ninth Circuit in habeas cases. By way of background, state prisoners must exhaust state habeas remedies before seeking relief in federal court. Federal courts may not consider petitions that have been rejected by a state court on a state law ground that is "independent of the federal question and adequate to support the judgment." A state procedural rule may constitute an adequate and independent ground if the rule is "firmly established and regularly followed." The case at hand concerned California's rule for filing timely petitions. California does not impose a fixed statutory deadline, but requires petitioners to file claims "as promptly as the circumstances allow." Petitioner Martin's conviction became final in 1997. He filed a first round of state habeas proceedings in 1998, but did not assert ineffective assistance of counsel claims until 2002. The California Supreme Court summarily denied Martin's 2002 petition as untimely. As a result, the federal district court denied Martin's federal habeas claims as procedurally barred. The Ninth Circuit disagreed, however, finding that California's time bar was not an adequate ground for dismissal because it was not firmly defined or consistently applied.

The Court reversed. Writing for a unanimous Court, Justice Ginsburg found that California's timeliness requirement had been "firmly established" in a trilogy of cases. Time limitations need not be expressed in precise, numerical terms to be firmly established. The Court further found that California courts "regularly followed" the timeliness rule in hundreds of decisions each year. The Ninth Circuit had concluded that the rule was not consistently applied because it had led to divergent outcomes from case to case – for example, a one-year delay was found to be substantial in one case, while a fourteen-month delay was found to be insubstantial in another case. The Court cautioned against rejecting discretionary rules just because they might lead to seeming inconsistencies in some cases: "Discretion enables a court to home in on case-specific considerations and to avoid the harsh results that sometimes attend consistent application of an unyielding rule." The Court might have reached a different result if Martin could demonstrate that the California court had exercised its discretion in a manner that was surprising or unfair to him, but that was not the case here.

The Court granted cert in three cases:

The Outer Continental Shelf Lands Act provides worker compensation for "any injury occurring as the result of operations conducted on the outer Continental Shelf." Pacific Operators Offshore v. Valladolid (10-507) asks whether an outer continental shelf worker injured on land is: "(1) always eligible for compensation, because his employer's operations on the shelf are the but for cause of his injury . . . (2) never eligible for compensation, because the Act applies only to injuries occurring on the shelf . . . [or] (3) sometimes eligible for compensation, because eligibility for benefits depends on the nature and extent of the factual relationship between the injury and the operations on the shelf"?

Stok & Assoc. v. Citibank, N.A. (10-514), which asks: "Under the Federal Arbitration Act . . . should a party be required to demonstrate prejudice after the opposing party waived its contractual right to arbitrate by participating in litigation, in order for such waiver to be binding and irrevocable?"

Golan v. Holder (10-545), which presents two questions for review: "(1) Does the Progress Clause of the United States Constitution prohibit Congress from taking works out of the Public Domain? (2) Does Section 514 [of the Uruguay Round Agreements Act of 1994, which restored copyright protection to certain works that had been in the public domain] violate the First Amendment of the United States Constitution?"

And the Court asked the SG to weigh-in on petitions in four other cases:

Osage Nation v. Irby (10-537) would present two questions for review: (1) whether indicia external to the statutory text, such as modern demographics, can be considered in determining whether Congress disestablished an Indian reservation; and (2) whether the court of appeals "properly ruled that the Osage Nation's reservation has been disestablished in the absence of unambiguous statutory direction and without obtaining or considering the position of the United States government."

New York v. Permanent Mission of India (10-627) concerns the Secretary of State's designation, as a "benefit" for foreign missions under the Foreign Missions Act ("FMA"), of over $100 million dollars in preemptive exemptions from State and local property tax laws. The petition for cert raises three questions: (1) "In determining whether Congress authorized the Secretary to preempt traditional State taxing powers, did the Court of Appeals err by deferring to the Secretary's expansive interpretation of her own FMA powers, rather than requiring a clear and manifest expression of Congressional intent?"; (2) "Did the Court of Appeals further err by misreading the FMA as authorizing the Secretary's preemption of State and local property tax laws?; and (3) "Did the Court of Appeals depart from this Court's clear precedent by upholding the Secretary's creation and conferral of retroactive tax exemptions under the FMA, even though Congress did not authorize the Secretary, expressly or otherwise, to promulgate retroactive rules?"

United States ex rel. Summers v. LHC Group (10-827) concerns the False Claims Act's requirement that complaints under the Act be filed under seal. The case would ask whether "the Sixth Circuit err[ed] in holding that the sealing provisions of the False Claims Act are absolute, and no balancing test concerning inadvertent, unavoidable violation of those provisions is permissible?"

First American Financial Corp. v. Edwards (10-708) asks the Court to resolve two questions: "(1) Did the Ninth Circuit err in holding that a private purchaser of real estate settlement services has standing under [the Real Estate Settlement Procedures Act of 1974] to maintain an action in federal court in the absence of any claim that the alleged violation affected the price, quality, or other characteristics of the settlement services provided? (2) Does such a purchaser have standing to sue under Article III, § 2 of the United States Constitution, which provides that the federal judicial power is limited to "Cases" and "Controversies" and which this Court has interpreted to require the plaintiff to "have suffered an 'injury in fact,'" Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992)?"

We'll be back shortly with more decisions.

Kim & Jenny

From the Appellate and Complex Legal Issues Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400