Wyeth v. Levine (06-1249), Summers v. Earth Island Institute (07-463), Negusie v. Holder (07-499) and order list

March 6, 2009 Supreme Court Update

Greetings, Court fans!

The Court issued three decisions and an Order List this week. The ruling garnering all the press came in Wyeth v. Levine (06-1249), which is being hailed as a victory for patients, consumers, and . . . trial lawyers. The plaintiff, Levine, was a musician who went to the hospital seeking relief from migraine headaches and nausea and ended up having part of her arm amputated. A botched injection of Wyeth's anti-nausea drug Phenergan using the IV push method sent the drug into an artery instead of a vein, which led to gangrene, and eventually resulted in the amputation of Levine's forearm. Levine sued Wyeth in Vermont state court alleging that the Phenergan label was defective because it failed to properly warn clinicians of the risks of the IV-push method. Wyeth moved for summary judgment, arguing that failure-to-warn claims based on Phenergan's labelling were pre-empted by federal law. The trial court rejected Wyeth's pre-emption arguments and a jury ultimately awarded Levine $7.4 million. The Vermont Supreme Court affirmed.
The Court, in an opinion by Justice Stevens, held that the federal Food Drug and Cosmetic Act (FDCA) and the Food and Drug Administration (FDA) regulations on drug labels do not pre-empt a state-law tort claim that a drug label's warnings are inadequate. Wyeth made two arguments for pre-emption: first, that it was "impossible" to comply with both duties imposed by state law and federal labeling requirements, and second, that complying with state law would obstruct the "purposes and objectives" of the federal regulations. In rejecting Wyeth's impossibility argument, the Court noted that as a general rule under the FDA premarket approval process, a manufacturer may only change a drug label after the FDA approves a supplemental application. But FDA's "changes being effected" ("CBE") exception to that rule allows drug manufacturers to add or strengthen warnings in its label before receiving approval. Thus, it was not impossible for Wyeth to change its label to comply with state-law obligations. As a corollary to its "impossibility" argument, Wyeth also claimed that a change in the label would somehow make Phenergan a new or misbranded drug, and would subject Wyeth to liability under different portions of the FDCA. The Court summarily rejected Wyeth's speculative interpretation of these other provisions of the FDCA, and scoffed at the idea that the FDA would go after Wyeth for misbranding when it strengthened a drug warning pursuant to the CBE regulations.
Wyeth's argument that complying with state-law obligations would obstruct the purposes and objectives of federal drug labeling regulations, which (according to Wyeth) entrust labeling decisions to the experts at the FDA, fared no better. The Court drew upon the legislative history of the FDCA, including Congress's enduring silence as to pre-emption of state-law tort suits over drugs, despite its presumed knowledge of these suits, to conclude that Congress did not believe state-law suits over the warnings in drug labels posed any obstacle to Congress' purposes in enacting the FDCA. The Court also rejected Wyeth's reliance on the preamble to a 2006 FDA regulation stating that FDA's approval of labeling pre-empts conflicting or contrary state law, and threatens FDA's statutorily prescribed role as the "expert Federal agency responsible for evaluating and regulating drugs." In a rebuke to the Bush FDA (whose statement in the preamble reversed the agency's longstanding position on state-law tort claims), the Court called this regulatory preamble inherently suspect, lacking in the force of law, and deserving of no weight. (The United States' amicus brief received a similar smack-down for pushing the new interpretation of federal drug regulation expressed in the regulatory preamble instead of the FDA's longstanding understanding.) In the end, Stevens stressed that it is ultimately the drug company's duty to stay on top of its drug label warnings – in no small part because the FDA has limited resources to monitor the 11,000 drugs in the market all by itself. Stevens also praised the role that patients' state tort suits serve in uncovering unknown drug hazards, providing incentives for drug manufacturers to disclose safety risks promptly, and motivating injured persons to come forward with information ($7 million is pretty good motivation).
Breyer wrote a brief concurrence to state his belief that the FDA could create a drug label with a specific set of cautions and instructions that would not be subject to change by state tort law. In such cases, the FDA could specifically describe through regulations when its labels are to serve as both a ceiling and a floor, and in so doing, "possibly" pre-empt state tort actions based on a label's failure to warn. But Breyer agreed with the majority that the FDA had not done so in this case.
Justice Thomas concurred in the judgment only. Aside from making clear that he sided with the plaintiff on federalism grounds (and the first few pages of his opinion look as though he may have taken a dare to use the words "federalism" or "federalist" as many times as possible), Thomas' main point was that the Court's implied pre-emption jurisprudence – and particularly the Court's analysis of whether a state law is pre-empted due to obstruction of the "purposes and objectives" of federal law – has gone off the rails by analyzing legislative or regulatory intent that is far removed from the statutory text. Thomas would only give pre-emptive effect to federal standards and policies set forth in statutory text, or that "necessarily" (whatever that means) follow from that text. Here, the FDCA did not explicitly preempt state law claims and the CBE regulations did not make it impossible for Wyeth to comply with its state-law duty to modify the Phenergan label; end of story. The majority's reliance on legislative history, vague hints at intent, and Congress's inaction to conclude that allowing state-law tort claims would not obstruct the purposes and objectives of the FDCA were simply out of place. Thomas also called out activist judges, decrying their freewheeling evaluations of the purposes and objectives of federal law to give pre-emptive effect to "judicially manufactured" policies instead of the text enacted by Congress. Thomas ultimately concluded that this whole "purposes and objectives" wing of pre-emption jurisprudence should be abandoned.
Justice Alito dissented, joined by the Chief and Justice Scalia. Noting that "tragic facts make bad law," Alito reasoned that impassioned state juries should not decide what should appear on a warning label – not only because they are not experts (like the FDA), but because these juries, face-to-face with an individual, tragic plaintiff, cannot take the long view on what is or is not a safe and reasonable use of a drug by the population as a whole. The dissent argued that Geier v. American Honda Motor Co. (2000) (holding that plaintiff's claim that Honda negligently designed cars without airbags was pre-empted by the National Traffic and Motor Safety Vehicle Act and the regulations promulgated thereunder), was controlling. Under Geier, the Court should give weight to the FDA's actions addressing the costs and benefits associated with the IV-push method, and the recent Bush-era FDA policy statements in which the FDA articulated its pre-emptive intent (which the dissent believed repudiated the decade-old statements of the FDA that the majority preferred). The dissent closed with a dire warning that after today's ruling "parochialism may prevail," as potential users of a drug and the medical community in general are whipsawed by 50 or more conflicting interpretations, instead of the one clear voice from the FDA experts.
The next case, Summers v. Earth Island Institute (No. 07-463), is the latest in a long-running series of Article III "case or controversy" standing cases involving environmental groups – and it will make it even harder for these groups to sue. A coalition of the Earth Island Institute, the Sierra Club, and three other environmental groups, sought to challenge regulations implementing a part of the Forest Service Decisionmaking and Appeals Reform Act of 1992 ("DARA"), which required the Forest Service to establish a notice, comment, and appeal process for projects that implement land and resource management plans. However, the Bush-era Forest Service promulgated regulations in 2003 exempting salvage-timber sales of 250 acres or less (which may not seem like a bad idea, until you consider the cumulative impact of thousands of these sales). In September 2003, the Forest Service approved a salvage timber sale of 238 fire-damaged acres of the Sequoia National Forest – the Burnt Ridge Project – without notice, comment, or an appeal process. Plaintiffs brought a facial challenge to the 2003 regulations and an as-applied challenge seeking to stop the Burnt Ridge Project, claiming that the failure to provide notice, comment and an appeal process violated Congress's clear mandate in DARA and deprived them of their procedural rights. The district court granted a preliminary injunction against the Burnt Ridge sale, and soon thereafter the parties settled their dispute over that particular project. Notwithstanding the settlement, however, the court proceeded to address plaintiffs' facial challenge to the regulations exempting small sales and struck them down. The Ninth Circuit affirmed in relevant part.
The Court split again, but this time, the conservatives came out on top. Justice Scalia wrote for the majority, which reversed the Ninth Circuit, holding that the settlement of the Burnt Ridge Project dispute divested the environmental groups of Article III standing to seek injunctive relief, because they could no longer demonstrate a concrete and particularized "injury in fact" that was "actual and imminent" (two of the three prongs for establishing Article III standing). An environmental group can demonstrate Article III standing by submitting evidence that its members would be injured by a proposed government action, but here, the strongest evidence concerned a particular member's repeated visits to the Burnt Ridge Project area, his imminent plans to do so again, and his claim that his recreational interests would be harmed if he did not have an opportunity to participate in the administrative process. With the Burnt River Project out of the picture, Scalia identified only one affidavit from a member who claimed an injury from the application of the regulations to other Forest Service land. And Scalia found that member's vague statements about future plans to visit Forest Service lands insufficient, even where the member stated that he intended to visit the Allegheny National Forest – which contained a series of projects subject to the challenged regulations. For Scalia, even this was insufficient to establish imminent injury. The take-home message from the majority – which demonstrates the potentially far-reaching implications of this ruling – is that the mere deprivation of a procedural right standing alone, without a concrete interest affected by the deprivation, is not enough to create Article III standing. (Justice Kennedy agreed with the majority's reasoning, but wrote a brief separate concurrence to add language to conform to his concurrence in Lujan v. Defenders of Wildlife.)
Justice Breyer dissented, joined by Stevens, Souter, and Ginsburg. The dissenters would find standing where plaintiffs have already been subjected to the injury they wish to challenge, if plaintiffs can demonstrate a realistic likelihood that the challenged conduct will recur in the near future and harm the plaintiffs, even if plaintiffs cannot show the precise times, dates, and "GPS coordinates" where the harm will occur. Breyer found a "realistic threat" of future injury just by looking at the numbers. The Forest Service admitted that it intended to conduct thousands of further salvage-timber sales "in the reasonably near future." The environmental groups have hundreds of thousands of members who regularly use the forests. And the environmental groups and their members regularly oppose salvage timber sales in proceedings before the Forest Service. As Breyer put it, "To know, virtually for certain, that snow will fall in New England this winter is not to know the name of each particular town where it is bound to arrive." This shouldn't preclude justice being done. Scalia, in the majority opinion, rejected Breyer's probability analysis as too speculative to confer Article III standing, even though he admitted that the odds are that some unidentified member of the environmental groups would suffer an actual and imminent injury in fact, and thus would have standing.
Finally, in Negusie v. Holder (07-499), the Court addressed (or, rather, declined to address) the question of whether the Immigration and Nationality Act (INA) bars an alien from obtaining refugee status in the United States if he or she involuntarily participated in the persecution of any person on account of race, religion, nationality, or membership in a political or social group. Petitioner, a dual national of Eritrea and Ethiopia, was caught up in the conflict between the two nations and was imprisoned, beaten, and abused by Eritrea for refusing to fight against Ethiopia. After two years of such incarceration, he was released, but forced to become a prison guard himself, in which position he was involved in the persecution of others who were held on the basis of their race, religion, or nationality. Eventually, he escaped, and ended up in the United States where he claimed refugee status. The Immigration Court denied his application on the basis of the "persecutor bar," and the Board of Immigration Appeals (BIA) upheld this decision (while declining to grant him refugee status, both courts found it likely that he would face torture if he was returned to Eritrea, so granted deferral of removal under the Convention Against Torture (CAT)). The Fifth Circuit affirmed. Each court relied on the earlier Supreme Court decision, Fedorenko v. United States, which proscribed an "objective effect" of actions test, holding as irrelevant the alien's motivations or intent. The Court reversed.
Justice Kennedy, writing for the majority, concluded that the BIA had misapplied Fedorenko, finding that its scope was narrower than the BIA presumed, and that it did not mandate the decision that the INA persecutor bar applies even to involuntary or coerced conduct. Nevertheless, the Court did not decide whether coercion or duress is or is not relevant with respect to the persecutor bar. Rather, finding the statute inconclusive and ambiguous on this point, and invoking principles of Chevron deference, the Court remanded the issue to the BIA to decide it "in the first instance" – hinting, however, that the BIA's decision would be reviewable by the Supreme Court for reasonableness in the second instance.
Justice Scalia, joined by Justice Alito, concurred with the majority, but wrote separately to emphasize that the agency had the option of adhering to its decision – notwithstanding the majority's hints that this adherence might be "unreasonable" (which he characterized as a "warning shot across the bow" from the Court to the BIA). Invoking criminal and military law, Scalia averred that the "duress defense" was not a knockdown argument, noting that a soldier cannot invoke it for following unlawful military orders, and that it was not an accepted defense for intentional killing at common law. Moreover, he argued that criminal "culpability" was not the only acceptable category for the BIA to employ: since asylum is a benefit accorded by grace, not entitlement, desirability of the alien might be the more pertinent basis for decision. Justice Stevens, joined by Justice Breyer, concurred in part and dissented in part. Their main beef with the majority opinion concerned the scope of Chevron deference: the courts, they thought, should construe the statute, marking the bounds of delegated agency choice. Only then should the agency implement the statute. In the case of the INA, they would hold that the persecutor bar does not apply as an automatic disqualification for coerced conduct, since those coerced are not "culpable" – being themselves victims, not persecutors. (They would allow the agency to set up a balancing test to determine whether the persecutor bar applied in individual instances, however.) Justice Thomas, in a blistering "text, history, and structure" statutory interpretation dissent actually agreed with Stevens and Breyer: the statutory meaning of the INA was for the Court to decide, since this meaning was plain and unambiguous on its face (invoking INS v. St. Cyr, he mocked the "Court's efforts to derive ambiguity from the utmost clarity of the persecutor bar."). Contrary to Stevens, however, he found that the INA clearly encompassed all persecutorial conduct, coerced or uncoerced, and would have affirmed the decision of the Fifth Circuit.
The Court also asked granted cert in one case . . .
Reed Elsevier, Inc. v. Muchnick (08-103), where the Court limited review to the following question: "Does 17 U.S.C. § 411(a) restrict the subject matter jurisdiction of the federal courts over copyright infringement actions?"
. . . and asked the SG to weigh in on four others:
Frommert v. Conkright (08-803), Conkright v. Frommert (08-810), and Pietrowski v. Conkright (08-826), which collectively ask the Court to decide what standard should be used to determine whether employees knowingly and voluntarily waived their right, pursuant to ERISA, to challenge the terms of an employer's pension benefit plan by accepting severance pay conditioned on signing a release form, and whether a plan administrator's interpretation of plan benefit provisions, when made outside of the administrative claims process, is entitled to Firestone deference; and
Vos v. Barg (08-603), where the Court would address whether a federal law on Medicaid benefits preempts state laws allowing recovery of benefits from the estate of the recipient's surviving spouse regardless of whether, at the time of the recipient's death, the recipient held legal title to the assets subsequently comprising the surviving spouse's estate.
That's all for now. As always, thanks for reading!
From the Appellate Practice Group at Wiggin and Dana
For more information, contact Kim Rinehart or any other member of the Practice Group at 203-498-4400