News & Observer | newsobserver.com | Rule changes may derail suits

Published: May 14, 2008 12:30 AM
Modified: May 14, 2008 02:43 AM

Rule changes may derail suits

Agency denies undercutting litigation

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WASHINGTON - Faced with an unfriendly Congress, the Bush administration has found another, quieter way to make it more difficult for consumers to sue businesses over faulty products. It's rewriting the bureaucratic rulebook.

Lawsuit limits have been included in 51 rules proposed or adopted since 2005 by agency bureaucrats governing just about everything Americans use: drugs, cars, railroads, medical devices and food.

Decried by consumer advocates and embraced by industry, the agencies' use of the government's rule-making authority represents the administration's final act in a long-standing drive to shield companies from lawsuits.

President Bush has campaigned for lawsuit reform since his days as Texas governor. As president, he has made little headway on the issue in Congress. He has been thwarted by Democrats every time he has tried to tackle the issue head-on. Turns out there was another way: one little-noticed step at a time.

If the rulemaking at the various agencies had been a centralized effort in the White House or the Justice Department, "it would have failed because immediately everybody would have mobilized resistance," said Michael Greve of the American Enterprise Institute, a conservative Washington think tank.

Limits on lawsuits have been ordered or proposed for drug labeling and packaging -- one issue that will get a big airing, today because of a case involving actor Dennis Quaid's newborn twins -- and for rules ranging from mattress flammability standards to school bus passenger seating to dietary sweeteners and roof-crush requirements in car rollovers.

Of the 51 regulations, 41 came from the Food and Drug Administration and National Highway Traffic Safety Administration.

Ten of 15 federal traffic safety regulations from last year have been finalized by NHTSA and are now in force or soon will be -- a development that has gotten minimal public attention.

Underlying this bureaucratic version of lawsuit reform is the concept of federal preemption -- a legal idea that is hard to build widespread public interest in.

Rooted in the Supremacy Clause of the Constitution, federal preemption refers to circumstances in which federal law and regulation trump state law, in this instance state laws that govern when one person may be held liable for another's injury.

Frequently filed in state courts, where juries often are more receptive to plaintiffs' claims against corporations, product liability lawsuits are often moved at the request of business defendants to more restrictive federal courts.

Regardless of where the suits end up, the issue is increasingly whether companies can use broad preemption language in regulatory preambles to get cases thrown out.

The preambles are the agencies' interpretation of whether the federal regulatory law permits preemption of lawsuits. An expansive interpretation of preemption leaves little room for consumers to sue, and that is what the national trial lawyers group, the American Association for Justice, says is taking place.

Jon Haber, AAJ's chief executive officer, says the agencies are engaging in "a brazen end run around Congress, the Constitution and the states in an effort to let negligent corporations off the hook and knowingly put consumers at risk."

The real-world impact of preemption will be on display when a congressional committee hears from Quaid and his wife, who have sued a maker of blood-thinner heparin in Illinois state court.

The Quaids sued after their newborn twins were given massive doses of the blood thinner at a hospital. The Quaids claim the manufacturer was negligent in packaging different doses of the product in similar vials with blue backgrounds.

Baxter Healthcare is seeking to use the doctrine of preemption to shield it from any civil liability, claiming that once the FDA approved the labeling and packaging at issue, the company is immune from civil suits for monetary damages.

Joan Claybrook, head of the NHTSA during the Carter administration, says her former agency is using regulatory preambles in a campaign against lawsuits.

"What the companies want is complete immunity, and the regulators in the Bush administration are helping them," says Claybrook, now head of the consumer advocacy group Public Citizen.

The NHTSA denies designing rules to undercut lawsuits.

"After considering both the purposes of each safety rulemaking and possible state actions that might arise, in most cases we have concluded that there are no presently identified factual situations that would create a conflict or frustrate federal objectives," says the agency. "We cannot, however, rule out the possibility that such a factual situation might arise in the future."

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