The Uncertain Boundary Between Federal and State Law

fifth Annual Judicial Symposium mapping the legal frontier: The Uncertain Boundary Between Federal and State Law

Course Materials

July 2009 All views, opinions and conclusions expressed are those of the authors and/or speakers, and do not necessarily reflect the opinion and/or policy of NFJE and its leadership.

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Produced in the United States of America Course Materials Table of Contents

Federal Preemption of State Common-Law Tort Claims...... 1 David A. Dana The Role of State and Federal Courts in Federal Preemption Cases— A Spirited Discussion Between Adversaries at the Bar ...... 15 Lawrence S. Ebner The Role of State and Federal Courts in Federal Preemption Cases— A Spirited Discussion Between Adversaries at the Bar ...... 215 Brian Wolfman The Federal Arbitration Act and Its Impact on State Arbitration Laws...... 247 Christopher R. Drahozal The Historical Rationale for Punitive Damages, Its Evolution, and Current Application...... 267 Christy D. Jones

Federal Preemption of State Common-Law Tort Claims

David A. Dana

Northwestern University School of Law

375 East Chicago Avenue Chicago, IL 60611 (312) 503-0240 [email protected] David A. Dana is a Professor of Law and Associate Dean for Research at Northwest- ern University School of Law. He previously taught at Boston University, and has been a visiting professor at Harvard University and the University of Virginia. Prior to entering teaching, Professor Dana was a litigator for a large Washington, D.C., law firm (Wilmer, Cutler & Pickering) and then for the Environment & Natural Resources Division of the United States Department of Justice. He is a graduate of Harvard Col- lege and Harvard Law School, and clerked for the Honorable Betty Fletcher of the U.S. Court of Appeals for the Ninth Circuit. Professor Dana has taught and written in the areas of environmental law, property law, ethics, constitutional law and complex litigation/class actions. His work has appeared in a range of law reviews, including the Yale Law Journal, the University of Chicago Law Review, the Southern California Law Review and the Supreme Court Economic Review. He organized a symposium on issues of federal preemption last year, and as part of that symposium published Democratizing Federal Preemption in the Northwestern University Law Review. Some of his current research focuses on issues of tort liability and federal preemption as they relate to emerging technologies such as nanotechnology. Federal Preemption of State Common-Law Tort Claims

Table of Contents I. Introduction...... 5 II. Recent Cases...... 7 A. Before Riegel: Geier...... 7 B. Riegel...... 8 C. Wyeth...... 8 D. American Home Products v. Ferrari...... 10 E. What is Preemption Doctrine, Given These Cases?...... 10 III. The Big Issues...... 10 A. Federalism...... 10 B. The Role of Agencies in Our Democracy...... 11 C. The Rationality and Irrationality of the State Tort System...... 12 Endnotes...... 14

Federal Preemption of State Common-Law Tort Claims v Dana v

Federal Preemption of State Common-Law Tort Claims

I. Introduction The law of federal preemption of state common-law claims is in flux. In just the past two years, the United States Supreme Court has issued two decisions (Riegel v. Medtronic1 and Wyeth v. Levine2) that come to opposite conclusions about federal preemption of a tort suit and suggest very different ways of proceeding in future cases. At the same time, the Georgia Supreme Court in American Home Products v. Ferrari,3 for which certiorari has been sought, adopted an approach and reached conclusions that seem inconsistent with both Rie- gel and Wyeth. Each of these three cases is about a different federal statute, but they nonetheless can be understood as setting the boundaries of an ongoing doctrinal debate about federal preemption of common-law tort claims. In that doctrinal debate, the intent of Congress vis-à-vis preemption is always invoked as the touchstone of preemption analysis.4 Given the Supremacy Clause of the United States Constitution, and Congress’s unique role as lawmaker in terms of the Supremacy Clause, that focus on congressional intent is proper. But Riegel, Wyeth, and Ferrari highlight the basic problem with reliance on congressional intent once we depart from a plain or clear statement rule for preemption: if intent can be found even in the absence of an applicable express preemption clause (as in a number of major pre-Riegel precedents that Riegel and Wyeth preserve as good law) or (as in Riegel) on the basis of highly ambiguous language in an express preemption clause of a statute, then how much guidance does congressional intent really provide? Or if (as in Ferrari) the absence of preemption can be found despite fairly strong preemptive statutory language suggesting preemption of tort suits, then, again, what work does the idea or concept of congressional intent really do in preemption decisions? Because congressional intent is so often contestable, it matters a great deal which side in a preemption dispute bears the burden of persuasion and/or proof. The question of burden is framed in the preemption case law around the concept of “the presumption against preemption.” Riegel and Wyeth—and the United States Supreme Court case law generally—raise more questions about this presumption and when and how it applies than they answer. It seems arguable, simply reading the cases, that a presumption always does apply or, alternatively, that it applies only in certain kinds of cases involving traditional state prerogatives, or, alternatively, it applies except in certain kinds of cases involving traditional domains of federal concern. And nowhere in the case law is there guidance for a court on how to understand a dispute when it can plausibly be framed as involving both an area or problem of traditional state concern and one of tradition or long-established federal concern. Finally, even when we can agree that presumption applies, how big is that presumption, and what is needed to overcome it? The standard reason courts give for a presumption being proper is federalism and in particular the quasi-sovereign, if still (ultimately) subordinate, status of the states in our federal republic. Concerns for federalism values arguably should lead Justices to resist finding federal preemption in the same way as they arguably should lead Justices to take seriously the Tenth and Eleventh Amendments as limits on federal power and the limits of congressional power under the Commerce Clause. But in the preemption case law, we do not necessarily see a correlation between “pro-federalism” positions taken outside the context of preemption cases and votes or positions in preemption cases; some Justices, such as Justice Scalia, who emphasize federalism outside the preemption context, appear to have little interest in it when addressing issues of preemption.5 The most notable case of consistency has been Justice Thomas, and in this regard his powerful concurrence in Wyeth, in which he argues for broad limits on implied preemption on federalism grounds, is worth close attention.

Federal Preemption of State Common-Law Tort Claims v Dana v 5 In addition to federalism concerns, the preemption case law also highlights ideological differences about the role of federal administrative agencies in our democracy. Before the United States Supreme Court’s decision in Chevron,6 the federal courts rarely spoke of federal administrative agencies having any distinct authority in interpreting federal law; agencies implemented the law but legal interpretation was left to the federal courts, on de novo review, without deference to agency views as to the meaning of federal law. Chevron changed that and established the doctrine that reasonable agency constructions of ambiguous statutory language warranted judicial deference even when, on de novo review, the court would have opted for a different interpretation. The Chevron doctrine, which has been subject to endless debate about its theoretical soundness and practical effects, raises fundamental questions about the proper relationship between the federal courts and federal agencies. Chevron and the debate over Chevron are relevant to the preemption debate because federal agencies in the last ten years or so have increasingly opined that state regulations or common-law claims are preempted, and the courts sometimes have given these agency opinions weight. As a doctrinal matter, the question has been posed as to whether agency opinions about preemption deserve Chevron deference or a more modest and flexible form of deference known as Skidmore deference7 or no deference at all. (This has been a topic that legal academics in particular have seized upon.8) Behind the Chevron deference-Skidmore deference-no deference debate is a more fundamental debate as to what is at stake in preemption cases. If we see such cases as involving essentially technical disputes about whether state tort liability or state regulation would interfere with a federal program, and if we see federal agencies as experts in such technical matters, then deference to agency views about preemption make sense. But if we view preemption as a matter of discerning congressional intent and striking the proper federal-state balance given federalism concerns, as a legal and almost constitutional legal question, and we see federal agencies as inexpert in federalism and indeed as taking state inputs and concerns too lightly, then it is not at all clear that we should accord any deference to agency views. One of the most important aspects of Wyeth is the way in which the various opinions by the Justices express the full range of possible positions regarding deference to agency determinations. As explained below, Wyeth does teach us something about when substantial deference to agency views on preemption will be denied; but there seem to be important differences on this subject found in the majority opinion authored by Justice Ste- vens, Justice Breyer’s concurrence, Justice Thomas’s concurrence, and Justice Alito’s dissent. Future cases almost certainly will build on the Stevens-Breyer-Thomas-Alito debate about agency opinions regarding preemption. In addition to federalism and the proper role of federal agencies in lawmaking in a republic of laws, the third theme underlying the preemption cases is the rationality or irrationality of the American tort system and especially the American jury. Once the courts move away from the formal distinction between tort as a realm of compensation only and embrace an understanding of it as a realm of de facto regulation also (which the United States Supreme Court has largely done), it becomes relevant how well we think regulation by jury (with judicial supervision) will be administered and, in particular, whether we think it can be undertaken with due respect to the needs of the federal regulatory regime. A certain confidence in state judges and juries in tort cases is implicit in the majority decision in Wyeth and even more clearly in the Georgia Supreme Court’s decision in Ferrari. But a certain deep skepticism about state judges and juries in tort cases is implicit in the Riegel majority opinion and indeed explicit in Justice Alito’s dissent in Wyeth. The federal preemption debate is not just about how much weight we give federalism or how much authority we recognize in federal agencies but also how much rationality we ascribe to the state common-law tort system as a whole. Given the broad and difficult issues underlying preemption cases, it is no wonder that we have seen and perhaps will continue to see what appears to be sharp divisions within and between the courts and apparent inconsistencies in case outcomes.

v Fifth Annual Judicial Symposium v July 2009 II. Recent Cases

A. Before Riegel: Geier Before Riegel and Wyeth, the United States Supreme Court decision that spoke most powerfully to federal preemption of tort claims was Geier v. American Honda.9 Geier suggests a very expansive conception of federal preemption and, in that sense, set the groundwork for the expansive conception articulated in Riegel. By apparently demanding either a textual basis in a federal statute for preemption or clear and concrete evidence that state law has and will act as an obstacle to the purposes of federal law and federal programs, Wyeth is at least as much in tension with Geier as it is with Riegel. Geier involved a tort suit brought by an injured driver who alleged that the absence of a side air bag in the car he drove constituted a design defect. What is notable about Geier is that it is a decision nominally based on congressional intent (as all preemption decisions are) that not only fails to be based on federal statutory text but seems to be contrary to the federal statutory text. The Court held that the express preemption provision in the National Traffic and Motor Vehicle Safety Act of 1966, when read in light of a savings clause in that same statute, clearly contemplated that common-law suits generally would be permitted notwithstanding a manufacturer’s compliance with federal standards. Understandably, the dissenters maintained that meant the defendant Honda should have borne a special burden in seeking to preempt a tort suit given this express rejection of preemption in the federal statutory text. And yet the majority found that the driver’s tort suit was preempted. Another notable feature of the Geier majority opinion is that it does not build on the somewhat intui- tive idea that when a federal agency affirmatively acts to protect the public, it may obviate the need for state tort law and in that sense justify federal preemption of tort suits; on the contrary, Geier roots a finding of federal preemption in inaction by the federal agency vis-à-vis the kind of car the injured driver drove. The Court held that the agency’s strategy of gradualism—that is, its decision to phase-in air bag requirements by beginning only with some models but not others, including the one in the accident at issue—would be unduly interfered with by allowing a common-law suit to proceed. Thus, according to the Court, the tort suit had to be preempted under a form of implied preemption known as obstacle preemption. According to the majority decision authored by Justice Breyer, [I]n effect, petitioners’ tort action depends upon its claim that manufacturers had a duty to install an airbag when they manufactured the 1987 Honda Accord. Such a state law—i.e., a rule of state tort law imposing such a duty--by its terms would have required manufacturers of all similar cars to install airbags rather than other passive restraint systems, such as automatic belts or passive interiors. It thereby would have presented an obstacle to the variety and mix of devices that the federal regulation sought. It would have required all manufacturers to have installed airbags in respect to the entire District-of-Columbia-related portion of their 1987 new car fleet, even though [the DOT regulation] at that time required only that 10 percent of a manufacturer’s nationwide fleet be equipped with any passive restraint device at all. It thereby also would have stood as an obstacle to the gradual passive restraint phase-in that the federal regulation deliberately imposed.10 Geier is also notable in the weight it gives to the DOT’s opinion, as expressed in the solicitor general’s brief, that the DOT regulations at issue were designed to effect a gradual phase-in of air bags and that the plaintiff’s tort suit would pose a substantial obstacle to the objective of that regulation and, thus, is or should be deemed preempted. The DOT’s opinion in this regard was nothing more than a one-time statement in a brief--it was not an opinion that was formally adopted after public notice and comment of any kind or that the DOT had repeatedly maintained over time—and yet the Court accorded it deference, citing the technical expertise of the DOT.

Federal Preemption of State Common-Law Tort Claims v Dana v 7 B. Riegel Riegel is much of a piece with Geier, as it also finds preemption of a common-law tort suit. But the decision arguably is more firmly rooted in federal statutory language, in that it does not run contrary to what federal statutory language seems to say. Indeed, Riegel grounded preemption in some express statutory language establishing preemption, albeit not express language explicitly about preemption of common-law suits or civil liability. At the same time, Riegel goes even farther than Geier in embracing agency-based preemption in that it suggests that an agency opinion that state tort suits are preempted “counts” (deserves judicial deference) even if the opinion is simply a statement made in an amicus brief (as was true in Geier) and even if (as was not true in Geier) the opinion is contrary to the public position the agency had previously taken for years. Riegel involved a tort suit brought by an injured person against the manufacturer of a catheter that rup- tured, causing a heart blockage. The federal statute at issue—the Medical Device Amendments (“MDA”) to the Food and Drug Control Act (“FDCA”)—expressly preempted state requirements for a medical device that differed from federal requirements. In an earlier case, the Court had held that state common-law tort suits are not the same thing as state requirements, at least in cases where the FDA had simply applied generally applicable rules to the device at issue rather than engaging in product-specific, intensive, premarket review and approval. The majority in Riegel reasoned that premarket review and approval were different—“the FDA may grant premarket approval only after it determines that a device offers a reasonable assurance of safety and effectiveness”—and that common-law suits challenging the safety of approved devices therefore were preempted. The majority opinion authored by Justice Scalia explained that it was unambiguous that the word requirements in the MDA Amendments meant to include common-law suits. The majority also added that the FDA’s agreement with that interpretation in an amicus brief could be accorded Skidmore deference--less than Chevron deference, but more than no deference. Justice Ginsburg’s dissent took issue with the notion that requirement in the MDA amendments was unambiguous. Her dissent argued that the background history suggested that Congress was concerned with preempting state regulatory requirements for premarket review and approval, rather than common-law suits. On its face, indeed, requirements does not readily meet dictionary definitions of tort suits for compensation, and resort to dictionary sources is precisely what Justice Scalia (the author of the Riegel majority opinion) has advocated in addressing the question of plain or clear statutory meaning in other opinions.11 Justice Ginsburg also criticized the majority’s position that the agency’s amicus brief deserved weight in deciding the preemption question. Justice Ginsburg’s central point was that this statement of position on the part of the agency was brand new and new for the litigation at hand, and that, previously, the agency had expressed precisely the opposite opinion.

C. Wyeth The most recent United States Supreme Court case comes out differently from Geier and Riegel: it holds that there is no federal preemption of a common-law tort suit. Nonetheless, Wyeth could be understood as generally reconcilable with Riegel despite the opposite result regarding preemption, inasmuch as Riegel relied on the language of an express preemption clause whereas the Wyeth majority opinion made much of the absence of any comparable express preemption clause addressing prescription drugs (as opposed to medical devices). At the same time, Wyeth appears impossible to square with Riegel (or Geier) with respect to the weight to be given to mere expressions of current agency opinion regarding preemption: both Geier and Riegel accept statements in amicus briefs as deserving some deference, but the Wyeth majority suggests a much higher bar for according agency opinions any deference at all.

v Fifth Annual Judicial Symposium v July 2009 The plaintiff in Wyeth received an injection of a drug that resulted in gangrene. The drug had been approved for use by the FDA, as had the warning label for the drug. The issue in the tort case was essentially whether the drug manufacturer should have strengthened the warning that had been approved by FDA. There was no express preemption clause at issue, unlike in Riegel; but neither was there any express savings clause preserving common-law liability for the manufacturer to overcome, as in Geier. Relying on various expressions of congressional intent, the majority concluded that Congress did not impliedly intend to preempt common-law actions based on allegations that the manufacturer should have strengthened the FDA-approved label. In what may turn out to be the most important passage in Wyeth for future cases, the majority dismissed a statement made by FDA in the preamble to a 2006 rule in which FDA opined that the tort suits based on FDA- approved warnings are or should be preempted: The weight we accord the agency’s explanation of state law’s impact on the federal scheme depends on its thoroughness, consistency, and persuasiveness … . Under this standard, the FDA’s 2006 preamble does not merit deference. When the FDA issued its notice of proposed rulemaking in December 2000, it explained that the rule would “not contain policies that have federalism implications or that preempt State law.” 65 Fed. Reg. 81103; see also 71 id., at 3969 (noting that the “proposed rule did not propose to preempt state law”). In 2006, the agency finalized the rule and, without offering States or other interested parties notice or opportunity for comment, articulated a sweeping position on the FDCA’s pre-emptive effect in the regulatory preamble. The agency’s views on state law are inherently suspect in light of this procedural failure … . Further, the preamble is at odds with what evidence we have of Congress’ purposes, and it reverses the FDA’s own longstanding position without providing a reasoned explanation, including any discussion of how state law has interfered with the FDA’s regulation of drug labeling during decades of coexistence. The FDA’s 2006 position plainly does not reflect the agency’s own view at all times relevant to this litigation.12 It is hard to discern what rule regarding agency opinions Wyeth announces. Must agencies provide states and others input before reaching an opinion, if the opinion is to be accorded weight? Must they do so as part of a structured notice and comment process? Must they be consistent in the opinion over time, and how consistent? How much of an explanation is enough for an opinion to be reasoned? One could read the passage quoted above to make it impossible for an agency opinion to have weight unless it has been adopted after notice and comment, and even then maintained over years and grounded in a detailed analysis of the congressional purposes of the statutory scheme and how state regulation or liability actually has interfered or would interfere with those objectives. It is also possible to read Wyeth as holding only that, when an agency opinion has all the “defects” or problems of the FDA opinion in the 2006 preamble, it cannot be accorded deference. The other opinions in Wyeth are, in part, responses to the majority opinion’s treatment of agency opinions regarding preemption. Justice Breyer’s concurrence seeks to preserve room for deference to agency opinions at least when they are adopted as part of an agency regulation, and implicitly suggests that deference may be due even when some of the “defects” cited by Justice Stevens’s majority opinion may be attributed to the agency opinion or statement to the effect that state tort suits are preempted. If Justice Breyer thinks that the majority perhaps went too far in imposing limits on deference to agency opinions, Justice Thomas’s concurrence argues the majority did not go far enough; in his view, preemption should be based on express statutory language and thus agency opinions regarding preemption are or should be altogether irrelevant. Finally, Justice Alito’s dissent argues, plausibly, that the majority’s treatment of agency opinions is inconsistent with Riegel and Geier, and argues for a return to—a reaffirmation of—the Riegel-Geier approach.

Federal Preemption of State Common-Law Tort Claims v Dana v 9 D. American Home Products v. Ferrari In American Home Products v. Ferrari, the Georgia Supreme Court held that the National Childhood Vaccine Injury Act does not preclude a common-law tort suit alleging that a design defect in a childhood vaccine had caused autism in a young child. The relevant language in the Act expressly preempts civil liability for “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.” The question for the court was whether FDA approval of a vaccine and its warnings inherently meant that any side effects were “unavoidable” and that civil liability was therefore precluded. The court recognized that the Act was heavily motivated by concern that the fear of civil common-law liability was creating a dangerous vaccine shortage but held that the legislative history, when read in total, indicated that Congress did not intend to bar all common-law suits and instead intended the issue of unavoidability of side effects to be taken up on a case-by-case basis. The court stressed that if Congress had wanted to bar all civil suits, it could have said just that and omitted the limiting language “that were unavoidable.” American Home Products v. Ferrari is arguably at the opposite end of the spectrum from Geier in its approach to preemption. Whereas Geier finds no civil liability despite congressional language purporting to save such liability, American Home Products v. Ferrari saves civil liability despite congressional language purporting to preclude such liability—indeed, despite the whole point of the federal statute apparently being to assuage industry concerns so that it would proceed with vaccine production without fear of second-guessing regarding injuries or death resulting from vaccination. In any case, the Third Circuit recently disagreed with Ferrari,13 and it remains to be seen whether the United States Supreme Court will wade into the controversy by granting certiorari.

E. What is Preemption Doctrine, Given These Cases? Given the recent cases reviewed here, what can we say about the law of federal preemption? That it is not overwhelmingly consistent; that the express language of federal statutes matters, but only so much; that implied preemption as a legal category is alive and well; and that federal agency opinions about preemption can matter, but they also can be dismissed as deserving no weight or deference. Finally, the case law suggests some possible divergence between federal and state courts’ approaches and attitudes toward federal preemption-- although there has not been, as far as this author knows, any systematic effort to assess differences between how federal courts and state courts decide federal preemption disputes. The lack of clarity in federal preemption law is not that surprising given the big issues implicated by preemption cases, including how important is federalism really, what is the proper role of administrative agencies in a democracy, and how broken—or not—is the state law tort system.

III. The Big Issues

A. Federalism The United States Supreme Court has repeatedly affirmed that preemption cases do raise federalism issues, but the case law is opaque as to how courts should reconcile the idea that states deserve a sphere of autonomy and respect and the idea, and indeed clear constitutional principle, that federal law is supreme. The part of preemption doctrine that ostensibly seems to balance these two competing ideas is the so-called “presumption against preemption.” The basic idea of the presumption seems to be that, because states and federalism values matter, preemption should not be found in “close cases” where the presumption is not overcome.

10 v Fifth Annual Judicial Symposium v July 2009 That sounds reasonable, until one notes that court opinions finding federal preemption often simply ignore the presumption, pretending it does not exist, or attempt to cabin it to areas that “states have traditionally occupied” and that the federal government traditionally has not occupied.14 It seems to this author that, even if there is or should be a limit on the presumption against preemption to areas of traditional state concern, the presumption should always apply vis-à-vis state tort liability because states traditionally have been the venue for tort compensation for physical injuries, certainly much more than the federal government. Indeed, state tort protection for injured persons is one of the most traditional aspects of state law. And in any case, from the perspective of core federalism values, it is unclear whether the focus on the traditional role of the states makes sense. The idea that the states enjoy a presumption against preemption only in traditional arenas suggests a highly static and highly constrained role for state governance and thus, arguably, devalues the role of the states in American democracy.15 In his concurrence in Wyeth, Justice Thomas extends federalism concerns beyond the realm of the presumption against preemption to ask a very basic question about federal preemption law: should the federal courts ever be finding federal preemption based on anything other than the express language of a congressional statute? Implied preemption comes in many forms, most notably (1) in the form of obstacle or conflict preemption (what was at issue in Geier and Riegel), where the court asks if the state law or liability will pose an obstacle to a federal statute that is silent regarding preemption, and (2) in the form of field preemption, where the court asks whether Congress has occupied an entire field of regulation or law even though no single statute purports to do so in a preemptive manner. As Justice Thomas rightly articulates, implied preemption inquiry can be very expansive and have very little or nothing to do with actual statutory text. Justice Thomas then takes the next step to argue that in a federal republic where federal law is supreme, preemption cannot be based on the sort of expansive analysis employed under the rubric of implied preemption analysis: “Congressional and agency musings, however, do not satisfy the Art. 1, s 7 requirements for enactment of federal law, and therefore do not pre-empt state law under the Supremacy Clause … . Under the Supremacy Clause, state law is preempted only by federal law made in pursuance of the Constitution, Art. Vi, cl 2—not by extratextual considerations of the purposes of congressional inaction.”16 Justice Thomas’s proposed approach would in effect replace the amorphous federalism-justified presumption against preemption with a federalism-justified requirement that preemption be rooted in some words, albeit perhaps ambiguous words, in a specific federal statute. In terms of preserving a sphere for the states free from undue federal preemption, that approach could make a significant difference: for example, it almost certainly would have produced a different (no federal preemption) decision in Geier.

B. The Role of Agencies in Our Democracy As already noted, the majority opinion in Wyeth moves the Court away from a position of ready deference to agency opinions regarding the preemptive effect of federal law. But, as also noted, Wyeth can be read in different ways. The Court’s treatment of this issue might have been more illuminating if the Court had framed it in terms of the standard reasons why, under the Chevron framework, courts would ever give deference to an agency opinion about the meaning of federal law. One of these reasons is that federal agencies are said to be more democratically accountable—closer to We the People—than the federal courts, which after all, are designed to be very well insulated from poli- tics.17 Because of their greater accountability, federal agencies are more likely to reach decisions that accord with majority or popular sentiment and in that sense perhaps are better proxies for congressional intent. This argument is debatable in the preemption context for several reasons. First, the states are also loci of democracy—they are instrumentalities through which We the People speak—and so state regulation and state civil

Federal Preemption of State Common-Law Tort Claims v Dana v 11 liability do reflect public attitudes and carry a certain democratic weight. As Ernie Young notes, “the context of preemption adds a third decisionmaker: the state government institution responsible for the rule that is being preempted. The state institution is likely to be closer to the people and, in the case of state legislatures (as well as some state courts and executive officials), directly accountable to them.”18 Second, federal agencies can issue opinions in a way that is far removed from public sight and debate, far removed from democracy, as ordinarily understood—as, for example, when an agency expresses an opinion about preemption via a solicitor general’s brief. Indeed, notice and comment rulemaking is important not just because it gives agencies input but because it also is a means by which agencies are held accountable to the public for precisely what their decisions were and what their rationales for those decisions were. Another reason for deference to agency views about law and legal interpretation is agency expertise. This rationale both makes sense—and makes no sense—with respect to the question of federal preemption. To the extent that the question of federal preemption involves an assessment of what Congress’s goals and purposes were, as evidenced by statutory language and legislative history and congressional action and inaction regarding a federal program or law over time, federal agencies have absolutely no special expertise. To the extent that federal preemption involves a consideration of quasi-constitutional questions of federalism and the best balance between state sovereignty and federal supremacy, federal agencies, again, have no special expertise. But to the extent that preemption analysis could be aided by informed observations about the real-world effects of state regulation or liability, those observations by a federal agency could be very helpful to a court in determining whether a true conflict exists between federal and state law. Justice Breyer in Wyeth seemed to be recognizing this core area of competence for agencies when he explained that “[t]he FDA may seek to determine whether and when state tort law acts as a help or a hindrance to achieving the safe drug-related medical care that Congress sought” by providing an assessment as to whether state law or liability would reduce access to or a drug by reducing its supply and/or increasing its price. 19

C. The Rationality and Irrationality of the State Tort System Inevitably, any analysis of federal preemption of state tort law implicates the question of what would likely happen in the state courts if state tort suits are allowed to proceed. And that question implicates the soundness and reliability of state courts and state juries with a view not just to compensating victims but also to striking a fair balance between manufacturers’ rights and responsibilities and between the benefits of a manufacturer’s course of action and its costs or risks. Thus, Justice Alito complains in his Wyeth dissent that “[b]y their very nature, juries are ill-equipped to perform the FDA’s cost-benefit-balancing function” and concludes that because juries are ill-equipped, federal preemption should be recognized.20 It is probably more than coincidence that we have (before Wyeth at least) seen in the past few decades an uptick in judicial findings of federal preemption of state tort suits and a growing sense in many quarters that state tort systems are broken and need to be constrained through tort reform. State judges and federal judges and Justices certainly must have views about plaintiffs’ lawyers, state tort systems, and juries. These views cannot help but affect how open they are to the argument that state tort liability will pose an obstacle to federal legal objectives. But federal judges or Justices (or even state ones) are not necessarily truly expert in these matters: their views about plaintiffs’ lawyers and state courts and juries may be ill-founded. If understandings about state tort systems are going to inform preemption decisions, those understandings should be out in the open as much as possible and subject to debate and scrutiny as part of the preemption litigation. Moreover, a focus on runaway juries and large jury verdicts in particular may be misplaced because even if there were never any federal preemption of state tort suits, many such suits would never reach a jury.

12 v Fifth Annual Judicial Symposium v July 2009 In American Home Products v. Ferrari, for example, the causal links between mercury in vaccines and autism were not established by peer-reviewed studies, and it is extremely unlikely that any case would ultimately proceed to a jury or—even if it did—that a jury verdict would be sustained on appeal. There are checks on liability within the state tort system—arguably more checks now than in years past—and some considerable empirical evidence of willingness on the part of juries to follow judicial direction. At a minimum, it would seem that federal preemption decisions should not rest on unexamined, unexplored assumptions that the state tort system is badly broken and will operate to impose crushing damages awards if there is no federal check.

Federal Preemption of State Common-Law Tort Claims v Dana v 13 Endnotes

1 128 S. Ct. 1118 (2008) 2 129 S. Ct. 1187 (2009) 3 668 S.E.2d 236 (GE 2008). 4 See, e.g., Metropolitan Life Ins. Co. v. Massachusetts, 471 U.S. 724, 747 (1985) (explaining that congressional intent is the “ultimate touchstone” in preemption analysis) [citations and internal quotations omitted]. 5 See, e.g., Sandra Zellmer, Preemption by Stealth, 45 Houst. L. Rev. 1659, 1670 (2009) (“When it comes to preemption, however, the Justices split in ways that cut across ideological lines. Champions of federalism and states’ rights, like Jus- tice Scalia and former Justices Rehnquist and O’Connor, do not always vote against preemption of state laws, while champions of strong central government, like Justices Stevens, Ginsburg, Breyer, and Souter, do not always vote in favor of preemption. As a result, Supreme Court opinions seem to oscillate between a love of federalism, which would suggest a restrictive view of preemption, and an aversion to state interference with federal programs. It is tempting to surmise that the preemption cases are not about federalism at all but rather reflect promarket, antiregulatory goals. Perhaps hostility toward government regulation at any level is in fact in play, but it is difficult to discern a clear pattern to this effect in the preemption cases viewed as a whole. In some cases, state law remedies and state and local regulatory initiatives are applauded and in others they are excoriated.”) 6 Chevron v. NRDC, 467 US 837 (1984). 7 Skidmore v. Swift Co., 3232 U.S. 134, 140 (1944). Skidmore deference requires that a court establish the appropriate level of judicial deference toward an agency’s interpretation of the statute by considering “the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade, if lacking power to control.” Id. at 140. 8 See, e.g., Nina Mendelson, Chevron and Preemption, 102 Mich. L. Rev. 7373 (2004). 9 529 U.S. 861 (2000). 10 Id. at 882. 11 See generally Miranda McGowan, Do as I Do, Not as I Say: An Empirical Investigation of Justice Scalia’s Ordinary Mean- ing Method of Statutory Interpretation, 78 Miss. L. J. 129 (2008). 12 129 S. Ct. at 1201. 13 See Bruesewitz v. Wyeth, 561 F3d 233 (3d Cir 2009). 14 See Buckman Co. v. Plaintiff’s Legal Committee, 531 U.S. 341, 347 (2001) (seeming to constrain the presumption to “fields the states have traditionally occupied”). This narrow view of the presumption was most recently, if rather con- fusingly, articulated by the dissent in Wyeth, in which Judge Alito asserted that, at least as to so-called conflict preemption, the presumption should not apply in areas long reserved for federal, rather than, state regulation and concern. 129 S. Ct. at 1229 n.14. 15 See David A. Dana, Democratizing the Law of Federal Preemption, 102 Nw. U . L. Rev. 507, 516-17 (2008) (explaining that the Supreme Court has abandoned traditional state functions as a useful criterion in its Tenth Amendment jurisprudence). 16 129 S. Ct. at 1207, 1217 (Thomas, J., dissenting). 17 See Chevron, 467 U.S. at 865 (“While agencies are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the government to make … policy choices”). 18 See Ernest A. Young, Executive Preemption, 102 Nw. U. L. Rev. 869, 887 (2008). The democratic case against federal preemption is especially strong where a large number of states have opted for a nonfederal regulation or for the imposition of liability notwithstanding compliance with federal regulations. See Dana, supra note 15 (developing this argument with an emphasis of state adoption of climate change regulations and standards). 19 129 S. Ct. at 1204-1205 (Breyer, J., concurring). 20 Id. at 1229 (Alito, J., dissenting).

14 v Fifth Annual Judicial Symposium v July 2009 The Role of State and Federal Courts in Federal Preemption Cases—A Spirited Discussion Between Adversaries at the Bar

Lawrence S. Ebner

McKenna Long & Aldridge LLP

1900 K Street NW Washington, DC 20006-1108 (202) 496-7727 (202) 496-7756 [fax] [email protected] Lawrence S. Ebner heads the Appellate Practice Group of McKenna Long & Aldridge LLP, a national firm with more than 450 attorneys and public policy advisors. A graduate of Dartmouth College and Harvard Law School, Mr. Ebner began his legal career in 1972 at the U.S. Department of Justice’s Civil Division. He joined his firm’s Washington, D.C., office in 1974 as an associate, and has been a partner there for the past 30 years. Mr. Ebner’s clients are primarily companies that manufacture products or provide services that are regulated or procured by the federal government. They range from pesticide and drug manufacturers to railroads to bat- tlefield contractors. Although Mr. Ebner has handled federal and state court appeals on a great variety of subjects, for more than two decades he has devoted a significant part of his practice to federal preemption of product liability claims and other tort- based causes of action. This has included oral arguments before the California, Texas and Wisconsin supreme courts, as well as before several federal and state courts of appeals, and preparation of amicus curiae briefs to the U.S. Supreme Court in key federal preemption cases. The Role of State and Federal Courts in Federal Preemption Cases—A Spirited Discussion Between Adversaries at the Bar Table of Contents Presentation...... 19

The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Ebner v 17

Presentation

(Slip Opinion) OCTOBER TERM, 2008 1

Syllabus

NOTE: Where it is feasible, a syllabus (headnote) will be released, as is being done in connection with this case, at the time the opinion is issued. The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337. SUPREME COURT OF THE UNITED STATES

Syllabus

HAYWOOD v. DROWN ET AL.

CERTIORARI TO THE COURT OF APPEALS OF NEW YORK

No. 07–10374. Argued December 3, 2008—Decided May 26, 2009 Believing that damages suits filed by prisoners against state correction officers were largely frivolous and vexatious, New York passed Cor- rection Law §24, which divested state courts of general jurisdiction of their jurisdiction over such suits, including those filed under 42 U. S. C. §1983, and replaced those claims with the State’s preferred alternative. Thereunder, a prisoner will have his claim against a correction officer dismissed for want of jurisdiction and will be left to pursue a damages claim against the State in the Court of Claims, a court of limited jurisdiction in which the prisoner will not be entitled to attorney’s fees, punitive damages, or injunctive relief. Petitioner filed two §1983 damages actions against correction employees in state court. Finding that it lacked jurisdiction under Correction Law §24, the trial court dismissed the actions. Affirming, the State Court of Appeals rejected petitioner’s claim that the state statute’s jurisdictional limitation violated the Supremacy Clause. It reasoned that because that law treats state and federal damages actions against correction officers equally—i.e., neither can be brought in New York courts—it was a neutral rule of judicial administration and thus a valid excuse for the State’s refusal to entertain the federal cause of action. Held: Correction Law §24, as applied to §1983 claims, violates the Su- premacy Clause. Pp. 5–13. (a) Federal and state law “together form one system of jurisprudence, which constitutes the law of the land for the State; and the courts of the two jurisdictions are . . . courts of the same country, having jurisdiction partly different and partly concurrent.” Claflin v. Houseman, 93 U. S. 130, 136–137. Both state and federal courts have jurisdiction over §1983 suits. So strong is the presumption of concurrency that it is defeated only when Congress expressly ousts

The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Ebner v 19 2 HAYWOOD v. DROWN

Syllabus

state courts of jurisdiction, see e.g., id., at 136; or “[w]hen a state court refuses jurisdiction because of a neutral state rule regarding the administration of the courts,” Howlett v. Rose, 496 U. S. 356, 372. As to whether a state law qualifies as such a neutral rule, States retain substantial leeway to establish the contours of their judicial systems, but lack authority to nullify a federal right or cause of action they believe is inconsistent with their local policies. Whatever its merits, New York’s policy of shielding correction officers from liability when sued for damages arising out of conduct performed in the scope of their employment is contrary to Congress’ judgment that all persons who violate federal rights while acting under color of state law shall be held liable for damages. “A State may not . . . relieve congestion in its courts by declaring a whole category of federal claims to be frivolous.” Id., at 380. Pp. 5–8. (b) The New York Court of Appeals’ holding was based on the misunderstanding that Correction Law §24’s equal treatment of federal and state claims would guarantee that the statute would pass constitutional muster. Although the absence of discrimination is essential to this Court’s finding a state law neutral, nondiscrimination alone is not sufficient to guarantee that a state law will be deemed neutral. In addition to this misplaced reliance on equality, respondents mistakenly treat this case as implicating the “great latitude [States enjoy] to establish the structure and jurisdiction of their own courts.” Howlett, 496 U. S., at 372. However, this Court need not decide whether Congress can compel a State to offer a forum, otherwise unavailable under state law, to hear §1983 suits, because New York has courts of general jurisdiction that routinely sit to hear analogous §1983 actions. Pp. 8–13. 9 N. Y. 3d 481, 881 N. E. 2d 180, reversed and remanded.

STEVENS, J., delivered the opinion of the Court, in which KENNEDY, SOUTER, GINSBURG, and BREYER, JJ., joined. THOMAS, J., filed a dissenting opinion, in which ROBERTS, C. J., and SCALIA and ALITO, JJ., joined as to Part III.

20 Cite as: 556 U. S. ____ (2009) 1

Opinion of the Court

NOTICE: This opinion is subject to formal revision before publication in the preliminary print of the United States Reports. Readers are requested to notify the Reporter of Decisions, Supreme Court of the United States, Wash- ington, D. C. 20543, of any typographical or other formal errors, in order that corrections may be made before the preliminary print goes to press. SUPREME COURT OF THE UNITED STATES ______

No. 07–10374 ______KEITH HAYWOOD, PETITIONER v. CURTIS DROWN ET AL.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF NEW YORK [May 26, 2009]

JUSTICE STEVENS delivered the opinion of the Court. In our federal system of government, state as well as federal courts have jurisdiction over suits brought pursuant to 42 U. S. C. §1983, the statute that creates a remedy for violations of federal rights committed by persons acting under color of state law.1 While that rule is generally applicable to New York’s supreme courts—the State’s trial courts of general jurisdiction—New York’s Correction Law §24 divests those courts of jurisdiction over §1983 suits that seek money damages from correction officers. New York thus prohibits the trial courts that generally exercise jurisdiction over §1983 suits brought against other state officials from hearing virtually all such suits brought

—————— 1 Section 1 of the Civil Rights Act of 1871, Rev. Stat. §1979, as amended, 42 U. S. C. §1983, provides in relevant part: “Every person who, under color of any statute, ordinance, regulation, custom, or usage, of any State or Territory or the District of Columbia, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”

21 2 HAYWOOD v. DROWN

Opinion of the Court against state correction officers. The question presented is whether that exceptional treatment of a limited category of §1983 claims is consistent with the Supremacy Clause of the United States Constitution. 2 I Petitioner, an inmate in New York’s Attica Correctional Facility, commenced two §1983 actions against several correction employees alleging that they violated his civil rights in connection with three prisoner disciplinary proceedings and an altercation. Proceeding pro se, petitioner filed his claims in State Supreme Court and sought punitive damages and attorney’s fees. The trial court dismissed the actions on the ground that, under N. Y. Cor- rect. Law Ann. §24 (West 1987) (hereinafter Correction Law §24), it lacked jurisdiction to entertain any suit arising under state or federal law seeking money damages from correction officers for actions taken in the scope of their employment. The intermediate appellate court summarily affirmed the trial court. 35 App. Div. 3d 1290, 826 N. Y. S. 2d 542 (2006). The New York Court of Appeals, by a 4-to-3 vote, also affirmed the dismissal of petitioner’s damages action. The Court of Appeals rejected petitioner’s argument that Cor- rection Law §24’s jurisdictional limitation interfered with §1983 and therefore ran afoul of the Supremacy Clause of the United States Constitution. The majority reasoned that, because Correction Law §24 treats state and federal damages actions against correction officers equally (that

—————— 2 The Supremacy Clause, Art. VI, cl. 2, provides: “This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”

22 Cite as: 556 U. S. ____ (2009) 3

Opinion of the Court is, neither can be brought in New York courts), the statute should be properly characterized as a “neutral state rule regarding the administration of the courts” and therefore a “valid excuse” for the State’s refusal to entertain the federal cause of action. 9 N. Y. 3d 481, 487, 881 N. E. 2d 180, 183, 184 (2007) (quoting Howlett v. Rose, 496 U. S. 356, 369, 372 (1990) (internal quotation marks omitted)). The majority understood our Supremacy Clause precedents to set forth the general rule that so long as a State does not refuse to hear a federal claim for the “sole reason that the cause of action arises under federal law,” its withdrawal of jurisdiction will be deemed constitutional. 9 N. Y. 3d, at 488, 881 N. E. 2d, at 184. So read, discrimination vel non is the focal point of Supremacy Clause analysis. In dissent, Judge Jones argued that Correction Law §24 is not a neutral rule of judicial administration. Noting that the State’s trial courts handle all other §1983 damages actions, he concluded that the State had created courts of competent jurisdiction to entertain §1983 suits. In his view, “once a state opens its courts to hear section 1983 actions, it may not selectively exclude section 1983 actions by denominating state policies as jurisdictional.” Id., at 497, 881 N. E. 2d, at 191. Recognizing the importance of the question decided by the New York Court of Appeals, we granted certiorari. 554 U. S. ___ (2008). We now reverse. II Motivated by the belief that damages suits filed by prisoners against state correction officers were by and large frivolous and vexatious, New York passed Correction Law §24.3 The statute employs a two-step process to strip —————— 3 The New York Attorney General described Correction Law §24 as “further[ing] New York’s legitimate interest in minimizing the disruptive effect of prisoner damages claims against correction employees,

23 4 HAYWOOD v. DROWN

Opinion of the Court its courts of jurisdiction over such damages claims and to replace those claims with the State’s preferred alternative. The provision states in full: “1. No civil action shall be brought in any court of the state, except by the attorney general on behalf of the state, against any officer or employee of the department, in his personal capacity, for damages arising out of any act done or the failure to perform any act within the scope of employment and in the discharge of the duties by such officer or employee. “2. Any claim for damages arising out of any act done or the failure to perform any act within the scope of employment and in the discharge of the duties of any officer or employee of the department shall be brought and maintained in the court of claims as a claim against the state.” Thus, under this scheme, a prisoner seeking damages from a correction officer will have his claim dismissed for want of jurisdiction and will be left, instead, to pursue a claim for damages against an entirely different party (the State) in the Court of Claims—a court of limited jurisdiction.4 See N. Y. Const., Art. VI, §9; N. Y. Ct. Clms. Law Ann. §9 (West 1989) (hereinafter Court of Claims Act). For prisoners seeking redress, pursuing the Court of Claims alternative comes with strict conditions. In addi- —————— many of which are frivolous and vexatious.” Brief in Opposition 10; see also Artega v. State, 72 N. Y. 2d 212, 219, 527 N. E. 2d 1194, 1198 (1988) (“In carrying out their duties relating to security and discipline in the difficult and sometimes highly stressful prison environment, correction employees . . . should not be inhibited because their conduct could be the basis of a damage claim”). 4 Although the State has waived its sovereign immunity from liability by allowing itself to be sued in the Court of Claims, a plaintiff seeking damages against the State in that court cannot use §1983 as a vehicle for redress because a State is not a “person” under §1983. See Will v. Michigan Dept. of State Police, 491 U. S. 58, 66 (1989).

24 Cite as: 556 U. S. ____ (2009) 5

Opinion of the Court tion to facing a different defendant, plaintiffs in that Court are not provided with the same relief, or the same procedural protections, made available in §1983 actions brought in state courts of general jurisdiction. Specifically, under New York law, plaintiffs in the Court of Claims must comply with a 90-day notice requirement, Court of Claims Act §9; are not entitled to a jury trial, §12; have no right to attorney’s fees, §27; and may not seek punitive damages or injunctive relief, Sharapata v. Town of Islip, 56 N. Y. 2d 332, 334, 437 N. E. 2d 1104, 1105 (1982). We must decide whether Correction Law §24, as applied to §1983 claims, violates the Supremacy Clause. III This Court has long made clear that federal law is as much the law of the several States as are the laws passed by their legislatures. Federal and state law “together form one system of jurisprudence, which constitutes the law of the land for the State; and the courts of the two jurisdictions are not foreign to each other, nor to be treated by each other as such, but as courts of the same country, having jurisdiction partly different and partly concurrent.” Claflin v. Houseman, 93 U. S. 130, 136–137 (1876); see Minneapolis & St. Louis R. Co. v. Bombolis, 241 U. S. 211, 222 (1916); The Federalist No. 82, p. 132 (E. Bourne ed. 1947) (A. Hamilton) (“[T]he inference seems to be conclusive, that the State courts would have a concurrent jurisdiction in all cases arising under the laws of the Union, where it was not expressly prohibited”). Although §1983, a Reconstruction-era statute, was passed “to interpose the federal courts between the States and the people, as guardians of the people’s federal rights,” Mitchum v. Fos- ter, 407 U. S. 225, 242 (1972), state courts as well as federal courts are entrusted with providing a forum for the vindication of federal rights violated by state or local officials acting under color of state law. See Patsy v.

25 6 HAYWOOD v. DROWN

Opinion of the Court Board of Regents of Fla., 457 U. S. 496, 506–507 (1982) (canvassing the legislative debates of the 1871 Congress and noting that “many legislators interpreted [§1983] to provide dual or concurrent forums in the state and federal system, enabling the plaintiff to choose the forum in which to seek relief”); Maine v. Thiboutot, 448 U. S. 1, 3, n. 1 (1980). So strong is the presumption of concurrency that it is defeated only in two narrowly defined circumstances: first, when Congress expressly ousts state courts of jurisdiction, see Bombolis, 241 U. S., at 221; Claflin, 93 U. S., at 136; and second, “[w]hen a state court refuses jurisdiction because of a neutral state rule regarding the administration of the courts,” Howlett, 496 U. S., at 372. Focusing on the latter circumstance, we have emphasized that only a neutral jurisdictional rule will be deemed a “valid excuse” for departing from the default assumption that “state courts have inherent authority, and are thus presumptively competent, to adjudicate claims arising under the laws of the United States.” Tafflin v. Levitt, 493 U. S. 455, 458 (1990). In determining whether a state law qualifies as a neutral rule of judicial administration, our cases have established that a State cannot employ a jurisdictional rule “to dissociate [itself] from federal law because of disagreement with its content or a refusal to recognize the superior authority of its source.” Howlett, 496 U. S., at 371. In other words, although States retain substantial leeway to establish the contours of their judicial systems, they lack authority to nullify a federal right or cause of action they believe is inconsistent with their local policies. “The suggestion that [an] act of Congress is not in harmony with the policy of the State, and therefore that the courts of the State are free to decline jurisdiction, is quite inadmissible, because it presupposes what in legal contemplation does not exist.” Second Employers’ Liability Cases, 223 U. S. 1,

26 Cite as: 556 U. S. ____ (2009) 7

Opinion of the Court 57 (1912). It is principally on this basis that Correction Law §24 violates the Supremacy Clause. In passing Correction Law §24, New York made the judgment that correction officers should not be burdened with suits for damages arising out of conduct performed in the scope of their employment. Because it regards these suits as too numerous or too frivolous (or both), the State’s longstanding policy has been to shield this narrow class of defendants from liability when sued for damages.5 The State’s policy, whatever its merits, is contrary to Congress’ judgment that all persons who violate federal rights while acting under color of state law shall be held liable for damages. As we have unanimously recognized, “[a] State may not

—————— 5 In many respects, Correction Law §24 operates more as an immunity-from-damages provision than as a jurisdictional rule. Indeed, the original version of the statute gave correction officers qualified immunity, providing that no officer would be “liable for damages if he shall have acted in good faith, with reasonable care and upon probable cause.” N. Y. Correct. Law. §6–b (McKinney Supp. 1947). And, more recently, a state legislative proposal seeking to extend Correction Law §24’s scheme to other state employees explained that its purpose was to grant “the same immunity from civil damage actions as all other State employees who work in the prisons.” App. 85. In Howlett v. Rose, 496 U. S. 356 (1990), we considered the question whether a Florida school board could assert a state-law immunity defense in a §1983 action brought in state court when the defense would not have been available if the action had been brought in federal court. We unanimously held that the State’s decision to extend immunity “over and above [that which is] already provided in §1983 . . . directly violates federal law,” and explained that the “elements of, and the defenses to, a federal cause of action are defined by federal law.” Id., at 375; Owen v. Independence, 445 U. S. 622, 647, n. 30 (1980); see also R. Fallon, D. Meltzer, & D. Shapiro, Hart & Wechsler’s The Fed- eral Courts and the Federal System 1122 (5th ed. 2003) (“Federal law governs the immunity in [§1983] actions, even when brought against state officials”). Thus, if Correction Law §24 were understood as offering an immunity defense, Howlett would compel the conclusion that it violates the Supremacy Clause.

27 8 HAYWOOD v. DROWN

Opinion of the Court . . . relieve congestion in its courts by declaring a whole category of federal claims to be frivolous. Until it has been proved that the claim has no merit, that judgment is not up to the States to make.” Howlett, 496 U. S., at 380; Burnett v. Grattan, 468 U. S. 42, 55 (1984) (rejecting as “manifestly inconsistent with the central objective of the Reconstruction–Era civil rights statutes” the judgment “that factors such as minimizing the diversion of state officials’ attention from their duties outweigh the interest in providing employees ready access to a forum to resolve valid claims”). That New York strongly favors a rule shielding correction officers from personal damages liability and substituting the State as the party responsible for compensating individual victims is irrelevant. The State cannot condition its enforcement of federal law on the demand that those individuals whose conduct federal law seeks to regulate must nevertheless escape liability. IV While our cases have uniformly applied the principle that a State cannot simply refuse to entertain a federal claim based on a policy disagreement, we have yet to confront a statute like New York’s that registers its dissent by divesting its courts of jurisdiction over a disfavored federal claim in addition to an identical state claim. The New York Court of Appeals’ holding was based on the misunderstanding that this equal treatment of federal and state claims rendered Correction Law §24 constitutional. 9 N. Y. 3d, at 489, 881 N. E. 2d, at 185 (“Put simply, because Correction Law §24 does not treat section 1983 claims differently than it treats related state law causes of action, the Supremacy Clause is not offended”). To the extent our cases have created this misperception, we now make clear that equality of treatment does not ensure that a state law will be deemed a neutral rule of judicial administration and therefore a valid excuse for

28 Cite as: 556 U. S. ____ (2009) 9

Opinion of the Court refusing to entertain a federal cause of action. Respondents correctly observe that, in the handful of cases in which this Court has found a valid excuse, the state rule at issue treated state and federal claims equally. In Douglas v. New York, N. H. & H. R. Co., 279 U. S. 377 (1929), we upheld a state law that granted state courts discretion to decline jurisdiction over state and federal claims alike when neither party was a resident of the State. Later, in Herb v. Pitcairn, 324 U. S. 117 (1945), a city court dismissed an action brought under the Federal Employers’ Liability Act (FELA), 45 U. S. C. §51 et seq., for want of jurisdiction because the cause of action arose outside the court’s territorial jurisdiction. We upheld the dismissal on the ground that the State’s venue laws were not being applied in a way that discriminated against the federal claim. 324 U. S., at 123. In a third case, Missouri ex rel. Southern R. Co. v. Mayfield, 340 U. S. 1 (1950), we held that a State’s application of the forum non conveniens doctrine to bar adjudication of a FELA case brought by nonresidents was constitutionally sound as long as the policy was enforced impartially. Id., at 4. And our most recent decision finding a valid excuse, Johnson v. Fankell, 520 U. S. 911 (1997), rested largely on the fact that Idaho’s rule limiting interlocutory jurisdiction did not discriminate against §1983 actions. See id., at 918. Although the absence of discrimination is necessary to our finding a state law neutral, it is not sufficient. A jurisdictional rule cannot be used as a device to undermine federal law, no matter how evenhanded it may appear. As we made clear in Howlett, “[t]he fact that a rule is denominated jurisdictional does not provide a court an excuse to avoid the obligation to enforce federal law if the rule does not reflect the concerns of power over the person and competence over the subject matter that jurisdictional rules are designed to protect.” 496 U. S., at 381. Ensuring equality of treatment is thus the beginning, not the end, of

29 10 HAYWOOD v. DROWN

Opinion of the Court the Supremacy Clause analysis. In addition to giving too much weight to equality of treatment, respondents mistakenly treat this case as implicating the “great latitude [States enjoy] to establish the structure and jurisdiction of their own courts.” Id., at 372. Although Correction Law §24 denies state courts authority to entertain damages actions against correction officers, this case does not require us to decide whether Congress may compel a State to offer a forum, otherwise unavailable under state law, to hear suits brought pursuant to §1983. The State of New York has made this inquiry unnecessary by creating courts of general jurisdiction that routinely sit to hear analogous §1983 actions. New York’s constitution vests the state supreme courts with general original jurisdiction, N. Y. Const., Art. VI, §7(a), and the “inviolate authority to hear and resolve all causes in law and equity.” Pollicina v. Misericordia Hos- pital Medical Center, 82 N. Y. 2d 332, 339, 624 N. E. 2d 974, 977 (1993). For instance, if petitioner had attempted to sue a police officer for damages under §1983, the suit would be properly adjudicated by a state supreme court. Similarly, if petitioner had sought declaratory or injunctive relief against a correction officer, that suit would be heard in a state supreme court. It is only a particular species of suits—those seeking damages relief against correction officers—that the State deems inappropriate for its trial courts.6 —————— 6 While we have looked to a State’s “common-law tort analogues” in deciding whether a state procedural rule is neutral, see Felder v. Casey, 487 U. S. 131, 146, n. 3 (1988), we have never equated “analogous claims” with “identical claims.” Instead, we have searched for a similar claim under state law to determine whether a State has established courts of adequate and appropriate jurisdiction capable of hearing a §1983 suit. See Testa v. Katt, 330 U. S. 386, 388, 394 (1947); Martinez v. California, 444 U. S. 277, 283–284, n. 7 (1980) (“[W]here the same type of claim, if arising under state law, would be enforced in the state courts, the state courts are generally not free to refuse enforcement of

30 Cite as: 556 U. S. ____ (2009) 11

Opinion of the Court We therefore hold that, having made the decision to create courts of general jurisdiction that regularly sit to entertain analogous suits, New York is not at liberty to shut the courthouse door to federal claims that it considers at odds with its local policy.7 A State’s authority to organ- ize its courts, while considerable, remains subject to the strictures of the Constitution. See, e.g., McKnett v. St. Louis & San Francisco R. Co., 292 U. S. 230, 233 (1934). We have never treated a State’s invocation of

—————— the federal claim” (emphasis added)). Section 1983 damages claims against other state officials and equitable claims against correction officers are both sufficiently analogous to petitioner’s §1983 claims. 7 The dissent’s contrary view is based on its belief that “States have unfettered authority to determine whether their local courts may entertain a federal cause of action.” Post, at 8 (opinion of THOMAS, J.). But this theory of the Supremacy Clause was raised and squarely rejected in Howlett. Respondents in that case “argued that a federal court has no power to compel a state court to entertain a claim over which the state court has no jurisdiction as a matter of state law.” 496 U. S., at 381; see also Brief for National Association of Counties et al. as Amici Curiae in Howlett v. Rose, O. T. 1989, No. 89–5383, pp. 11–13 (“[S]tate courts are under no obligation to disregard even-handed jurisdictional limitations that exclude both state and federal claims”). We declared that this argument had “no merit” and explained that it ignored other provisions of the Constitution, including the Full Faith and Credit Clause and the Privileges and Immunities Clause, which compel States to open their courts to causes of action over which they would normally lack jurisdiction. See 496 U. S., at 381–382; see also Hughes v. Fetter, 341 U. S. 609, 611 (1951) (interpreting the Full Faith and Credit Clause and concluding that a State cannot “escape [its] constitutional obligation to enforce the rights and duties validly created under the laws of other states by the simple device of removing jurisdiction from courts otherwise competent”); Angel v. Bullington, 330 U. S. 183, 188 (1947) (noting that the Constitution may “fetter the freedom of a State to deny access to its courts howsoever much it may regard such withdrawal of jurisdiction ‘the adjective law of the State’, or the exercise of its right to regulate ‘the practice and procedure’ of its courts”). We saw no reason to treat the Supremacy Clause differently. Howlett, 496 U. S., at 382–383. Thus, to the extent the dissent resurrects this argument, we again reject it.

31 12 HAYWOOD v. DROWN

Opinion of the Court “jurisdiction” as a trump that ends the Supremacy Clause inquiry, see Howlett, 496 U. S., at 382–383, and we decline to do so in this case. Because New York’s supreme courts generally have personal jurisdiction over the parties in §1983 suits brought by prisoners against correction officers and because they hear the lion’s share of all other §1983 actions, we find little concerning “power over the person and competence over the subject matter” in Correc- tion Law §24. Id., at 381; see id., at 378 (conducting a similar analysis and concluding that the Florida courts of general jurisdiction were “fully competent to provide the remedies [§1983] requires”).8 Accordingly, the dissent’s fear that “no state jurisdictional rule will be upheld as constitutional” is entirely unfounded. Post, at 29, n. 10. Our holding addresses only the unique scheme adopted by the State of New York—a law designed to shield a particular class of defendants (correction officers) from a particular type of liability (damages) brought by a particular class of plaintiffs (prisoners). Based on the belief that damages suits against correction officers are frivolous and vexatious, see supra, at 3–4, n. 3, Correction Law §24 is effectively an immunity statute cloaked in jurisdictional garb. Finding this

—————— 8 The dissent’s proposed solution would create a blind spot in the Su- premacy Clause. If New York had decided to employ a procedural rule to burden the enforcement of federal law, the dissent would find the scheme unconstitutional. Yet simply because New York has decided to impose an even greater burden on a federal cause of action by selectively withdrawing the jurisdiction of its courts, the dissent detects no constitutional violation. Thus, in the dissent’s conception of the Supremacy Clause, a State could express its disagreement with (and even open hostility to) a federal cause of action, declare a desire to thwart its enforcement, and achieve that goal by removing the disfavored category of claims from its courts’ jurisdiction. If this view were adopted, the lesson of our precedents would be that other States with unconstitutionally burdensome procedural rules did not go far enough “to avoid the obligation to enforce federal law.” Howlett, 469 U. S., at 381.

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Opinion of the Court scheme unconstitutional merely confirms that the Su- premacy Clause cannot be evaded by formalism.9 V The judgment of the New York Court of Appeals is reversed, and the case is remanded to that court for further proceedings not inconsistent with this opinion.

It is so ordered.

—————— 9 A contrary conclusion would permit a State to withhold a forum for the adjudication of any federal cause of action with which it disagreed as long as the policy took the form of a jurisdictional rule. That outcome, in turn, would provide a roadmap for States wishing to circumvent our prior decisions. See id., at 383 (rejecting a similar argument that would have allowed “the State of Wisconsin [to] overrule our decision in Felder . . . by simply amending its notice-of-claim statute to provide that no state court would have jurisdiction of an action in which the plaintiff failed to give the required notice”).

33 Cite as: 556 U. S. ____ (2009) 1

THOMAS, J., dissenting SUPREME COURT OF THE UNITED STATES ______

No. 07–10374 ______KEITH HAYWOOD, PETITIONER v. CURTIS DROWN ET AL.

ON WRIT OF CERTIORARI TO THE COURT OF APPEALS OF NEW YORK [May 26, 2009]

JUSTICE THOMAS, with whom THE CHIEF JUSTICE, JUSTICE SCALIA, and JUSTICE ALITO join as to Part III, dissenting. The Court holds that New York Correction Law Anno tated §24, which divests New York’s state courts of sub ject-matter jurisdiction over suits seeking money damages from correction officers, violates the Supremacy Clause of the Constitution, Art. VI, cl. 2, because it requires the dismissal of federal actions brought in state court under 42 U. S. C. §1983. I disagree. Because neither the Consti tution nor our precedent requires New York to open its courts to §1983 federal actions, I respectfully dissent. I Although the majority decides this case on the basis of the Supremacy Clause, see ante, at 5–13, the proper start ing point is Article III of the Constitution. Article III, §1, provides that “[t]he judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish.” The history of the drafting and ratification of this Article establishes that it leaves untouched the States’ plenary authority to decide whether their local courts will have subject-matter jurisdiction over federal causes of action.

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THOMAS, J., dissenting The text of Article III reflects the Framers’ agreement that the National Government needed a Supreme Court. There was sharp disagreement at the Philadelphia Con vention, however, over the need for lower federal courts. Several of the Framers, most notably James Madison, favored a strong central government that included lower federal tribunals. Under the Virginia Plan, the Constitu tion would have established a “National Judiciary . . . to consist of one or more supreme tribunals, and of inferior tribunals to be chosen by the National Legislature.” 1 Records of the Federal Convention of 1787, p. 21 (M. Far rand ed. 1911) (hereinafter Farrand). A revised version of the proposal, which stated that the National Judiciary would “ ‘consist of One supreme tribunal, and of one or more inferior tribunals,’” was approved on June 4, 1787. Id., at 95. The following day, however, John Rutledge raised an objection to “establishing any national tribunal except a single supreme one.” Id., at 119. He proposed striking the language providing for the creation of lower federal courts because state courts were “most proper” for deciding “all cases in the first instance.” Ibid. According to Rutledge, “the right of appeal to the supreme national tribunal [was] sufficient to secure the national rights [and] uniformity of Judgm[en]ts,” and the lower federal courts were thus an “unnecessary encroachment” on the sovereign prerogative of the States to adjudicate federal claims. Id., at 124. Madison nonetheless defended the Virginia Plan. He countered that “inferior [federal] tribunals . . . dispersed throughout the Republic” were necessary to meet the needs of the newly formed government: “An effective Judiciary establishment commensurate to the legislative authority [is] essential. A Government without a proper Executive [and] Judiciary would be the mere trunk of a body without arms or legs to act or move.” Ibid. But despite Madison’s objections, Rutledge’s motion prevailed.

35 Cite as: 556 U. S. ____ (2009) 3

THOMAS, J., dissenting See id., at 125. Madison and James Wilson soon thereafter proposed alternative language that “‘empowered [Congress] to institute inferior tribunals.’” Ibid. This version moder ated the original Virginia Plan because of the “distinction between establishing such tribunals absolutely, and giving a discretion to the Legislature to establish or not establish [inferior federal courts].” Ibid. Over continued objections that such courts were an unnecessary expense and an affront to the States, the scaled-back version of the Vir ginia Plan passed. Ibid. On June 15, 1787, however, the New Jersey Plan was introduced. Although it did not directly challenge the decision to permit Congress to “institute” inferior federal courts, the plan, among other things, required state courts to adjudicate federal claims. Id., at 125, 243. In particu lar, the plan provided that, except for cases of impeach ment (over which the Supreme Court would have original jurisdiction), “all punishments, fines, forfeitures [and] penalties . . . shall be adjudged by the Common law Judi ciar[ies] of the State in which any offence contrary to the true intent [and] meaning of [federal law] shall have been committed or perpetrated, with liberty of commencing in the first instance all suits [and] prosecutions for that purpose in the superior Common law Judiciary in such State, subject nevertheless, for the correction of all errors, both in law [and] fact in rendering judgment, to an appeal to the Judiciary of the U[nited] States.” Id., at 243, 244. The introduction of the New Jersey Plan reignited the debate over the need for lower federal courts. In light of the plan’s provision for mandatory state-court jurisdiction over federal claims, Pierce Butler “could see no necessity for such tribunals.” 2 id., at 45. Luther Martin added that lower federal courts would “create jealousies [and] oppositions in the State tribunals, with the jurisdiction of which they will interfere.” Id., at 45–46. But Nathaniel

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THOMAS, J., dissenting Ghorum responded that inferior federal tribunals were “essential to render the authority of the Nat[ional] Legis lature effectual.” Id., at 46. Edmund Randolph bluntly argued that “the Courts of the States can not be trusted with the administration of the National laws.” Ibid. George Mason suggested that, at the very least, “many circumstances might arise not now to be foreseen, which might render such a power absolutely necessary.” Ibid. Roger Sherman also “was willing to give the power to the Legislature,” even though he “wished them to make use of the State Tribunals whenever it could be done . . . with safety to the general interest.” Ibid. At the conclusion of this debate, the New Jersey Plan, including its component requiring state-court considera tion of federal claims, was defeated and the Madison- Wilson proposal was delivered to the Committee of Detail, see id., at 133. The Committee amended the proposal’s language to its current form in Article III, which gives Congress the power to “ordain and establish” inferior federal courts. See id., at 168. The delegates to the Con stitutional Convention unanimously adopted this revised version, see id., at 315, and it was ultimately ratified by the States. This so-called Madisonian Compromise bridged the divide “between those who thought that the establishment of lower federal courts should be constitutionally manda tory and those who thought there should be no federal courts at all except for a Supreme Court with, inter alia, appellate jurisdiction to review state court judgments.” R. Fallon, D. Meltzer, & D. Shapiro, Hart and Wechsler’s The Federal Courts and the Federal System 348 (4th ed. 1996). In so doing, the compromise left to the wisdom of Congress the creation of lower federal courts: “So far as the inferior Federal Courts were concerned, it was entirely discretion ary with Congress to what extent it would vest Federal judicial power in them. It could grant to them as much or

37 Cite as: 556 U. S. ____ (2009) 5

THOMAS, J., dissenting as little as it chose of those classes of jurisdiction, enu merated in Article III as belonging to the judicial power of the United States. It could, if it chose, leave to the State Courts all or any of these classes.” Warren, Federal Criminal Laws and the State Courts, 38 Harv. L. Rev. 545, 547 (1925) (footnote omitted). The assumption that state courts would continue to exercise concurrent jurisdiction over federal claims was essential to this compromise. See The Federalist No. 82, pp. 130, 132 (E. Bourne ed. 1947) (A. Hamilton) (“[T]he inference seems to be conclusive, that the State courts would have a concurrent jurisdiction in all cases arising under the laws of the Union, where it was not expressly prohibited”).1 In light of that historical understanding, this Court has held that, absent an Act of Congress provid ing for exclusive jurisdiction in the lower federal courts, the “state courts have inherent authority, and are thus presumptively competent, to adjudicate claims arising under the laws of the United States.” Tafflin v. Levitt, 493 U. S. 455, 458–459 (1990); see also Plaquemines Tropical Fruit Co. v. Henderson, 170 U. S. 511, 517–518 (1898) —————— 1 Alexander Hamilton’s recognition of “concurrent jurisdiction” should not be mistaken for a suggestion that the Constitution requires state courts to hear federal claims. See ante, at 5 (opinion of STEVENS, J.). He merely understood that the States would be “divested of no part of their primitive jurisdiction” and state courts “in every case in which they were not expressly excluded by the future acts of the national legislature . . . [would] of course take cognizance of the causes to which those acts may give birth.” The Federalist No. 82, at 132. Hamilton thus assumed that state courts would continue to entertain federal claims consistent with their “primitive jurisdiction” under state law. Ibid. But he remained skeptical that state courts could be forced to entertain federal causes of action when state law deprived them of jurisdiction over such claims. See Hamilton, The Examination No. 6, (Jan. 2, 1802), in 25 Papers of Alexander Hamilton 484, 487–488 (H. Syrett ed. 1977) (“[I]t is not to be forgotten, that the right to employ the agency of the State Courts for executing the laws of the Union, is liable to question, and has, in fact, been seriously questioned”).

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THOMAS, J., dissenting (“‘[I]n judicial matters, the concurrent jurisdiction of the state tribunals depends altogether upon the pleasure of congress, and may be revoked and extinguished whenever they think proper, in every case in which the subject mat ter can constitutionally be made cognizable in the federal courts; and that, without an express provision to the con trary, the state courts will retain a concurrent jurisdiction in all cases where they had jurisdiction originally over the subject matter” (quoting 1 J. Kent, Commentaries on American Law 374–375 (1826) (hereinafter Kent))). As a result, “if exclusive jurisdiction [in the federal courts] be neither express nor implied, the State courts have concur rent jurisdiction whenever, by their own constitution, they are competent to take it.” Claflin v. Houseman, 93 U. S. 130, 136 (1876). The Constitution’s implicit preservation of state author ity to entertain federal claims, however, did not impose a duty on state courts to do so. As discussed above, there was at least one proposal to expressly require state courts to take original jurisdiction over federal claims (subject to appeal in federal court) that was introduced in an attempt to forestall the creation of lower federal courts. See supra, at 3–4. But in light of the failure of this proposal—which was offered before the adoption of the Madisonian Com promise—the assertions by its supporters that state courts would ordinarily entertain federal causes of action cannot reasonably be viewed as an assurance that the States would never alter the subject-matter jurisdiction of their courts. The Framers’ decision to empower Congress to create federal courts that could either supplement or displace state-court review of federal claims, as well as the exclusion of any affirmative command requiring the States to consider federal claims in the text of Article III, confirm this understanding. See U. S. Term Limits, Inc. v. Thorn- ton, 514 U. S. 779, 848 (1995) (THOMAS, J., dissenting) (“Where the Constitution is silent about the exercise of a

39 Cite as: 556 U. S. ____ (2009) 7

THOMAS, J., dissenting particular power—that is, where the Constitution does not speak either expressly or by necessary implication—the Federal Government lacks that power and the States enjoy it”).2 The earliest decisions addressing this question, written by then-serving and future Supreme Court Justices, con firm that state courts remain “tribunals over which the government of the Union has no adequate control, and which may be closed to any claim asserted under a law of the United States.” Osborn v. Bank of United States, 9 Wheat. 738, 821 (1824); see also Stearns v. United States, 22 F. Cas. 1188, 1192 (No. 13, 341) (DC Vt. 1835) (Thomp son, J.) (Article III does not give Congress authority to “compel a state court to entertain jurisdiction in any case; they are not inferior courts in the sense of the constitu tion; they are not ordained by congress. State courts are left to consult their own duty from their own state author ity and organization”). “The states, in providing their own

—————— 2 See also Collins, Article III Cases, State Court Duties, and the Madisonian Compromise, 1995 Wis. L. Rev. 39, 144 (1995) (hereinafter Collins) (“It is . . . extremely difficult to argue from the debatable assumption that state courts would be under an obligation to take all Article III judicial business in the first instance—as a quid pro quo for the Constitution’s noninclusion of any reference to lower federal courts—to the conclusion that such a duty still existed when the second half of that bargain was decisively rejected (in the Madisonian Com promise, no less)”); Pfander, Rethinking the Supreme Court’s Original Jurisidiction in State-Party Cases, 82 Cal. L. Rev. 555, 596 (1994) (“The framers may well have assumed that the federal system would simply take the state courts as it found them; state courts could exercise a concurrent jurisdiction over any federal claims that fit comfortably within their pre-existing jurisdiction—what Hamilton in The Federalist called their primitive jurisdiction—so long as the federal claims were not, by virtue of congressional decree, subject to the exclusive jurisdic tion of the federal courts. It seems unlikely, however, that the framers would have chosen to compel the state courts to entertain federal claims against their will and in violation of their own jurisdictional limits” (footnotes omitted)).

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THOMAS, J., dissenting judicial tribunals, have a right to limit, control, and re strict their judicial functions, and jurisdiction, according to their own mere pleasure.” Mitchell v. Great Works Milling & Mfg. Co., 17 F. Cas. 496, 499 (No. 9,662) (CCD Me. 1843) (Story, J.). In short, there was “a very clear intimation given by the judges of the Supreme Court, that the state courts were not bound in consequence of any act of congress, to assume and exercise jurisdiction in such cases. It was merely permitted to them to do so as far, as was compatible with their state obligations.” Kent 375; see also id., at 377 (explaining that the Constitution “per mits state courts which are competent for the purpose, and have an inherent jurisdiction adequate to the case, to entertain suits in the given cases”). Under our federal system, therefore, the States have unfettered authority to determine whether their local courts may entertain a federal cause of action. Once a State exercises its sovereign prerogative to deprive its courts of subject-matter jurisdiction over a federal cause of action, it is the end of the matter as far as the Constitu tion is concerned. The present case can be resolved under this principle alone. New York Correction Law Annotated §24, ¶1 (West 1987) (NYCLA) provides that “[n]o civil action shall be brought in any court of the state, except by the attorney general on behalf of the state, against any officer or em ployee of the department, in his personal capacity, for damages arising out of any act done or the failure to per form any act within the scope of the employment and in the discharge of the duties by such officer or employee.” The majority and petitioner agree that this statute erects a jurisdictional bar that prevents the state courts from entertaining petitioner’s claim for damages under §1983. See ante, at 4 (agreeing that “a prisoner seeking damages from a correction officer will have his claim dismissed for want of jurisdiction”); Brief for Petitioner 21 (“Every New

41 Cite as: 556 U. S. ____ (2009) 9

THOMAS, J., dissenting York court must immediately dismiss such suits for lack of jurisdiction, regardless of merit”). Because New York’s decision to withdraw jurisdiction over §1983 damages actions—or indeed, over any claims—does not offend the Constitution, the judgment below should be affirmed. II The Court has evaded Article III’s limitations by finding that the Supremacy Clause constrains the States’ author ity to define the subject-matter jurisdiction of their own courts. See ante, at 5–8. In particular, the Court has held that “the Federal Constitution prohibits state courts of general jurisdiction from refusing” to entertain a federal claim “solely because the suit is brought under a federal law” as a “state may not discriminate against rights aris ing under federal laws.” McKnett v. St. Louis & San Francisco R. Co., 292 U. S. 230, 233–234 (1934). There is no textual or historical support for the Court’s incorpora tion of this antidiscrimination principle into the Suprem acy Clause. A 1 The Supremacy Clause provides that “[t]his Constitu tion, and the Laws of the United States which shall be made in Pursuance thereof . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.” Art. VI, cl. 2. Under this provision, “[t]he laws of the United States are laws in the several States, and just as much binding on the citizens and courts thereof as the State laws are. . . . The two together form one system of jurisprudence, which constitutes the law of the land for the State.” Claflin, 93 U. S., at 136–137; see also Gregory v. Ashcroft, 501 U. S. 452, 460 (1991); Robb v. Connolly, 111 U. S. 624, 637

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THOMAS, J., dissenting (1884). Thus, a valid federal law is substantively superior to a state law; “if a state measure conflicts with a federal requirement, the state provision must give way.” Swift & Co. v. Wickham, 382 U. S. 111, 120 (1965). As a textual matter, however, the Supremacy Clause does not address whether a state court must entertain a federal cause of action; it provides only a rule of decision that the state court must follow if it adjudicates the claim. See R. Ber ger, Congress v. The Supreme Court 245 (1969) (The Supremacy Clause only “‘enacts what the law shall be’. . . . [I]t defines the governing ‘supreme law,’ and if a State court has jurisdiction, it commands that that law shall govern”). The Supremacy Clause’s path to adoption at the Con vention confirms this focus. Its precursor was introduced as part of the New Jersey Plan. See 1 Farrand 245 (“[A]ll Acts of . . . Cong[ress] made by virtue [and] in pursuance of the powers hereby . . . vested in them . . . shall be the supreme law of the respective States so far forth as those Acts . . . shall relate to the said States or their Citizens”); ibid. (“[T]he Judiciary of the several States shall be bound thereby in their decisions, any thing in the respective laws of the Individual States . . . notwithstanding”). But, as explained above, see supra, at 3–4, the New Jersey Plan also included an entirely separate provision that ad dressed state-court jurisdiction, which would have re quired all federal questions to “b[e] determined in the first instance in the courts of the respective states.” 3 Farrand 287. These two provisions of the New Jersey Plan worked in tandem to require state courts to entertain federal claims and to decide the substantive dispute in favor of federal law if a conflict between the two arose. After the adoption of the Madisonian Compromise and the defeat of the New Jersey Plan, the Framers returned to the question of federal supremacy. A proposal was introduced granting Congress the power to “ ‘negative all

43 Cite as: 556 U. S. ____ (2009) 11

THOMAS, J., dissenting laws passed by the several States (contravening in the opinion of [Congress] the articles of Union, or any treaties subsisting under the authority of [Congress]).’” 2 id., at 27. James Madison believed the proposal “essential to the efficacy [and] security of the [federal] Gov[ernmen]t.” Ibid. But others at the Convention, including Roger Sherman, “thought it unnecessary, as the Courts of the States would not consider as valid any law contravening the Authority of the Union, and which the legislature would wish to be negatived.” Ibid. In the end, Madison’s proposal was defeated. Id., at 28. But as a substitute for that rejected proposal, Luther Martin resurrected the Supremacy Clause provision from the New Jersey Plan and it was unanimously approved. See id., at 28–29.3 This historical record makes clear that the Supremacy Clause’s exclusive function is to disable state laws that are substantively inconsistent with federal law—not to re quire state courts to hear federal claims over which the courts lack jurisdiction. This was necessarily the case when the clause was first introduced as part of the New Jersey Plan, as it included a separate provision to confront the jurisdictional question. Had that plan prevailed and been ratified by the States, construing the Supremacy Clause to address state-court jurisdiction would have rendered the separate jurisdictional component of the New Jersey Plan mere surplusage. See Marbury v. Madison, 1 Cranch 137, 174 (1803) (“It cannot be presumed that any

—————— 3 As proposed by Luther Martin, the Clause provided as follows: “ ‘[T]hat the Legislative acts of the [United States] made by virtue [and] in pursuance of the articles of Union, and all treaties made [and] ratified under the authority of the [United States] shall be the supreme law of the respective States, as far as those acts or treaties shall relate to the said States, or their Citizens and inhabitants—[and] that the Judiciaries of the several States shall be bound thereby in their deci sions, any thing in the respective laws of the individual States to the contrary notwithstanding.’ ” 2 Farrand 28–29.

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THOMAS, J., dissenting clause in the constitution is intended to be without ef fect”); see also Kelo v. New London, 545 U. S. 469, 507 (2005) (THOMAS, J., dissenting). The Supremacy Clause’s exclusive focus on substantive state law is also evident from the context in which it was revived. First, the Clause was not adopted until after the New Jersey Plan’s rejection, as part of the entirely sepa rate debate over Madison’s proposal to grant Congress the power to “negative” the laws of the States. By then, the Framers had already adopted Article III, thereby ending the fight over state-court jurisdiction. The question before the Convention thus was not which courts (state or fed eral) were best suited to adjudicate federal claims, but which branch of government (Congress or the courts) would be most effective in vindicating the substantive superiority of federal law. The Supremacy Clause was directly responsive to that question. Second, the timing of the Clause’s adoption suggests that the Framers viewed it as achieving the same end as Madison’s congressional “negative” proposal. Although Madison believed that Congress could most effectively countermand inconsistent state laws,4 the Framers de —————— 4 Madison did not believe that federal courts were up to the task. See Letter from James Madison to Thomas Jefferson (Oct. 24, 1787), reprinted in 3 id., at 131, 134 (“It may be said that the Judicial author ity, under our new system will keep the States within their proper limits, and supply the place of a negative on their laws. The answer is, that it is more convenient to prevent the passage of a law than to declare it void after it is passed; that this will be particularly the case, where the law aggrieves individuals, who may be unable to support an appeal [against] a State to the supreme Judiciary; that a State which would violate the Legislative rights of the Union, would not be very ready to obey a Judicial decree in support of them, and that a recur rence to force, which, in the event of disobedience would be necessary, is an evil which the new Constitution meant to exclude as far as possi ble”). He had even less faith in state courts. See 2 id., at 27–28 (“Con fidence can (not) be put in the State Tribunals as guardians of the National authority and interests”). In light of Madison’s mistrust of

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THOMAS, J., dissenting cided that the Judiciary could adequately perform that function. There is no evidence that the Framers envi sioned the Supremacy Clause as having a substantively broader sweep than the proposal it replaced. And, there can be no question that Madison’s congressional “negative” proposal was entirely unconcerned with the dispute over whether state courts should be required to exercise juris diction over federal claims. Indeed, Madison’s proposal did not require the States to become enmeshed in any federal business at all; it merely provided that state laws could be directly nullified if Congress found them to be inconsistent with the Constitution or laws of the United States. The role of the Supremacy Clause is no different. It does not require state courts to entertain federal causes of action. Rather, it only requires that in reaching the merits of such claims, state courts must decide the legal question in favor of the “law of the Land.” Art. VI, cl. 2. For this reason, Representative Fisher Ames explained during the debate over the First Judiciary Act that “[t]he law of the United States is a rule to [state-court judges], but no authority for them. It controlled their decisions, but could not enlarge their powers.” 1 Annals of Congress 808 (1789) (reprint 2003). And because the Constitution requires from state judges only an oath of “Allegiance and not an Oath of Office,” the federal government “[c]annot compel them to act—or to become our Officers.” Notes of William Patterson from Speech on Judiciary Act (June 23, 1789), in 9 Documentary History of the First Federal Congress 1789–1791, p. 477 (K. Bowling & H. Veit eds. 1988); 1 Annals of Congress 805 (remarks of Rep. Sedg —————— state courts, any suggestion that he drafted Article III to require state courts to entertain federal claims, or that he advocated for the inclusion in the Constitution of a provision guaranteeing the supremacy of federal law as a means of accomplishing that same goal, would be doubtful. Madison appears to have preferred that the state courts hear as little federal business as possible.

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THOMAS, J., dissenting wick, Debate of Aug. 29, 1789) (arguing that inferior fed eral courts should be established because state courts “might refuse or neglect to attend to the national busi ness”); 10 id., at 892 (remarks of Rep. Harper) (explaining that Congress “cannot enforce on the State courts, as a matter of duty, a performance of the acts we confide to them” but arguing that there was “no cause to complain” “until they refuse to exercise” the jurisdiction granted over federal claims).5 The supremacy of federal law, therefore, is not im pugned by a State’s decision to strip its local courts of subject-matter jurisdiction to hear certain federal claims. Subject-matter jurisdiction determines only whether a court has the power to entertain a particular claim—a condition precedent to reaching the merits of a legal dis

—————— 5 The majority contends that the Full Faith and Credit Clause and the Privileges and Immunities Clause support its view of the Suprem acy Clause because each “compel[s] States to open their courts to causes of action over which they would normally lack jurisdiction.” Ante, at 11, n. 7 (citing Howlett v. Rose, 496 U. S. 356, 381–382 (1990)). But the majority has it backwards. The Full Faith and Credit Clause and the Privileges and Immunities Clause include a textual prohibition on discrimination that the Supremacy Clause lacks. See Art. IV, §1 (“Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State”); Art. IV, §2 (“The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States”). The Framers’ decision to address state-to-state discrimination in these two clauses without taking similar steps with respect to federal-state relations governed by the Supremacy Clause aligns with reasons given for abandoning the Articles of Confederation, see The Federalist No. 42, p. 292 (E. Bourne ed. 1947) (J. Madison) (describing the Full Faith and Credit Clause as “an evident and valuable improvement on the clause relating to this subject in the articles of Confederation”), and the principle of dual sovereignty that the Constitution preserves, see Texas v. White, 7 Wall. 700, 725 (1869). Accordingly, contrary to the majority’s supposition, there are in fact strong “reason[s] to treat the Supremacy Clause differently,” ante, at 11, n. 7, from the Full Faith and Credit and Privileges and Immunities Clauses.

47 Cite as: 556 U. S. ____ (2009) 15

THOMAS, J., dissenting pute. See Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 94 (1998) (“Without jurisdiction the court cannot proceed at all in any cause. Jurisdiction is power to de clare the law, and when it ceases to exist, the only func tion remaining to the court is that of announcing the fact and dismissing the cause” (internal quotation marks omitted)). Although the line between subject-matter jurisdiction over a claim and the merits of that claim can at times prove difficult to draw, see Arbaugh v. Y & H Corp., 546 U. S. 500, 513–515 (2006), see also Bell v. Hood, 327 U. S. 678, 682 (1946), the distinction is crucial in the Supremacy Clause context. If the state court does not reach the merits of the dispute for lack of statutory or constitutional jurisdiction, the preeminence of federal law remains undiminished. Accordingly, the superiority of federal law as a substan tive matter does not trigger an obligation on States to keep their courts jurisdictionally neutral with respect to federal and state-law claims. “The federal law in any field within which Congress is empowered to legislate is the supreme law of the land in the sense that it may supplant state legislation in that field, but not in the sense that it may supplant the existing rules of litigation in state courts. Congress has full power to provide its own courts for litigating federal rights. The state courts belong to the States.” Brown v. Gerdes, 321 U. S. 178, 193 (1944) (Frankfurter, J., concurring). 2 The Court was originally faithful to this conception of federal supremacy. In Claflin, the Court concluded that because the federal statute under consideration did not deprive the state court of jurisdiction, the state court was competent to resolve the claim. See 93 U. S., at 136–137 (“[R]ights, whether legal or equitable, acquired under the laws of the United States, may be prosecuted in the

48 16 HAYWOOD v. DROWN

THOMAS, J., dissenting United States courts, or in the State courts, competent to decide rights of the like character and class; subject, how ever, to this qualification, that where a right arises under a law of the United States, Congress may, if it see[s] fit, give to the Federal courts exclusive jurisdiction”). But the Court was careful to also explain that the Constitution did not impose an obligation on the States to accept jurisdic tion over such claims. See id., at 137 (explaining that there “is no reason why the State courts should not be open for the prosecution of rights growing out of the laws of the United States, to which their jurisdiction is compe tent, and not denied”). The Constitution instead left the States with the choice—but not the obligation—to enter tain federal actions. See id., at 139 (“[W]here no direction is given [from Congress] on the subject, it was assumed, in our early judicial history, that the State courts retained their usual jurisdiction concurrently with the Federal Courts invested with jurisdiction in like cases”). Then in Second Employers’ Liability Cases, 223 U. S. 1 (1912), the Court applied the rule set forth in Claflin and correctly rejected a Connecticut court’s refusal to enforce the 1908 Federal Employers’ Liability Act (FELA), 45 U. S. C. §51 et seq. FELA neither provided for exclusive federal jurisdiction nor attempted to require state courts to entertain claims brought under it. See 223 U. S., at 54– 55. Therefore, the statute was enforceable “as of right, in the courts of the States when their jurisdiction, as prescribed by local laws, is adequate to the occasion.” Id., at 55 (emphasis added). Connecticut had not deprived its courts of subject-matter jurisdiction over FELA claims; thus, the state court’s refusal to hear the claim was “not because the ordinary jurisdiction of the Superior Courts, as defined by the constitution and laws of the State, was deemed inadequate or not adapted to the adjudication of such a case.” Ibid. Rather, the state court took the posi tion that “it would be inconvenient and confusing for the

49 Cite as: 556 U. S. ____ (2009) 17

THOMAS, J., dissenting same court, in dealing with cases of the same general class, to apply in some the standards of right established by the congressional act and in others the different stan dards recognized by the laws of the State.” Id., at 55–56. The Court’s reversal of such a decision is compatible with the original understanding of Article III and the Supremacy Clause. Because there was no question that the state court had subject-matter jurisdiction under state law to adjudicate the federal claim, id., at 57, the Court correctly observed that the state court’s refusal to decide the case amounted to a policy dispute with federal law: “When Congress, in the exertion of the power confided to it by the Constitution, adopted that [federal] act, it spoke for all the people and all the States, and thereby established a policy for all. That policy is as much the policy of Con necticut as if the act had emanated from its own legisla ture, and should be respected accordingly in the courts of the State.” Ibid. It was for this specific reason, then, that the Court rejected Connecticut’s refusal to adjudicate the federal claim. As the Court correctly noted, the “existence of the jurisdiction creates an implication of duty to exer cise it, and that its exercise may be onerous does not militate against that implication.” Id., at 58. But nothing in Second Employers’ suggested that the Supremacy Clause could pre-empt a state law that de prived the local court of subject-matter jurisdiction over the federal claim. Instead, the Second Employers’ Court took exactly the opposite position on this question: “[W]e deem it well to observe that there is not here involved any attempt by Congress to enlarge or regulate the jurisdiction of state courts . . . but only a question of the duty of such a court, when its ordinary jurisdiction as prescribed by local laws is appropriate to the occasion.” Id., at 56–57. The Court again confronted this issue in Douglas v. New York, N. H. & H. R. Co., 279 U. S. 377 (1929). There, the Court considered whether a New York court was required

50 18 HAYWOOD v. DROWN

THOMAS, J., dissenting to hear a claim brought under FELA. Unlike the Con necticut court in Second Employers’, however, the New York court did not have jurisdiction under state law to entertain the federal cause of action. 279 U. S., at 386– 387. As a result, this Court upheld the state-court ruling that dismissed the claim. The Court explained that FELA did “not purport to require State Courts to entertain suits arising under it, but only to empower them to do so, so far as the authority of the United States is concerned. It may very well be that if the Supreme Court of New York [was] given no discretion, being otherwise competent, it would be subject to a duty. But there is nothing in the Act of Congress that purports to force a duty upon such Courts as against an otherwise valid excuse.” Id., at 387–388. In other words, because the New York court lacked subject matter jurisdiction under state law, it was not “otherwise competent” to adjudicate the federal claim. In sum, Claflin, Second Employers’, and Douglas to gether establish that a state court’s inability to entertain a federal claim because of a lack of state-law jurisdiction is an “otherwise valid excuse” that in no way denies the superiority of federal substantive law. It simply disables the state court from adjudicating a claim brought under that federal law. 3 It was not until five years after Douglas that the Court used the Supremacy Clause to strike down a state juris dictional statute for its failure to permit state-court adju dication of federal claims. See McKnett, 292 U. S. 230. The Court started by correctly noting that it “was settled” in Second Employers’ “that a state court whose ordinary jurisdiction as prescribed by local laws is appropriate to the occasion, may not refuse to entertain suits under [FELA].” 292 U. S., at 233. Yet, even though the Alabama court lacked such jurisdiction over the relevant federal

51 Cite as: 556 U. S. ____ (2009) 19

THOMAS, J., dissenting claim pursuant to a state statute, the McKnett Court held that the state court had improperly dismissed the federal claim. Id., at 231–234. According to the Court, “[w]hile Congress has not at tempted to compel states to provide courts for the en forcement of [FELA], the Federal Constitution prohibits state courts of general jurisdiction from refusing to do so solely because the suit is brought under a federal law. The denial of jurisdiction by the Alabama court is based solely upon the source of law sought to be enforced. The plaintiff is cast out because he is suing to enforce a federal act. A state may not discriminate against rights arising under federal laws.” Id., at 233–234. For all the reasons identified above, McKnett cannot be reconciled with the decisions of this Court that preceded it. Unlike the Connecticut court in Second Employers’, the Alabama Supreme Court did not indulge its own bias against adjudication of federal claims in state court by refusing to hear a federal claim over which it had subject matter jurisdiction. Rather, like the New York court decision affirmed in Douglas, the Alabama court’s dis missal merely respected a jurisdictional barrier to adjudi cation of the federal claim imposed by state law. The fact that Alabama courts were competent to hear similar state law claims should have been immaterial. Alabama had exercised its sovereign right to establish the subject matter jurisdiction of its courts. Under Claflin and its progeny, that legislative judgment should have been up held. Despite McKnett’s infidelity to the Constitution and more than a century of Supreme Court jurisprudence, the Court’s later decisions have repeated McKnett’s declara tion that state jurisdictional statutes must be policed for antifederal discrimination. See, e.g., Testa v. Katt, 330 U. S. 386, 394 (1947) (“It is conceded that this same type of claim arising under Rhode Island law would be enforced

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THOMAS, J., dissenting by that State’s courts. . . . Under these circumstances the State courts are not free to refuse enforcement of petition ers’ claim”); Howlett v. Rose, 496 U. S. 356, 375 (1990) (“[W]hether the question is framed in pre-emption terms, as petitioner would have it, or in the obligation to assume jurisdiction over a ‘federal’ cause of action, . . . the Florida court’s refusal to entertain one discrete category of §1983 claims, when the court entertains similar state-law actions against state defendants, violates the Supremacy Clause”). The outcome in these cases, however, can be reconciled with first principles notwithstanding the Court’s stated reliance on McKnett’s flawed interpretation of the Su premacy Clause.6 In Testa, the Court struck down the Rhode Island Su preme Court’s refusal to entertain a claim under the fed eral Emergency Price Control Act. There was no dispute that “the Rhode Island courts [had] jurisdiction adequate and appropriate under established local law to adjudicate this action.” 330 U. S., at 394, and n. 13. The Rhode Island court nevertheless declined to exercise that juris —————— 6 Other decisions also have articulated this antidiscrimination princi ple. See, e.g., Johnson v. Fankell, 520 U. S. 911 (1997); Missouri ex rel. Southern R. Co. v. Mayfield, 340 U. S. 1 (1950); Herb v. Pitcairn, 324 U. S. 117 (1945); Miles v. Illinois Central R. Co., 315 U. S. 698 (1942). The outcomes in these cases nonetheless preserved state-court jurisdic tional autonomy. In Johnson and Herb, the Court sustained the state court dismissals of the federal claims as nondiscriminatory. See Johnson, supra, at 918–920; Herb, supra, at 123. In Mayfield, the Court never decided whether the state court had jurisdiction over the relevant federal claim; rather, it remanded the case to the Missouri Supreme Court based on the state court’s possibly erroneous interpre tation of federal law at issue in that case. See 340 U. S., at 4–5. Finally, in Miles, the Court struck down a Tennessee decision that enjoined a citizen of that State from pursuing a FELA action in Mis souri state court “on grounds of inequity.” 315 U. S., at 702. The Court correctly held that, so long as jurisdiction existed under Missouri law, the Tennessee court could not rely on its own notions of “inequity” to thwart the vindication of a federal right in state court. Ibid.

53 Cite as: 556 U. S. ____ (2009) 21

THOMAS, J., dissenting diction under its decision in Robinson v. Norato, 71 R. I. 256, 258, 43 A. 2d 467, 468 (1945), which had relied on a “universally acknowledged” doctrine “of private interna tional law” as a basis for refusing to adjudicate federal “penal” claims. Because the Rhode Island Supreme Court had invoked this common-law doctrine despite the exis tence of state-law statutory jurisdiction over the federal claims, this Court correctly ruled that the state court’s “policy against enforcement . . . of statutes of other states and the United States which it deems penal, [could not] be accepted as a ‘valid excuse.’” 330 U. S., at 392–393. Testa thus represents a routine application of the rule of law set forth in Second Employers’: As long as jurisdiction over a federal claim exists as a matter of state law, state court judges cannot sua sponte refuse to enforce federal law because they disagree with Congress’ decision to allow for adjudication of certain federal claims in state court. See 330 U. S., at 393 (“[A] state court cannot ‘refuse to enforce the right arising from the law of the United States because of conceptions of impolicy or want of wisdom on the part of Congress in having called into play its lawful powers’” (quoting Minneapolis & St. Louis R. Co. v. Bom- bolis, 241 U. S. 211, 222 (1916)).7

—————— 7 Despite suggestions to the contrary, see ante, at 5; Howlett v. Rose, 496 U. S. 356 (1990), the Court’s decision in Bombolis, 241 U. S. 211, which held that the Seventh Amendment does not require a unanimous jury verdict when federal civil claims are adjudicated in state court, provides no support for the antidiscrimination principle. As quoted above, the Court (in dicta) accurately summarized the holding of Second Employers’. See 241 U. S., at 222. The Court also reiterated that before a state court owes a duty to enforce federal law, it must have subject-matter jurisdiction over the claim under state law. See id., at 221 (“[L]awful rights of the citizen, whether arising from a legitimate exercise of state or national power . . . are concurrently subject to be enforced in the courts of the State or nation when such rights come within the general scope of the jurisdiction conferred upon such courts by the authority, State or nation, creating them”); id., at

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THOMAS, J., dissenting In Howlett, the Court likewise correctly struck down a Florida Supreme Court decision affirming the dismissal of a §1983 suit on state-law sovereign immunity grounds. See 496 U. S., at 361, 375–381. The Florida court had interpreted the State’s statutory “waiver of sovereign immunity” not to extend to federal claims brought in state court. Id., at 361 (citing Fla. Stat. §768.28 (1989)). Ac cording to the state court, absent a statutory waiver, Florida’s pre-existing common-law sovereign immunity rule provided a “blanket immunity on [state] governmen tal entities from federal civil rights actions under §1983” brought in Florida courts. 496 U. S., at 364. Based on this rule, the Florida Supreme Court affirmed the dis missal with prejudice of the §1983 suit against the state officials. See id., at 359; see also Howlett v. Rose, 537 So. 2d 706, 708 (Fla. App. 1989) (concluding that Florida’s “common law immunity” rule barred “the use of its courts for suits against the state in those state courts”). No antidiscrimination rule was required to strike down the Florida Supreme Court’s decision. Even though sev eral Florida courts had concluded that the defense of sovereign immunity was jurisdictional, see 496 U. S., at 361, n. 5, “[t]he force of the Supremacy Clause is not so weak that it can be evaded by mere mention of the word ‘jurisdiction,’” id., at 382–383. That is, state courts cannot evade their obligation to enforce federal law by simply characterizing a statute or common-law rule as “jurisdic tional”; the state law must in fact operate in a jurisdic tional manner. No matter where the line between subject matter jurisdiction and the merits is drawn, see supra, at —————— 222 (explaining that state courts are “charged with the duty to safe guard and enforce the right of every citizen without reference to the particular exercise of governmental power from which the right may have arisen, if only the authority to enforce such right comes generally within the scope of the jurisdiction conferred by the government creat ing them”).

55 Cite as: 556 U. S. ____ (2009) 23

THOMAS, J., dissenting 14, Florida’s “common law immunity” rule crossed it. First, because the Florida Supreme Court had dismissed the §1983 lawsuit with prejudice, its decision was on the merits. Cf. Semtek Int’l Inc. v. Lockheed Martin Corp., 531 U. S. 497, 505 (2001) (“‘With prejudice’ is an acceptable form of shorthand for ‘an adjudication upon the merits’” (quoting 9 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §2373, p. 396, n. 4 (1981))). Sec ond, Florida’s sovereign immunity rule violated the Su premacy Clause by operating as a state-law defense to a federal law. See Martinez v. California, 444 U. S. 277, 284, n. 8 (1980) (“‘[P]ermitt[ing] a state immunity defense to have controlling effect’” over a federal claim violates the Supremacy Clause). Resolving a federal claim with pre clusive effect based on a state-law defense is far different from simply closing the door of the state courthouse to that federal claim. The first changes federal law by deny ing relief on the merits; the second merely dictates the forum in which the federal claim will be heard. In the end, of course, “the ultimate touchstone of consti tutionality is the Constitution itself and not what we have said about it.” Graves v. New York ex rel. O’Keefe, 306 U. S. 466, 491–492 (1939) (Frankfurter, J., concurring). And contrary to McKnett, the Constitution does not re quire state courts to give equal billing to state and federal claims. To read the Supremacy Clause to include an anti discrimination principle undermines the compromise that shaped Article III and contradicts the original understand ing of Constitution. There is no justification for preserv ing such a principle. But even if the Court chooses to adhere to the antidiscrimination rule as part of the Su premacy Clause inquiry, the rule’s infidelity to the text, structure, and history of the Constitution counsels against extending the principle any further than our precedent requires. Cf. United States v. Lopez, 514 U. S. 549, 584– 585 (1995) (THOMAS, J., concurring); see infra, at 27–33.

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THOMAS, J., dissenting B Although the Supremacy Clause does not, on its own force, pre-empt state jurisdictional statutes of any kind, it may still pre-empt state law once Congress has acted. Federal law must prevail when Congress validly enacts a statute that expressly supersedes state law, see Sprietsma v. Mercury Marine, 537 U. S. 51, 62–63 (2002); United States v. Locke, 529 U. S. 89, 109 (2000), or when the state law conflicts with a federal statute, see American Tele- phone & Telegraph Co. v. Central Office Telephone, Inc., 524 U. S. 214 (1998); Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132 (1963). NYCLA §24 does not fall prey to either category of pre-emption.8 First, federal law does not expressly require New York courts to accept jurisdiction over §1983 suits. Under §1983, any state official who denies “any citizen of the United States or other person within the jurisdiction thereof . . . any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.” The statute addresses who may sue and be sued for violations of federal law. But it in

—————— 8 Because 42 U. S. C. §1983 does not pre-empt NYCLA §24, there is no need to reach the more difficult question of whether Congress has the delegated authority under the Constitution to require state courts to entertain a federal cause of action. Compare Printz v. United States, 521 U. S. 898, 907 (1997) (suggesting that Congress’ authority in this regard was “perhaps implicit in one of the provisions of the Constitu tion [Article III, §1], and was explicit in another [Article VI, cl. 2]”); Prakash, Field Office Federalism, 79 Va. L. Rev. 1957, 2032 (1993) (“As a matter of original understanding, the Founding Generation under stood that state courts could be commandeered to enforce federal law”), with Prigg v. Pennsylvania, 16 Pet. 539, 615 (1842) (concluding that state courts could not “be compelled to enforce” the 1793 Fugitive Slave Act); Collins 45 (concluding as an original matter that “states did not have to accept unwanted federal civil and criminal judicial business, and that Congress could not compel them to do so”).

57 Cite as: 556 U. S. ____ (2009) 25

THOMAS, J., dissenting cludes no substantive command requiring New York to provide a state judicial forum to a §1983 plaintiff. See Felder v. Casey, 487 U. S. 131, 158 (1988) (O’Connor, J., dissenting) (“Section 1983 . . . creates no substantive law. . . . Its purpose, as we have repeatedly said, ‘was to interpose the federal courts between the States and the people, as guardians of the people’s federal rights’” (quot ing Patsy v. Board of Regents of Fla., 457 U. S. 496, 503 (1982))). Like FELA, therefore, §1983 does not “enlarge or regulate the jurisdiction of state courts.” Second Employ- ers’, 223 U. S., at 56.9 Second, NYCLA §24 does not conflict with §1983. See Wyeth v. Levine, 555 U. S. ___, ___ (2009) (slip op., at 9) (THOMAS, J., concurring in judgment) (explaining that the Court has alternatively described the standard for conflict pre-emption as “physical impossibility” and “direct con flict” (citations omitted)). As explained above, Congress did not grant §1983 plaintiffs a “right” to bring their claims in state court or “guarantee” that the state forum would remain open to their suits. See id., at ___ (slip op., at 12). Moreover, Congress has created inferior federal courts that have the power to adjudicate all §1983 actions. And this Court has expressly determined that §1983 plaintiffs do not have to exhaust state-court remedies before proceeding in federal court. See Patsy, supra, at 516. —————— 9 The history surrounding §1983’s enactment also supports this con clusion. See Felder v. Casey, 487 U. S. 131, 158 (1988),(O’Connor, J., dissenting) (“[T]he original version of §1983 provided that the federal courts would have exclusive jurisdiction of actions arising under it. This fact is conclusive proof that the Congress which enacted §1983 over 100 years ago, could not possibly have meant thereby to alter the operation of state courts in any way . . . . Abandoning the rule of exclusive federal jurisdiction over §1983 actions, and thus restoring the tradition of concurrent jurisdiction . . . did not leave behind a pre emptive grin without a statutory cat” (internal quotation marks and citations omitted)).

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THOMAS, J., dissenting Therefore, even if every state court closed its doors to §1983 plaintiffs, the plaintiffs could proceed with their claims in the federal forum. See, e.g., Felder, supra, at 160 (O’Connor, J., dissenting) (“Every plaintiff has the option of proceeding in federal court, and the Wisconsin statute has not the slightest effect on that right”). And because the dismissal of §1983 claims from state court pursuant to NYCLA §24 is for lack of subject-matter jurisdiction, see supra, at 8–9, it has no preclusive effect on claims refiled in federal court, see Allen v. McCurry, 449 U. S. 90, 94, 105 (1980) (requiring “a final judgment on the merits” before a §1983 would be barred in federal court under the doctrine of claim preclusion), and thus does not alter the substance of the federal claim. Any contention that NYCLA §24 conflicts with §1983 therefore would be misplaced. The Court nevertheless has relied on an expansive brand of “conflict” pre-emption to strike down state-court procedural rules that are perceived to “burde[n] the exer cise of the federal right” in state court. Felder, 487 U. S., at 141. In such cases, the Court has asked if the state-law rule, when applied “to §1983 actions brought in state courts [is] consistent with the goals of the federal civil rights laws, or does the enforcement of such a requirement instead ‘stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress’?” See id., at 138 (quoting Hines v. Davidowitz, 312 U. S. 52, 67 (1941)). There has been no suggestion in this case, however, that NYCLA §24 is a procedural rule that must be satisfied in order to bring the §1983 action in state court. See supra, at 8–9; infra, at 27; see also ante, at 13, n. 9. As explained above, petitioner’s claim was not proce durally deficient; the state court simply lacked the power to adjudicate the claim. See supra, at 8–9. Thus, the Felder line of cases is inapplicable to this case. But even if there were such a claim made in this case,

59 Cite as: 556 U. S. ____ (2009) 27

THOMAS, J., dissenting the Supremacy Clause supplies this Court with no author ity to pre-empt a state procedural law merely because it “burdens the exercise” of a federal right in state court. “Under the Supremacy Clause, state law is pre-empted only by federal law ‘made in Pursuance’ of the Constitu tion, Art. VI, cl. 2—not by extratextual considerations of the purposes underlying congressional inaction,” such as a desire to ensure that federal law is not burdened by state law procedural obligations. Wyeth, 555 U. S., at ___ (slip op., at 23) (THOMAS, J., concurring in judgment). A sweep ing approach to pre-emption based on perceived congres sional purposes “leads to the illegitimate—and thus, un constitutional—invalidation of state laws.” Id., at __ (slip op., at 24). I cannot agree with the approach employed in Felder “that pre-empts state laws merely because they ‘stand as an obstacle to the accomplishment and execution of the full purposes and objectives’ of federal law . . . as perceived by this Court.” 555 U. S., at ___ (slip op., at 24). III Even accepting the entirety of the Court’s precedent in this area of the law, however, I still could not join the majority’s resolution of this case as it mischaracterizes and broadens this Court’s decisions. The majority con cedes not only that NYCLA §24 is jurisdictional, but that the statute is neutral with respect to federal and state claims. Nevertheless, it concludes that the statute vio lates the Supremacy Clause because it finds that “equality of treatment does not ensure that a state law will be deemed a neutral rule of judicial administration and therefore a valid excuse for refusing to entertain a federal cause of action.” Ante, at 8–9. This conclusion is incorrect in light of Court precedent for several reasons. A The majority mischaracterizes this Court’s precedent

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THOMAS, J., dissenting when it asserts that jurisdictional neutrality is “the be ginning, not the end, of the Supremacy Clause analysis.” Ante, at 9–10. As explained above, see supra, at 10–23, “subject to only one limitation, each State of the Union may establish its own judicature, distribute judicial power among the courts of its choice, [and] define the conditions for the exercise of their jurisdiction and the modes of their proceeding, to the same extent as Congress is empowered to establish a system of inferior federal courts within the limits of federal judicial power.” Brown, 321 U. S., at 188 (Frankfurter, J., concurring). That “one limitation” is the neutrality principle that the Court has found in the Su premacy Clause. See id., at 189 (“The only limitation upon the freedom of a State to define the jurisdiction of its own courts is that . . . [it] must treat litigants under the Federal act as other litigants are treated” (internal quota tion marks omitted)); Herb v. Pitcairn, 324 U. S. 117, 123 (1945) (“The freedom of the state courts so to decide is, of course, subject to the qualification that the cause of action must not be discriminated against because it is a federal one”). Here, it is conceded that New York has deprived its courts of subject-matter jurisdiction over a particular class of claims on terms that treat federal and state actions equally. See ante, at 1–2, 8–10. That is all this Court’s precedent requires. See supra, at 9, 18–19. The majority’s assertion that jurisdictional neutrality is not the touchstone because “[a] jurisdictional rule cannot be used as a device to undermine federal law, no matter how even-handed it may appear,” ante, at 9, reflects a misunderstanding of the law. A jurisdictional statute simply deprives the relevant court of the power to decide the case altogether. See 10A C. Wright, A. Miller, & M. Kane, Federal Practice and Procedure §2713, p. 239 (3d ed. 1998) (“If the court has no jurisdiction, it has no power to enter a judgment on the merits and must dismiss the action”); Restatement (Second) of Judgments §11, p. 108

61 Cite as: 556 U. S. ____ (2009) 29

THOMAS, J., dissenting (1980) (defining subject-matter jurisdiction as a court’s “authority to adjudicate the type of controversy involved in the action”). Such a statute necessarily operates without prejudice to the adjudication of the matter in a competent forum. See supra, at 14–15. Jurisdictional statutes there fore by definition are incapable of undermining federal law. NYCLA §24 no more undermines §1983 than the amount-in-controversy requirement for federal diversity jurisdiction undermines state law. See 28 U. S. C. §1332. The relevant law (state or federal) remains fully operative in both circumstances. The sole consequence of the juris dictional barrier is that the law cannot be enforced in one particular judicial forum.10 As a result, the majority’s focus on New York’s reasons for enacting this jurisdictional statute is entirely mis

—————— 10 If by asserting that state law is not permitted to “undermine fed eral law,” ante, at 9, the majority instead is arguing that NYCLA §24 is a procedural rule that too heavily “burdens the exercise of the federal right” in state court, see Felder, 487 U. S., at 141, its argument is equally misplaced. First, the majority concedes that NYCLA §24 is not a state procedural rule. See ante, at 12, n. 8. Second, applying the reasoning of Felder to a jurisdictional statute like NYCLA §24 would overrule all of the Court’s decisions upholding state laws that decline jurisdiction over federal claims, and would virtually ensure that in future cases, no state jurisdictional rule will be upheld as constitu tional. By simply rendering a federal claim noncognizable in state court, a statute depriving a state court of subject-matter jurisdiction (even under the terms and conditions permitted by this Court’s prece dent) will always violate Felder’s command that a state rule must not undermine the “remedial objectives” of a federal claim, see 487 U. S., at 138. The jurisdictional statute also will unavoidably implicate Felder’s concern that a state rule should not inevitably produce a different outcome depending on whether a claim is asserted in state or federal court, see ibid. A state jurisdictional statute necessarily will result in a different outcome in state court, where it will cause dismissal of the federal claim, than in federal court, where that claim will be heard. It is for this reason that the Court has been careful to keep its examina tion of state jurisdictional statutes and state procedural rules in differ ent categories.

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THOMAS, J., dissenting placed. See ante, at 7–8. The States “remain independent and autonomous within their proper sphere of authority.” Printz v. United States, 521 U. S. 898, 928 (1997). New York has the organic authority, therefore, to tailor the jurisdiction of state courts to meet its policy goals. See Fay v. Noia, 372 U. S. 391, 466–467 (1963) (Harlan, J., dissenting) (“The right of the State to regulate its own procedures governing the conduct of litigants in its courts, and its interest in supervision of those procedures, stand on the same constitutional plane as its right and interest in framing ‘substantive’ laws governing other aspects of the conduct of those within its borders”). It may be true that it was “Congress’ judgment that all persons who violate federal rights while acting under color of state law shall be held liable for damages.” Ante, at 7– 8. But Congress has not enforced that judgment by statu torily requiring the States to open their courts to all §1983 claims. See n. 8, supra. And this Court has “never held that state courts must entertain §1983 suits.” National Private Truck Council, Inc. v. Oklahoma Tax Comm’n, 515 U. S. 582, 587, n. 4 (1995). Our decisions have held only that the States cannot use jurisdictional statutes to dis criminate against federal claims. Because NYCLA §24 does not violate this command, any policy-driven reasons for depriving jurisdiction over a “federal claim in addition to an identical state claim,” ante, at 8, are irrelevant for purposes of the Supremacy Clause. This Court’s decision in Howlett is not to the contrary. Despite the majority’s assertion, Howlett does not stand for the proposition “that a State cannot employ a jurisdic tional rule ‘to dissociate itself from federal law because of disagreement with its content or a refusal to recognize the superior authority of its source.’” Ante, at 6 (quoting Howlett, 496 U. S., at 371). As an initial matter, the ma jority lifts the above quotation—which was merely part of a passage explaining that a “State may not discriminate

63 Cite as: 556 U. S. ____ (2009) 31

THOMAS, J., dissenting against federal causes of action,” id., at 372—entirely out of context. Howlett’s reiteration of McKnett’s neutrality command, which is all the selected quotation reflects, see 496 U. S., at 372–373, offers no refuge to the majority in light of its concession that NYCLA §24 affords “equal treatment” to “federal and state claims.” Ante, at 8. Howlett instead stands for the unremarkable proposi tion that States may not add immunity defenses to §1983. See ante, at 7, n. 5 (explaining that Howlett held that “a Florida school board could [not] assert a state-law immu nity defense in a §1983 action brought in state court” because “the ‘elements of, and the defenses to, a federal cause of action are defined by federal law’” (quoting 496 U. S., at 375)). A state law is not jurisdictional just be cause the legislature has “denominated” it as such. Id., at 381. As the majority observes, the State’s “invocation of ‘jurisdiction’” cannot “trump” the “Supremacy Clause inquiry,” ante, at 11–12. The majority, therefore, is cor rect that a state court’s decision “to nullify a federal right or cause of action [that it] believe[s] is inconsistent with [its] local policies” cannot evade the Supremacy Clause by hiding behind a jurisdictional label, ante, at 6, because “the Supremacy Clause cannot be evaded by formalism,” ante, at 13. Rather, a state statute must in fact operate jurisdictionally: It must deprive the court of the power to hear the claim and it must not preclude relitigation of the action in a proper forum. See supra, at 28–29. Howlett proved the point by striking down a state-law immunity rule that bore the jurisdictional label but operated as a defense on the merits and provided for the dismissal of the state court action with prejudice. See 496 U. S., at 359; supra, at 22–23. But the majority’s axiomatic refrain about jurisdictional labels is entirely unresponsive to the issue before the Court—i.e., whether NYCLA §24 operates jurisdictionally. Unlike the Florida immunity rule in Howlett, NYCLA §24

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THOMAS, J., dissenting is not a defense to a federal claim and the dismissal it authorizes is without prejudice. See 9 N. Y. 3d 481, 490, 881 N. E. 2d 180, 186 (2007) (explaining that “the Legisla ture did nothing more than exercise its prerogative to establish the subject matter jurisdiction of state courts” and that “litigants like plaintiff can use the federal courts to pursue section 1983 claims” against correction officers). For this reason, NYCLA §24 is not merely “denominated” as jurisdictional—it actually is jurisdictional. The New York courts, therefore, have not declared a “category” of §1983 claims to be “‘frivolous’” or to have “‘no merit’” in order to “‘relieve congestion’” in the state-court system. See ante, at 7–8 (quoting Howlett, supra, at 380). These courts have simply recognized that they lack the power to adjudicate this category of claims regardless of their merit. The majority’s failure to grapple with the clear differ ences between the immunity rule at issue in Howlett and NYCLA §24 proves that its decision is untethered from precedent. And more broadly, the majority’s failure to account for the important role of claim preclusion in evaluating whether a statute is jurisdictional undermines the important line drawn by this Court’s decisions be tween subject-matter jurisdiction and the merits. See Marrese v. American Academy of Orthopaedic Surgeons, 470 U. S. 373, 382 (1985) (“With respect to matters that were not decided in the state proceedings . . . claim preclu sion generally does not apply where ‘the plaintiff was unable to . . . seek a remedy because of the limitations on the subject matter jurisdiction of the courts’” (quoting Restatement (Second) of Judgments §26(1)(c)(1982))); see also Arbaugh, 546 U. S., at 514–516; Steel Co., 523 U. S., at 94. The majority’s principal response is that NYCLA §24 “is effectively an immunity statute cloaked in jurisdictional garb.” Ante, at 12. But this curious rejoinder resurrects an

65 Cite as: 556 U. S. ____ (2009) 33

THOMAS, J., dissenting argument that the majority abandons earlier in its own opinion. See ante, at 7, n. 5. The majority needs to choose. Either it should definitively commit to making the impos sible case that a statute denying state courts the power to entertain a claim without prejudice to its reassertion in federal court is an immunity defense in disguise, or it should clearly explain why some other aspect of Howlett controls the outcome of this case. This Court has required Congress to speak clearly when it intends to “upset the usual constitutional balance of federal and state powers.” Gregory, 501 U. S., at 460. It should require no less of itself. At bottom, the majority’s warning that upholding New York’s law “would permit a State to withhold a forum for the adjudication of any federal cause of action with which it disagreed as long as the policy took the form of a juris dictional rule” is without any basis in fact. Ante, at 13, n. 9. This Court’s jurisdictional neutrality command al ready guards against antifederal discrimination. A deci sion upholding NYCLA §24, which fully adheres to that rule, would not “circumvent our prior decisions.” Ibid. It simply would adhere to them.11 —————— 11 The majority also suggests that allowing jurisdictional neutrality to be the test “would create a blind spot in the Supremacy Clause” be cause a procedural rule that too heavily burdens a federal cause of action would be struck down as unconstitutional while “a State could express its disagreement with (and even open hostility to) a federal cause of action, declare a desire to thwart its enforcement, and achieve that goal by removing the disfavored category of claims from its courts’ jurisdiction.” Ante, at 12, n. 8. This is incorrect for at least two rea sons. First, as explained above, a State may permissibly register its hostility to federal law only by subjecting analogous state-law claims to equally disfavored treatment. See supra, at 19–20. Hostility to federal law is thus irrelevant under this Court’s precedent—the Supremacy Clause is concerned only with whether there is antifederal discrimina tion. Second, the majority obscures important differences between procedural rules, like the notice-of-claim rule at issue in Felder, and neutral jurisdictional statutes like NYCLA §24. Unlike a neutral

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THOMAS, J., dissenting B The majority also incorrectly concludes that NYCLA §24 is not a neutral jurisdictional statute because it applies to a “narrow class of defendants,” ante, at 7, and because New York courts “hear the lion’s share of all other §1983 actions,” ante, at 12. A statute’s jurisdictional status does not turn on its narrowness or on its breadth. See Ar- baugh, supra, at 515, n. 11. Rather, as explained above, a statute’s jurisdictional status turns on the grounds on which the state-law dismissal rests and the consequences that follow from such rulings. No matter how narrow the majority perceives NYCLA §24 to be, it easily qualifies as jurisdictional under this established standard. Accord ingly, it is immaterial that New York has chosen to allow its courts of general jurisdiction to entertain §1983 actions against certain categories of defendants but not others (such as correction officers), or to entertain §1983 actions against particular defendants for only certain types of relief. Building on its assumption that a statute’s jurisdictional status turns on its scope, the majority further holds that “having made the decision to create courts of general jurisdiction that regularly sit to entertain analogous suits,

—————— jurisdictional statute, which merely prevents a state court from enter taining a federal claim, failure to comply with a state procedural rule will result in dismissal of a federal claim with prejudice. See Felder, 487 U. S., at 151 (explaining that the State’s “outcome-determinative law must give way when a party asserts a federal right in state court”). Contrary to the majority’s assertion, therefore, it is not that state courts with “unconstitutionally burdensome procedural rules did not go far enough”—it is instead that they went too far by placing an insur mountable procedural hurdle in the plaintiff’s path that led to a judg ment against him on the merits. Ante, at 12, n. 8. As a result, the Court’s assessment of whether a state procedural rule too heavily burdens a federal right does not have any bearing on the Court’s continued adherence to the neutrality principle as the sole determinant in evaluating state-law jurisdictional statutes.

67 Cite as: 556 U. S. ____ (2009) 35

THOMAS, J., dissenting New York is not at liberty to shut the courthouse door to federal claims that it considers at odds with its local pol icy.” Ante, at 11. But whether two claims are “analogous” is relevant only for purposes of determining whether a state jurisdictional statute discriminates against federal law. This inquiry necessarily requires an evaluation of the similarities between federal and state law claims to assess whether state-court jurisdiction is being denied to a federal claim simply because of its federal character. In contrast, the majority limits its analysis to state-law claims, finding discrimination based solely on the fact that state law provides jurisdiction in state court for claims against state officials who serve in “analogous” roles to the correction officers. See ante, at 10. The majority’s inquiry is not probative of antifederal discrimination, which is the concern that first led this Court in McKnett to find a Su premacy Clause limitation on state-court jurisdictional autonomy. Consequently, there is no support for the majority’s assertion that New York’s decision to treat police officers differently from correction officers for pur poses of civil litigation somehow violates the Constitution. See ante, at 10. Worse still, the majority concludes that §1983 claims for damages against “other state officials” are “sufficiently analogous to petitioner’s §1983 claims” to trigger a Su premacy Clause violation. Ante, at 10–11, and n. 6. Un der this reasoning, if a State grants its trial courts juris diction to hear §1983 claims for damages against any state official, the State’s decision to deny those courts the power to entertain some narrower species of §1983 claims—even on jurisdictionally neutral terms—a fortiori violates the Supremacy Clause. The majority’s assurance that its holding is applicable only to New York’s “unique scheme” thus rings hollow. Ante, at 12. The majority is forcing States into an all-or-nothing choice that neither the Con stitution nor this Court’s decisions require. See FERC v.

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THOMAS, J., dissenting Mississippi, 456 U. S. 742, 774, n. 4 (1982) (Powell, J., concurring in part and dissenting in part) (“It would not be open to us to insist on adjudication in a state court of a federal claim arising beyond the jurisdiction of the local court” (internal quotation marks omitted)). Indeed, the majority’s novel approach breaks the prom ise that the States still enjoy “‘great latitude . . . to estab lish the structure and jurisdiction of their own courts.’” Ante, at 10 (quoting Howlett, 496 U. S., at 372). It cannot be that New York has forsaken the right to withdraw a particular class of claims from its courts’ purview simply because it has created courts of general jurisdiction that would otherwise have the power to hear suits for damages against correction officers. The Supremacy Clause does not fossilize the jurisdiction of state courts in their original form. Under this Court’s precedent, States remain free to alter the structure of their judicial system even if that means certain federal causes of action will no longer be heard in state court, so long as States do so on nondis criminatory terms. See Printz, 521 U. S., at 906, n. 1. (explaining that “the States obviously regulate the ‘ordi nary jurisdiction’ of their courts”); Johnson v. Fankell, 520 U. S. 911, 922, n. 13 (1997) (“We have made it quite clear that it is a matter for each State to decide how to structure its judicial system”). Today’s decision thus represents a dramatic and unwarranted expansion of this Court’s precedent. IV “[I]n order to protect the delicate balance of power man dated by the Constitution, the Supremacy Clause must operate only in accordance with its terms.” Wyeth, 555 U. S., at ___ (slip op., at 3) (THOMAS, J., concurring in judgment). By imposing on state courts a duty to accept subject-matter jurisdiction over federal §1983 actions, the Court has stretched the Supremacy Clause beyond all

69 Cite as: 556 U. S. ____ (2009) 37

THOMAS, J., dissenting reasonable bounds and upended a compromise struck by the Framers in Article III of the Constitution. Further more, by declaring unconstitutional even those laws that divest state courts of jurisdiction over federal claims on a non-discriminatory basis, the majority has silently over turned this Court’s unbroken line of decisions upholding state statutes that are materially indistinguishable from the New York law under review. And it has transformed a single exception to the rule of state judicial autonomy into a virtually ironclad obligation to entertain federal busi ness. I respectfully dissent.

THE WHITE HOUSE

Office of the Press Secretary

For Immediate Release May 20, 2009

May 20, 2009

MEMORANDUM FOR THE HEADS OF EXECUTIVE DEPARTMENTS AND AGENCIES

SUBJECT: Preemption

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 Federal Government's role in promoting the general welfare and guarding individual liberties is critical, but State law and national law often operate concurrently to provide independent safeguards for the public. Throughout our history, State and local governments have frequently protected health, safety, and the environment more aggressively than has the national Government.

An understanding of the important role of State governments in our Federal system is reflected in longstanding practices by executive departments and agencies, which have shown respect for the traditional prerogatives of the States. In recent years, however, notwithstanding Executive Order 13132 of August 4, 1999 (Federalism), executive departments and agencies have sometimes announced that their regulations preempt State law, including State common law, without explicit preemption by the Congress or an otherwise sufficient basis under applicable legal principles.

The purpose of this memorandum is to state the general policy of my Administration that preemption of State law by executive departments and agencies should be undertaken only with full consideration of the legitimate prerogatives of the States and with a sufficient legal basis for preemption. Executive departments and agencies should be mindful that in our Federal system, the citizens of the several States have distinctive circumstances and values, and that in many instances it is appropriate for them to apply to themselves rules and principles that reflect these circumstances and values. As Justice Brandeis explained more than 70 years ago, "[i]t is one of the happy incidents of the federal system that a single courageous state may, if its citizens choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of the country."

To ensure that executive departments and agencies include statements of preemption in regulations only when such statements have a sufficient legal basis:

1. Heads of departments and agencies should not include in regulatory preambles statements that the department or agency intends to preempt State law through the regulation except where preemption provisions are also included in the codified regulation.

(OVER)

71 2

2. Heads of departments and agencies should not include preemption provisions in codified regulations except where such provisions would be justified under legal principles governing preemption, including the principles outlined in Executive Order 13132.

3. Heads of departments and agencies should review regulations issued within the past 10 years that contain statements in regulatory preambles or codified provisions intended by the department or agency to preempt State law, in order to decide whether such statements or provisions are justified under applicable legal principles governing preemption. Where the head of a department or agency determines that a regulatory statement of preemption or codified regulatory provision cannot be so justified, the head of that department or agency should initiate appropriate action, which may include amendment of the relevant regulation.

Executive departments and agencies shall carry out the provisions of this memorandum to the extent permitted by law and consistent with their statutory authorities. Heads of departments and agencies should consult as necessary with the Attorney General and the Office of Management and Budget's Office of Information and Regulatory Affairs to determine how the requirements of this memorandum apply to particular situations.

This memorandum is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.

The Director of the Office of Management and Budget is authorized and directed to publish this memorandum in the Federal Register.

BARACK OBAMA

# # #

72 Litigation Advisory March 9, 2009

Practical Implications of Wyeth v. Levine

Lawrence S. Ebner CONTACTS

On March 4 the Supreme Court issued its widely publicized decision in If you would like more Wyeth v. Levine, No. 06-1249. The Court held that the Federal Food, information, please contact Drug, and Cosmetic Act (FDCA) does not preempt product liability any of the McKenna Long claims alleging that the warnings on a prescription drug’s FDA- & Aldridge LLP attorneys approved labeling were inadequate. or public policy advisors with whom you regularly Any company that produces or sells federally regulated products work.You may also should read the four separate opinions comprising the 6-3 Wyeth contact: decision. They address the subject of “implied conflict preemption” since the FDCA does not contain an express preemption provision relating to prescription drugs. Justice Stevens’ majority opinion (joined Lawrence S. Ebner by Justices Kennedy, Souter, Ginsburg, and Breyer) holds that drug- 202.496.7727 related failure-to-warn claims are not impliedly preempted because the manufacturer could have strengthened warnings without FDA’s prior approval, and because such claims complement, rather than conflict with, FDA’s regulation of labeling. Justice Breyer’s concurring opinion suggests that federal agencies should act through notice-and- comment rulemaking if they want their views on the impact of state tort claims on a federal regulatory scheme to have preemptive effect. Justice Thomas’ opinion concurs in the majority’s conclusion that the failure-to-warn claims involved in Wyeth are not preempted, but broadly attacks the Court’s longstanding jurisprudence on “purposes and objectives” preemption (i.e., the principle that state law is impliedly preempted if it frustrates or obstructs the purposes or operation of federal law). Justice Alito’s dissenting opinion (joined by Chief Justice Roberts and Justice Scalia) argues that the plaintiff’s failure-to-warn claims are preempted because Congress intended that the FDA - an expert federal agency - not individual juries in 50 States, determine whether the warnings on a drug’s labeling are adequate.

Taken together, these opinions illustrate the deep and continuing divisions within the Supreme Court regarding federal preemption doctrine and the particular circumstances under which federal law preempts state law, including state law-based product liability claims.

As a practical matter, it seems clear from Wyeth (in which six Justices opposed implied preemption), and from the Court’s recent decisions interpreting and applying express preemption provisions (e.g., Riegel v. Medtronic, Inc., 128 S.Ct. 999 (2008) (medical devices); Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005) (pesticides)), that the safest—and in the future, perhaps only—route to federal preemption of product liability claims is via a plainly worded preemption provision in a federal statute. Unfortunately, many existing preemption provisions are poorly, ambiguously, and inconsistently drafted. Despite the Obama Administration’s presumed aversion to federal tort preemption, product manufacturers and their trade associations should be advocating enactment of new preemption provisions and/or revision of existing provisions so that federal statutes get the task of supplanting state law done without the need for costly and time-consuming judicial interpretations that can produce problematic or conflicting results.

73 Another practical lesson flowing from Wyeth is that a clear, thorough, and easily retrievable record of correspondence or other interactions with federal regulatory agencies on product-specific issues such as labeling, warnings, risks, and safety is critical to successful defense of product liability suits, either on preemption grounds or at trial. In Wyeth the majority and dissenting opinions appear to disagree about the facts—exactly what label warnings the drug manufacturer proposed, and what risk and labeling issues the FDA considered, and when. Because federal agency personnel often communicate with companies in a way that is less than ideal, such as when they convey decisions orally or in cryptic emails, it is important for companies to engage in “defensive recordkeeping.” In other words, companies need to take whatever steps may be necessary to ensure that a federal agency’s scientific determinations, and regulatory approvals or rejections, regarding subjects such as label warnings and product risks are well documented and readily accessible in a company’s own files.

A copy of the Wyeth decision is available on the Supreme Court’s website at http://www.supremecourtus.gov/opinions/08pdf/06-1249.pdf.

About Us Subscription Info MMcKenna Long & Aldridge LLP is an international If you would like to be removed from future Litigation law firm consisting of more than 475 attorneys and Alerts, please email [email protected] public policy advisors. The Firm provides business solutions in the areas of environmental regulation, international law, public policy and regulatory affairs, corporate law, government contracts, intellectual property and technology, complex litigation, real estate, energy and finance. To learn more about the firm and its services, log on to www.mckennalong.com.

*This Report is for informational purposes only and does not constitute specific legal advice or opinions. Such advice and opinions are provided by the firm only upon engagement with respect to specific factual situations. This communication is considered Attorney Advertising.

74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 No. 06-179

IN THE Supreme Court of the United States ————

DONNA S. RIEGEL, individually and as administrator of the estate of Charles R. Riegel, Petitioner, v. MEDTRONIC, INC., Respondent. ———— On Writ of Certiorari to the United States Court of Appeals for the Second Circuit ———— BRIEF OF CROPLIFE AMERICA, AMERICAN CHEMISTRY COUNCIL, AND CONSUMER SPECIALTY PRODUCTS ASSOCIATION AS AMICI CURIAE IN SUPPORT OF RESPONDENT ————

DOUGLAS T. NELSON LAWRENCE S. EBNER JOSHUA SALTZMAN Counsel of Record CROPLIFE AMERICA McKENNA LONG & 1156 15th Street, N.W. ALDRIDGE LLP Washington, D.C. 20005 1900 K Street, N.W. (202) 296-1585 Washington, D.C. 20006 (202) 496-7500 Attorneys for Amici Curiae

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20002

98 TABLE OF CONTENTS Page TABLE OF AUTHORITIES...... ii INTEREST OF THE AMICI CURIAE...... 1 SUMMARY OF ARGUMENT ...... 3 ARGUMENT...... 6 I. MANUFACTURERS ARE NOT IMMU- NIZED FROM PRODUCT LIABILITY SUITS BY EXPRESS PREEMPTION OF DAMAGES CLAIMS THAT ARE PREMISED UPON STATE-LAW DU- TIES WHICH DIVERGE FROM FED- ERAL REQUIREMENTS ...... 6 II. CONSUMER PROTECTION IS EN- HANCED BY EXPRESS PREEMPTION OF DAMAGES CLAIMS THAT ARE PREMISED UPON STATE-LAW DU- TIES WHICH DIVERGE FROM FED- ERAL REQUIREMENTS ...... 12 III. THE “PARALLEL REQUIREMENTS” EXCLUSION SHOULD APPLY ONLY TO DAMAGES CLAIMS THAT ARE PREMISED UPON BREACH OF A SPECIFIC STATE-LAW DUTY TO COMPLY WITH A SPECIFIC FED- ERAL REQUIREMENT ...... 21 CONCLUSION ...... 29

(i)

99 ii TABLE OF AUTHORITIES CASES Page Aetna Health Inc. v. Davila, 542 U.S. 200 (2004)...... 11 Arkansas-Platte & Gulf Partnership v. Van Waters & Rogers, Inc., 959 F.2d 158 (10th Cir.), vacated and remanded, 506 U.S. 910 (1992) (vacating and remanding for further consideration in light of Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)), previous opinion adhered to, 981 F.2d 1177 (10th Cir.), cert. denied, 510 U.S. 813 (1993)...... 16 Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005)...... passim Booth v. Board of Regents, No. Civ.A. 7:05- CV-34, 2005 WL 2099246 (M.D. Ga. Aug. 30, 2005) ...... 23 Central Valley Fresh Produce, Inc. v. Wilbur-Ellis Company, No. 04 CE CG 00542 (Cal. Super. Ct., Fresno Cty. June 30, 2005) (unpublished) ...... 23 Chicago & North Western Transporation Company v. Kalo Brick & Tile Company, 450 U.S. 311 (1981)...... 11 Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)...... 4, 8, 19 Etcheverry v. Tri-Ag Service, Inc., 993 P.2d 366 (Cal. 2000) ...... 11, 16 Ferebee v. Chevron Chemical Company, 736 F.2d 1529 (D.C. Cir. 1984)...... 16 Geier v. American Honda Motor Company, 529 U.S. 861 (2000)...... 19, 20 Grenier v. Vermont Log Buldings, Inc., 96 F.3d 559 (1st Cir. 1996) ...... 11

100 iii TABLE OF AUTHORITIES—Continued Page King v. E. I. DuPont de Nemours & Company, 996 F.2d 1346 (1st Cir. 1993).. 16 Kuiper v. American Cyanamid Company, 131 F.3d 656 (7th Cir. 1997)...... 11 Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996)...... passim Mortellite v. Novartis Crop Protection, Inc., 460 F.3d 483 (3rd Cir. 2006)...... 12 National Bank of Commerce v. Dow Chemical Company, 165 F.3d 602 (8th Cir. 1999)...... 11 Netland v. Hess & Clark, Inc., 284 F.3d 895 (8th Cir. 2002) ...... 11 Papas v. Upjohn Company, 926 F.2d 1019 (11th Cir. 1991), vacated and remanded sub nom. Papas v. Zoecon Corp., 505 U.S. 1215 (1992) (vacating and remanding for further consideration in light of Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)), aff'd sub nom. Papas v. Upjohn Co., 985 F.2d 516 (11th Cir.), cert. denied, 510 U.S. 913 (1993)...... 16 Riegel v. Medtronic, Inc., 451 F.3d 104 (2d Cir. 2006)...... passim United States v. Locke, 529 U.S. 89 (2000).. 25 Wisconsin Public Intervenor v. Mortier, 501 U.S. 597 (1991)...... 15, 17, 18 Worm v. American Cyanamid Company, 5 F.3d 744 (4th Cir. 1993)...... 28 Wuebker v. Wilbur-Ellis Company, 418 F.3d 883 (8th Cir. 2005)...... 12

101 iv TABLE OF AUTHORITIES—Continued STATUTES AND REGULATIONS Page 7 U.S.C. § 136(q)(1)(G) ...... 26 7 U.S.C. § 136v(a)...... 17 7 U.S.C. § 136v(b)...... passim 21 U.S.C. § 360k(a)...... passim 21 C.F.R. § 808.1(d)(1)...... 24 40 C.F.R. Part 156...... 22 MISCELLANEOUS H.R. Rep. No. 92-511 (1971), reprinted in 1972 U.S.C.C.A.N. 3993 ...... 17 NORMAN J. SINGER, J.D. SHAMBIE SINGER, STATUTES AND STATUTORY CONSTRUC- TION § 46.6 (7th ed. 2007) ...... 22

102 IN THE Supreme Court of the United States ———— No. 06-179 ———— DONNA S. RIEGEL, individually and as administrator of the estate of Charles R. Riegel, Petitioner, v. MEDTRONIC, INC., Respondent. ———— On Writ of Certiorari to the United States Court of Appeals for the Second Circuit ———— BRIEF OF CROPLIFE AMERICA, AMERICAN CHEMISTRY COUNCIL, AND CONSUMER SPECIALTY PRODUCTS ASSOCIATION AS AMICI CURIAE IN SUPPORT OF RESPONDENT ———— INTEREST OF THE AMICI CURIAE 1 Amici curiae CropLife America, American Chem- istry Council, and Consumer Specialty Products

1 The parties have consented to the filing of this brief. No counsel for a party authored this brief in whole or in part, and no counsel or party made a monetary contribution intended to fund the preparation or submission of this brief. No person other than amici curiae, their members, or their counsel made a monetary contribution to its preparation or submission.

103 2 Association are submitting this brief because they have a substantial interest in the development, interpretation, and application of this Court’s jurisprudence on federal preemption of state-law damages claims involving products whose safety is closely regulated by expert federal agencies such as the Food and Drug Administration (FDA) and the United States Environmental Protection Agency (EPA). Amici believe that consumer protection is significantly strengthened by preemption of any type of tort claim that is based on a state-law duty which diverges from, conflicts with, or otherwise undermines federal safety regulation, especially in areas such as product labeling and warnings, where nationally uniform regulation is critical to proper usage. CropLife America is the national trade association for the plant science industry. Its member companies develop, produce, sell, and distribute virtually all of the agricultural crop protection pesticides and biotechnology products used by American farmers to provide consumers with safe, affordable, and abundant food and fiber. For more than sixty years CropLife America has been industry’s leading voice on significant federal and state pesticide regulatory issues. One such issue is the deleterious impact of state-law failure-to-warn claims on the system of nationally uniform product labeling which Congress mandated through enactment of § 136v(b) of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. § 136v(b). CropLife America has participated as amicus curiae in numerous appeals involving the scope of FIFRA preemption under § 136v(b), including Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005), a case upon which petitioner and the amici curiae supporting her heavily rely.

104 3 The American Chemistry Council represents the leading companies engaged in the business of chemistry. A substantial number of the Council’s members produce and distribute pesticides, including a wide variety of antimicrobial products, which like all pesticide products, are comprehensively regulated under FIFRA by EPA. The Consumer Specialty Products Association represents the interests of companies which provide households, institutions, and industrial customers with products that help provide a cleaner and health- ier environment. Those products include disinfec- tants and insecticides used in homes, hospitals, and restaurants.

SUMMARY OF ARGUMENT 1. Petitioner and her amici curiae are attempting to use this premarket approval (“PMA”) medical device product liability case as a vehicle for mounting an all-out assault on the principle, firmly established by this Court’s federal preemption precedents, that state-law damages claims can be encompassed by a federal regulatory statute’s express prohibition against state-imposed requirements. Their anti-preemption policy arguments, which present a lopsided view of the benefits of product liability litigation, mistakenly assume that manufacturers are totally immunized from liability by express preemption con- fined to damages claims that are based on state-law duties which diverge from federal regulatory requirements regarding safety-related subjects such as product design or labeling. They also incorrectly assume that such express preemption—although limited in scope—deprives persons injured by defective

105 4 products of their sole means for obtaining compensation. 2. Petitioner’s theory that no damages claim can be encompassed by a federal statute’s preemption provision unless Congress has manifested an unequivocal intent to preempt any and all damages claims not only is illogical, but also contrary to the claim-by-claim framework for express preemption analysis mandated by this Court’s precedents, such as Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), and Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005). In reaffirming this claim-by-claim approach, which the Second Circuit followed here in applying § 360k(a) of the Food, Drug, and Cosmetic Act’s Medical Device Amendments (“MDA”), 21 U.S.C. § 360k(a), the Court should make it clear that the substance and elements of a state-law cause of action, and not the name a plaintiff assigns to a particular claim, determines whether it falls within the scope of a federal statute’s express preemption provision. 3. Consumer protection is enhanced, not under- mined, by federal preemption of damages claims that would impose state-law duties which diverge from or otherwise conflict with federal regulatory requirements. This is especially true where a federal statute’s goal is to achieve national uniformity of regulation regarding product design, labeling, or other safety-related subjects. Conflicting or differing jury verdicts, which indisputably have a regulatory effect on a product’s manufacturer, can impede, impair, or destroy the national uniformity that Con- gress seeks to achieve under the auspices of expert and experienced federal agencies such as FDA and EPA.

106 5 4. In opposing preemption of state-law damages claims, petitioner and her amici rely too much on flawed dicta in the Bates majority opinion, which addresses the preemptive scope of § 136v(b) of FIFRA. In particular, the history of prior tort litigation is irrelevant to the plain meaning of a preemption provision such as § 136v(b) of FIFRA or § 360k(a) of the MDA. Tort claims that impose divergent state- law duties can seriously disrupt federal regulatory programs. And the majority’s suggestion that product liability litigation is the only means for obtaining compensation seems oblivious to corporate social responsibility and product stewardship programs which voluntarily compensate consumers when and if postmarket problems develop. 5. The Court should clarify that the inferential “parallel requirements” exclusion from express preemption discussed in Bates and Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), should not be applied in a way which nullifies congressional intent to preempt state requirements that are different from or in addition to federal requirements. A broad exclusion which encompasses any general common-law duty that is consistent with any general federal statutory standard would provide plaintiffs and their attorneys with a virtually automatic route around express preemption. Instead, the exclusion should apply only if a claim is based on a specific state-law duty that seeks to enforce a specific federal regulatory requirement.

107 6 ARGUMENT I. MANUFACTURERS ARE NOT IMMU- NIZED FROM PRODUCT LIABILITY SUITS BY EXPRESS PREEMPTION OF DAMAGES CLAIMS THAT ARE PREM- ISED UPON STATE-LAW DUTIES WHICH DIVERGE FROM FEDERAL REQUIRE- MENTS In its opinion below, the court of appeals took “care to explain that [it did] not hold that all state tort claims as to PMA-approved devices are preempted.” Riegel v. Medtronic, Inc., 451 F.3d 104, 106 (2d Cir. 2006). The lower court further indicated that “contrary to the dissent’s fear that the decision . . . will deprive those who were injured by an unreasonably dangerous medical device of any remedy whatsoever . . . the scope of [the] decision is actually quite limited.” Id. at 124 (internal quotation marks omitted). Nevertheless, petitioner’s wide-ranging attack on federal preemption of state-law damages claims involving federally regulated products approaches that subject as if it were an all-or-nothing proposition. Her arguments against preemption are predicated upon the mistaken notion that either Congress manifestly intended to afford total immunity to manufacturers of allegedly defective, federally regulated products, thereby depriving consumers of all judicial recourse, or such manufacturers necessarily are subject to the full panoply of state-law causes of action for product liability regardless of the plain, broad language of a federal statute’s preemption provision. Relying upon this “total immunity” fallacy, petitioner asserts that the issue before the Court is whether a manufacturer such as Medtronic “is entitled to immunity from state-law damages suits,

108 7 regardless of their merits, the nature of Medtronic’s conduct, or the severity of the resulting injuries.” Pet. Br. at 14; see also id. at 1 (referring to “Medtronic’s plea for immunity from liability”). Petitioner’s amici follow the same tack.2 Taking aim at this overblown target, petitioner argues that there is a “glaring absence in the legislative record of any suggestion that consumers would lose their only means of obtaining compensation for injuries.” Pet. Br. at 19. She urges the Court to equate the lack of congressional intent to afford manufacturers blanket immunity from product liability suits with the opposite extreme, namely, that “Congress did not intend § 360k(a) to preempt damages claims at all.” Id. at 15. Petitioner’s black-or-white approach to federal preemption of product liability litigation conflicts with the type of careful, claim-by-claim analysis which this Court repeatedly has indicated courts must follow when applying a federal regulatory statute’s express preemption provision to damages suits. In analyzing the preemptive scope of § 5(b) of the Public Health Cigarette Smoking Act of 1969, which provides that “[n]o requirement or prohibition based on smoking and health shall be imposed under State law with respect to the advertising or promotion of any

2 See, e.g., Br. of AARP at 21 (arguing against “immunizing device manufacturers from tort suits”); Br. of Sen. Kennedy & Rep. Waxman at 8 (“Congress did not intend to preempt state tort suits.”); Br. of Am. Ass’n for Justice at 8 (“The question before the Court is whether Congress intended [the MDA] to prevent future victims from bringing state-law tort actions . . . .”); Br. for the States of New York, et al. at 4-5 (“It is simply implausible that Congress . . . would have meant to supersede all of state tort law in the area of device safety.”).

109 8 cigarettes,” the Court in Cipollone v. Liggett Group, Inc., explained why a claim-by-claim analysis is necessary: That the pre-emptive scope of § 5(b) cannot be limited to positive enactments does not mean that that section pre-empts all common law claims. . . . For purposes of § 5(b), the common- law is not of a piece. Instead . . . we must look to each of petitioner’s common-law claims to determine whether it is in fact pre-empted. 505 U.S. at 523 (emphasis added). The Court then proceeded to consider whether § 5(b) of the Cigarette Act applied to each type of state-law damages claim alleged in the suit (e.g., failure to warn; breach of express warranty; fraudulent misrepresentation). Id. at 523-30; see Br. of Consumers Union at 3, 12 (“This Court’s precedents on preemption dictate a close analysis of both the purportedly preemptive federal law and the purportedly preempted state rule. . . . a close reading of the [Cipollone] decision reveals the Court doing the work it has always done in preemption cases: assiduously comparing the allegedly preemptive federal statute with the specific state-law claims being pressed.”). The court of appeals adhered to this claim-by-claim analytical framework in applying § 360k(a) of the MDA to this case. First, the lower court, 451 F.3d at 114-16, discussed this Court’s fragmented express preemption decision in Medtronic, Inc. v. Lohr, which in part V of the lead opinion analyzed the applicability of § 360k(a) to each of Medtronic’s different types of claims, see 518 U.S. at 492-94 (discussing design claim) and id. at 497-502 (discussing manufacturing and labeling claims). The court then considered the

110 9 causes of action in this case, and concluded that some—but not all—tort claims involving PMA medical devices are expressly preempted by § 360k(a). See Riegel, 451 F.3d at 124 (“[T]ort claims that are premised on a manufacturer’s deviation from the standards set forth in the device’s approved PMA application . . . are in no way preempted. Only those claims that allege liability despite a PMA-approved device’s adherence to those standards are . . . preempted.”). The Court should affirm the Second Circuit’s holding, which concludes that § 360k(a) expressly preempts many types of state-law claims, see id. at 121, but neither immunizes medical device manufacturers from damages suits, nor deprives consumers of judicial recourse for non-preempted causes of action, id. at 123 (agreeing “with the district court’s conclusion that the Riegels’ negligent manufacturing claim was not preempted”). None of this Court’s product liability preemption precedents, including Bates v. Dow AgroSciences, mandates or condones the wholesale approach to tort preemption that petitioner is advocating here (i.e., that no tort claims are preempted unless Congress deliberately and demonstrably intended to enact a provision that preempts all tort claims). In Bates, a product liability suit involving a federally regulated pesticide, the Court reiterated its holding in both Cipollone and Lohr that an express preemption provision which prohibits states from imposing their own requirements “reaches beyond positive enactments, such as statutes and regulations, to embrace common-law duties,” 544 U.S. at 443, but that such a proscription does not afford manufacturers blanket immunity from product liabil-

111 10 ity suits. The Court indicated instead that to determine whether a particular claim is preempted, “[t]he proper inquiry calls for an examination of the elements of the common-law duty at issue.” Id. at 445 (citing Cipollone, 505 U.S. at 524). More specifically, Bates holds, based on the express terms of § 136v(b) of FIFRA, that “a particular state rule” is preempted only if it satisfies two conditions: “First, it must be a requirement ‘for labeling or packaging,’” and “[s]econd, it must impose a labeling or packaging requirement that is ‘in addition to or different from those required under [FIFRA].’” Id. at 444 (quoting 7 U.S.C. § 136v(b)).3 Applying the first prong of this test for express preemption under FIFRA, the Court held that unlike “fraud and negligent failure-to-warn claims,” which “are premised on common-law rules that qualify as ‘requirements for labeling or packaging,’” id. at 446, “petitioners’ claims for defective design, defective manufacture, negligent testing, and breach of express warranty are not preempted,” id. at 444, because “[n]one of these common- law rules requires that manufacturers label or package their products in any particular way,” ibid. This Court’s classification of different types of damages claims as falling either within or outside the scope of a statute’s express preemption provision should not relieve a trial court of the task of analyzing each cause of action pleaded in a particular suit to determine whether it is preempted. For example,

3 Both the MDA and FIFRA contain “a similarly worded preemption provision.” Bates, 544 U.S. at 447. Each preempts “any” state-imposed “requirements” that are “in addition to” or “different from” federal requirements. Compare 21 U.S.C. § 360k(a) and 7 U.S.C. § 136v(b).

112 11 prior to Bates numerous courts recognized that the applicability of § 136v(b) of FIFRA does not depend upon “the guise under which the claim is presented.” Netland v. Hess & Clark, Inc., 284 F.3d 895, 900 (8th Cir. 2002);4 see generally Aetna Health Inc. v. Davila, 542 U.S. 200, 214 (2004) (“[D]istinguishing between pre-empted and non-pre-empted claims based on the particular label affixed to them would elevate form over substance and allow parties to evade the preemptive scope of [the statute] simply by relabeling their . . . claims.” (internal quotation marks omitted); Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 324 (1981) (preemption cannot be “avoided by mere artful pleading”). Along the same lines, Justice Thomas’ separate opinion in Bates, joined by Justice Scalia, explains that “[a] state-law cause of action, even if not specific to labeling, nevertheless imposes a labeling requirement ‘in addition to or different from’ FIFRA’s when it attaches liability to statements on the label that do not produce liability under FIFRA.” Bates, 544 U.S.

4 See, e.g., Nat’l Bank of Commerce v. Dow Chem. Co., 165 F.3d 602, 608 (8th Cir. 1999) (“It is immaterial whether an inadequate labeling or failure to warn claim is brought under a negligence or products liability theory.”); Kuiper v. American Cyanamid Co., 131 F.3d 656, 662 (7th Cir. 1997) (holding that § 136v(b) preempts claims for misrepresentation or express warranty based on oral or advertising statements “if they merely repeat information in the label itself”); Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559, 565 (1st Cir. 1996) (holding that § 136v(b) preempts a purported design or manufacturing defect claim if it is actually a “disguised labeling claim”); Etcheverry v. Tri-Ag Serv., Inc., 993 P.2d 366, 377 (Cal. 2000) (“When a claim, however couched, boils down to an assertion that a pesticide’s label failed to warn of the damage plaintiff allegedly suffered, the claim is preempted by FIFRA.”).

113 12 at 456 (emphasis added) (Thomas, J. concurring in the judgment in part and dissenting in part). But subsequent to the Court’s seemingly rigid listing of non-preempted categories of claims in Bates, courts in pesticide-related suits have been acting reflexively, declining to look behind the name that a plaintiff assigns to a cause of action to determine whether it is based on a rule that qualifies as a requirement for labeling, and thus is preempted.5 In affirming the Second Circuit’s medical device preemption decision here, the Court should clarify Bates, and indeed emphasize that form does not trump substance when determining whether a state-law product liability claim, no matter how denominated, is expressly preempted by a federal regulatory statute such as the MDA or FIFRA.

II. CONSUMER PROTECTION IS ENHANCED BY EXPRESS PREEMPTION OF DAM- AGES CLAIMS THAT ARE PREMISED UPON STATE-LAW DUTIES WHICH DIVERGE FROM FEDERAL REQUIRE- MENTS Petitioner and her amici repeatedly assert that federal preemption of damages claims undermines

5 See, e.g., Mortellite v. Novartis Crop Protection, Inc., 460 F.3d 483, 490 (3rd Cir. 2006) (“FIFRA does not preempt claims based on theories of strict liability, negligent testing, and breach of express warranty. As the Supreme Court explained, such common law claims plainly do not impose labeling requirements . . . .”); Wuebker v. Wilbur-Ellis Co., 418 F.3d 883, 887 (8th Cir. 2005) (rejecting, based on Bates, manufacturer’s contention that plaintiffs’ defective design and breach of warranty claims, “as pleaded,” challenge the adequacy of FIFRA labeling requirements).

114 13 consumer protection. They contend that product liability litigation against manufacturers of federally regulated products is an essential and beneficial form of supplemental, state-by-state regulation necessitated by “constrained and conflicted” federal agencies. Br. of AARP at 6.6 Further, they contend that preemption of damages claims “would improperly foreclose all remedies,” Pet. Br. at 43, thereby depriving injured persons of their sole financial recourse.7 To the contrary, consumer protection is enhanced when highly experienced federal agencies, staffed by dedicated scientific experts, regulate products such as medical devices, drugs, and pesticides in a nationally uniform manner. Product liability claims based on state-law duties that diverge from or otherwise conflict with federal requirements can have a significant adverse impact on national uniformity of regulation concerning safety-related subjects such as product design and label warnings. Furthermore, the vast majority of manufacturers display a high degree

6 See also Br. of Am. Ass’n for Justice at 15 (referring to “the longstanding reliance on post-marketing liability as a comple- mentary means to achieve product safety”); Br. of Consumers Union at 18 (“It has been, and should continue to be, the most unusual case when this Court upends the friendly collaboration between federal laws and state tort remedies.”); Br. of AARP at 7 (“The limited PMA process . . . is entirely inadequate to replace the long-standing safety incentives and consumer protections provided by state tort law.”). 7 See also Pet. Br. at 19 (referring to the “absence in the legislative record of any suggestion that consumers would lose their only means of obtaining compensation for injuries caused by poorly designed or inadequately labeled PMA devices”); Br. of AARP at 27 (“Tort law provides the only relief for patients injured by defective medical devices.”).

115 14 of corporate responsibility by voluntarily compensating consumers when and if safety-related problems develop with their products. In proffering their objections to any federal preemption of damages claims, petitioner and her amici place too much reliance upon policy dicta included within Justice Stevens’ majority opinion in Bates. As Justice Thomas, joined by Justice Scalia, indicated in his partial dissent, the majority [opinion] advances several arguments designed to tip the scales in favor of the States and against the Federal Government. These arguments, in addition to being unnecessary, are unpersuasive. . . . [O]ur task is to determine which state-law claims [the statute] pre-empts, without slanting the inquiry in favor of either the Federal Government or the States. Bates, 544 U.S. at 457 (Thomas, J., concurring in the judgment in part and dissenting in part) (emphasis added). 1. The Bates majority opinion asserts that the “long history of tort litigation against manufacturers . . . adds force to the basic presumption against preemption.” 544 U.S. at 449. Justice Thomas, joined by Justice Scalia, disagreed: The history of tort litigation against manufacturers is . . . irrelevant. . . . We cannot know, without looking to the text of § 136v(b), whether FIFRA preserved that tradition or displaced it. . . . [W]hile allowing additional state-law remedies likely aids in enforcing FIFRA’s misbranding requirements . . . it is for Congress, not this Court, to strike a balance between state tort suits and federal regulation.

116 15 See id. at 457-58 (Thomas, J.) (emphasis added).8 In the case of FIFRA, even if “tort litigation against pesticide manufacturers . . . was a common feature of the legal landscape at the time of the 1972 amendments,” id. at 440-41, that ancient history is completely irrelevant. This is because “the extensive amendments” that Congress adopted in 1972, id. at 437, which were “spurred by growing environmental and safety concerns,” ibid., included “significantly strengthen[ing] FIFRA’s . . . labeling standards,” Wisconsin Public Intervenor v. Mortier, 501 U.S. 597, 601 (1991), in part by enacting § 136v(b). The purpose of § 136v(b) is to achieve and maintain national labeling uniformity by prohibiting states from imposing “requirements for labeling” that are “in addition to or different from” federal requirements. See Bates, 544 U.S. at 452. Along the same lines, it is not surprising that a “groundswell of federal and state decisions” holding that certain types of tort claims are expressly preempted by a statutory prohibition against state- imposed “requirements,” Bates, 544 U.S. at 441, did not emerge until after the Court’s Cipollone opinion in 1992. Indeed, the Court triggered the wave of FIFRA tort preemption decisions when, within a week of deciding Cipollone, it vacated and remanded two FIFRA cases for further consideration in light of Cipollone. After both courts of appeals held on remand, based on Cipollone, that § 136v(b) expressly

8 Justices Thomas and Scalia have expressed the view that the presumption against preemption “does not apply . . . when Congress has included within a statute an express pre-emption provision.” Bates, 544 U.S. at 457 (Thomas, J.) (citing Cipollone, 505 U.S. at 545-46) (Scalia, J., concurring in judgment in part and dissenting in part)).

117 16 preempts labeling-related damages claims, the Court declined further review,9 and during the next twelve years denied certiorari in many other FIFRA preemption cases prior to granting review in Bates. Further, as the Court noted in Bates, 544 U.S. at 441, prior to Cipollone, only the D.C. Circuit had considered the question of whether damages claims are encompassed by § 136v(b), and contrary to this Court’s subsequent holdings in Cipollone, Lohr, and Bates, held that the term “requirements” is limited to state positive enactments.10

9 See Arkansas-Platte & Gulf Partnership v. Van Waters & Rogers, Inc., 959 F.2d 158 (10th Cir.), vacated and remanded, 506 U.S. 910 (1992) (vacating and remanding for further consideration in light of Cipollone), previous opinion adhered to, 981 F.2d 1177 (10th Cir.), cert. denied, 510 U.S. 813 (1993); Papas v. Upjohn Co., 926 F.2d 1019 (11th Cir. 1991), vacated and remanded sub nom. Papas v. Zoecon Corp., 505 U.S. 1215 (1992) (vacating and remanding for further consideration in light of Cipollone), aff'd sub nom. Papas v. Upjohn Co., 985 F.2d 516 (11th Cir.), cert. denied, 510 U.S. 913 (1993). 10 The Bates majority opinion’s invocation of that pre-Cipollone decision, Ferebee v. Chevron Chemical Co., 736 F.2d 1529 (D.C. Cir. 1984), is puzzling. See Bates, 544 U.S. at 451. In the wake of Cipollone, numerous courts of appeals and state appellate courts have held that Ferebee “is no longer good law.” Etcheverry v. Tri-Ag Serv., 993 P.2d at 372; see, e.g., King v. E. I. DuPont de Nemours & Co., 996 F.2d 1346, 1351 (1st Cir. 1993) (“In deciding Ferebee, the District of Columbia Circuit did not have the benefit of the Supreme Court’s subsequent analysis and ruling in Cipollone . . . we do not find Ferebee persuasive.”). Moreover, the D.C. Circuit “has expressly acknowledged that Cipollone repudiated [Ferebee’s] central premise by ‘explaining that damage actions . . . must be preempted where positive enactments are preempted.’” Etcheverry, 993 P.2d at 372 (quoting Waterview Management Co. v. F.D.I.C., 105 F.3d 696, 699 (D.C. Cir. 1997)).

118 17 2. The Bates majority opinion denigrates the crucial role that national uniformity of regulation plays in promoting the safety of products such as medical devices, drugs, and pesticides. See 544 U.S. at 450 (asserting that the “United States greatly overstate[d] the degree of uniformity and centralization that characterizes FIFRA”). In the case of FIFRA, the fact that “the statute authorizes a relatively decentralized scheme that preserves a broad role for state regulation,” ibid., proves nothing about the statute’s express preemption of divergent state labeling requirements. Congress mandated, through enactment of § 136v(b)—which is entitled “Uniform- ity”—that EPA establish and maintain a system of nationally uniform product labeling. To be sure, the statute preserves the states’ supplemental role in regulating pesticide “sale or use.” See 7 U.S.C. § 136v(a). But when Congress “transformed FIFRA . . . into a comprehensive regulatory statute,” Mortier, 501 U.S. at 601 (internal quotation marks omitted), it did not “authorize[] a relatively decentralized scheme,” Bates, 544 U.S. at 450, with regard to product labeling, which this Court acknowledges is “an area that FIFRA’s [federal-state regulatory] ‘program’ pre-empts,” Mortier, 501 U.S. at 615.11

11 Legislative materials demonstrate that when Congress enacted § 136v(b) in 1972 (four years prior to § 360k(a) of the MDA), it believed that EPA alone—and not the states—would have authority to regulate pesticide labeling. See, e.g., H.R. Rep. No. 92-511 (1971) at 16 (“In dividing the responsibility between the States and the Federal Government for the management of an effective pesticide program, the [House] Commit- tee [on Agriculture] has adopted language which is intended to completely preempt State authority in regard to labeling.”) (emphasis added). Along the same lines, in Mortier, the Court explained that “FIFRA’s historic focus [is] on labeling,” 501 U.S.

119 18 Pesticide labeling is different from the ordinary labels placed on most types of non-federally regulated products. It enables EPA, a federal agency which possesses tremendous scientific expertise and decades of regulatory experience, to ensure that all necessary warnings, safety precautions, directions for use, and other essential information are communicated from a pesticide product’s manufacturer through the chain of distribution to the individuals who actually use the product. The substantial health, safety, environmental, and product performance benefits that nationally uniform, EPA-regulated product labeling affords to consumers, farmers, and professional pesticide applicators cannot be overstated. The same undoubtedly is true for nationally uniform medical device and drug labeling. The Bates majority opinion acknowledges the “narrow, but still important, role” that § 136v(b) plays in the FIFRA scheme: “In the main, it pre-empts competing state labeling standards—imagine 50 different labeling regimes prescribing the color, font size, and wording of warnings . . . .” 544 U.S. at 452. Further, the opinion holds that § 136v(b) expressly preempts “any statutory or common-law rule that would impose a labeling requirement that diverges from those set out in FIFRA and its implementing regulations.” Ibid. Yet, the opinion asserts that the United States, which appeared in Bates as amicus curiae, “exaggerate[d] the disruptive effects of using common-law suits to enforce the prohibition on misbranding,” id. at 451. at 613, and that when Congress rewrote FIFRA in 1972, it “significantly strengthened” the Act’s “labeling standards,” id. at 601, in part by enacting § 136v(b).

120 19 To the contrary, where as in the case of the MDA or FIFRA, national uniformity with respect to a particular regulated subject such as labeling is an undeniable statutory objective, especially where that goal is expressed in a plainly and broadly worded preemption provision and is not constrained by a saving clause, damages claims that encroach upon the federal regulatory scheme necessarily conflict with congressional intent and threaten to destroy uniformity. Where “the pre-emption provision itself reflects a desire to subject the industry to a single, uniform set of federal safety standards . . . [t]his policy by itself favors pre-emption of state tort suits, for the rules of law that judges and juries create or apply in such suits may themselves similarly create uncertainty and even conflict, say, when different juries in different States reach different decisions on similar facts.” Geier v. Am. Honda Motor Co., 529 U.S. 861, 871 (2000). In the same vein, petitioner concedes that § 360k(a) of the MDA was enacted to supplant state regulation and achieve nationwide uniformity, see Pet. Br. at 7, 16, but fails to reconcile that important, safety- related statutory objective with this Court’s repeated holding that damages awards are a form of state regulation. See, e.g., Cipollone¸ 505 U.S. at 521. Even if, as petitioner asserts, “the impetus for Con- gress’s enactment of a preemption provision [in the MDA] was the existence of state regulatory programs that potentially could subject device manufacturers to inconsistent requirements once federal requirements were put into place,” Pet. Br. at 16, it would be illogical to assume that Congress would have wanted to allow the states to circumvent preemption and impose such inconsistent requirements through dam-

121 20 ages awards. See Lohr, 518 U.S. at 504 (Breyer, J., concurring in part and concurring in the judgment) (discussing the “anomalous consequences” of failing to recognize that “[t]he effects of the state agency regulation and the state tort suit are identical”). As the court of appeals explained below, in the absence of preemption “it is certainly conceivable that different juries would reach conflicting verdicts about the same medical devices, thus rendering it almost impossible for a device to comply simultaneously with its federal PMA (which, after all, can only change after an extensive process) and with the various verdicts issued by different juries around the country.” Riegel, 451 F.3d at 122. This Court should affirm the opinion below “to avoid the conflict, uncertainty, cost, and occasional risk to safety itself that too many different safety-standard cooks might otherwise create.” Geier, 529 U.S. at 871. 3. The Bates majority opinion erroneously suggests that “depriv[ing] injured parties of a long available form of compensation,” 544 U.S. at 449, would eliminate their only recourse. That proposition is necessarily incorrect where, as in the case of the MDA and FIFRA, an express preemption clause is limited in scope, and thus does not cloak a manufacturer with blanket immunity from product liability suits. Further, the premise that litigation is the only way to obtain compensation for defective products simply is not true. Most companies that market federally regulated products such as medical devices, drugs, and pesticides are responsible corporate citizens and seek to avoid litigation by voluntarily compensating persons legitimately claiming to have been injured by their products.

122 21 For example, as a matter of good product stewardship and sound business sense, agricultural pesticide manufacturers, through their regional and local representatives, work closely with individual farmers to investigate and resolve pesticide-related problems, such as crop injury. When circumstances warrant, manufacturers voluntarily provide a variety of remedies such as cost reimbursement, pesticide reapplica- tion, replacement of seed, or monetary compensation. In the infrequent event of widespread problems, manufacturers establish formal claims resolution programs to try to learn more about the claims and avoid the costs and burdens of litigation for the benefit of all parties and the public.

III. THE “PARALLEL REQUIREMENTS” EXCLUSION SHOULD APPLY ONLY TO DAMAGES CLAIMS THAT ARE PREM- ISED UPON BREACH OF A SPECIFIC STATE-LAW DUTY TO COMPLY WITH A SPECIFIC FEDERAL REQUIREMENT As an alternative to their contention that “Con- gress did not intend § 360k(a) to preempt damages claims at all,” petitioner asserts “that, if § 360k(a) is nonetheless read to encompass damages claims, such preemption would occur only in very narrow circumstances.” Pet. Br. at 15-16. Indeed, in part III of her brief, id. at 39, petitioner attempts to transform the “parallel” state requirements exclusion from preemption discussed in Bates, 544 U.S. at 447-48, and Lohr, 518 U.S. at 494-97, 513 (O’Connor, J., concurring in part and dissenting in part), into a gaping loophole which would swallow any preemption provision that prohibits states from imposing their own, additional or different regulatory requirements, either through positive enactments or damages awards. In affirm-

123 22 ing the opinion below, the Court should make it clear that the “parallel requirements” exclusion discussed in Bates and Lohr should not be applied in a way that renders express preemption provisions meaningless. See generally NORMAN J. SINGER, J.D. SHAMBIE SINGER, STATUTES AND STATUTORY CONSTRUCTION § 46.6 (7th ed. 2007) (“A statute should be construed so that effect is given to all of its provisions, so that no part will be inoperative or superfluous, void or insignificant . . . .”). In Bates the Court, finding “strong support” in Lohr, adopted a “‘parallel requirements’ reading of § 136v(b)” that excludes “a state-law labeling requirement . . . if it is equivalent to, and fully consistent with, FIFRA’s misbranding provisions.” 544 U.S. at 447. The Court indicated that “[s]tate-law requirements must also be measured against any relevant EPA regulations that give content to FIFRA’s misbranding standards.” Id. at 453; see, e.g., 40 C.F.R. Part 156 (Labeling Requirements for Pesticides). Thus, the Court held that § 136v(b) “pre-empts any statutory or common-law rule that would impose a labeling requirement that diverges from those set out in FIFRA and its implementing regulations,” but “[i]t does not . . . pre-empt any state rules that are fully consistent with federal requirements.” Id. at 452. The Court stressed that although “the state-law requirement need not be phrased in the identical language as its corresponding FIFRA requirement . . . If a case proceeds to trial, the court’s jury instructions must ensure that nominally equivalent labeling requirements are genuinely equivalent.” Id. at 454. Seizing upon the “parallel requirements” language in Bates and Lohr, petitioner contends that “the

124 23 Riegels’ claims are not preempted for the additional reason that they are based on duties that mirror federal design and labeling requirements.” Pet. Br. at 39. Petitioner contends that all it takes to avoid an otherwise broadly stated express preemption provision (e.g., a preemption provision prohibiting states from imposing requirements that are different from or in addition to federal requirements) is a state-law claim that is based on a general common- law duty (e.g., the duty to provide adequate warnings) and a similarly general federal statutory standard or requirement (e.g., the duty to distribute a product that is not misbranded). See id. at 42.12 According to petitioner, “[s]tate damages claims are ordinarily premised on duties of general applicability, such as the duty to warn of risks or to use due care in the design of a product,” id. at 38, and such common- law duties escape preemption because they are “equivalent to the federal standards.” Id. at 14.13

12 Like petitioner, some trial courts have read Bates as requiring only the most superficial type of comparison to conclude that a state-law failure-to-warn or fraud claim, although premised on state-law requirements for labeling, falls outside the scope of § 136v(b) of FIFRA. See, e.g., Booth v. Bd. of Regents, No. Civ.A. 7:05-CV-34, 2005 WL 2099246, at *3 (M.D. Ga. Aug. 30, 2005) (“In this case, the requirements that would be imposed by the Georgia law of fraud are consistent with FIFRA.”); Central Valley Fresh Produce, Inc. v. Wilbur-Ellis Co., No. 04 CE CG 00542 (Cal. Super. Ct., Fresno Cty. June 30, 2005) (“[H]ere plaintiff’s claims of inadequate warnings or instructions on the product label appear to be consistent with FIFRA’s misbranding provisions, since the statute expressly forbids false or misleading statements on a product as well as inadequate instructions or warnings.”). 13 Damages claims based on general common-law duties purporting to be applicable to federally regulated medical devices

125 24 For example, petitioner asserts that any medical device-related inadequate warning claim arising under New York law falls outside the scope of § 360k(a) of the MDA because “[t]he generally applicable New York state-law duty to warn mirrors [the] general federal requirement” prohibiting the marketing of a “misbranded” medical device. Id. at 42. Similarly, petitioner argues that because New York law relating to the duty to design reasonably safe products “states these obligations very generally . . . a state determination, through a damages verdict, that a device was not reasonably safe is consistent with the federal scheme.” Id. at 40. To be sure, this Court held in Lohr and Bates that even a broad federal statutory prohibition against states imposing their own, “different” or “additional” requirements through damages claims does not encompass identical, parallel, equivalent, or fully consistent state requirements. In Bates the Court left it to the court of appeals to determine, on remand, whether the “particular common-law duties” underlying the petitioners’ fraud and failure-to-warn claims “are equivalent to FIFRA’s misbranding standards,” 544 U.S. at 447, “emphasiz[ing] that a state-law labeling requirement must in fact be equivalent to a requirement under FIFRA in order to survive preemption,” id. at 453.

should not be confused with FDA’s regulatory exemption from preemption for state “requirements of general applicability where the purpose of the requirement relates . . . to other products in addition to devices (e.g., requirements such as general electrical codes, and the Uniform Commercial Code . . . ).” 21 C.F.R. § 808.1(d)(1) (emphasis added).

126 25 According to petitioner’s expansive view of the parallel requirements exclusion, however, virtually every product liability claim involving a federally regulated product is based on a general common-law duty that is equivalent to a general federal statutory standard, and therefore, no product liability claim ever would impose a state-law requirement that is “different from” or “in addition to” a federal regulatory requirement, and thus, be expressly preempted. If such a facile comparison of general common-law tort duties (e.g., the duty to warn) with general federal statutory requirements (e.g., the requirement to ensure that products are not misbranded) were sufficient to save damages claims from preemption, the congressional allocation of regulatory authority between the Federal Government and the states reflected in the terms of an express preemption provision such as § 360k(a) of the MDA or § 136v(b) of FIFRA would be rendered meaningless. Cf. United States v. Locke, 529 U.S. 89, 106 (2000) (“We decline to give broad effect to saving clauses where doing so would upset the careful regulatory scheme established by federal law.”). The Court, therefore, should reject petitioner’s wholesale attempt to circumvent express preemption of damages claims by means of the parallel requirements exclusion. Instead, to give meaning to both express preemption of additional or different state requirements and the implicit exclusion for parallel requirements, the Court should clarify Lohr and Bates by holding that the exclusion applies only to damages claims premised upon a manufacturer’s alleged breach of a state-law duty to comply with a specific federal requirement. “While States are free to impose liability predicated on a violation of the

127 26 federal standards set forth in FIFRA and in any accompanying regulations . . . they may not impose liability for labeling requirements predicated on distinct state standards of care.” Bates, 544 U.S. at 455 (Thomas, J., concurring the judgment in part and dissenting in part) (emphasis added). For example, in holding that § 360k(a) does not preempt petitioner’s defective manufacturing claim, the court of appeals indicated that “[a] jury verdict in the Riegels’ favor on this claim would not have imposed state requirements that differed from, or added to, the PMA-approved standards for this device, but would instead have simply sought recovery for Medtronic’s alleged deviation from those standards.” Riegel, 451 F.3d at 123 (emphasis added). Or in the FIFRA context, a state-law claim alleging that a pesticide manufacturer failed to include on product labeling a specific warning that was required by EPA would be based on a state-law duty that is “genuinely equivalent” to the federal requirement, Bates, 544 U.S. at 454; see also id. at 442 (“Nothing in the text of FIFRA would prevent a State from making the violation of a federal labeling or packaging requirement a state offense, thereby imposing its own sanctions on pesticide manufacturers who violate federal law.”) (emphasis added).14

14 Further, because a pesticide label containing all warnings required under FIFRA would not be misbranded for lack of adequate warnings, see 7 U.S.C. § 136(q)(1)(G), a failure-to-warn claim concerning that pesticide necessarily would impose state- law requirements for labeling that are in addition to or different from the federal requirements, and therefore, would be expressly preempted. See Bates, 544 U.S. at 454 (“For a manufacturer should not be held liable under a state labeling require-

128 27 But a damages claim premised upon noncompliance with a specific state-law duty that parallels a specific federal requirement (such as a federal design or labeling specification) is quite unlike a product liability claim premised upon breach of a general common-law duty to design reasonably safe products or to provide adequate labeling and warnings. The “liability-creating premise” for the latter type of claim “is that the [product] itself, in its present [federally] approved form, is in some way defective and therefore requires modification.” Riegel, 451 F.3d at 122. This type of claim should not be allowed to automatically escape a federal regulatory statute’s express preemption of additional or different, state- imposed requirements merely because it is based on a general state-law duty that is consistent with a general federal regulatory standard or requirement. Thus, a damages claim premised upon failure to design a medical device in a way that differs from the device’s FDA-approved design, including any specific FDA design requirements, would be preempted by § 360k(a) even though the general common-law duty to design reasonably safe products is consistent with the general MDA requirement that the safety and effectiveness of the device be reasonably assured. Cf. Lohr, 518 U.S. at 503-04 (Breyer, J., concurring in part and concurring in the judgment) (discussing, by way of example, why a claim based on failure to design a hearing aid component with a 1-inch wire would be preempted if FDA regulations require a 2- inch wire). Similarly, a claim based on a manufacturer’s failure to provide pesticide label warnings ment subject to § 136v(b) unless the manufacturer is also liable for misbranding as defined by FIFRA.”).

129 28 that go beyond those required by EPA would be based on a “common-law rule that would impose a labeling requirement that diverges from those set out in FIFRA and its implementing regulations,” Bates, 544 U.S. at 452, and would be expressly preempted by § 136v(b) even though the state common-law duty to provide adequate warnings is consistent with FIFRA’s prohibition against misbranding.15 The vast majority of manufacturers go to great lengths to ensure compliance with all requirements pertaining to the design, safety, labeling, and sale of their federally regulated products. While the parallel requirements exclusion would enable a damages claim to avoid preemption in the event of a manufacturer’s noncompliance with specific federal design, labeling, or other requirements, this Court should not allow it to function as a readily accessible means for flouting congressional intent.

15 In one of the leading pre-Bates cases on FIFRA preemption, Worm v. American Cyanamid Co., 5 F.3d 744 (4th Cir. 1993), the court of appeals held that § 136v(b) permits “a state . . . to recognize that a breach of a FIFRA-created duty forms the basis for a state remedy,” but that “[a]llowing such actions . . . is substantially distinguishable from accepting the argument that the state common law duty to warn is not ‘in addition to or different from’ the federally defined duty.” Id. at 748 (emphasis added).

130 29 CONCLUSION The judgment of the court of appeals should be affirmed. Respectfully submitted,

131 No. 06-144

IN THE Supreme Court of the United States

————

BASF CORPORATION, Petitioner, v. RONALD PETERSON, et al., Respondents. ————

On Petition for a Writ of Certiorari to the Supreme Court of Minnesota

————

MOTION OF CROPLIFE AMERICA FOR LEAVE TO FILE BRIEF AS AMICUS CURIAE AND BRIEF IN SUPPORT OF PETITIONER

————

Of Counsel: LAWRENCE S. EBNER Counsel of Record DOUGLAS T. NELSON MCKENNA LONG & JOSHUA SALTZMAN ALDRIDGE LLP CROPLIFE AMERICA 1900 K Street, N.W. 1156 15th Street, N.W. Washington, D.C. 20006 Suite 400 (202) 496-7500 Washington, D.C. 20005 (202) 296-1585 Attorneys for Amicus Curiae CropLife America

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20001

132 IN THE Supreme Court of the United States ———— No. 06-144 ———— BASF CORPORATION, Petitioner, v. RONALD PETERSON, et al., Respondents. ———— On Petition for a Writ of Certiorari to the Supreme Court of Minnesota ———— MOTION FOR LEAVE TO FILE BRIEF AS AMICUS CURIAE ———— Pursuant to Sup. Ct. R. 37.2(b), CropLife America hereby moves for leave to file the accompanying amicus curiae brief in support of the petition for a writ of certiorari. Counsel for Petitioner BASF Corporation has consented to the filing of the brief (a copy of Petitioner’s written consent has been filed with the Clerk’s office), but Respondents’ counsel has with- held consent, thereby necessitating this motion. CropLife America is the national trade association for the plant science industry. Its member companies produce, sell, and distribute virtually all of the agricultural crop protection pesticides, including herbicides, insecticides, and fungicides, which American farmers use to provide consumers with abundant food and fiber. The association is committed to safe and responsible use of the industry’s products. To

133 achieve that objective, pesticide products must be used in accordance with nationally uniform product labeling regulated by the United States Environmental Protection Agency (EPA) pursuant to the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). The subject of this appeal—FIFRA preemption of state-law damages claims that conflict with EPA’s regulation of pesticide labeling—is of utmost importance to CropLife America and its members. During the past 15 years, the association has filed numerous amicus curiae briefs addressing the scope and application of FIFRA preemption. CropLife America submitted an amicus brief to this Court in Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005) (holding that FIFRA’s preemption provision, 7 U.S.C. § 136v(b) (“Uniformity”), expressly preempts state law damages claims which impose requirements for labeling that diverge from, and are not substantially equivalent to, FIFRA’s labeling requirements), and in support of BASF’s pre-Bates certiorari petition here, see BASF Corp. v. Peterson, 544 U.S. 1012 (2005) (vacating and remanding for further consideration in light of Bates). CropLife America seeks leave to file the accompanying amicus curiae brief in order to present its views on why the Minnesota Supreme Court’s post-Bates remand opinion warrants review. From an industry-wide perspective, there are two principal reasons why review of this case is essential: First, the state court misread Bates in a most fundamental and troublesome way. The Court should take this opportunity to clarify, for the benefit of lower courts and litigants in state- law pesticide damages suits, that Bates neither instructs nor allows a court to elevate the name, form, or plaintiff's characterization of a state-law cause of action (e.g., a “consumer fraud” claim) over its nature, elements, or substance (e.g., a claim based on a duty that conflicts with EPA’s labeling regulations) to determine whether it imposes “requirements for labeling” for purposes of § 136v(b).

134 Second, the state court’s preemption analysis undermines the structure and disrupts the operation of the federal/state pesticide regulatory scheme, whose principal purpose is to protect human health, the environment, and agricultural crop production. In particular, under the pretext of consumer protection, the opinion holds that a pesticide manufacturer can be held liable under state law for utilizing EPA-authorized subset labeling to identify the crops to which a herbicide may be safely applied, and for advocating compliance with FIFRA’s crucial mandate that pesticides be used only in accordance with their labeling. CropLife America believes that the discussion of these and related points in the accompanying amicus brief will be helpful to the Court in deciding whether to grant the certiorari petition. Therefore, this motion for leave to file the amicus brief should be granted. Respectfully submitted,

135 TABLE OF CONTENTS Page INTEREST OF THE AMICUS CURIAE...... 1 SUMMARY OF ARGUMENT...... 1 ARGUMENT...... 4 I. THE COURT SHOULD GRANT REVIEW TO CLARIFY THAT NO FORM OF STATE- LAW CAUSE OF ACTION IS CATE- GORICALLY EXCLUDED FROM FIFRA PREEMPTION ...... 4 II. THE COURT SHOULD GRANT REVIEW BECAUSE THE LOWER COURT’S OPIN- ION UNDERMINES THE STRUCTURE AND DISRUPTS THE OPERATION OF THE FEDERAL/STATE PESTICIDE REGU- LATORY SCHEME...... 12 CONCLUSION ...... 20

(i)

136 ii TABLE OF AUTHORITIES CASES Page Aetna Health Inc. v. Davilla, 542 U.S. 200 (2004)...... 8 Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005)...... passim Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311 (1981)...... 8 Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)...... 4 Freightliner Corp. v. Myrick, 514 U.S. 280 (1995)...... 11 Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559 (1st Cir. 1996)...... 9 Kuiper v. American Cyanamid Co., 131 F.3d 656 (7th Cir. 1997) ...... 9 Lowe v. Sporicidin Int'l, 47 F.3d 124 (4th Cir. 1995)...... 9 Mortellite v. Novartis Crop Protection, Inc., No. 03-3847, 2006 WL 2390514 (3d Cir. Aug. 21, 2006)...... 9, 10 Netland v. Hess & Clark, Inc., 284 F.3d 895 (8th Cir. 2002)...... 8 Taylor AG Indus. v. Pure-Gro, 54 F.3d 555 (9th Cir. 1995)...... 9 Turner v. Chevron USA, Inc., No. B173622, 2006 WL 1314013 (Cal. Ct. App. May 15, 2006), pet. for review denied (Cal. Sup. Ct. Aug. 16, 2006) (No. 44553) ...... 10 United States v. Locke, 529 U.S. 89 (2000)...... 11 Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597 (1991)...... 13 Wuebker v. Wilbur-Ellis Co., 418 F.3d 883 (8th Cir. 2005)...... 10

137 iii TABLE OF AUTHORITIES STATUTES AND REGULATIONS Page 7 U.S.C. § 136j(a)(2)(G)...... 18, 19 7 U.S.C. § 136v(a)...... 12 7 U.S.C. § 136v(b)...... passim 7 U.S.C. § 136w-1(a)...... 20 40 C.F.R. § 152.130(a) ...... 18 40 C.F.R. § 152.130(b)...... 15 40 C.F.R. § 156.10(a)(1)...... 18 MISCELLANEOUS 49 Fed. Reg. 37,960 (Sept. 26, 1984)...... 17 53 Fed. Reg. 15,952 (May 4, 1988)...... 16 EPA Label Review Manual (3d ed. 2003)...... 18 Leslie A. Brueckner, A Turning of the Tide for Preemption, 41 Trial 28 (Nov. 2005) ...... 10

138 IN THE Supreme Court of the United States ———— No. 06-144 ———— BASF CORPORATION, Petitioner, v. RONALD PETERSON, et al., Respondents. ———— On Petition for a Writ of Certiorari to the Supreme Court of Minnesota ———— BRIEF OF CROPLIFE AMERICA AS AMICUS CURIAE IN SUPPORT OF PETITIONER ———— INTEREST OF THE AMICUS CURIAE 1 The interest of the amicus curiae is described in the accompanying motion for leave to file this brief. SUMMARY OF ARGUMENT Review should be granted because this case provides the Court with an ideal and timely opportunity to clarify a crucial aspect of the Court’s opinion in Bates v. Dow AgroSciences LLC, 544 U.S. 431 (2005). More specifically, the Court

1 Pursuant to Sup. Ct. R. 37.6, CropLife America states that no counsel for a party has written this brief in whole or in part and that no person or entity, other than amicus curiae, its members, or its counsel, has made a monetary contribution to the preparation or submission of this brief.

139 2 should grant review to end the widespread confusion surrounding Bates by making it clear that nothing in that opinion allows the name, form, or characterization given to a state- law cause of action by a plaintiff to govern whether the claim falls within the scope of FIFRA’s preemption provision, 7 U.S.C. § 136v(b). The Court held in Bates that a state-law damages claim imposes a “requirement for labeling” for purposes of § 136v(b) if the legal duty upon which the claim is premised would “set a standard” for a pesticide product’s labeling, or require a product to be labeled in a “particular way.” 544 U.S. at 444, 445, 446. The Court further indicated that “[r]ules that require manufacturers to design reasonably safe products, to use due care in conducting appropriate testing of their products, to market products free of manufacturing defects, and to honor their express warranties or other contractual commitments plainly do not qualify as requirements for ‘labeling or packaging.’. . . Thus, petitioners’ claims for defective design, defective manufacture, negligent testing, and breach of express warranty are not pre-empted.” Id. at 444. In its post- Bates opinion on remand, the Minnesota Supreme Court misconstrued this statement to mean that any state-law claim whose name, form, or “characterization” is not “very directly related” or “directly addressed” to a pesticide product’s labeling is categorically excluded from the preemptive scope of § 136v(b). Pet. App. at 13a. Based on this misreading of Bates, the state court failed to analyze the true nature of the legal duties underlying the Respondent farmers’ claims, and instead, adopted the farmers’ own superficial characterization of their claims as involving “nonlabel” conduct. Id. at 19a. The recurring question of whether the Court in Bates, which is being hailed by the trial bar as a landmark realign- ment of the Court’s tort preemption jurisprudence, intended to elevate form over substance and thereby enable a plaintiff to plead around preemption at will, has tremendous practical

140 3 importance for any type of pesticide or other state-law damages action where federal preemption is raised as an affirmative defense. While the urgent need to clarify (or correct) this aspect of Bates is reason enough to grant review here, the opinion below also warrants the Court’s scrutiny because unless reversed, it will severely destabilize the underpinnings of the federal/state pesticide regulatory scheme, stifle innova- tive activity within the pesticide industry, and impair Ameri- can farmers’ already precarious ability to produce a broad variety of food crops in a cost-effective manner. There are at least five reasons why the lower court’s opinion turns the federal/state scheme on its head: First, contrary to Bates, the opinion allows individual juries to establish their own divergent state-law requirements for the content and format of a pesticide product’s nationally uniform labeling, including with regard to listing the agricultural crops to which a product may be lawfully (and safely) applied. Second, the opinion transforms a voluntarily obtained FIFRA registration into both an unqualified license and a state law duty to sell a product throughout the United States for all of its federally registered uses; the opinion thereby encroaches upon each state’s inherent authority to restrict, based on agricultural, environmental and other factors within its own borders, the sale and use of FIFRA-registered pesticides. Third, the opinion undermines FIFRA’s fundamental prohibition against using a pesticide in a manner inconsistent with its EPA-approved labeling, such as by applying a product to crops that are not included on its labeling. Fourth, the opinion discourages adequate pre-market testing of pesticide products to ensure that they are safe and effective for use on particular types of crops in specific regions. Fifth, the opinion elimi- nates pesticide manufacturers’ already tenuous economic incentives for developing and marketing products that are suitable for use on low-acreage “minor” crops such as fruits

141 4 and vegetables, which have high economic value to farmers and nutritional benefits for consumers.

ARGUMENT I. THE COURT SHOULD GRANT REVIEW TO CLARIFY THAT NO FORM OF STATE-LAW CAUSE OF ACTION IS CATEGORICALLY EXCLUDED FROM FIFRA PREEMPTION In Bates this Court articulated a two-part, textually based test for determining whether a state-law damages claim falls within the preemptive scope of § 136v(b) of FIFRA: For a particular state rule to be pre-empted, it must satisfy two conditions. First, it must be a requirement “for labeling or packaging” . . . Second, it must impose a labeling or packaging requirement that is “in addition to or different from those required under this subchapter.” 544 U.S. at 444 (quoting 7 U.S.C. § 136v(b)). Addressing the first prong, the Court rejected a label alteration “inducement test” as too subjective, indicating instead that “[a] requirement is a rule of law that must be obeyed . . . . The proper inquiry calls for an examination of the elements of the . . . duty at issue . . . .” Id. at 445 (emphasis added) (citing Cipollone v. Liggett Group, Inc., 505 U.S. 504, 523-24 (1992) (“The central inquiry in each case is straightforward: we ask whether the legal duty that is the predicate of the . . . damages action constitutes a ‘requirement’ . . . .”)). Further, “requirements for labeling” are rules which “require[] that manufacturers label . . . their products in [a] particular way,” id. at 444 (emphasis added), in other words, “rules [that] set a standard for a product’s labeling,” id. at 446 (emphasis added). 1. The Opinion Below Fundamentally Misconstrues Bates. The Minnesota Supreme Court failed to conduct the

142 5 straightforward legal inquiry required by Bates. The state court did not ask whether, as a matter of law, the Respondent farmers’ damages claims are predicated upon state-law rules that would “set a standard” for BASF’s Poast Plus labeling, or require that the product to be labeled “in [a] particular way,” for example, by requiring BASF, despite EPA’s subset labeling regulation, to list all of the product’s federally registered crops. Instead, the state court embarked upon the subjective, convoluted, fact-laden exercise of deciding which party’s “characterization” of the claims is more accurate, and then allowed Respondents’ self-serving characterization to define the nature of the state-law duties imposed by the claims. Plainly misreading Bates, the court erroneously asserted that in light of the Supreme Court’s clarification of the appropriate FIFRA preemption standards, it has become even more apparent that the debate in this case is not about . . . the legal standard imposed by application of the New Jersey statute in the context of the farmers’ claims. Instead, the fundamental debate is simply about how the farmers’ claims are accurately characterized. Because we conclude that the record supports the farmers’ characterization of their claims as based on nonlabel conduct, under Bates, there is no FIFRA preemption. Pet. App. at 18a-19a (emphasis added). Compounding this error, the opinion below rewrites § 136v(b) by adding the requirement “that state regulation must be very directly related to labeling . . . in order to invoke FIFRA preemption. . . . That is, FIFRA preemption applies only if the state requirement on which liability is based is directly addressed to labeling . . . .” Id. at 13a (emphasis added). This “very directly related” or “directly addressed” to labeling test, which is nowhere to be found in the text of § 136v(b) or in Bates, was the “crucial determinant” for the

143 6 lower court’s conclusion that the farmers’ claims should be characterized as being “based on BASF’s marketing and advertising actions and not on the content of the product labels.” Id. at 14a. Rather than recognizing that the farmers’ claims are predicated upon state-law duties that would set standards for Poast Plus labeling and require the product to be labeled in a particular way, the state supreme court’s circular discussion of how the claims should be “characterized” merely reflects the consumer fraud veneer which Respondents have applied to their claims in an effort to circumvent § 136v(b).2 Further- more, by concluding that the “farmers . . . more accurately characterize the nature of the farmers’ claims” as involving “nonlabel conduct,” id. at 16a, 19a, the state court conveniently avoided the second prong of the Bates test, i.e., whether their claims are based on a “rule that would impose a labeling requirement that diverges from those set out in FIFRA and its implementing regulations.” Bates, 544 U.S. at 452 (emphasis added). Had the court addressed this second question, it would have been difficult to reach any conclusion other than that Respondents’ claims are based on state-law duties that widely diverge from EPA’s labeling regulations, and therefore, establish a state-law standard for labeling that is “in addition to or different from” FIFRA’s standards as implemented by EPA. See Pet. at 14-19. For the same reason, the state supreme court erred by failing to recognize that as mandated by Bates, 544 U.S. at 454, the trial court

2 See, e.g., Pet. App. at 17a (“The duty the farmers’ claims imposed on BASF was not to register and label Poast and Poast Plus as one product, but rather, having registered and labeled them separately, to refrain from deceptive statements about their EPA registration, their active ingredient composition, and their relative efficacy on major and minor crops.”); ibid. (“[T]he farmers’ claims do not challenge the legality of BASF’s subset labeling, but rather its misrepresentations about the products, their registration, and their capacities . . . .”).

144 7 should have instructed the jury regarding FIFRA’s and EPA’s labeling requirements. 2. This Court Should Clarify Bates by Explicitly Holding That Lower Courts Must Not Place Form Over Substance in Determining Whether a State-Law Cause of Action Is Preempted by § 136v(b) of FIFRA. Consistent with the plain language of § 136v(b), Bates clearly holds that a state-law claim must impose a “requirement for labeling” as the first condition for express preemption. 544 U.S. at 444. In other words, any claim that does not impose a “requirement for labeling” is categorically excluded from the scope of § 136v(b). The state court’s supposedly “careful reading” of Bates, Pet. App. at 12a, goes astray, however, by reading into Bates a much broader categorical exclusion for virtually any type of state-law cause of action which does not facially attack a pesticide product’s labeling. For example, the opinion below found it “significant that the Court [in Bates] also made the point that a state requirement applicable to oral statements does not qualify as a requirement for ‘labeling or packaging’ covered by section 136v(b).” Ibid. (citing Bates, 544 U.S. 445 n.17). Based on this Court’s supposedly “narrow view of the ‘labeling or packaging requirement’ factor,” ibid., the state court indicated that “[t]he conduct at issue is analogous to the oral sales representations that the Supreme Court found in Bates to be outside the scope of FIFRA preemption.” Id. at 17a; see also id. at 13a (referring to the Supreme Court’s “refusal to view regulation of oral statements, even those that mirror label language, as requirements for labeling”). To be sure, the Court indicated in Bates that “[r]ules that require manufacturers to design reasonably safe products, to use due care in conducting appropriate testing of their products, to market products free of manufacturing defects, and to honor their express warranties or other contractual commitments plainly do not qualify as requirements for ‘labeling or

145 8 packaging.’” 544 U.S. at 444. This statement, however, is not equivalent to a holding that state-law causes of action are categorically excluded from the preemptive scope of § 136v(b) merely because they are denominated as, or pleaded or presented in the form of, claims for defective design, inadequate testing, breach of warranty—or here, consumer fraud—even if, in a particular case, they are based on state-law rules that would set standards for a pesticide product’s labeling or otherwise require a product to be labeled in a particular way. Such a holding would represent a sea change in this Court’s tort preemption jurisprudence, which establishes that the substance, not the form, of a state-law claim governs whether it is preempted. See, e.g., Aetna Health Inc. v. Davilla, 542 U.S. 200, 214 (2004) (“distinguishing between pre-empted and non-pre-empted claims based on the particular label affixed to them would elevate form over substance and allow parties to evade the pre-emptive scope of [the statute] simply by relabeling their . . . claims”) (internal quotation marks omitted); Chicago & North Western Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 324 (1981) (preemption cannot be “avoided by mere artful pleading”). Because pesticide-related damages suits, now reinvigorated by Bates, continue to be a persistent feature of this nation’s judicial landscape, the Court should grant review in order to clarify for the benefit of lower courts and litigants that any state-law damages claim—no matter how characterized, denominated, or formulated—that “set[s] a standard for a product’s labeling,” Bates, 544 U.S. at 446, or “requires that manufacturers label . . . their products in [a] particular way,” id. at 444, imposes requirements for labeling within the scope of § 136v(b). Prior to Bates, the federal courts of appeals had uniformly recognized that FIFRA preemption cannot be avoided merely by the “guise under which the claim is presented.” Netland v. Hess & Clark, Inc., 284 F.3d 895, 900 (8th Cir. 2002); see

146 9 also Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559, 564 (1st Cir. 1996) (“merely to call something a design or manufacturing defect claim does not automatically avoid FIFRA’s explicit preemption clause”). Along the same lines, the federal courts widely had held that a state-law claim purporting to be based on an oral or other “off-label” statement that repeated information on a product’s labeling necessarily imposed state-law requirements for the labeling itself. See, e.g., Kuiper v. American Cyanamid Co., 131 F.3d 656, 662 (7th Cir. 1997) (farmers “cannot automatically avoid FIFRA preemption simply because they challenge alleged misrepresentations that were made separately from the label. . . . even off-label statements are preempted if they merely repeat information in the label itself.”); Taylor AG Indus. v. Pure- Gro, 54 F.3d 555, 563 (9th Cir. 1995) (FIFRA preempts claim based on pesticide distributor’s oral representation regarding crop safety where there was “no evidence establishing that [it] made any statements that were inconsistent with or went beyond the labels”); Lowe v. Sporicidin Int’l, 47 F.3d 124, 127-30 (4th Cir. 1995) (§ 136v(b) preempts claims based on “off-label” representations which do not “substantially differ” from the label). Now, however, the Minnesota Supreme Court has misconstrued the Bates “requirement for labeling” discussion, 544 U.S. at 444-45, as holding that most types of state-law causes of action are categorically excluded from § 136v(b) simply based on the name, form, or characterization that a plaintiff assigns to them.3 The state supreme court is not alone; other post-Bates decisions have made the same critical error. For example, in Mortellite v. Novartis Crop Protection, Inc., No. 03-3847, 2006 WL 2390514 (3d Cir. Aug. 21, 2006), a pesticide-related crop damage case, the Third Circuit read

3 The state supreme court acknowledged the Court held in Bates that fraud and negligent-failure-to-warn claims do impose requirements for labeling. See Pet. App. at 10a (citing Bates, 544 U.S. at 446).

147 10 Bates as categorically excluding strict liability, negligent testing, and breach of warranty claims, and also oral misrepresentation claims, from § 136v(b). See id., at *4 (“As the Supreme Court explained, such common law claims plainly do not impose labeling requirements, and therefore cannot conflict with FIFRA.”). Similarly, in Wuebker v. Wilbur-Ellis Co., 418 F.3d 883, 886-87 (8th Cir. 2005), a pesticide-related personal injury case, the Eighth Circuit read Bates as categorically excluding design defect claims, and as a result, reversed a district court’s pre-Bates holding that a purported design defect claim was actually based on a state-law duty to provide additional label warnings, and thus was preempted by § 136v(b). See also Turner v. Chevron USA, Inc., No. B173622, 2006 WL 1314013, at *6 (Cal. Ct. App. May 15, 2006), pet. for review denied (Cal. Sup. Ct. Aug. 16, 2006) (No. 44553) (holding that “Bates puts to rest [the] contention that FIFRA expressly preempts Turner’s claim for strict liability, design defect under the risk-benefit test,” even though that test requires juries to examine the adequacy of label warnings). Not surprisingly, the trial bar has seized upon the same “requirement for labeling” passage in Bates. See, e.g., Leslie A. Brueckner, A Turning of the Tide for Preemption, 41 Trial 28, 30 (Nov. 2005) (“The eagerly awaited decision . . . held 7-2 that common law design defect, manufacturing defect, negligent testing, and breach-of-express- warranty claims are entirely exempt from express preemption.”) (emphasis added). Justice Thomas, joined by Justice Scalia, filed in Bates a separate opinion which highlights the need for the Court to clarify that lower courts must analyze each claim, regardless of its name, form, or characterization, to determine whether it is based on a state-law rule that would impose requirements for labeling. In his opinion Justice Thomas noted that under § 136v(b), “States . . . may not impose liability for labeling requirements predicated on distinct state standards of care.”

148 11 Bates, 544 U.S. at 455 (Thomas, J., concurring in the judgment in part and dissenting in part). Then he indicated that “the majority omits a step in its reasoning that should be made explicit: A state-law cause of action, even if not specific to labeling, nevertheless imposes a labeling requirement ‘in addition to or different from’ FIFRA’s when it attaches liability to statements on the label that do not produce liability under FIFRA.” Id. at 456. This “missing step” in the Court’s Bates opinion—a step which the Court now should make explicit—flatly contradicts the state supreme court’s view here that only claims which are “very directly related” or “directly addressed” to labeling can be preempted. Review is needed to ensure that the lower court’s mis- interpretation of the Bates’ test for preemption, an error which other courts also have committed, does not proliferate any further. This Court has not hesitated to clarify its federal tort preemption jurisprudence where, as here, it is necessary to aid the lower courts and litigants. See, e.g., Freightliner Corp. v. Myrick, 514 U.S. 280, 287-89 (1995) (clarifying discussion in Cipollone, 505 U.S. at 517, which courts of appeals had misconstrued to mean that inclusion in a statute of an express preemption clause forecloses implied preemption); cf. United States v. Locke, 529 U.S. 89, 107 (2000) (clarifying that a frequently cited “fragmentary quote from Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947) [regarding the “presumption against preemption”], does not support the scope given to it by the Court of Appeals”). CropLife America believes that it is important from the viewpoint of maintaining consistency in this Court’s preemption jurisprudence that Bates not be misconstrued as elevating form over substance in determining whether a state-law cause of action is displaced. For this reason, the Court should grant review to clarify (or correct) Bates.

149 12 II. THE COURT SHOULD GRANT REVIEW BECAUSE THE LOWER COURT’S OPINION UNDERMINES THE STRUCTURE AND DIS- RUPTS THE OPERATION OF THE FEDERAL/ STATE PESTICIDE REGULATORY SCHEME CropLife America and its members view the Minnesota Supreme Court’s decision in this nationwide class action as a serious threat to the structure and operation of the federal/ state pesticide regulatory scheme. That court’s post-Bates remand opinion, like its pre-Bates decision, upholds a jury verdict which requires an R&D-oriented pesticide manufacturer to pay tens of millions of dollars under a state consumer fraud statute on the theory that it engaged in an “unconscionable commercial practice” (i) by distributing a FIFRA-registered product with EPA-authorized and approved “subset” labeling only in states where the product had been registered, and (ii) by advocating against unlawful, potentially hazardous, off-label use of pesticides. If left undisturbed, this decision will continue to engender tremendous confusion and uncertainty within the regulated community, and in view of the potential financial rewards, almost certainly will spawn additional “consumer fraud” class action suits that further erode the pesticide regulatory scheme. See, e.g., FarmLaw. com (hyping the farmers’ trial court victory in the instant litigation). 1. The State Court’s Opinion Abrogates the Important Role Played by the States in Registering Pesticides and the Need for Adequate Crop-By-Crop Testing on a Regional or Local Basis. Although § 136v(b) expressly preempts the states from imposing additional or different requirements for labeling, § 136v(a) specifies that they may “regulate the sale or use of any federally registered pesticide,” provided that such regulation “does not permit any sale or use prohibited by [FIFRA].” 7 U.S.C. § 136v(a); see Bates, 544 U.S. at 446 n.20 (noting that “§ 136v(a) is merely declaratory of the au-

150 13 thority that the States retained after FIFRA”). Pursuant to this residual authority, the states have established their own individual state pesticide registration requirements, with which every FIFRA-registered product must comply prior to being sold or used. See Tr. at 2007:15-24; 2010:6-2011:1; 2068:5- 2069:24; 2604:3-9; 2606:22-24; 2612:9-2613:7; 2615:13- 2616:11 (testimony of parties’ regulatory experts regarding state pesticide registration requirements geared to state and local agricultural and environmental conditions). Under the federal/state scheme, a product cannot lawfully be marketed, advertised, sold, or used for a federally registered use (i.e., crop) in a particular state unless and until that state’s pesticide regulatory agency, pursuant to the state’s own pesticide registration requirements, has approved the product for that use in that state. In other words, a FIFRA registration alone is not a license to sell or use a pesticide product anywhere. See Bates, 544 U.S. at 442 & 442 n.14 (discussing the states’ pesticide regulatory role); Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 613 (1991) (“FIFRA nowhere seeks to establish an affirmative permit scheme for the actual use of pesticides.”). Responsible product stewards like BASF extensively test their products for phytotoxicity (i.e., crop injury) on a crop- by-crop basis before making them available to farmers. Testing typically has to be conducted on a regional or local basis, in order to take into account differing soil, terrain, climatic, environmental, and other conditions. In addition, because farmers commonly “tank mix” different pesticide products prior to application, testing on various combinations of products often has to be conducted to ascertain whether a tank mixture will be phytotoxic when applied to crops grown in a particular region or state. The results of these and other types of phytotoxicity testing very well may determine the particular states in which a product should be sold and used, and thus, registered.

151 14 If a manufacturer chooses to refrain from marketing a FIFRA-registered product in Minnesota, North Dakota, or any other particular state, nothing in the statute requires the manufacturer to obtain a registration from that state. The lower court’s ruling, however, appears to impose liability for BASF’s forbearance from rushing to farmers a product which had not been fully tested, on a region-by-region basis, for phytotoxicity on minor crops. See Pet. at 5. Growers can hardly afford to destroy or damage their low-acreage minor crops with a product or tank mixture that has not been tested for crop safety under varying regional or local conditions. Nor can pesticide manufacturers bear that risk. Indeed, the state court’s decision shatters whatever fragile incentives manufacturers like BASF may have for diverting limited R&D resources to development of test data needed to register new or existing pesticides for use on minor crops.4 The ruling appears to impose financial liability upon BASF for the very reason that it made such an investment by registering its thoroughly tested Poast herbicide, on both a federal and state level, for use on dozens of minor crops, see Pet. at 4, but refrained from doing the same for the newer Poast Plus, which BASF indicates had not been adequately tested for phytotoxicity to minor crops, id. at 5. If the ruling is allowed to stand, the inevitable consequence will be that already scant incentives for manufacturers to develop or expand products for use on minor crops will evaporate. Many minor crop

4 Because of the long-standing need to maintain and bolster pesticide manufacturers’ incentives to develop products suitable for use on minor crops, Interregional Research Project No. 4 (“IR-4”) was established in 1963 as a cooperative effort between USDA and state agricultural research centers. See Tr. at 3245. IR-4 Executive Director Robert Holm testified at the trial below that the program's “sole purpose is to provide crop-protection solutions for minor crop growers, the rationale being that . . . crop-protection companies lacked the economic incentive to develop their chemicals on minor crops.” Id. at 3246 (emphasis added).

152 15 growers throughout the nation then will be deprived of the pesticide products that they need. 2. In Violation of § 136v(b), the State Court’s Opinion Imposes Liability for a Manufacturer’s Use of EPA- Authorized Subset Labeling, Which Is an Essential Compo- nent of the Federal/State Regulatory Scheme, and Until Now, a Common and Beneficial Commercial Practice. The lower court’s holding that a pesticide manufacturer’s use of EPA-authorized subset labeling somehow represents an “unconscionable commercial practice,” punishable by payment of treble damages under a vague state consumer protection law, thwarts the objectives of this necessary and widely utilized federal labeling practice, which is highly beneficial to farmers and other pesticide users, as well as to manufacturers. EPA’s long-standing subset labeling regulation allows a pesticide manufacturer to distribute a product with labeling that lists less than all of its FIFRA-registered uses: A registrant may distribute or sell a product under labeling bearing any subset of the approved directions for use, provided that in limiting the uses listed on the label, no changes would be necessary in precautionary statements, use classification, or packaging of the product. 40 C.F.R. § 152.130(b) (emphasis added). In other words, EPA does not require the labeling accompanying a pesticide product to identify all of the uses (i.e., crops) encompassed by that product’s FIFRA registration. Without subset labeling, a manufacturer would have to list all FIFRA-registered crops, even those for which a registration has not been sought or obtained in a particular state. Selling the product with such all-encompassing labeling would violate that state’s registration requirements. As a result, the manufacturer could not lawfully sell the product at all within that state, not even for use on the crops which have

153 16 received the state’s approval. Farmers then would be deprived of beneficial crop protection products. Alternatively, a manufacturer could seek state registration before a product is fully tested for use on specific crops under the soil, climatic, environmental, and other conditions present in the particular state or region. That, too, would be problematic for both farmers and manufacturers. Therefore, subset labeling is a regulatory necessity. It enables a FIFRA-registered product to be sold for those crops which have received state as well as EPA approval, while avoiding violation of state registration requirements for other crops. Equally important, it affords a manufacturer the opportunity to complete safety testing of the product on such other crops before seeking state registrations. Subset labeling also is important for commercial reasons. When EPA promulgated the subset labeling regulation in 1988, it formalized a long-standing policy which affords manufacturers flexibility in deciding how to market multi-use (e.g., multi-crop) products. See 53 Fed. Reg. 15,952, 15,957 (May 4, 1988) (“A company having a registered product is permitted (both by current policy and by this final rule) to market the product in a variety of ways.”). Thus, a “product may be marketed . . . bearing different subsets of approved uses . . . to distinguish primary uses for different regions of the country.” Ibid. (emphasis added). For example, utilizing subset labeling, a manufacturer is permitted to sell the same herbicide product in Mississippi labeled only for use on cotton and in Iowa labeled only for use on corn. Along the same lines, subset labeling affords a manufacturer the flexibility to address special regional or local considerations (e.g., soil types, climatic parameters, pest biotypes, and presence of endangered species) for safe and efficacious use of a product on a particular type of crop. Also, a pesticide product’s FIFRA registration may cover both agricultural crop uses and non-agricultural uses (e.g., home, lawn, and garden uses). In such a case, a manufacturer

154 17 can use subset labeling to distinguish between the agricultural and non-agricultural uses of the same product, which might be packaged (as well as labeled) differently for each category. Without subset labeling, manufacturers would have to try to obtain multiple FIFRA registrations for the same product in order to avoid including agricultural and non-agricultural uses on the same labeling. But “[e]xpanding usage of a single product is often more desirable from a marketing perspective (and usually easier to accomplish) than registering a number of similar products, each with fewer uses.” 49 Fed. Reg. 37,960, 37,971 (Sept. 26, 1984). Thus, subset labeling con- serves EPA’s limited resources and provides a way for manufacturers to select from among a product’s EPA-approved uses, those that meet the needs of different types of users. The opinion below severely disrupts the federal/state regulatory scheme by rendering use of subset labeling a perilous practice. Yet, the subset labeling regulation, which specifically authorized BASF to omit minor crop uses from its Poast Plus labeling, necessarily represents EPA’s determination that including less than all FIFRA-registered crops on an agricultural pesticide product’s labeling does not render that labeling deceptive (i.e., misbranded). As a result, any state-law claim, such as Respondents’ claims here, which are based on a duty requiring a manufacturer to list all FIFRA-registered crops on a pesticide product’s labeling, necessarily imposes a requirement for labeling which is not “equivalent to, and fully consistent with, FIFRA’s misbranding provisions,” Bates, 544 U.S. at 447, but instead, “diverges from [the labeling requirements] set out in FIFRA and its implementing regulations,” id. at 452. Such claims, therefore, are expressly preempted by § 136v(b) under the Bates test.5

5 For similar reasons, Respondents’ claims that it was deceptive for BASF not to label Poast Plus the same as Poast also are preempted because they are based on duties which diverge from EPA’s requirements (i) that separately registered products be distributed with their own sepa-

155 18 3. The State Court’s Opinion Imposes Liability for Advocating Compliance With, and Facilitating Enforcement of, FIFRA’s Prohibition Against Misuse of Pesticides, Which Is a Fundamental Precept of the Federal/State Regulatory Scheme. FIFRA makes it “unlawful for any person . . . to use any registered pesticide in a manner inconsistent with its labeling.” 7 U.S.C. § 136j(a)(2)(G). One egregious example of such unlawful misuse is applying a pesticide to a crop that is not listed on its labeling. Nevertheless, Respondents contended at trial that BASF engaged in “unconscionable” conduct by reminding farmers that off-label use of pesticides (e.g., use of a pesticide product on crops not included on its labeling) is unlawful, and by providing information to state pesticide enforcement officials, which led to prosecutions of certain pesticide dealers and farmers for off-label use. See Pet. at 8, 24. The opinion below held that this conduct was “deceptive,” Pet. App. at 15a, and affirmed imposition of state-law liability based in part on these activities. Off-label use (i.e., misuse) of agricultural pesticide products can cause serious problems such as crop damage, illegal pesticide residues in food crops, pesticide drift or runoff, and hazards to applicators, bystanders, domestic animals, and wildlife. The lower court’s ruling, which appears to impose liability upon BASF for advocating against the off-label use of pesticides, sends shockwaves through the federal/state regulatory structure. If left undisturbed, the opinion below will leave manufacturers with the choice of either looking the other way when they suspect that their products are being rately approved labeling, see 40 C.F.R. §§ 152.130(a), 156.10(a)(1), and (ii) that to avoid confusion, different products be distributed with different names, see EPA Label Review Manual (3d. ed. 2003), Ch. 12: Labeling Claims, at Part IV.C (“The exact same name cannot be used for different products registered by any one registrant. The product name must be sufficiently different to clearly distinguish one product from another.”).

156 19 misused, or incurring the risk of massive state-law liability by reporting possible misuse. Either way, the impact of the state supreme court’s opinion severely undermines FIFRA’s prohibition against misuse of pesticides. FIFRA’s prohibition against using a pesticide in a manner inconsistent with its labeling is commonly known by the maxim “The Label is the Law.” During the trial court proceedings below, Dan Barolo, who served as Director of EPA’s Office of Pesticide Programs, testified that “[t]he absolute underpinning and foundation of the program is em- bodied in this particular statement.” Tr. at 2556. The record of this case reflects that when North Dakota’s agriculture commissioner requested EPA to provide an “enforcement waiver” so that farmers could violate § 136j(a)(2)(G) by applying Poast Plus for crops not listed on its labeling, Dr. Lynn Goldman, EPA’s then Assistant Administrator for pesticides, responded as follows: It is critical for us to keep in mind that, under FIFRA, the label is the law. . . . To move away from this basic precept and inform farmers that it is acceptable to substitute different products with different approved labels has serious national implications with regard to the health and safety of farmers and workers. . . . If EPA were to undermine the basic understanding by farmers that they must follow the labeling on a specific product, we would cause confusion in the regulated community, and, in effect, be encouraging pesticide misuse. Def. Ex. 636 (emphasis added). By holding a pesticide manufacturer liable under state law for discouraging the misuse of agricultural pesticides, the state court’s opinion causes the exact type of “serious national implications” and “confusion in the regulated community” which EPA sought to prevent by refusing an enforcement waiver for off-label use of Poast Plus. Furthermore, Congress decided to rely upon the states to enforce FIFRA’s prohibition against misuse of

157 20 pesticides. See 7 U.S.C. § 136w-1(a) (“State Primary En- forcement Responsibility”). The lower court’s opinion warrants this Court’s review because it flouts that important state enforcement responsibility by condoning imposition of state- law liability on a manufacturer for promoting compliance with pesticide labeling.

CONCLUSION The petition for a writ of certiorari should be granted. Respectfully submitted,

158 A BNA, INC. PRODUCT SAFETY & LIABILITY ! REPORTER

Reproduced with permission from Product Safety & Li- ability Reporter, Vol. 33, No. 23, 06/13/2005, pp. 592- 597. Copyright ஽ 2005 by The Bureau of National Af- fairs, Inc. (800-372-1033) http://www.bna.com

PESTICIDES

Attorney Larry Ebner analyzes the U.S. Supreme Court ruling in Bates v. Dow Agro- Sciences LLC, which involved the preemptive scope of the Federal Insecticide, Fungicide, and Rodenticide Act. The author says that while the impact of Bates remains to be seen, it is clear that pesticide manufacturers promptly should begin to develop and utilize sophisticated new approaches when raising FIFRA preemption or otherwise defending against unwarranted product liability or toxic tort claims.

FIFRA PREEMPTION AFTER BATES v. DOW AGROSCIENCES

BY LAWRENCE S. EBNER state-law standards that diverge from federal labeling requirements, or that otherwise conflict with the Act or .S. Supreme Court decisions are supposed to be its implementation. the final word on important and difficult legal is- U sues. The Court’s perplexing opinion in Bates v. Bates does not merit the landmark status some activ- Dow AgroSciences LLC, 125 S.Ct. 1788 (2005), how- ists hastily assigned to the case. In fact, beginning with ever, raises as many questions as it answers about fed- Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992), in- eral preemption of pesticide-related personal injury and volving federal preemption of cigarette-related claims, crop damage claims. Advocacy groups like Beyond Pes- Bates is the latest in a 13-year string of Supreme Court ticides and Earthjustice quickly proclaimed victory after tort preemption decisions which, when viewed as a the Court issued its decision on April 27. But in reality, whole, even legal scholars find difficult to reconcile. As neither the pesticide industry nor anti-pesticide mili- one federal district judge explained only three weeks tants and their trial lawyer allies obtained the clear-cut prior to Bates, ‘‘[m]any commentators believe these ruling that they sought regarding the Federal Insecti- [post-Cipollone] cases did little to cure the confusion cide, Fungicide, and Rodenticide Act’s preemptive . . . Justices Blackmun and Scalia predicted’’ that the scope. Instead, the Court’s 7-2 majority opinion, au- plurality opinion in Cipollone (also written by Justice thored by Justice Stevens, is a jumble of inconsistencies Stevens) would engender. In re Welding Fume Products which lower courts will have to untangle on a case-by- Liability Litigation, 364 F.Supp.2d 669, 681 (N.D. Ohio case basis, as pesticide manufacturers continue to as- 2005); id. at 681 n.12 (collecting post-Cipollone Su- sert preemption when confronted with claims based on

159 2 preme Court cases) & n.14 (collecting law review ar- Pesticide labeling is the principal means by which ticles). EPA—a federal agency with the necessary scientific re- In his separate opinion in Cipollone, Justice Black- sources and expertise, experience, and national per- mun stated that ‘‘I can only speculate as to the difficulty spective to regulate labeling—ensures that all necessary lower courts will encounter in attempting to implement warnings, directions for use, and other essential infor- today’s decision.’’ 505 U.S. 504 at 543-44 (Blackmun, J., concurring in part and dissenting in part). Along the mation are communicated from a pesticide’s manufac- same lines, Justice Scalia correctly observed that ‘‘ques- turer through the chain of distribution to the pesticide tions raised by today’s decision will fill the lawbooks for applicator or user. As EPA confirmed in a recent Fed- years to come. A disposition that raises more questions eral Register notice, than it answers does not serve the country well.’’ Id. at 556 (Scalia, J., concurring in part and dissenting in [a] pesticide label is the user’s direction for using part). These same concerns apply to Bates. The deci- pesticides safely and effectively. It contains impor- sion is now part of the jurisprudential labyrinth which tant information about where to use, or not use, the the Supreme Court has created in wrestling with the re- product, health and safety information that should curring conflict between our federalist system (i.e., be read and understood before using a pesticide States’ rights) and federal statutes, like FIFRA, which product, and how to dispose of that product. mandate national uniformity of regulation with regard to health and safety-related subjects, such as pesticide labeling. 70 Fed. Reg. 12,276, 12,281 (Mar. 11, 2005). To under- This article discusses why the impact of Bates re- score the importance of a pesticide’s nationally uni- mains to be seen. It already is clear, however, that pes- form, EPA-regulated labeling, FIFRA makes it unlawful ticide manufacturers should promptly begin to develop for any person to use a pesticide ‘‘in a manner inconsis- and utilize sophisticated new approaches when raising tent with its labeling.’’ 7 U.S.C. § 136j(a)(2)(G). FIFRA preemption or otherwise defending against unwarranted product liability or toxic tort claims. Pre-Bates Case Law. In 1992 the Supreme Court held in Cipollone that a ‘‘federal statute barring additional Case Background ‘requirement[s]’ . . . imposed under State law pre-empts common-law claims.’’ CSX Transp., Inc. v. Easterwood, Pesticide Labeling Under FIFRA. Bates, a crop damage 507 U.S. 658, 664 (1993) (quoting Cipollone, 505 U.S. at case, is the Supreme Court’s first opinion on tort pre- 522) (internal quotation marks omitted) (emphasis emption under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 136-136y. FIFRA is added). In the wake of Cipollone, ‘‘a groundswell of fed- the nation’s principal pesticide regulatory statute. It eral and state decisions emerged’’ holding that was enacted in 1947, but ‘‘[i]n 1972, growing environ- § 136v(b) of FIFRA expressly preempts failure-to-warn mental and safety concerns led Congress to undertake claims and other causes of action which impose addi- a comprehensive revision’’ of the Act. Wisconsin Public tional or different, state-law requirements for labeling. Intervenor v. Mortier, 501 U.S. 597, 601 (1991) (holding Bates, 125 S.Ct. at 1797. The Supreme Court precipi- that FIFRA does not categorically preempt local govern- tated the ‘‘groundswell’’ of FIFRA preemption prece- ments from regulating pesticide use). The 1972 amendments ‘‘significantly strengthened FIFRA’s registration dent by remanding for further consideration in light of and labeling standards’’ and transformed the Act into a Cipollone, two federal court of appeals cases involving ‘‘comprehensive regulatory statute.’’ Ibid; see also failure-to-warn claims against pesticide manufacturers. Bates, 125 S.Ct. at 1794-95. In so doing, Congress care- After those federal courts of appeals held on remand fully considered the allocation of pesticide regulatory that § 136v(b) expressly preempts failure-to-warn authority between the newly created U.S. Environmen- claims, the Supreme Court declined further review. Pa- tal Protection Agency and the states. Under the federal- pas v. Upjohn Co., 985 F.2d 516 (11th Cir. 1993); state ‘‘regulatory partnership’’ that Congress estab- Arkansas-Platte & Gulf Partnership v. Van Waters & lished, the states share responsibility with EPA for regulating the ‘‘sale or use’’ of pesticides (see 7 U.S.C. Rogers, Inc., 981 F.2d 1177 (10th Cir. 1993). In fact, for § 136v(a)), but as the Supreme Court indicated in well over a decade, the Court repeatedly let stand simi- Mortier, pesticide ‘‘labeling . . . fall[s] within an area lar rulings concerning the preemptive scope of that FIFRA’s ‘program’ pre-empts.’’ Id. at 615; see 7 § 136v(b). By the time Bates was decided, all nine fed- U.S.C. § 136v(b). eral courts of appeals that had considered the subject in More specifically, FIFRA’s express preemption provi- light of Cipollone, along with state appellate courts in sion, § 136v(b) (‘‘Uniformity’’), provides that a ‘‘State more than half the States, and a multitude of federal shall not impose any requirements for labeling or pack- and state trial courts, had adopted or applied the prin- aging in addition to or different from those required un- ciple that § 136v(b) expressly preempts failure-to-warn der [FIFRA].’’ Bates not only mischaracterizes this and other labeling-related damages claims. The small long-standing cornerstone of the federal-state pesticide number of cases holding to the contrary included a regulatory scheme as a ‘‘relatively obscure provision’’ much-criticized, pre-Cipollone court of appeals decision (125 S.Ct. at 1802), but also conveniently ignores Con- (Ferebee v. Chevron Chemical Co., 736 F.2d 1529 (D.C. gress’ intent ‘‘[i]n dividing the responsibility between the States and the Federal Government for the manage- Cir. 1984)), and a Texas Supreme Court case holding ment of an effective pesticide program . . . to completely that labeling-related crop damage claims are excluded preempt State authority in regard to labeling.’’ H.R. from § 136v(b) (American Cyanamid Co. v. Geye, 79 Rep. No. 92-511, at 16 (1971) (emphasis added). S.W.3d 21 (Tex. 2002)). See Bates, 125 S.Ct. at 1794.

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Brief for the United States as Amicus Curiae in Ameri- can Cyanamid Co. v. Geye, No. 02-367. ‘Bates’ certainly does not merit the landmark status which some activists hastily assigned to the Express Preemption Test Under § 136v(b) case. Bates is limited to the express preemptive scope of § 136v(b) of FIFRA. The Court had no difficulty rejecting the fundamental contention of the petitioners and their public interest group amici that § 136v(b)’s prohi- Bates Suit. The petitioners in Bates, Texas peanut bition against states imposing additional or different re- farmers, claimed that their crops, planted in soils with quirements for labeling is inapplicable to damages ac- pH levels of 7.2 or higher, were damaged by Strong- tions: ‘‘[T]he term ‘requirements’ in § 136v(b) reaches arm௡, an herbicide whose EPA-approved label originally recommended its use ‘‘in all areas where peanuts beyond positive enactments, such as statutes and regu- are grown.’’ Bates, 125 S.Ct. at 1793. According to the lations, to embrace common-law duties. . . . While the growers, the manufacturer’s agents made equivalent use of ‘requirements’ in a pre-emption clause may not representations in their sales presentations. Ibid. After invariably carry this meaning, we think this is the best growers reported crop damage, the manufacturer, Dow reading of § 136v(b).’’ Bates, 125 S.Ct. at 1798 (citing AgroSciences LLC, distributed the herbicide in Texas Cipollone) (emphasis added). with an EPA-approved supplemental label which pro- Based on the language of § 136v(b), the Court found hibited application ‘‘to soils with a pH of 7.2 or greater.’’ that Ibid. Federal district court litigation ensued between Dow AgroSciences and growers who had not agreed to [f]or a particular state rule to be pre-empted, it must participate in the company’s claims settlement pro- satisfy two conditions. First, it must be a require- gram. The growers brought claims for breach of ex- ment ‘‘for labeling or packaging’’; rules governing press warranty, fraud, violation of the Texas Deceptive the design of a product, for example, are not pre- Trade Practices - Consumer Protection Act, strict liabil- empted. Second, it must impose a labeling or pack- ity (including defective design and defective manufac- aging requirement that is ‘‘in addition to or different ture), and negligent testing, as well as allegations con- from those required under this subchapter.’’ strued as negligent failure to warn. Id. at 1793, 1797 n.15. Ibid. In essence, this is no different than the analysis The federal district court in Texas held that § 136v(b) which the majority of courts have utilized since Cipol- expressly preempted the growers’ claims (one claim lone to determine whether a claim is preempted by was dismissed on state-law grounds), and the U.S. § 136v(b). Bates, however, expounds upon § 136v(b)’s Court of Appeals for the Fifth Circuit affirmed. Id. at express preemption criteria in a way that creates sub- 1793. The growers filed a petition for a writ of certiorari, arguing that § 136v(b) does not preempt tort claims stantial uncertainty for litigants. The opinion also un- at all, and alternatively, that labeling-related crop dam- derscores the need, in connection with § 136v(b) pre- age claims are not covered by § 136v(b) due to EPA’s emption analysis, for close, case-by-case judicial scru- waiver of the submission of product efficacy (i.e., effec- tiny of the specific state-law requirements for labeling tiveness) data at the time that most (but not all) agricul- that would be imposed by particular claims. tural pesticides are first registered (see 7 U.S.C. § 136a(c)(5)). At the Supreme Court’s invitation, the United States, through the Solicitor General, filed an ‘‘Requirements for Labeling’’ amicus curiae brief supporting the view that § 136v(b) preempts failure-to-warn and other labeling-related Bates explains that the ‘‘petitioners’ fraud and claims, including those involving crop damage. negligent-failure-to-warn claims are premised on Government’s Position. The government’s position, common-law rules that qualify as ‘requirements for la- which EPA actively supported, was in line with the vast beling’’’because they ‘‘set a standard for a product’s majority of pre-Bates FIFRA preemption case law. Dur- labeling.’’ Id. at 1799 (emphasis added). In contrast, the ing the Clinton administration, the government had opinion indicates that ‘‘[r]ules that require manufactur- filed an amicus curiae brief in California’s state su- ers to design reasonably safe products, to use due care preme court, unsuccessfully advocating the categorical in conducting appropriate testing of their products, to view that § 136v(b) does not preempt tort claims. See market products free of manufacturing defects, and to Etcheverry v. Tri-Ag Service, Inc., 993 P.2d 366 (Cal. honor their express warranties or other contractual 2000); see also Bates, 125 S.Ct. at 1794 n.7; Lawrence commitments plainly do not qualify as requirements for S. Ebner, ‘‘The California Supreme Court Weighs In On ‘labeling or packaging.’’’Id. at 1798. According to the FIFRA Preemption,’’ BNA Toxics Law Reporter (Vol. 15, No. 24) at 627 (June 22, 2000). In 2003, when the Su- Court, because ‘‘[n]one of these common-law rules re- preme Court invited the United States to express its quires that manufacturers label or package their prod- views on FIFRA preemption in connection with a certio- ucts in any particular way . . . petitioners’ claims for de- rari petition that subsequently was denied, the govern- fective design, defective manufacture, negligent testing, ment reexamined the position that it advocated in and breach of express warranty are not pre-empted.’’ Etcheverry and concluded that it was incorrect. See Ibid.

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company to recurring state tort liability? Justice Stevens’ baffling suggestion in Bates that a jury verdict The ruling expounds upon § 136v(b)’s express awarding damages for a manufacturer’s violation of a common-law duty does not impose a ‘‘requirement’’ for preemption criteria in a way that creates purposes of federal preemption under § 136v(b) conflicts with his opinion in Cipollone, which explains that substantial uncertainty for litigants. ‘‘[s]tate regulation can be as effectively exerted through an award of damages as through some form of preventive relief. The obligation to pay compensation can be, indeed is designed to be, a potent method of governing But does the Court’s holding enable a plaintiff to conduct and controlling policy.’’ 505 U.S. at 521 (inter- avoid § 136v(b) simply by attaching a ‘‘defective de- nal quotation marks omitted) (discussing a federal pre- sign’’ or ‘‘breach of express warranty’’ tag to a cause of emption provision which prohibited the States from im- action? That clearly would be contrary to Supreme posing certain requirements); see also Medtronic v. Court preemption precedent. The Court has explained Lohr, 518 U.S. 470, 504 (1996) (Breyer, J., concurring in that ‘‘distinguishing between pre-empted and non-pre- part and concurring in the judgment) (‘‘[t]he effects of empted claims based on the particular label affixed to . . . the state tort suit are identical’’ to those of a ‘‘state them would elevate form over substance and allow par- agency regulation’’). The pre-Bates FIFRA preemption ties to evade the pre-emptive scope of [the statute] sim- cases were equally emphatic. See, e.g., MacDonald v. ply by relabeling their . . . claims.’’ Aetna Health Inc. v. Monsanto Co., 27 F.3d 1021, 1025 (5th Cir. 1994) (reject- Davila, 124 S.Ct. 2488, 2498 (2004) (internal quotation ing as ‘‘sophistry’’ the plaintiffs’ contention that ‘‘state marks omitted); see also Chicago & North Western common law tort judgments are not ‘requirements’...it Transp. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 324 cannot be presumed that businesses wish to bring about (1981) (preemption cannot be ‘‘avoided by mere artful their own economic suicide’’); see generally Viet D. pleading’’). Prior to Bates, it was well-established that Dinh, ‘‘Reassessing the Law of Preemption,’’ 88 Geo. ‘‘merely to call something a design or manufacturing L.J. 2085, 2114 (2000) (‘‘the effect of tort liability on pri- defect claim does not automatically avoid FIFRA’s ex- mary conduct is the same as a statutory prescription or plicit preemption clause.’’ Grenier v. Vermont Log regulatory standard’’). Bldgs., Inc., 96 F.3d 559, 564 (1st Cir. 1996) (holding Bates nevertheless holds that ‘‘[t]he inducement test that a personal injury plaintiff’s pesticide-related design is unquestionably overbroad’’ and ‘‘finds no support in defect claim was a ‘‘disguised labeling claim’’); see also the text of § 136v(b).’’ 125 S.Ct. at 1799. But how can Netland v. Hess & Clark, Inc., 284 F.3d 895, 900 (8th Cir. that be since, according to the Court (ibid.), a state-law 2002) (‘‘if the state law claim is premised on inadequate duty sets a standard for labeling (i.e., imposes a require- labeling or a failure to warn [it] is nonetheless pre- ment for labeling within the meaning of § 136v(b)) if it empted regardless of the guise under which the claim is requires a manufacturer to label a product in a particu- presented’’) (internal quotation marks omitted); Traube lar way? The opinion cautions that § 136v(b) ‘‘does not v. Freund, 775 N.E.2d 212, 217 (Ill. App. Ct. 2002) (‘‘FI- call for speculation as to whether a jury verdict will FRA preemption clearly does not turn upon the name a prompt the manufacturer to take any particular action.’’ plaintiff gives to his or her cause of action.’’). Ibid. The Court previously has explained, however, that The lower courts will have to decide whether Bates ‘‘this Court’s pre-emption cases ordinarily assume com- authorizes plaintiffs to circumvent § 136v(b) simply by pliance with the state-law duty in question.’’ Geier v. pleading around it, or instead, whether even in light of American Honda Motor Co., 529 U.S. 861, 882 (2000). Bates, § 136v(b) continues to apply to claims which a Further, the opinion notes that ‘‘[g]iven the inherently plaintiff has denominated and pleaded as ‘‘defective de- dangerous nature of pesticides, most safety gains are sign’’ or ‘‘breach of express warranty,’’ but nevertheless achieved not through modifying a pesticide’s design, are based on state-law duties that, upon close examina- but by improving the warnings and instructions con- tion, ‘‘set a standard for a product’s labeling.’’ Bates, tained on its label.’’ 125 S.Ct. at 1802 n.25. In view of 125 S.Ct. at 1799. Indeed, the Court emphasized that in the Court’s seemingly circular reasoning, trial courts determining whether a state-law claim imposes a re- will have to decide whether Bates still allows them to quirement for labeling, ‘‘[t]he proper inquiry calls for consider, as one factor in determining whether a claim an examination of the elements of the common-law is based on a duty that would require a product to be la- duty at issue.’’ Ibid. beled in a particular way (i.e., a duty that would impose Under Bates, if the state-law duty underlying a cause requirements for labeling), evidence that the manufac- of action ‘‘requires that manufacturers label . . . their turer would change the labeling to avoid liability for products in any particular way,’’ then that duty would breach of that duty. ‘‘set a standard for . . . labeling.’’ Id. at 1798, 1799. The Court found, however, that the Fifth Circuit was ‘‘quite Meaning of ‘In Addition To or Different From’ wrong when it assumed that any event, such as a jury verdict, that might ‘induce’ a pesticide manufacturer to Section 136v(b) preempts any requirements for label- change its label should be viewed as a requirement.’’ Id. ing which are ‘‘in addition to or different from’’ those at 1798. According to the Court, ‘‘[a] requirement is a required under FIFRA. 7 U.S.C. § 136v(b) (emphasis rule of law that must be obeyed; an event, such as a jury added). Bates reads into this seemingly all- verdict, that merely motivates an optional decision is encompassing prohibition, a ‘‘parallel requirements’’ not a requirement.’’ Id. at 1799 (emphasis added). exception (125 S.Ct. at 1800) which, unless judiciously applied by the lower courts, threatens to engulf ‘Optional’ in the Real World? But in the real world, how § 136v(b) itself. ‘‘optional’’ is a pesticide manufacturer’s decision to re- The opinion holds that § 136v(b) ‘‘pre-empts any vise a label if leaving it unchanged would expose the statutory or common-law rule that would impose a la-

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162 5 beling requirement that diverges from those set out in Id. at 1801. According to the Court, that phrase is ‘‘evi- FIFRA and its implementing regulations. It does not, dence of [Congress’] intent to draw a distinction be- however, pre-empt any state rules that are fully consis- tween state labeling requirements that are pre-empted tent with federal requirements.’’ Id. at 1803 (emphasis and those that are not.’’ Ibid. But there is an alternative added). More specifically, Bates holds that ‘‘a state-law plausible interpretation: Rather than merely prohibiting labeling requirement is not pre-empted by § 136v(b) if state labeling requirements that differ from federal re- it is equivalent to, and fully consistent with, FIFRA’s quirements, Congress also expressly barred additional misbranding provisions.’’ Id. at 1800 (emphasis added). state labeling requirements in order to entirely preclude FIFRA makes it unlawful to distribute or sell a pesti- state regulation of labeling. This reading of § 136v(b) is cide that is ‘‘misbranded.’’ 7 U.S.C. § 136j(a)(1)(E). A supported by its legislative history, which indicates that pesticide is misbranded if, among other things, its label the House Committee on Agriculture ‘‘has adopted lan- does not contain adequate warnings (id. guage which is intended to completely preempt State § 136(q)(1)(G)), its labeling does not contain necessary authority in regard to labeling.’’ H.R. Rep. No. 92-511, directions for use (id. § 136(q)(1)(F)), or its labeling at 16 (1971) (emphasis added). It also is consistent with contains a false or misleading statement (id. the Supreme Court’s acknowledgement in Wisconsin § 136(q)(1)(A)). Citing FIFRA’s prohibition against dis- Public Intervenor v. Mortier that pesticide ‘‘labeling . . . tribution of a misbranded pesticide, the Court indicates fall[s] within an area that FIFRA’s ‘program’ pre- that ‘‘manufacturers have a continuing obligation to ad- empts.’’ 501 U.S. at 615. here to FIFRA’s labeling requirements.’’ Bates, 125 Bates acknowledges that ‘‘FIFRA does not provide a S.Ct. at 1795. federal remedy’’ to individuals who seek to enforce the The Court remanded the petitioners’ fraud and statute’s labeling requirements (including its misbrand- failure-to-warn claims for the Fifth Circuit’s determina- ing requirements). 125 S.Ct. at 1801. The absence of tion as to whether they are based on state-law duties such a private enforcement provision in FIFRA repre- that ‘‘diverge’’ from, or instead, whether they are based sents a carefully considered congressional determina- on duties that are ‘‘equivalent’’ to, FIFRA’s misbranding tion, not a statutory deficiency. See Rodriguez v. Ameri- standards, as applied by EPA. See id. at 1803 & 1803 can Cyanamid Co., 858 F. Supp. 127, 131 (D. Ariz. n.27. (It can be inferred from the Court’s remand that 1994) (‘‘Congress considered and explicitly rejected Bates does not read into § 136v(b) the categorical exclu- amendments that would have authorized citizen suits to sion of efficacy-related crop damage claims that the pe- enforce the 1972 Act’s prohibitions’’) (quoting In re titioners and their amici had advocated.) The Court ex- Agent Orange Product Liability Litigation, 635 F.2d plained its ‘‘equivalency’’ concept as follows: 987, 992 n.9 (2d Cir. 1980) and collecting cases); see We emphasize that a state-law labeling requirement also Almond Hill School v. U.S. Dept. of Agriculture, must in fact be equivalent to a requirement under 768 F.2d 1030, 1037-38 (9th Cir. 1985) (discussing the FIFRA in order to survive pre-emption. For example, reasons why Congress decided not to include a private were the Court of Appeals to determine that the ele- enforcement provision in FIFRA). ment of falsity in Texas’ common-law definition of Yet, according to the Court, ‘‘[p]rivate remedies that fraud imposed a broader obligation than FIFRA’s re- enforce federal misbranding requirements would seem quirement that labels not contain ‘‘false or mislead- to aid, rather than hinder, the functioning of FIFRA.’’ ing statements,’’ that state-law cause of action would be pre-empted by § 136v(b) to the extent of Bates, 125 S.Ct. at 1802. To the contrary, a spate of that difference. State-law requirements must also be damages suits allowing juries in every state to deter- measured against any relevant EPA regulations that mine for themselves whether a product is misbranded give content to FIFRA’s misbranding standards. For under FIFRA, especially if EPA has made no finding example, a failure-to-warn claim alleging that a that the product is misbranded, inevitably would dis- given pesticide’s label should have stated ‘‘DAN- rupt if not destroy the national labeling uniformity GER’’ instead of the more subdued ‘‘CAUTION’’ which Congress mandated in the statute. The United would be pre-empted because it is inconsistent with States, in the amicus curiae brief which the Solicitor 40 CFR § 156.64 (2004), which specifically assigns General and EPA General Counsel submitted to the Su- these warnings to particular classes of pesticides based on their toxicity. preme Court, expressed great concern about the impact of such suits: Id. at 1803-04 (emphasis added). The Court noted that The FIFRA [misbranding and enforcement] provi- [a]t present, there appear to be relatively few regu- sions, taken in combination, provide a comprehen- lations that refine or elaborate upon FIFRA’s sive scheme for imposing and enforcing a nationally broadly phrased misbranding standards. To the ex- uniform system of labeling requirements and confer tent that EPA promulgates such regulations in the upon EPA the full range of authority to interpret future, they will necessarily affect the scope of pre- and apply the uniform federal standards. emption under § 136v(b). ... Id. at 1804 n.28; see also id. at 1804 (Breyer, J., concurring) (explaining that ‘‘EPA enjoys . . . authority’’ to It is no answer to say that the FIFRA misbranding ‘‘determine the pre-emptive effect’’ of its own rules and standard and the state standard of due care are that ‘‘the federal agency charged with administering the ‘‘consistent,’’ because the State is under no obliga- statute is often better able than are courts to determine tion under state law to ensure that its common-law the extent to which state liability rules mirror or distort standard produces labeling requirements that are the same as those mandated under FIFRA — and ab- federal requirements’’). sent an EPA finding of misbranding is in no position Referring to its ‘‘ ‘parallel requirements’ reading of to do so. EPA administers FIFRA through central- § 136v(b),’’ the Court asserts that there is no other ized expert judgment, while the 50 States apply ‘‘plausible alternative interpretation of ‘in addition to or common-law standards through an adversarial pro- different from’ that would give that phrase meaning.’’ cess . . . it is virtually certain that even identically

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phrased federal and state standards would produce § 136v(b) unless the manufacturer is also liable for divergent labeling requirements. misbranding as defined by FIFRA. ... Ibid. (emphasis on ‘‘genuinely’’ in original); see also id. Congress, which expressed its objective in Section at 1805 (Thomas, J., concurring in the judgment in part 136v(b) to subject pesticide manufacturers to a and dissenting in part) (‘‘A state-law cause of action, single body of federal law governing pesticide label- even if not specific to labeling, nevertheless imposes a ing obligations, could not have intended to under- labeling requirement ‘in addition to or different from’ mine that uniformity by allowing each State to de- FIFRA’s when it attaches liability to statements on the termine for itself whether the federally approved la- label that do not produce liability under FIFRA.’’) (em- bel is ‘‘false or misleading,’’ and, if so, what phasis added). remedies and sanctions to impose on the registrant. In other words, for purposes of § 136v(b) preemption Brief for United States as Amicus Curiae at 25-26 (em- analysis, the question which Bates instructs courts to phasis added). answer on a case-by case, claim-by-claim basis is According to the Court, ‘‘the United States whether the omission (or inclusion) of a particular exaggerate[s] the disruptive effects of using common- warning or other statement on a product’s labeling ren- law suits to enforce the prohibition on misbranding.’’ ders the product misbranded under FIFRA. Under 125 S.Ct. at 1802. But the majority opinion’s reliance on Bates, if a product is not misbranded under FIFRA, a ‘‘[t]he long history of tort litigation against manufactur- state-law damages claim imposing requirements for la- ers of poisonous substances (id. at 1801),’’ especially beling of the product (e.g., a failure-to-warn claim), prior to enactment of § 136v(b) more than three de- would impose requirements that are ‘‘in addition to or cades ago, is as Justice Thomas indicated, ‘‘irrelevant’’ different from,’’ and not equivalent to, FIFRA’s mis- (id. at 1806) (Thomas, J., concurring in the judgment in branding standards. Therefore, § 136v(b) would ex- part and dissenting in part). Needless to say, the fre- pressly preempt the claim. quency, burdens, and costs of litigation in today’s It may not be readily apparent to a trial court whether world, especially in the area of product liability and a particular failure-to-warn claim (or similar claim) toxic torts, have greatly increased since the mid- would impose a requirement for labeling that is ‘‘genu- Twentieth Century. Nor are tort suits needed as some inely equivalent’’ to FIFRA’s misbranding standards, as sort of ‘‘catalyst’’ to spur product improvements. Id. at interpreted and applied by EPA. Such a determination 1802. Pesticide manufacturers are responsible corpo- may involve considerably more judicial analysis than a rate citizens which already have every ethical and com- superficial comparison between the general elements of mercial incentive for ensuring that their products are the state-law cause of action and the text of FIFRA’s safe and effective, and that their labeling is up-to-date. misbranding definition. For example, suppose a plain- Bates ultimately acknowledges the significant role of tiff alleges that a manufacturer failed to warn him that § 136v(b) in maintaining nationally uniform labeling: using its pesticide product would cause his hair to fall out. In order to determine whether omission of that [U]nder our interpretation, § 136v(b) retains a nar- warning from the product’s EPA-approved label ren- row, but still important, role. In the main, it pre- dered the product misbranded for purposes of § 136v(b) empts competing state labeling standards—imagine preemption analysis, the trial court would have to deter- 50 different labeling regimes prescribing the color, mine whether such a warning was ‘‘necessary’’ and ‘‘if font size, and wording of warnings—that would create significant inefficiencies for manufacturers. complied with . . . adequate to protect health’’ (7 U.S.C. § 136(q)(1)(G)). To make that determination, the court, 125 S.Ct. at 1803 (emphasis added). The Court failed to either prior to or during trial, might want to consider appreciate, however, that the compelling need for na- facts such as whether the plaintiff has credible scientific tional labeling uniformity transcends economic ineffi- evidence to support his claim that the pesticide caused ciencies. Indeed, although ‘‘the statute authorizes a his hair to fall out; whether the manufacturer was relatively decentralized scheme that preserves a broad aware of any such scientific evidence; and whether role for state regulation’’ (id. at 1802), the crucial role EPA, if aware of such evidence, would have required a played by EPA-regulated, nationally uniform product warning on the product’s labeling regarding the risk to labeling in promoting the safe and effective use of pes- a user’s hair. If EPA would not have required such a ticides cannot be overstated. warning, then the manufacturer would not be ‘‘liable for misbranding as defined by FIFRA.’’ Bates, 125 S.Ct. at 1804. As a result, the failure-to-warn claim would im- The Post-Bates Challenge pose a labeling requirement which diverges from EPA’s Trial courts called upon to conduct post-Bates pre- labeling requirements, and therefore, as confirmed by emption analyses under § 136v(b) face a formidable Bates, would be preempted by § 136v(b). task. Bates indicates that ‘‘[i]n undertaking a preemption analysis at the pleadings stage of a case, a Conclusion court should bear in mind the concept of equivalence.’’ 125 S.Ct. 1804. Further, Bates creates new challenges for pesticide manufacturers, which not only need to continue doing every- [i]f a case proceeds to trial, the court’s jury instruc- thing possible to prevent product liability, but also to tions must ensure that nominally equivalent labeling defend themselves vigorously when unwarranted dam- requirements are genuinely equivalent. If a defendant so requests, a court should instruct the jury on ages suits are filed. Bates is a major disappointment for the relevant FIFRA misbranding standards, as well industry, and has the potential to seriously undermine as any regulations that add content to those stan- EPA’s authority to regulate nationally uniform pesticide dards. For a manufacturer should not be held liable labeling and carry out the statute’s misbranding prohi- under a state labeling requirement subject to bition in a fair and uniform manner. Nevertheless, FI-

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FRA preemption remains an important and viable de- tribution will immediately need to adopt new strategies fense against certain types of state-law damages claims. and tactics for pursuing preemption, and when neces- Pesticide manufacturers and others in the chain of dis- sary, for mounting an aggressive defense at trial.

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165 No. 03-388

IN THE Supreme Court of the United States ————

DENNIS BATES, ET AL., Petitioners, V.

DOW AGROSCIENCES, LLC, Respondent. ———— On Writ of Certiorari to the United States Court of Appeals for the Fifth Circuit ———— BRIEF OF CROPLIFE AMERICA AND NATIONAL PEST MANAGEMENT ASSOCIATION AS AMICI CURIAE IN SUPPORT OF RESPONDENT ————

DOUGLAS T.NELSON LAWRENCE S.EBNER * SEEMA MAHINI MCKENNA LONG & CROPLIFE AMERICA ALDRIDGE LLP 1156 15th Street, N.W. 1900 K Street, N.W. Suite 400 Washington, D.C. 20006 Washington, D.C. 20005 (202) 496-7500 (202) 296-1585 Attorneys for Amici Curiae * Counsel of Record

WILSON-EPES PRINTING CO., INC. – (202) 789-0096 – WASHINGTON, D. C. 20001

166 TABLE OF CONTENTS Page TABLE OF AUTHORITIES...... iii INTEREST OF THE AMICI CURIAE ...... 1 SUMMARY OF ARGUMENT...... 4 ARGUMENT...... 6 I. SECTION 136v(b) OF FIFRA NEITHER PREEMPTS ALL DAMAGES CLAIMS AGAINST PESTICIDE MANUFACTURERS NOR PRECLUDES FARMERS FROM OBTAINING COMPENSATION FOR CROP INJURY...... 6 A. The Lower Courts Have Consistently Held That Only Labeling-Related Damages Claims Are Preempted By § 136v(b) ...... 6 B. Agricultural Pesticide Manufacturers Are Conscientious Product Stewards Which Strive To Maintain Good Will With Farm- ers Through Prompt Resolution Of Crop Injury Claims ...... 11 II. FIFRA PREEMPTION OF LABELING- RELATED DAMAGES CLAIMS PRE- SERVES THE SIGNIFICANT HEALTH, SAFETY, ENVIRONMENTAL, AND PROD- UCT PERFORMANCE BENEFITS OF EPA- REGULATED, NATIONALLY UNIFORM PRODUCT LABELING...... 13 A. Nationally Uniform Product Labeling Plays A Crucial Role In The Coordinated Federal/State Regulatory Partnership Es- tablished By Congress ...... 13

(i)

167 ii TABLE OF CONTENTS—Continued Page B. Labeling-Related Damages Claims Would Impair—Not Promote—FIFRA’s Goals..... 20 III.CONGRESSDIDNOTINTENDTO EXCLUDE FROM FIFRA PREEMP- TIONLABELING-RELATEDDAMAGES CLAIMSTHATINVOLVEAGRICUL- TURAL CROP INJURY...... 24 CONCLUSION ...... 30

168 iii TABLE OF AUTHORITIES CASES Page Akee v. Dow Chem. Co., 272 F.Supp.2d 1112 (D. Hawaii 2003) ...... 9 American Cyanamid Co. v. Geye, 79 S.W.3d 21 (Tex. 2002), cert. denied, 539 U.S. 969 (2003)...... 3, 29 Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)...... 4, 21, 22, 24, 26 CSX Transp., Inc. v. Easterwood, 507 U.S. 658 (1993)...... 4 Etcheverry v. Tri-Ag Service, Inc., 993 P.2d 366 (Cal. 2000)...... passim Geier v. American Honda Motor Co., Inc., 529 U.S. 861 (2000) ...... 24 Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559 (1st Cir. 1996)...... 8 In re DuPont-Benlate Litigation, 859 F.Supp 619 (D.P.R. 1994)...... 8 In re Starlink Corn Products Liability Litigation, 212 F.Supp.2d 828 (N.D. Ill. 2002)...... 9, 10 Kuiper v. American Cyanamid Co., 131 F.3d 656 (7th Cir. 1997) ...... 9, 29 Lescs v. William R. Hughes, Inc., 168 F.3d 482 (Table), No. 97-2278, 1999 WL 12913 (4th Cir. Jan. 14, 1999) (Text)...... 10 Lowe v. Sporicidin Int’l, 47 F.3d 124 (4th Cir. 1995) ...... 10 MacDonald v. Monsanto Co., 27 F.3d 1021 (5th Cir. 1994) ...... 22 Medtronic v. Lohr, 518 U.S. 470 (1996) ...... 4, 22 Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199 (9th Cir. 2002) ...... 7 National Agric. Chem. Ass’n v. Rominger, 500 F. Supp. 465 (E.D. Cal. 1980) ...... 13

169 iv TABLE OF AUTHORITIES—Continued Page Nat’l Bank of Commerce v. Dow Chem. Co., 165 F.3d 602 (8th Cir. 1999) ...... 8 Netland v. Hess & Clark, Inc., 284 F.3d 895 (8th Cir.), cert. denied, 537 U.S. 949 (2002)..... 8 New York State Pesticide Coalition v. Jorling, 874 F.2d 115 (2d Cir. 1989) ...... 14, 16 Papas v. Upjohn Co., 985 F.2d 516 (11th Cir. 1993)...... 9 Papas v. Upjohn Co., 926 F.2d 1019 (11th Cir. 1991), vacated and remanded sub nom. Papas v. Zoecon Corp., 505 U.S. 1215 (1992) (vacating and remanding for further consideration in light of Cipollone v. Liggett Group, Inc., 505 U.S. 504 (1992)), aff’d sub nom. Papas v. Upjohn Co., 985 F.2d 516 (11th Cir. 1993) ...... 23 Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984)...... 13, 14, 26 Taylor AG Indus. v. Pure-Gro, 54 F.3d 555 (9th Cir. 1995) ...... 9, 22, 29 Welchert v. American Cyanamid, Inc., 59 F.3d 69 (8th Cir. 1995) ...... 23, 29 Wisconsin Public Intervenor v. Mortier, 501 U.S. 597 (1991)...... 3, 13, 14 Worm v. American Cyanamid Co., 5 F.3d 744 (4th Cir. 1993) ...... 8, 20, 29 Worm v. American Cyanamid Co., 970 F.2d 1301 (4th Cir. 1992) ...... 22 STATUTES AND REGULATIONS Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136-136y (2000) ...... 1 7 U.S.C. § 136j(a)(2)(G)...... 16

170 v TABLE OF AUTHORITIES—Continued Page 7 U.S.C. § 136w-1(a)...... 20 7 U.S.C. § 136v(b)...... passim 40 C.F.R. Part 156 ...... 16, 18 40 C.F.R. § 156.10(i)(2)(ii) ...... 16 40 C.F.R. § 156.78(d)...... 19 40 C.F.R. § 158.640(b)(1) ...... 28 LEGISLATIVE MATERIALS Federal Env. Pesticide Control Act: Hearings Before the Subcomm. on Agric. Research & Gen’l Legis. of the Sen. Comm. on Agric. & Forestry, 92d Cong. 416 (Mar. 9, 1971) ...... 15 Federal Env. Pesticide Control Act: Hearings Before the Subcomm. on Agric. Research & Gen’l Legis. of the Sen. Comm. on Agric. & Forestry, 92d Cong. 87 (Mar. 7-8, 1972) ...... 15 H.R. Rep. No. 313 (1947), reprinted in 1947 U.S.C.C.A.N. 1200...... 14 H.R. Rep. No. 92-511 (1971), reprinted in 1972 U.S.C.C.A.N. 3993...... 15, 21 H.R. Rep. No. 95-343 (1977), reprinted in 1978 U.S.C.C.A.N. 1966...... 25, 26 H.R. Rep. No. 95-663 (1977), reprinted in 1978 U.S.C.C.A.N. 1991...... 27, 28 S. Rep. No. 92-838 (1972), reprinted in 1972 U.S.C.C.A.N. 3993...... 16 S. Rep. No. 95-1188 (1978)...... 26 S. Rep. No. 95-334 (1977)...... 16, 25, 27 14 Weekly Comp. Pres. Doc. 1696 (Oct. 2, 1978).... 26 Conf. Rpt. on S. 1678 (Sept. 18, 1978), Sen. Comm. on Agric., Nutrition & Forestry, 95th Cong. (Comm. Print 1979) ...... 26

171 vi TABLE OF AUTHORITIES—Continued MISCELLANEOUS Page 44 Fed. Reg. 27,932 (May 11, 1979)...... 26, 29 48 Fed. Reg. 24,000 (July 26, 1983) ...... 27 69 Fed. Reg. 23,200 (Apr. 28, 2004)...... 18 AAPCO Mission Statement, available at http:// aapco.ceris.purdue.edu/htm/mission.htm ...... 20 Draft Pesticide Registration (PR) Notice 2004- XX (Apr. 28, 2004), available at http:// www.epa.gov/PR_Notices/draftpr2004-X.pdf .. 19 Pesticide Registration (PR) Notice 2001-1 (Jan. 2, 2001), available at http://www.epa.gov/ opppmsd1/PR_Notices/pr2001-1.pdf ...... 18 Pesticide Registration (PR) Notice 2001-3 (Jan. 16, 2001), available at http://www.epa.gov/ opppmsd1/PR_Notices/pr2001-3.pdf ...... 19 Pesticide Registration (PR) Notice 2001-6 (Sept. 7, 2001), available at http://www. epa.gov/opppmsd1/PR_Notices/pr2001-6.pdf... 19 Pesticide Registration (PR) Notice 96-6 (Oct. 1, 1996), available at http://www.epa.gov/ opppmsd1/PR_Notices/pr96-6.html ...... 19 Pesticide Registration (PR) Notice 96-7 (Oct. 1, 1996), available at http://www.epa.gov/ opppmsd1/PR_Notices/pr96-7.html ...... 19 Pesticide Registration (PR) Notice 97-8 (Sept. 25, 1997), available at http://www.epa.gov/ opppmsd1/PR_Notices/pr97-8.html ...... 19 EPA, Label Review Manual, available at http://www.epa.gov/oppfead1/labeling/lrmail... 17 EPA, “Read the Label First,” available at http://www.epa.gov/pesticides/label...... 17 Northeastern Regional Pesticide Coordinators, Pesticide Applicator Training Manual, Ch. XIV-3 (2d ed., revised 1998)...... 16

172 vii TABLE OF AUTHORITIES—Continued Page Viet D. Dinh, “Reassessing the Law of Preemption,” 88 Geo. L.J. 2085 (2000)...... 22 Amicus Br. for United States, American Cyanamid Co. v. Geye, No. 02-367 (U.S. filed May 30, 2003)...... 7 Amicus Br. for United States, Wisconsin Pub. Intervenor v. Mortier, No. 89-1905 (U.S. filed Feb. 1991)...... 15

173 INTEREST OF THE AMICI CURIAE1 Amici curiae CropLife America and National Pest Management Association have a substantial interest in the subject of this appeal—the preemptive reach of § 136v(b) of the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. §§136-136y. The members of these nationally prominent trade associations are the types of companies (pesticide manufacturers, formulators, and distributors, and structural pest control firms) that most frequently are subjected to agricultural crop damage, homeowner property damage, and personal injury suits involving the use of pesticides. The associations are submitting this amicus curiae brief for three principal reasons: (i) To rebut Petitioners’ insinuations that affirming the Fifth Circuit’s opinion below somehow would shield agricultural pesticide manufacturers from all state law damages remedies for pesticide-related crop injury, and leave aggrieved farmers with no means of obtaining compensation; (ii) To explain why federal preemption of failure-to- warn and other labeling-related damages claims promotes FIFRA’s goals and is essential for maintaining the important health, safety, environmental, and product performance benefits provided by nationally uniform pesticide product labeling that is regulated solely by the United States Environmental Protection Agency (EPA); and

1 The parties have lodged with the Clerk blanket consents to the filing of amicus curiae briefs. Pursuant to Sup. Ct. R. 37.6, amici curiae CropLife America and National Pest Management Association state that no counsel for a party has written this brief in whole or in part, and that no person or entity, other than amici curiae, its members, or its counsel, has made a monetary contribution to the preparation or submission of this brief.

174 2 (iii) To highlight the implausibility of Petitioners’ contention that by enacting FIFRA’s so-called efficacy data waiver, Congress intended to create a gaping exception to preemption for labeling-related damages claims that involve agricultural crop injury. CropLife America, a national, not-for-profit trade association, represents the American plant science industry on a broad range of legislative, regulatory, legal, scientific, and product stewardship issues. Its members serve farmers and consumers by developing, manufacturing, and distributing virtually all of the agricultural crop protection pesticides and biotechnology products used to produce safe, high-quality, affordable, and abundant food, fiber, and other crops. For the past 57 years, CropLife America (formerly known as the American Crop Protection Association, and before that, the National Agricultural Chemicals Association) has been industry’s foremost voice on enactment, amendment, and implementation of FIFRA, the nation’s primary pesticide regulatory statute. CropLife America and its members consider FIFRA’s carefully balanced allocation of pesticide regulatory authority between EPA and the states, especially the system of federally regulated, nationally uniform product labeling mandated by § 136v(b), to be a subject of paramount importance. For this reason, CropLife America has an abiding interest in ensuring that courts, when confronted with state law liability claims that directly or indirectly attack the adequacy of the warnings, precautionary measures, directions for use, or other information on a pesticide’s federally regulated product labeling, properly apply § 136v(b), which expressly preempts the states from imposing “any requirements for labeling” that are “in addition to or different from” those imposed under FIFRA. 7 U.S.C. § 136v(b). On numerous occasions during the past 12 years, CropLife America has successfully argued in amicus curiae briefs submitted to federal courts of appeals and state appellate

175 3 courts that § 136v(b) encompasses requirements imposed through state damages claims for inadequate labeling or failure to warn. In addition, last year CropLife America filed an amicus curiae brief urging review of the Texas Supreme Court’s opinion in American Cyanamid Co. v. Geye, 79 S.W.3d 21 (Tex. 2002), cert. denied, 539 U.S. 969 (2003), which contrary to the Fifth Circuit’s opinion here, erroneously held that all agricultural crop damage claims (including those that are labeling-related) are excluded from preemption. The National Pest Management Association (“NPMA”) is a national, not-for-profit, trade association representing more than 5,000 pest control companies throughout the United States. The association’s members help protect food, health, property and the environment with a broad range of pest management services such as control of termites, insects, and rodents in residential, commercial, and institutional settings; control of mosquitoes and wildlife that transmit West Nile Virus or other life-threatening diseases; and control of stored product pests in food handling and agricultural surroundings. NPMA, which was established in 1933, supports its members through technical, educational, business, public relations, and government affairs programs. Since pest management professionals are both required and trained to apply pesticides in a manner consistent with their nationally uniform, EPA-approved product labeling, NPMA participates as amicus curiae in appeals involving important issues arising under FIFRA, including the statute’s preemptive effect. For example, NPMA and other associations (including CropLife America) jointly filed an amicus curiae brief in Wisconsin Public Intervenor v. Mortier, 501 U.S. 597 (1991) (involving FIFRA preemption of a local government pesticide use ordinance), in which the Court confirmed (id. at 615) that “labeling . . . fall[s] within an area that FIFRA’s ‘program’ pre-empts.” NPMA has

176 4 joined CropLife America here because the categorical anti- preemption position that Petitioners and most of their amici are advocating would severely undermine the congressionally mandated system of nationally uniform pesticide product labeling, which greatly facilitates applicator training and safety, and helps to protect consumers and the public. SUMMARY OF ARGUMENT The scope of FIFRA’s express preemption provision, § 136v(b), is defined by its own plain, broad, language. States are unequivocally prohibited from imposing “any requirements for labeling” which are “in addition to or different from” those required under FIFRA. 7 U.S.C. § 136v(b) (“Uniformity”) (emphasis added). This Court’s preemption jurisprudence establishes that a federal statutory prohibition against imposition of state requirements easily encompasses requirements imposed through state damages actions. See Cipollone v. Liggett Group, Inc., 505 U.S. 504, 521 (1992); see also Medtronic v. Lohr, 518 U.S. 470, 504, 509 (1996); CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993). Therefore, as numerous federal courts of appeals and state appellate courts have held, § 136v(b) expressly preempts any state damages claim, such as a claim based on failure to warn, that would have the effect of imposing state requirements for labeling which are in addition to or different from those that have been imposed under FIFRA. The same courts have been equally clear, however, that § 136v(b) does not preempt non-labeling related claims. Petitioners’ overblown assertions implying that § 136v(b) immunizes pesticide manufacturers from all “damages actions” (rather than merely preempting labeling-related claims), and leaves farmers with no means of obtaining compensation for crop injury, are unfounded both as a matter of law and fact. Pesticide manufacturers are excellent product stewards, and have strong economic incentives for resolving crop injury pro-

177 5 blems before they turn into litigation. This is why crop damage litigation is the exception, not the norm. Nationally uniform product labeling that is regulated solely by EPA plays a critical role in achieving FIFRA’s fundamental goal of protecting health and the environment. For example, such labeling is an essential component of educational and training programs for pesticide applicators, and enormously aids applicator comprehension of, and compliance with, label warnings, precautionary measures, and directions for use. Only EPA (and certainly not a lay juror) has the expertise, experience, and other resources to determine, on a product-by-product, category-by-category, or across-the-board basis, what specific warnings, precautionary measures, and other information should or should not be included on nationally uniform pesticide labeling. Rather than having a salutary effect, the nationwide epidemic of labeling-related damages suits that Petitioners and their amici are urging this Court to trigger would clash with FIFRA’s health and environmental goals by drastically undermining the integrity of EPA’s labeling determinations, and for all practical purposes, destroying national labeling uniformity. Section 136v(b), enacted in 1972, contains no exception to preemption for labeling-related damages claims that involve agricultural crop injury. Nor did Congress intend to amend § 136v(b), or otherwise affect that provision’s self-executing operation, when in 1978 at EPA’s request, it streamlined FIFRA’s federal registration procedures, including by enacting the efficacy data waiver authorization found in § 136a(c)(5). Congress authorized EPA to selectively waive submission of efficacy data to support a registration because of the high level of efficacy-related expertise within the agricultural community, not the courtroom. Lay juries would not have the type of expertise that Congress had in mind if called upon in a crop injury suit to second-guess the adequacy of EPA’s labeling determinations.

178 6 ARGUMENT I. SECTION 136v(b) OF FIFRA NEITHER PRE- EMPTS ALL DAMAGES CLAIMS AGAINST PESTICIDE MANUFACTURERS NOR PRE- CLUDES FARMERS FROM OBTAINING COMPENSATION FOR CROP INJURY A. The Lower Courts Have Consistently Held That Only Labeling-Related Damages Claims Are Preempted By § 136v(b) By its own express terms, § 136v(b) of FIFRA is limited to preemption of “any requirements for labeling . . . in addition to or different from those required under [the Act].” 7 U.S.C. § 136v(b) (emphasis added). As a result, only labeling- related damages claims, such as failure-to-warn claims (which necessarily impose state law requirements for “adequate” label warnings), are expressly preempted. This is the fixed, statutorily defined scope of tort preemption under § 136v(b). Nevertheless, in an effort to bolster their extreme position that § 136v(b) does not preempt any damages claims, Petitioners, in the first 29 pages of their brief, attempt to transform FIFRA preemption into an all-or-nothing proposition. They erect and then take aim at an easy but illusory target, namely that Congress did not intend § 136v(b) to immunize pesticide manufacturers from all state law liability or deprive farmers of all state law damages remedies. See, e.g., Pet. Br. at 2 (“it is unthinkable that Congress . . . intended to exonerate manufacturers from traditional state-law remedies”); at 14 (“State damages actions are not preempted by FIFRA”); at 16 (“Nothing .. . indicates that Congress intended to . . . preclud[e] farmers from seeking redress for the damages caused to them by pesticide manufacturers.”); at 25 (“FIFRA’s Legislative History And Purposes Reveal No Intent To Preempt Damages Actions”); at 26 (“no witness or Member of Congress ever suggested that the proposed [1972] legislation would shield pesticide manufacturers from product

179 7 liability tort suits”); at 29 (“it does not follow that all such claims are barred”). Unlike virtually every lower court that has opined on the scope of FIFRA tort preemption, Petitioners and their amici somehow overlook the clearly circumscribed preemptive boundary of § 136v(b) (i.e., preemption of additional or different requirements for labeling) and that provision’s resultant limitation to labeling-related damages claims, such as claims for failure to warn.2 To be sure, “[t]he federal court decisions holding that FIFRA preempts state law failure-to- warn claims are numerous, consistent, pragmatic and powerfully reasoned.” Etcheverry v. Tri-Ag Service, Inc., 993 P.2d 366, 368 (Cal. 2000).3 But as the Fifth Circuit reconfirmed in its opinion below, “FIFRA does not preempt common law that is unconcerned with [pesticide] labeling.” Pet. App. 10a (citing Andrus v. AgrEvo USA Co., 178 F.3d 395, 398 (5th Cir. 1999)); see also id. at 11a (quoting Hart v. Bayer Corp., 199 F.3d 239, 245 (5th Cir. 2000) (“FIFRA preemption does not extend to non-labeling state common-law causes of action”). Indeed, “courts have rejected preemption challenges with regard to a wide variety of claims where they did

2 Section 136v(b) also preempts “any requirements for . . . packaging in addition to or different from those required under [FIFRA].” Nothing in this brief is intended to imply that § 136v(b) does not also encompass packaging-related claims. 3 The California Supreme Court squarely rejected all of the arguments, many of which are repeated by Petitioners here, in what Petitioners nevertheless describe as the “powerful brief” (Pet. Br. at 28) filed by the government as amicus curiae in Etcheverry. See Nathan Kimmel, Inc. v. DowElanco, 275 F.3d 1199, 1207 (9th Cir. 2002) (“The California Su- preme Court found the EPA’s position [in Etcheverry] both unsupported by the relevant law and unpersuasive in its substance, noting that the EPA’s views went against the holdings of eight federal circuit courts of appeal.”). Last term the government advised this Court that it has “reexamined the position that it urged in Etcheverry [and] concluded that [it] is incorrect.” U.S. Br. at 17, American Cyanamid Co. v. Geye (No. 02-367).

180 8 not implicate requirements for labeling.” Etcheverry, 993 P.2d at 377 (collecting cases). For example, in Netland v. Hess & Clark, Inc., 284 F.3d 895, 900 (8th Cir.), cert. denied, 537 U.S. 949 (2002), the court of appeals reaffirmed that “ ‘if the state law claim is premised on inadequate labeling or a failure to warn,’ which results in the imposition of additional or different labeling requirements, the claim is nonetheless preempted regardless of the guise under which the claim is presented” (quoting Nat’l Bank of Commerce v. Dow Chem. Co., 165 F.3d 602, 608 (8th Cir. 1999)); see, e.g., Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559, 565 (1st Cir. 1996) (§ 136v(b) preempts a purported design or manufacturing defect claim if it actually is a “disguised labeling claim”). But “[t]he line between a claim for mislabeling and a claim for a defective product may not always be clear.” Worm v. American Cyanamid Co., 5 F.3d 744, 747 (4th Cir. 1993). The court of appeals agreed with the plaintiff in Netland “that defectively manufactured or designed products properly labeled under FIFRA remain subject to state regulation, in the form of common law or other claims.” 284 F.3d at 900. Thus, § 136v(b) would not preempt a farmer’s claim that his crops were destroyed by a herbicide which, due to a manufacturing error, contained substantially more active ingredient than allowed by its FIFRA registration. Nor would § 136v(b) preempt a claim that a herbicide was ineffective in killing weeds because it contained substantially less active ingredient than approved by EPA. Along the same lines, a claim that “particular lots” of herbicide caused crop damage because they were “negligently contaminated” with another herbicide has been held not preempted. In re DuPont-Benlate Litigation, 859 F.Supp 619, 622, 623 (D.P.R. 1994); see also Nat’l Bank of Comm., 165 F.3d at 608-09 (§ 136v(b) does not preempt a claim based on the presence of a “toxic impurity” in a pesticide product). And a district court recently ruled

181 9 that § 136v(b) does not preempt a negligent distribution claim alleging that a bulk container of an agricultural pesticide “erupted” and caused environmental contamination. See Akee v. Dow Chem. Co., 272 F.Supp.2d 1112, 1127 (D. Hawaii 2003) (“the court does not see anything in the record before it suggesting that this claim is in any way a labeling or warning based claim”). The lower courts have been virtually unanimous in holding that “[w]hen a claim, however couched, boils down to an assertion that a pesticide’s label failed to warn of the damage plaintiff allegedly suffered, the claim is preempted by FIFRA.” Etcheverry, 993 P.2d at 376 (collecting cases). For example, § 136v(b) preempts claims alleging that a pesticide is “misbranded” (which §2(q)(1)(G) defines to include labels that do not contain adequate warnings). See, e.g., Kuiper v. American Cyanamid Co., 131 F.3d 656, 666 (7th Cir. 1997); Papas v. Upjohn Co., 985 F.2d 516, 518-19 (11th Cir. 1993). But a claim alleging that the manufacturer of corn seed which was genetically modified to be resistant to certain insects failed to comply with the terms of a FIFRA conditional registration, such as selling the seeds without the label required by EPA, has been held not to impose an additional or different requirement for labeling, and thus, not preempted. See In re Starlink Corn Products Liability Litigation, 212 F.Supp.2d 828, 836 (N.D. Ill. 2002). Further, the lower courts have consistently held that § 136v(b) preempts claims for misrepresentation or breach of express warranty based on so-called “off-label” statements (e.g., advertising statements; oral statements) “if they merely repeat information in the label itself.” Kuiper, 131 F.3d at 662; see also Pet. App. 17a (farmers’ fraud and breach of warranty claims are preempted “[b]ecause no evidence was presented demonstrating that the retailer statements deviated from the contents of the Scepter label”);Taylor AG Indus. v. Pure-Gro, 54 F.3d 555, 563 (9th Cir. 1995) (FIFRA

182 10 preempts claim based on distributor’s oral representation regarding crop safety where there was “no evidence establishing that [it] made any statements that were inconsistent with or went beyond the labels”); Lowe v. Sporicidin Int’l, 47 F.3d 124, 127-30 (4th Cir. 1995) (§ 136v(b) preempts claims based on “off-label” representations which do not “substantially differ” from the label). As the California Supreme Court indicated in Etcheverry, however, “[w]here off-label statements address matters outside the scope of the label, an action may well lie.” 993 P.2d at 378; see, e.g., In re Starlink, 212 F.Supp.2d at 836-37 (“Claims based on off-label representations . . . are not preempted . . . to the extent the representations substantially differ from the label.”); id. at 837 (holding that oral statements to farmers that genetically modified corn “was safe for human consumption . . . directly contradict the approved label”). Thus, if a herbicide were registered only for use on peanuts, but the manufacturer advertised that it also works well on cotton, § 136v(b) would not preempt a cotton crop injury claim based on that off-label statement, since it substantially differs from, rather than repeats the information on, the EPA-approved label. Therefore, affirming the principle adopted by numerous federal and state appellate courts that § 136v(b) preempts only failure-to-warn and other labeling-related claims would not, as Petitioners claim, give “sweeping effect to the preemption provision.” Pet. Br. at 1. Preemption of such claims benefits farmers and the public by preserving the national labeling uniformity mandated by Congress (see discussion infra), but contrary to the hyperbolic advocacy of Petitioners and their amici, in no way precludes farmers or other plaintiffs from pursuing non-labeling related damages actions against pesticide manufacturers. See Lescs v. William R. Hughes, Inc., 168 F.3d 482 (Table), No. 97-2278, 1999 WL 12913, at *7 (4th Cir. Jan. 14, 1999) (Text) (“FIFRA’s language does not suggest some extraordinarily broad scope

183 11 of preemption that extends beyond the statutory scheme. Nor does it work to destroy all means of redress for plaintiffs under the common law of a state.”). B. Agricultural Pesticide Manufacturers Are Con- scientious Product Stewards Which Strive To Maintain Good Will With Farmers Through Prompt Resolution Of Crop Injury Claims According to Petitioners, “[b]ecause nothing in FIFRA affords compensation to parties injured by pesticides, state- law damages claims properly fill the void left by Congress.” Pet. Br. at 14. This facile logic erroneously implies that litigation is the only way that farmers can obtain compensation from pesticide manufacturers for crop injury. Like most farmers, these Petitioners, to whom Respondent offered the opportunity to obtain reasonable compensation without litigation (see J.A. 143-45), know better. In reality, pesticide manufacturers are an integral, well respected part of the agricultural community. Along with university researchers, agricultural extension agents, private crop consultants, seed suppliers, farm store retailers, and custom applicators, pesticide manufacturers and their distributors serve as an important informational resource to farmers. For example, manufacturers provide farmers, either directly or through distributors and retailers, with abundant technical information regarding their products and how they can be used safely and effectively on particular crops. In addition, manufacturers continually interact with farmers to better learn how their products perform in specific geographic locations or under particular environmental conditions. Such information can lead to more finely tuned directions for use, and when necessary, use restrictions. Moreover, R&D-oriented pesticide innovators invest hundreds of millions of dollars in screening, testing, and registering highly efficacious new products that benefit farmers, the

184 12 agricultural economy, and consumers throughout the United States and world. These include, for example, low dose, less toxic products which break down rapidly after application to food crops; products applied with advanced delivery systems that reduce applicator and environmental exposure; and biotechnology products, such as genetically engineered seed that grows into insect-resistant crops. Prior to obtaining a FIFRA registration for a new agricultural pesticide, a manufacturer may conduct more than 250 health, safety, environmental, and efficacy studies. In addition to their individual activities, pesticide manufacturers, through CropLife America, participate in industry-wide product stewardship programs, such as the Ag Container Recycling Council, which helps farmers reduce disposal costs and avoid environmental contamination. Petitioners’ contention that a multitude of lay jurors, who know nothing about crop production or pesticides, should have free reign to find that pesticide manufacturers’ EPA- approved labeling is inadequate, and on that basis, render huge damages awards in order to fill a FIFRA compensation “void,” fails to take into account the highly collegial and cooperative relationship between agricultural pesticide manufacturers and farmers. As a matter of good product stewardship and sound business sense, manufacturers’ regional and local field representatives, who typically have considerable agronomic expertise, work closely with farmers to promptly investigate and resolve product performance and/or crop injury problems without litigation. Most pesticide manufacturers have well established customer satisfaction policies. When circumstances warrant, and depending on the nature of the problem, remedies provided by manufacturers may range from re-application of pesticides at the manufacturer’s expense, to reimbursement of the cost of unsatisfactorily performing products, to replacement of seed or monetary compensation for injured crops. Upon the infrequent event of widespread crop injury problems with a product, manu-

185 13 facturers have established formal claims settlement procedures (such as the Strongarm mediation program initiated by Respondent here) in order to maintain the company’s reputation and good will, treat farmers fairly, and avoid lawsuits. If FIFRA tort preemption were the all-encompassing product liability defense that Petitioners and their amici pretend to fear, manufacturers, aside from their excellent product stewardship and strong economic incentives for satisfying farmers’ needs, would have little reason to resolve crop injury claims. Instead, manufacturers invest substantial financial resources to resolve any crop injury problems that farmers encounter. As a result, and contrary to the impression that Petitioners try to create, the need to file crop damage suits for the purpose of obtaining compensation from pesticide manufacturers is the exception, and certainly not, as Petitioners assert, a reason to hold that § 136v(b) is limited to positive enactments. II. FIFRA PREEMPTION OF LABELING-RE- LATED DAMAGES CLAIMS PRESERVES THE SIGNIFICANT HEALTH, SAFETY, ENVIRON- MENTAL, AND PRODUCT PERFORMANCE BENEFITS OF EPA-REGULATED, NATION- ALLY UNIFORM PRODUCT LABELING A. Nationally Uniform Product Labeling Plays A Crucial Role In The Coordinated Federal/State Regulatory Partnership Established By Con- gress “FIFRA’s historic focus [is] on labeling.” Wisconsin Pub. Intervenor v. Mortier, 501 U.S. at 613. When FIFRA was first enacted in 1947, it was intended to supplement existing regulation of pesticides by the states. See Ruckelshaus v. Monsanto Co., 467 U.S. 986, 990 n.2 (1984); National Agric. Chem. Ass’n v. Rominger, 500 F. Supp. 465, 468 (E.D. Cal.

186 14 1980). But even back then, Congress was concerned about the need for promoting national uniformity in pesticide labeling. See H.R. Rep. No. 313, at 3 (1947) (noting that the 1947 FIFRA “is in accord” with the Uniform State Insecticide, Fungicide, and Rodenticide Act; that enactment of the federal legislation “will greatly facilitate the coordination of work in this field among the States and with the Federal Govern- ment;” and that “[i]t is highly desirable that laws governing [pesticides] be as nearly uniform as possible . . . so that manufacturers may have Nation-wide distribution with a minimum of conflict between the labeling requirements of the various laws.”) (emphasis added). To this end, “[t]he 1947 legislation . . . contained general standards setting forth the types of information necessary for proper labeling of a registered pesticide, including directions for use; warnings to prevent harm to people, animals, and plants; and claims made about the efficacy of the product.” Ruckelshaus, 467 U.S. at 991. There was, however, no express preemption provision regarding state regulation of labeling. “In 1972, growing environmental and safety concerns led Congress to undertake a comprehensive revision of FIFRA.” Mortier, 501 U.S. at 601. Congress transformed the Act into a “comprehensive regulatory statute” (Ruckelshaus, 467 U.S. at 991) and “significantly strengthened [its] registration and labeling standards.” Mortier, 501 U.S. at 601. During its extensive deliberations, Congress carefully considered the allocation of pesticide regulatory authority between the newly created EPA and the states in order to establish “a coordinated Federal-State administrative system to carry out the new program.” Id. at 615 (quoting H.R. Rep. No. 92-511, at 1). Under that “regulatory partnership” the states share responsibility with EPA for regulating the sale and use of pesticides, but pesticide “labeling . . . fall[s] within an area that FIFRA’s ‘program’ pre-empts.” Id.; see also New York State Pesticide Coalition v. Jorling, 874 F.2d 115, 118 (2d

187 15 Cir. 1989) (“The states have joint control with the federal government in regulating the use of pesticides . . . with the exception of the EPA’s exclusive supervision of labeling.”). More specifically, the 1972 FIFRA amendments added § 136v(b) (“Uniformity”), which Congress intended “to completely preempt State authority in regard to labeling.” H.R. Rep. No. 92-511, at 16 (1971). Representatives of both the pesticide industry and agriculture testified in support of the need for national labeling uniformity. See, e.g. Fed. Env. Pesticide Control Act: Hearings Before the Subcomm. on Agric. Research & Gen’l Legis. of the Sen. Comm. on Agric. & Forestry, 92d Cong. 416 (Mar. 9, 1971) (Stmnt. of Parke C. Brinkley, President, Nat’l Agric. Chem. Ass’n) (EPA has “sufficient scientific expertise [for] the determination of the proper labeling . . . of each product. There is no need for this process to be duplicated in each of the 50 States.”); id. at 354 (Stmnt. of Clifford G. McIntyre, Director, Natural Resources Dept., and Ass’t Legis. Dir., Am. Farm Bureau Fed.) (“In labeling the manufacturers have a real problem with the whole diversified requirements in 48 States. We accept the concept of some uniformity.”). EPA and state pesticide regulators also supported national uniformity. See id., 92d Cong. 87 (Mar. 7-8, 1972) (Stmnt. of David D. Dominick, Ass’t Admin. for Categorical Programs, EPA) (“I think that the basic thrust that is needed in new legislation is uniformity [of] registration.”); id. at 153 (Stmnt. of Charles H. Frommer, Dir., Bureau of Pesticide Control, N.Y. State Dep’t of Env’l Conservation) (“We very strongly favor the provision of [§ 136(b)] which provides for uniform labeling. We have en- dorsed uniform labeling and we intend to continue to endorse uniform labeling.”). As the Solicitor General explained to the Court in Mortier, “an exclusively federal approach is necessary in certain areas of pesticide regulation. One such area is labeling.” U.S. Br. at 22, Wisconsin Pub. Intervenor v. Mortier (No. 89-1905).

188 16 Thus, as amended, “FIFRA placed the ‘labeling’ of pesticides within the singular province of the EPA.” Jorling, 874 F.2d at 117. Indeed, Congress intended a pesticide’s nationally uniform, EPA-approved product labeling not to be merely a “guide,” but instead, “the final authority” governing application of a pesticide. S. Rep. No. 95-334, at 4 (1977). Further, prior to 1972, FIFRA contained “no prohibition .. . against the misuse of a registered pesticide.” S. Rep. No. 92-838, at 4 (1972). In order to correct this deficiency, Congress added § 136j(a)(2)(G), which makes it “unlawful for any person . . . to use any registered pesticide in a manner inconsistent with its labeling.” 7 U.S.C. §136j(a)(2)(G). To underscore the importance of this federal statutory prohibition, EPA requires every pesticide label to caution applicators that “It is a violation of Federal law to use this product in a manner inconsistent with its labeling.” 40 C.F.R. §156.10(i)(2)(ii). In fact, FIFRA’s fundamental precept that “The LabelIs The Law” is a prominent feature of the basic training provided in virtually every state-sponsored pesticide applicator training program. See, e.g., Northeastern Regional Pesticide Coordi- nators, Pesticide Applicator Training Manual (commonly referred to as the multi-state “Core Manual”), Ch. XIV-3 (2d ed., revised 1998). Pesticide labeling is different from the ordinary labels placed on most types of products. It is the principal means by which EPA ensures that all necessary warnings, safety precautions, personal protective equipment requirements, directions for use, and other essential information is communicated from a pesticide’s manufacturer through the chain of distribution to the individuals who actually handle and use the product. See 40 C.F.R. Part 156 (Labeling Requirements for Pesticides); see also Jorling, 874 F.2d at 119 (“‘FIFRA labeling’ is designed to be read and followed by the end user.”). EPA continually stresses the importance of reading and complying with all pesticide labeling requirements. See,

189 17 e.g., “Read the Label First” (http://www. epa.gov/pesticides/ label). It is difficult to overstate the substantial health, safety, environmental, and product performance benefits that nationally uniform, EPA-regulated product labeling affords to farmers, professional pesticide applicators, and the public: First, EPA has the necessary personnel, expertise, experience, institutional policies, funding, and national perspective, and possesses (or has access to) the registration data (e.g., product chemistry data; toxicity data; environmental fate data; fish and wildlife data; and efficacy data) required to comprehensively regulate the warnings, precautionary measures, directions for use, and other information on a product’s labeling before and/or after the product is registered. Needless to say, review and regulation of product labeling is a responsibility which EPA takes very seriously. See, e.g., EPA, Label Review Manual, available at http://www.epa. gov/oppfead1/labeling/lrmail. No state agency, much less a court or jury, has resources or expertise which approach EPA’s capability to scrutinize or regulate pesticide labeling. Second, distribution of a FIFRA-registered product with its own, EPA-approved, nationally uniform labeling is essential for applying or using it in a safe and effective manner. As part of their product stewardship and marketing activities, manufacturers of agricultural, structural pest control, public health, and other types of pesticides provide written information to farmers, professional applicators, and other users regarding how to apply or use particular products safely and effectively in accordance with their EPA-approved labeling. Manufacturers, often in conjunction with distributors, university and extension personnel, state regulators, and national, state and local trade associations, also conduct educational and training sessions on a local, regional, or national level. Label review and comprehension is the cornerstone of such programs. Without nationally uniform labeling for a pesticide product, detailed application information and appro-

190 18 priate training would be difficult if not impossible to provide. Further, if pesticide manufacturers were confronted with the economic burden and logistical nightmare of distributing the same product for the same uses with different labeling required by different states (or inexpert juries), they could be forced to make their products available only in the states with the largest potential markets. That would deprive farmers in other states of the beneficial, cost-effective products that they need. Third, across-the-board national labeling uniformity for all FIFRA-registered products with respect to format (e.g., the listing of active ingredients), and the utilization of toxicity signal words (e.g., “DANGER;” “WARNING”) and precautionary statements for physical and chemical hazards (e.g., “Corrosive, causes eye or skin damage;” “Extremely flammable”), facilitates applicator training and label comprehension. See 40 C.F.R. Part 156. Uniformity also is critical for first aid and the operations of the National Pesticide Information Center (http://www.npic.orst.edu) and other poison control centers. See, e.g., Pesticide Registration (“PR”) Notice 2001- 1 (“First Aid Statements on Pesticide Product Labels”) (EPA PR notices can be accessed through http://www.epa.gov/ PR_Notices). Fourth, to the extent feasible and appropriate, EPA also strives to achieve labeling uniformity for various categories of products in order to promote their safe and effective use. For example, in April 2004 EPA issued for comment draft uniform labeling statements for professionally applied, wide- area adult mosquito control products. See 69 Fed. Reg. 23,200 (Apr. 28, 2004). These labeling requirements, which EPA developed with input from state regulators, set forth certain specific language to be included on the labeling of such products. EPA’s “purpose [is]to improve consistency in the labeling of this group of products [to] better serve the needs of users, regulators and the public.” Draft PR Notice

191 19 2004-XX at 3. Among other things, the draft PR notice includes uniform mosquito product label language “toensure use or supervision by trained applicators” and “to protect bodies of water and aquatic life.” Id. at 4, 6. Along the same lines, EPA has adopted uniform requirements for certain aspects of the labeling of other categories of pesticide products. These include flammable total release room foggers, (40 C.F.R. § 156.78(d)), non-antimicrobial residential/household use insecticides (PR Notice 2001-6), insect repellents (PR Notice 2001-3), soil applied termiticides (PR Notice 96-7), and pet care pesticide products (PR Notice 96-6). The purpose of these and similar EPA labeling requirements for categories of products is to “bring uniformity” to pesticide labeling. See PR Notice 97-8. Fifth, there are numerous national and regional structural termite and pest control companies and lawn care companies which apply pesticides in multiple states. Such firms develop and conduct their own extensive technician (i.e.¸ pesticide applicator) training, often with the assistance of product manufacturers and distributors. The same is true for the companies that protect public health through wide-scale mosquito and vector control. Applicator training would be exceedingly difficult to develop and conduct if a particular pesticide product used by a pest control company had different labels (with different warnings, personal protective equipment requirements, directions for use, etc.) in different states. To say the least, such disparate labels would be confusing and difficult to follow for individual pest control technicians, many of whom routinely cross state lines in a day’s work. Sixth, nationally uniform product labeling not only promotes applicator compliance, but also, state enforcement activities. Although § 136v(b) reserves to EPA alone the authority to regulate the content and format of pesticide labeling, Congress has assigned to the states the “primary

192 20 enforcement responsibility for pesticide use violations.” 7 U.S.C. § 136w-1(a). This means that the states have the principal responsibility for ensuring that pesticides are applied or used in accordance with their nationally uniform labeling. Because of national labeling uniformity, state pesticide enforcement officials are able to interact with each other to address compliance issues relating to particular labeling requirements for specific products or categories of products. For example, the Association of Structural Pest Control Regulatory Officials (“ASPCRO”) is a professional association whose members often comment to EPA as a group regarding labeling issues relating to specific termite control and other structural pesticide products. See http://www. aspcro.org. Another organization, the Association of Ameri- can Pesticide Control Officials (“AAPCO”) is comprised of state and federal pesticide regulatory officials. AAPCO’s primary mission is “to encourage uniformity among the states in their pesticide regulatory programs,” such as “uniform and effective . . . enforcement,” including with regard to “safe use of pesticides.” See AAPCO Mission Statement, available at http://aapco.ceris.purdue.edu/htm/mission.htm. AAPCO could not fulfill its mission without nationally uniform pesticide labeling. The foregoing are only some of the reasons why Congress, in enacting § 136v(b), mandated nationally uniform pesticide labeling, which more than ever remains a crucial mechanism for achieving FIFRA’s goals, especially protection of health and the environment. B. Labeling-Related Damages Claims Would Impair—Not Promote—FIFRA’s Goals “The objectives and purposes of FIFRA include . . . comprehensive and uniform regulation of . . . labeling.” Worm, 5 F.3d at 747. According to Petitioners, however, preemption of state damages actions that attack the adequacy of the warnings and other information on EPA-approved, nationally

193 21 uniform product labeling somehow conflicts with FIFRA’s goals. See, e.g., Pet. Br. at 14 (“To construe §136v(b) as preempting the farmers’ suits would be contrary to Congress’s central aim. . . .”). One of the amicus briefs filed in support of Petitioners even argues that “FIFRA and state damages actions complement one another in a constructive way.” Br. of Natural Resources Defense Council, et al. at 1. But exactly the opposite is true. Labeling-related damages claims would seriously undermine EPA’s exclusive authority to regulate pesticide labeling, severely thwart national labeling uniformity, and substantially diminish the health, safety, environmental, and product performance benefits that only nationally uniform labeling can provide. Petitioners’ argument (Pet. Br. at 25-26) that FIFRA did not preempt failure-to-warn suits prior to the pesticide regulatory sea change which Congress effected in 1972—in other words, before Congress’ mandate for national labeling uniformity— proves nothing regarding the preemptive purpose, nature, and effect of § 136v(b), or the deleterious effects that labeling- related damages claims would have on the federal pesticide regulatory scheme today. “[T]he purpose of Congress is the ultimate touchstone of pre-emption analysis.” Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992) (internal quotation omitted). Congress’ purpose in enacting § 136v(b), which is entitled “Unifor- mity,” is absolutely clear: “In dividing the responsibility between the States and the Federal Government for the management of an effective pesticide program, the Committee has adopted language which is intended to completely preempt State authority in regard to labeling. . . .” H.R. Rep. No. 92- 511, at 16 (1971) (emphasis added). It is simply implausible that Congress, utilizing the broad and unambiguous language of § 136v(b), would have so clearly intended to preempt the states from imposing their own additional or different requirements for labeling, but simultaneously intended to

194 22 allow the states, “through the back door by means of tort suits,” to impose precisely such additional or different labeling requirements. Etcheverry, 993 P.2d at 376. There can be no doubt that “[t]he effects of . . . the state tort suit are identical” to those of a “state agency regulation.” Medtronic, 518 U.S. at 504 (Breyer, J., concurring in part and concurring in the judgment); see also Cipollone, 505 U.S. at 521 (“The obligation to pay compensation can be, indeed is designed to be, a potent method of governing conduct and controlling policy.”) (internal quotation omitted); Taylor, 54 F.3d at 560 (“Awarding damages on the Appellants’ claim would therefore be tantamount to allowing the state . . . to regulate pesticide labeling indirectly, an action which is specifically prohibited by § 136v(b).”); Worm v. American Cyanamid Co., 970 F.2d 1301, 1307 (4th Cir. 1992) (“surely a jury verdict resulting from a pesticide manufacturer’s failure to warn of the dangers of the product has an effect no different from a legislatively enacted state regulation requiring the insertion of a specific warning on the pesticide label”); see generally Viet D. Dinh, “Reassessing the Law of Preemption,” 88 Geo. L.J. 2085, 2114 (2000) (“the effect of tort liability on primary conduct is the same as a statutory prescription or regulatory standard”). As a result, without preemption of labeling-related damages claims, nationally uniform labeling would become a mockery, or at the very least exceedingly difficult to achieve or maintain. The “undeniable practical effect” of such damages claims “would be that state law requires additional labeling standards not mandated by FIFRA; it cannot be presumed that businesses wish to bring about their own economic suicide.” MacDonald v. Monsanto Co., 27 F.3d 1021, 1025 (5th Cir. 1994). To avoid state tort liability for inadequate labeling, pesticide manufacturers would be compelled by the vagaries of each adverse jury verdict to seek EPA’s permission to add more and more additional,

195 23 different, inconsistent and/or conflicting warnings, precautionary measures, directions for use, etc. to their “nationally uniform” labeling. “Such a change, if permitted by the EPA, would destroy the uniformity that Congress and the EPA seeks to achieve in pesticide labeling . . . case-by-case, state- by-state outside pressure on the regulatory process would hinder the development of an orderly, systematic, and uniform nationwide labeling scheme.” Papas v. Upjohn Co., 926 F.2d 1019, 1025-26 (11th Cir. 1991). Furthermore, unlike EPA, common-law juries lack the expertise, experience, resources, and national perspective to review a pesticide’s labeling for accuracy and adequacy, much less impose their own additional or different labeling requirements. Nevertheless, Petitioners’ proposal to allow individual juries around the nation “to sit, in effect, as super- EPA review boards that could question the adequacy of the EPA’s [labeling] determination[s]” would, as a practical matter, destroy national labeling uniformity. Welchert v. American Cyanamid, Inc., 59 F.3d 69, 73 (8th Cir. 1995). More specifically, the resultant jumble of differing or conflicting, jury-imposed warnings, precautionary measures, directions for use, etc. would compel manufacturers to try to devise “patchwork” labeling, which if approved by EPA, would be lengthy, confusing, contradictory, and challenging or impossible to follow. That in turn, would interfere with safe and effective use of pesticides. Therefore, rather than promoting FIFRA’s objectives, including the important goal of national labeling uniformity, damages claims for failure to warn or inadequate labeling would make them exceedingly difficult to accomplish, if not unattainable. As a result, FIFRA’s “policy [of uniformity] by itself favors pre-emption of state tort suits, for the rules of law that judges and juries create or apply in such suits may themselves similarly create uncertainty and even conflict, say, when different juries in different States reach different deci-

196 24 sions on similar facts.” Geier v. American Honda Motor Co., Inc., 529 U.S. 861, 871 (2000). Rather than “complement- ing” EPA’s regulation of pesticides and their labeling, such suits “would take from those who would enforce a federal law the very ability to achieve the law’s congressionally mandated objectives that the Constitution, through the operation of ordinary pre-emption principles, seeks to protect.” Id. at 872. III. CONGRESS DID NOT INTEND TO EXCLUDE FROM FIFRA PREEMPTION LABELING- RELATED DAMAGES CLAIMS THAT IN- VOLVE AGRICULTURAL CROP INJURY Petitioners contend that even if § 136v(b) reaches damages claims, it does not apply to labeling-related claims which directly or indirectly allege that an agricultural pesticide’s labeling was inadequate to prevent crop injury. See Pet. Br. at 29. Nothing in the plain, broad, preemptive language of § 136v(b), however, excludes state-imposed labeling requirements that involve agricultural crop injury or product efficacy. “When Congress has considered the issue of preemption and has included in the enacted legislation a provision explicitly addressing that issue, and what that provision provides a ‘reliable indicium of congressionalintent with respect to state authority,’ Malone v. White Motor Corp., 435 U.S., at 505, ‘there is no need to infer congressional intent to pre-empt state laws from the substantive provisions’ of the legislation.” Cipollone, 505 U.S. at 517 (emphasis added). Nevertheless, Petitioners erroneously infer from one of FIFRA’s substantive provisions, the efficacy data waiver authorization contained in § 136a(c)(5) of the statute’s pesticide registration section, that Congress intended to create a gaping exception to preemption under § 136v(b) for labeling-related damages claims that involve efficacy-related agricultural crop injury. To the contrary, there is no basis for assuming that by enacting the 1978 efficacy data waiver

197 25 authorization as one of many federal registration refinements requested by EPA, Congress intended to upset the fundamental allocation of regulatory authority between EPA and the states, and specifically EPA’s exclusive authority to regulate nationally uniform pesticide labeling, which was so carefully considered only six years earlier when Congress rewrote FIFRA and enacted § 136v(b). If Petitioners’ unfounded view of the (nonexistent) relationship between the efficacy data waiver authorization and § 136v(b) were correct, it would follow a fortiori that for more than 25 years the states have been free to enact statutes or issue agency rules that regulate pesticide labeling to prevent efficacy-related crop injury. Not surprisingly, despite the supposed “regulatory gap” created by EPA’s efficacy data waiver policy (Br. for Natural Resources Defense Council at 23), neither Petitioners nor their amici have pointed to any such state positive enactments. There is no indication in the legislative history of the Federal Pesticide Act of 1978 that Congress intended the efficacy data waiver authorization of § 136c(5)(a) to amend or otherwise affect § 136v(b) in any manner. Instead, the efficacy data waiver authorization was one of a number of pesticide registration-related amendments which EPA requested during 1977-78 because under the 1972 Act, the federal “registration and reregistration process has ground to a virtual halt.” S. Rep. No. 95-334, at 3 (July 6, 1977); see H.R. Rep. No. 95-343, at 6 (May 16, 1977) (Stmnt. of Douglas M. Costle, Admin., EPA) (discussing “specifics about correcting the difficulties which currently beset the pesticides regulatory program”). “The [1978] amendments [were] designed to improve the operation of the Federal pesticide registration program and facilitate the implementation of the major changes in that program made by the 1972 amendments to the Act.” S. Rep. No. 95-334, at 1; see also Stmnt. of Sen. Leahy on Consideration of the Conf. Rpt.

198 26 on S. 1678, September 18, 1978, at 1-2, Sen. Comm. on Agric., Nutrition & Forestry, 95th Cong. (Comm. Print 1979) (“This bill will break the logjam in the reregistration process”). The 1978 amendments to FIFRA’s registration and reregistration provisions included changes to the data consideration, data compensation, and trade secrets provisions with regard to the granting of “generic” (i.e., me-too) pesticide registrations (see Ruckelshaus, 467 U.S. at 993-94); expedited registration procedures for “formulator” products containing registered active ingredients purchased from another company; provisions for the granting of “conditional” registrations prior to submission of all data required for registration or reregistration; provisions relating to registration of pesticides for “minor” agricultural uses; extension of the period for reregistering previously registered pesticides; and the efficacy data waiver authorization. See S. Rep. No. 95-1188 (Sept. 12, 1978). Upon signing the Federal Pesticide Act of 1978, President Carter stated that “[w]ith these amendments, the important task of registering pesticides may move forward in a more streamlined and efficient manner.” 14 Weekly Comp. Pres. Doc. 1696 (Oct. 2, 1978). As to the specific need for the efficacy data waiver authorization, EPA Administrator Costle testified in April 1977 “we feel that far too much Agency time is currently being spent in reviewing efficacy data while shortages abound in the reregistration data validation areas.” H.R. Rep. No. 95-343, at 9 (May 16, 1977) (emphasis added); see also 44 Fed. Reg. 27,932, 27,938 (May 11, 1979) (“The decision to pursue efficacy waiver as an Agency policy stemmed from a need to reduce the amount of resources devoted to reviewing product performance so that additional effort could be devoted to the evaluation of health and safety data, and from a desire to reduce regulatory burdens in pesticide registration.”) (emphasis added). Therefore, “the purpose of Congress” (Cipollone, 505 U.S. at 516) in enacting the efficacy data

199 27 waiver authorization had nothing whatsoever to do with preemption of state law. Instead, “Congress intended to give EPA broad discretion to determine how best to expend its limited resources reviewing pesticides.” 48 Fed. Reg. 34,000, 34,001 (July 26, 1983); see also S. Rep. No. 95-334, at 3 (“The expenditure of resources by the [EPA] in reviewing efficacy data is not the best use of resources since a pesticide manufacturer is not likely to expend the substantial investment in time and money needed to obtain registration of a pesticide on a non-efficacious product.”). Petitioners’ theory that § 136v(b) only applies when manufacturers submit to EPA for review, data on a particular subject (e.g., efficacy) defeats the very purpose of the waiver, which is to afford EPA flexibility to efficiently allocate its limited scientific resources by requiring submission of efficacy data only when and if crop damage problems develop after a product is registered and in use. Moreover, the labeling-related crop injury claims which Petitioners incorrectly assert the efficacy data waiver authorization excludes from preemption, would conflict with how Congress intended review of product efficacy to work. The provision’s legislative history explains that if “the Admin- istrator found that some other procedure for assuring the efficacy of pesticide products appeared to be sufficient [he] could register or reregister products without requiring submission or citation of some or all of the efficacy data that otherwise would be required under FIFRA.” H.R. Rep. No. 95-663, at 27 (1977) (emphasis added). This authority would be used most commonly with respect to agricultural pesticides, due to the high level of knowledge concerning pesticidal efficacy which prevails in the agricultural community, the existence of means for communicating efficacy information to users, the organizational expertise of the Department of Agricul-

200 28 ture, the Extension Services, and the universities in this area, and the stake the industry has in marketing products that are efficacious. Id. (emphasis added). Along the same lines, when EPA adopted its efficacy data waiver policy pursuant to § 3a(c)(5), the Agency indicated that “the efficacy of agricultural pesticides can be effectively regulated by the marketplace (in conjunction with extension services and university research personnel). 44 Fed. Reg. at 27,938 (emphasis added). Thus, both Congress and EPA indicated that waiving submission of efficacy data was possible because of the considerable, efficacy-related knowledge and expertise present within the agricultural community. Regulation of labeling by lay jurors, who lack the high level of knowledge and expertise contemplated by Congress, would be incompatible with, and seriously undermine, the type of expert “marketplace regulation”—not courtroom regulation—that Congress and EPA envisioned. Unless preempted, labeling-related claims involving agricultural crop injury would wreak the same havoc with national labeling uniformity as labeling-related damages claims involving any other subject. Petitioners’ premise that there are no pertinent labeling “requirements” because EPA has abandoned regulation of labeling in connection with product efficacy and crop injury prevention is belied by the actual language of the Agency’s efficacy data waiver. See 40 C.F.R. § 158.640(b)(1) (“The Agency has waived all requirements to submit efficacy data. . . . However, each registrant must ensure through testing that his products are efficacious when used in accordance with label directions and commonly accepted pest control practices. The Agency reserves the right to require, on a case-by-case basis, submission of efficacy data for any pesticide product”) (emphasis added). Thus, for most products (but not including the Strongarm product at issue here) EPA merely has waived the automatic

201 29 submission of efficacy data at the time a product is first registered. When EPA adopted this policy, it explained that “[t]he Administrator reserves the right to request submission of efficacy data in support of label claims for any registered product. A request may be made for any product for which a pattern of inadequate performance has been reported.” 44 Fed. Reg. at 27,939 (emphasis added). Accordingly, when and if efficacy-related problems develop after a pesticide product has been registered and used by farmers, EPA has the authority, both under FIFRA and its own efficacy data waiver regulation, to require submission of efficacy data and regulate the product’s nationally uniform labeling to prevent crop injury. Nothing about the efficacy data waiver authorization or the selective manner in which EPA has implemented it changes the fact that any requirements for labeling imposed through state damages claims for crop injury necessarily would be “in addition to or different from” the requirements for labeling imposed by EPA under FIFRA, and therefore, expressly preempted by § 136v(b). The Texas Supreme Court in American Cyanamid v. Geye, which involved the same FIFRA preemption issue, got it wrong. The court acknowledged that “[t]his is an express preemption case,” but instead of focusing on the language of § 136v(b), erroneously indicated that “EPA regulations define ‘the domain expressly pre-empted.’” 79 S.W.3d at 24 (quoting Cipollone, 505 U.S. at 517) (emphasis added). The court then mistakenly assumed that EPA’s efficacy data policy means that the Agency never regulates labeling to prevent crop injury. Id. at 25. The federal courts of appeals have reached the opposite and correct conclusion. See, e.g., Kuiper; Welchert; Taylor; Worm. As the Fifth Circuit explained in its opinion below, We find Geye unhelpful because it did not address the principal issue: whether the scope of FIFRA’s express preemption clause includes product effectiveness claims

202 30 which relate to product labeling. Geye holds only that the specific Texas state-law claims for crop damage did not present a problem of conflict preemption. . . . The scope of FIFRA’s express preemption clause is defined by the simple text of § 136v. That the EPA has not elected to impose labeling regulations concerning product effectiveness does not alter the plain meaning of § 136v(b) nor avoid preemption of a claim that has the effect of imposing labeling requirements. Pet. App. 14a-15a (emphasis added).

CONCLUSION The Fifth Circuit’s opinion should be affirmed. Respectfully submitted,

DOUGLAS T.NELSON LAWRENCE S. EBNER * SEEMA MAHINI MCKENNA LONG & CROPLIFE AMERICA ALDRIDGE LLP 1156 15th Street, N.W. 1900 K Street, N.W. Suite 400 Washington, D.C. 2 0006 Washington, D.C. 20005 (202) 496-7500 (202) 296-1585 Attorneys for Amici Curiae * Counsel of Record November 2004

203 WARNING TO TRIAL LAWYERS: READ THE LAW -- THE FEDERAL LAW -- BEFORE PROCEEDING BY DOUGLAS T. N ELSON AND LAWRENCE S. EBNER*

In the world of toxic tort suits, “failure to warn” can responsibility between the States and the Federal Govern- be a trial lawyer’s fastest road to success. A plaintiff, with the ment for the management of an effective pesticide program aid of an attorney, files a state court suit alleging that use of [Congress] adopted language which is intended to completely some toxic chemical, let’s say a pesticide, caused his chronic preempt State authority in regard to labeling and packag- illness. The boilerplate complaint alleges that the pesticide’s ing.”9 Section 136v(b), entitled “Uniformity,” accomplishes manufacturer is liable under state law because it failed to this objective by mandating that a “State shall not impose or warn him about the risks of using the product. At trial, a well continue in effect any requirements for labeling or packaging paid expert testifies that the warnings and precautions on the in addition to or different from those required under pesticide product’s labeling were inadequate. The sympa- [FIFRA].”10 As the Supreme Court confirmed in Wisconsin thetic jury, with the benefit of hindsight (“if only the plaintiff Public Intervenor v. Mortier, although the states possess had been warned, he would not have used the product”), the residual authority to regulate pesticides, “labeling . . . awards hundreds of thousands of dollars in compensatory fall[s] within an area that FIFRA’s ‘program’ pre-empts.”11 and punitive damages. The FIFRA Preemption Defense Gains Widespread Judicial There is plenty wrong with this picture, too much Approval to discuss here. One crucial omission is the fact that the In 1984, the D.C. Circuit held in a now widely repudi- pesticide and its labeling, including the warnings that ac- ated decision, Ferebee v. Chevron Chemical Co., that de- company the product, are extensively regulated by the spite the language of §136v(b), FIFRA does not expressly or United States Environmental Protection Agency (“EPA”) impliedly preempt state law damages claims that attack the pursuant to the Federal Insecticide, Fungicide, and Roden- adequacy of the warnings on a pesticide’s labeling.12 Begin- ticide Act (“FIFRA”), the federal pesticide statute. Origi- ning in the early 1990s, however, federal and state courts nally enacted in 1947, Congress rewrote the act in 1972 to around the nation began to recognize that allowing individual “transform FIFRA from a labeling law into a comprehensive juries to second guess EPA by imposing state tort liability on regulatory statute.”1 The legislation was enacted for the pesticide manufacturers for inadequate labeling or failure to “protection of man and the environment.”2 The revised stat- warn would interfere with Congress’ goal of maintaining a ute “establishe[d] a coordinated Federal-State administra- system of nationally uniform product labeling regulated ex- tive system to carry out the new program.”3 Indeed, one of clusively by EPA. For example, in a seminal FIFRA tort pre- the statute’s key features is the carefully balanced alloca- emption case, Papas v. Upjohn Co. (“Papas I”), the Eleventh tion of regulatory authority between the federal government Circuit held that and the states. [a] jury determination that a label was inadequate FIFRA requires all pesticide products to be granted would require that the manufacturer change the la- a registration by EPA, and to be distributed with EPA-ap- bel or risk additional suits for damages. Such a proved product labeling.4 But there is no blanket “field pre- change, if permitted by the EPA, would destroy the emption” of state regulatory authority over pesticides.5 In- uniformity that Congress and the EPA seeks to stead, FIFRA “specifies several roles for state and local au- achieve in pesticide labeling . . . This case-by-case, thorities,”6 and expressly confirms that the states can further state-by-state outside pressure on the regulatory regulate the “sale or use” of pesticides.7 This means, for process would hinder the development of an or- example, that a state agency, pursuant to a state pesticide derly, systematic, and uniform nationwide labeling regulatory statute, can ban the sale or use of a FIFRA-regis- scheme.13 tered pesticide. Under §136v(b) of FIFRA, however, EPA alone has the authority to regulate the content and format of Similarly, in another early case, Arkansas-Platte & Gulf Part- each pesticide product’s labeling, which must be nationally nership v. Van Waters & Rogers, Inc. (“Arkansas-Platte I”), uniform and accompany the product at all times.8 the Tenth Circuit held that “State court damage awards based on failure to warn . . . would hinder the accomplishment of Congress wanted a single federal regulatory agency, the full purpose of §136v(b), which is to ensure uniform la- possessing the necessary scientific resources, expertise, and beling standards.”14 Accordingly, these courts of appeals data, as well as the national perspective and experience, to held that state law failure-to-warn claims are impliedly pre- determine what warnings, precautionary measures, and di- empted by FIFRA because they conflict with the statute’s rections for use, should accompany each pesticide product’s goal of national labeling uniformity. own, nationally uniform, federally approved labeling. Thus, FIFRA’s legislative history indicates that “[i]n dividing the In June 1992, the Supreme Court held in Cipollone 6 E ngageVolume 4, Issue 2

204 v. Liggett Group, Inc., a landmark tort preemption case in- tion defense, which is limited to claims which directly or indi- volving federal cigarette advertising and labeling legislation, rectly challenge the adequacy of the warnings or other infor- that a federal statute which expressly preempts the states mation on EPA-approved product labeling, has been suc- from imposing their own “requirement[s] . . . sweeps broadly cessfully invoked by pesticide manufacturers and distribu- and suggests no distinction between positive enactments tors in personal injury, environmental contamination, and crop and common law . . . ‘[state] regulation can be as effectively damage suits. exerted through an award of damages as through some form of preventive relief.’ ”15 Shortly after deciding Cipollone, The Trial Bar Persuades The Clinton EPA To Intervene the Supreme Court vacated and remanded Papas I and Ar- As the FIFRA tort preemption doctrine was adopted kansas-Platte I to the courts of appeals for further consider- by more and more federal and state courts throughout the ation in light of Cipollone. On remand, both courts held that 1990s, trial lawyers started to realize that they would be de- § 136v(b), which prohibits the states from imposing addi- prived of the ability to pursue failure-to-warn claims against tional or different “requirements” for labeling, expressly pre- pesticide manufacturers. To try to pin liability for their cli- empts state tort claims for inadequate labeling or failure-to- ents’ problems on pesticide manufacturers, trial lawyers, in- warn.16 stead of directly or indirectly attacking the EPA-approved labeling or warnings accompanying a pesticide product, now Since that time, all nine federal circuits that have would have to satisfy the burden of proving at trial that a considered the subject of FIFRA tort preemption in light of pesticide product, approved for use both by EPA and state Cipollone have held that §136v(b) expressly preempts fail- regulatory agencies, contained a design defect or manufac- ure-to-warn and other claims which implicate the adequacy turing flaw. of EPA-approved product labeling.17 This is because such claims have the unavoidable effect of imposing state law In 1996, certain members of the trial bar, supported requirements for labeling which are “in addition to or differ- by anti-pesticide groups, prevailed upon EPA’s Office of Gen- ent from” those imposed under FIFRA. The Eleventh Circuit eral Counsel to issue, through the Office of Pesticide Pro- in Papas II explained that “Cipollone convinces us that the grams, a “guidance” document purporting to “correct a mis- term ‘requirements’ in section 136v(b) ‘sweeps broadly and understanding” on the part of several federal courts of ap- suggests no distinction between positive enactments and peals which had held that § 136v(b) of FIFRA preempts label- the common law.’ . . . Common law damages awards are one ing-related agricultural crop damage claims.23 CropLife form of state regulation and, as such, are ‘requirements’ within America (formerly known as the American Crop Protection the meaning of section 136v[b].”18 Or as the Ninth Circuit Association), the national trade group for agricultural pesti- put it in Taylor AG Indus. v. Pure-Gro, “[l]ike the preemption cide manufacturers and distributors, objected to the propri- provision of the 1969 Cigarette Act [in Cipollone], §136v(b) ety and content of the guidance document. In response to uses the broad term ‘requirements’ to preempt state actions CropLife America, which has played a leading role in estab- for damages. . . . ‘[n]ot even the most dedicated hair-splitter lishing and maintaining the FIFRA preemption defense, EPA’s could distinguish these statements.’ ”19 Along the same lines, General Counsel disclaimed any intent to take a position on the Fifth Circuit held in Andrus v. AgrEvo USA Co., that “the FIFRA preemption. ‘undeniable practical effect’ of . . . recovering a large damage award on . . . claims that the manufacturer failed to meet state Two years later, however, with the nationwide body labeling requirements and failed to warn . . . of potential ad- of FIFRA preemption cases continuing to expand, the EPA, verse effects would be the imposition of additional labeling supported by the trial bar and anti-pesticide groups, tried standards not mandated by FIFRA.”20 again to stem the judicial tide. More specifically, in Etcheverry v. Tri-Ag Service, a case before the supreme court of Califor- Numerous state appellate courts have reached the nia, the nation’s most important agricultural state, on the same conclusion, often affording deference to the unanimous, issue of whether FIFRA preempts failure-to-warn claims in- post-Cipollone view of the federal courts of appeals on this volving agricultural crop damage, the federal government question of federal statutory interpretation. For example, in filed an amicus curiae brief for the first time in any FIFRA tort Etcheverry v. Tri-Ag Service, Inc., the California Supreme preemption case. The brief was filed despite industry’s Court explained that “[t]he federal court decisions holding efforts to persuade the government to stay out of private tort that FIFRA preempts state law failure-to-warn claims are nu- litigation, or at least recognize that FIFRA preemption of la- merous, consistent, pragmatic and powerfully reasoned.”21 beling-related claims is expressly mandated by § 136v(b) and Consistent with the overwhelming body of case law on FIFRA consistent with EPA’s statutory responsibility to maintain preemption, the court held that “[w]hen a claim, however national labeling uniformity. couched, boils down to an assertion that a pesticide’s label failed to warn of the damage plaintiff allegedly suffered, the The position taken in the March 1999 Etcheverry claim is preempted by FIFRA.”22 amicus brief ignored the vast body of FIFRA preemption case law that had developed in light of Cipollone. Instead, Thus, for more than a decade, the FIFRA preemp- attempting to resurrect Ferebee’s holding (without ever cit- E ngage Volume 4, Issue 2 7

205 ing that case), the government’s amicus brief argued that 2002 by the pesticide manufacturer defendant in American § 136v(b) is limited to positive enactments (such as state Cyanamid Co. v. Geye.29 In Geye the Texas Supreme Court statutes and state agency regulations), and does not encom- held in a result-driven opinion (contrary to the holdings of pass tort claims at all. In support of this categorical anti- the Fifth Circuit, California Supreme Court, and numerous preemption position, the government’s brief adopted many other courts), that labeling-related claims involving crop of the arguments that the trial bar and anti-pesticide groups damage are excluded from FIFRA preemption. had unsuccessfully advocated in other FIFRA preemption cases. The California Supreme Court, in a 5-2 decision, Significantly, in November 2002, two months after squarely rejected all of the government’s anti-preemption ar- the Geye certiorari petition was filed, the Supreme Court, for guments.24 In so doing, the court noted that “[e]ven though the first time in any FIFRA tort preemption case, invited the the question presented in this case has been addressed by Solicitor General to submit a brief expressing the views of the nine of the federal circuit courts of appeals, the United States United States. The Court’s invitation (in reality, an order to failed to file amicus curiae briefs in any of the cases and file an amicus brief), afforded the government a clear oppor- permitted those courts to proceed upon a fundamental as- tunity to reconsider the Etcheverry amicus brief. sumption that it now characterizes as mistaken.”25 Industry attorneys, including from CropLife America Following the severe lashing that its arguments re- and the Chamber of Commerce of the United States, met with ceived in Etcheverry, the federal government never again the Solicitor General’s office, and with attorneys from EPA filed a brief advocating an anti-FIFRA tort preemption posi- and other interested federal agencies, to explain why as a tion. Nevertheless, this Etcheverry amicus brief has contin- matter of both legal analysis and public policy, the reasons ued to be routinely submitted, quoted, and/or cited by trial for FIFRA preemption of failure-to-warn and other labeling- lawyers as representing EPA’s position on FIFRA preemp- related damages claims are compelling. (One author of this tion of state tort claims. Most courts have not been per- article represented American Cyanamid, the petitioner in Geye, suaded. For example, the plaintiffs in Eyl v. Ciba-Geigy Corp. and the other author is the General Counsel of CropLife asked the Nebraska Supreme Court “to adopt the position of America, which filed an amicus brief in support of the peti- the EPA that was set forth in an amicus brief filed in tioner.) Etcheverry.”26 The Nebraska Supreme Court pointedly declined to do so: The Solicitor General’s May 2003 amicus brief to the Supreme Court unequivocally declared that the categori- [W]e give no deference to the EPA’s position in the cal position against FIFRA preemption that had been advo- amicus brief filed in Etcheverry. The Etcheverry cated in the Etcheverry amicus brief to the California Su- brief was written for that specific case. The EPA did preme Court is “incorrect” and “no longer represents the not file an amicus brief with this court in this case. view of the United States”30 The Solicitor General’s Geye Nor have we found – outside of Etcheverry – a amicus further explains: similar brief filed by the EPA in any of the numerous other cases which have discussed FIFRA preemp- The United States has reexamined the position that tion. In addition, the record is silent whether the it urged in Etcheverry in light of the ruling by the view expressed in the Etcheverry brief was an EPA California Supreme Court in that case, as well as the official policy statement for all cases and if the EPA subsequent rulings of other courts, and it has con- still adheres to that view. Further, we note that in cluded that its position in Etcheverry that FIFRA Etcheverry, the California Supreme Court did not categorically does not preempt common law tort suits adopt the EPA’s arguments.27 or other damages actions is incorrect. In the United States’ view, just as Section 136v(b) applies to re- As a result of developments during the Supreme Court’s 2002 quirements imposed in a law enacted by a state leg- term, the Etcheverry amicus brief is now indisputably a dead islature or a regulation promulgated by a state letter, and cannot ethically be cited by trial attorneys or anti- agency, it applies to requirements imposed in the pesticide groups as representing the government’s position. form of a duty or standard of care in a tort action. . . The United States . . . submits that the legal stan- The Bush Administration’s Position dard applied in a state-law damages action may “im- The U.S. Supreme Court has repeatedly denied re- pose” a “requirement[]” for labeling or packaging view of cases involving FIFRA tort preemption. Most re- within the meaning of 7 U.S. C. 136v(b).31 cently, on June 27, 2003, the Court denied the April 2003 certiorari petition filed in Eyl v. Ciba-Geigy Corp. by Public The foregoing position of the United States on Citizen Litigation Group (a petition which relied upon the FIFRA tort preemption, presented to the U.S. Supreme Court Etcheverry amicus as supposedly representing the in the Geye amicus brief, is consistent with Cipollone and government’s position).28 On the same day, the Court also other Supreme Court tort preemption jurisprudence, as well denied the certiorari petition that was filed in September as with the nearly unanimous views of the hundreds of fed- 8 E ngageVolume 4, Issue 2

206 eral and state trial and appellate courts that have considered 13 Papas v. Upjohn Co., 926 F.2d 1019, 1025-26 (11th Cir. 1991) the subject. This Administration’s carefully considered reex- (emphasis added). 14 959 F.2d 158, 162 (10th Cir. 1992). amination of FIFRA tort preemption remedies the prior 15 505 U.S. 504, 521 (1992) (quoting San Diego Building Trades Administration’s politicization of that subject.32 Council v. Garmon, 359 U.S. 236, 247 (1959); see also CSX Transp., Inc. v. Easterwood, 507 U.S. 658, 664 (1993) (quoting Cipollone, 505 Conclusion U.S. at 522) (noting Cipollone held that a “federal statute barring 33 additional ‘requirement[s] . . . “imposed under state law” ’ pre-empts The Supremacy Clause, which is the constitutional common-law claims”). basis for federal preemption of state law, is one of the princi- 16 Arkansas-Platte & Gulf Partnership v. Van Waters & Rogers, Inc. pal constitutional underpinnings of our federalism. Respect (“Arkansas-Platte II”), 981 F.2d 1177 (10th Cir.), cert. denied, 510 for states’ rights does not require, and the Supremacy Clause U.S. 813 (1993); Papas v. Upjohn Co. (“Papas II”), 985 F.2d 516 (11th Cir.), cert. denied, 510 U.S. 913 (1993). does not allow, state law tort claims which, as in the case of 17 See, e.g., Dow AgroSciences v. Bates, 332 F.3d 323 (5th Cir. 2003); pesticide-related failure-to-warn claims, conflict with federal Netland v. Hess & Clark Inc., 284 F.3d 895 (8th Cir.), cert. denied 123 law. Congress determined that to promote safe and effective S.Ct. 415 (2002); Hawkins v. Leslie’s Pool Mart, Inc., 184 F.3d 244 (3d use of pesticides, nationally uniform product labeling is nec- Cir. 1999); Kuiper v. American Cyanamid Co., 131 F.3d 656 (7th Cir. 1997); Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559 (1st Cir. essary and desirable, and that only the federal EPA should 1996); Taylor AG Indus. v. Pure-Gro, 54 F.3d 555 (9th Cir. 1995); have the authority to regulate it. This intent is clearly ex- Lowe v. Sporicidin Int’l, 47 F.3d 124 (4th Cir. 1995); Papas v. Upjohn pressed in § 136v(b) of FIFRA. The courts, and now the Co. (“Papas II”), 985 F.2d 516 (11th Cir. 1993); Arkansas-Platte & Executive Branch, have recognized that state tort claims for Gulf Partnership v. Van Waters & Rogers, Inc. (“Arkansas-Platte II”), 981 F.2d 1177 (10th Cir. 1993). failure-to-warn and inadequate labeling are encompassed by 18 985 F.2d at 518 (quoting Cipollone, 505 U.S. at 521). the broad, plain language of that preemption provision. 19 54 F.3d 555, 559-60 (9th Cir. 1995) (quoting Shaw v. Dow Brands, Inc., 994 F.2d 364, 371 (7th Cir. 1993)). 20 * Douglas T. Nelson is Senior Vice President and General 178 F.3d 395, 398-99 (5th Cir. 1999) (quoting MacDonald v. Monsanto Co., 27 F.3d 1021, 1025 (5th Cir. 1994)). Counsel of CropLife America, a trade association of the de- 21 993 P.2d 366, 368 (Cal. 2000). velopers, manufacturers, formulators and distributors of plant 22 Id. at 377. science solutions for agriculture and pest management in the 23 Pesticide Regulation (“PR”) Notice 96-4. 24 United States. CropLife America (predecessor names, Na- See 993 P.2d at 371-74; see also Lawrence S. Ebner, The California Supreme Court Weighs In On FIFRA Preemption, 15 BNA Toxics Law tional Agricultural Chemicals Association (1933-1995) and Reporter 627 (June 22, 2000); Lawrence S. Ebner, California Su- American Crop Protection Association (1995-2000)) has preme Court Repudiates Federal Government Position on FIFRA Tort played a leading role in establishing and maintaining the Preemption, Product Liability Law & Strategy (April 2000). 25 FIFRA tort preemption doctrine, including by filing amicus Id. at 374 . 26 650 N.W.2d 744, 753 (Neb. 2002), cert. denied 71 U.S.L.W. 3799 briefs in numerous federal and state appellate cases on that (June 27, 2003) (No. 02-1500). subject. 27 Id. at 753-754. 28 See n.26. 29 Lawrence S. Ebner is leader of the Appellate Group at McKenna 79 S.W.3d 21 (Tex. 2002), cert. denied 71 U.S.L.W. 3799 (June 27, 2003) (No. 02-367). Long & Aldridge LLP in Washington, D.C. He has advo- 30 Brief for the United States As Amicus Curiae, American Cyanamid cated the FIFRA preemption defense on behalf of individual Co. v. Geye (No. 02-367), available at http://www.justice.gov/osg/ pesticide manufacturers and CropLife America in appeals briefs/2002/2pet/6invit/2002-0367.pet.ami.inv.html 31 before the U.S. Supreme Court, federal courts of appeals, and Id. at 17, 18-19 (emphasis added). 32 The government’s brief opposed certiorari in Geye on the ground state appellate courts. These include the Geye, Etcheverry, that because the Texas Supreme Court’s order was interlocutory (it Taylor, Arkansas-Platte, and Papas cases discussed in this affirmed the state court of appeals’ reversal of the state trial court’s article. grant of summary judgment in favor of the manufacturer), the U.S. Supreme Court lacked jurisdiction under 28 U.S.C. § 1257. For this reason, the government’s brief took no position on the merits of Footnotes whether the Geye plaintiffs’ particular claims are labeling-related, and 1 Ruckelshaus v. Monsanto Co, 467 U.S. 986, 991 (1984) (citing H.R. thus, preempted. See U.S. Br. at 19. Rep. No. 92-511, at 1 (1971)). 33 U.S. Const., Art. VI, cl. 2. 2 S. Rep. No. 92-838, pt. II, at 1 (1972). 3 S. Rep. No. 92-511, at 1 (1971). 4 7 U.S.C. §§ 136a(a), 136a(c)(5). 5 Wisconsin Public Intervenor v. Mortier, 501 U.S. 597, 612 (1991) (holding that FIFRA does not preempt local governments from adopt- ing ordinances that restrict pesticide use). 6 Id. at 601. 7 7 U.S.C. § 136v(a). 8 7 U.S.C. § 136v(b). 9 H.R. Rep. No. 92-511, at 16 (1971) (emphasis added); see id. at 1-2 (“State authority to change Federal labeling and packaging is completely preempted . . . .”). 10 7 U.S.C. § 136v(b). 11 Mortier, 501 U.S. at 615. 12 Ferebee v. Chevron Chemical Co., 736 F.2d 1529 (D.C. Cir. 1984) E ngage Volume 4, Issue 2 9

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is&Perspecti sy

In its recent decision in Etcheverry v. Tri-Ag Service Inc., the California Supreme Court ruled that state based failure-to-warn claims are preempted by the Federal Insecticide, Fun- gicide, and Rodenticide Act. In this week's Analysis and Perspective, author Lawrence S. Ebner explains the state supreme court's decision, discounts the U.S . government's "extraordinarily belated anti-preemption" litigation position, and responds to the minority's dissenting opinion. Ebner predicts that Etcheverry "will have far-reaching impact not only in California but throughout the United States ." The California Supreme Court Weighs In On FIFRA Preemption

LAWRENCE S. EBNER gument, four of the court's seven justices, joined by a fifth justice in a separate opinion, unequivocally re- he California Supreme Court's recent decision in jected the government's extreme and extraordinarily Etcheverry v. Tri-Ag Service, Inc., 993 P.2d 366, 93 belated anti-preemption position . Moreover, the Cal . Rptr . . 2000), is a very significant 2d 36 (Cal ad- Etcheverry majority sharply rebuked the government's Tdition to the already substantial body of case law hold- fall-back contention that FIFRA does not preempt Fungicide, and ing that the Federal Insecticide, Roden- failure-to-warn claims involving agricultural crop dam- ticide Act ("FIFRA") preempts pesticide-related prod- age .' uct liability claims for inadequate labeling or failure to This article highlights the California Supreme warn . Court's decision, including its criticism of the govern- Prior to Etcheverry, California's highest court had ment's arguments, and also offers a response to the dis- not ruled on the critically important FIFRA preemption senting opinion .' defense, even though probably more agricultural crop damage and personal injury suits involving pesticides Case Background are filed in California than anywhere else in the nation .' The U. S. Environmental Protection Agency (EPA) is Furthermore, the Federal government participated in responsible for administering FIFRA, the comprehen- Etcheverry as amicus curiae for the first time in any FI- FRA tort preemption case . The government vigorously Ass'n, Chemical Specialties Manufacturers Ass'n, and Interna- argued, in a manner that was virtually oblivious to the tional Sanitary Supply Ass'n (supporting defendants) ; Wash- hundreds of federal and state FIFRA preemption cases ington Legal Foundation (supporting defendants) ; Product Li- decided during the past 13 years, that based on its text ability Advisory Council (supporting defendants) ; Public Citi- and legislative history, FIFRA does not preempt tort zen Litigation Group (supporting plaintiffs) ; Rural Legal claims at all .' Following extensive briefing and oral ar- Assistance Foundation (supporting plaintiffs) . s See Lawrence S . Ebner, "California Supreme Court Re- ' At the time the Petition for Review was filed pudiates Federal government Position on Pesticide Tort Pre- in emption," Leader's Product Liability Law & Strategy (April Etcheverry, there were at least 20 pesticide-related product liability suits pending in lower California state courts . 2000), for additional background on the government's decision to participate in Etcheverry. As that article indicates, in Wis- z Etcheverry also attracted the attention of the following additional amici curiae : American Crop Protection consin Pub. Intervenor v. Mortier, 501 U.S . 598, 615 (1991) Ass'n, RISE (holding that FIFRA does not preempt local governments from (Responsible Industry for a Sound Environment), Chemical Producers and Distributors Ass'n, Chemical Manufacturers regulating pesticide use), the Solicitor General of the United States filed an amicus curiae brief arguing that "[t]o be sure, an exclusively federal approach is necessary in certain areas of pesticide regulation [and] [o]ne such area is labeling" (empha- Lawrence S. Ebner chairs the Appellate Liti- sis added) . gation Group at McKenna & Cuneo, L.L.P, in a The Opinion of the Court was authored by Associate Jus- Washington, D.C. He specializes in tice Janice R. Brown, and joined by Chief Justice Ronald M. pesticide-related litigation and represents George and Associate Justices Ming W. Chin and Marvin R. Bayer Corp. Ebner has appeared in person Baxter. Associate Justice Joyce L. Kennard filed a separate before four federal courts of appeals, two concurring and dissenting opinion, rejecting both the govern- state supreme courts, and numerous other ment's position that FIFRA does not preempt any failure-to- appellate and trial courts to advocate the warn claims, and the majority's holding that FIFRA preempts all failure-to-warn FIFRA preemption defense . The views claims . Associate Justice Kathryn M. Wer- degar wrote a dissenting opinion, joined by Associate Justice expressed in this article are his own . Stanley Mosk, asserting that FIFRA does not preempt state tort claims.

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sive federal pesticide regulatory statute. 7 U.S .C. § 136- adequate labeling in one form or another,' with the 136y (1998) . Pursuant to FIFRA, every pesticide product `main issue being the failure of the labels to warn sold in the United States must be granted a registration against mixing chemicals.' " Etcheverry, 93 Cal. Rptr. by EPA, and distributed with EPA-approved product la- 2d at 39. In a bizarre 2-1 split decision, which now has beling. See 7 U.S.C. § 136a. The warnings, directions been "depublished," the California Court of Appeal, for use, and other information included on a product's Third Appellate District, reversed, finding that "the labeling must be adequate to prevent "unreasonable ad- bulk of [FIFRA preemption] case law [had] gone verse effects on the environment." Id. § 136a(c)(5)(C) . astray," and that § 136v(b) does not preempt failure-to- This includes, among other things, harm to people, the warn claims. Id. The Supreme Court of California natural environment, and agricultural crops. Id. agreed to review the case. § 1360) . The Majority Opinion The majority opinion begins with the principle that The majority of justices in Etcheverry although state courts are not bound by decisions of lower federal courts (i.e., courts of appeals and district "unequivocally rejected the government's extreme courts), even on federal questions, "they are persuasive and entitled to great weight" where they "are `both nu- and extraordinarily merous and consistent.' " Id. at 38 (citations omitted) . Finding that "[t]he federal court decisions holding that belated anti-preemption position." FIFRA preempts state law failure-to-warn claims are numerous, consistent, pragmatic and powerfully reasoned," the court "reverse[d] the judgment of the [California] Court of Appeal reaching the contrary con- FIFRA's preemption provision, § 136v(b), is entitled clusion." Id. (emphasis added) .' "Uniformity." Its purpose is to ensure that each FIFRA- The bulk of the majority opinion is directed to the registered product is accompanied by nationally uni- court of appeal's analysis and the government's argu- form labeling regulated solely by EPA. Section 136v(b) ments: accomplishes this objective by broadly providing that a A. 'Cipollone.' The state court of appeal contended "State shall not impose or continue in effect any re- that FIFRA preemption case law addition had failed "to draw the quirements for labeling or packaging in to or correct lesson" from the U .S . Supreme Court's opinion different from those required under [FIFRA] ." 7 U.S.C. in Cipollone . Id. at 39 . The Court held in Cipollone that § 136v(b) (emphasis added) . In other words, by virtue of the 1969 federal "Cigarette Act" preemption clause, § 136v(b), Congress intended that EPA alone-and not which provides that "[n]o requirement . . . based on the states-have the authority to determine what warn- smoking and health shall be imposed under State law ings, directions for use, and other information should with respect to the advertising or promotion of any be required on a pesticide product's labeling. cigarettes," encompasses common law claims, includ- Numerous federal and state courts have held that ing for failure to warn. See id. at 40 (quoting Public § 136v(b) expressly preempts any state law damages Health Cigarette Smoking Act of 1969, Pub. L. 91-222, claim, including failure-to-warn claims, which would § 5) (emphasis added) . In reaching this conclusion, the have the effect of imposing additional or different, state Court explained that the 1969 clause is "much law requirements for "adequate" pesticide labeling. broader," than its 1965 predecessor, which the Court This case law has developed in light of Cipollone v. Lig- found did not encompass damages claims since it gett Group, Inc., 505 U.S. 504, 520-21 (1992), the land- merely barred state-required "statements" relating to mark, smoking-related, tort preemption case holding smoking and health. Id. (quoting Cipollone, 505 U .S. at that a federal statutory prohibition against state- 520; Federal Cigarette Labeling and Advertising Act of imposed "requirement[s]," easily encompasses requirements imposed through common law claims. See s All nine federal courts of appeals which have considered Etcheverry, 93 Cal. Rptr. 2d at 40. the subject in light of Cipollone-including the U.S. Court of In Etcheverry, California farmers alleged that their Appeals for the Ninth Circuit (which encompasses California 1993 walnut crop was injured due to the phytotoxic ef- and other Western states)-have concluded that § 136v(b) pre- fect of a tank mix of two FIFRA-registered insecticides, empts state tort claims for inadequate labeling or warnings. whose EPA-approved labeling contained no warnings See Hawkins v. Leslie's Pool Mart, Inc., 184 F.3d 244 (3d Cir. against applying the products together. Claiming that 1999) ; Andrus v. AgrEvo USA Co., 178 F.3d 395 (5th Cir. 1999); they should have been warned about the alleged dan- National Bank of Commerce v. Dow Chem. Co., 165 F.3d 602 combining (8th Cir. 1999) ; Kuiper v. American Cyanamid Co., 131 F.3d gers of the products, the Etcheverrys sued 656 (7th Cir. 1997), cert. denied, 523 U.S. 1137 (1998); Grenier the products' manufacturer (Bayer Corp.), the retail dis- v. Vermont Log Bldgs., Inc., 96 F.3d 559 (1st Cir. 1996) ; tributor that sold them the products (Tri-Ag Service), Welchert v. American Cyanamid Co., 59 F.3d 69 (8th Cir. and the state-licensed pest control advisor (a Tri-Ag em- 1995); Taylor AG Indus. v. Pure-Gro, 54 F.3d 555 (9th Cir. ployee) who recommended application of the tank mix 1995); Lowe v. Sporicidin Int'l, 47 F.3d 124 (4th Cir. 1995) ; (which also contained certain surfactant chemicals) . Bice v. Leslie's Poolmart, Inc., 39 F.3d 887 (8th Cir. 1994) ; Their complaint asserted state law causes of action for MacDonald v. Monsanto Co., 27 F.3d 1021 (5th Cir. 1994); negligence, negligence per se, products liability, breach Worm v. American Cyanamid Co., 5 F.3d 744 (4th Cir. 1993) ; of implied warranty, misrepresentation, strict liability King v. E1 du Pont de Nemours & Co., 996 F.2d 1346 (1st Cir. for ultra hazardous activity, and trespass . 1993); Shaw v. Dow Brands, Inc., 994 F.2d 364 (7th Cir. 1993) ; Papas v. Upjohn Co., 985 F.2d 516 (11th Cir.), cert. denied, 510 The state trial court granted the defendants' sum- U.S. 913 (1993) ; Arkansas-Platte & Gulf Partnership v. Van mary judgment motions based on FIFRA preemption, Waters & Rogers, Inc., 981 F.2d 1177 (10th Cir.), cert. denied, holding that "all of plaintiffs' causes of action `allege in- 510 U.S. 813 (1993).

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1965, Pub . L. 89-92, § 5). Numerous courts have con- (Waterview Management Co . v. F.D.I.C. 105 F.3d 696, 699 Cir. [summarizing cluded in light of Cipollone that § 136v(b) of FIFRA, (D.C . 1997) Cipollone's holding] .) . which like the 1969 Cigarette Act preemption provision Ferebee's fundamental thesis-that liability under state law bars state-imposed "requirements," expressly preempts for failure to warn is not a requirement for labeling or pack- pesticide-related state tort claims for inadequate label- aging different from that required under FIFRA-has been ing or warnings. As the California Supreme Court con- rejected by the federal courts since Cipollone as "soph- firmed in Etcheverry, "[t]here is no notable difference istry" and "silly," and the attempted distinction has been between the language in the 1969 Cigarette Act and the characterized as "illusory ." language in [§ 136v(b)] ." Id. at 41 (quoting Taylor AG Etcheverry, 93 Cal. Rptr. 2d. at 42 (emphasis added) . . Indus . v. Pure-Gro, 54 F.3d 555, 559 (9th Cir. 1995)) Although Ferebee is considered a dead letter, the government in its amicus brief, without ever citing that case by name, essentially reargued Ferebee's theory- The state supreme court "rejected as that tort claims for inadequate labeling do not impose state law requirements because pesticide manufactur- 'inconsistent' " with Cipollone, the court of ers supposedly may prefer to choose to pay damages in future liability suits rather than amend their labeling to appeal's "convoluted avoid them. See Ferebee, 736 F.2d at 1541 . When the attorney representing the government attempted to advo- attempt" to rewrite § 136v(b). cate this specious theory at the hearing held before the California Supreme Court, Justice Brown admonished him that the government's position was "disingenuous" in view of all of the cases that have repudiated Ferebee. The state supreme court disagreed with the court of C. 'Medtronic .' The government also argued that the appeal that FIFRA preemption cases have failed to con- U.S. Supreme Court's highly fragmented, medical de- sider the 1965 Cigarette Act clause. The court noted vice preemption decision in Medtronic, Inc. v. Lohr, 518 that when two federal circuit courts, following remand U.S. 470 (1996), seriously eroded post-Cipollone FIFRA by the U.S. Supreme Court for reconsideration in light preemption case law. Medtronic arose under the federal of Cipollone, held that "FIFRA was functionally equiva- Medical Device Amendments ("MDA") preemption lent to the 1969 Cigarette Act, insofar as their preemp- clause, which provides that "no State . . . may establish tion provisions were concerned, they impliedly found . . . with respect to a device . . . any requirement .. . that it was distinguishable from the 1965 Cigarette which is different from, or in addition to, any [federal] Act." Id. (citing Papas v. Upjohn Co., 985 F.2d 516 (11th requirement applicable . . . to the device [and] which re- Cir. 1993) ; Arkansas-Platte & Gulf Partnership v. Van lates to [any] matter included in a requirement appli- Waters & Rogers, Inc., 981 F.2d 1177 (10th Cir. 1993)) . cable to the device." See Etcheverry, 93 Cal. Rptr. 2d. at Furthermore, the state supreme court rejected as "in- 43 (quoting 21 U.S .C. § 360k(a)) . According to the consistent" with Cipollone, the court of appeal's convo- Court, the defendant in Medtronic essentially argued luted attempt to "literally rewrit[e] the text" of "that the plain language of the statute pre-empts any § 136v(b) in an effort to demonstrate that it is more and all common-law claims brought by an injured plain- "grammatically akin" to the 1965 cigarette act preemp- tiff against a manufacturer of medical devices." tion clause. Id. at 41, 42. As the court indicated, "the Medtronic, 518 U.S. at 486. The Medtronic plurality (U.S .] Supreme Court drew the very distinction be- opinion holds, however, that the MDA preemption tween the 1965 and 1969 Cigarette Acts that the Court clause, as interpreted by congressionally authorized of Appeal seeks to explain away in its effort to prove FDA regulations which implemented and narrowed the that all of the other courts are guilty of a 'striking omis- scope of the clause, " 'was not intended to pre-empt sion.' " Id. at 42 . most, let alone all, general common law duties enforced B. 'Ferebee .' The state court of appeal also contended by damages actions.'" See Etcheverry, 93 Cal. Rptr. 2d that "the one case that got it right . . . was a pre- at 44 (quoting Medtronic, 518 U.S . at 491) . Cipollone case," Ferebee v. Chevron Chem. Co. 36 F.2d Although the Court held in Medtronic that none of 1529 (D .C. Cir. 1984), which held that FIFRA neither the plaintiff's damages claims involving an allegedly de- expressly nor impliedly preempts damages claims. Id. fective heart pacemaker lead were preempted under the According to Ferebee, state tort claims for inadequate unique statutory/regulatory scheme involved in that labeling or warnings, unlike "direct" regulatory com- case, five Justices (i.e., a majority of the Court) in two mands, do not impose "requirements" for labeling separate opinions explicitly reaffirmed Cipollone's within the meaning of § 136v(b). Ferebee held instead holding that a federal statutory prohibition against im- that such claims are just another way for states to regu- position of state requirements encompasses common late pesticide use, which § 136v(a) of FIFRA, 7 U.S .C. law claims . See Medtronic, 518 U.S . at 504 (Breyer, J., § 136v(a), confirms they can do. concurring in part and concurring in the judgment) The Etcheverry majority opinion explains, however, ('[one] can reasonably read the word 'requirement' as that including the legal requirements that grow out of the application, in particular circumstances, of a State's tort [r]eliance upon Ferebee is misplaced because it is no longer law . . . a contrary holding would have anomalous con- good law. [citations omitted] Although the District of Co- sequences") ; id. at 510, 512 lumbia Circuit has not expressly overruled Ferebee, it has (O'Connor, J ., concurring in expressly acknowledged that Cipollone repudiated its cen- part and dissenting in part) (the Cipollone "rationale is tral premise by "explaining that damage actions can be equally applicable in the present context .. . the term used to enforce state regulations as effectively as other 'requirement' encompasses state common-law causes forms of preventive relief and thus damage actions must be of action") ; see also Geier v. American Honda Motor preempted where positive enactments are preempted. . . ." Co., 120 S.Ct. 1913, 1918 (2000) ("A majority of this

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Court has said that . . . a provision that uses the word is phytotoxicity of which plaintiffs complain." Id. at 46.7 `requirements' [ ] may well expressly pre-empt . . . tort Further, actions") ; id., at *20 (Stevens, J., dissenting) ("we con- even assuming arguendo that phytotoxicity is included cluded that broadly phrased pre-emptive commands en- within the concept of efficacy, there remain two fundamen- compassed common-law claims") (citing Cipollone and tal flaws in the argument that pesticide efficacy will go Medtronic) . "largely, or entirely, unregulated" if state failure-to-warn claims are preempted: (1) Although the EPA has waived the Etcheverry's majority opinion squarely rejects the submission of efficacy data for agricultural pesticides at the government's (and the plaintiffs') arguments regarding time of their initial registration, the agency does require the supposedly devastating impact of Medtronic on FI- and review such data if efficacy-related problems develop FRA preemption: "Medtronic does not undermine the later; and (2) California has a comprehensive registration conclusion that FIFRA preempts state failure-to-warn and regulatory program for pesticides, and while the Cali- claims. The overwhelming majority of the courts that fornia Department of Pesticide Regulation may not impose have examined the question have so held." Etcheverry, its own requirements for labeling, it can restrict or prohibit the sale or use of products that it determines are ineffica- 93 Cal. Rptr. 2d at 43 (citations omitted). As the court cious or phytotoxic. explained, "Medtronic is distinguishable on the ground Congress gave the federal Food and Drug Administra- Id. at 46; see id. 46-47 (discussing these points in detail) . The tion a unique role in determining the scope of preemp- majority opinion finds that although "FIFRA clearly does con- tion under the MDA [determining when state medical template a state/federal partnership in the regulation of pesti- device regulations should be exempted from preemp- cide efficacy and phytotoxicity . . . [t]his does not mean, how- tion] . . . . Congress did not give EPA an analogous role ever, that the regulation may be accomplished through the back door by means of tort suits that effectively require in implementing FIFRA." Id. at 44 (citing Kuiper v. changes in EPA-approved labeling." Id. at 47 (emphasis American Cyanamid Co., 960 F. Supp. 1378, 1384 (E.D. added). Thus, the court concluded that "having lay juries as- Wis. 1997), aff'd, 131 F.3d 656 (7th Cir. 1997) ("FIFRA sess questions of phytotoxicity in the context of failure-to- does not have a corresponding federal regulation which warn claims is neither necessary nor desirable, and holding limits its preemptive effect... . Such a regulation, along that such actions are preempted by FIFRA promotes federal- with the MDA's particular statutory language, was criti- ism, rather than undermines it." Id. (emphasis added) .$ cal to the Court's opinion in Medtronic .") . Indeed, § 136v(b) contains no exceptions or exemptions, and Congress gave EPA no role whatsoever in implement- "This nationally influential court decisively ing or interpreting it. Preemption of Failure-To-Warn Claims Involving Crop repudiated the government's misguided attempt Damage . The government argued in the alternative that even if FIFRA preempts some failure-to-warn claims, to turn the tide on FIFRA preemption." they do not include failure-to-warn claims based on an agricultural pesticide's alleged lack of "efficacy" (i .e., effectiveness in controlling insects, weeds, or other The Etcheverrys' Claims . plaintiffs' amid) Having disposed of the court pests) . The government (and other of appeal opinion and the government's (and plaintiffs') pointed to an EPA guidance document, Pesticide Regu- arguments, the California Supreme Court held that "FI- lation ("PR") Notice 96-4, which asserts that as a result FRA preempts state law claims for failure to warn of the of the so-called efficacy data waiver, "EPA does not risks of using a pesticide." Id. Although "courts have re- concern itself with questions of efficacy in the initial jected preemption challenges with regard to a wide va- pesticide registration and label approval process." riety of claims where they did not implicate require- Etcheverry, 93 Cal. Rptr. 2d at 45-46. According to the ments for labeling or packaging different from those re- government, "the courts that have reached the conclu- quired by FIFRA," the court explained that "[w] hen a sion that FIFRA preempts state failure-to-warn claims claim, however couched, boils down to an assertion that have done so under the mistaken impression that FI- a pesticide's label failed to warn of the damage plaintiff FRA regulates all aspects of pesticide labeling." Id. at allegedly suffered, the claim is preempted by FIFRA-" 44-45.6 Id. at 48 (emphasis added) . The Etcheverry majority took the government to task The majority opinion does not directly address the for asserting this erroneous position: "Even though the question of whether the Etcheverrys' particular causes question presented in this case has been addressed by nine of the federal circuit courts of appeals, the United ' The Etcheverrys alleged that the tank mix of the two pes- States failed to file amicus curiae briefs in any of the ticides was phytotoxic to their walnut crop. The court ex- cases and permitted those courts to proceed upon a fun- plained that EPA's testing guidelines draw a clear distinction damental assumption that it now characterizes as mis- between phytotoxicity (the toxic effect of a pesticide on a plant) and efficacy (the effectiveness of a pesticide in control- taken." Id. at 44. The court explained that the efficacy ling a target pest) . See Etcheverry, 93 Cal. Rptr. 2d at 45. In an data waiver and PR Notice 96-4 are "beside the point" effort to bootstrap its efficacy data waiver argument into since "(p]hytotoxicity is not a matter of efficacy, and it Etcheverry, the government conveniently "redefined" efficacy to include phytotoxicity for purposes of its amicus brief. s The "efficacy data waiver" is somewhat of a misnomer. a It also should be emphasized that § 136v(b) of FIFRA pre- Although EPA has waived automatic submission of efficacy empts state labeling requirements that either are "in addition data at the time of initial registration of an agricultural pesti- to" or "different from" federal requirements. As a result, even cide, EPA regulations require the registrant to generate effi- if there were gaps in EPA's regulation of labeling, § 136v(b) cacy data and have them available for submission at EPA's re- would preempt states from filling them, either through state quest should questions about efficacy arise after a registration statutes or regulations, or through damages awards in tort is granted. See 40 C.F.R. § 158.640(b)(1) . suits.

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of action are preempted . Although the trial court held such damage were allowed but unsuccessful, EPA that all of the plaintiffs' claims are failure-to-warn or in- "would have no reason to expend the resources re- adequate labeling claims, and thus, preempted, the quired to reassess the adequacy of a label." Id. On the court of appeal limited its analysis to holding that FI- other hand, if there were many reports of successful FRA does not preempt failure-to-warn claims. See id. at failure-to-warn suits, EPA "would hardly be likely to af- 49. As a result, the state supreme court remanded the firm the label." Id. Further, even if EPA were to reassess case for further proceedings consistent with its opinion and reaffirm a product's label, under Justice Kennard's that failure-to-warn claims are indeed preempted. Id. theory preemption would depend on whether a particu- "For the guidance of the Court of Appeal on re- lar failure-to-warn suit were brought before or after mand," the majority opinion rejects another of the gov- EPA's determination is made. Thus, the majority found ernment's fall back arguments-that claims based on that "the rule proposed [by Justice Kennard] would be so-called "off-label" statements (e .g., oral or advertising as destructive to the ideal of reaching like results in like statements) are not preempted. The court explained cases as it would be to Congress's goal of ensuring uni- that such statements are preempted if they "merely re- formity in pesticide labeling by preempting state peat information in the label itself ." Id. (quoting Kuiper failure-to-warn claims." Id. (emphasis added) . v. American Cyanamid Co., 131 F.3d 656, 662 (7th Cir. 1997)).9 Dissenting Opinion Justice Werdegar's dissent, joined by Justice Mosk Concurring and Dissenting Opinion (the court's most liberal as well as senior member), can In her separate concurring and dissenting opinion, be summarized as follows : Justice Kennard "agree[d] with the majority in rejecting a distinction between state regulation by statute or (a) "[P]roper appreciation of the states as indepen- regulation and state regulation by tort liability." dent sovereigns in our federal system demands that we Etcheverry, 93 Cal. Rptr. 2d at 50-51 (Kennard, J., con- presume Congress did not intend to displace the his- curring and dissenting) . She indicated that "[t]ort liabil- toric police powers of the states unless such intent is ity, imposed by a suit at common law, is an indirect but both `clear and manifest .' " Etcheverry, 93 Cal. Rptr. 2d powerful method of regulating the contents of pesticide at 52 (quoting Rice v. Santa Fe Elevator Corp., 331 U .S. labels." Id. at 50. Thus, she "reject[ed] the dissent's 218, 230 (1947)) (emphasis added) (Werdegar, J., dis- conclusion that [FIFRA] preempts no state law tort ac- senting) . This case involves an express preemption pro- tions asserting failure-to-warn claims predicated upon vision, § 136v(b) of FIFRA, whose meaning "[ajt best inadequacies in pesticide labels ." Id. Justice Kennard . . . is ambiguous." Id. at 54. "Any attempt to infer Con- asserted, however, that "preemption exists only if the gress's intent" to preempt common law claims from "its EPA, presented with evidence of the crop damage, has statutory silence" on the subject is "improper." Id. at not required, and would not require, any label correc- 55. A "requirement" for labeling "most certainly in- tion." Id. In her view, a manufacturer confronted with a cludes all positive enactments of law, but it could also failure-to-warn claim involving crop damage allegedly include common law claims for damages, the success of due to a tank mix, would have "to establish FIFRA pre- which could have the indirect effect of encouraging emption through evidence that the EPA, after full con- manufacturers to alter their labeling . . . [t] he pertinent sideration of information relevant to the allegation that inquiry is whether the words of section 136v(b) clearly combined use of its products causes crop damage, has embrace the latter, broader interpretation ." Id. at 54 determined that no change in the products' labels is re- (emphasis added) . "Although Cipollone . . . suggested quired ." Id. at 51 . the word `requirement' be given a broad interpretation in the preemption context, the high court's later decision in Medtronic . . . revealed that such an interpreta- "Although [the] dissenting opinion may seem to tion is too simplistic ." Id. at 60 .

make sense at first reading, a deeper analysis (b) In § 136v(a) "Congress has affirmatively and specifically preserved the power of the states to regulate reveals that it is seriously flawed." pesticides." Id. at 55 (citing Wisconsin Public Interve- nor v. Mortier, 501 U.S. 597, 613 (1991)) (emphasis added) . As a result, to "view FIFRA as an overarching federal regulatory scheme intended to supplant all or The majority opinion responds by explaining that even most state regulation is inaccurate ." Id. "Reading this theory "sets up a 'Catch-22' by imposing a burden FIFRA's preemption clause in conjunction with section defendants cannot reasonably be expected to carry." Id. 136v(a) reveals Congress's intent that the scope of FI- at 49 n.3 . "EPA would be unlikely ever to make [the] de- FRA's preemption of state law should be limited in na- termination" that Justice Kennard posits. Id. The major- ture." Id. The majority "fail[ed] to appreciate the sig- ity indicated this is because if there were only few crop nificance of section 136v(a) as a critical indicator of damage reports, or if failure-to-warn suits claiming Congress's intent." Id. s In Kuiper, a crop damage case alleging phytotoxicity, the (c) Further, "[t]he majority's interpretation . . . leads Seventh Circuit noted that while federal of ap- some courts to this conundrum: A state may directly regulate pesti- peals have held that FIFRA preempts any claim based on an off-label statement that does not "substantially differ" from the cides pursuant to section 136v(a)--even to the point of label, others "go farther." See Kuiper, 131 F.3d at 663. The banning their use-through statutes or administrative Etcheverry majority indicated that "[w1here off-label state- regulations (so long as the state does not require label- ments address matters outside the scope of the label, an action ing inconsistent with what the EPA has approved), even may well lie ." Etcheverry, 93 Cal. Rptr. 2d at 49 . if such regulation has the indirect effect of encouraging

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manufacturers to alter their labels, but a state may not any presumption against preemption applicable to the indirectly regulate pesticides by permitting tort suits at states' historic police powers simply does not apply. In- common law for damages, for the very same reason deed, in a case decided a few days after Etcheverry, the that such regulation has the indirect effect of encourag- U .S. Supreme Court confirmed that "[a]n `assumption' ing manufacturers to alter their labels." Id. at 57 (em- of nonpre-emption is not triggered when the State regu- phasis added). Moreover, "it must be assumed, in the lates in an area where there has been a history of sig- absence of a clear expression of congressional intent, nificant federal presence ." United States v. Locke, 120 that Congress intended to tolerate the tension between S. Ct. 1135, 1147 (Mar. 2000) (citing Jones v. Rath Pack- section 136v(b)'s grant of exclusive power to the EPA ing Co., 430 U.S. 519, 525 (1977)) (" 'assumption' is over pesticide labeling and the availability of state tort triggered where 'the field which Congress is said to remedies that could have an indirect effect on the con- have pre-empted has been traditionally occupied by the tent of such labels." Id. at 59. "There being no clear and States' ") (emphasis added) . manifest expression of Congress' intent in FIFRA to preempt state tort law . . . and it appearing implausible 2. The dissenting opinion incorrectly assumes that Congress intended to remove the remedies that histori- § 136v(a) is a "critical indicator" of the congressional cally have been available to compensate people for in- intent underlying § 136v(b). To the contrary, Wisconsin juries caused by unreasonably dangerous commercial Pub. Intervenor v. Mortier makes it clear that § 136v(a) products . . . the majority's expansive view of FIFRA's serves a very limited function necessitated by enact- preemptive effect is erroneous." Id. at 60. ment of § 136v(b). In Mortier, the U.S. Supreme Court Although this dissenting opinion may seem to make held that FIFRA neither expressly nor impliedly pre- sense at first reading, a deeper analysis reveals that it is empts local governments from regulating pesticide seriously flawed : sales or use. As to implied preemption, the Court found that because FIFRA "does not occupy the field of pesti- 1 . The dissenting opinion's emphasis on the "pre- cide regulation in general . . . [t]he specific grant of au- sumption against preemption" of the "historic police thority in § 136v(a) consequently does not serve to hand powers of the states" in the absence of "clear and mani- back to the States powers that the statute had impliedly fest" congressional intent is unwarranted for at least usurped." Mortier, 501 U.S. at 614 (emphasis added) . two reasons . First, as the majority opinion explains, § 136v(b) is "virtually indistinguishable" from the 1969 federal "The dissent confuses the question of whether a Cigarette Act preemption provision, whose express prohibition against state-imposed "requirement[s]" the statutory prohibition against states imposing U.S . Supreme Court held in Cipollone "easily encompass[es] obligations that take the form of requirements encompasses requirements imposed common-law rules." Etcheverry, 93 Cal. Rptr. 2d at 40, 41 (quoting Cipollone, 505 U.S. at 521; King v. E.I. du through state tort claims . . . with the question Pont de Nemours & Co., 996 F.2d 1346, 1349 (1st Cir. 1993)). Moreover, as discussed above, a majority of Jus- of what particular types of tices in Medtronic expressly reaffirmed Cipollone's holding. The dissent confuses the (i) question of state tort claims are preempted ." whether a statutory prohibition against states imposing requirements encompasses requirements imposed through state tort claims-a question which the U.S. Supreme Court has repeatedly answered in the Thus, contrary to the dissenting opinion, § 136v(a) is affirmative-with (ii) the question of what particular not some sort of broad grant of state authority. "Rather, types of state tort claims are preempted-a question it acts to ensure that the States could continue to regu- whose answer the U.S . Supreme Court has indicated late use and sales even where, such as with regard to depends on the scope of a statute's particular preemp- the banning of mislabeled products, a narrow pre- tion provision (e.g., in the case of § 136v(b), only tort emptive overlap might occur." Id. (emphasis added) . In claims which would have the effect of imposing require- other words, the Supreme Court indicated that ments for "labeling or packaging" that are "in addition § 136v(a) merely confirms the states' authority to regu- to or different from" EPA's requirements are pre- late pesticide sales or use where the sales or use regu- empted). See generally Medtronic, 518 U.S. at 503 lation may peripherally touch upon the subject of label- (Bryer, J ., concurring in part and concurring in the ing (e .g., banning the sale or use of misbranded prod- judgment) (drawing a distinction between the question ucts) ; it in no way carves out an exception from of whether the MDA "ever pre-empt a state-law tort ac- § 136v(b) that would allow states to impose additional tion," and if so, the question of whether "the MDA pre- or different requirements for the labeling itself . Section empt the particular state-law tort claims at issue") . 136v(a), therefore, is not a saving clause (since it does Second, the subject matter of § 136v(b) -regulation not "save" any authority for the states to regulate label- of pesticide labeling (and packaging)-does not fall ing), and it contributes virtually nothing to the meaning within the historic police powers of the states . Instead, of § 136v(b) . As the Etcheverry majority opinion ex- pesticide labeling long has been comprehensively (and plains, the courts are almost unanimous in rejecting Fe- at least since 1972, exclusively) regulated by the Fed- rebee's theory that § 136v(a) somehow authorizes states eral government . See Wisconsin Pub. Intervenor v. to regulate labeling through the guise of regulating use Mortier, 501 U .S. at 613, 615 (explaining that "FIFRA's by imposing tort liability for failure to warn. See historic focus [is] on labeling" and that "labeling [is] an Etcheverry, 93 Cal. Rptr. 2d at 42-43 . area that FIFRA's 'program' pre-empts") . As a result,

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3. The dissent's apparent concerns about depriving U.S. 280, 288 (1995)) . The Court held in Geier that "no- plaintiffs of all or most remedies in pesticide-related airbag" product liability claims are impliedly pre- damages suits are unfounded. FIFRA preemption is an empted by the federal motor vehicle safety statute, al- important, but narrowly focused, defense. It only per- though not encompassed by that statute's express pre- tains to state tort claims that would have the effect of emption provision. imposing additional or different labeling or packaging In the case of FIFRA, failure-to-warn claims are im- requirements . Both the majority and dissenting opin- pliedly as well as expressly preempted. This is because ions cite the case law holding that other types of claims such claims would directly conflict with FIFRA by frus- (i.e., claims unrelated to labeling or packaging) are not trating the unequivocal congressional objective of na- preempted. See id. at 48-49; 56. Thus, the dissent's ref- tional labeling uniformity. As the Supreme Court indi- erences to Medtronic's holding that the MDA do not cated in Geier, albeit in connection with a different fed- preempt "any and all" tort claims relating to allegedly eral statute: defective medical devices are inapposite . See the pre-emption provision itself reflects a desire to subject Medtronic, 518 U .S. at 486. the industry to a single, uniform set of federal safety standards. Its pre-emption of all state standards, even those that 4. There is no basis for the dissent's attempted dis- might stand in harmony with federal law, suggests an intent tinction between "direct" regulation of labeling to avoid the conflict, uncertainty, cost, and occasional risk to safety itself (through state statutes and state agency regulations) that too many different safety-standard and "indirect" regulation of cooks might otherwise create . . . . This policy by itself fa- labeling (through state tort vors pre-emption claims) for FIFRA of state tort suits, for the rules of law that preemption purposes. The whole and juries create point of Cipollone and judges or apply in such suits may them- its progeny (including the hun- selves similarly create uncertainty and even dreds of post-Cipollone conflict, say, FIFRA preemption cases) is that when different juries in different States reach different de- there is no such distinction for purposes of express pre- cisions on similar facts. emption of state-imposed "requirements ." Thus, the Id. 1920 (emphasis added) . This same rationale is "conundrum" proposed by the dissent is fallacious. equally applicable to FIFRA and Congress' goal- reflected in the title and text of § 136v(b)-of maintaining national labeling uniformity. The Etcheverry majority recognized the destructive effect that failure-to-warn "The whole point of Cipollone and its progeny .. . claims would have on national labeling uniformity, but the dissent utterly failed to do so. See Etcheverry, 93 is that there is no .. . distinction for purposes Cal. Rptr. 2d at 49 n.3. to of express preemption of state-imposed Conclusion The California Supreme Court's well-reasoned FI- 'requirements' " between direct and indirect FRA preemption holding in Etcheverry should have far- reaching impact not only in California, but throughout regulation of labeling. the United States. One major reason is because this nationally influential court decisively repudiated the government's misguided attempt to turn the tide on FIFRA preemption . By upholding the congressional intent 5. The dissent completely fails to consider the ques- clearly manifested in § 136v(b), the court has rendered tion of whether FIFRA impliedly preempts failure-to- a ruling which greatly benefits not only the pesticide in- warn and other labeling claims even if, as the dissent dustry, but also farmers and the public. erroneously concludes, there is no express preemption of such claims by § 136v(b) . It is well settled that state '° On April 12, 2000 the court denied two requests for law is impliedly preempted as conflicting with federal modification of the Etcheverry decision. The first was submit- law where it " 'stands as an obstacle to the accomplish- ted by the California Attorney General's office. Although the ment and execution of the full purposes and objectives State of California did not participate in the case, it requested of Congress.'" Geier v. American Honda Motor Co., in a post-decision letter to the court, that the majority opinion 120 S.Ct. at 1921 (quoting Hines v. Davidowitz, 312 U.S. be modified "to assure that the opinion is not read to find that 52, 67 (1941)) (discussing this "frustration-of-purpose" the 'clear and reasonable warning' requirement" of California principle of implied conflict preemption) . Proposition 65 is preempted by FIFRA. Letter from California In Geier, the Deputy U .S. Supreme Court reaffirmed that Attorney General Edward G. Weil (Mar. 17, 2000). The a statute can im- second request was submitted by a tobacco plaintiffs' preempt common law claims even attorney pliedly if the statute's who expressed concern about certain quotations in the major- preemption clause does not expressly preempt them. ity opinion regarding the 1969 Cigarette Act preemption provi- See id. at 1919 (citing Freightliner Corp. v. Myrick, 514 sion discussed in Cipollone.

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214 The Role of State and Federal Courts in Federal Preemption Cases—A Spirited Discussion Between Adversaries at the Bar

Brian Wolfman

Public Citizen Litigation Group

1600 20th Street, NW Washington, DC 20009 (202) 588-7730 [email protected] Brian Wolfman is the Director of Public Citizen Litigation Group, where he has worked since 1990. Mr. Wolfman’s litigation experience includes cases involving consumer health and safety regulation, freedom of information, expanding access to the courts, opposing federal preemption of state products liability law, consumer law and class actions. In the preemption area, he has been lead counsel in a range of cases involving injuries from radiation exposure, prescription drugs, federally regulated hazardous substances, pesticides and medical devices, including Medtronic, Inc., v. Lohr, 518 U.S. 470 (1996). Mr. Wolfman has argued five cases before the Supreme Court (winning four), been lead counsel in about a dozen others and, as co-counsel to his Litigation Group colleagues and others, had substantial involvement in several dozen more. He co-directs the Litigation Group’s Alan Morrison Supreme Court Assis- tance Project with the Project’s Fellow. He has been lead counsel in many federal court and state court appeals. Mr. Wolfman currently teaches a course on appellate courts at Harvard Law School and has previously taught at Stanford Law School, Ameri- can University’s Washington College of Law, and Georgetown University Law Center. Before joining the Litigation Group in 1990, Mr. Wolfman was a staff attorney at Legal Services of Arkansas, where he did trial and appellate litigation involving housing law, welfare law, family law, employment rights and consumer protection. He is a graduate of the University of Pennsylvania and Harvard Law School. The Role of State and Federal Courts in Federal Preemption Cases—A Spirited Discussion Between Adversaries at the Bar Table of Contents Presentation 1...... 219 Presentation 2...... 228

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Presentation 1

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Reproduced with permission from Product Safety & Li- ability Reporter, 37 PSLR 550, 05/11/2009. Copyright � 2009 by The Bureau of National Affairs, Inc. (800- 372-1033) http://www.bna.com

The U.S. Supreme Court’s decision in Wyeth v. Levine sharply limited the availability of implied preemption as a defense in pharmaceutical cases. In this Analysis & Perspective, attorney Brian Wolfman discusses the decision and its implications for prescription drug litigation as well as litigation in other areas that are regulated by the federal government.

After Wyeth, Wolfman says, a defendant in a prescription drug case must demonstrate a ‘‘tight fit between the labeling change proposed by the manufacturer (and rejected by the FDA) and the labeling change that the plaintiff contends would have prevented her injuries.’’ Moreover, he says, in light of Wyeth, agency claims of preemption with respect to other products or services are likely to be subject to increased judicial scrutiny, and it is unlikely that these claims will be accorded substantial deference unless they are tethered to a congressional authorization regarding preemption.

Wyeth v. Levine and Its Implications

BY BRIAN WOLFMAN I. Introduction n March 2, the Supreme Court ruled in Wyeth v. 1 Brian Wolfman is the director of Public Citi- Levine that approval of the prescription drug zen Litigation Group in Washington, D.C. He O Phenergan and its labeling by the Food and Drug has been counsel in many cases raising pre- Administration (FDA) did not preempt plaintiff Diana emption questions in the U.S. Supreme Court Levine’s state-law tort claim premised on defendant and the federal courts of appeals. He is also Wyeth’s failure to warn adequately about one of Phen- a contributor to the Consumer Law & ergan’s risks. My intent here is not to write from a Policy Blog, www.clpblog.org. He can be plaintiff’s or a defendant’s perspective, but, rather, to reached at [email protected]. 1 129 S. Ct. 1187 (2009).

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describe the Court’s decision and to assess how it may tablish that the drug is ‘safe for use under the condi- affect litigation involving prescription drugs and other tions prescribed, recommended, or suggested in the federally regulated products and services. proposed labeling thereof,’ whether there is ‘substantial Because it is difficult to understand Wyeth without evidence that the drug will have the effect it purports or appreciating the facts of the case and the basics of fed- is represented to have under the conditions of use pre- eral drug regulation, those topics are addressed in Part scribed, recommended, or suggested in the proposed la- II below. Part III describes the Supreme Court’s deci- beling thereof,’ and whether, ‘based on a fair evaluation sion, and Part IV discusses its likely effects. of all material facts, such labeling is false or misleading in any particular.’ ’’12 II. Background Because prescription drug labeling provides information used by clinicians to prescribe and administer an A. The Facts approved drug, FDA regulations describe in detail the On April 7, 2000, Diana Levine, a Vermont musician, proper form and content for labeling.13 After FDA ap- received injections of Wyeth’s prescription drug Phen- proval, a drug generally must be accompanied by label- ergan to treat nausea associated with a migraine head- ing in the same form as approved by the FDA.14 The la- ache.2 The drug was first administered by intramuscu- bel’s content is not, however, set in stone. Rather, a lar injection. Later that day, the drug was administered manufacturer is required to alter its labeling in certain intravenously through a technique known as direct IV, circumstances. An FDA regulation provides that ap- or ‘‘IV-push.’’3 In this method, a syringe pushes medi- proved drug ‘‘labeling shall be revised to include a cation directly into the patient’s vein. The method is warning as soon as there is reasonable evidence of an called ‘‘direct’’ to distinguish it from a more common association of a serious hazard with a drug.’’15 In addi- means of intravenous administration in which the medi- tion, the FDA is not required to approve all label cation is placed into a stream of saline flowing from a changes before drug manufacturers make them. At the hanging IV bag.4 As the Supreme Court noted, the lat- time of Ms. Levine’s Phenergan injection, manufactur- ter method is nearly risk-free.5 On the other hand, when ers were permitted, pursuant to the FDA’s so-called Phenergan is administered by the IV-push method, in- ‘‘changes being effected,’’ or CBE, regulation, to revise advertent exposure to arterial blood may result, which, labels, without prior FDA approval, to ‘‘add or in turn, may lead to gangrene and amputation.6 The tes- strengthen a contraindication, warning, precaution, or timony at trial showed that, prior to Ms. Levine’s injec- adverse reaction’’ [or to] ‘‘add or strengthen an instruc- tion, there had been at least 20 reported cases in which tion about dosage and administration that is intended to IV-push administration of Phenergan had caused an increase the safe use of the drug product.’’16 7 amputation. In 2008, the FDA amended the CBE regulation to au- As a result of IV-push administration of Phenergan, thorize only those label changes that ‘‘reflect newly ac- 8 the drug penetrated Ms. Levine’s artery. For seven quired information.’’17 The revised regulation’s defini- weeks after the injection, Ms. Levine suffered severe tion of ‘‘ ‘newly acquired information’ is not limited to physical and emotional pain as her right hand turned new data, but also encompasses ‘new analyses of previ- 9 black and died. Ms. Levine endured two amputations. ously submitted data.’ ’’18 She first lost her right hand and then her right arm up to the elbow.10 2. The Relationship Between Federal Drug Regulation and State Law B. The FDA Drug Approval Process, the FDCA’s In the 70 years since the FDCA’s enactment, the Relationship With State Law, and Approval of the states’ common-law tort systems have provided com- Phenergan Label pensation for injuries caused by prescription drugs, and, until recently, courts had held uniformly that fed- 1. FDA Approval and Drug Labeling eral law does not preempt tort claims seeking redress Since its enactment in 1938, the federal Food, Drug, for such injuries.19 As contrasted with medical de- and Cosmetic Act (FDCA) has governed the entry of vices,20 the FDCA contains no preemption provision re- prescription drugs on the market. A manufacturer seek- garding prescription drugs. And, as noted in Wyeth, an ing to market a prescription drug must file a new drug initial draft of the FDCA contained a right of action for 11 application (NDA) with the FDA. The agency must ap- damages sustained from drug-related injuries, which prove the NDA ‘‘unless it fails to meet certain criteria, including whether test results and other information es- 12 Levine v. Wyeth, 944 A.2d 179, 185 (Vt. 2006) (quoting 21 U.S.C. § 355(d)), aff’d sub nom., Wyeth v. Levine, 129 S. Ct. 2 Id. at 1191. 1187 (2009). 3 Id. 13 See generally 21 C.F.R. Part 201. 4 Id. at 1192. 14 See id. § 314.70(b)(2)(v). 5 Id. 15 Id. § 201.80(e). 6 Id. at 1191. 16 Id. § 314.70(c)(6)(iii)(A), (C). 7 Id. at 1197 (citing trial testimony). 17 Id. § 314.70(c)(6)(iii); see 73 Fed. Reg. 49603 (2008). 8 Id. at 1190-91. 18 Wyeth, 129 S. Ct. at 1196 (quoting 73 Fed. Reg. at 49604). 9 Levine v. Wyeth, trial transcript, Vol. III, at 38 (testimony 19 For cases stating the traditional no-preemption view, see, of Dr. Mark Bucksbaum) (‘‘Pain scales usually are run from e.g., Tobin v. Astra Pharm. Prods. Inc., 993 F.2d 528, 537 (6th one to ten. This is a ten.... there’s not much worse than this Cir. 1993); Osburn v. Anchor Labs., 825 F.2d 908, 911-13 (5th type of scenario.’’); id. at 165-66 (testimony of Diana Levine) Cir. 1987); Wells v. Ortho Pharm. Corp., 788 F.2d 741, 746 (describing excruciating pain, terror, and fear of losing arm (11th Cir. 1986); Carlin v. Superior Court, 13 Cal. 4th 1104, and dying). 1113 (Cal. 1996); Feldman v. Lederle Labs., 592 A.2d 1176, 10 Wyeth, 129 S. Ct. at 1191. 1185-97 (N.J. 1991). 11 See 21 U.S.C. § 355(a). 20 See 21 U.S.C. § 360k.

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220 v Fifth Annual Judicial Symposium v July 2009 3 was apparently eliminated ‘‘because common-law 4. Proceedings in the Vermont Courts claims were already available under state law.’’21 Ms. Levine sued Wyeth in Vermont Superior Court to Until earlier this decade, the FDA had never sug- recover compensation for her life-altering injuries. The gested that state-law product liability suits are pre- jury awarded damages based on its determination that empted by the FDCA or by the agency’s approval of a Wyeth’s ‘‘inadequate label’’ caused Ms. Levine’s injury, drug’s labeling. In fact, on at least two occasions, the and that ‘‘the critical defect in Phenergan’s label was FDA took a different view. In 1979 and 1998, in pre- the lack of an adequate warning about the risks of IV- ambles accompanying drug regulations, the agency push administration.’’30 The Vermont Supreme Court stated that state tort law did not interfere with federal affirmed. It rejected Wyeth’s preemption arguments regulation and that federal regulation should not influ- and found that there was ‘‘no evidence’’ that the FDA ence state-law liability.22 had considered, much less rejected, a specific request In December 2000, the FDA proposed to amend its by Wyeth to strengthen the Phenergan label with re- 31 drug labeling regulations. At that time, the agency spect to the risks of IV-push administration. noted that the amended ‘‘rule would ‘not contain policies that have federalism implications or that preempt III. The Supreme Court’s Decision State law.’ ’’23 In 2006, however, in finalizing these la- As noted at the outset, the Supreme Court ruled 6 to beling rules, the agency took a different view, claiming 3 for Diana Levine, rejecting Wyeth’s preemption argu- in the regulatory preamble that, in some circumstances, ment and upholding the jury’s verdict in Ms. Levine’s the FDA’s approval of a prescription drug’s labeling favor. Justice John Paul Stevens wrote for a five-justice preempts a state tort claim premised on the manufac- majority that included Justices Anthony M. Kennedy, turer’s failure to warn of hazards associated with the David H. Souter, Stephen G. Breyer, and Ruth Bader drug.24 Tort defendants claimed that the 2006 preamble Ginsburg. Justice Breyer, joining fully in the majority was entitled to judicial deference in drug-injury litiga- opinion, wrote a short concurring opinion expressing tion because it expressed the authoritative views of the his views on regulatory preemption. Justice Clarence agency charged with administering the FDCA. The Thomas concurred in the judgment, but wrote sepa- lower courts split on that question, with some courts, rately to explain that the majority’s ruling went too far including the Vermont Supreme Court in Wyeth, reject- in its ‘‘implicit endorsement of far-reaching implied ing deference to the agency’s view on preemption,25 preemption doctrine.’’32 Justice Samuel A. Alito Jr., and other courts embracing it.26 joined by Chief Justice John G. Roberts Jr. and Justice Antonin Scalia, dissented. The first three opinions are 3. History of The Phenergan Label discussed below, with emphasis on the majority opinion Phenergan and its labeling were first approved by the because it will likely have the greatest influence on fu- 27 FDA in 1955. As detailed in the Supreme Court’s opin- ture preemption doctrine. Justice Alito’s dissent pro- ion, between 1973 and 1998, the FDA and Wyeth en- vides a comprehensive rebuttal to the majority and ex- gaged in sporadic exchanges concerning the drug’s la- plains why, in Justice Alito’s view, the Court’s Su- beling, prompted mainly by a 1981 submission made by premacy Clause precedents and the FDA’s role in 28 Wyeth in response to new FDA labeling rules. At one assessing the risks and benefits of prescription drugs point, the agency requested a revised warning on arte- warranted a finding of preemption. Because the dissent rial exposure to Phenergan, and Wyeth submitted a re- is unlikely to influence future tort litigation, at least in vision (which Wyeth later contended constituted a the near term, it is not discussed further here. strengthened warning about the risks of IV-push administration). Ultimately, however, the agency did not A. Justice Stevens’s Majority Opinion approve Wyeth’s submission, but instead instructed the company to ‘‘[r]etain [the] verbiage in [the] current la- 1. Framing the Issues bel.’’29 Justice Stevens’s opinion begins by summarizing the facts, the issue before the Court, and the majority’s conclusion: 21 Wyeth, 129 S. Ct. at 1199 n.7 (citing FDCA’s legislative history). 22 See 63 Fed. Reg. 66378, 66384 (1998) (‘‘FDA does not be- Directly injecting the drug Phenergan into a pa- lieve that the evolution of state tort law will cause the develop- tient’s vein creates a significant risk of cata- ment of standards that would be at odds with the agency’s strophic consequences. A Vermont jury found that regulations.’’); 44 Fed. Reg. 37434, 37437 (1979) (‘‘It is not the petitioner Wyeth, the manufacturer of the drug, intent of the FDA to influence the civil tort liability of the had failed to provide an adequate warning of that manufacturer.’’); see also Wyeth, 129 S. Ct. at 1201-02 & n.10 risk and awarded damages to respondent Diana (also citing 59 Fed. Reg. 3948 (1994)). 23 Levine to compensate her for the amputation of Wyeth, 129 S. Ct. at 1201 (quoting 65 Fed. Reg. 81082, her arm. The warnings on Phenergan’s label had 81103 (2000)). 24 71 Fed. Reg. 3922, 3933-36 (2006) (hereafter ‘‘2006 pre- been deemed sufficient by the federal Food and amble’’). Drug Administration (FDA) when it approved 25 See Levine v. Wyeth, 944 A.2d at 192-94; see also, e.g., Wyeth’s new drug application in 1955 and when it Desiano v. Warner-Lambert Co., 467 F.3d 85, 97 n.9 (2d Cir. later approved changes in the drug’s labeling. The 2006), aff’d by equally divided court sub nom., Warner- question we must decide is whether the FDA’s ap- Lambert Co., LLC v. Kent, 128 S. Ct. 1168 (2008). provals provide Wyeth with a complete defense to 26 See, e.g., In re Bextra & Celebrex Marketing Sales Prac- tices and Prod. Liab. Litig., 2006 WL 2374742, *6-*7 (N.D. Cal. 2006). 30 Id. at 1194. 27 Wyeth, 129 S. Ct. at 1192. 31 Levine v. Wyeth, 944 A.2d at 93. 28 See id. 32 Wyeth, 129 S. Ct. at 1205 (Thomas, J., concurring in the 29 See id. (quoting FDA correspondence). judgment).

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Levine’s tort claims. We conclude that they do that manufacturers may only unilaterally amend their not.33 labels ‘‘to reflect newly acquired information,’’43 ap- Thereafter, the Court framed Wyeth’s preemption ar- plied retroactively to Ms. Levine’s claim, or, as Wyeth guments. Because the FDCA does not expressly pre- maintained, did no more than ‘‘reaffirm[] the interpre- empt state authority with respect to prescription drugs, tation of the regulation in effect when this case was the question before the Court, Justice Stevens ex- tried.’’44 Rather, the Court held that, because the plained, was whether Ms. Levine’s state-law claims amended regulation defined ‘‘newly acquired informa- were impliedly preempted either because ‘‘it would tion’’ to include new analyses of existing data,45 after have been impossible for [Wyeth] to comply with the learning of at least 20 amputations resulting from IV- state-law duty to modify Phenergan’s labeling without push injections of Phenergan prior to Ms. Levine’s in- violating federal law,’’34 or because Ms. Levine’s suit jury, ‘‘Wyeth could have analyzed the accumulating posed an ‘‘unacceptable ‘obstacle to the accomplish- data and added a stronger warning about IV-push ad- ment and execution of the full purposes and objectives ministration of the drug.’’46 The Court also emphasized of Congress.’ ’’35 that, in 2007, when Congress amended the FDCA to Justice Stevens made two preliminary legal observa- provide the FDA authority to require manufacturers to tions. The first was boilerplate and not in dispute: that amend their labels to enhance safety, Congress reiter- ‘‘the purpose of Congress is the ultimate touchstone in ated that, despite the FDA’s new authority, manufactur- 36 every preemption case.’’ The second, very much in ers could still use the CBE regulation to make label dispute, concerned the so-called presumption against changes on their own.47 preemption of state law: that ‘‘ ‘the historic police pow- The Court rejected Wyeth’s claim that a Phenergan ers of the States were not to be superseded by [a] Fed- label updated through the CBE regulation would have eral Act unless that was the clear and manifest purpose been misbranded under federal law. The Court noted of Congress,’ ’’ particularly ‘‘ ‘in a field which the States that, under the FDCA, a label is misbranded if it fails to have traditionally occupied.’ ’’37 This presumption has contain ‘‘adequate warnings,’’48 and that, presumably, a long been targeted by tort defendants because, as the label is not rendered inadequate simply because it has Court has explained, it applies to state tort law as well 38 been updated using the CBE regulation, which is an as state positive law. Justice Stevens rejected the drug industry’s broad claim ‘‘that the presumption against FDA-authorized means for unilaterally amending a preemption should not apply to claims of implied con- drug label. As Justice Stevens put it: ‘‘[T]he very idea flict preemption at all,’’39 noting that ‘‘this Court has that the FDA would bring an enforcement action long held to the contrary.’’40 He also rejected Wyeth’s against a manufacturer for strengthening a warning narrower claim that the presumption should not apply pursuant to the CBE regulation is difficult to accept— neither Wyeth nor the United States has identified a to Ms. Levine’s case because the federal government 49 has a long history of regulating drug labeling. ‘‘That ar- case in which the FDA has done so.’’ The Court also explained that a drug is not misbranded based on gument,’’ Justice Stevens explained, ‘‘misunderstands’’ 50 the presumption against preemption, which ‘‘accounts ‘‘FDA’s belief’’ that misbranding has occurred; rather, a jury (or, presumably, some other adjudicator) makes for the historic presence of state law but does not rely 51 on the absence of federal regulation.’’41 conclusive misbranding determinations. Having rejected Wyeth’s ‘‘cramped reading of the 2. ‘‘Impossibility’’ Preemption CBE regulation’’ and its view of misbranding,52 Justice The Court then turned to Wyeth’s ‘‘impossibility’’ ar- Stevens turned to what he termed Wyeth’s ‘‘more fun- gument: that Wyeth could not comply with both the damental’’ misunderstanding of the FDCA.53 Dismiss- state-law duty to warn Ms. Levine’s physicians of the ing Wyeth’s view that the FDA ‘‘bears primary respon- risks of IV-push administration of Phenergan and its sibility for drug labeling,’’54 Justice Stevens reviewed federal labeling obligations under the FDCA. The Court FDA regulations that, he said, make the manufacturer rejected this argument, first, on the basis of the CBE responsible for the content of drug labels ‘‘at all regulation, which, as explained above, authorizes a times.’’55 He pointed primarily to 21 C.F.R. § 201.80(e), drug manufacturer unilaterally to update a drug label to which requires all prescription drug manufacturers to add or strengthen warnings, including warnings about methods of drug administration.42 The Court did not reach the question whether the 43 Wyeth, 129 S. Ct. at 1196 (quoting 73 Fed. Reg. at 49609). 2008 amendment to the CBE regulation, which states 44 Id. 45 Id. at 1197 (discussing 73 Fed. Reg. at 49604, 49607). 46 Id. 33 Wyeth, 129 S. Ct. at 1190-91. 47 Id. at 1198 (Congress ‘‘reaffirmed the manufacturer’s ob- 34 Id. at 1193 (citing Fidelity Fed. Sav. & Loan Assn. v. De ligations and referred specifically to the CBE regulation, which la Cuesta, 458 U. S. 141, 153 (1982)). both reflects the manufacturer’s ultimate responsibility for its 35 Id. at 1194 (quoting Hines v. Davidowitz, 312 U. S. 52, 67 label and provides a mechanism for adding safety information (1941)). to the label prior to FDA approval.’’) (citing 121 Stat. 925–26). 36 Id. at 1194-95 (quoting Medtronic Inc. v. Lohr, 518 U.S. The relevant FDCA amendment is codified at 21 U.S.C. 470, 485 (1996)). § 355(o)(4)(I). 37 Id. (quoting Lohr, 518 U.S. at 485). 48 Id. at 1197 (quoting 21 U.S.C. § 352(f) 38 Lohr, 518 U.S. at 485 (‘‘[B]ecause the States are indepen- 49 Id. dent sovereigns in our federal system, we have long presumed 50 Id. that Congress does not cavalierly pre-empt state law causes of 51 Id. (citing 21 U.S.C. §§ 331, 332, 334(a)-(b)). action.’’). 52 Id.. 39 Wyeth, 129 U.S. at 1195 n.3. 53 Id. 40 Id. (citing cases). 54 Id. 41 Id. 55 Id. at 1198 (citing 21 C.F.R. §§ 201.80, 314.80(b); 73 Fed. 42 21 C.F.R. §§ 314.70(c)(6)(iii)(A), (C). Reg. at 49605).

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222 v Fifth Annual Judicial Symposium v July 2009 5 revise their labels ‘‘to include a warning as soon as a statute authorizing agency preemption — that is, sim- there is reasonable evidence of an association of a seri- ply a ‘‘conclusion that state law is pre-empted.’’67 In ous hazard with a drug.’’56 contrast with situations in which agencies explain how Acknowledging that the FDA has authority to reject a state law would affect substantive federal regulation, labeling change made pursuant to the CBE regulation, ‘‘agencies have no special authority to pronounce on the Court then turned to the FDA’s review of the Phen- preemption absent delegation by Congress.’’68 ergan label, explaining that ‘‘absent clear evidence’’ s The agency’s position was ‘‘inherently suspect’’ be- that the agency would not have approved a label change cause its original notice of proposed rulemaking ex- of the kind that would have prevented Ms. Levine’s in- pressly stated that the rule would not preempt state law jury, ‘‘we will not conclude that it was impossible for or have ‘‘federalism implications,’’ and offered no no- Wyeth to comply with both federal and state require- tice to the states of the FDA’s ‘‘sweeping position’’ on 57 ments.’’ Based on the record of the case, as set out at preemption set forth in the preamble accompanying the 58 some length by the Vermont Supreme Court, the final rule.69 Court held that ‘‘Wyeth has offered no such evi- s The preamble could not be squared with the FDA’s dence.’’59 The Court explained that the Vermont courts longstanding position that federal labeling rules set a had rejected, ‘‘as a matter of fact,’’60 Wyeth’s conten- regulatory ‘‘floor’’ that is complemented, not under- tion that when the FDA had told Wyeth to retain the mined, by state tort law.70 ‘‘current verbiage’’ in its label (and did not adopt Wyeth’s revised label), it had not rejected a strength- s The preamble conflicted with the reality of drug ened warning against IV-push administration. The regulation. The FDA, Justice Stevens maintained, has Court noted that even the FDA did not construe its re- ‘‘limited resources to monitor the 11,000 drugs on the jection of Wyeth’s revised Phenergan label as relating markets’’; manufacturers are more likely than the FDA to IV-push administration of the drug; rather, the to observe post-marketing risks as they emerge; and agency acknowledged in its Supreme Court brief that tort suits help ‘‘uncover unknown drug hazards and Wyeth’s proposed revision was ‘‘non-substantive’’ and provide incentives for’’ manufacturers to disclose risks that the FDA had rejected it for ‘‘formatting reasons.’’61 expeditiously.71 In sum, the Court concluded, ‘‘impossibility’’ preemption ‘‘is a demanding defense,’’62 which Wyeth had not met. *** 3. ‘‘Obstacle’’ or ‘‘Frustration of Purposes’’ Preemption In concluding its opinion, the majority left open the Justice Stevens then turned to Wyeth’s argument that possibility that some state-law tort claims might frus- state-law liability would pose an obstacle to the objec- trate congressional objectives, while reiterating that tives of federal drug labeling regulation. The Court’s re- Ms. Levine’s claim had not done so and affirming the sponse was plain: ‘‘The most glaring problem with this judgment of the Vermont Supreme Court.72 argument is that all evidence of Congress’ purposes is to the contrary.’’63 It noted that Congress (1) rejected a B. Justice Breyer’s Concurrence federal damages remedy in the bill that ultimately be- Although joining fully in the majority opinion, Justice came the FDCA because damages remedies were al- 73 64 Breyer wrote, as he has before, to state that because ready available under state law; and (2) had not en- state tort law may interfere with FDA labeling regula- acted an express preemption provision at any time dur- tion, the agency could, through ‘‘lawful specific regula- ing the FDCA’s 70-year history, as it had for medical 65 tions,’’ seek to oust state law by deciding when FDA devices in 1976. regulation is ‘‘a ceiling as well as a floor.’’74 ‘‘It is pos- The Court then turned to the FDA’s 2006 preamble, which, as explained above, concluded that state tort 67 Id. at 1201 (emphasis in original). claims are preempted in some circumstances by the 68 FDA’s approval of a drug’s label. For a number of rea- Id. For this reason, Justice Stevens distinguished the 2006 preamble from the situation in Geier v. American Honda sons, the Court held that the preamble was ‘‘entitled to 66 Motor Co., 529 U. S. 861 (2000), which held that a Department no weight’’: of Transportation regulation providing manufacturers various s The preamble was an ‘‘agency proclamation[] of options for passive restraints in automobiles preempted a dam- preemption,’’ not a regulation promulgated pursuant to ages suit premised on the defendant’s failure to install one type of passive restraint (air bags). The Court in Geier gave weight to ‘‘the agency’s explanation of how state law interfered with 56 21 C.F.R. § 201.80. its regulation,’’ as ‘‘further support’’ for the Court’s ‘‘indepen- 57 Wyeth, 129 S. Ct. at 1198. dent conclusion that the plaintiff’s tort claim obstructed the 58 Levine v. Wyeth, 944 A.2d at 189. federal regime.’’ Wyeth, 129 S. Ct. at 1203. 59 Wyeth, 129 S. Ct. at 1198. 69 Id. at 1201. 60 Id. 70 Id. at 1201-02 & n.10 (relying on 63 Fed. Reg. 66378, 61 Id. at 1199 n.5 (quoting government’s amicus brief). 66384 (1998); 44 Fed. Reg. 37437 (1979); 59 Fed. Reg. 3948 62 Id. at 1199. (1994); Margaret Porter, ‘‘The Lohr Decision: FDA Perspective 63 Id. and Position,’’ 52 Food & Drug L. J. 7, 10 (1997)). 64 Id. at 1199 & n.7 (citing initial version of FDCA and hear- 71 Id. at 1202 & nn.10-11 (citing governmental studies and ing testimony). views of former FDA Commissioners explaining inadequacy of 65 Id. at 1200 (citing 21 U.S.C. § 360k(a)). The Court also FDA regulation and the agency’s inability to detect post- noted that, in 1997, Congress preempted certain state require- marketing risks). ments with respect to over-the-counter drugs, but preserved 72 Id. at 1204. state product liability claims. See id. at 1200 n.8 (citing 21 73 See, e.g., Lohr, 518 U.S. at 505 (Breyer, J., concurring in C.F.R. §§ 379r(e), 379s(d)). part and concurring in the judgment). 66 Id. at 1204. 74 Wyeth, 129 S. Ct. at 1204 (Breyer, J., concurring).

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sible,’’ Justice Breyer explained, that such a regulation tial sovereign authority’’ and seek ‘‘to protect [a] deli- could ‘‘have pre-emptive effect.’’75 cate balance of power’’ between state and federal authority.81 C. Justice Thomas’s Concurrence in the Judgment Second, he said, it is an affront to two, interlocking Justice Thomas concurred in the judgment in a constitutional commands: the Supremacy Clause, lengthy opinion staking out bold new positions on im- which makes ‘‘supreme’’ only those laws ‘‘ ‘made in plied preemption—both challenging the Court’s current Pursuance’ of the Constitution,’’82 and the Bicameral view of ‘‘impossibility’’ or ‘‘direct conflict’’ preemption and Presentment Clauses, which demand that the ‘‘pas- and calling for an end to ‘‘obstacle’’ or ‘‘frustration of sage of legislation’’ follow ‘‘ ‘a step-by-step, deliberate 76 purposes’’ preemption. His opinion is likely to keep and deliberative process.’ ’’83 According to Justice Tho- the law reviews buzzing for some time. Because Justice mas, ‘‘[t]he Supremacy Clause thus requires that pre- Thomas’s concurrence is unlikely to affect lower-court emptive effect be given only to those federal standards litigation in the near term, just a few comments are ap- and policies that are set forth in, or necessarily follow propriate here. from, the statutory text that was produced through the Justice Thomas questioned whether ‘‘physical impos- constitutionally required bicameral and presentment sibility’’ is the appropriate standard for assessing procedures.’’84 whether federal and state law directly conflict, noting Third, ‘‘obstacle’’ or ‘‘frustration of purposes’’ pre- that ‘‘if federal law gives an individual the right to en- emption is ‘‘problematic because it encourages an gage in certain behavior that state law prohibits, the overly expansive reading of statutory text,’’85 in a mis- laws would give contradictory commands notwith- guided and error-inducing search for a statute’s pur- standing the fact that an individual could comply with poses.86 In this regard, Justice Thomas chided the ma- both by electing to refrain from the covered behav- jority for relying on the fact that Congress had not en- 77 ior.’’ But whether or not denominated ‘‘physical im- acted an express preemption clause for prescription possibility,’’ Justice Thomas rejected conflict preemp- drugs, noting that ‘‘the Court could just as easily rely on tion in Ms. Levine’s case for much the same reasons as its own perceptions regarding congressional inaction to had the majority: Wyeth’s ability under the CBE regula- give unduly broad pre-emptive effect.’’87 Justice Tho- 78 tion to amend its label without FDA pre-approval, and mas was particularly critical of the Court’s decision in its obligation ‘‘to revise the federally approved label ‘to Geier,88 where, he explained, the Court’s search for include a warning as soon as there is reasonable evi- meaning in ‘‘agency comments, regulatory history, and dence of an association of a serious hazard with a agency litigating positions was inherently flawed,’’ be- 79 drug.’ ’’ cause it was contradicted by a statutory provision that Justice Thomas then rejected Wyeth’s claim of ‘‘im- expressly preserved common-law claims.89 possibility’’ for another, more far-reaching reason: ‘‘To In sum, Justice Thomas would narrow the circum- say, as the [FDCA] does, that Wyeth may not market a stances in which implied preemption operates by refor- drug without federal approval (i.e., without an FDA- mulating the concept of ‘‘impossibility’’ preemption and approved label) is not to say that federal approval gives eliminating ‘‘obstacle’’ or ‘‘frustration of purposes’’ pre- Wyeth the unfettered right, for all time, to market its emption, leaving most of the work of the Supremacy drug with the specific label that was federally ap- 80 Clause to Congress, rather than the courts, by forcing proved.’’ But the same point could be made with re- Congress to speak clearly in the text of its enactments. spect to any product that federal law allows on the market, either via a preapproval process or otherwise. After IV. Wyeth’s Future Effect all, federal regulatory schemes always provide a manu- What effect will Wyeth have on future litigation and facturer the choice whether to conform its conduct to on preemption jurisprudence? It makes sense, first, to the agency’s dictates or to remove its product from the ask how the Court’s decision will affect tort cases in- market altogether. If Justice Thomas meant that con- volving name-brand and generic prescription drugs, flict preemption does not apply whenever a manufac- and, then, to turn to its other implications. turer can remove its federally regulated product from the market, rather than subjecting itself to new federal A. Name-Brand Prescription Drugs regulatory obligations, it is difficult to see any room for Wyeth will have its most immediate and important ef- conflict preemption regarding such a product. fect on state-law tort claims premised on a drug manu- Moreover, for three interrelated reasons, Justice Tho- facturer’s alleged failure to warn of a risk associated mas expressed disapproval of any form of ‘‘obstacle’’ or ‘‘frustration of purposes’’ preemption. First, he maintained, it is at odds with various constitutional impera- 81 Id. at 1205-06. tives of federalism, including the Tenth Amendment, all 82 Id. at 1206 (quoting U.S. Const. Art. VI, cl. 2) of which underscore the States’ retention of ‘‘substan- 83 Id. at 1207 (quoting INS v. Chadha, 462 U.S. 919, 959 (1983). 84 Id. 75 Id. 85 Id. at 1216. 76 Justice Thomas briefly foreshadowed his Wyeth concur- 86 Id. at 1207-08, 1212. rence in 2005. See Bates v. Dow Agrosciences LLC, 544 U.S. 87 Id. at 1217. 431, 459 (2005) (Thomas, J., concurring in the judgment in 88 See Geier v. American Honda Motor Co., 529 U. S. 861 part and dissenting in part). (2000). 77 Wyeth, 129 S. Ct. at 1209 (Thomas, J., concurring in the 89 Wyeth, 129 S. Ct. at 1214 (Thomas, J., concurring in the judgment) (citing Nelson, ‘‘Preemption,’’ 86 Va. L. Rev. 225, judgment); see also id. at 1214 n.6 (suggesting manipulability 260-61 (2000)). of preemption analysis that looks to statutory purpose); see id. 78 Id. at 1209-10. at 1217 (‘‘purposes’’ doctrine ‘‘leads to decisions giving im- 79 Id. at 1210 (quoting 21 C.F.R.§ 201.80(e)). properly broad pre-emptive effect to judicially manufactured 80 Id. policies’’).

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224 v Fifth Annual Judicial Symposium v July 2009 7 with its name-brand prescription drug. Wyeth may not ‘‘ ‘passing attention to the issue of’ IV-push versus IV- eliminate the preemption defense in all such cases, but, drip administration’’95 was not enough, in the Vermont at the least, it will make that defense considerably more trial court’s view, to warrant preemption. The Court difficult to sustain.90 went on to explain that Wyeth had failed to provide the The Supreme Court rejected ‘‘impossibility’’ preemp- FDA ‘‘with an evaluation or analysis concerning the tion both because the CBE regulation permits a manu- speciﬁc dangers posed by the IV-push method,’’96 and facturer unilaterally to update a label to provide safety never ‘‘attempted to give the kind of warning’’ that led information and because a manufacturer is under a to the jury’s decision to impose liability.97 In sum, it ap- continuing duty, under 21 C.F.R. § 201.80(e), to revise pears that, after Wyeth, the defendant must demon- its label as soon as it learns of a safety-related problem strate a tight fit between the labeling change proposed associated with the drug. Moreover, the Court rejected by the manufacturer (and rejected by the FDA) and the preemption on the facts of Ms. Levine’s case because, labeling change that the plaintiff contends would have even though the label warned of the serious risks of ar- prevented her injuries. terial exposure to Phenergan, ‘‘the FDA had not made Even in the unusual case where the manufacturer can an affirmative decision to preserve the IV-push method plausibly claim that it asked the FDA to amend the la- or intended to prohibit Wyeth from strengthening its bel to include a warning of the kind that the plaintiff al- warning about IV-push administration.’’91 leges would have prevented her injuries, a drug com- Taken together, these holdings place a significant pany defendant may find it difficult to show that the burden on tort defendants in drug-injury cases. The FDA would not have approved a stronger warning. Court itself explained that ‘‘[i]mpossibility preemption Agency officials are unlikely to cooperate in a search of is a demanding defense,’’92 which, in Wyeth, required its files to determine what it ‘‘would have done’’ (but ‘‘clear evidence’’ that the FDA would have prohibited a did not do) with regard to label changes. If a manufac- strengthened warning about IV-push administration.93 turer asks for a label change, and the agency does not In drug-injury cases where evidence of the relevant issue a formal rejection, that likely means that the harm is not known to the public or the medical commu- agency is still studying the question or is otherwise in- nity until after the product has been marketed, the con- different, not that there is, in Wyeth’s words, ‘‘clear evi- cern may not have been before the FDA at the time the dence’’ that the agency has rejected the proposed label was approved.94 After the FDA has approved a change. As the Supreme Court has said repeatedly, drug, if patients are encountering injuries associated agency inaction is generally insufficient to preempt with a risk not adequately disclosed on the label, it will state law because it cannot be understood to reflect the be a rare case in which the manufacturer had earlier re- official position of the federal government.98 quested a label change that, if made, would have pre- For all of these reasons, after Wyeth, implied prevented the patient’s injury. emption of failure-to-warn claims involving injuries In Wyeth, the Court indicated that the agency’s gen- from prescription drugs is likely to be rare.99 eral consideration of the relevant risk (in Wyeth, of gangrene from arterial exposure to Phenergan) or the B. Generic Prescription Drugs general risks of the form of drug administration (in Phenergan is a name-brand prescription drug that Wyeth, of intravenous versus intramuscular injection) entered the market after the FDA approved Wyeth’s are not sufficient to trigger preemption when the plain- NDA. The second main pathway to marketing approval tiff complains of a more speciﬁc inadequacy in the la- is the Abbreviated New Drug Application (ANDA) es- bel. Rather, to have preemptive effect, the agency’s fo- tablished by the 1984 Hatch-Waxman Amendments to cus must be specific. And it must also be intense. Thus, the FDCA,100 which sought to speed generic drugs to the Court noted with apparent approval that the FDA’s market. Under Hatch-Waxman, after a name-brand drug loses patent protection, a manufacturer may file

90 This section addresses Wyeth’s impact on drug-injury claims alleging a failure to warn, which is the principal type of 95 Wyeth, 129 S. Ct. at 1193 (quoting trial court finding). claim in drug-injury litigation. It does not address Wyeth’s im- 96 Id. at 1198 (emphasis added). pact, if any, on claims not premised on a failure to warn, such 97 Id. (emphasis added). as claims alleging design defect or breach of implied warranty. 98 Sprietsma v. Mercury Marine, 537 U.S. 51, 67 (2002); Post-Wyeth, one court has found preemption where the plain- Freightliner Corp. v. Myrick, 514 U.S. 280, 286, 289-90 (1995); tiff claimed that no warning would have been adequate be- Puerto Rico Dept. of Consumer Affairs v. ISLA Petroleum cause the drug was unreasonably dangerous. See Longs v. Corp., 485 U.S. 495, 503 (1988); cf. Rice v. Norman Williams Wyeth, 2009 WL 754524, *3-*4 (N.D. Ohio Mar. 20, 2009); but Co., 458 U.S. 654, 659 (1982) (‘‘The existence of a hypothetical see Myers-Armstrong v. Actavis Totowa LLC, 2009 WL or potential conflict is insufficient to warrant the preemption 1082026, *5 (N.D. Cal. Apr. 22, 2009) (applying standard set of the state statute.’’). forth in Wyeth and rejecting preemption of claim that FDA- 99 The few post-Wyeth decisions issued to date suggest that approved drugs should not have been marketed in light of defendants will face a heavy burden in establishing preemp- safety hazards). tion in cases involving prescription drugs. See Schrock v. 91 Wyeth, 129 S. Ct. at 1199. Wyeth, Inc., ___ F. Supp.2d ___, 2009 WL 635415, *2-*3 (W.D. 92 Id. Okla. Mar. 11, 2009); Brockert v. Wyeth Pharmaceuticals Inc., 93 Id. at 1198. __S.W. 3d __, 2009 WL 997438 (Tex. App. Apr. 14, 2009); Mc- 94 See Lasser, et al., ‘‘Timing of New Black Box Warnings Carrell v. Hoffman La-Roche, Inc., ___ A.2d ___, 2009 WL and Withdrawals for Prescription Medications,’’ 287 J.A.M.A. 614484, *43 (N.J. Super. Ct. App. Div. Mar. 12, 2009) (noting 2215, 2218 (May 1, 2002) (‘‘Many serious ADRs [adverse drug that preemption is the ‘‘exception’’ and that defendant must reactions] are discovered only after a drug has been on the establish that ‘‘it advocated . . . a stronger warning’’ and that market for years. Only half of newly discovered serious ad- ‘‘the FDA would not have approved [that] stronger warning’’); verse drug reactions are detected and documented in the Phy- see also IMS Health Inc. v. Sorrell, 2009 WL 1098474, *23 n.23 sicians’ Desk Reference [the doctors’ drug labeling bible] (D. Vt. Apr. 23, 2009). within 7 years after drug approval.’’). 100 Pub. L. No. 98-417, 98 Stat. 1585 (1984).

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an ANDA, seeking FDA approval to market a generic that change—the same standard that Wyeth imposes on version of the name-brand drug.101 To simplify some- name-brand drug manufacturers.108 what, a generic manufacturer need not submit independent evidence of the drug’s safety and efficacy, but need C. Medical Devices The Supreme Court held last year in Riegel v. only establish the generic product’s ‘‘bioequivalence’’ to 109 the name-brand drug.102 Medtronic Inc., that most tort claims regarding class III medical devices that have gone through the FDA’s In recent years, generic prescription drug manufac- pre-market approval process are preempted by the ex- turers have argued that they are entitled to a special press preemption provision of the Medical Device form of preemption, beyond any preemption that might Amendments to the FDCA.110 Earlier, the Court held in be available to name-brand manufacturers, on the Medtronic v. Lohr, Inc.,111 that tort claims involving ground that they are locked-in to the label approved for medical devices that enter the market through less ex- the name-brand equivalent. In particular, they maintain acting forms of FDA scrutiny are not preempted. that the CBE regulation does not apply to them, and Wyeth does not alter the legal terrain regarding pre- they therefore lack authority to alter their labels with- emption of tort claims involving medical devices. But out FDA pre-approval. On the other hand, plaintiffs Wyeth may be politically significant and hasten Con- have pointed to an FDA regulation that they claim ex- gress’s consideration and passage of the Medical De- pressly authorizes ANDA holders to employ the CBE vice Safety Act of 2009, which was introduced in both 112 regulation.103 Prior to Wyeth, this issue had divided the Houses of Congress on March 5, and would overrule courts.104 Riegel by rendering the Medical Device Amendment’s express preemption provision inapplicable to state-law This article is not the place to rehash those argu- damages actions involving medical devices. Because ments, which, in light of Wyeth, may no longer be criti- the approval processes for drugs and medical devices cal. Even assuming that the CBE regulation cannot be are similar, and the purpose of FDA approval for both used by an ANDA holder to amend its label without types of products—to enhance the safety and effective- FDA pre-approval, Wyeth may nevertheless apply with ness of potentially dangerous but potentially life-saving full force to cases involving generic drugs—that is, to products—are identical, Congress may view it as the same extent that it applies to name-brand drugs. Re- anomalous that injured drug patients, but not injured call that the CBE regulation was not the exclusive, or device patients, have access to the civil justice system. even the principal, basis for rejecting preemption in If, as Justice Stevens put it, ‘‘State tort suits uncover un- Wyeth.105 Rather, Justice Stevens explained that known drug hazards and provide incentive for drug Wyeth’s quest for preemption was based on a ‘‘more manufacturers to disclose safety risks promptly,’’ and fundamental misunderstanding’’ of the regulatory re- ‘‘serve a distinct compensatory function that may moti- gime: that the ‘‘FDA, rather than the manufacturer, vate injured persons to come forward with informa- 113 bears primary responsibility for drug labeling.’’106 To tion,’’ Congress may want such suits to serve the the contrary, ‘‘a central premise of federal drug regula- same functions with respect to medical devices. In sum, tion [is] that the manufacturer bears responsibility for Wyeth may boost the chances for a congressional over- the content of its label at all times.’’107 As the primary ride of Riegel. authority for this attribute of federal drug regulation, D. The Presumption Against Preemption the Court cited 21 C.F.R. § 201.80(e), which requires Wyeth emphatically reaffirmed the presumption manufacturers to revise their labels ‘‘as soon as there is against preemption, which tort defendants have been reasonable evidence of an association of a serious haz- trying to eliminate for years. In particular, the Court re- ard with a drug.’’ Section 201.80(e) applies to all manu- jected Wyeth’s argument that the presumption does not facturers of prescription drugs, and the generic drug in- apply in light of the federal government’s century-long dustry has not argued otherwise. Thus, after Wyeth, it involvement in drug labeling, explaining that the pre- would appear that the preemption defense is available sumption depends on ‘‘the historic presence of state to a generic drug manufacturer, if at all, only when it law,’’ not ‘‘on the absence of federal regulation.’’114 In can show that it asked the FDA to authorize a label other words, longstanding federal domination and an change of the kind that would have prevented the plain- absence of a significant state-law role, not simply long- tiff’s injury and that the FDA would not have permitted

108 In the two post-Wyeth generic drug-injury cases decided 101 See 21 U.S.C. § 355(j). to date, the Court rejected preemption under Wyeth and held 102 See id. § 355(j)(8)(B) (defining bioequivalence); 21 that the CBE regulation applies to generic drug manufacturers C.F.R. § 320.1(e) (same). as well as to name-brand drug manufacturers. See Kellogg v. 103 See 21 C.F.R. § 314.97. Wyeth, 2009 WL 975382, *4 (D. Vt. Apr. 10, 2009) (on denial of 104 Compare, e.g., Foster v. Am. Home Prod. Corp.. 29 F.3d certification for interlocutory appeal under 28 U.S.C. § 1292 165, 170 (4th Cir. 1994) (‘‘[G]eneric manufacturers . . . [are] (b)); Stacel v. Teva Pharmaceuticals, USA, 2009 WL 703274, permitted to add or strengthen warnings and delete misleading *4-*7 (N.D. Ill. Mar. 16, 2009); see also Schrock, 2009 WL statements on labels, even without prior FDA approval.’’) 635415 (rejecting preemption in light of Wyeth in case involv- (dicta); Block v. Wyeth, Inc. 2003 WL 203067, *1 (N.D. Tex. ing generic and name-brand drugs, but not analyzing generic- 2003) (rejecting preemption because ‘‘manufacturer of a ge- drug issue separately). neric drug may alter a drug’s labeling’’ under 21 C.F.R. 109 128 S. Ct. 999 (2008). §§ 314.70(c), 314.97), with, e.g., Mensing v. Wyeth, Inc., 562 110 See 21 U.S.C. § 360k(a). F. Supp.2d 1056, 1061-65 (D. Minn. 2008) (finding preemption 111 518 U.S. 470 (1996). on ground that ANDA holder cannot make label change). 112 See S. 540, 111th Cong. (2009); H.R. 1346, 111th Cong. 105 See supra Part III.A.2. (2009). 106 Wyeth, 129 S. Ct. at 1997. 113 Wyeth, 129 S. Ct. at 1202. 107 Id. at 1197-98. 114 Id. at 1195 n.3.

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226 v Fifth Annual Judicial Symposium v July 2009 9 standing federal presence, is required before the pre- Comptroller of the Currency (OCC) claims that the Na- sumption will be set aside. Moreover, the Court rejected tional Bank Act bars states from bringing enforcement the view, expressed in Justice Alito’s dissent,115 that the actions against national banks under generally appli- presumption does not apply in implied conflict preemp- cable state laws that themselves are not substantively 116 tion cases. And earlier this Term, the Court noted preempted by the Act. The questions presented in that the presumption applies to ‘‘questions of express or Cuomo involve the validity of, and claimed deference 117 implied preemption.’’ At this point, the legitimacy of to, an OCC regulation that, the petitioner maintains, the presumption against express and implied preemp- does nothing more than assert that state enforcement tion in state-law tort cases appears settled. authority is preempted.121 Wyeth may make defense of E. Deference to Agency Pronouncements Regarding the OCC’s regulation more difficult. Preemption In addition, the issuance of the FDA’s 2006 preamble Wyeth provided guidance on the circumstances in was not an isolated event, but rather part of a larger ef- which a court should and should not defer to agency fort by Bush Administration agencies, including the Na- rules or other pronouncements on preemption. The tional Highway Traffic Safety Administration,122 the Court made clear that it would not give full-fledged Consumer Product Safety Commission,123 and the Fed- Chevron deference to an agency’s ‘‘assertion’’ or ‘‘con- eral Railroad Administration,124 to insert language in clusion’’ that state law is preempted, at least absent an regulatory preambles and regulations purporting to express delegation from Congress instructing the preempt state tort law. The level of deference, if any, to agency to issue rules or to otherwise make decisions re- be accorded these agency pronouncements will depend garding preemption.118 Thus, the Court contrasted on the thoroughness, consistency, formality, and per- agency pronouncements such as the FDA’s 2006 regu- suasiveness of each effort, and the degree to which the latory preamble on preemption, which may be entitled agency was acting, if at all, pursuant to a congressional 119 to ‘‘some weight,’’ because they represent only an delegation.125 In light of Wyeth, however, agency agency’s unsolicited opinion on preemption, with a stat- claims of preemption are likely to be subject to in- ute that authorizes the FDA to grant states exemptions creased judicial scrutiny, and it is unlikely that such from the Medical Device Amendment’s express pre- claims will be accorded substantial deference unless emption provision, and, thus, requires the agency to de- they are tethered to a congressional authorization refine the borderline between state and federal law.120 garding preemption.126 Wyeth’s holdings regarding deference are likely to be influential. Their impact may be seen later this Su- preme Court Term when the court decides Cuomo v. 121 See 12 C.F.R. § 7.40000. To view the questions presented The Clearinghouse Association, L.L.C., No. 08-453 (ar- in Cuomo, see http://origin.www.supremecourtus.gov/qp/08- gued April 28, 2009). In Cuomo, the federal Office of the 00453qp.pdf. 122 See, e.g., 70 Fed. Reg. 49223, 42245-46 (2005) (preamble to proposed rule on vehicle roof crush standards). 115 See id. at 1228-29 & n.14 (Alito, J., dissenting). 123 70 Fed. Reg. 13472, 13496 (2006) (preamble to final rule 116 See id. at 1195 n.3 (citing California v. ARC America on mattress flammability). Corp., 490 U. S. 93, 10–102 (1989); Hillsborough County v. Au- 124 See, e.g., 72 Fed. Reg. 42016, 42028 (2007) (preamble to tomated Medical Laboratories, Inc., 471 U. S. 707, 716 (1985)). proposed rule on front-end strength of cab cars and multiple- 117 Altria Group, Inc. v. Good, 129 S. Ct. 538, 543 (2009). unit locomotives). 118 Wyeth, 129 S. Ct. at 1201. 125 See Wyeth, 129 S. Ct. at 1201. 119 Id. (quoting Geier, 529 U.S. at 883). 126 See City of Joliet v. New West, L.P., __F.3d __, 2009 WL 120 See id. (referring to 21 U.S.C. § 360k(b)); see also id. at 937250, *4 (7th Cir. Apr. 9, 2009) (rejecting preemption views 1201 n.9 (referring to other statutes that authorize agencies to of Department of Housing and Urban Development in light of determine scope of preemption). Wyeth.

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Understanding Tort Preemption Claims (Dec. 2006)

By Brian Wolfman*

The basic idea of the federal preemption doctrine is easily stated: It is a constitutionally mandated choice-of-law principle that demands that federal law trumps when state and federal law conflict or in the rare instance when the comprehensiveness of federal law in an area demands no role for state law in that area. But application of that principle can be terribly difficult. It requires that one master its basic tenets – the Supreme Court’s jurisprudence interpreting the constitution’s Supremacy Clause from which the preemption requirement flows.

It requires an understanding of the fundamentals of statutory construction, because, generally, preemption turns on whether legislation enacted by Congress expressly or impliedly ousts state law. And, because present-day preemption issues tend to involve policing the borderline between a federal regulatory scheme and state law-making authority, familiarity with administrative law is often a must. Beyond these basics, one must also fully understand the details of both the particular federal statutory and regulatory structure at issue, that is, the federal legal landscape said to have preemptive effect, and the state-law regime said to be preempted.

For a plaintiff’s lawyer handling products cases, preemption is an ever-present worry.

Whenever the product that caused your client’s injury is regulated in some fashion by federal law, the defendant likely will argue that your client’s state-law claim for damages is preempted.

That means when your client has been injured by a defective car, truck, medical device, boat,

*Director, Public Citizen Litigation Group, Washington, D.C. The Litigation Group regularly litigates preemption cases at all levels of the federal and state judiciaries. It has served as lead counsel for plaintiffs in many tort preemption cases, including Medtronic, Inc. v. Lohr, 518 U.S. 470 (1996), which is discussed in this article. If you wish to consult the Litigation Group on a preemption case, contact Mr. Wolfman at [email protected].

Page 1 of 19 228 v Fifth Annual Judicial Symposium v July 2009 tobacco product, or pesticide, or by a mislabeled drug or hazardous household cleaner, or has been victimized by a bank or other lending institution, the defendant will likely claim that federal law preempts your client’s state-law damages claim seeking to recover for those injuries. The defendant often will advance these preemption arguments no matter how weak the federal regulatory scheme or how attenuated the connection between that scheme and the harms suffered by your client or the state-law duties under which your client seeks a remedy.1

In this essay, I address federal preemption of state-law damages actions in three ways.

First, I introduce the basic theoretical justification for preemption and ask whether that justification has been adopted in current preemption doctrine. Second, I discuss whether that theoretical basis for preempting state tort law exists in the real world. In other words, generally speaking, I ask whether the basis for according preemptive effect – that state tort law interferes with federal regulatory objectives – is a reality. Finally, I explain why, in general, preemption of state tort law is a bad idea, or, put differently, why immunizing the makers of products that cause injury because, for instance, their products have been approved for marketing by a federal agency, harms both the injured people and society generally.

I. The Theoretical Basis Offered By Defendants For Preemption Of State Tort Law Is Not Firmly Established In Preemption Doctrine.

It is important to understand and be able to repudiate the basic theoretical justification offered by defendants for preemption of state tort law. Here, I am not speaking of the nitty-gritty, the detailed comparison between a particular federal regulatory regime and the state tort claims

1For a discussion of strategies for defeating a preemption defense based on identifying differences between the purpose of the relevant federal regulatory scheme and the purpose of the relevant state common law, see Brian Wolfman and Douglas L. Stevick, “Preempting the preemption defense,” TRIAL 54 (July 1998).

Page 2 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 229 asserted in a particular case. There, as the case law shows, the devil is in the details.2 I am referring to the broad, theoretical basis asserted by defendants for preemption of tort claims as a general matter. In that regard, defendants seek to equate the effect of tort law – of state-law damages actions – with positive state regulation.

This point is best illustrated by an example. Let’s assume that a federal agency has approved the marketing of a particular medical device as it is currently designed, manufactured, and labeled. And, though there may be powerful arguments to the contrary, let’s further assume that a state’s ban on the marketing of this federally approved device in that state would be preempted on the ground that the ban would conflict with federal law. The question, then, is whether a state-law tort suit seeking damages on the ground that the plaintiff’s injuries were caused by the device’s defective design or inadequate labeling is also preempted. In other words, is the effect of positive law (in this case, a state’s positive law requirement that a product not be marketed) the same as a jury’s damages verdict (in this case, a state’s award of damages based on a design defect)? This is an important question because defendants have relied heavily on the argument that positive law and common-law damages exert the same regulatory effect, and, thus, when positive law is preempted, common law should be as well.

Does the Supreme Court buy into this equivalence between positive state regulation and a jury’s award of damages? Well, to put it mildly, the Court has been schizophrenic. The Court’s first statement on this topic was in the labor law context in San Diego Building Trades Council v.

2See, e.g., Bates v. DowAgrosciences, 544 U.S. 431, 437-42 (2005) (complex federal scheme for regulation of pesticides and similar products); Medtronic, Inc. v. Lohr, 518 U.S. 470, 475-480 (1996) (federal medical device regulation).

Page 3 of 19 230 v Fifth Annual Judicial Symposium v July 2009 Garmon.3 Garmon involved a business’s attempt to prevent union picketing through a suit under

California law for an injunction and damages. In an earlier stage of the litigation, the Supreme

Court held that the injunctive relief was preempted by the National Labor Relations Act.4 In

Garmon, the Court also rejected the attempt to impose damages under California law, explaining that

[state] regulation can be as effectively exerted through an award of damages as

through some form of preventive relief. The obligation to pay compensation can

be, indeed is designed to be, a potent method of governing conduct and

controlling policy. Even the States’ salutary effort to redress private wrongs or

grant compensation for past harm cannot be exerted to regulate activities that are

potentially subject to the exclusive federal regulatory scheme.5

Garmon was not a products liability case, and federal labor law, unlike most federal statutes that regulate consumer products and services, authorizes monetary remedies. Thus,

Garmon presented a situation distinguishable from the medical device example discussed above, where neither the relevant federal regulatory statute nor any other federal law provides a means to compensate people harmed by medical devices.6 Nevertheless, it is easy to see why modern preemption-seeking defendants rely so heavily on Garmon. Its exclusive focus on tort damages

3359 U.S. 236 (1959).

4See id. at 238.

5Id. at 247.

6See Medical Device Amendments to the Food, Drug, and Cosmetic Act, Pub. L. No. 94-295, 90 Stat. 539 (1976) (codified chiefly at 21 U.S.C. § 360c et seq.).

Page 4 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 231 as a regulatory, rather than a compensatory, tool is useful to defendants seeking to equate positive law with tort law.

Nevertheless, as noted, Garmon arose in a context quite different from modern tort law, and, even after Garmon, the prevailing assumption was that regulatory standards and state compensation schemes occupied separate spheres.7 Indeed, until the 1990’s, the Supreme Court had never held a state-law tort claim preempted by federal regulation, at least not where federal law itself did not provide a right of action for damages. In 1992, the Court arguably began to change course. A plurality opinion in the famous tobacco liability case, Cipollone v. Liggett

Group, Inc.,8 relied on the language from Garmon quoted above and concluded that the Public

Health Cigarette Smoking Act of 1969, which requires specific warnings on cigarette packages, preempted some, but not all, tort claims based on a failure to warn about the dangers of smoking.9 To be sure, this part of the Cipollone decision was premised, in part, on particular language of the 1969 Act that purportedly pointed in the direction of preemption of common-law duties.10 But it also relied on Garmon’s claim that damages liability can have, and is intended to have, the same effect on the defendant’s future conduct as positive state regulation. Since then, defendants in products liability and similar cases have relied on this language from Garmon and

7See, e.g., Silkwood v. Kerr-McGee Corp., 464 U.S. 238 (1984); Hurley v. Lederle Laboratories, 863 F.2d 1173, 1176-78 & n.2 (5th Cir. 1988) (rejecting preemption and reviewing case law); Osburn v. Anchor Laboratories, Inc., 825 F.2d 908, 911-13 (5th Cir. 1987); Ferebee v. Chevron Chemical Co., 736 F.2d 1529, 1539-43 (D.C. Cir. 1984); Feldman v. Lederle Laboratories, 479 A.2d 374 (N.J. 1984).

8505 U.S. 504 (1992).

9Id. at 521 (quoting Garmon, 359 U.S. at 247) .

10See id.

Page 5 of 19 232 v Fifth Annual Judicial Symposium v July 2009 Cipollone ad nauseam, in an effort to show that state tort law and state positive law have the same regulatory effect, that is, that they are inherently the same.

But not so fast. In the majority portion of the Cipollone decision, which addressed the preemptive effect of an earlier version of the cigarette labeling law (the 1965 Federal Cigarette

Labeling and Advertising Act), just a few paragraphs above the endorsement of Garmon, the same justice who wrote the plurality (Justice Stevens) said something quite different: that the

1965 Act, because of its particular wording, preempts “only positive enactments by legislatures or administrative agencies that mandate particular warning labels” and “not . . . common-law damages actions.”11 The Court thus held that although the 1965 Act preempted state positive-law labeling requirements, it did not preempt any state damages actions, even those premised on a failure to warn. In responding to the tobacco industry’s arguments that the 1965 Act preempted state-law damages claims premised on the industry’s failure to warn, the Court seemed to reject the Garmon viewpoint as a general, overarching justification for preemption:

There is no general, inherent conflict between federal pre-emption of state

warning requirements and the continued vitality of state common-law damages

actions.12

The internal tension in Cipollone was carried over to the medical device preemption case

– Medtronic v. Lohr13 – where a plurality (again, Justice Stevens) suggested that a rational

11Id. at 519.

12Id. at 518.

13518 U.S. 470.

Page 6 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 233 Congress could (and did) treat state common-law duties damages actions differently from positive state law,14 while the dissenters and a concurring Justice arguably equated the two as a general proposition.15

Although the Supreme Court’s confusion on this score runs deep, it is important to mention three rulings from the Court that challenge directly the equality between positive law and damages liability. First, in Goodyear Atomic Corp. v. Miller,16 the Court considered whether an Ohio administrative agency could, consistent with federal preemption principles, award additional workers’ compensation benefits based on violations of state safety standards at federally owned, privately operated nuclear production facility. The Court held that the additional award was not preempted. Acknowledging that state positive law safety requirements might be preempted, the Court viewed damages liability as fundamentally different:

Congress’ reluctance to allow direct state regulation of federal projects says little

about whether Congress was likewise concerned with the incidental regulatory

effects arising from the enforcement of a workers’ compensation law, like Ohio’s,

that provides an additional award when the injury is caused by the breach of a

safety regulation. The effects of direct regulation on the operation of federal

projects are significantly more intrusive than the incidental regulatory effects of

such an additional award provision. Appellant may choose to disregard Ohio

14Medtronic, 518 U.S. at 486-91.

15See id. at 504-05 (Breyer, J., concurring); id. at 510 (O’Connor, J., dissenting) (relying on Garmon).

16486 U.S. 174 (1988).

Page 7 of 19 234 v Fifth Annual Judicial Symposium v July 2009 safety regulations and simply pay an additional workers’ compensation award if

an employee's injury is caused by a safety violation. We believe Congress may

reasonably determine that incidental regulatory pressure is acceptable, whereas

direct regulatory authority is not.17

The last quoted sentence, which suggests that Congress had thought about the differences between “incidental regulatory pressure” and “direct regulatory authority,” seems like something of a misstatement. The federal statutes relevant in Goodyear Atomic, as with most federal regulatory statutes, even those that expressly preempt state law, had said nothing one way or the other about preemption of state-law monetary liability. Thus, in reality, the Court in Goodyear

Atomic was saying that positive law and damages liability generally do not exert the same regulatory effect and, therefore, that a reasonable Congress, if it had thought about the question, would not have equated the two in confronting the issue presented by the case.

Nor can the Garmon formulation be squared with two recent Supreme Court forays into tort preemption. In the Federal Boat Safety Act (FBSA) tort preemption case, Sprietsma v.

Mercury Marine,18 a young woman had died tragically when she fell overboard and was struck by a boat’s propeller blades. One of the questions presented in Sprietsma was whether a state common-law duty premised on a boat manufacturer’s failure to install a propeller guard was preempted by the FBSA’s express preemption provision, which the manufacturer claimed had, upon its enactment, preempted all positive law and common law regarding boat safety. The

Court rejected that argument, noting that is “perfectly rational” for Congress to preempt state

17Id. at 185-86.

18537 U.S. 51 (2002).

Page 8 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 235 positive law, but not “common-law claims, which—unlike most administrative and legislative regulations—necessarily perform an important remedial role in compensating accident victims.”19 This statement is very important, because, generally, even when the Court has refused to find tort claims preempted, and has challenged the notion that tort law exerts the same regulatory effect as positive law, it has not expressly touted tort law’s remedial function. And tort law’s ability to compensate is indisputably one way that tort law and positive administrative law requirements are not the same.

Finally, in 2005, in Bates v. DowAgrosciences,20 a case about whether the Federal

Insecticide, Fungicide, and Rodenticide Act,21 the federal law regulating pesticides, preempts state tort claims, the Court overruled the pro-preemption position of nearly every federal circuit and about 30 state appellate courts.22 The Court was confronted with an express preemption provision that preempts state law “requirements” when they differ from, or add to, federal regulatory requirements.23 In holding that most (and possibly all) of the plaintiff’s claims were not preempted, the Court explained that a positive law “requirement is a rule of law that must be obeyed; an event, such as a jury verdict, that merely motivates an optional decision, is not a

19Id at 64. The Court also went on to reject the manufacturer’s argument that the plaintiff’s common-law claim was impliedly preempted by the Coast’s Guard supposed safety- based opposition to propeller guards or by the FBSA more generally. Id. at 64-70.

20544 U.S. 431.

217 U.S.C. § 136 et seq.

22Id. at 440 (noting that, after Cipollone, “a groundswell of federal and state decisions emerged holding that [the federal pesticide law’s express preemption provision] § 136v(b) pre-empted claims like those advanced in this litigation”).

237 U.S.C. § 136v(b).

Page 9 of 19 236 v Fifth Annual Judicial Symposium v July 2009 requirement[,]” thus making the point that positive regulation has a much more direct effect on conduct than does a damages award.

By now, you are wondering: Why am I boring you with all of this back-and-forth on the basic justification for preemption of state tort claims? It’s important because if the basic theoretical justification for preemption – equating state positive law and state tort law – is not really a part of the legal landscape, then the defendants have only two things on which to hang their hats: highly ambiguous express preemption provisions created by Congresses that were striving to increase protections for consumers,24 or, even less plausibly, claims of implied preemption arising from the interstices of federal law. As a general matter, neither of these types of assertions should fare well if the courts consistently apply the oft-stated presumption against preemption of state law, which is said to apply with particular force in tort preemption cases because of the state’s traditional role as the prime protector of its citizens’ health and safety.25 In sum, once the overarching justification for tort preemption is gone, the preemption proponent must come up with some other, more case-specific, justification. The defendant no longer has a knock-out punch.

As exemplified by the discussion of Bates above, a typical federal express preemption provision goes something like this: Preemption occurs where a state-law “requirement” conflicts

24See, e.g., Medtronic, 518 U.S. at 487 (plurality opinion) (“Medtronic’s construction of § 360k would therefore have the perverse effect of granting complete immunity from design defect liability to an entire industry that, in the judgment of Congress, needed more stringent regulation in order ‘to provide for the safety and effectiveness of medical devices intended for human use[.]’”) (quoting 90 Stat. 539).

25See, e.g., id. at 485.

Page 10 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 237 with a federal positive law “requirement.”26 That language, standing alone, doesn’t tell the courts very much about whether state tort law is or is not preempted. If anything, because the federal law “requirement” to which such a provision refers is indisputably a positive regulatory requirement, it makes sense to think of the state-law “requirement” as being one of positive law as well.27 And, as noted, these ambiguous provisions sit smack dab in the middle of statutes passed in the 1960’s and 1970’s to improve consumer safety and health or financial security, with never a word – not a single word – that what Congress was really doing was enacting massive tort “reform” more expansive than the express tort “reform” statutes that Congress has been repeatedly unwilling to enact over the last 20 years.28

Let’s take but one of many possible illustrations of the implausibility of such a preemption claim. Does anyone seriously believe that the Medical Device Amendments to the

Food, Drug, and Cosmetic Act,29 which was principally sponsored by Ted Kennedy30 and passed

26See, e.g., 7 U.S.C. § 136v(b) (pesticides); 21 U.S.C. § 360k(a) (medical devices).

27See, e.g., Medtronic, 518 U.S. at 489 (plurality opinion) (“§ 360k refers to ‘requirements’ many times throughout its text. In each instance, the word is linked with language suggesting that its focus is device-specific enactments of positive law by legislative or administrative bodies, not the application of general rules of common law by judges and juries. . .[,] suggesting that the pre-empted ‘requirements’ established or continued by States also refer primarily to positive enactments of state law.”)

28See, e.g., Robert S. Adler & Richard A. Mann, “Preemption and Medical Devices: The Courts Run Amok,” 59 Mo. L. Rev. 895, 940-42 & nn.185-189 (1994) (discussing failed attempts at such tort “reform” legislation).

29Pub. L. No. 94-295, 90 Stat. 539 (1976).

30See, e.g., 121 Cong. Rec. 10688 (1975) (“The legislation is written so that the benefit of the doubt is always given to the consumer. After all, it is the consumer that pays with his health and life for medical device malfunctions.”) (Sen. Kennedy); see generally Food and Drug Law Institute, An Analytical Legislative History of the Medical Device Amendments of 1976 (Daniel

Page 11 of 19 238 v Fifth Annual Judicial Symposium v July 2009 in 1976 by an overwhelmingly Democratic post-Watergate Congress, in response to medical device tragedies such as the Dalkon Shield that played themselves out in courtrooms around the nation,31 was intended, between the lines, to eliminate the right to recover under state law for injuries caused by defective FDA-approved medical devices? People can seriously believe that tort preemption is a good thing, but I don’t think they can seriously believe that it arises from an enactment like the Medical Device Amendments.

II. The Theoretical Basis For Preemption Has No Basis In Reality.

Having shown that the doctrinal playing field is wide open, I come to my second point.

Does equating positive law with tort law work as a practical matter? In other words, as a general proposition, does the equation make empirical sense? That’s an easy one, and the answer is no.

As a matter of regulatory impact, it is a huge leap from the proposition that tort law is meant to and does to some degree have a regulatory effect, to the proposition that its impact is equivalent to direct, positive-law regulation. When the FDA, for instance, wants to get a food, drug, or device off the market, it can do so swiftly. It can actually seize products, like David

Kessler did with misbranded orange juice when he first became FDA commissioner.32 It can deny regulatory approval; it can effectively impose advertising restrictions; it can demand data.

The Food, Drug, and Cosmetic Act gives industry various procedural rights in opposing agency action, but, as a practical matter, the agency generally can exert its positive law priorities with

F. O'Keefe, Jr. & Robert A. Spiegel eds., 1976).

31See, e.g., Medtronic, 518 U.S. at 475-76; Adler & Mann, 59 Mo. L. Rev. at 912 & n.84 (discussing Dalkon Shield litigation’s relevance to enactment of Medical Device Amendments).

32Warren E. Leary, “Citing Labels, U.S. Seizes Orange Juice,” New York Times, p. 18 (Apr. 25, 1991).

Page 12 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 239 great force. I recognized that agencies often do not exercise their full regulatory authority because of indifference, insufficient resources, lack of political will, or “capture” by the regulated industry.33 My point here, however, is that federal agencies generally have the ability to quickly alter the conduct of the regulated industry.

Contrast that direct regulatory power with the tort system. Large industry players generally react very slowly, and sometimes not at all, to liability pressures. By that I mean that most instances of liability are absorbed without any change in manufacturer conduct of the kind that can effectively be obtained swiftly by a regulator. As the Supreme Court has recognized, after the imposition of damages liability, the defendant is never legally compelled to alter its future conduct.34 To the extent that tort law exerts regulatory effect against a drug manufacturer, it occurs only after repeated suits, settlements, and findings of liability, and even then the cause-and-effect relationship is rarely clear. In many instances, even where there is an onslaught of lawsuits, the manufacturer holds out forever or acts only after years of liability pressure. The

Supreme Court, as noted earlier, put this well in Goodyear Atomic, when it said that “the effects of direct state regulation on the operation of federal government are significantly more intrusive

33For a comprehensive review of these problems at an agency particularly indifferent to its safety mission, the Federal Motor Carrier Safety Administration, see Stephen Labaton, “As Trucking Rules Are Eased, a Debate on Safety Grows,” New York Times, p. 1 (Dec. 3, 2006), available at www.nytimes.com/2006/12/03/washington/03trucks.html?_r=1&pagewanted=1&ei=5094&en=6 0f6e12c02fd6a8e&hp&ex=1165122000&partner=homepage&oref=slogin).

34See, e.g., Goodyear Atomic, 486 U.S. at 185-86; see also, e.g., Ferebee, 736 F.2d at 1544 (D.C. Cir. 1984) (noting that a liability judgment “is not equivalent to a direct regulatory command that Chevron change its label. Chevron can comply with both federal and state law by continuing to use the EPA-approved label and by simultaneously paying damages to successful tort plaintiffs such as Mr. Ferebee.”)

Page 13 of 19 240 v Fifth Annual Judicial Symposium v July 2009 than the incidental regulatory effects of state law.”35

Of course, there is some symbiosis here, as the regulatory system exerts pressures on the tort system and vice versa, and as both exert financial and political pressure on politicians and industry, and both are capable of making public information that would otherwise stay locked away in corporate file cabinets. But that doesn’t alter the basic truth: There is no reason to build a body of legal literature and judicial doctrine on the equivalency between tort and direct regulation when that equivalency is not remotely accurate.

III. Why Tort Preemption Is Generally A Bad Idea

All of this brings me to my last point: why tort preemption is generally a bad idea. To my mind, there are two basic reasons. I touched briefly on the first already. The tort system has an non-regulatory component – compensation – that is virtually never a component of the American administrative law system, that is, federal agencies that regulate virtually never compensate as well. Unfortunately, much modern tort preemption doctrine, and many legal academics, intrigued by the theoretical regulatory effect of tort as a means of social control, have not focused on the compensatory component. In my view, the principal purpose of tort law, particularly in a world where, in theory, the agencies are already accomplishing their regulatory function, is compensation. That compensation component, as I have noted, is what, more than anything else, distinguishes the tort system from the modern regulatory state. That is not to say that the creation and perpetuation of tort duties are not intended to have an effect on future conduct. They are.

But, at the very least, regulatory control and compensation are major goals of tort law. If that is so, why should the compensation principle give way to the regulatory principle when there is a

35Goodyear Atomic, 486 U.S. at 185.

Page 14 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 241 perceived “regulatory” conflict between tort law and the administrative state? And, why shouldn’t the plaintiff’s interest in compensation prevail, particularly given the current political reality, in which federal law provides neither comprehensive health care nor accident insurance.

Given these political deficiencies and the relatively weak regulatory effect of tort, why wouldn’t we want the compensation principle to trump the regulation principle, at least in the absence of the most direct types of conflict between federal law and state law (for instance, where federal law forbade boat propeller guards, and the state-law tort claim was premised on a duty to provide one,36 or where federal law prohibited air bags, and the state-law tort claim was premised on a duty to require them37)? In this regard, one conception of strict products liability, in which the law acknowledges that even socially beneficial products can cause grave harm, and thus we keep those products on the market but compensate those who are injured, is perfectly consistent (and, in any event, not in conflict with) a regulatory system that seeks, but can never fully achieve, optimal health and safety benefits.38

And that brings me naturally to the second reason why preemption is generally a bad idea.

The regulatory system is not intended to prevent all harm, nor could it. It is meant to balance risks and benefits (with the knowledge that injuries will occur) in a highly imperfect system, where regulators depend almost exclusively on profit-motivated sellers to submit all available

36Compare Sprietsma, 537 U.S. 51 (rejecting preemption involving state-law duty to provide propeller guard where no such direct conflict existed).

37Compare Geier v. American Honda Motor Co., 529 U.S. 861 (2000) (finding preemption involving state-law duty to provide air bags where no such direct conflict existed).

38See Prosser & Keeton on Torts 536-37, 692-93 (4th ed. 1984); Morris on Torts 240-41 (2d ed. 1980).

Page 15 of 19 242 v Fifth Annual Judicial Symposium v July 2009 relevant data – data that changes over time, as new information emerges only well after a product is marketed. That being the case, even assuming that tort law exerts some regulatory pressure – and I do – why wouldn’t we want it to do so? Indeed, on occasion, the Supreme Court has seemed to answer that question affirmatively, understanding both that tort law does not exert the same regulatory effect as positive law, and that it can apply useful pressure where the regulatory system fails to achieve its full purposes.39

A present-day example helps illustrate the serious concerns raised by a system that would simultaneously tolerate tort preemption and regulatory failure. In a regulatory preamble accompanying a new FDA rule concerning drug labeling,40 the FDA has claimed that its labeling rules preempt state tort claims premised on a drug manufacturer’s failure to warn.41 In other words, the agency maintains that the principal type of state-law damages claim raised by people injured by drugs has been silently obliterated by federal law – silently, because no federal statute or regulation remotely suggests such a result. As a legal matter, the FDA’s view seems like a stretch for a host of reasons, not the least of which is that when Congress was considering the legislation that became the Food, Drug, and Cosmetic Act in 1938 – the legislation that authorizes the FDA to issue labeling rules in the first place – it “rejected a provision in a draft of the original FD&C providing a federal cause of action for damages because ‘a common law right of action [already] exists.’”42 As my colleague Allison Zieve and I have discussed in detail

39See, e.g., Bates, 544 U.S. at 431 (quoting Ferebee, 736 F.2d at 1541-42).

4071 Fed. Reg. 3922 (Jan. 24, 2006).

41Id. at 3933-3936.

42Adler & Mann, 59 Mo. L. Rev. at 924 & n.130 (quoting legislative history).

Page 16 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 243 elsewhere, the FDA’s preemption position has no legal support and is not entitled to judicial deference.43

For present purposes, however, my point is not to undermine the FDA’s legal claim to preemption, but to show why preemption would do violence to public safety and, thus, to the agency’s mission. To put it mildly, the FDA’s preemption plea is ill-timed. Recently, two independent government reports have described the dangerous shortcomings in FDA oversight of drug safety.

First, in a report issued in March 2006, the General Accountability Office concluded that

FDA lacks clear and effective processes for making decisions about, and

providing management oversight of, postmarket safety issues. The process has

been limited by a lack of clarity about how decisions are made and about

organizational roles, insufficient oversight by management, and data constraints.44

And, more recently, a National Academies’ Institute of Medicine report, prepared at the FDA’s request, found that the Nation’s drug safety system is impaired by “serious resource constraints that weaken the quality and quantity of the science that is brought to bear on drug safety; an organizational culture in [FDA] that is not optimally functional; and unclear

43Allison M. Zieve & Brian Wolfman, “The FDA’s Argument for Eradicating State Tort Law: Why It Is Wrong and Warrants No Deference,” 21 Toxics Law Rptr. (BNA) 516 (May 25, 2006), and 34 Prod. Safety & Liab. Rptr. (BNA) 308 (Mar. 27, 2006).

44General Accountability Office, “Improvement Needed in FDA’s Postmarket Decision-making and Oversight Process, Highlights” (GAO-06-402 March 2006), available at www.gao.gov/cgibin/getrpt?GAO-06-402.

Page 17 of 19 244 v Fifth Annual Judicial Symposium v July 2009 and insufficient regulatory authorities particularly with respect to enforcement.”45

Even those on the inside have serious concerns with the FDA’s ability to achieve the agency’s mission. In two recent surveys, FDA employees expressed alarm with the improper pressure they feel to approve new drugs. In one, released by the Union of Concerned Scientists in the summer of 2006, 60 percent of FDA employees who responded knew of situations “where commercial interests have inappropriately induced or attempted to induce the reversal, withdrawal or modification of FDA determinations or actions.”46 Eighteen percent of the employees agreed that “I have been asked, for non-scientific reasons, to inappropriately exclude or alter technical information or my conclusions in an FDA scientific document.”47 Similarly, in a 2003 survey by FDA’s parent agency, the Department of Health and Human Services, 18 percent of FDA physicians and scientists who responded reported pressure to recommend that drugs be approved, even when they had reservations about safety, effectiveness, or quality, and

66 percent lacked some or any confidence that the agency “adequately monitors the safety of prescription drugs once they are on the market.”48

Rezulin, Lotronex, Celebrex, Vioxx, Zoloft, Prozac, and Accutane. You have no doubt

45Institute of Medicine, “The Future of Drug Safety: Promoting and Protecting the Health of the Public,” at S-4 (Sept. 22, 2006), available at http://newton.nap.edu/execsumm_pdf/11750.

46Union of Concerned Scientists, “Summary of FDA Scientists Survey” (July 2006), available at www.ucsusa.org/scientific_integrity/interference/fda-scientists-survey3 summary.html.

47Id.

48U.S. Department of Health and Human Services, Office of Inspector General, “FDA’s Review Process for New Drug Applications,” at 12, 19 (March 2003), link available at www.ucsusa.org/news/press_release/fda-scientists-issued-early-warnings-on-drug- approvals.html.

Page 18 of 19 The Role of State and Federal Courts in Federal Preemption Cases: A Spirited... v Wolfman v 245 heard these names; they are among the many drugs, in just the past few years, that have required post-approval labeling changes to add or strengthen warnings. (Ultimately, several were removed from the market entirely.) The need for these labeling changes was demonstrated, at least in part, with information and pressure derived from the tort system. As a 2002 medical journal article noted, “[m]any serious ADRs [adverse drug reactions] are discovered only after a drug has been on the market for years. Only half of newly discovered serious adverse drug reactions are detected and documented in the Physicians’ Desk Reference [the doctors’ drug labeling bible] within 7 years after drug approval.”49

With all that said, do we really want to override the tort system? Do we really want a system where an imperfect regulatory system, all too often influenced by the regulated industries, must do the job on its own, while those who are injured have no means of compensation? To ask those questions is to answer them.

49Lasser, et al., “Timing of New Black Box Warnings and Withdrawals for Prescription Medications,” 287 J.A.M.A. 2215, 2218 (May 1, 2002).

Page 19 of 19 246 v Fifth Annual Judicial Symposium v July 2009 The Federal Arbitration Act and Its Impact on State Arbitration Laws

Christopher R. Drahozal

University of Kansas School of Law

1535 W. 15th St. Lawrence, Kansas 66045 (785) 864-9239 [email protected] Christopher R. Drahozal is the John M. Rounds Professor of Law at the Univer- sity of Kansas School of Law. He is an associate reporter for the Restatement (Third) of the U.S. Law on International Commercial Arbitration, and chair of the Consumer Arbitration Task Force of the Searle Civil Justice Institute at Northwestern University School of Law. Professor Drahozal has written extensively on the law and economics of arbitration. He is the author of a casebook on commercial arbitration published by Lexis Publishing (now in its second edition), and is writing a treatise on U.S. arbitration law to be published by Oxford University Press. His articles have appeared in the Journal of Legal Studies, Law and Contemporary Problems, the Vanderbilt Law Review, the Illinois Law Review, the Notre Dame Law Review, and the International Review of Law and Economics, among others. He has made presentations on arbitration law and practice throughout the United States, Canada, and Europe. Before teaching, Professor Drahozal was in private law practice in Washington, D.C., and served as a law clerk for the Iran-U.S. Claims Tribunal, the United States Supreme Court, and the United States Court of Appeals for the Fifth Circuit. The Federal Arbitration Act and Its Impact on State Arbitration Laws

Table of Contents I. Introduction...... 251 II. Framework for Analyzing FAA Preemption...... 251 A. Does the FAA Apply?...... 252 B. Does the Matter Involve Domestic Arbitration or International Arbitration?...... 253 1. Step One: Does the state law apply to contracts generally? If so, the law is not preempted...... 253 2. Step Two: Have the parties expressly contracted for application of the state law? If so, the law is not preempted...... 254 . Step Three: Does the state law invalidate or significantly postpone enforcement of the parties’ arbitration agreement? If so, the law is preempted...... 255 4. Step Four: Analyze the state law under one of the following alternative preemption theories–Keystone Theory; RUAA Theory; Anti-FAA Theory; Pro-Contract Theory; FAA Exclusivity Theory (see Figure 2)...... 255 III. Applications...... 256 A. Enforceability of Arbitration Agreements...... 256 1. Contract formation requirements...... 256 2. Mutual obligations to arbitrate...... 256 . Unconscionability as a general contract defense...... 257 4. Public injunction actions...... 258 B. Procedures in Arbitration...... 258 1. Arbitrator disclosure...... 258 2. Location of arbitration proceedings...... 259 C. Procedures in State Courts...... 259 IV. Other Federal Legislation...... 261 A. Reverse Preemption under the McCarran-Ferguson Act...... 261 B. Federal Statutes Prohibiting or Otherwise Regulating Predispute Arbitration Agreements...... 261 C. Proposed Federal Statutes Prohibiting Predispute Arbitration Agreements...... 262 1. Arbitration Fairness Act...... 262 2. Other pending bills...... 262

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 249

The Federal Arbitration Act and Its Impact on State Arbitration Laws

I. Introduction In Southland Corp. v. Keating, the United States Supreme Court held that the Federal Arbitration Act (“FAA”) applies in state court and preempts conflicting state laws. 465 U.S. 1, 16 (1984). Southland has proven to be a controversial decision, both because of its analysis (or lack thereof) of the legislative history of the FAA and because of its restrictive effect on the power of states to regulate arbitration. E.g., id. at 25-28, 35 (O’Connor, J., dissenting). Nonetheless, the Court has “repeatedly reaffirmed” Southland and has indicated that the preemptive effect of the FAA is “‘now well-established.’” Preston v. Ferrer, 128 S. Ct. 978, 983 (2008) (quoting in part Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 272 (1995)). Justice Thomas, however, continues to dissent from FAA preemption decisions based on his view that the FAA does not apply in state court. See Preston, 128 S. Ct. at 989 (Thomas, J., dissenting). Justice Scalia has stated that while he will not dissent in cases relying on Southland, he “stand[s] ready to join four other Justices in overruling it.” Allied-Bruce, 513 U.S. at 285 (Scalia, J., dissenting). (For a debate on whether the Southland Court’s holding was consistent with congressional intent, see Federal Preemption under the FAA, Disp. Resol. Mag., Spring 2004, at 23; see also Christopher R. Drahozal, In Defense of Southland: Reexamining the Legislative History of the Federal Arbitration Act, 78 Notre Dame L. Rev. 101 (2002); David S. Schwartz, Correcting Federalism Mistakes in Statutory Interpretation: The Supreme Court and the Federal Arbitration Act, 67 Law & Contemp. Probs. 5 (2004).) Although the holding in Southland appears to be settled law, a surprising degree of uncertainty remains as to its application in an array of settings. Courts continue either to ignore or to misapply FAA preemption doctrine, albeit less frequently than in the past. The United States Supreme Court has resolved some uncertainties, but others persist. Moreover, Congress is considering whether to enact legislation (and already has enacted legislation dealing with several types of contracts) that would substantially change the relationship between federal and state arbitration law. The proposed Arbitration Fairness Act of 2009, recently reintroduced in Congress, would make unenforceable predispute arbitration agreements in consumer, employment and franchise contracts, regardless of whether the agreements are enforceable under state law. Part II of this paper sets out a framework for analyzing FAA preemption issues, which both organizes the analysis and identifies unsettled issues. Part III applies the framework to some recurring questions of FAA preemption. Part IV summarizes other federal laws, both enacted and proposed, that alter the preemptive effect of the FAA.

II. Framework for Analyzing FAA Preemption This section sets out a four-step framework for analyzing FAA preemption issues, which is based on Christopher R. Drahozal, Federal Arbitration Act Preemption, 79 Ind. L.J. 393 (2004). The framework is designed to be applied in state courts but also applies to a substantial degree (although with some differences) in federal court. Presumably, an arbitration panel could use the framework in considering the interrelationship between state law and the FAA in an appropriate case. For other views on FAA preemption, see, e.g., 1 Ian R. Macneil et al., Federal Arbitration Law ch. 10 (1999); Stephen J. Ware, Principles of Alternative Dispute Resolution 28-46 (2d ed. 2007); Edward Brunet, The Minimal Role of Federalism and State Law in Arbitration, 8 Nev. L.J. 326 (2007); Steven J. Burton, The New Judi- cial Hostility to Arbitration: Federal Preemption, Contract Unconscionability, and Agreements to Arbitrate, 2006

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 251 J. Disp. Resol. 469; Stephen L. Hayford & Alan R. Palmiter, Arbitration Federalism: A State Role in Commercial Arbitration, 54 Fla. L. Rev. 175 (2002); Stephen L. Hayford, Federal Preemption and Vacatur: The Bookend Issues under the Revised Uniform Arbitration Act, 2001 J. Disp. Resol. 67; Alan Scott Rau, Does State Arbitration Law Matter at All? Part II: A Continuing Role for State Law, ADR Currents, Dec. 1998, at 20; David S. Schwartz, The Federal Arbitration Act and the Power of Congress over State Courts, 83 Or. L. Rev. 541 (2004).

A. Does the FAA Apply? For the framework described below to be relevant, the FAA must apply to the arbitration agreement. By its terms, section 2 of the FAA applies to an arbitration agreement “in any maritime transaction or a contract evidencing a transaction involving commerce.” 9 U.S.C. §2 [emphasis added]. In Allied-Bruce Terminix Cos. v. Dobson, the United States Supreme Court held that the FAA extends to the full extent of Congress’s power to regulate interstate commerce. 513 U.S. 265, 277 (1995). Subsequently, in Citizens Bank v. Alafabco, Inc., the Court summarily reversed a decision of the Alabama Supreme Court, which had held that an arbitration clause in a debt-restructuring agreement was not subject to the FAA, as “adher[ing] to an improperly cramped view of Congress’ Commerce Clause power.” 539 U.S. 52, 57 (2003) (per curiam). After Alafabco, the Alabama Supreme Court stated that “it would be difficult indeed to give an example of an economic or commercial activity that one could, with any confidence, declare beyond the reach of Congress’s power under the Commerce Clause, and, by extension, under the FAA.” Service Corp. Int’l v. Fulmer, 883 So. 2d 621, 629 (Ala. 2003). Nonetheless, a few state courts have continued to hold that arbitration clauses in certain contracts—in particular, nursing home contracts and residential sale and construction contracts— were not subject to the FAA: Nursing Homes: Bruner v. Timberlane Manor L.P., 155 P.3d 16, 30 (Okla. 2006) (“declin[ing] to join Ala- bama, Mississippi and Texas in treating the federal distribution of medicare insurance funds and state distribution of federal-state-matching medicaid funds as indicia of commerce that triggers the FAA”). But see Owens v. Coosa Valley Health Care, Inc., 890 So. 2d 983, 988 (Ala. 2004) (holding that interstate contacts of nursing home “demonstrate that the underlying transaction in this case--Coosa Valley’s providing nursing-home care to Tucker--involves interstate commerce under the FAA”); Miller v. Cotter, 863 N.E.2d 537, 544 (Mass. 2007) (“Congress’s commerce power is interpreted broadly, and ‘may be exercised in individual cases without show- ing any specific effect upon interstate commerce’ if in the aggregate the economic activity in question would represent ‘a general practice … subject to federal control.’ Healthcare is such an activity.”); Vicksburg Partners, L.P. v. Stephens, 911 So. 2d 507, 515 (Miss. 2005) (“Nursing homes through general practice, which includes daily activities like receiving supplies from out-of-state vendors and payments from out-of-state insurance companies or the federal Medicare program, affect interstate commerce.”); In re Nexion Health at Humble, Inc., 173 S.W.3d 67, 69 (Tex. 2005) (“Because ‘commerce’ is broadly construed, the evidence of Medicare payments made to HHC on John’s behalf is sufficient to establish interstate commerce and the FAA’s application in this case.”); Rainbow Health Care Center, Inc. v. Crutcher, 2008 U.S. Dist. Lexis 6705, at *15-*17 (N.D. Okla. Jan. 29, 2008) (rejecting the Bruner court’s Commerce Clause holding, concluding that “this [c]ourt cannot reach a similar conclusion,” but distinguishing Bruner on the ground that in Bruner the parties had contracted for state arbitration law to apply). Residential Construction and Sales: Satomi Owners Ass’n v. Satomi, L.L.C., 159 P.3d 460, 468 (Wash. Ct. App. 2007) (“[T]he condominium owners purchased real property, not building materials, goods, or services. Whatever hold the FAA had or continues to have over the transactions preceding integration of the materials, goods, and services into the real estate does not extend to the sale of the real property itself.”), review granted, 180 P.3d 1292 (Wash. 2008); Baronoff v. Kean Dev. Co., 818 N.Y.S.2d 421 (N.Y. Sup. Ct. 2006) (contracts to reno-

252 v Fifth Annual Judicial Symposium v July 2009 vate home and apartment “cannot be said to ‘affect commerce’” even though the materials came from out-of- state). But see Elizabeth Homes, L.L.C. v. Cato, 968 So. 2d 1, 4 n.1 (Ala. 2007) (“Evidence that a builder obtained materials and components for a house from out-of-state suppliers is sufficient to establish that a transaction for the construction and sale of a house sufficiently involved interstate commerce for purposes of the FAA.”); Shepard v. Edward Mackay Enter., Inc., 56 Cal. Rptr. 3d 326, 332 (Cal. Ct. App. 2007) (home construction contract subject to FAA, even when none of parties were from different states, when construction materials came from out-of-state); In re Diamond Waterproofing Sys., Inc., 826 N.E.2d 802, 805 (N.Y. Ct. App. 2005) (contract to renovate residential building affects interstate commerce because “[n]umerous out-of-state entities were involved in the transaction”); In re Cutler-Galloway Servs., Inc., 2007 Tex. App. Lexis 3928, at *3 (Tex. Ct. App. May 23, 2007) (“[T]he written contracts pertaining to the USAA construction project … evidence a transaction affecting interstate commerce because they involve the transport of stone materials from Arizona to Texas.”). Note that section 1 of the FAA excludes from its scope “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. §1. In Circuit City Stores, Inc. v. Adams, the U.S. Supreme Court held that this exclusion was limited to “transportation workers”-- that is, that it is not a general exclusion of employment contracts from the FAA. 532 U.S. 105, 109 (2001).

B. Does the Matter Involve Domestic Arbitration or International Arbitration? This paper focuses on FAA preemption in cases involving domestic arbitration, which is governed by chapter 1 of the FAA. 9 U.S.C. §§1-16. In the vast majority of cases, international arbitrations are governed instead by chapters 2 or 3 of the FAA. Id. §§201-208, 301-307. Much of the same analysis will apply but with potentially broader displacement of state law. See, e.g., Ledee v. Ceramiche Ragno, 684 F.2d 184, 187 (1st Cir. 1982) (“The parochial interests of the Commonwealth, or of any state, cannot be the measure of how the ‘null and void’ clause [in Article II(3) of the New York Convention] is interpreted … . Rather, the clause must be interpreted to encompass only those situations—such as fraud, mistake, duress, and waiver—that can be applied neutrally on an international scale.”); Certain Underwriters at Lloyd’s London v. Argonaut Ins. Co., 500 F.3d 571, 581-83 (7th Cir. 2007) (holding that, in absence of choice-of-law clause in contract, federal common law governs the interpretation of an arbitration agreement subject to the New York Convention). The framework consists of the following four steps (see Figure 1 at end):

1. Step One : Does the state law apply to contracts generally? If so, the law is not preempted. The Supreme Court has interpreted section 2 of the FAA as permitting states to apply general contract law defenses to invalidate arbitration clauses. As the Court stated in Allied-Bruce Terminix Cos. v. Dobson: States may regulate contracts, including arbitration clauses, under general contract law principles and they may invalidate an arbitration clause “upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. §2 (emphasis added). What States may not do is decide that a contract is fair enough to enforce all its basic terms (price, service, credit), but not fair enough to enforce its arbitration clause. The Act makes any such state policy unlawful … . 513 U.S. at 281. Accordingly, this step of the framework ordinarily saves from preemption general contract law defenses, even if applied to invalidate an agreement to arbitrate. Thus, a party could argue that it did not assent to an arbitration agreement, even if the result is that the court holds the arbitration agreement unenforceable. But the contract defense must be generally applicable.

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 253 Thus, in dicta in Perry v. Thomas, the Supreme Court indicated that a state court may not “rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable, for this would enable the court to effect what we hold today the state legislature cannot.” 482 U.S. 483, 492 n.9 (1987). For further discussion of this distinction, see Part III.A.3. One unsettled issue is whether the FAA preempts state laws that apply to arbitration agreements and some other contract provision, but not to contracts generally. Such a law does not “single out” arbitration agreements, but also is not a general contract law defense. Courts are split on whether such laws are preempted by the FAA. Compare Keystone, Inc. v. Triad Sys. Corp., 971 P.2d 1240, 1244 (Mont. 1998) (holding state law requiring in-state venue not preempted because it applies both to arbitration and court proceedings) with Bradley v. Harris Research, Inc., 275 F.3d 884, 888 (9th Cir. 2001) (holding state law requiring in-state venue preempted even though it applies both to arbitration and court proceedings). By comparison, a state statute that applies to all terms in a particular contract, but only to particular types of contracts, is unlikely to be preempted by the FAA. Mitchell v. American Fair Credit Ass’n, 122 Cal. Rptr. 2d 193, 202-203 (Cal. Ct. App. 2002) (upholding against FAA preemption challenge California statute requiring that modifications of contracts with credit services organizations be signed).

2. Step Two : Have the parties expressly contracted for application of the state law? If so, the law is not preempted. This step derives from the Supreme Court’s holding in Volt Information Sciences, Inc. v. Board of Trust- ees of the Leland Stanford Junior University, 489 U.S. 468 (1989). In Volt, the Supreme Court held that a state law that otherwise might be preempted is not preempted when the parties incorporate it by reference into their arbitration agreement. The California Court of Appeal had construed a general choice-of-law clause in the parties’ contract as incorporating California arbitration law, in particular a provision staying arbitration pending resolution of related court proceedings. The Supreme Court deferred to the California court’s interpretation of the choice-of-law clause, finding that the interpretation was not so unreasonable as to be preempted by the FAA. The Court then concluded that the California law was not preempted, explaining that “[w]here, as here, the parties have agreed to abide by state rules of arbitration, enforcing those rules according to the terms of the agreement is fully consistent with the goals of the FAA, even if the result is that arbitration is stayed where the Act would otherwise permit it to go forward.” 489 U.S. at 479. Thus, if the parties have expressly contracted for application of the state law at issue, the state law is not preempted. The more difficult question is identifying when parties agree to incorporate state arbitration law by reference into their contract. In Mastrobuono v. Shearson Lehman Hutton, Inc., the Court (reviewing a judgment of a federal court rather than a state court) held that a general choice-of-law clause referred only to state substantive law, not state arbitration law. 514 U.S. 52, 59-60 (1995). Subsequently, in Preston v. Ferrer, the Court reiterated that conclusion. 128 S. Ct. 978 (2008). The contract in Preston included both an arbitration clause incorporating the arbitration rules of the American Arbitration Association and a choice-of-law clause speci- fying California law to govern the contract. According to the Court, the “‘best way to harmonize’ the parties’ adoption of the AAA rules and their selection of California law is to read the latter to encompass prescriptions governing the substantive rights and obligations of the parties, but not the State’s ‘special rules limiting the authority of arbitrators.’” Id. at 989 (quoting Mastrobuono, 514 U.S. at 63-64). Thus, the Supreme Court has limited Volt and refused to interpret a general choice-of-law clause as incorporating state arbitration law.

254 v Fifth Annual Judicial Symposium v July 2009 3. Step Three : Does the state law invalidate or significantly postpone enforcement of the parties’ arbitration agreement? If so, the law is preempted. This step reflects the holdings of the Supreme Court’s FAA preemption cases to date. In each of the Court’s cases holding state laws preempted, the state law invalidated (or at least significantly postponed enforcement of) the parties’ contractual obligation to arbitrate so that they ended up going to court or another forum instead of arbitration to resolve their dispute. Thus, in Southland, 465 U.S. at 10, and Perry v. Thomas, 482 U.S. at 486-87, the state laws invalidated the parties’ agreements to arbitrate certain claims, permitting a court instead to adjudicate the claims. In Allied-Bruce, the Alabama law at issue invalidated predispute arbitration clauses altogether. 513 U.S. at 269. In Doctor’s Associates, Inc. v. Casarotto, the Montana law invalidated arbitration agreements that were not conspicuously disclosed in the contract. 517 U.S. 681, 687 (1996). In Mas- trobuono, the Supreme Court stated in dicta that the FAA preempted a New York rule precluding arbitrators from awarding punitive damages. 514 U.S. at 58. More recently, in Buckeye Check Cashing, Inc. v. Cardegna, the Court made clear that FAA preemption extends to the parties’ agreement to allocate decisions on the enforceability of the main contract (that includes an arbitration clause) to the arbitrator. 546 U.S. 440, 447-49 (2006); see also Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452-53 (2003) (plurality opinion) (arbitrator to determine whether ambiguous arbitration clause permits class arbitration). Finally, in Preston v. Ferrer, the Supreme Court held that a state law is preempted if it results in the parties appearing before an administrative agency rather than going to arbitration, and even if the law significantly postpones arbitration rather than precluding it altogether. 128 S. Ct. 978, 985-86 (2008). In this step of the framework, then, a state law is preempted if it prevents or significantly postpones enforcement of an arbitration agreement, in whole or in part, unconditionally or conditionally.

4. Step Four : Analyze the state law under one of the following alternative preemption theories–Keystone Theory; RUAA Theory; Anti-FAA Theory; Pro-Contract Theory; FAA Exclusivity Theory (see Figure 2). The state laws analyzed under this step of the framework are laws that either seek to regulate the arbitration process or set out the procedure governing arbitration agreements and awards in state court, rather than invalidating the parties’ obligation to arbitrate. The United States Supreme Court has not yet addressed how to analyze challenges to such laws. Courts and commentators have suggested a variety of theories. • Keystone Theory: State law is preempted only if it invalidates the parties’ arbitration agreement. See Keystone, Inc. v. Triad Sys. Corp., 971 P.2d 1240, 1244 (Mont. 1998). State laws that regulate the arbitration process or that set out the process to be followed in state courts are not preempted. • RUAA Theory: State law is preempted if it overrides a provision in the parties’ arbitration agreement that is an “essential” characteristic of commercial arbitration. This is the theory followed by the drafters of the Revised Uniform Arbitration Act. See Stephen L. Hayford & Alan R. Palmiter, Arbitration Federalism: A State Role in Commercial Arbitration, 54 Fla. L. Rev. 175, 213-26 (2002); Stephen L. Hayford, Federal Preemption and Vacatur: The Bookend Issues under the Revised Uniform Arbitration Act, 2001 J. Disp. Resol. 67, 75. • Anti-FAA Theory: State law is preempted if it is contrary to a specific FAA provision (at least an “essential” provision) or to general principles of federal arbitration law. See 1 Ian R. Macneil et al., Federal Arbitration Law §10.8.2.4 (1999) (state law is preempted if it is “anti- FAA”).

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 255 • Pro-Contract Theory: State law is preempted if it overrides a provision in the parties’ arbitration agreement. See Stephen J. Ware, ‘Opt-In’ for Judicial Review of Errors of Law under the Revised Uniform Arbitration Act, 8 Am. Rev. Int’l Arb. 263, 269 (1997) (FAA “gives the terms of arbitration agreements the force of federal law”). • FAA Exclusivity Theory: State law is preempted in its entirety when it singles out arbitration agreements for treatment different from that given to other contracts. Under this theory, in other words, the FAA would occupy the field of arbitration law. In Volt, the Supreme Court rejected such a view, stating that the FAA does not “reflect a congressional intent to occupy the entire field of arbitration.” 489 U.S. at 477. This theory is included here for comparison purposes only.

III. Applications This section discusses the current case law dealing with FAA preemption in a variety of areas, dealing with (1) the enforceability of arbitration agreements, (2) the procedures in arbitration, and (3) the procedures in state courts for enforcing arbitration agreements and awards. It does not, however, purport to be a comprehensive treatment of all FAA preemption issues. For a lengthy list of cases holding state statutes or rules preempted by the FAA, see David S. Schwartz, State Judges as Guardians of Federalism: Resisting the Federal Arbitration Act’s Encroachment on State Law, 16 Wash. U. J. L. & Pol’y 129, 154 app. A (2004).

A. Enforceability of Arbitration Agreements As noted above, the U.S. Supreme Court has held that state laws that make arbitration agreements unenforceable are preempted by the FAA. The following cases illustrate some current issues and missteps in the application of this principle.

1. Contract formation requirements Despite the U.S. Supreme Court’s decision in Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 687 (1996), some state courts continue to enforce requirements in state statutes that impose additional prerequi- sites to the enforceability of arbitration agreements. See, e.g., Bennett v. Leas, 2008 Tex. App. Lexis 4817 (Tex. Ct. App. June 26, 2008) (applying Tex. Civ. Prac. & Rem. Code §171.002(c), which requires attorney signature for agreement to arbitrate legal malpractice claims, to refuse enforcement of arbitration agreement in legal malpractice action; no discussion of FAA preemption); Swayne v. Torrance Care Center West, Inc., 68 Cal. Rptr. 3d 588 (Cal. Ct. App.) (refusing to enforce arbitration clause that did not satisfy the requirements of Cal. Health & Safety Code §1599.81, which requires prominent notice that “Residents shall not be required to sign this arbitration agreement as a condition of admission to this facility”; no discussion of FAA preemption), reh’g granted and opinion depublished, 2007 Cal. App. Lexis 2130 (Cal. Ct. App. Dec. 12, 2007). It may be that the parties in these cases failed to argue that the state statute was preempted. If they did, however, and the contract was within the scope of the FAA (which almost certainly was the case), then the statutes plainly are preempted by the FAA.

2. Mutual obligations to arbitrate Arkansas courts require “mutuality within the arbitration agreement itself” for the agreement to be enforceable. See Money Place, LLC v. Barnes, 78 S.W.3d 714, 717 (Ark. 2002); see also Advance Am. Servicing of Ark., Inc. v. McGinnis, 2008 Ark. Lexis 754, at *17 (Ark. Nov. 6, 2008). If the arbitration agreement requires only

256 v Fifth Annual Judicial Symposium v July 2009 one party to arbitrate, it is unenforceable under Arkansas law, even if the arbitration agreement is included in a contract supported by consideration. Federal district courts in Arkansas have correctly held that this special mutuality requirement for arbitration agreements is preempted by the FAA. See Enderlin v. XM Satellite Radio Holdings, Inc., 2008 U.S. Dist. Lexis 27668, at *31 (E.D. Ark. Mar. 25, 2008) (“Arkansas law requiring mutuality within the arbitration paragraph itself is preempted by the FAA because it places the arbitration clause on unequal footing with other contract terms that do not each have to be mutual.”); see also Easter v. Compucredit Corp., 2009 U.S. Dist. Lexis 16354, at *8-*10 (W.D. Ark. Feb. 27, 2009) (following Enderlin). Note that a number of courts reach a result similar to that of the Arkansas Supreme Court by using the doctrine of unconscionability, e.g., Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1280-81 (9th Cir. 2006) (en banc), an approach that is less likely to be held preempted by the FAA, as discussed in the next section.

3. Unconscionability as a general contract defense A difficult and as-yet unsettled issue is when the use of unconscionability doctrine to invalidate arbitration agreements is preempted by the FAA. Plainly, unconscionability is a general contract law defense. How- ever, as noted above, the U.S. Supreme Court has indicated (in dicta) that a state court may not “rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable.” Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987). Accordingly, most courts will not invalidate an arbitration clause as unconscionable on the basis of a characteristic of arbitration itself, such as the lack of a jury trial. But they will use unconscionability to invalidate provisions in arbitration clauses (such as punitive damages waivers or class arbitration waivers), which may have the effect of invalidating the arbitration clause if the invalid provision or provisions cannot be severed from the clause. With only rare exceptions, courts generally have rejected the argument that the FAA preempts such applications of the unconscionability doctrine. Thus, the Ninth Circuit in Ting v. AT&T held that the FAA did not preempt its use of the unconscionability doctrine to invalidate an arbitration clause that included a class arbitration waiver. 319 F.3d 1126, 1150 n.15 (9th Cir. 2003). The court of appeals reasoned that “[b]ecause unconscionability is a generally applicable contract defense, it may be applied to invalidate an arbitration agreement without contravening §2 of the FAA.” Id. By comparison, the Third Circuit in Gay v. CreditInform held that Pennsylvania state court applications of the unconscionability doctrine were preempted by the FAA. 511 F.3d 369, 395 (3d Cir. 2007). According to the Third Circuit: [I]t is perfectly obvious that Gay relies on the uniqueness of the arbitration provision in framing her unconscionability argument … . [S]he contends that the provision is unconscionable because of what it provides, i.e., arbitration of disputes on an individual basis in place of litigation possibly brought on a class action basis. Thus, with all due respect to the Pennsylvania Superior Court, we will not apply state law … and thereby interfere with the appropriate application of the FAA. The Commerce and Supremacy Clauses of the United States Constitution are implicated here. Id. But see Homa v. American Express Co., 558 F.3d 225, 230 (3d Cir. 2009) (distinguishing Gay on ground that New Jersey law precluded enforcement of both class arbitration and class action waivers, and thus was a “general contract defense”). To date, the U.S. Supreme Court has declined to grant review of the issue. See Laster v. T-Mobile USA, Inc., 2007 U.S. App. Lexis 25265 (9th Cir. Oct. 25, 2007), cert. denied, 128 S. Ct. 2500 (2008); see also Gentry v. Superior Court, 165 P.3d 556, 569 (Cal. 2007) (“Nor do we accept Circuit City’s argument that a rule invalidating class arbitration waivers discriminates against arbitration clauses in violation of the Federal Arbitration Act”), cert. denied, 128 S. Ct. 1743 (2008). The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 257 4. Public injunction actions In Broughton v. Cigna Healthplans, the California Supreme Court held that the FAA does not preempt state law making unenforceable agreements to arbitrate claims for injunctive relief brought on behalf of the public. 988 P.2d 67, 78-79 (Cal. 1999); see also Cruz v. PacifiCare Health Sys., Inc., 66 P.3d 1157, 1159 (Cal. 2003). The court reasoned as follows: [The U.S. Supreme Court] has never directly decided whether a legislature may restrict a private arbitration agreement when it inherently conflicts with a public statutory purpose that transcends private interests. In the present case, … we believe there is such an inherent conflict between arbitration and a statutory injunctive relief remedy designed for the protection of the general public. Although both California and federal law recognize the important policy of enforcing arbitration agreements, it would be perverse to extend the policy so far as to preclude states from passing legislation the purposes of which make it incompatible with arbitration, or to compel states to permit the vitiation through arbitration of the substantive rights afforded by such legislation. Broughton, 988 P.2d at 78-79. The court denied that its decision was based on an impermissible “suspicion of arbitration” as a means of dispute resolution; instead, “it is a recognition that arbitration cannot necessarily afford all the advantages of adjudication in the area of private attorney general actions, that in a narrow class of such actions arbitration is inappropriate, and that this inappropriateness does not turn on the happenstance of whether the rights and remedies being adjudicated are of state or federal derivation.” Id. at 79. Several federal district courts in California have rejected the Broughton court’s analysis, holding that the FAA preempts California law precluding enforcement of predispute agreements to arbitrate public injunction claims. See Shroyer v. New Cingular Wireless Servs., Inc., 2006 U.S. Dist. Lexis 97407, at *11 (C.D. Cal. May 26, 2006), reversed on other grounds, 498 F.3d 976 (9th Cir. 2007); Arriaga v. Cross Country Bank, 163 F. Supp. 2d 1189, 1198-99 (S.D. Cal. 2001), overruled on other grounds, Ingle v. Circuit City Stores, Inc., 328 F.3d 1165 (9th Cir. 2003).

B. Procedures in Arbitration The application of FAA preemption principles to state laws that seek to regulate the procedures in arbitration proceedings, rather than the enforceability of arbitration agreements, is much less settled. The outcome in such cases depends on the alternative preemption theories described in Step Four of the framework set out in Part II.

1. Arbitrator disclosure Ethics standards promulgated by the California Judicial Council require neutral arbitrators to make detailed disclosures of possible conflicts of interest. See Judicial Council of California, Ethics Standards for Neu- tral Arbitrators in Contractual Arbitration, available at http://www.courtinfo.ca.gov/rules/documents/pdfFiles/ ethics_standards_neutral_arbitrators.pdf. Under California law, the failure to make the required disclosures is a ground for vacating an arbitration award. Cal. Civ. Proc. Code §1286.2(a)(6)(A). Both the Ninth Circuit and the California Supreme Court have held that the ethics standards as applied to securities arbitration are preempted by the federal securities laws. See Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119, 1121 (9th Cir. 2005); Jevne v. Superior Court, 111 P.3d 954, 958 (Cal. 2005). But whether the FAA preempts the ethics standards, and the associated ground for vacating arbitration awards, is not finally resolved. See Ovitz v. Schulman, 35 Cal. Rptr. 3d 117, 134 (Cal. Ct. App. 2005) (rejecting preemption challenge to vacating award for nondisclosure under California ethics standards; the California law permitting

258 v Fifth Annual Judicial Symposium v July 2009 vacatur “does not undermine the enforceability of arbitration agreements,” “neither limits the rights of con- tracting parties to submit disputes to arbitration, nor discourages persons from using arbitration,” and “does not reflect hostility to arbitration or an attempt to limit the ability to enter arbitration agreements”; rather, the law “seeks to enhance both the appearance and reality of fairness in arbitration proceedings, thereby instilling public confidence”). Under the Keystone Theory, the California ethics standards would not be preempted because they do not invalidate the arbitration agreement. They likely would not be preempted under either the RUAA Theory or the Anti-FAA Theory (except possibly to the extent they result in vacatur of the award; see Part III.C). If the parties agreed on disclosure standards, such as by agreeing to governing arbitration rules, the ethics standards would be preempted under the Pro-Contract Theory. Likewise, the ethics standards would be preempted under the FAA Exclusivity Theory.

2. Location of arbitration proceedings Most courts addressing state statutes that require arbitration to take place in the state have held that such statutes are preempted by the FAA. E.g., Bradley v. Harris Research, Inc., 275 F.3d 884, 890 (9th Cir. 2001); OPE Int’l LP v. Chet Morrison Contractors, Inc., 258 F.3d 443, 447 (5th Cir. 2001); KKW Enters., Inc. v. Gloria Jean’s Gourmet Coffees Franchising Corp., 184 F.3d 42, 50-52 (1st Cir. 1999); Management Recruiters Int’l, Inc. v. Bloor, 129 F.3d 851, 856 (6th Cir. 1997) (dicta). But see Keystone, Inc. v. Triad Sys. Corp., 971 P.2d 1240, 1245-46 (Mont. 1998) (rejecting preemption challenge to statute). (Note that at least some of those statutes would have invalidated the arbitration clause altogether when an out-of-state forum is selected, a much stronger case for FAA preemption.) Under the Keystone Theory, a court would reject the preemption challenge (as the Montana Supreme Court did in Keystone) because the dispute will still be resolved in arbitration. The state statute likely also would not be preempted under either the RUAA Theory (because the location of the hearing is not an essential characteristic of arbitration) or the Anti-FAA Theory (because the FAA does not address the location of the hearing). Under the Pro-Contract Theory, however, the statute would be preempted because the state law seeks to override the parties’ chosen location for the arbitration. Finally, under the FAA Exclusivity Theory, the state statute would be preempted.

C. Procedures in State Courts Virtually every state has enacted a statute setting out the procedures for enforcing arbitration agreements and awards in its courts. See, e.g., Unif. Arb. Act (1955); Rev. Unif. Arb. Act (2000). This section addresses the extent to which the FAA preempts those state procedures. By their terms, the procedural provisions of the FAA (as opposed to the substantive provisions, sec- tions 1 and 2) apply only in federal court. E.g., 9 U.S.C. §4 (petition to compel arbitration brought in “United States district court”); id. §§9-11 (“United States court in and for the district wherein the award was made”). Moreover, the Supreme Court has never held that the procedural provisions apply in state court. See Volt Info. Sciences, Inc. v. Board of Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 477 n.6 (1989) (“While we have held that the FAA’s ‘substantive’ provisions--§§1 and 2--are applicable in state as well as federal court, we have never held that §§3 and 4, which by their terms appear to apply only to proceedings in federal court, are nonetheless applicable in state court.”); Southland Corp. v. Keating, 465 U.S. 1, 15 n.10 (1984) (“[W]e do not hold that §§3 and 4 of the Arbitration Act apply to proceedings in state courts.”). Nonetheless, under some circumstances the substantive provisions of the FAA might preempt state procedures. For example, a state statute providing for de novo review of all arbitration awards presumably The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 259 would be preempted. Similarly, it is likely that a state’s failure to provide any procedures whatsoever for enforcing arbitration agreements or awards would be overridden by the FAA. The more difficult question is when, if ever, are other state procedures likely to be preempted by the FAA. Unlike the statutes discussed in Part III.B, which address the procedures in arbitration, these statutes address the procedures in court, and hence are unlikely to conflict with an essential characteristic of arbitration or with the parties’ arbitration agreement. As a result, the statutes are unlikely, subject to occasional exceptions, to be preempted under two of the alternative preemption theories (the RUAA Theory and the Pro- Contract Theory). Instead, the most likely theory to apply is the Anti-FAA Theory, under which the statutes are preempted only when they are contrary to a specific provision in the FAA—especially when the state statute makes it less likely that an arbitration agreement or award will be enforced than does the FAA (i.e., when the state rule is less favorable to arbitration than the FAA). The cases consistently uphold state procedural rules when they are more favorable to arbitration than the FAA, even when they differ from the FAA rule: • State rule denying immediate appeal from order compelling arbitration. Held not preempted in: Muao v. Grosvenor Props. Ltd., 122 Cal. Rptr. 2d 131 (Cal. Ct. App. 2002); Weston Secs. Corp. v. Aykanian, 703 N.E.2d 1185, 1189 (Mass. App. Ct. 1998); Toler’s Cove Homeowners Ass’n, Inc., v. Tri- dent Constr. Co., 586 S.E.2d 581, 584-85 (S.C. 2003). • State rule requiring personal service (rather than mail service) of petitions to vacate awards. Held not preempted in: Manson v. Dain Bosworth Inc., 623 N.W.2d 610, 615-16 (Minn. Ct. App. 1998). • State rule providing for summary court determination of existence and validity of arbitration agreement rather than jury trial. Held not preempted in: Rosenthal v. Great W. Fin’l Sec. Corp., 926 P.2d 1061, 1069-70 (Cal. 1996); St. Fleur v. WPI Cable Sys./Mutron, 879 N.E.2d 27, 33-34 (Mass. 2008). • State statute providing fewer grounds for vacating awards than provided for under the FAA. Held not preempted in: Siegel v. Prudential Ins. Co., 79 Cal. Rptr. 2d 726, 739-40 (Cal. Ct. App. 1998) (state statute not including federal “manifest disregard of the law” standard); Penn Va. Oil & Gas Corp. v. CNX Gas Co., 2007 U.S. Dist. Lexis 12206, at *20 (W.D. Va. Feb. 22, 2007) (state statute not including federal nonstatutory grounds for vacatur). • State rule setting shorter time limit for bringing action to vacate award than provided for in FAA. Held not preempted in: Ekstrom v. Value Health, Inc., 68 F.3d 1391, 1395-96 (D.C. Cir. 1995); Moscatiello v. Hilliard, 939 A.2d 325, 329 (Pa. 2007). The cases are split on whether state procedural rules that are less favorable to arbitration are preempted by the FAA: • State rule permitting immediate appeal from order compelling arbitration. Held not preempted in: Wells v. Chevy Chase Bank, F.S.B., 768 A.2d 620, 624 (Md. 2001); Jankovsky v. Grana-Morris, 2001 Ohio App. Lexis 3938, at *5-*6 (Ohio Ct. App. Sept. 7, 2001). • State statute providing more grounds for vacating awards provided for in FAA. Held preempted in: M&L Power Servs., Inc. v. American Networks Int’l, 44 F. Supp. 2d 134, 142 (D.R.I. 1999) (refusing to vacate award under state “complete irrationality” standard); Skinner v. Donaldson, Lufkin & Jenrette Secs. Corp., 2003 U.S. Dist. Lexis 24045, at *21-*23 (N.D. Cal. Dec. 29, 2003) (“Any state law that allows for additional grounds for dismissal of an arbitration award would be preempted by the FAA.”) (refusing to vacate award under California statute precluding administration of consumer arbitrations by private arbitration company with conflict of interest). Held not preempted

260 v Fifth Annual Judicial Symposium v July 2009 in: Ovitz v. Schulman, 35 Cal. Rptr. 3d 117, 134 (Cal. Ct. App. 2005) (rejecting FAA preemption challenge to vacatur for failure to disclose); Cable Connection, Inc. v. DIRECTV, Inc., 190 P.3d 586, 597-98 (Cal. 2008) (rejecting FAA preemption challenge to state rule enforcing contract provision that expands the grounds for vacatur). (Both Ovitz and DIRECTV, Inc., unlike the other cases, involve state rules that may either conflict with or support party agreements. As such, they may also be evaluated under the Pro-Contract Theory.)

IV. Other Federal Legislation The FAA is not the only federal statute that affects the ability of states to regulate arbitration. The McCarran-Ferguson Act, which preserves state authority to regulate the business of insurance, has been construed by most courts to permit states to regulate the arbitration of insurance disputes. In addition, several recent federal statutes (and a number of pending bills) make predispute arbitration agreements unenforceable in certain types of contracts. Such statutes preempt state laws that would otherwise enforce predispute arbitration agreements in such contracts.

A. Reverse Preemption under the McCarran-Ferguson Act The McCarran-Ferguson Act preserves state authority to regulate the business of insurance. See 15 U.S.C. §1012(a), (b) (“No Act of Congress shall be construed to invalidate, impair, or supersede any law enacted by any State for the purposes of regulating the business of insurance, … unless such Act specifically relates to the business of insurance.”). Relying on the McCarran-Ferguson Act, almost all courts to have faced the issue have held that state laws that expressly regulate the arbitration of insurance disputes, including laws that make predispute arbitration agreements in insurance contracts unenforceable, are not preempted by the FAA. See Standard Security Life Ins. Co. v. West, 267 F.3d 821, 823-24 (8th Cir. 2001); Mutual Reinsurance Bur. v. Great Plains Mut. Ins. Co., 969 F.2d 931, 934 (10th Cir. 1992); McKnight v. Chicago Title Ins. Co., 358 F.3d 854, 858 (11th Cir. 2004); Allen v. Pacheco, 71 P.3d 375, 384 (Colo. 2003); Love v. Money Tree, Inc., 614 S.E.2d 47, 50 (Ga. 2005); Friday v. Trinity Universal, 939 P.2d 869, 872-73 (Kan. 1997). But see Little v. Allstate Ins. Co., 705 A.2d 538, 540 (Vt. 1997).

B. Federal Statutes Prohibiting or Otherwise Regulating Predispute Arbitration Agreements In recent years, Congress has passed several statutes prohibiting or otherwise regulating the use of predispute arbitration clauses in several specific types of contracts: • Contracts between motor vehicle franchisors and franchisees (e.g., car manufacturers and car dealers)—statute requires written consent to arbitration after a dispute arises, as well as a “written explanation of the factual and legal basis” for any award. 15 U.S.C. §1226(a)(2), (3). • Consumer credit contracts with military personnel--statute makes it unlawful to extend consumer credit to a covered member of the military or dependent when the creditor requires the borrower to agree to arbitration. 10 U.S.C. §987; see also id. §987(f)(4) (“[N]o agreement to arbitrate any dispute involving the extension of consumer credit shall be enforceable against any covered member or dependent of such a member, or any person who was a covered member or dependent of that member when the agreement was made.”). • Contracts between livestock or poultry producers and meat packers or live poultry dealers—statute requires a contract that includes a predispute arbitration clause also to contain a conspicuous

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 261 “provision that allows a producer or grower, prior to entering the contract, to decline to be bound by the provision.” 7 U.S.C. §197c(a), (b).

C. Proposed Federal Statutes Prohibiting Predispute Arbitration Agreements In addition, a number of proposed statutes that would restrict the enforceability of predispute arbitration clauses, most notably the proposed Arbitration Fairness Act of 2009, currently are pending in Congress. Note that the Arbitration Fairness Act (as well as the other bills and enacted statutes that make predispute arbitration agreements unenforceable) reverse the federalism concerns underlying criticisms of Southland and FAA preemption. Under the FAA, predispute arbitration agreements are enforceable, even if state law would make them unenforceable. States retain some authority to regulate predispute arbitration clauses through the use of general contract defenses (although the precise extent of that authority is not clear). Under the Arbitration Fair- ness Act, predispute agreements to arbitrate consumer, employment, and franchise disputes are unenforceable, even if a state wishes to enforce such agreements.

1. Arbitration Fairness Act On April 29, 2009, Senator Feingold reintroduced the Arbitration Fairness Act in the Senate. See Arbi- tration Fairness Act of 2009, S. 931, 111th Cong. (2009). The proposed Act provides that “no predispute arbitration agreement shall be valid or enforceable if it requires arbitration of an employment, consumer, franchise, or civil rights dispute.” Id. §3. The Senate version of the bill differs from the House version in several respects, most notably that it (1) creates a new chapter 4 of the FAA rather than modifying chapter 1; (2) does not apply to international franchise agreements; and (3) modifies language in the House version that appeared to abolish the separability doctrine for all arbitration agreements. Compare Arbitration Fairness Act of 2009, H.R. 1020, 111th Cong. (2009). An alternative approach is reflected in the Fair Arbitration Act, introduced by Senator Sessions in the 110th Congress but not yet reintroduced in the current Congress. Fair Arbitration Act, S. 1135, 110th Cong. (2007). That proposed Act would not outlaw predispute arbitration agreements altogether, but rather would impose various disclosure and procedural requirements on arbitration proceedings. Id. §2.

2. Other pending bills Although most attention has been focused on the Arbitration Fairness Act, a number of other bills that would restrict predispute arbitration agreements are pending as well. Of those bills, the Fairness in Nurs- ing Home Arbitration Act progressed the furthest during the last Congress, having been approved by the House and Senate Judiciary Committees. • Fairness in Nursing Home Arbitration Act of 2009, H.R. 1237, 111th Cong., §2(a) (2009) (adding §17 to the Federal Arbitration Act): “A pre-dispute arbitration agreement between a long-term care facility and a resident of such facility (or person acting on behalf of such resident, including a person with financial responsibility for such resident) shall not be valid or specifically enforceable.” See also Fairness in Nursing Home Arbitration Act of 2009, S. 512, 111th Cong., §3 (2009) (adding §2(b) to the Federal Arbitration Act) (same). • Consumer Fairness Act of 2009, H.R. 991, 111th Cong., §2(a) (2009) (adding §1003 to Consumer Credit Protection Act): “A written provision in any consumer transaction or consumer contract which requires binding arbitration (whether by the terms of such transaction or contract directly or at the request of any party to the transaction or contract) to resolve any controversy arising out of or related to the transaction or contract, or the failure 262 v Fifth Annual Judicial Symposium v July 2009 to perform the whole or any part of the transaction or contract shall constitute a violation of this title, shall not be enforceable, and shall be treated as an unfair and deceptive trade act or practice under Federal or State law.” See also Predatory Mortgage Lending Practices Reduc- tion Act, H.R. 2108, 111th Cong., §5 (2009) (same in large part). • Mortgage Reform and Anti-Predatory Lending Act, H.R. 1728, 111th Cong., §206(a) (2009) (adding §129C(j)(1) to the Truth in Lending Act): “No residential mortgage loan and no extension of credit under an open end consumer credit plan secured by the principal dwell- ing of the consumer, other than a reverse mortgage, may include terms which require arbitration or any other nonjudicial procedure as the method for resolving any controversy or settling any claims arising out of the transaction.” • Servicemembers Access to Justice Act, S. 263, 111th Cong., §3 (2009) (amending Uniformed Services Employment and Reemployment Rights Act of 1994): “Notwithstanding any other provision of law, any clause of any agreement between an employer and an employee that requires arbitration of a dispute arising under this chapter shall not be enforceable.” See also Servicemembers Access to Justice Act, H.R. 1474, 111th Cong., §3 (2009) (same). • Taxpayer Abuse Prevention Act, S. 585, 111th Cong., §4(a) (2009): “Any person that provides a loan to a taxpayer that is linked to or in anticipation of a Federal tax refund for the taxpayer may not include mandatory arbitration of disputes as a condition for providing such a loan.” • Whistleblower Protection Enhancement Act of 2009, H.R. 1507, 111th Cong., §11(d) (2009) (adding subsection (e) to Section 315 of the Federal Property and Administrative Serv- ices Act of 1949): “[N]o predispute arbitration agreement shall be valid or enforceable if it requires arbitration of a dispute arising under this section.” • Payday Loan Reform Act of 2009, H.R. 1214, 111th Cong., §2 (2009) (adding new §129B to the Truth in Lending Act): “It shall be unlawful for a payday lender to … include in the loan documents … a mandatory arbitration clause that is oppressive, unfair, unconscionable, or substantially in derogation of the rights of consumers.”

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 263 Figure 1. Preemption Analysis Under the Figure 2. Alternative Theories of FAA Preemption Federal Arbitration Act

Does the state law State law is NOT apply to contracts Yes PREEMPTED generally? State law is preempted only if it invalidates the parties’ arbitration agreement Keystone Theory

State law is preempted if it overrides a provision in the parties’ arbitration agreement No RUAA that is an essential characteristic of commercial arbitration Theory

State law is preempted if it is contrary to a specific FAA provision (at least an Anti-FAA “essential” provision) or with general principles of federal arbitration law Have the parties Theory expressly contracted Yes State law is NOT for application of the PREEMPTED state law? Pro-Contract State law is preempted if it overrides a provision in the parties’ arbitration agreement Theory

FAA Exclusivity State law is preempted in its entirety when it singles out arbitration agreements for No Theory different treatment from other contracts

Does the state law invalidate or postpone Yes State law is enforcement of the PREEMPTED arbitration agreement? 21

Continue with ALTERNATIVE PREEMPTION THEORIES (see Figure 2)

20 264 v Fifth Annual Judicial Symposium v July 2009 Figure 2. Alternative Theories of FAA Preemption Figure 2. Alternative Theories of FAA Preemption

State law is preempted only if it invalidates the parties’ arbitration agreement Keystone State law is preempted only if it invalidates the parties’ arbitration agreement Keystone Theory Theory State law is preempted if it overrides a provision in the parties’ arbitration agreement RUAA that is an essential characteristic of commercial arbitration Theory State law is preempted if it overrides a provision in the parties’ arbitration agreement RUAA that is an essential characteristic of commercial arbitration Theory State law is preempted if it is contrary to a specific FAA provision (at least an Anti-FAA “essential” provision) or with general principles of federal arbitration law Theory State law is preempted if it is contrary to a specific FAA provision (at least an Anti-FAA Pro-Contract “essential” State law provision) is preempted or ifwith it overrides general a provision principles in the of parties’ federal arbitration arbitration agreement law Theory Theory

FAA Exclusivity State State law law is preemptedis preempted inif itsit entiretyoverrides when a itprovision singles out inarbitration the parties’ agreements arbitration for agreement Pro-Contract Theory different treatment from other contracts Theory

FAA Exclusivity State law is preempted in its entirety when it singles out arbitration agreements for Theory different treatment from other contracts

The Federal Arbitration Act and Its Impact on State Arbitration Laws v Drahozal v 265

The Historical Rationale for Punitive Damages, Its Evolution, and Current Application

Christy D. Jones

Butler, Snow, O’Mara, Stevens & Cannada, PLLC

17th Floor, Regions Plaza 210 East Capitol Street (39201) P.O. Box 22567 Jackson, Mississippi 39225 (601) 948-5711 (601) 985-4500 [fax] [email protected] Christy D. Jones is chair of the Healthcare Industry Department at Butler Snow. She has tried numerous product liability cases, including pharmaceutical and medical device cases, across the United States. Christy has extensive experience in litigation involving prescription and over-the-counter medications, medical devices, vaccines and other biological products, contraceptives, herbicides, pesticides, asbes- tos, and plastics. Christy served on the National Trial Team in the Silicone Breast Implant litigation for Baxter Healthcare Corporation, as nationwide coordinator of certain litigation for Champion International, Inc., before its acquisition by Interna- tional Paper, as regional counsel in DTP vaccine litigation for American Cyanamid Co. (now Wyeth), and as products liability counsel for Edwards Lifesciences, John- son & Johnson and its various entities, Merck & Co., Inc., GlaxoSmithKline, and other pharmaceutical companies. Most recently, she has served as lead counsel in the first two products liability cases tried against Johnson & Johnson and McNeil Consumer Healthcare for Children’s Motrin and Stevens-Johnson Syndrome (Sabrina Brierton Johnson v. Johnson & Johnson, TC018540, California Superior Court, County of Los Angeles, West District, and Kimberly Zundel v. Johnson & Johnson, L-6854-05, Superior Court of New Jersey, Law Division, Middlesex County). Both trials resulted in verdicts for the defense. The Historical Rationale for Punitive Damages, Its Evolution, and Current Application

Table of Contents I. Introduction—Don’t Let the Bedbugs Bite...... 271 II. Punitive Damages in Historical Perspective...... 271 III. An Evolving Analytical Framework...... 273 A. BMW of North America, Inc. v. Gore...... 273 B. Cooper Industries, Inc. v. Leatherman Tool Group, Inc...... 274 C. State Farm Mutual Automobile Insurance Co. v. Campbell...... 275 D. Philip Morris USA v. Williams...... 276 E. Exxon Shipping Co. v. Baker...... 277 IV. Current Applications...... 278 A. What Behaviors Are We Trying to Punish?...... 278 B. Who Are We Trying to Punish?...... 278 C. Change We Can Believe In?...... 279 D. Additional Considerations...... 281 V. Conclusion...... 281

The Historical Rationale for Punitive Damages, Its Evolution, and Current... v Jones v 269

The Historical Rationale for Punitive Damages, Its Evolution, and Current Application

I. Introduction—Don’t Let the Bedbugs Bite In 2003, Circuit Judge Richard Posner addressed the appeal of defendant hotel owner-operators in Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672 (7th Cir. 2003). The plaintiffs, a brother and sister, were attacked by bedbugs during their November 2000 stay in a downtown Chicago motel. Evidence at trial showed that as early as 1998, the motel’s exterminating company had discovered the pests. The motel refused to act. By the spring of 2000, desk clerks were giving refunds to the guests based on reports of bugs in the rooms. By July, management had acknowledged a “major problem” with bedbugs in rooms throughout the motel, placing them on a “do not rent, bugs in room” status. Of the motel’s 191 rooms, 190—including the one rented by plaintiffs— were occupied on the night in question. The plaintiffs’ room was among those classified by the motel as “Do Not Rent Until Treated.” A jury awarded each plaintiff $5000 in compensatory damages and $186,000 in punitive damages, roughly a 37:1 ratio. Judge Posner noted that “[t]here was, in short, sufficient evidence of ‘willful and wanton conduct’ within the meaning that the Illinois courts assign to the term to permit an award of punitive damages,” before raising the key question: “But in what amount?” Mathias, 347 F.3d at 675 [emphasis added]. While the damages assessed against the motel owners pale in comparison to the multimillion, even multibillion dollar awards gar- nering headlines and drawing the attention of the United States Supreme Court, Judge Posner’s question illustrates the ongoing tension between judicial deference and fixed guidelines for punitive damages awards. This paper examines the historical context for, and the recent constitutional jurisprudence of, punitive damages and attempts to place the material in context for current application.

II. Punitive Damages in Historical Perspective To begin, let’s return to Mathias. In reviewing the “bedbug award,” Judge Posner identified two policy issues underpinning the broader question of what constitutes the proper amount of a punitive award. “We must consider why punitive damages are awarded and why the [Supreme] Court has decided that due process requires that such awards be limited.” Mathias, 347 F.3d at 676. For the first question, Judge Posner sought to place punitive damages in historical perspective: “Eng- land’s common law courts first confirmed their authority to award punitive damages in the eighteenth century, at a time when the institutional structure of criminal law enforcement was primitive and it made sense to leave certain minor crimes to be dealt with by the civil law.” Mathias, 347 F.3d at 676 (citing Dorsey D. Ellis, Jr., Fair- ness and Efficiency in the Law of Punitive Damages, 56 S. Cal. L. Rev. 1, 12-20 (1982)). Yet the historical perspective is not so easily captured. Before Mathias, in Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001), the Supreme Court had noted a different and evolving function of punitive damages: Until well into the 19th century, punitive damages frequently operated to compensate for intangible injuries, compensation which was not otherwise available under the narrow conception of compensatory damages prevalent at the time. See Haslip, 499 U.S. at 61, 111 S. Ct. 1032 (O’CONNOR, J., dissenting); see also Note, Exemplary Damages in the Law of Torts, 70 Harv. L. Rev. 517, 520 (1957) (observing a “vacillation” in the 19th-century cases between “compensatory”

The Historical Rationale for Punitive Damages, Its Evolution, and Current... v Jones v 271 and “punitive” theories of “exemplary damages”). As the types of compensatory damages available to plaintiffs have broadened, see, e.g., 1 J. Nates, C. Kimball, D. Axelrod, & R. Goldstein, Dam- ages in Tort Actions §3.01[3][a] (2000) (pain and suffering are generally available as species of compensatory damages), the theory behind punitive damages has shifted toward a more purely punitive (and therefore less factual) understanding. Cf. Note, 70 Harv. L. Rev., at 520 (noting a historical shift away from a compensatory--and towards a more purely punitive--conception of punitive damages). Cooper Industries, 532 U.S. at 437 & n.11, 121 S. Ct. at 1686 & n.11. Yet even this explanation suffered scholarly criticism. See, e.g., Anthony J. Sebok, What Did Punitive Damages Do? Why Misunderstanding the History of Punitive Damages Matters Today, 78 Chi.-Kent L. Rev. 163, 180 (2003) (“The only problem with footnote eleven is that it is wrong”). According to Professor Sebok, the varying rationale for punitive damages awards in the 19th century fell into one of six categories: “(1) compensation for emotional suffering; (2) compensation for insult; (3) personal vindication; (4) vindication of the state; (5) punishment to set an example; and (6) punishment to deter.” Id. at 197. In 1996, policy analyst Alexander Volokh explained the historical context for punitive damages this way: The notion that total damages can exceed mere compensatory damages has a long history. The Babylonian Hammurabi Code, the Hindu Code of Manu, and the Bible all contain references to the doctrine of multiple damages. The Romans assessed multiple damages for certain offenses, and justified them by invoking the need to constrain wealthy elites. In ancient Rome, quadruple damages were a creditor’s remedy against debtors who didn’t pay their debts for a year; while part of the multiple damages may have been some substitute for interest, a 300 percent interest rate is a bit high, and so we must conclude that the primary purpose of this fine was punitive. Closer to home, in the 18th century, courts assessed “exemplary damages” against the government for its oppressive treatment of a dissenting newspaper in the companion cases of Wilkes v. Wood and Huckle v. Money. From then on, English courts used exemplary damages to punish and deter the misuse of wealth and power. In America, punitive damages were first used in the 1780s and 1790s. The first such award was in Genay v. Norris, a malicious poisoning case. Punitive damages were later awarded in cases such as Coryell v. Colbaugh, a suit over breach of promise of marriage, and Boston Manufacturing Co. v. Fiske, a suit over patent infringement. Punitive damages were generally used against bullies who oppressed the weak and powerless, in cases of assault and battery, rape, and (what would now be called) sexual harassment. By the end of the 19th century, the application of the doctrine shifted from powerful individuals to large corporations. Railroads often had to pay punitive damages to women, invalids, and children who were badly treated by conductors, porters, and other railway employees. Judges and juries awarded punitive damages in cases where the defendant exhibited willful and gross (but not criminal) disregard of a plaintiff’s rights. Alexander Volokh, Punitive Damages and Environmental Law: Rethinking the Issues, Reason Public Policy Insti- tute, Policy Study No. 213 (Sept. 1996). In Exxon Shipping Co. v. Baker, 554 U.S. ____, 128 S. Ct. 2605 (2008), the Court revisited the historical context. “[L]egal codes from ancient times through the Middle Ages … called for multiple damages for especially harmful acts. But punitive damages were a common law innovation untethered to strict numerical multipliers, and the doctrine promptly crossed the Atlantic to become widely accepted in American courts by the

272 v Fifth Annual Judicial Symposium v July 2009 middle of the 19th century.” 128 S. Ct. at 2620 [citations omitted]. The Court then recognized three historical justifications for punitive damages: 1) as punishment for extraordinary wrongdoing (the Court cited the case of Wilkes v. Wood, Lofft 1, 18, 98 Eng. Rep. 489 (1763)--one of the foundations for the Fourth Amendment--as an example); 2) as an exemplary deterrent, “for example’s sake to deter from any such proceeding for the future”; and ) as compensation for intangible injuries, “compensation which was not otherwise available under the narrow conception of compensatory damages prevalent at the time” previously described in Cooper Industries. 128 S. Ct. at 2620 [citations omitted]. However, the Court noted: “Regardless of the alternative rationales over the years, the consensus today is that punitives are aimed not at compensation but principally at retribution and deterring harmful conduct.” 128 S. Ct. at 2621.

III. An Evolving Analytical Framework This brings us to the second issue raised in Mathias. The defendant hotel invoked United States Supreme Court decisions for the proposition that, as to punitive damages, only single digit multipliers of compensatory damages could pass due process muster. Indeed, in State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 425 (2003), the Supreme Court noted that “four times the amount of compensatory damages might be close to the line of constitutional impropriety.” Thus, defendant argued, a $20,000 ceiling (i.e., a 4:1 ratio) was the uncrossable line into “constitutional impropriety.” Mathias, 347 F.3d at 675-76. In rejecting this argument, the court relied, in part, on the same decisions and upheld an award nearly ten times greater. The disparity between these two viewpoints highlights the second analytical question raised by Judge Posner—“easier to answer than the first”—as to the justification for due process controls over punitive damages. Id. at 676. In this context, Judge Posner identified three precepts regulating damages designed to punish. The first, and most instinctive, precept is that the punishment should fit the crime “in the sense of being propor- tional to the wrongfulness of the defendant’s action … .” 347 F.3d at 676. The second precept is that a defendant should be afforded reasonable notice of the sanction for unlawful acts “so that he can make a rational determination of how to act,” thus the need for “reasonably clear standards for determining the amount of punitive damages for particular wrongs.” Id. The third precept, “the core of the Aristotelian notion of corrective justice, and more broadly of the rule of law, is that sanctions should be based on the wrong done rather than on the status of the defendant; a person is punished for what he does, not for who he is, even if the who is a huge corporation.” Id. Mathias therefore illustrates and explains why the Supreme Court has entered this arena to set and enforce the constitutional limits of these awards. The following opinions establish what those limits are.

A. BMW of North America, Inc. v. Gore BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), arose when a purchaser discovered that his presumably brand-new luxury automobile had been repainted before his purchase. The driver maintained that this suppression of a “material fact” constituted fraud and that his restored automobile was worth less than a car that had not been refinished. An Alabama jury agreed and returned a verdict awarding $4000 in compensatory damages and $4 million in punitive damages. BMW argued that its policy of selling certain repaired cars The Historical Rationale for Punitive Damages, Its Evolution, and Current... v Jones v 273 as new comported with the laws of as many as 25 states. As such, the manufacturer denied wrongdoing. The Alabama Supreme Court remitted the punitive damages award to $2 million. On review, the United States Supreme Court referred generally to the “considerable flexibility” States have in determining the level of punitive damages to be awarded in different classes of cases and in any particular case. 116 S. Ct. at 1595. “Only when an award can fairly be categorized as ‘grossly excessive’ in relation to these interests does it enter the zone of arbitrariness that violates the Due Process Clause of the Fourteenth Amendment.” Id. In addition, the power of states to impose burdens on the interstate market for automobiles is subordinate to both the federal power over interstate commerce and the need to respect the interests of other states. Id. at 1597. Consequently, the Court established three guideposts necessary to ensure that defendants receive adequate notice of the magnitude of punitive sanctions, and to protect them from “grossly excessive” awards. • Degree of reprehensibility—The Court held that the enormity or severity of the offense was perhaps “the most important indicium of the reasonableness of a punitive damages award.” Id. at 1599. Because some wrongs are more blameworthy than others, the Court reasoned, the degree of the offense should be considered. In this case, BMW’s attempt to craft a disclosure policy in compliance with the “strictest extant state statute was [not] sufficiently reprehensible to justify a $2 million award of punitive damages.” Id. at 1600. • Ratio—Comparing the amount of the punitive damages award to the actual harm inflicted on the plaintiff is perhaps the most commonly cited indicator, with a pedigree dating to 13th century English statutes that provided for double, treble, or quadruple damages. Id. at 1601. However, the Court rejected a categorical approach to constitutional lines marked by simple mathemati- cal formulas. “Indeed, low awards of compensatory damages may properly support a higher ratio than high compensatory awards, if, for example, a particularly egregious act has resulted in only a small amount of economic damages. A higher ratio may also be justified in cases in which the injury is hard to detect or the monetary value of noneconomic harm might have been difficult to determine.” Id. at 1602. “When the ratio is a breathtaking 500 to 1, however, the award must surely ‘raise a suspicious judicial eyebrow.’” Id. at 1603 [citation omitted]. • Sanctions for Comparable Misconduct—Here, the Court recognized substantial deference to the legislative judgments concerning appropriate sanctions for the conduct at issue. Id. at 1603. Civil and criminal penalties for statutory and regulatory violations provide notice to a defendant of the consequences of its malfeasance. Although exemplary damages may outpace, for example, civil fines, a disproportional ratio between the two may indicate improper excess. Id. & n.38. In one additional note of interest, the breadth of BMW’s interstate activities was a relevant—not aggravating—factor in the federal oversight of punitive damages. “The fact that BMW is a large corporation rather than an impecunious individual does not diminish its entitlement to fair notice of the demands that the several States impose on the conduct of its business. Indeed, its status as an active participant in the national economy implicates the federal interest in preventing individual States from imposing undue burdens on interstate commerce.” Id. at 1604.

B. Cooper Industries, Inc. v. Leatherman Tool Group, Inc. Five years later, the Court issued Cooper Industries, Inc. v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001). There, rival tool manufacturers were litigating over certain advertising by one manufacturer that, although purporting to represent the other toolmaker’s new-to-market product, actually depicted a modified

274 v Fifth Annual Judicial Symposium v July 2009 version of the original tool. An Oregon federal jury awarded $50,000 in damages and $4.5 million in punitive damages to the innovator. The district court refused to set aside the award under Gore, and the Ninth Circuit affirmed. On review, the United States Supreme Court again noted that states enjoy broad discretion in both defining and prescribing punishment for criminal acts and in authorizing and limiting punitive damages awards. 121 S. Ct. at 1683. Still, “the Due Process Clause of the Fourteenth Amendment … imposes substantive limits on that discretion.” Id. at 1684. In surveying its prior decisions, the Court reflected that “the constitutional violations were predicated on judicial determinations that the punishments were ‘grossly disproportional to the gravity of … defendant[s’] offense[s].’” Id. [citations omitted]. Consistent with Gore, the Court noted that “in deciding whether that line has been crossed, we have focused on the same general criteria: the degree of the defendant’s reprehensibility or culpability; the relationship between the penalty and the harm to the victim caused by the defendant’s actions; and the sanctions imposed in other cases for comparable misconduct.” Id. at 1684-85. It is important to note, however, that “of greatest relevance for the issue we address today, in each of these cases we have engaged in an independent examination of the relevant criteria.” Id. at 1685. That is, the Court held, “courts of appeal should apply a de novo standard of review when passing on district courts’ determinations of the constitutionality of punitive damages awards.” Id. at 1685-86. Because the level of punitive damages was not a true finding of fact, de novo review does not offend the Seventh Amendment. Id. at 1686. The evolution of compensatory damage concepts, including, for example, “pain and suffering,” led to a corresponding refinement and narrowing of the justification for punitive damages toward recognizing a more purely punitive-concept for such awards. Id.& n.11 [citations omitted]. Further, a comparison of the institutional competence of trial courts and appellate courts “fail[s] to tip the balance in favor of deferential appellate review.” Id. at 1688. The Court then applied Gore in light of its newly minted standard of de novo review. The Court noted that certain acts of the defendant were properly found by the court of appeals to be lawful, potentially affecting the degree of reprehensibility. The Court next examined potential flaws in the degree of harm as influenced not by actual damages but by “potential harm” caused by the defendant. For the “comparable sanctions” factor, the Court noted the factual distinction between those fines based on a single violation of state law as opposed to multiple violations. The Court disclaimed ruling based on Gore: “We have made these comments on issues raised by application of the three Gore guidelines to the facts of this case, not to prejudge the answer to the constitutional question, but rather to illustrate why we are persuaded that the Court of Appeals’ answer to that question may depend on the standard of review.” Id. at 1689. Armed with this new de novo standard of review, the Ninth Circuit thereafter reexamined the $4.5 million dollar punitive damages award under the Gore guideposts and reduced the award to $500,000. See Leather- man Tool Group, Inc. v. Cooper Industries, Inc., 285 F.3d 1146 (9th Cir. 2002).

C. State Farm Mutual Automobile Insurance Co. v. Campbell In State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513 (2003), the relevant facts arose from an insurer’s dual decisions to reject a policy limits settlement offer and to try an automobile accident case on behalf of its insured following a crash that resulted in death and permanent disability for the other drivers. The jury found that the insured was 100 percent at fault. In the subsequent multiphase bad faith action, the plaintiff-insured was awarded $2.6 million compensatory and $145 million in punitive damages. The trial court reduced those amounts to $1 million and $25 million, respectively. The Utah Supreme Court, applying Gore, reversed and reinstated the $145 million punitive damages award. The Historical Rationale for Punitive Damages, Its Evolution, and Current... v Jones v 275 On review the United States Supreme Court initially noted the distinction between compensatory damages, designed to redress determinable losses, and punitive damages, aimed at deterrence and retribution. 123 S. Ct. at 1519. “Although these [punitive damages] awards serve the same purposes as criminal penalties, defendants subjected to punitive damages in civil cases have not been accorded the protections applicable in a criminal proceeding. This increases our concerns over the imprecise manner in which punitive damages systems are administered.” Id. at 1520. Because “[e]xacting appellate review ensures that an award of punitive damages is based upon an ‘application of law, rather than a decisionmaker’s caprice,’” the Court found that “this case is neither close nor difficult.” Id. at 1520-21 [citation omitted]. Reversing the Utah Supreme Court’s rein- statement of the $145 million award, the Court closely examined the facts within the Gore framework. As to the reprehensibility of the insurer’s conduct, the Court emphasized that the case “was used as a platform to expose, and punish, the perceived deficiencies of State Farm’s operations throughout the country” and that the Utah Supreme Court had condemned State Farm “for its nationwide policies rather than for the conduct directed toward the Campbells.” Id. at 1521. “A State cannot punish a defendant for conduct that may have been lawful where it occurred.” Id. at 1522. “Nor, as a general rule, does a State have a legitimate concern in imposing punitive damages to punish a defendant for unlawful acts committed outside of the State’s jurisdiction.” Id. Consequently, “[d]ue process does not permit courts, in the calculation of punitive damages, to adjudicate the merits of other parties’ hypothetical claims against a defendant under the guise of the reprehensibility analysis … .” Id. at 1523. With regard to the ratio between punitive and compensatory damages, the Court recited an extensive judicial and legislative history “dating back over 700 years and going forward to today, providing for sanctions of double, treble, or quadruple damages to deter and punish. While these ratios are not binding, they are instructive. They demonstrate what should be obvious: Single-digit multipliers are more likely to comport with due process, while still achieving the State’s goals of deterrence and retribution, than awards with ratios in range of 500 to 1 or, in this case, of 145 to 1.” Id. at 1524 [citations omitted]. Notably, “[w]hen compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of the due process guarantee.” Id. The Court found that the civil and criminal penalties available were dwarfed by the $145 million punitive damages award. The Court explained its concern about attempts to substitute punitive damages for criminal penalties. “Great care must be taken to avoid use of the civil process to assess criminal penalties that can be imposed only after the heightened protections of a criminal trial have been observed, including, of course, its higher standards of proof. Punitive damages are not a substitute for the criminal process, and the remote possibility of a criminal sanction does not automatically sustain a punitive damages award.” Id. at 1526.

D. Philip Morris USA v. Williams The Supreme Court expanded themes that it first announced in Campbell in Philip Morris USA v. Wil- liams, 549 U.S. 346, 127 S. Ct. 1057 (2007). There, the widow of a deceased smoker obtained a judgment of $821,000 in compensatory and $79.5 million in punitive damages. The Court granted review to address whether states are empowered to uphold punitive damages awards based on harm by the defendant to nonparties. The Court answered the question in the negative based upon three primary considerations. First, “the Due Process Clause prohibits a State from punishing an individual without first providing that individual with ‘an opportunity to present every available defense.’” Id. at 1063 [citation omitted]. Second, “to permit punishment for injuring a nonparty victim would add a near standardless dimension to the punitive damages equation.” Id. Third, “we can find no authority supporting the use of punitive damages awards for the purpose of punishing a defendant for harming others.” Id.

276 v Fifth Annual Judicial Symposium v July 2009 Yet the Court’s analysis did not end there. The Court explained that the Gore factor of reprehensibility prevents the absolute preclusion of proof of harm to nonparties. “Evidence of actual harm to nonparties can help to show that the conduct that harmed the plaintiff also posed a substantial risk of harm to the general public, and so was particularly reprehensible … .” Id. at 1064. “Yet for the reasons given above, a jury may not go further than this and use a punitive damages verdict to punish a defendant directly on account of harms it is alleged to have visited on nonparties.” Id. Despite the Court’s mandate that “the Due Process Clause requires States to provide assurance that juries are not asking the wrong question, i.e., seeking, not simply to determine reprehensibility, but also to punish for harm caused strangers,” the Court gave little guidance for how trial courts might address the distinction. Id. at 1064. Instead, “[a]lthough the States have some flexibility to determine what kind of procedures they will implement, federal constitutional law obligates them to provide some form of protection in appropriate cases.” Id. at 1065. Following remand, the Oregon Supreme Court reaffirmed its earlier conclusion—which had been vacated—citing different bases for its holdings. Williams v. Philip Morris Inc., 344 Or. 45, 176 P.3d 1255 (2008). The United States Supreme Court granted certiorari, and oral argument was heard on December 3, 2008. The Court later dismissed its writ as having been “improvidently granted.” See Philip Morris USA, Inc. v. Williams, 129 S. Ct. 1436 (2009).

E. Exxon Shipping Co. v. Baker Exxon Shipping Co. v. Baker, 554 U.S. ____, 128 S. Ct. 2605 (2008), arose from the grounding of the supertanker Exxon Valdez off the Alaskan coast, spilling millions of barrels of oil into Prince William Sound, which resulted in an award of $287 million in compensatory damages and $5 billion in punitive damages. On appeal the Ninth Circuit remitted punitive damages to $2.5 billion. The issues before the Supreme Court involved the relation between federal maritime law and the federal constitutional constraints on punitive damages. After reviewing the historical rationale for (and the uniquely American problems surrounding) punitive damages awards, the Court noted its departure from its prior due process review in the context of maritime law. “Our review of punitive damages today, then, considers not their intersection with the Constitution, but the desirability of regulating them as a common law remedy for which responsibility lies with this Court as a source of judge-made law in the absence of statute.” Id. at 2626-27. It was notable that the Court rejected “general criteria” approaches as adopted in some states (e.g., Ala- bama and Maryland), stating that “our experience with attempts to produce consistency in the analogous business of criminal sentencing leaves us doubtful that anything but a quantified approach will work.” Id. at 2628. However, “[a]lthough the legal landscape is well populated with examples of ratios and multipliers expressing policies of retribution and deterrence, most of them suffer from features that stand in the way of borrowing them as paradigms of reasonable limitations suited for application to this case.” Id. at 2631. After first rejecting the use of treble damages as a multiplier, the Court reviewed a number of studies that “cover cases of the most as well as the least blameworthy conduct triggering punitive liability, from malice and avarice, down to recklessness, and even gross negligence in some jurisdictions. The data put the median ratio for the entire gamut of circumstances at less than 1:1, meaning that the compensatory award exceeds the punitive award in most cases.” Id. at 2633. “Accordingly, given the need to protect against the possibility (and the disruptive cost to the legal system) of awards that are unpredictable and unnecessary, either for deterrence or for measured retribution, we consider that a 1:1 ratio, which is above the median award, is a fair upper limit in maritime cases.” Id. The Historical Rationale for Punitive Damages, Its Evolution, and Current... v Jones v 277 IV. Current Applications The unmistakable trend exhibited by these decisions—with the notable exception of the dismissal of the writ of certiorari in Williams in March 2009—is a shift away from the judicial deference in favor of the states’ “considerable flexibility” (as announced in Gore) and toward an increasingly fixed set of judicial controls. Nonetheless, even in the wake of these cases, the punitive damages calculus remains troublesome.

A. What Behaviors Are We Trying to Punish? Although the literature reflects that judicial discretion has not yielded “mass-produced runaway awards,” and by most accounts the “median ratio of punitive to compensatory awards has remained less than 1:1,” these favorable statistics continue to be overshadowed by the inherent uncertainty of individual awards. Baker, 128 S. Ct. at 2625. “The real problem, it seems, is the stark unpredictability of punitive awards. Courts of law are concerned with fairness as consistency, and evidence that the median ratio of punitive to compensatory awards falls within a reasonable zone, or that punitive awards are infrequent, fails to tell us whether the spread between high and low individual awards is acceptable. The available data suggest it is not.” Id. One basis for such variance among individual awards turns on a corollary to the Gore court’s concept of reprehensibility. That is, what behaviors are we trying to punish? The categories include the following: • Intent/knowledge—where the defendant caused damage intentionally or knowingly • Recklessness—where the defendant knew and consciously disregarded a substantial and unjustifi- able risk that the damage would occur • Negligence—where the defendant should have known, but didn’t, of a substantial and unjustifi- able risk that the damage would occur • Innocent accidents—where the damage occurred, but the risk of its having happened was justifi- able or insubstantial See, e.g., Baker, 128 S. Ct. at 2621 (“Under the umbrellas of punishment and its aim of deterrence, degrees of relative blameworthiness are apparent”). The Baker court also noted that other behaviors can bear on awards, such as “when wrongdoing is hard to detect (increasing chances of getting away with it)” or “when the value of the injury and the corresponding compensatory award are small (providing low incentives to sue).” 128 S. Ct. at 2622. In Mathias, Judge Posner implicated both the “willful and wanton” nature of the hotel owners’ conduct and the “modest stakes” involved in the litigation as justifications for affirming the disproportionate punitive damages award. 347 F.3d at 675, 677.

B. Who Are We Trying to Punish? Judge Posner also noted, however, that “a defendant’s wealth is not a sufficient basis for awarding punitive damages. That would be discriminatory and would violate the rule of law, as we explained earlier, by making punishment depend on status rather than conduct.” Mathias, 347 F.3d at 677. See also Campbell, 123 S. Ct. at 1525 (“The wealth of a defendant cannot justify an otherwise unconstitutional punitive damages award.”). Yet punishing corporate bullies is a concept difficult to divorce from our historical perspective of punitive damages. Often lost in determinations of damages—both compensatory and punitive—against corporate defendants are the direct and indirect penal impacts of such awards on employees and stockholders. Because employees live and work within communities, their incomes are dispersed among not only external drivers such as savings accounts, taxes, and import purchases, but also within the goods and services

278 v Fifth Annual Judicial Symposium v July 2009 system of the local economy. This circulation of money through an economy is known as a “multiplier effect.” While job creation leads to a positive multiplier effect, the negative impact of employee layoffs or wage con- strictions due to damages awards can similarly multiply, affecting entire local economies. Similarly, stock prices represent present value of expected future cash flows. When a substantial compensatory damages award is announced, shareholder expectations of future cash flows are lowered by the total cost of the award. Consequently, stock prices fall. However, this decline is not limited to the net present value of the awards plus associated costs—often, a cost of lost goodwill accompanies the decline in value. This band- wagon effect results in enormous penalties in value to shareholders. For example, in August 1999, the first fen- phen verdict of $23 million was reached against American Home Products. In the aftermath of the verdict, stock prices plummeted more than $10 per share. With more than 1.3 billion shares outstanding, shareholders lost more than $13 billion in value. These costs, both to the communities in which corporate employees reside and to shareholders hold tremendous potential to punish corporate misdeeds. Yet, although real, such hidden costs rarely enter the punitive damages calculus of the reviewing court.

C. Change We Can Believe In? As the Baker court noted, anecdotal evidence does not support the notion that judges and juries are refining the deliberative process to arrive at optimal penalties and deterrence. Baker, 128 S. Ct. at 2625-26. Instead, awards continue to fluctuate wildly. Indeed, even the Court’s leading decision in Gore was mirrored by a similar case tried in Alabama that yielded “a comparable amount of compensatory damages” but “no punitive damages at all.” Gore, 116 S. Ct. at 1594 & n.8. In 2004, Harvard law professor Kip Viscusi tracked 64 punitive damages awards exceeding $100 million from 1985 through April 2004. W. Kip Viscusi, The Blockbuster Punitive Damages Awards, 53 Emory L.J. 1405 (Summer 2004). The ratios of punitive to compensatory awards ranged from 0.3:1 to 43,076.9:1, and the awards spanned 18 states. In addition, both the frequency and the amounts of the awards increased over time. Professor Viscusi noted that the ratio limits outlined by the Court’s decision in State Farm v. Campbell would affect over 90 percent of the awards. However, both Philip Morris and Baker were decided after Professor Viscu- si’s article was published. Twenty years ago, Theodore Olson, later Solicitor General, articulated ten points of contention regarding the punitive damages system. These points are paraphrased below: 1) Punitive damages are not damages, but fines. 2) Punitive damages are an anomaly between criminal and civil justice systems. ) Punitive damages are awarded after civil trials that do not include the procedural safeguards in place in criminal trials. 4) Juries that are limited to evidence in only one case are ill-equipped to punish for the violation of a public standard. 5) The standards for awarding punitive damages are elastic and ad hoc. ) Punitive damage awards are highly unpredictable. 7) After being instructed to set aside bias, emotion, and prejudice as to the merits, juries are subjected to arguments based on these very factors in a punitives phase. 8) Punitive damages awards are often retroactive and ex post facto.

The Historical Rationale for Punitive Damages, Its Evolution, and Current... v Jones v 279 9) Punitive damages in a business setting punish the wrong people—shareholders—rather than a corporation or its officers. 10) Punitive damages awards are increasing in frequency and amount. See http://www.manhattan-institute.org/html/cjm_15.htm. Not one of the Supreme Court decisions discussed above had been decided when Olson lodged his criticisms. And yet, despite the Court’s repeated efforts to reign in blockbuster awards and to delineate due process standards for use by the courts, Olson’s concerns are as valid today as they were in 1989. Perhaps this explains why, tellingly, when faced with the opportunity to judicially regulate punitive awards in maritime actions in Baker—unencumbered by either state law or questions of constitutional due process—the Court opted for certainty in declaring a fixed 1:1 ratio of punitive to compensatory damages. Or why, in oral argument in December 2008 on Philip Morris II, Justice Roberts suggested asserting the Court’s “constitutional authority” to establish a substantive due process procedure for punitive damages. See Oral Argu- ment, Philip Morris USA Inc. v. Williams, 07-1216, pp. 51-53 (Dec. 3, 2008). As Judge Posner pointed out in 2003 in Mathias, “as there are no punitive-damages guidelines, corresponding to the federal and state sentencing guidelines, it is inevitable that the specific amount of punitive damages awarded whether by a judge or by a jury will be arbitrary.” 347 F.3d at 678. Judge Posner’s math- ematical aside illustrates the point: “It is probably not a coincidence that $5,000 + $186,000 = $191,000/191 = $1,000: i.e., $1,000 per room in the hotel.” Id. Without more specific guidelines, such an award—arbitrary though it may be—was affirmed. (An interview with defense counsel from the Mathias case confirmed that the award was the sole doing of the jury, and that Judge Posner’s math does yield “uncanny parallels”). At the same time, this award, perhaps simply a constitutional outlier, has very little predictive value. But is Mathias truly an outlier? Certainly, despite the relatively pedestrian amounts involved, the skewed ratio of nearly 40:1 would place it well beyond the single digit multipliers and the constitutional safe havens of four times compensatory damages set out in Campbell. Yet, as noted, Judge Posner—generally acknowledged as an erudite and thoughtful jurist—essentially disregarded the ratio limits because of the modest stakes. The vigorous defense of the action constituted, to Judge Posner, defendant’s “investing in developing a reputation to deter plaintiffs” by making it costly to litigate. Mathias, 347 F.3d at 677. Judge Posner seems to be saying, then, that the threat of heightened—not reduced—punitive damages in such cases is necessary to make such cases worthwhile to plaintiffs’ counsel, essentially the same rationale for permitting the recovery of attorneys’ fees for consumer class actions. This is not to suggest, however, that the Supreme Court’s message has gone wholly unheeded. In the last six months, two circuits have stricken large punitive damages awards in favor of 1:1 ratios. In Jurinko v. Medical Protective Co., 305 Fed. Appx. 13 (3d Cir. 2008), the Third Circuit rejected a punitive damages award of $6,250,000, representing a greater than 3:1 ratio, and concluded based on Gore and Campbell that the defendant’s conduct “does not justify so high an award in light of the moderate degree of reprehensibility, the substantial compensatory award, and the large disparity between the award and civil penalties.” Id. at 30. Similarly, in Morgan v. New York Life Insurance Co., 559 F.3d 425 (6th Cir. 2009), the Sixth Circuit noted its prior reliance on Campbell in holding that “when compensatory damages are substantial, then a lesser ratio, perhaps only equal to compensatory damages, can reach the outermost limit of due process guarantees.” Id. at 442 (citing Bridgeport Music, Inc. v. Justin Combs Pub., 507 F.3d 470, 488 (6th Cir. 2007)). The $6 million in compensatory damages in Morgan were “fifteen times more than the amount we previously found to be substantial [$400,000 in Bridgeport Music].” Morgan, 559 F.3d at 442. As a result, the court vacated the $10 million dollar award (despite its relatively low 1.67:1 ratio) and remanded with instructions “for an order of remittitur that

280 v Fifth Annual Judicial Symposium v July 2009 will set the punitive damages in an amount that it determines is compatible with due process, not to exceed the amount of compensatory damages.” Id. at 443 [emphasis added]. Whether Mathias will be upheld under Philip Morris or Baker is debatable. From the Gore guideposts to the Morgan ratio, there is a definite, concerted effort to reduce and fix upper limits for punitive damages. These limits should constrict punitive damages awards. Except, Judge Posner might riposte, when they don’t.

D. Additional Considerations Although this review has emphasized the increasingly rigorous constitutional standard for punitive damages awards, Mathias offers another side of the argument. That is, can due process stand for the protection, if not the enlargement, of punitive damages awards? While a complete Erie analysis exceeds the scope of this paper, the Supreme Court has noted that “[f]or rights that are state created, state law governs the amount properly awarded as punitive damages, subject to an ultimate federal constitutional check for exorbitancy.” Gas- perini v. Center for Humanities, Inc., 518 U.S. 415, 431, 116 S. Ct. 2211, 2221 & n.12 (1996). In Baker, the Court surveyed a number of jurisdictions for state-imposed restrictions on punitive damages: State regulation of punitive damages varies. A few States award them rarely, or not at all. Nebraska bars punitive damages entirely, on state constitutional grounds. Four others permit punitive damages only when authorized by statute: Louisiana, Massachusetts, and Washington as a matter of common law, and New Hampshire by statute codifying common law tradition. Michigan courts recognize only exemplary damages supportable as compensatory, rather than truly punitive, while Connecticut courts have limited what they call punitive recovery to the “expenses of bringing the legal action, including attorney’s fees, less taxable costs.” 128 S. Ct. at 2622-23 [citations omitted]. Where the states exercise such authority independent of the developing federal strictures, how are the federal courts to respond? Is the de novo standard of review announced in Cooper Industries subject to statutory controls? If Gasperini—which dealt with the interpretation of damages standards in a nonpunitive context—is any indication, the answer may very well be yes. See, e.g., Gasperini, 116 S. Ct. at 2224 (“New York’s dominant interest can be respected, without disrupting the federal system, once it is recognized that the federal district court is capable of performing the checking function, i.e., that court can apply the State’s ‘deviates materially’ standard in line with New York case law evolving under [the statute]”). Finally, if punitive damages are destined for fixed ratios to compensatory damages, is constitutional due process offended when those actual damages are subjected to independent statutory caps? See, e.g., Miss. Code Ann. §11-1-60 (2009) (setting an upper limit of $1 million for certain noneconomic damages such as pain and suffering apart from punitive or exemplary damages). The answer to these questions remains to be determined—likely by a Supreme Court seemingly intent on reducing punitive damages awards.

V. Conclusion Despite the growing body of governing law, the determination of punitive damages awards in individual cases continues to be an arduous and uncertain task. The clear shift of punitive damages from their varied functions in the 19th century to today’s quasi-criminal retribution and deterrence penalties injects due process concerns that the Supreme Court has yet to fully address. At the same time, beginning with Gore in 1996, the Court appears to be moving (slowly but steadily) away from judicial deference toward a determinative system of quan- tifiable—and replicable—results. As Judge Posner noted, “[t]he judicial function is to police a range, not a point.” Mathias, 347 F.3d at 678. Nonetheless, consistency and predictability in awards continue to elude judges and juries.

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