Friday, December 5, 2008

Preemption and The Current President

Source: Tresa Baldas who writes for National Law Journal, a Fulton Daily Report affiliate.

The clock is ticking for lawyers specializing in consumer safety litigation as they wait to see what "midnight regulations" the Bush administration squeaks through before leaving office in January.

There are dozens of rules now under review by the administration that affect everything from prescription drug labeling to water quality to auto roof safety, according to the Office of the Federal Register, the government's official daily publication for rules, proposed rules and notices of federal agencies.

Midnight regulations are last-minute federal rules and regulations that a president issues before leaving office, usually in the last three months of his term.

Defense counsel are counting on the Bush administration to leave behind regulations that offer greater liability protection to manufacturers and less regulation. The plaintiffs' bar fears just that, warning that as many as 21 possible regulations could be a "nightmare" for consumer safety and the environment.

"Let's say all 21 pass - that's a worst-case scenario. You will be looking at thousands of consumers who will be left with no recourse and manufacturers who have the ability to walk away with complete immunity," said attorney Gerie Voss, director of regulatory affairs for the American Association for Justice (AAJ), the voice of the plaintiffs' bar, which is tracking the 21 pending consumer safety regulations.

Pre-emption front and center

But corporate defense counsel Matthew Neumeier of the Chicago office of Washington-based Howrey said that the "Bush administration is continuing to generate regulations consistent with its philosophy - that the regulation of business should be minimal.

"And if there is regulation, the regulation should attempt to protect businesses from liability under other state law theories if they're compliant [with federal rules]," he said. "The pre-emption issues are really front and center."

And it's the pre-emption language within the proposed rules that have the plaintiffs' bar particularly concerned. These rules include

• A proposed regulation that would require auto manufacturers - for the first time in 35 years - to increase the strength of vehicle roofs. Plaintiffs' lawyers say the roof strength standards are still too low, and that automakers that meet that rule will be granted complete immunity from all lawsuits, according to the AAJ.

• A proposed rule by the U.S. Food and Drug Administration (FDA) to revise warning labels regarding the use of prescription drugs during pregnancy and breast-feeding, and to update them with more detailed information, including clinical trial results.

This rule includes a pre-emption clause, which the AAJ fears will offer drug makers blanket immunity and give injured women no recourse.

• A proposed FDA rule that would shield companies from liability for potentially harmful over-the-counter drug ingredients. The proposed rule changes the status of some ingredients used in over-the-counter drugs, making them subject to additional FDA approval. Once they were approved, manufacturers no longer could be held accountable should the ingredients cause harm, according to the AAJ.

Some lawyers believe the Obama administration will eventually reverse what might slip through before Inauguration Day.

Defense counsel say that Corporate America isn't taking advantage of any regulatory favors, or behaving irresponsibly. Instead, they argue, businesses should be required to follow only one set of rules, and if they do so, they should be immune from state lawsuits.

Read more about this doctrine here.

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