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No Legal Shield in Drug Labeling, Justices Rule

Supreme Court rules juries can award damages for harm from unsafe drugs even though their manufacturers had satisfied federal regulators.

WASHINGTON — In a major setback for business groups that had hoped to build a barrier against injury lawsuits seeking billions of dollars, the Supreme Court on Wednesday said state juries may award damages for harm from unsafe drugs even though their manufacturers had satisfied federal regulators.

Nathaniel Brooks for The New York Times

The ruling could have significant implications beyond drug manufacturing. Many companies have sought tighter federal regulation in recent years in part to shield themselves from litigation.

The court, by a 6-to-3 vote, upheld a jury verdict of $6.7 million in favor of a musician from Vermont whose arm had to be amputated after she was injected with an antinausea drug. The drug’s manufacturer, Wyeth, had argued that its compliance with the Food and Drug Administration’s labeling requirements should immunize it from lawsuits.

Pharmaceutical companies were especially disappointed by Wednesday’s decision.

Ronald Rogers, a spokesman for Merck, said, “We believe state courts should not be second-guessing the doctors and scientists at the F.D.A.”

Merck was hit with several huge damage awards over its painkiller Vioxx before agreeing to a $4.85 billion settlement in 2007. Allowing juries to make determinations about drug risks, Mr. Rogers said, would cause “mass confusion.”

The Supreme Court has been sympathetic in recent years to arguments that federal law should pre-empt state injury suits. Last year, in Riegel v. Medtronic, an eight-justice majority of the court ruled that many state suits concerning injuries caused by medical devices were barred by the express language in a federal law. Wednesday’s decision addressed implied pre-emption, a different legal standard.

Drug companies and other businesses, supported by the Bush administration, had hoped the Vermont case would establish broader protections. They relied not on express language in a statute enacted by Congress, as in Riegel, but on what might be implied from federal regulatory standards and policies — in this case, from the drug agency’s authority to approve drug labels.

Producers of goods as different as antifreeze, fireworks, popcorn, cigarettes and light bulbs have sought to take refuge behind federal oversight in recent years to fend off litigation. After Wednesday’s decision, those efforts are most likely to succeed if they are based on express language in a Congressional statute or a specific regulatory action that makes compliance with state requirements impossible.

“This narrows the playing field,” for implied pre-emption arguments, Mark Herrmann, a corporate defense lawyer in Chicago, said of the decision. “This does not eliminate the playing field.”

Most drug company stocks, including Wyeth’s, closed up on Wednesday, as did the Dow Jones industrial average, which rose 150 points, breaking a long losing streak.

Catherine M. Sharkey, a law professor at New York University, said the decision does mean that “there is certainly a thumb on the scale against the more aggressive arguments for implied pre-emption.”

Justice John Paul Stevens, writing for the majority in Wednesday’s decision, Wyeth v. Levine, No. 06-1249, said Congress could have required pre-emption in the case but had not. “Evidently,” he said, “it determined that widely available state rights of action provided appropriate relief for injured consumers.”

Justice Stevens noted that Congress did adopt just such an express pre-emption provision for medical devices in the law at issue in the Riegel case.

Until a recent change in policy under the Bush administration, Justice Stevens wrote, the drug agency had welcomed state injury suits as a useful complement to federal regulation. But in “a dramatic change in position” in 2006, Justice Stevens said, the agency reversed that longstanding policy not withstanding its “limited resources to monitor the 11,000 drugs on the market.”

The agency’s new position, Justice Stevens wrote, “is entitled to no weight.” He was similarly dismissive of a brief supporting Wyeth filed by the Justice Department under former President George W. Bush, saying it was “undeserving of deference.”

Justice Stevens was joined by Justices Anthony M. Kennedy, David H. Souter, Ruth Bader Ginsburg and Stephen G. Breyer. Justice Clarence Thomas voted with the majority but did not adopt Justice Stevens’s reasoning, saying instead that he objected generally to “far-reaching implied pre-emption doctrines” that “wander far from the statutory text.”

Justice Samuel A. Alito Jr., writing for the three dissenters, said the court had done an about-face, “turning yesterday’s dissent into today’s majority opinion” and turning ordinary injury suits into a “frontal assault on the F.D.A.’s regulatory regime for drug labeling.”

“This case illustrates,” Justice Alito said, “that tragic facts make bad law.”

The case began in 2000, when Diana Levine, suffering from migraine headaches, visited a clinic. She was given injections of Demerol for the pain and Wyeth’s drug Phenergan for nausea.

If Phenergan is exposed to arterial blood, it can cause swift and irreversible gangrene. For that reason, it is usually administered by intramuscular injection or intravenous drip. This time, a physician’s assistant used a third method, injecting the drug into what she thought was a vein, a method known as “IV push.”

In the following weeks, Ms. Levine’s hand and forearm turned black, and they were amputated in two stages. She settled a lawsuit against the clinic and went to trial against Wyeth, claiming its warnings against IV-push administration were not strong enough.

She greeted Wednesday’s decision with elation. “Next to getting my hand back,” she said of the Supreme Court, “it’s the least they could have done and the best they could have done.”

Bert Rein, a lawyer for Wyeth, said the company had “fully complied with federal law in its labeling of Phenergan,” adding that the F.D.A. is “in the best position to weigh the risks and benefits of a medicine.”

Justice Alito said Wyeth had provided ample notice about the risk of gangrene in “six separate warnings,” some of them “in boldfaced font and all-capital letters,” on the drug label the F.D.A. had approved.

Justice Alito, writing for himself, Chief Justice John G. Roberts and Justice Antonin Scalia, added that juries see only the “tragic accident” before them and “are ill-equipped to perform the F.D.A.’s cost-benefit-balancing function.” The agency, by contrast, he wrote, “has the benefit of the long view” and “conveys its warnings with one voice.”

“After today’s ruling,” he said, “parochialism may prevail.”

Gardiner Harris contributed reporting.

Source: http://www.nytimes.com/2009/03/05/washington/05scotus.html?ref=policy, Published: March 4, 2009

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