Bush Administration officials are using their last days in office to rewrite a wide array of federal rules in order to block product safety lawsuits by consumers and states. WSJ's Alicia Mundy reports. (Oct. 15)
By ALICIA MUNDY
Updated Oct. 15, 2008 11:59 p.m. ET
WASHINGTON -- Bush administration officials, in their last weeks in office, are pushing to rewrite a wide array of federal rules with changes or additions that could block product-safety lawsuits by consumers and states.
The administration has written language aimed at pre-empting product-liability litigation into 50 rules governing everything from motorcycle brakes to pain medicine. The latest changes cap a multiyear effort that could be one of the administration's lasting legacies, depending in part on how the underlying principle of pre-emption fares in a case the Supreme Court will hear next month.
This year, lawsuit-protection language has been added to 10 new regulations, including one issued Oct. 8 at the Department of Transportation that limits the number of seatbelts car makers can be forced to install and prohibits suits by injured passengers who didn't get to wear one.
These new rules can't quickly be undone by order of the next president. Federal rules usually must go through lengthy review processes before they are changed. Rulemaking at the Food and Drug Administration, where most of the new pre-emption rules have appeared, can take a year or more.
The Bush administration's efforts to protect corporations that comply with federal rules from legal action have fueled a long-running power struggle between business interests, which support the efforts, and consumer groups and trial lawyers who have denounced the moves.
The U.S. Chamber of Commerce's Institute for Legal Reform supports pre-emption as part of its campaign to "neutralize plaintiff trial lawyers' excessive influence over the legal and political systems," according to its Web site. "It's exceedingly difficult for companies to comply with 50 different state standards," the Institute's president, Lisa Rickard, said in an interview.
The American Association for Justice, the trial lawyers' lobby, is trying to formulate a strategy to undo pre-emptive rules. "This is the gift that keeps on giving for corporations," said the association's chief executive, Jon Haber.
The use of rulemaking to protect corporations from product liability was discussed from early in the Bush administration, said former Bush domestic-policy adviser Jay Lefkowitz, who was instrumental in the process.
One administration concern was the spiraling number of multimillion-dollar product-liability lawsuits against corporations based on state "failure to warn" rules, said Mr. Lefkowitz and other former administration officials. Some state consumer-safety laws on product warnings are tougher than, and conflict with, federal standards, particularly in the pharmaceutical area.
"You can't ask companies to follow different standards," Mr. Lefkowitz said. The lobby for drug makers, the Pharmaceutical Research and Manufacturers of America, says that such inconsistencies on drug labels "may be, at best, confusing, or at worst, life-threatening."
The Office of Management and Budget, which reviews regulations, has denied there has been a top-down plan in the administration to end lawsuits via regulatory changes. But in March, the OMB directed wording on railroad-tank-car safety. According to an email titled, "Preemption language for the preamble in the tank car rule," the Federal Railroad Administration and the Pipeline Hazardous Materials Safety Administration, part of the Department of Transportation, were asked to use OMB's pre-emption wording. The rule hasn't been finalized.
Some federal rules protecting industry from litigation:
- MATTRESS FLAMMABILITY Rule requires mattresses that burn more slowly. Prevents suits if consumer is injured in fire.
- DRUG LABELING A rule makes the FDA responsible for the wording of label warnings. Companies that comply get protection.
- RAILROAD SAFETY Requires stronger construction for rail cars carrying hazardous materials. Suits barred if cars catch fire.
Mr. Lefkowitz said the administration decided not to press its pre-emption agenda in Congress, where it might lose. "There was already authority within federal government statutes and regulations to start the reform process without legislation," he said. "Using that and legal briefs, we proceeded."
The FDA began entering lawsuits and submitting briefs on the side of drug makers and supporting federal pre-emption in 2001, though the agency previously supported the right to sue. The Supreme Court will hear arguments next month in a case called Wyeth v. Levine that will be a big test of federal pre-emption authority. Diana Levine, a musician, lost an arm to gangrene after receiving an antimigraine drug made by Wyeth in a hospital emergency room. She claims the company didn't adequately warn about side effects under Vermont law. Wyeth says it followed federal warning-label standards and is protected from Ms. Levine's claims.
The FDA, through the Justice Department, is defending pre-emption in that case, citing its own 2006 rule that says federal safety regulations trump state ones.
Pre-emption regulations are already affecting some pharmaceutical suits. The state of Alaska recently settled a case with Eli Lilly & Co. to recoup medical costs for the antipsychotic drug Zyprexa for $15 million, a fraction of the original amount demanded, because of the Wyeth case, which could undo a large jury verdict, said the state's assistant attorney general Ed Sniffen.
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