Regulating Safety After Merck v. Albrecht

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In Merck v. Albrecht, the issue of federal preemption has crossed over the typical conservative and liberal divide.

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Two separate legal systems in the United States regulate safety. The first, administrative law, allows regulators to write rules, inspect goods, and control would-be violators with licenses, fines, and actions that ban dangerous goods from the market. The second, tort law, allows injured private parties to bring state civil lawsuits to discourage companies from producing unreasonably dangerous products.

Despite serving overlapping roles, each system typically works independently of the other. Administrators can regulate risky products whether or not private plaintiffs can prove that product harmed them in court. Similarly, a company cannot excuse its negligent behavior simply by claiming it followed a government regulation. The tort system aspires to make up for regulatory gaps when overworked government officials lack information, resources, or the will to check dangerous behavior. According to the Third Restatement of Torts, administrative regulations constitute a floor, but rarely the ceiling, on the steps businesses take to make sure they sell goods that are reasonably safe.

One significant exception has emerged in the area of federal preemption. Under the Supremacy Clause of the U.S. Constitution, federal laws and regulations can bar conflicting state laws, including the state rules that form the basis for tort suits. Sometimes federal laws expressly say that a conflicting state rule is invalid. But sometimes, federal laws quietly preempt state tort suits when businesses cannot comply with federal and state tort law requirements at the same time (this is known as “impossibility preemption”) or when the state tort law would frustrate the purposes of a federal regulation (also known as “obstacle preemption”). In cases involving cigarettes, herbicides, airbags, medical devices, and drugs, the U.S. Supreme Court has remade federal preemption law into a doctrine about who decides what is safe—federal regulators, through the administrative process, or judges and jurors in the civil justice system.

The Supreme Court’s latest foray into this area is Merck v. Albrecht, a case of impossibility preemption, where defendants say they cannot comply with conflicting federal regulations and state tort laws over whether to warn about a drug’s side-effects. The Court’s decision settled a narrow procedural question—whether a judge or a jury decides whether state tort law has been preempted. Beyond this, the different opinions in Albrecht highlight that, in the near future, federal preemption questions will turn on unusual coalitions of conservative and liberal justices with different views about regulatory expertise, the value of civil litigation, and federal power.

Albrecht’s case forms just a small part of thousands of cases that plaintiffs have filed against Merck for side effects they suffered from Fosamax. People take Fosamax for osteoporosis, but the drug also has been associated with crumbling jaws and severe leg fractures. Plaintiffs argue that Merck knew and failed to warn them about these risks. Merck argues that the plaintiffs’ claims should be preempted because the company fully complied with U.S. Food and Drug Administration (FDA) regulations, including FDA’s instructions in 2008 that it not change its labels to warn about “stress fractures.” The federal trial court agreed with Merck, but the U.S. Court of Appeals for the Third Circuit reversed. The Third Circuit held that, to find preemption, a jury needed to resolve complex factual issues over whether FDA really meant to stop Merck from warning plaintiffs about their more specific and severe injuries.

The Supreme Court reversed by agreeing on a narrow, but possibly important, procedural question—that judges, not juries, get to decide that a federal law preempts a state tort suit. That decision alone could offer a limited procedural win for defendants hoping to dismiss cases early on in the litigation.

Even that, however, remains to be seen. The Supreme Court acknowledged that some preemption questions will require courts to resolve contested “brute facts” about what the regulator knew and what it intended. This may mean discovery, followed by summary judgment motions (or even bench trials). For example, in Albrecht, Merck argued that FDA would not let it warn about the risk of atypical leg fractures based on the information it gave FDA. Plaintiffs disagreed and said that, while FDA rejected Merck’s warning about “stress fractures,” FDA never intended to prevent Merck from warning about the more specific, unusual bone fractures the plaintiffs suffered.

But the justices did not agree on the standard for proving impossibility preemption. In cases where defendants allege impossibility preemption, the Supreme Court has held that defendants must show “clear evidence” of a conflict between state and federal law. Justice Breyer, writing for the majority in Albrecht, held that clear evidence would exist when a drug manufacturer could show two things: (1) the company “fully informed” FDA of the “justifications for new warning required by state law” and (2) the agency must specifically told the manufacturer that “it would not approve changing the drug’s label to include that warning.”

Justice Breyer’s opinion garnered six votes, including those of Justices Gorsuch and Thomas. But he did not explain what other evidence could meet the standard articulated in his opinion. It also remains unclear whether the rule he announced would exist in other regulatory settings. The Court ultimately remanded the case to decide whether this case was preempted in light of the Court’s opinion.

Justice Thomas wrote separately to explain why he believed FDA’s regulatory scheme should not preempt the plaintiffs’ claims on remand. Justice Thomas said that a state law could be preempted even if a drug maker did not “fully inform the FDA of the justifications for the warning,” as the majority held. But Justice Thomas could not find a conflict because Merck independently could have changed its label through a separate process without asking FDA.

Justice Thomas also did not give much weight to informal communications between FDA and Merck about whether to change its label. He emphasized that the only kinds of agency actions that could preempt state law are those that come from “the statutory text and … have the force of law.” Thomas thus rejected Merck’s argument that the FDA probably would have stopped it from trying to change its label: “Neither agency musings, nor hypothetical future rejections constitute pre-emptive ‘Laws.’” Justice Thomas’ concurrence reflected his long-held views of federal preemption, which has long resisted “freewheeling, extratextual” explorations of a statute’s purpose or an agency’s motivations.

Justice Alito, on the other hand, wrote separately to explain why he thought FDA’s regulatory scheme likely would preempt plaintiffs’ claims on remand. For Justice Alito, preemption should not depend on whether the drug maker, or anyone else, brought “new information to the FDA’s attention” or whether FDA told the manufacturer to keep its old label. FDA already has an independent obligation to require label changes when it learns about new safety information. Because agencies are entitled to a “presumption” that they follow federal law, Justice Alito would find a state tort suit preempted even when FDA “simply considered the new information and decided not to act.”

Justice Alito also believed FDA’s informal communications, emails, and phone calls with Merck were relevant to deciding the preemption question. He emphasized that when Merck proposed to change its label in 2008, “FDA remained in contact with Merck about the issue of atypical femoral fractures” but did not require any label change until 2010.

The majority and concurring opinions reflect different views about how agencies and courts can promote effective regulation without threatening “our federalism.” Justice Alito’s approach, which would preempt so long as companies comply with FDA’s comprehensive regulations, reflects a general trust in collaboration between public agencies and private enterprise to identify new risks. In much the same vein, the Restatement of Torts has recognized a limited “regulatory compliance” defense, by which some courts have allowed would-be defendants to limit their civil liability when they comply with current regulations designed for specific products and warnings.

But the Court majority’s rule that companies “fully inform” regulators of their own risky products reflects a different idea—that private tort duties can help public regulators appreciate risk. When manufacturers raise alarms about their own products with a regulator, they may help regulators see those same risks in a new light.

Relatedly, requiring that companies fully inform a regulator avoids the “moral hazard” that Justice Kagan and Gorsuch raised during oral argument. They discussed a situation where a company might overwhelm regulators with data, and offer an “inartfully drafted warning that it thinks is reasonably calculated to be refused so that it can avoid … its own costs of negligence.” This is consistent with the view that the civil justice system can complement, rather than impede, important federal safety objectives by generating useful information for regulators about the businesses they oversee.

The separate opinions in Albrecht also reflect differences over how best to protect states against the encroachment of federal power. Justice Breyer’s majority opinion, that agencies still enjoy flexibility to preempt state laws, is consistent with his longheld view that agencies are often better equipped to balance federal law enforcement priorities against state tort lawsuits. Based on her work with the Administrative Conference of the United States, Professor Cathy Sharkey has suggested that, under the right conditions, agencies can make more calibrated, data-driven decisions—and bring together federal and state stakeholders—then courts or Congress alone. But Justice Thomas’ view places more control in the hands of the courts. Preemption, under his view, only should be available when agencies hew closely to statutory text, follow formal procedures, and are subject to close judicial scrutiny.

Admittedly, private lawsuits do more than regulate corporate behavior. They compensate victims, oblige wrongdoers to repair harm they do to others, and give people a civic forum to resolve disputes. But federal multidistrict litigation, the kind which produced Merck v. Albrecht, is dominated by large product liability cases that have regulatory impacts as much as federal agencies do. The opinions in Albrecht reflect shifting fault lines among the justices about whether these multidistrict lawsuits complement or conflict with how our regulators make decisions about safety.

Notably, these different views will not always lead to different conclusions about preemption. Justice Thomas joined Justice Breyer’s majority opinion, even while adhering to his own views on preemption. And Justice Alito, joined by Justice Roberts, appears to share Justice Breyer’s comfort with affording agencies latitude to preempt conflicting state law. Like other preemption cases this term, Albrecht appears to have scrambled the divide between conservatives and liberals on the court—creating new bedfellows, based on their divergent views of federal power, administrative expertise, and the role our civil justice system plays in promoting informed regulation.

Adam Zimmerman

Adam Zimmerman is a professor of law at Loyola Law School, Los Angeles.

This essay is part of a series, entitled The Supreme Court’s 2018–2019 Regulatory Term.