States Lose to Agency Advisory Opinions: The Strange Case of the 2006 FDA Drug Preamble

 By James T. O’Reilly

 James T. O’Reilly is a professor of law at the University of Cincinnati College of Law.

The Tenth Amendment collided with the Federal Register in January 2006, and the injuries to states were no accident. Preemption is a familiar controversy for most Section members. States lose their remedial powers for certain tort claims, on rare occasions, when the private cause of action is preempted by an express federal statutory ban on private suits. ERISA and banking laws may be recognized as such barriers to certain state-law claims. But can a federal agency without express preemptive statutes use an agency advisory opinion, not even a federal regulation, to extinguish a large group of state tort remedies?

Students of the arcane art of implied preemption rarely see as sweeping a claim of administrative agency preemption as appeared in the Federal Register on January 24, 2006. 71 Fed. Reg. 3,936. For several years, the Food and Drug Administration (FDA) had been slowly and surely working toward final rules on the boring details of format, design, and content of prescription drug labels. This soporific topic had been addressed with meticulous comments by medical experts, drug makers, and consumer organizations and the ninety-page typescript of a preamble was to be published. In the middle of the preamble, when it finally appeared in the Federal Register, was included an essay of an additional ten pages on the current FDA view of the preemptive power of FDA against state tort law. Readers of many Federal Register documents will recognize the discontinuity of including a legal brief in a technical document; similarly, the FDA team that prepared the final rule may have found it anomalous for the essay to be shoehorned into their lengthy preamble.

A state court hearing a damages claim against a drug manufacturer, or against a physician who had prescribed a prescription drug with his or her additional advice to the patient, would not be able to proceed with the case under the FDA claim of preemptive power. Even in a state with an “open access to courts” provision that had barred the efforts to block tort claims within the new wave of tort reform legislation, FDA would assert that its decision overrode the state powers. The drug makers would have the benefit of virtual immunity through preemption by FDA’s advisory opinion.

Normal preemption cases involve Congress making an express preemption choice, or perhaps “occupying the field” so that states can no longer allow regulations or common law findings to interfere. But the majority of litigation involves “implied” forms of preemption. A minority of federal preemption cases involve preemption with no statute, but an administrative agency’s final regulation that blocks state actions. The farther the federal government moves out on a limb, away from express preemption,* the less solid its claim to constitutional Supremacy Clause power has become.

The historic significance of the January 24, 2006, preemption is that it employs an advisory opinion—not a rule—to extinguish existing state tort laws for products liability and for certain malpractice claims. Of course, FDA cannot create its alternate system for tort compensation and cannot create a cause of action against anyone—it can only try to kill off the state tort claims by asserting preemption. A preamble to a final rule has no binding effect outside of the agency, according to FDA’s own procedural rules at 21 C.F.R. part 10, so this is a particularly unusual “weapon” with which to blow away the state tort claims.

Most readers will not know FDA’s procedures for drug approval, but in brief, the manufacturer totally controls all research, drug content, and timing of submissions, subject to FDA disapproval and to a series of negotiations leading to an approval of a new pharmaceutical drug. FDA approved labels are the minimum and states have for decades allowed plaintiffs to argue that the approval did not grant an immunity against warning claims; states have ruled that tort claims could continue with assertions that a stronger warning should have been given. There are seven changes to that prior law that are asserted in the 2006 FDA preamble:

Reasonable minds can differ about the political merit of the FDA position. All those familiar with the controversy over FDA’s legal briefs intervening in private tort actions in 2001–05 expected that the newly appointed leaders of the FDA would place some of their intervention arguments into some form of pronouncement. The ten pages of the 2006 typescript concerning preemption appeared as an odd patch in an otherwise routine preamble; a 100-page typescript that covers the many details of appropriate prescription drug content, format, and placement of labels. State advocates already recognize that preemption by federal regulation is a force to be reckoned with—but is the mere presence of a federal agency’s advisory opinion, an essay stuck in the middle of a long and complex preamble on labeling designs, enough to bar the state courthouse doors to the injured plaintiffs? If all it takes for states to lose power is an advisory opinion by a federal agency, then the Tenth Amendment will be of little force against the might of the federal bureaucracy. State attorneys general should resist this “below the radar” attack on the authority of the states to protect their citizens.

*In my forthcoming ABA Publishing textbook, Federal Preemption of State & Local Powers (spring 2006), I catalogue the numerous subgroups of preemption theories that have been applied to cut off state authorities.