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Thursday, June 23, 2011

The Nationalistic Fruits of Legal Formalism: How Caleb Nelson has single-handedly destroyed the presumption against preemption

To the dismay of all friends of federalism, the Court ruled for the petitioners today in PLIVA, Inc. v. Mensing, a decision expanding the concept of "impossibility" preemption based on the sort of formalism that only Justice Thomas could love. The worst of PLIVA is not the result of reviving "impossibility preemption" (which is bad enough) but the Court's wholehearted embrace of Caleb Nelson's textualist reading of the Supremacy clause, a reading that, if taken seriously, overrules any "presumption against preemption" under Santa Fe Elevator. The most disheartening aspect of the opinion is that Justice Kennedy joined in this endorsement of Caleb's pro-preemption theory -- a theory that makes nonsense out of Kennedy's own opinion in Gonzales v. Oregon, which relied heavily on precisely the anti-preemption canon that Caleb's theory rejects. This is bitter fruit for anti-preemption folks like myself to swallow after Williamson v. Mazda and Chamber of Commerce v. Whiting. Our only hope is that the same absent-mindedness that caused Justice Kennedy to reject his own past reasoning will make PLIVA a short-lived debacle for the anti-preemption canon.

The issue in PLIVA was whether a manufacturer of a generic drug could be held liable for negligently labeling that drug under state law, when federal law gave the manufacturer of generics no obvious way to change the challenged label. beyond persuading the FDA to change the labeling rules for the brand-name drug of which the generic was a knock-off. PLIVA -- a manufacturer of generic drugs -- argued that it would be impossible for it to modify the label for its drug, because, unlike the manufacturer of brand-name drugs, the manufacturer of generics cannot change a label pursuant to the "changes-being-effected" (CBE) provisions of the FDCA. Instead, everything about a generic -- the manufacture, design, and label -- must be identical to the characteristics of the brand-name drug of which the generic is a copy. This is how, indeed, manufacturers of generics can avoid the lengthy drug approval process that brand-name manufacturers must endure. Given that federal law made illegal that which state tort law required -- namely, an alteration of the federally approved label -- the Court found that it was impossible for PLIVA to comply with the state tort duty.

Here, however, is the paradox: The manufacturer of a generic drug is still obliged to inform the FDA of any inadequacies in the approved label. Indeed, if PLIVA knew that the label were inadequate -- say, too bland in warning of risks of brain damage from long-term uses of a drug -- then PLIVA would be in violation of the FDCA for peddling a misbranded drug. Everyone knows that the FDA relies on drug manufacturers to supply the agency with data about potential problems with drug labels: The FDA simply lacks the personnel to update labels and drugs in an optimal fashion. In some practical sense, FDA does not control the drug makers: Pharma controls the FDA, by controlling the FDA's access to data about post-marketing problems with labels, side-effects, etc. So why should not PLIVA not be required, as a condition of asserting the defense of preemption, to show that it did not breach any federal duty to inform the FDA of possible problems with its label before asserting that PLIVA's hands were tied by federal law?

Here is where Justice Thomas offered two extraordinarily formalistic responses -- one that embraced an extreme formalism in statutory construction and the other, in constitutional law.

Regarding statutory construction, Justice Thomas argued that the state-law duty was not a duty to keep the FDA updated: State tort law imposed a duty to change the federally approved label. Therefore, the specific action sought by the respondents was rendered impossible by federal law, even if a different action (petitioning the FDA for a revision of labeling rules) was not. Justice Thomas acknowledged that this theory meant that generic drug makers would receive more protection through federal preemption from state-law tort suits than makers of brand-name drugs. Justice Thomas further acknowledged that such a difference was weird, given that generic drugs were supposed to be identical to brand-name drugs. Too bad: One had to follow the strict logic of preemption even into the land of bizarre: "it is not this Court's task to decide whether the statutory scheme established by Congress is unusual or even bizarre," he intoned. SCOTUS is just following statutory orders.

Thus, a federal statute utterly lacking any preemption clause can be invoked by a generic drug maker to preempt state tort duties even if that drug maker is in blatant violation of that self-same federal statute -- even if reports are pouring over the drug maker's transom that the label ignored horrible risks. The drug maker could even suppress those reports in violation of federal law and yet invoke the federal law that the drug maker violated as a reason to defy state tort law -- because the federal law (that the drug maker otherwise ignored) forced that drug maker to ignore risks (of which the drug maker was completely aware). When a court reaches a conclusion so utterly senseless, then it is time to ask whether the reductio to such absurdum might suggest a flaw in the premises.

Instead, the PLIVA majority took a one-statute train wreck and converted it into a disaster for statutory construction more generally, by endorsing Caleb Nelson's disastrous theory of Article VI's supremacy clause. In brief, Caleb would resurrect a sweeping view of Article VI in the name of a textualist and originalist vision of the Constitution that the Court has otherwise completely ignored when construing Congress' enumerated powers. On Caleb's theory, the final "notwithstanding" in Article VI's Supremacy clause is, in fact, a term of art -- a non obstante clause indicating that the canon against implied repeal, which normally would strain to construe federal law not to repeal pre-existing state law, should be waived. According to Caleb, this suggests that any anti-preemption canon of construction is contrary to the text and original semantic meaning of Article VI.

I have elsewhere denounced Caleb's admittedly brilliant but entirely pernicious exposition of Article VI's non obstante clause. The basic objection is that it makes no sense to enforce strictly the non obstante clause in Article VI while vastly under-enforcing the limits on Congress' enumerated power implied by Article I, section 8. The non obstante clause was the Federalists' quid in return for which they had to give up the quo of unlimited federal power. But -- as Justice Thomas himself has frequently complained -- the Court does not really enforce those limits according to the terms of the original compact. (Surely, Caleb would agree?) To enforce the letter of the non obstante clause but not the letter of the enumeration in Article I is to distort the Constitution from a balanced bargain into a hyper-centralized Leviathan that no one -- not Federalist, not Anti-Federalist -- ever endorsed.

Indeed, the Court has been repeatedly on record as rejecting the non obstante principle by endorsing its opposite -- an anti-preemption canon of construction that tries to preserve state law from federal preemption whenever possible. The essence of the canon is that if federal law is amenable to a construction that will avoid gratuitous preemption of state law, then such a construction is to be preferred. As Justice Kennedy stated in Gonzales v. Oregon, "the background principles of our federal system ... belie the notion that Congress would use such an obscure grant of authority to regulate areas traditionally supervised by the States’ police power." Caleb's whole theory is that these "background principles" count for nothing when construing federal statute's preemptive effect. How could Kennedy then so cavalierly abandon what he had so recently endorsed?

My suspicion: Caleb's scholarship seems so technical and artlessly apolitical that it is hard to see that it upends the entire jurisprudence. His article comes off as balanced, careful, expert, historically erudite, legalistic -- the sort of loving gloss on mossy old doctrines that could not possibly have radical implications. It is indeed all of these good things -- but it is also a radical subversion of federalism as we know it. Let's hope that the Court figures out that it has abolished federalism in a fit of absent-mindedness before Caleb's principle burrows even deeper into the U.S. Reports.

Posted by Rick Hills on June 23, 2011 at 05:35 PM | Permalink


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I concur with Andrew. If the generic manufacturer is in fact blatantly violating federal law, that creates a strong policy argument in favor of preemption -- leave it to the feds to decide whether or not to sanction the manufacturer. Even if a state tort claim is preempted, the manufacturer does not necessarily get off scot free.

Posted by: anon | Jun 25, 2011 2:55:25 PM

To me, the most pernicious aspect of Pliva is not its distortions of statutory construction or constitutional law, but of administrative law. The entire premise of the generic manufacturer's preemption argument--that they could not use the CBE provision to unilaterally change their labels--was swallowed hook, line, and sinker by the Court, based on nothing more than the FDA's statement to that effect (unaccompanied by any textual analysis of its own regulations) in its amicus brief. Justice Thomas "defers" to that "interpretation" under Auer, because it's not "plainly erroneous." That's not how Auer works. Moreover, nearly every court to consider whether generic manufacturers could change their labels through the CBE process--among them 3 federal courts of appeals, including one of the decisions that was being reviewed here--had held that, under the regs, they could. Nevertheless, not one single Justice saw fit to question the FDA's contrary statement in its amicus brief. Bizarre, especially when one considers that, had the Court agreed with all other courts to date that the generics could change their labels, the admittedly "bizarre" result here would have been avoided entirely.

Posted by: Anonymous | Jun 24, 2011 1:41:57 PM

Ah -- just saw the correction. Sorry.

Posted by: Anonymous | Jun 24, 2011 11:08:11 AM

I thought the only citations to Nelson were in Part III-B-2, which Justice Kennedy didn't join.

Posted by: Anonymous | Jun 24, 2011 11:07:02 AM

Your discussion of canons of preemption seems reasonable enough (and it seems to be the main thrust of what you're saying). But you seem to be suggesting that even if preemption were explicitly provided for, that obeying relevant federal laws should be required for reliance on those laws for a preemption defense. Am I misstating your position?

If not, that seems like a dangerous path to walk. What it would do is effectively empower state officials to enforce federal law, since the relevant act for the tort would be the failure to obey the federal law, not the action which state law requires and federal law forbids. That is, the "correct" actor in the circumstances would make the report and not change the labeling, whereas the "wrong" actor would not make the report and also not change the labeling.

Giving the states de facto power to punish individuals or corporations for violations of federal law would also be inconsistent with federalism. Better, I would think, to have the state report the violation of federal law to the feds, and let them make the decision over whether or not to prosecute.

Posted by: Andrew MacKie-Mason | Jun 23, 2011 8:13:38 PM

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