The Omniscient Agency Myth

There are two issues kicking around in this discussion: (1) Should state tort law be preempted if there is some sort of federal regulation in place?   (2) Which institutions - particularly federal agencies and courts – are legally empowered and/or competent to decide that question? I’d like to chime in on (1), but I hope we’ll delve more deeply into (2) soon. 

The effort to preempt state tort law depends in part on myths critiquing the tort system, which Tom McGarity has discussed. Pro-preemption arguments also depend on another myth – that tort lawsuits are unnecessary because we have super-effective federal agencies that can regulate to prevent accidents or injuries from drugs, medical devices, and consumer products.   This myth in part motivated the Supreme Court’s recent opinion in Riegel v. Medtronic, where it concluded that some tort litigation over medical devices was preempted by FDA regulation.

Federal regulation has surely resulted in great improvements in safety and health - safer drugs, medical devices, food, and consumer products, for example. However, regulatory systems are inherently limited.   Federal agency officials can only address what they already know about. Agency information can often be inferior to what a manufacturer possesses or could get. Further, federal agency officials are far less able to anticipate potential problems than those who make and market a product and thus know it most intimately. Resource constraints further limit an agency’s ability to respond to information it does have or to modify already-set standards. Just a few days ago, the New York Times wrote about problems with artificial joints. The article commented that although the FDA is tasked with monitoring medical devices, “that system is often overwhelmed by the vast number of products it monitors and because doctors often do not report problems.” Barry Meier, “A Call for a Warning System on Artificial Joints,” New York Times, July 29, 2008.

Preserving tort liability even when federal regulators are active thus is critical for several reasons.   First, it gives manufacturers a continuous incentive to be vigilant about product risks, to exercise reasonable care with respect to consumers, and to keep consumers informed.  An article in the New England Journal of Medicine noted that FDA action on drug labels often trails available evidence by several years. Jerry Avorn & William Shrank, “Highlights and a Hidden Hazard: The FDA’s New Labeling Regulations,” 354 New Eng. J. Med. 2409 (2006). Tort liability prompts manufacturers to take immediate protective action, rather than waiting for federal regulators to get to the issue. And, importantly, tort liability can compensate consumers for harm that a manufacturer could have, through reasonable care, avoided. Federal regulation generally does none of these things. Finally, tort litigation is also good for the regulatory process. Tort litigation can uncover new information that prompts safety regulation. David Vladeck has documented how litigation over the faulty Dalkon Shield intrauterine devices led Congress to pass legislation calling for the regulation of medical device safety. David Vladeck, Preemption and Regulatory Safety, 33 Pepperdine L. Rev. 95 (2005). 

In short, although federal regulation is surely an important shield for consumers, there are big chinks in the armor. Tort liability is a critical part of protecting consumers from needless risks.