High Court rules in favor of federal preemption

Today, the Supreme Court issued five decisions, three of which hold that federal law preempts certain state regulations, state claims, or claims of jurisdiction by state administrative authorities.

In a decision that surely disappoints the plaintiff’s bar, the Supreme Court held in Riegel v. Medtronic, No. 06-179, that state law tort claims challenging the safety of FDA-approved medical devices are barred by federal law.

The opinion, authored by Justice Antonin Scalia, was based on the rationale that the Food and Drug Administration and federal laws covering device pre-market approval create a carefully-crafted balancing system for ensuring that safe products are on the market, while assuring that devices needed by patients are accessible. Federal regulators – not state authorities, and certainly not juries seated in state court trials – are in the best position to weigh the risks and benefits in this scheme.

“When state common law requires a recalculation of that balance, it frustrates” the regulatory scheme, Scalia said in comments this morning from the bench. “Leaving [it] to a jury [is] even worse.”

In Preston v. Ferrer, No. 06-1463, the Court held that the Federal Arbitration Act precluded the attempt by television’s “Judge Alex” Ferrer to go to a state court seeking a ruling that his contract with his former manager was void, rendering the contract’s arbitration clause void as well. He also sought to have the case heard before a state labor commission, claiming it held exclusive jurisdiction.

The opinion by Justice Ruth Bader Ginsburg held that once parties agree to arbitrate all disputes arising out of a contract, as Ferrer and his manager did, the Federal Arbitration Act preempts state administrative agencies, and the parties must arbitrate the dispute.
Allowing parties to go to state courts first “would likely [create] long delays, and Congress enacted the FAA to avoid delays,” Ginsburg said from the bench.

The court also ruled in favor on federal preemption in Justice Stephen Breyer’s opinion in Rowe v. New Hampshire Motor Transport Ass’n, No. 06-457, that federal law trumps two state laws requiring carriers delivering tobacco products to ensure that the recipients of the packages were of legal age to buy tobacco products.

In the other two opinions, both penned by Justice John Paul Stevens, the Court held that ERISA does not provide a remedy for individual injuries distinct from plan injuries for an administrator’s failure to follow the plan holder’s investment directions. But, the Court held that it does authorize recovery for for fiduciary breaches that impair the value of the entire plan. (LaRue v. DeWolff Boberg & Associates, No. 06-856) and that state courts can adopt broader rules of criminal procedure than those required by the U.S. Supreme Court (Danforth v. Minnesota, No. 06-8273).

More on these cases on coming up on this blog over the next few days, tomorrow on Lawyers USA‘s website, and in the next print edition of Lawyers USA.

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