Thursday, March 5, 2009

U.S. Supreme Court foils Perdue's 'business-friendly' idea?

Posted By on Thu, Mar 5, 2009 at 12:19 AM

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In January, Gov. Sonny Perdue told a banquet room filled with business folk that he had a grand plan to make Georgia more attractive for biotech companies.

The plan: He'd direct his floor leaders to introduce legislation that would grant legal immunity to drug companies whose products were approved by the U.S. Food and Drug Administration.

Wrench, meet plans. The U.S. Supreme Court today ruled the FDA's stamp of approval doesn't exempt drug companies from product-negligence lawsuits.

In one of the most important business cases in years, the Supreme Court on Wednesday ruled that a drug company is not protected from injury claims in state court merely because the federal government had approved the product and its labeling.

The 6-to-3 ruling went in favor of a Vermont musician, Diana Levine, who was awarded more than $6 million after losing much of her arm following a botched injection of an anti-nausea drug. It was a defeat for the Wyeth pharmaceutical company, which had asked the justices to throw out the award, and by extension other companies that might have pursued Wyeth’s line of argument in similar cases.

The key issue before the justices was whether the Food and Drug Administration’s approval of drug labels should pre-empt lawsuits in state courts contending, as Ms. Levine’s did, that the labels did not contain adequate warnings.

UPDATE: Egg, meet my face. A barrister I am not. As Johnny Legal points out in the comments, Perdue could still pursue his plan. After the jump, another opinion from an anonymous friend familiar with legalese.

As to your blog post...I just want to clarify that this SCOUTS decision does not prevent Georgia or any other state from passing legislation essentially granting immunity from tort lawsuits. (However, this decision might open up such legislation, were it to be enacted, to various constitutional and legal challenges.) I could explain this in detail, but the gist is that individual states can sometimes grant certain protections to their corporations that federal law does not recognize, as long as it does not impede another individual or entity's constitutional rights. Sonny could still try to pass his immunity and it would only apply here in Georgia courts to claims brought under Georgia law, with the rest of the country still having such lawsuits proceed.  Other states have done this with other industries, though there is no evidence that these sorts of statutes actually attract businesses to the state--the justification Perdue gave for the proposal.

(Photo by Joeff Davis)

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