[Senate Hearing 110-300]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 110-300
 
REGULATORY PREEMPTION: ARE FEDERAL AGENCIES USURPING CONGRESSIONAL AND 
                            STATE AUTHORITY?

=======================================================================

                                HEARING

                               before the

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                           SEPTEMBER 12, 2007

                               __________

                          Serial No. J-110-54

                               __________

         Printed for the use of the Committee on the Judiciary


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                       COMMITTEE ON THE JUDICIARY

                  PATRICK J. LEAHY, Vermont, Chairman
EDWARD M. KENNEDY, Massachusetts     ARLEN SPECTER, Pennsylvania
JOSEPH R. BIDEN, Jr., Delaware       ORRIN G. HATCH, Utah
HERB KOHL, Wisconsin                 CHARLES E. GRASSLEY, Iowa
DIANNE FEINSTEIN, California         JON KYL, Arizona
RUSSELL D. FEINGOLD, Wisconsin       JEFF SESSIONS, Alabama
CHARLES E. SCHUMER, New York         LINDSEY O. GRAHAM, South Carolina
RICHARD J. DURBIN, Illinois          JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         SAM BROWNBACK, Kansas
SHELDON WHITEHOUSE, Rhode Island     TOM COBURN, Oklahoma
            Bruce A. Cohen, Chief Counsel and Staff Director
      Michael O'Neill, Republican Chief Counsel and Staff Director


                            C O N T E N T S

                              ----------                              

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Feingold, Hon. Russell D., a U.S. Senator from the State of 
  Wisconsin......................................................     5
Leahy, Hon. Patrick J., a U.S. Senator from the State of Vermont.     1
    prepared statement...........................................   118
Specter, Hon. Arlen, a U.S. Senator from the State of 
  Pennsylvania...................................................     3
    prepared statement and attachments...........................   131

                               WITNESSES

Dinh, Viet D., Professor of Law, Georgetown University Law 
  Center, Washington, D.C........................................    12
Peddie, Collyn A., Attorney, Williams, Kherkher, Hart & Boundas 
  LLP, Houston, Texas............................................    10
Stone, Hon. Donna, State Representative, Delaware General 
  Assembly, President, National Conference of State Legislatures, 
  Dover, Delaware................................................     6
Untereiner, Alan E., Attorney, Robbins, Russell, Englert, Orseck 
  & Untereliner LLP, Washington, D.C.............................     8
Vladeck, David C., Professor of Law, Georgetown University Law 
  Center, Washington, D.C........................................    14

                         QUESTIONS AND ANSWERS

Responses Viet D. Dinh to questions submitted by Senator Grassley    26
Responses of Collyn A. Peddie to questions submitted by Senators 
  Leahy, Grassley and Feingold...................................    28
Responses of Donna Stone to questions submitted by Senators 
  Feingold and Grassley..........................................    38
Responses of Alan E. Untereiner to questions submitted by Senator 
  Grassley.......................................................    41
Responses of David C. Vladeck to questions submitted by Senators 
  Leahy, Feingold and Grassley...................................    48

                       SUBMISSIONS FOR THE RECORD

Conference of Chief Justices, resolution.........................    61
Dinh, Viet D., Professor of Law, Georgetown University Law 
  Center, Washington, D.C., prepared statement...................    63
Kessler, David A., M.D., Dean and Vice Chancellor for Medical 
  Affairs, Univorsity of California, San Francisco, and David C. 
  Vladeck, Professor of Law, Georgetown University Law Center, 
  essay..........................................................    72
North American Securities Administrators Association, Inc., 
  Washington, D.C., prepared statement...........................   120
Peddie, Collyn A., Attorney, Williams, Kherkher, Hart & Boundas 
  LLP, Houston, Texas, prepared statement........................   123
Stone, Hon. Donna, State Representative, Delaware General 
  Assembly, President, National Conference of State Legislatures, 
  Dover, Delaware, prepared statement............................   139
Untereiner, Alan E., Attorney, Robbins, Russell, Englert, Orseck 
  & Untereliner LLP, Washington, D.C., prepared statement........   154
Vladeck, David C., Professor of Law, Georgetown University Law 
  Center, Washington, D.C., prepared statement...................   172


REGULATORY PREEMPTION: ARE FEDERAL AGENCIES USURPING CONGRESSIONAL AND 
                            STATE AUTHORITY?

                              ----------                              


                     WEDNESDAY, SEPTEMBER 12, 2007

                                       U.S. Senate,
                                Committee on the Judiciary,
                                                   Washington, D.C.
    The Committee met, Pursuant to notice, at 11:11 a.m., in 
room SD-226, Dirksen Senate Office Building, Hon. Patrick J. 
Leahy, Chairman of the Committee, presiding.
    Present: Senators Leahy, Feingold, Whitehouse, and Specter.

OPENING STATEMENT OF HON. PATRICK J. LEAHY, A U.S. SENATOR FROM 
                      THE STATE OF VERMONT

    Chairman Leahy. Good morning. Unfortunately, with wrapping 
up one last bill on the floor and with the Appropriations 
Committee meeting one floor down on the defense appropriations 
bill, a number of us on this Committee are also on that 
Committee. Unlike members of the judiciary and other branches 
of Government, the Senators are not able to set their schedule 
with any kind of clarity in advance, and so we were delayed.
    Today we will focus on a little-known abuse of Executive 
authority that threatens devastating consequences for American 
consumers. Diana Levine was a successful musician in Vermont. 
She and her husband performed and recorded children's music. A 
few years ago, when she sought medical treatment at a local 
clinic for nausea, she was injected with an antihistamine. A 
subsequent infection resulted in gangrene, and Diana, the 
musician, had to have her arm amputated.
    She filed a common law negligence claim at her local 
courthouse against the drug's manufacturer. A jury awarded her 
$2.4 million in economic damages and $5 million in non-economic 
damages for her life-altering injuries--a figure that is 
certainly much, much lower than it might have been in some 
other States, but it seemed reasonable in our State. The drug 
company defendant appealed. The Vermont Supreme Court upheld 
the verdict and judgment upon review.
    This tragic case demonstrates how our civil justice system 
can work. It also, though, reveals a practice by this 
administration to usurp laws through Federal regulations at the 
expense of consumers. In this case, the drug company has 
ignored the jury findings, ignored the Supreme Court finding. 
Instead, it is seeking review from the U.S. Supreme Court 
because it argues that Federal regulation--not Federal law but 
a Federal regulation--of the drug's label should prevent even 
the filing of the suit for these injuries, that somehow a 
bureaucratic regulation should close the courthouse doors to 
300 million Americans.
    In this case, the Vermont Supreme Court held that the FDA 
labeling rules create only minimum requirements, and that the 
rules are not intended to and do not immunize drug companies 
from liability. It would be one of the most amazing things in 
the world if it did. And I agree with the Vermont Supreme 
Court. But I fear that some on the U.S. Supreme Court will 
follow the lead of the Bush administration and try to throw 
Diana out of court--just as it did Lilly Ledbetter last year in 
a terribly cramped legal opinion written by Justice Alito that 
prevented redress for employment discrimination. It leads many 
to ask what kind of an insulated, cosseted life some judges 
lead, totally devoid from the realities of life of most 
Americans.
    Diana's story illustrates how an obscure legal theory 
called ``implied preemption'' is being invoked to shield 
corporations from culpability and prevent injured Americans 
from obtaining redress for their injuries.
    Today's hearing will examine the Bush administration's 
efforts to assist corporations in this effort and the Bush 
administration trying to override State laws that protect 
Americans. Just yesterday, a judge appointed by this President 
struck down a New York City law requiring fast food restaurants 
to include calorie counts on their menus because local law 
supposedly conflicted with Federal regulations. Ironically, of 
course, it is different when you are out campaigning and 
talking. President Bush once told a group of Governors whose 
political support he needed that the role of the Federal 
Government is ``not to impose its will on States and local 
communities...it's to empower the States and people and local 
communities to be able to realize the vast potential of this 
country.'' Unfortunately, the reality catches up with the 
rhetoric, and the rhetoric rings hollow when the record shows 
clearly the administration's attempt to grant corporate 
defendants blanket civil immunity by aggressively preempting 
State law in the course of issuing administrative regulations.
    Now, in addition to concerns about the administration's 
actions threatening the principles of federalism, Senator 
Specter and I joined to voice our concern about how the 
administration's efforts in this regard violate the powers 
assigned to Congress. On November 17, 2005, we wrote to the 
National Highway Transportation Safety Administration about a 
proposed agency rule on ``roof crush standards'' that sought to 
preempt numerous State laws and ultimately, of course, weaken 
consumer protections for Americans. Senator Specter and I 
pointed out in our letter that it appeared the Federal agency 
was plainly acting beyond the authority granted to it by 
Congress in the Transportation Equity Act. But, unfortunately, 
the Federal agency's response did nothing to address our 
questions about its claimed authority to override State laws 
that may compensate motorists critically injured in car 
accidents. Those roof crush regulations are just one example of 
at least a dozen issued by the Consumer Product Safety 
Commission, the Department of Homeland Security, the Federal 
Drug Administration, and other Federal agencies that are being 
used not to protect consumers but to shield drug and other 
product manufacturers.
    The administration's concerted effort to thwart effective 
consumer protection and to remove the incentive to improve 
safety beyond the minimum standards set by regulatory agencies 
reminds me of the politicization of the Justice Department. 
Just as we have witnessed improper political considerations 
undermine our Federal law enforcement, we are now witnessing 
agency rulemaking turned into a mechanism to immunize powerful 
corporations and political contributors at the expense of 
ordinary Americans. Rather than issuing regulations based on 
facts and science to benefit the American people, the process 
has been hijacked. And the intended result of this politically 
motivated version of rulemaking not only slams the local 
courthouse door on injured victims, but it prevents State law, 
State regulators, and State courts from acting.
    I have gone way over my time. I will put the rest of my 
statement in the record. But when this administration attempts 
to override the efforts of State authorities to provide 
meaningful health and safety and consumer protections, all 
Americans are more vulnerable.
    [The prepared statement of Chairman Leahy appears as a 
submission for the record.]
    Chairman Leahy. Senator Specter?

STATEMENT OF HON. ARLEN SPECTER, A U.S. SENATOR FROM THE STATE 
                        OF PENNSYLVANIA

    Senator Specter. Thank you, Mr. Chairman. This is an 
important hearing to focus on the congressional role in 
specifying whether there should or should not be preemption. We 
have a large body of State law, common law, opening remedies, 
and now we have the regulatory agencies coming in and on their 
own authority saying that their regulatory process preempts the 
State law. And it requires a very close look at precisely what 
is going on and whether we are looking at the rule of law or 
whether we are looking at the ideas of public policy which are 
expressed by a specific administration.
    We have the case of the Consumer Product Safety Commission 
where the administration changes and there is a new Chairman 
and there is a totally different policy--picking up cases which 
had been decided, leading to very severe chastisement by the 
administrative law judge on the retreat from what is the rule 
of law. And we find that the Environmental Protection Agency 
comes out with regulations which modify the Clean Air Act on 
power plant emissions. You find the Children's Health Insurance 
Program is affected by what regulations are issued reflecting 
the policy position of the administration. And so often you 
have the judgments based upon so-called scientific evaluations 
which are highly suspect, whether the books are being cooked on 
these matters to provide a basis for a different regulatory 
process.
    You have the global warming contest. Finally, there is an 
acknowledgment--or at least so it seems--that there is a 
problem on global warming. But a lot of tests were advanced of 
dubious scientific value, and now the President has said there 
is a problem on global warming.
    You had the issue of the mercury pollution. You had the 
Surgeon General Richard Carmona testify about the White House 
directing him as to what to say about scientific findings. The 
Surgeon General is a scientist, not the Office of Management 
and Budget.
    You have the Endangered Species Act. You have the Concerned 
Scientists, 60 leading scientists, including Nobel laureates, 
coming out with a very severe challenge to the findings of the 
National Ambient Air Quality Standards, the regulations on 
asbestos. And so it leads to the inference that there is 
politicization. If you take the public policy determination by 
one administration changing from another, that is what you call 
politicization. And we really are a Nation where the rule of 
law governs.
    But you find the case involving 44,000 children riding in 
all-terrain vehicles who were injured, 150 of them fatally. And 
then you have groups like the National Association of 
Pediatricians, the emergency room doctors coming out wanting a 
change in the ATVs. And you have the agency with its general 
counsel, former counsel on the defense of ATVs.
    So I think we really have traditionally and wisely looked 
to the courts to decide these matters as opposed to the 
regulatory process. But it is a very deep and involved subject, 
and if I had the time, I would read the very excellent 
statement prepared by my staff as my opening statement, which I 
will include in the record.
    Chairman Leahy. I will read it.
    Senator Specter. I said to my superb lawyer--I have got a 
great law firm, by the way.
    [Laughter.]
    Senator Specter. And I said, after reading it, and taking 
some time to read it, I said, ``What am I going to do with 
this?'' I certainly cannot read it. And I am going to put it in 
the record with the hope that somebody will read it. And it is 
recommended reading--not for insomniacs. It will not put you to 
sleep. But we are dealing on some very, very complex issues, 
and I have tried to boil them down in the limited time allotted 
to a comparison of the rule of law versus public policy as one 
administration sees it. ``Politicization'' may be to harsh a 
word, or it may be too accurate a word.
    I do want to say this, Mr. Chairman. The schedule is just 
extraordinary right now, as tough as I have seen it.
    Senator Leahy and I were at the Appropriations Committee on 
the defense appropriation bill, and it is a bad meeting to 
miss. And I am sitting down with the military experts on the 
Webb amendment as to whether we have rotation of troops. So I 
am going to have to excuse myself early from the hearing, even 
though it is a very, very important one. But I will be 
following the transcript very closely.
    Again, I thank you, Mr. Chairman, for your perspicacity in 
scheduling this important hearing.
    [The prepared statement of Senator Specter appears as a 
submission for the record.]
    Chairman Leahy. I never even try to say that word because I 
get it all screwed up, but I thank you. And it is true, we do 
have excellent lawyers on both sides of the aisle here, another 
reason why some of us Senators consider ourselves 
constitutional impediments to the staff running everything, and 
we might be a lot better off if they did.
    Senator Feingold, did you wish to add anything to this?

STATEMENT OF HON. RUSSELL D. FEINGOLD, A U.S. SENATOR FROM THE 
                       STATE OF WISCONSIN

    Senator Feingold. I would like to make a brief statement, 
which my staff prepared for me.
    [Laughter.]
    Senator Feingold. I want to thank you, Mr. Chairman, for 
holding this hearing. In recent years, this administration has 
quietly undermined the longstanding relationship between 
Federal public safety regulation and State common law. After 
decades of recognizing that State common law is an 
indispensable partner to Federal safety regulation, our Federal 
agencies are suddenly taking the position that State lawsuits 
and Federal regulation cannot coexist and that State lawsuits 
intended to compensate the victims of defective products must 
be preempted.
    This is a 180-degree turnaround, and it is being 
implemented through a deliberate end-run around Congress. In at 
least one of these cases, Congress considered and rejected the 
idea of preempting State law. Likewise, agencies are ignoring 
their legal obligation under Executive order 13132 to avoid 
preemptive regulations where possible and to consult with 
States before they issue preemptive regulations.
    This back-door dismantling of State tort law suggests that 
this administration's rhetoric about States rights is really 
just that--rhetoric. It also disserves the public. For all 
their good points, Federal agencies react slowly to industry 
developments and lack the power to subpoena product information 
from corporations. Cases brought by consumers in State courts 
can help ensure that safety standards keep up with the 
industry, and they can provide an invaluable source of 
information for regulators as well as for the public. They also 
provide a critical safeguard against so-called ``agency 
capture,'' the all-too-common phenomenon of agencies falling 
under the influence of industries that they are supposed to 
regulate.
    Even if Federal agencies worked perfectly, Federal safety 
standards are meant, in my view--and, I know, in the view of 
the people in my State--to be a floor, not a ceiling. When you 
prevent consumers from bringing cases in State courts, you 
remove a key incentive for manufacturers to provide safety 
features beyond the bare minimum. And make no mistake--people 
will continue to be injured by defective products. The only 
difference will be who pays the price. It will be the victim 
and the taxpayers instead of the corporation that caused the 
harm.
    So I thank the witnesses for being here. And as Senator 
Specter indicated, it is a very busy morning, so I regret not 
being able to stay long, but I do feel strongly that this is an 
important matter requiring our close attention.
    Thank you, Mr. Chairman.
    Chairman Leahy. Thank you.
    Would the witnesses please stand and raise your right hand? 
Do you solemnly swear that the testimony you will give in this 
matter will be the truth, the whole truth, and nothing but the 
truth, so help you God?
    Ms. Stone. I do.
    Mr. Untereiner. I do.
    Ms. Peddie. I do.
    Mr. Dinh. I do.
    Mr. Vladeck. I do.
    Chairman Leahy. Let the record show that all indicated yes. 
We will go in the order they are there. Donna Stone is a 
Republican member of the Delaware General Assembly and the 
President of the National Conference of State Legislatures.
    Alan Untereiner is a partner in the Robbins, Russell law 
firm here in Washington, D.C., representing drug manufacturers 
in product liability suits.
    Collyn Peddie is an attorney at Williams, Kherkher in 
Houston, Texas. She represents victims who have been injured by 
prescription drugs.
    Viet Dinh is a professor of law at my alma mater, 
Georgetown University Law Center. He is a private consultant. 
He served from 2001 to 2003 as Assistant Attorney General for 
Legal Policy at the Justice Department and is no stranger to 
this room.
    David Vladeck is a professor of law at Georgetown 
University Law Center--my alma mater, I add again, but that is 
not why they are here--where he teaches classes in Federal 
courts, civil procedure, and government processes.
    Representative Stone, thank you very much for being here. 
Let's begin with you. Go ahead.

 STATEMENT OF HON. DONNA STONE, STATE REPRESENATIVE, DELAWARE 
 GENERAL ASSEMBLY, AND PRESIDENT, NATIONAL CONFERENCE OF STATE 
                 LEGISLATURES, DOVER, DELAWARE

    Ms. Stone. Thank you. Good morning. I am State 
Representative Donna Stone, and the President of the National 
Conference of State Legislatures. I am very grateful to 
Chairman Leahy and Ranking Member Specter--I am so sorry. This 
is my first time--and the members of the Senate Judiciary 
Committee for inviting me to speak to you about the preemption 
crisis that is facing States today. I ask that my written 
testimony be incorporated into the record.
    Chairman Leahy. Without objection, so ordered.
    Ms. Stone. Thank you, sir.
    NCSL is troubled by the growing trend in Congress and the 
Federal agencies to pass legislation and promulgate rules that 
have a detrimental impact on States because of their 
intrusively preemptive nature. This trend is problematic. If 
not curbed, it will undermine the genius of our Federal system.
    I am particularly alarmed by the emergence of agency 
regulatory actions that preempt without standing. Agency 
bureaucrats are unelected and have no real accountability to 
those impacted by an agency's preemptive regulations. This lack 
of accountability was the reason behind the 1999 revisions to 
Executive order 13132, better known as ``the federalism 
Executive order.'' This order requires agencies to consult with 
State and local elected officials and their national 
associations, like NCSL, whenever a proposed rule contains 
preemptive provisions. The goal of this consultation is for 
agencies to better understand the preemptive impact of the 
proposed rule and to minimize the preemption.
    Unfortunately, the federalism Executive order does not have 
the force of statute and cannot be enforced. Agencies 
arbitrarily abuse and ignore it. Several recent rulemakings 
serve to illustrate this point, and they share these common 
elements:
    One, enabling legislation contained no statutory authority 
granting the agency permission to preempt the established 
bodies of State law.
    Two, there was no consultation conducted with State and 
local officials.
    And, three, the agency acts sought to preempt significant 
areas of State law not within the purview of the Federal 
regulation.
    The first agency to attempt this recently was the National 
Highway Traffic Safety Administration, or NHTSA. NHTSA tried to 
promulgated a roof crush rule it claimed had no State impact, 
warranting a consultation under the federalism Executive order, 
but then went on brazenly to state that, if finalized, the rule 
would preempt all conflicting State common law in this area, 
including tort law. The rule has not yet been finalized.
    Shortly thereafter, the FDA finalized its 5-year-old Notice 
of Proposed Rulemaking on prescription drug labeling. Just 
prior to finalizing the rule, but long after the public comment 
period had closed, the FDA unilaterally decided to insert 
policy language expressly stating that the rule would preempt 
State product liability laws. Again, NCSL was not consulted, 
had no opportunity at that point to comment against the 
provision, and the FDA's enabling statute granted no authority 
to the FDA to preempt in this area.
    The most recent agency action occurred earlier in 2007 when 
the IRS sought to issue a ruling that would have preempted 
State Constitutions and statutes defining what constitutes a 
legislative day. Once again, there was no consultation with 
NCSL and no statutory authority.
    The problem of unwanted preemption is not solely limited to 
regulation, but is found also in recent acts of Congress. 
Examples include the REAL ID Act; the vaccine liability 
exemption, which prohibits any lawsuit under Federal law or any 
applicable State law from being filed for any claim arising 
from the use of the vaccine or the drug in question; and 
pending election reform legislation that would preempt State 
laws governing voting machine technology and election audit 
procedures.
    NCSL believes that the federalism Executive order should be 
codified in statute to strengthen the intergovernmental 
relations and to enhance transparency in legislative actions 
undertaken by Congress. I have detailed a five-part legislative 
proposal in my written testimony that I think will ameliorate 
these preemption problems. The components of this solution 
include:
    One, enhanced consultation--can I finish up?
    Chairman Leahy. Why don't you just name those parts? I have 
read that. They make a lot of sense. But go ahead and just name 
them.
    Ms. Stone. Enhanced consultation with State and local 
government officials prior to the consideration of preemptive 
Federal legislation or regulation.
    Two, a rule of construction that would pay due deference to 
State law when there is no express intent to preempt present 
law.
    Three, an enforcement provision.
    Four, legislative reporting of a bill's preemptive impact 
on States.
    And, five, an agency impact statement to ensure that 
agencies engage in meaningful consultation with State and local 
elected officials or their national organizations.
    I will stop there. Thank you very much.
    Chairman Leahy. Thank you very much, and your full 
statement is part of the record, Ms. Stone.
    Ms. Stone. Thank you.
    [The prepared statement of Ms. Stone appears as a 
submission for the record.]
    Chairman Leahy. Mr. Untereiner?

 STATEMENT OF ALAN E. UNTEREINER, ATTORNEY, ROBBINS, RUSSELL, 
       ENGLERT, ORSECK & UNTEREINER LLP, WASHINGTON, D.C.

    Mr. Untereiner. Good morning Chairman Leahy, Ranking Member 
Specter, other distinguished members of the Committee. Thank 
you for the opportunity to testify today.
    Chairman Leahy, you indicated that I was here today 
representing drug companies and have represented them and am 
currently representing them in litigation. That is not true. I 
am actually here on behalf of the U.S. Chamber of Commerce as 
well as the Chamber's Institute--
    Chairman Leahy. Is your microphone on, Mr. Untereiner? Is 
your microphone on?
    Mr. Untereiner. It is on. I will try to speak up.
    Chairman Leahy. Thank you.
    Mr. Untereiner. I am here on behalf of the U.S. Chamber and 
the Chamber's Institute for Legal Reform, and the views 
expressed today are my own, based on my experience in private 
practice and involvement in a wide range of preemption cases. I 
have submitted a written statement that discusses the doctrine 
of Federal preemption in detail and addresses a number of 
proposals that have been made for limiting that doctrine in its 
various forms, and I would like to ask that that written 
statement be made part of the record.
    Chairman Leahy. Without objection, it will be.
    Mr. Untereiner. Thank you.
    The doctrine of Federal preemption is critically important 
to the business community, to the creation of unified national 
markets, and to the health of our national economy. These 
benefits are often overlooked in the heated debates over 
whether a particular court decision that is controversial or a 
particular agency action that is controversial is correct.
    We live in a sprawling and large country that is rich in 
many things, including Government. The multiplicity of 
Government actors below the Federal level ensures that 
businesses with national operations will be subject to 
complicated, overlapping, and sometimes even conflicting legal 
regimes.
    These overlapping regulations have the potential to impose 
undue burdens on interstate commerce. When Congress exercises 
its unquestionable power to legislate preemptively, rather than 
merely concurrently with the States, by prescribing a set of 
uniform rules for the entire economy, it streamlines the legal 
system. It also reduces the regulatory burdens on business, 
lowers the barriers to new entry to small businesses, and helps 
to create a unified national marketplace for goods and 
services.
    It is important to remember that many preemption schemes 
created by Congress also vest additional regulatory authority 
in an expert Federal agency. This ensures that preemption does 
not result in a regulatory vacuum. It also means that the legal 
rules governing complex areas of the economy or products are 
formulated by expert regulators with a broad national 
perspective and needed scientific or technical expertise rather 
than by decisionmakers--such as municipal officials, elected 
State judges, and lay juries--who have a far more parochial 
perspective and limited set of information.
    Federal preemption of State law is an ordinary and 
ubiquitous feature of our scheme of Government. By virtue of 
the Supremacy Clause, each new State statute, each new Federal 
statute or regulation automatically preempts conflicting State 
and local law. Also, Congress has passed scores of statutes 
that contain express preemption clauses spanning a very wide 
array of areas, including the design and labeling of many types 
of specific products. These preemption schemes contain 
carefully crafted limitations and other provisions that 
accommodate the interests of State and local governments.
    Reasonable people can and do disagree about such matters as 
the regulatory function of tort law and liability judgments, 
whether it makes sense to treat common law or tort law 
differently under a preemptive Federal regime, and whether 
preemption gives rise to serious federalism concerns or is 
instead fully consistent with the Constitution's structure.
    Because reasonable people disagree, the courts in express 
preemption cases look to the actual language used by Congress 
to discern how Congress has resolved these issues in each 
particular case. There is no need to skew that inquiry with 
special new default rules pointing one way or another.
    Criticisms of so-called obstacle preemption are unfounded. 
The Supreme Court has made clear that obstacle preemption flows 
directly from the Supremacy Clause. Like ordinary conflict 
preemption, obstacle preemption plays a vitally important role 
in ensuring the supremacy and the full effectiveness of all 
Federal laws against incursions by the States. Obstacle 
preemption does not vest too much discretion in judges or 
administrative agencies. True, it does require judges to 
identify the relevant congressional purpose or purposes and to 
decide whether those Federal purposes are being frustrated. But 
Congress often declares its purposes explicitly in a statute or 
in the accompanying legislative materials. In any event, the 
Framers intended that the Supremacy Clause would be enforced by 
the courts.
    It makes little sense to disregard the views of an 
administrative agency concerning whether State or local law 
conflicts with or frustrates the purposes underlying a statute 
the agency is charged with administering. As Justice Stevens's 
opinion in Medtronic explained, an agency to which Congress has 
delegated authority to implement the statute is ``uniquely 
qualified to determine whether a particular form of State law 
stands as an obstacle to the accomplishment and execution of 
the full purposes of Congress.''
    Finally, the Committee should keep in mind that the 
doctrine of Federal preemption applies to all Federal laws and 
the operation of all Federal agencies. Additional generalized 
limits on preemption would impair the ability of Congress and 
administrative agencies to bring about the many significant 
benefits that flow from preemptive statutes and regulations. 
Congress should not allow controversies over a limited subset 
of preemption cases or administrative decisions to drive far-
reaching changes to this important area of law.
    Thank you.
    [The prepared statement of Mr. Untereiner appears as a 
submission for the record.]
    Chairman Leahy. Thank you. We will be getting back to that, 
but keep in mind we are not--I am not as concerned about cases 
where Congress very specifically preempts State law. It is 
something we should do rarely. But there are times when we do. 
I just do not agree when a Federal agency, not having been 
given the authority to preempt, directly or indirectly, 
suddenly does it on their own. At that point nobody is 
responsible. Ms. Stone, Senator Specter, Senator Whitehouse, 
and myself have to respond to our constituents, we have to 
respond to our States if we do something, if we vote for 
something. Somebody who has no responsibility to anybody other 
than the administration in power, it worries me if they are 
given too much authority. It is like these activist judges that 
we all worry about, and currently with the most activist 
Supreme Court I have seen in my lifetime.
    Ms. Peddie?

 STATEMENT OF COLLYN A. PEDDIE, ATTORNEY, WILLIAMS, KHERKHER, 
               HART & BOUNDAS LLP, HOUSTON, TEXAS

    Ms. Peddie. Thank you. Chairman Leahy, Ranking Member 
Specter, and members of the Committee, my name is Collyn 
Peddie, and I am lead counsel in three ongoing preemption 
battles in Texas and Pennsylvania involving thousands of Vioxx 
and vaccine claims. I am grateful to the Committee for allowing 
me this opportunity to give it a firsthand report from the 
front lines of those battles.
    With alarming frequency, those injured by prescription 
drugs see their right to seek compensation and a day in court 
eliminated entirely by the preemption doctrine. For 90 years, 
the FDA maintained that its prescription drug regulations only 
provided minimum standards; therefore, it did not consider 
State actions which asserted higher duties to be in conflict 
with those regulations or preempted by them.
    Beginning in 2002, however, the FDA aggressively asserted a 
new philosophy that FDA regulations provided both minimum and 
maximum standards for prescription drugs. State tort claims 
based on the failure to include in proposed warnings 
information that the FDA considered and rejected would, 
therefore, be impliedly preempted. In 2006, the FDA formalized 
this policy in a preamble to its drug labeling regulations.
    Although most courts have refused to defer to the FDA's 
pronouncement, a handful of courts have ignored Federal law and 
bedrock constitutional principles or relied upon the preamble 
to apply the implied preemption doctrine to preclude thousands 
of claims without trial or any consideration at all of their 
merits.
    Ruby Ledbetter's case is a good example. As a result of 
taking Vioxx for a year and a half, this active, healthy 
grandmother suffered heart attack. She sued Merck for failure 
to warn her doctor of its potential cardiovascular effects. 
Although Texas law would have permitted Ruby to show that Merck 
had withheld from or misrepresented material information to the 
FDA during the Vioxx approval process and, therefore, that 
Merck was not entitled to assert FDA approval as a defense in 
her case, Judge Wilson found that her ability even to try to 
make that threshold showing was impliedly preempted and 
dismissed her claim. In the name of Congress, then, he 
immunized from suit in Texas even drug manufacturers who lie to 
the FDA to gain approval and potentially locked the courthouse 
door to thousands of pharmaceutical plaintiffs.
    In Pennsylvania, Hannah Bruesewitz suffered a similar fate. 
While a normal toddler, Hannah received DPT vaccine. Within 2 
hours, she was in convulsions and has suffered from seizures 
ever since. Ignoring language in the Vaccine Act that expressly 
preserves suits like Hannah's that involve vaccines for which 
there were safer alternatives, a Federal judge held that 
Congress intended to preempt all design defect claims and 
dismissed hers. Worse, a second Federal judge, relying in part 
on the FDA Preamble, would have dismissed as impliedly 
preempted Hannah's failure to warn claims too, even though 
Congress expressly preserved those claims as well.
    Ruby's and Hannah's cases, therefore, reveal an emerging 
pattern of judicial and executive legislating, and 
nullification of laws permitting them to assert tort claims 
against drug companies. During the same period, however, the 
FDA has increasingly failed to enforce regulations designed to 
protect them. In one noteworthy instance, field inspectors 
revealed a corporate-wide problem involving the substitution of 
industrial nitrogen gas for medical oxygen. When nitrogen gas 
was pumped into an Ohio nursing home's oxygen delivery system, 
ten residents went into cardiac arrest and four died. Despite 
strong recommendations from field staff and the indictment of 
the company on negligent homicide charges, FDA officials 
ignored the matter for almost 2 years and took no enforcement 
action of any kind.
    With FDA enforcement actions in free fall and private suits 
increasingly preempted, what must be done to protect the 
public?
    First, Congress must make its intent clear. The FDA's 
pronouncements on preemption will be entitled to little or no 
deference in the face of clear expressions of congressional 
intent.
    Second, Congress must increase its oversight of the FDA and 
other safety agencies. The U.S. Supreme Court in a Vermont case 
is poised to review cases addressing the question of whether to 
give agency assertions of preemption so-called Chevron or 
conclusive deference. It is, therefore, critical that Congress 
police such statements now.
    Third, Congress should consider limiting legislation for 
preemption. Congress should specifically define and restrict 
the circumstances under which it will permit preemption to be 
implied.
    And, finally, Congress should consider passage of uniform 
statutory interpretation rules, including those addressing 
preemption. These laws are already in the common law. They 
should be codified. By providing more guidance to the court and 
agencies in interpreting Federal statutes, Congress can 
increase the likelihood that State and Federal courts will 
follow established principles and not legislate from the bench. 
New studies released just this week reveal that injuries for 
prescription drugs have increased dramatically in recent years. 
Unless Congress acts, and acts now, more citizens like Ruby and 
Hannah will be deprived of their day in court and any 
compensation at all for their injuries. Instead, these costs 
will be shifted entirely to the American taxpayer.
    For these reasons, I urge Congress to adopt the 
recommendations outlined here, and I ask that my more extensive 
written testimony be included in the record.
    Chairman Leahy. Without objection, the testimony will be 
part of the record.
    Ms. Peddie. Thank you.
    [The prepared statement of Ms. Peddie appears as a 
submission for the record.]
    Chairman Leahy. Professor Dinh?

    STATEMENT OF VIET D. DINH, PROFESSOR OF LAW, GEORGETOWN 
            UNIVERSITY LAW CENTER, WASHINGTON, D.C.

    Mr. Dinh. Thank you very much, Mr. Chairman, members of the 
Committee. Mr. Chairman, thank you for having me here and thank 
you for being such a loyal alumnus of Georgetown University Law 
Center.
    I must start with a note of full disclosure since we are in 
that spirit. My written statement, which is submitted for the 
record, is based upon and in some cases recycled from a series 
of articles I have written over the past decade on the question 
of preemption, and many of which I co-authored with Paul 
Clement, then my colleague on the Georgetown University Law 
faculty. And so, Chairman and members of the Committee and 
other witnesses, it is right to focus on this issue as one of 
longstanding concern and potential great constitutional and 
policy import in the past, present, and certainly in the 
future.
    A number of considerations I want to use my limited time in 
order to highlight. That is, we all know Article VI of the U.S. 
Constitution declares the laws of the United States to be the 
supreme law of the land and that judges shall be bound thereby. 
And so when we are talking about preemption, especially when we 
talk about conflict preemption, what we are really talking 
about is supremacy--that is, Federal law is supreme to conflict 
State law. And so conflict preemption, true conflict 
preemption--that is, it is impossible to comply with both State 
and Federal law is simply a choice of law rule that is under 
operation by the text of Article VI of the United States 
Constitution.
    The question of preemption, either express or implied, is, 
properly conceived, a method of regulation which Congress may 
employ pursuant to its power under Article I, Section 8, in 
order to regulate areas of Federal concern, most notably the 
regulation of interstate commerce. And so in that sense, when 
we are talking about preemption, one thing that we should note 
is that we start with a background, even though it was a very 
significant intrusion into State legislative prerogatives, as 
Ms. Stone has so cogently identified, but it works in the 
background of supremacy--that is, the Constitution set forth 
that Federal law shall be supreme. And as long as Congress acts 
within the scope of its power enumerated under Article I, 
Section 8, those laws would be supreme. I agree, however, that 
when Congress so acts, it should be very careful and only 
preempt when it deems necessary.
    The next area of concern that the Chairman has raised is 
the difference between regulatory preemption versus statutory 
preemption. And here I think the unbroken line of Supreme Court 
precedent is clear and unchallenged and correct. That is, so 
long as Congress delegates the power to regulate generally to 
the agencies in their organic statute, then that implication of 
power, that grant of power also implies the methods with which 
to regulate, including to preempt where necessary by express 
provision within the regulation.
    Of course, policies can change across agencies, across 
administrations, across administrators. When those policies 
change, they would be considered arbitrary and capricious 
unless accompanied by a well-reasoned explanation and, 
therefore, answering the Ranking Member's concern about the 
politicization or unwarranted reversals in courses of action.
    To this extent, I do not think that Congress has much to 
worry about in terms of runaway agencies because Congress has 
ample authority to correct such runaway action or to correct 
the course on which the administrative train is headed. It can 
revise the organic statute to deny the power to preempt, if 
that is a specific area of concern. It can amend the underlying 
text of a statute to make clear that the preemption action is 
contrary to congressional intent. And, also, I would not object 
to and, indeed, I would support the codification of the 
federalism Executive order. As Paul Clement and I wrote in 
1999, anything that forces--
    Chairman Leahy. Professor, it is easy to say we can always 
change the statute, but if they are following basically what is 
either spoken or unspoken administration policy of whatever 
administration, that means you have to get those changes past a 
Presidential veto, which means a two-thirds vote in both 
bodies. It is not quite as simple as--I agree with you on the 
basic theory. The reality is a lot more difficult than the 
theory.
    Mr. Dinh. Bicameralism and presentment do work a rather 
significant check on the legislative process, but I do think 
that it remains for Congress to have that tool. Anything that 
forces the Federal Government to stop, listen, and think about 
whether or not it is the proper forum to regulate and to 
displace State law I think is something to be advocated, which 
is why I support the codification of the federalism Executive 
order.
    The only note with which I will end is that I think it is 
profound constitutional policy and interpretive mistake to 
adopt any type of clear statement rule that requires an express 
statement of preemption. Otherwise, there would not be a 
preemption of State law. As you have seen in the progression of 
Federal regulation in the last 50 years, this era of Federal 
regulation has brought a lot of great changes to our society 
and a lot of the changes that many people on the opposite of 
this argument would advocate. And I think that to throw the 
baby out with the bath water because of a temporal fear of 
abuse may be overreaching and an overreaction.
    Thank you very much.
    [The prepared statement of Mr. Dinh appears as a submission 
for the record.]
    Chairman Leahy. Professor Vladeck?

  STATEMENT OF DAVID C. VLADECK, PROFESSOR OF LAW, GEORGETOWN 
            UNIVERSITY LAW CENTER, WASHINGTON, D.C.

    Mr. Vladeck. Good morning. Mr. Chairman, Senator 
Whitehouse, thank you very much for inviting me here to testify 
before you today.
    I want to begin by commending the Committee for grappling 
with this important and timely question. The administration's 
campaign to use regulatory agencies to broadly preempt State 
law raises fundamental questions about federalism, the 
allocation of power between Congress and the executive branch, 
and the importance of State law in compensating people injured 
through no fault of their own, and spurring innovation.
    Recent assertions of preemption by Federal agencies are, in 
the main, nothing less than an effort to arrogate to the 
executive branch power that properly belongs to Congress. 
Displacing State law is no trivial matter. Our federalist 
system is based on the premise that Federal and State law can 
comfortably co-exist, and for most of our Nation's history, 
State tort law has served as an important backstop to both 
Federal and State regulatory law.
    At its core, tort law serves a complementary purpose to 
direct Government regulation. Regulation seeks to prevent 
injury and to weed out products that are unsafe. But there are 
very few Federal statutes that provide compensation for injured 
parties--very few--Price Anderson Act, the 9/11 Act. But 
typically, when Congress regulates, it leaves it to the States 
to compensate people injured through the fault of others. Tort 
law serves that function. It informs the public about 
unforeseen hazards, and it deters unwarranted risk taking.
    Now, why should Congress care about this preemption 
campaign? First and foremost, the administration's policy is 
unsound. If you strip all the legalese that enshrouds the 
debate, what is going on here is that the administration is 
pushing silently and behind closed regulatory agency doors a 
public policy campaign that I do not think they could get 
through Congress.
    Second, the Congress is being pushed as the party that is 
responsible for these wholesale displacements in State law. If 
you look at every agency pronouncement announcing broad 
preemption, they blame Congress. The argument is that ``We are 
simply carrying out the will of Congress.'' So when the FDA 
preempts claims for drugs or medical devices and says that 
people who are injured can no longer sue, Congress is the 
culprit. The executive branch is placing the responsibility 
squarely on your shoulders, where it ought not to be.
    Third, in making these broad preemption claims, agencies 
are repudiating decades, at times, centuries worth of practice. 
These positions that are being set aside were set by their 
predecessors, Republicans and Democrats alike. The FDA's new 
position on failure-to-warn claims is contrary to the position 
taken by every administration since at least 1962 when this 
Congress passed the efficacy requirements of the Food, Drug, 
and Cosmetic Act.
    Fourth, the Constitution makes it quite clear that the 
final say over when State law ought to be displaced is 
Congress's to make, not the executive branch. This is plainly 
an arrogation by the executive branch that Congress ought not 
to stand by and tolerate.
    There have been many discussions about what can be done 
today. I do not share my colleague Professor Dinh's view that 
the process will sort itself out. For one thing, no agency has 
yet actually used the regulatory process as he describes to 
preempt State law. What has happened here is that although in 
the past agencies actually went through notice and comment 
rulemaking to develop regulations that set forth the borderline 
between State and Federal law, they are not doing that. They 
are simply announcing their conclusions in preambles to final 
rules. They are avoiding the notice and consultation 
requirements of the Executive order. This is the Clinton 
Executive order, but it is modeled on its predecessor Executive 
order that was issued by President Reagan.
    Since President Reagan, agencies have faithfully consulted 
with States and local governments before preempting. This new 
campaign is happening, by and large, behind closed agency 
doors, without adequate consultation with the State and local 
leaders like we have here today, and without any opportunity 
for the public to participate in any meaningful sense.
    I realize my time is up. Let me just say that I endorse 
many of the proposals here today. Part of what Congress has to 
do is wrest control of this question back to itself by being 
much more specific when it legislates, by contemplating omnibus 
legislation that will enshrine some of the substantive 
components of the Executive order, and by holding the executive 
branch feet to the fire. This problem has existed since 2002. 
As far as I know, this is the first time that Congress has 
tried to focus its attention on it.
    [The prepared statement of Mr. Vladeck appears as a 
submission for the record.]
    Chairman Leahy. We have a new Congress.
    [Laughter.]
    Mr. Dinh. We are painfully aware of that, Mr. Chairman.
    Chairman Leahy. People suddenly found out these things. We 
realize Congress has the ability for oversight. I rather like 
that, and we will do it.
    As I listen to you, Professor Vladeck, I am struck by the 
parallels between this and the whole question of signing 
statements. Probably the most egregious was all this talk about 
we are going to have a law against torture and the United 
States will not be involved with torture. And I recall one 
Senator, now running for President, who had great press 
conferences on it, and the President had great statements on 
it, and they signed the bill which had been passed virtually 
overwhelmingly by the Congress, and then very quietly on a 
Friday afternoon, put a signing statement saying we will not 
have torture--unless we decide to torture. That is basically 
what it said. And, you know, thus it goes.
    There is a derogation on our part, on the Congress's part. 
I was not in the majority at that time, but what we should have 
done, of course, was immediately pass the law again making it 
very clear that there are no exceptions.
    But you have written extensively about the issue of 
regulatory preemption. Your testimony, which is part of the 
record, has a whole litany of preemption language that has been 
put into Federal regulations.
    It is interesting that a number of these agencies suddenly 
decided almost at the same time to do this. Do you think this 
is a coincidence, Professor?
    Mr. Vladeck. No, it plainly is not. And we know this for 
two reasons. One is this campaign sprung forth at many agencies 
at exactly the same time, and that it came forward in 
regulatory proposals, all of which had to be reviewed 
extensively by the Office of Management and Budget. So the idea 
that the White House somehow doesn't have its fingerprints on 
this effort, writ large, is simply implausible.
    Federal Register notices must be cleared by OIRA, the 
Office of Information and Regulatory Affairs at OMB, before 
they can be published. So this is not just a coincidence.
    Chairman Leahy. Well, also, the Consumer Product Safety 
Commission for the first time recently included language in its 
mattress flammability rules to state that the Flammable Fabrics 
Act necessitates the preemption of State law, including State 
tort law. Why would they make such a change? What would this do 
for product safety?
    Mr. Vladeck. Well, as you know, Senator, there have been 
many, many lawsuits brought and successfully prosecuted under 
that statute. There have been many settlements of claims under 
mattress flammability. So the current law today is that if you 
or your children are injured in a fire with a mattress that 
caught on fire--and they are not supposed to--you would have a 
claim under State tort law and there would be no preemption. If 
the courts agree with the Consumer Product Safety Commission's 
interpretation, this would foreclose State claims across the 
country, and manufacturers of mattresses would be insulated 
from liability in the event that you or your loved ones or one 
of your constituents was injured in such a fire.
    Chairman Leahy. I am going to submit a question on the 
National Highway Transportation Safety Administration, the 
question that Senator Specter and I have raised. Representative 
Stone, you are here speaking for all legislatures. You are a 
Republican legislator. You have showed a lot of concern about 
this. The administration has given great speeches about States 
rights. But am I correct that this is preempting State laws, 
the laws that you and the other legislators pass, or the 
members of the Vermont General Assembly or Rhode Island's 
Legislature or anybody else?
    Ms. Stone. That is absolutely what is happening, sir, and 
our biggest concern--and I mentioned this in my remarks, and 
several other of the panelists have pointed it out as well. The 
folks that write these regulations at the agencies are not 
elected officials. They do not answer to a constituency. You 
do, sir. I do. Senator Whitehouse does as well. I mean, it is--
I believe that they are operating in a vacuum. I believe that 
oftentimes the draft rules are put out by staff. I am not sure 
actually that always the agency heads are aware of what is 
going out there. Or maybe they are very aware of it and it is 
going out with their blessing.
    Chairman Leahy. Either way it is bad.
    Ms. Stone. Either way it is preempting our ability for 
oversight and for taking care of our constituents.
    We are not anti-preemption. There are many instances where 
preemption has served all of our constituents well--the Civil 
Rights Act, women's rights, fair housing. But what we are, sir, 
is we are pro-process. We want to be included in the dialog. We 
want a seat at the table because we are part of the 
stakeholders.
    Chairman Leahy. When you are talking about something like 
the Civil Rights Act, we had years and years and years of 
debate. It became a national issue and then was voted on.
    Ms. Stone. Exactly. Exactly.
    Chairman Leahy. Senator Whitehouse is with me, and I am 
going to turn the gavel over to him in just a moment. But to 
followup on what Senator Specter and I had raised about the 
National Highway Transportation Safety Administration, we had 
raised the question with them about their preemption language 
they put in regulations to set the standards for the integrity 
of car roofs, an obvious safety issue if cars overturn.
    Now, they assert that their rules supplant all State laws, 
but is that consistent with the clear presumption against 
preemption that has been reiterated by even this activist 
Supreme Court?
    Mr. Vladeck. Not at all, Senator Leahy, and it is even 
worse with respect to the Safety Act. The Safety Act contains a 
savings clause that expressly preserves common law. But the 
roof crush standard is an important for another reason, which 
is this standard, once it takes effect, will amend the standard 
that was adopted 37 years ago. And so if an agency revisits a 
regulation every 37 years, in the interim that regulation 
becomes out of date; it stultifies the development of stricter 
and better rules.
    And one of the ironies, of course, is the new NHTSA 
standard will affect very few vehicles because tort 
litigation--and we have had lots of rollover problems, the Ford 
Explorer and so forth--has forced manufacturers over time to 
innovate and to develop stronger roofs. So the new NHTSA 
standard, which if the courts accept this view will preempt all 
State tort law involving roof crush, will affect very few new 
cars--very few new cars because most cars on the road today 
already meet this new standard. But it will freeze product 
liability law until NHTSA chooses to revisit the standard.
    Chairman Leahy. Thank you.
    Senator Whitehouse. [Presiding.] I would like to followup 
on some of Chairman Leahy's questions, because I thought he was 
right in the important area for discussion here.
    Professor Vladeck, twice you have used the phrase ``the 
administration's campaign'' to accomplish this. You are a 
professor of law. You do not use terms unadvisedly. You said 
more or less directly to the Chairman that you believe that 
this is a deliberate political maneuver--that is my phrase, not 
yours--by the administration. My question to you is: Would you 
hazard an opinion as to why? What is the motivation for doing 
this, and particularly in the context of a party that has 
strongly, from the very tippy-top of the party, identified 
itself with States rights for a long period of time? How do you 
reconcile an affirmative campaign to do this by the Bush 
administration with the principle of States rights that the 
Republican Party has allied itself with for so many years?
    Mr. Vladeck. That is a tough question. Let me answer it 
this way. If I can talk about the consequence rather than the 
motivation, I would prefer to do that. I do not know what is 
pushing the administration to do this. I know what the 
consequence is.
    If you look up and down the products that every consumer 
uses--drugs, medical devices, vehicles, the mattresses on which 
they and their families sleep. We have not talked about 
railroad safety or consumer finance issue. On each of these 
issues, the administration has pushed and has pressed very 
broad preemption of State law remedies, particularly consumer 
remedies that go to compensation.
    Now, one could argue that this is simply their view of how 
the justice system ought to work. One could argue that this is 
simply the administration showing that its allegiance really is 
to the business interests that benefit enormously from having 
State tort law withdrawn. But the loser, without any question 
at all, is the American consumer who has had his or her right 
to sue when a medical device fails, a right that pre-dated the 
Medical Device Amendments of 1976, a right that has existed 
indisputably until recently, taken away by the Federal 
Government. And if you look--
    Senator Whitehouse. Over and over again that is the common 
theme of which side--
    Mr. Vladeck. Over and over again--
    Senator Whitehouse.--against the consumer and in favor of 
the manufacturer.
    Mr. Vladeck. Right. And if you look at my testimony--I just 
collected a handful of cases. But if you do the math, those few 
cases involve over 100,000 American consumers who have 
defective heart valves, defibrillators, pacemakers, you know, 
implants, hip and other prostheses. These are serious, serious 
problems. And to tell a consumer who has got a defective heart 
valve they have to go through open heart surgery to get it 
replaced but, by the way, the manufacturer of that defective 
product bears no liability or responsibility for your injury, 
that is a blow to the American consumer.
    Senator Whitehouse. Professor Dinh, we talked a little bit 
about States rights already. Do you agree that this whole 
question of States rights has been an issue or a cause that has 
recently been strongly associated with the Republican Party?
    Mr. Dinh. Absolutely. The Executive order was first issued 
in 1982 by President Reagan. Preemption itself was the subject 
of a Judicial Conference pamphlet written by then-Judge Starr 
advocating the use of a presumption against preemption as a 
second-best alternative to reinvigorating enumerated powers.
    I happen to take a different view from Judge Starr in the 
Judicial Conference report. I think that federalism is properly 
protected by returning to the system of enumerated powers. And 
where Congress acts, and acts properly, then there should be no 
presumption one way or the other for or against preemption, but 
let Congress's intent speak for itself; and the same goes for 
the regulators.
    Senator Whitehouse. But the very principle of federalism, 
first of all, certainly implies a significant policymaking role 
in our society at the State government level, does it not?
    Mr. Dinh. Yes, it does, and that is why we have provisions 
in the Constitution preserving to the States their autonomy, 
and more significantly, the Ninth and Tenth Amendments and the 
prohibition in Article--
    Senator Whitehouse. And establishing the Federal 
Government, indeed, as a Government of expressly limited 
powers.
    Mr. Dinh. Absolutely, sir.
    Senator Whitehouse. Entirely apart from the structural 
system which sets up policymaking and recognize policymaking at 
the State level.
    Mr. Dinh. Absolutely, with one significant--
    Senator Whitehouse. That is an important backdrop in this 
debate, isn't it?
    Mr. Dinh. Right. It is--
    Senator Whitehouse. It is not just the Supremacy Clause we 
are talking about. If you look at the Constitution in toto, you 
have to look also at the limited-government provisions and at 
the whole principle of federalism.
    Mr. Dinh. Absolutely. Two halves of the same coin. 
Specifically enumerated powers in Article I, Section 8, where 
it is properly exercised, those powers take supremacy over 
conflicting State laws. And you are absolutely right in order 
to point to both halves of our federalism, as the court has put 
it.
    Senator Whitehouse. I think back to Ronald Reagan and his 
run for the Presidency and the extent to which in that run he 
championed the idea that there was too much power in 
Washington, that States rights needed to be recognized, that 
Washington was out of touch, and that you needed to 
disaggregated the power away from bureaucrats in Washington. 
And now I see another Republican administration whose 
procedures in this respect run directly contrary to that.
    Is there anything other than irony that would explain that 
contradiction?
    Mr. Dinh. Two observations, Mr. Chairman. The first is that 
there is a good reason why I strongly support the codification 
of the federalism Executive order. To the extent that it has 
been ignored and has not worked, I think we should amp it up in 
order to make it truly enforceable and work, because the 
process of consultation, assessment, and reflection on whether 
or not we intrude upon State legislative prerogatives is one 
that will simply result in better Federal policy.
    My second observation is that there are--you know, I don't 
think we--none of us in this room or in the Republican Party or 
elsewhere is disagreeing with the system of our federalism. 
There may be different questions asked to what is the proper 
forum for a particular resolution of a public policy. Is it 
through the rulemaking process with expertise--
    Senator Whitehouse. But the forum is essential to 
federalism, isn't it?
    Mr. Dinh. It is, but not simply at the State versus Federal 
level but, rather, rulemaking versus--general rulemaking versus 
ad hoc jury decision, which is one example in relevance to--
    Senator Whitehouse. You have provoked me with that.
    [Laughter.]
    Mr. Dinh. I didn't mean to.
    Senator Whitehouse. Well, to remember a phrase in the 
Washington Post article of yesterday on this subject, somebody 
whose name is Darren McKinney, who is apparently a spokesman 
for something called the American Tort Reform Association, 
which apparently has about 300 businesses and trade 
associations as its members, said this: ``Regulatory experts 
are better arbiters of what is a potential threat to a consumer 
than a judge or jury in Michigan.''
    Now, I assume he means that across the board and he is not 
making a complaint about the way judges or juries behave just 
in Michigan. But as somebody who has been a lawyer most of his 
life--I was the Attorney General in Rhode Island. I was the 
U.S. Attorney. I have been in courtrooms pretty much my entire 
professional life. I have got an awful lot of confidence in the 
good common sense of judges and juries. In fact, the 
Constitution really sets out the jury as a very special device 
for making sure that people ultimately can be heard by 
knowledgeable common-sense neighbors rather than, as Mr. 
McKinney says, ``regulatory experts.''
    So it is interesting to me that this individual would say 
that regulatory experts are better than judges and juries. I 
find that highly improbable. But setting aside on the merits 
whether it is true or not, how do you think Ronald Reagan would 
respond to the view that regulatory experts in Washington 
bureaucratic agencies are better arbiters of what is a 
potential threat to people in their homes and neighborhoods 
across this country than their local judges and juries?
    Mr. Dinh. I think President Reagan, as the recent 
publication of his speeches and handwritten radio addresses, 
had some fairly specific views about the litigation system and 
the civil justice system, and I will not try to characterize 
them here. But the fundamental question--and it is a very, very 
good question that you ask, Senator, as you know--is the 
following: Juries and judges in litigation must act also 
according to law. Agencies in exercising their powers delegated 
by you, by this Congress, must act according to the law set 
forth by this Congress. And so ultimately it is a system of how 
do we go about setting forth the best legal rules and are those 
rules going to be followed.
    One of the key elements that, you know, is lurking in this 
room that nobody has put a face to it is this notion of 
regulatory compliance. You know, is it OK for businesses and 
individuals to rely upon the fact that if they comply with the 
regulations issues, they are no longer in jeopardy of suit, 
either criminal or civil? And I think that is a question that 
fundamentally goes to the nature of regulation, be it by 
Congress or by agencies or by State legislatures.
    Senator Whitehouse. In the context of what you have been 
saying about the principle of States rights and federalism and 
the observation that Professor Vladeck drew that one side in 
the political struggle seems inevitably to be the winner in 
these determinations, as a general proposition wouldn't you 
agree that one of the things that defines a principle as a 
principle is that you are willing to stick by it even when your 
team loses?
    Mr. Dinh. Absolutely, and that is why I say that where 
Judge Starr and I differ on preemption is we see different 
paths to the mountaintop.
    Senator Whitehouse. Ms. Peddie, we have been talking about 
the role of judges and juries. You practice before judges and 
juries. I think you and I probably share a view as to the 
ability of judges and juries to get to the bottom of a matter, 
to hash through evidence and to make a fair decision. So I am 
not going to ask you about that because I suspect we agree.
    Ms. Peddie. I think we would.
    Senator Whitehouse. Let me ask you about a different though 
related point, which is that it strikes me that our 
Constitution goes to considerable effort to preserve judges and 
juries from political interference or control. And entirely 
apart from whether they are better quality decisionmakers, they 
are protected as being independent decisionmakers. And, 
clearly, a bureaucrat in Washington making these decisions, 
being told what to do by the President or the White House 
counsel or the Office of Management and Budget or the Office of 
Information and Regulatory Affairs is in a very different 
position. Would you comment on that distinction between the 
independence of judges and juries versus the political control 
over bureaucracies and how that bears on the rights of 
Americans in these circumstances?
    Ms. Peddie. Well, I think there is all the difference in 
the world. In the case of political appointees, which in many 
cases are the ones who are making these decisions, they change, 
and they change with administrations. And so you may have a 
very pro-preemption policy until 2008, and after 2008, you will 
have a very anti-preemption policy. And so what leaving it to 
political appointees does is to make things very unpredictable.
    In the case of judges and juries, my experience, I think, 
has been yours, that they usually reach the right result. Now, 
a few judges in Texas and in Pennsylvania have missed that 
goal, but on the whole, I think they try to do as best they 
can.
    Senator Whitehouse. The ones that are willing to give you a 
clean shot usually--
    Ms. Peddie. Absolutely. A level playing field and I am 
there. That is what we are looking for. But when they are 
hamstrung, as they are or will be in the case if something like 
the FDA Preamble is given conclusive deference, Chevron 
deference, they will not be able to exercise their independent 
judgment and do what they want to do.
    I think one of the examples that I would use here is in the 
case of Vioxx. One of the purposes of FDA regulations that came 
in a few years back when Vioxx was withdrawn from the market 
and much of the reaction that has taken place to that is, oh, 
we have got to get rid of all these claims because there are 
too many, and, oh, some of them have been lost--I think that is 
the best example of the value of jury systems. This is not a 
case--the Vioxx cases are not cases in which, you know, runaway 
juries have done, you know, horrible things. They have weighed 
the evidence; and in some cases they have found for the 
plaintiff, in some cases they have found for the defendant. It 
has been about an even split. And so I think what that 
illustrates is they are doing their job and there is nothing 
that needs to be fixed by an agency coming in and saying, I am 
sorry, you never even get to hear this.
    Senator Whitehouse. There is a phrase we hear in politics 
from time to time that politicians are obliged to ``dance with 
the guy or girl that brung 'em.'' And when you have an 
executive branch that is making its own rules through the 
administrative process, is it not more likely that the 
principle that that political entity has to dance with the 
organizations that support it, that that will infiltrate and 
affect the decisionmaking process than it is among, say, a jury 
in Michigan?
    Ms. Peddie. I think that is absolutely the case. For 
example, the best example I can give you is the architect of 
the preemption policy at the FDA was Daniel Troy, who was a 
lawyer for Pfizer before he ever went into the Administration. 
If the only voice that you hear is the voice of drug 
companies--and I have represented them. I have no problem with 
their exploiting the advantages given. I am here because I do 
not think they should be given those advantages. But when the 
only voice you hear is the voice of the drug companies, when 
they are writing the legislation, when their lawyers are in 
your agency, then, of course, you are going to get results that 
favor those drug companies.
    The people that I represent have no advocate. I am here on 
their behalf, and there are a few organizations that try to 
advocate on behalf of consumers. But we do not get in the halls 
of power very often. And so there is a real disproportionate 
access and voice, particularly in the prescription drug area, 
that we think is very unfair and has resulted in a lot of 
people losing their claims improperly.
    Senator Whitehouse. Mr. Untereiner, there is a famous judge 
who once referred to the States as ``laboratories of 
democracy.'' If you accept that principle that the States are 
laboratories of democracy and that we do not always get the 
answer right away and it is sometimes worth kind of working 
your way through a problem in the real world before you settle 
on the final solution, isn't that an argument in favor of 
Federal regulatory agencies standing back and letting the 
States work this out on their own rather than having there be 
central control out of a bureaucratic agency in Washington?
    Mr. Untereiner. Sure, that is an argument in favor of that, 
and I think the States do have substantial control over tort 
law, and the common law develops in many different ways. 
Preemption of State common law or State tort law is, I would 
argue, rather limited if you look at Congress's handiwork. If 
you look at the express preemption provisions that you have 
passed, it is limited, sometimes only to labeling requirements, 
sometimes only to labeling requirements that differ from the 
Federal requirements so that an injured plaintiff can still 
bring a tort suit under State tort law for violation of the 
Uniform Federal Standard.
    There are all sorts of federalism safeguards built into 
many of Congress's preemption schemes. Those includes things 
like the ability of States to go to the agency and ask for an 
exemption from preemption. In some preemptive schemes--
    Senator Whitehouse. It is a different kettle of fish, you 
will agree, if Congress is going out and making a decision 
about what preempts than it is if an Assistant Secretary of 
something or other is doing that. Isn't it?
    Mr. Untereiner. Yes, although these--
    Senator Whitehouse. Constitutionally different and 
practically different.
    Mr. Untereiner. Yes, although these agencies are operating 
under grants of authority from Congress to regulate health and 
safety and to ensure that interstate commerce is not unduly 
burdened and to ensure that there is some level of uniformity. 
So imagine you are an agency regulator and you are asked by a 
company that has a label that you have approved and that the 
company is required to use going forward whether a new warning 
should be added, and the agency looks at that and decides that 
there is no scientific basis for that warning, that the risk 
does not exist, the warning should not be given, and if it is 
given, it is going to actually discourage people from using a 
valuable product, and, in fact, you know, it is going to be 
contrary to the public health.
    I think a responsible regulator faced with that scenario 
might well conclude that it would be contrary to Congress's 
purposes and to a regulation requiring--or refusing to allow 
that warning, to allow State civil liability judgments to 
punish manufacturers to the tune of millions and millions--
    Senator Whitehouse. Why does that get to be his call, 
though? There are lots of things that, if you put the person in 
power and you could have all the power in the world, they 
would, in fact, make the right decision. But what characterizes 
American democracy is the way to which we have divided and 
subdivided power, both among the separated powers laterally and 
in terms of federalism vertically. And I think it is a very 
dangerous shortcut to say, well, because you can get to a good 
result by violating those provisions, we should violate them. I 
think they should and that the person who is in that position, 
it is their job to go to Congress and ask for the appropriate 
delegation, because that is the place where that authority 
should lie rather than with an executive branch official acting 
essentially unilaterally.
    Mr. Untereiner. The background principle of law against 
which Congress has acted since the early 1960s is that when it 
gives regulatory authority to an agency, that includes the 
authority of the agency to regulate preemptively. That does not 
mean agencies should do it willy nilly. Obviously, agencies, 
like Congress, should pay attention to the prerogatives of 
State and local governments. Congress has, if you look at the 
handiwork, if you look at the range of statutes. And I think 
many of the examples that trouble the Committee involve rather 
narrow instances of preemption where there is, in fact, a 
conflict between a requirement imposed by State tort law and a 
requirement imposed by a Federal agency.
    Senator Whitehouse. Representative Stone, thank you so much 
for being here. I appreciate it.
    Ms. Stone. It is my pleasure.
    Senator Whitehouse. I know that somebody with a position 
like yours, both in the Delaware Legislature and with the 
National Conference of State Legislatures, has a lot of demands 
on their time, and I am grateful that you have taken the 
trouble to be here.
    I just would like to ask you to comment a little bit on the 
process. You used an important phrase earlier. You are pro-
process.
    Ms. Stone. Exactly.
    Senator Whitehouse. And I spent my life before coming here 
in State government, and, you know, I have seen how hard it is 
to get elected Governor. I have seen how hard it is to get 
elected Representative or Senator. I have seen how hard people, 
once they are elected to those positions, work to fight their 
way through issues. It is all done publicly. The galleries of 
the Rhode Island General Assembly are usually filled. There are 
press people scribbling away. There are microphones in the 
hallways. The Governor operates under a similar level of 
scrutiny and attention. Particularly where there is some 
conflict, it gets even greater attention. An enormous amount of 
the energy and the will of the people of my State and of the 
people of Delaware has gone into electing people to those 
positions, electing you to yours.
    From a governmental point of view, isn't that entitled to a 
lot more credit than a decision that may well have been the 
result of a lobbyist's phone call to somebody in the White 
House who called somebody at OMB who called the Director who 
said this goes in and nobody ever saw any of that trail?
    Ms. Stone. We are in agreement. I think that a lot of what 
is happening is you have special interest groups who are not 
able to push their agendas legislatively at the State level.
    Senator Whitehouse. Because they do not have public policy 
merit.
    Ms. Stone. That is exactly right. And so they have found a 
way to circumvent that process. They now have the opportunity 
to do it through bureaucratic agencies, through regulations, 
and that is not what the process should be. These folks are not 
elected. They do not answer to a constituency like you do, like 
I do. They are bureaucrats. And I do not--
    Senator Whitehouse. They may answer to a constituency, but 
it is not like the one that you or I answer to. It is a 
narrower constituency.
    Ms. Stone. A much narrower constituency. And as I said 
earlier, we want to be part of the process. You have been a 
legislator. I am still a legislator. When you are dealing with 
issues, the absolute best way to deal with them is to involve 
the stakeholders. And we in State government are every bit as 
much a stakeholder as anyone else in the issues that we have 
talked about here today.
    We want a seat at the table. We want to be able to be part 
of the conversation. We are where the rubber meets the road, so 
to speak. And your constituents and my constituents are who we 
are answerable to, and that is what we want. We want the best 
for our constituents. That is who we swear an oath to protect 
and to work in the best capability that we can. And that is not 
what is happening. I mean, this is not the way I believe 
federalism was ever intended to work, and we want to get back 
to being included in the conversation and to be listened to, 
not to have an agency make a decision that, oh, by the way, the 
comment period is over and now we have decided that the rule 
that we have put forth actually does preempt State law.
    That is outrageous. It is absolutely outrageous. And we 
would very much appreciate being partners with you. We believe 
that an open process benefits everyone. It allows a better way 
to share information. And I think ultimately it results in much 
better policymaking.
    Senator Whitehouse. Well, thank you, Representative Stone. 
And I want to as I conclude the hearing--we all have places we 
have to be, and I am late for the place I have next to be. But 
I do want to say that I have found this a very, very 
interesting hearing. All of the witnesses have been very 
knowledgeable. I appreciate that they have shared their time 
and their trouble with us. It is an important issue, I think, 
for us to address the campaign that Professor Vladeck has 
identified in this administration, to utilize this, what 
Representative Stone has identified as highly non-democratic 
process, is one that I think merits our attention as a matter 
of genuine significance. And I want to commend Chairman Leahy 
and the Ranking Member of this Committee, Arlen Specter of 
Pennsylvania, for having had the wisdom to pull it together. 
And I thank all of you for your testimony.
    The record will remain open for a week for any further 
comment or answers to questions that you wish, and with that, 
if there is nothing further, we are adjourned.
    [Whereupon, at 12:35 p.m., the Committee was adjourned.]
    [Questions and answers and submissions for the record 
follow.]

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