Law360, New York (March 18, 2016, 11:25 AM ET) -- Justice Antonin Scalia’s death has generated intense debate about his legacy and the future of the U.S. Supreme Court. Scholars and practitioners alike remember Justice Scalia’s positions on social issues and his adherence to originalism and textualism. Justice Scalia’s legacy in the product liability context, however, shows a more nuanced jurist. His theories of constitutional and statutory interpretation did often lead to decisions in line with the corporate defendant’s position — on preemption, class action and arbitration. But the same principles resulted in pro-plaintiff dissents in the realm of punitive damages. We highlight these key opinions and their lasting influence on product liability law as our tribute to Justice Scalia.
We begin with the medical device preemption decision of Riegel v. Medtronic Inc., 552 U.S. 312 (2008). There, Justice Scalia held that the preemption clause of the Medical Device Amendments of 1976 barred state common law claims challenging the safety or effectiveness of medical devices granted premarket approval by the U.S. Food and Drug Administration. In his majority opinion, Justice Scalia relied on the text of the statute’s express preemption provision. By its plain language, the statute preempted state requirements “different from, or in addition to, any requirement applicable ... to the device” under federal law.
Justice Scalia distinguished the Court’s previous decision interpreting this provision, Medtronic Inc. v. Lohr, 518 U.S. 470 (1996), where the Court had declined to find preemption. Lohr concerned a less rigorous undertaking whereby manufacturers could avoid the premarket approval process if the new device was “substantially equivalent” to a device that predated the act. He framed the substantially equivalent review as a qualification for an exemption rather than a federal “requirement.”
But Justice Scalia also adhered to the conclusion of five Justices in Lohr that state “requirement[s]” encompass the state’s common law duties absent a contrary indication. In Riegel, Justice Scalia found no reason to depart from the normal rule and explained why preemption applied to the state tort claims as well as to state regulations. “State tort law that requires a manufacturer’s [devices] to be safer, but hence less effective, than the model the FDA has approved disrupts the federal scheme no less than state regulatory law to the same effect.” Moreover, a jury’s verdict is even more problematic in this area than a state regulation because the jury “sees only the cost of a more dangerous design, and is not concerned with its benefits.”
Beyond the holding itself, Justice Scalia’s decision was significant for other reasons. First, he did not even mention the presumption against preemption despite the dissent’s express invocation of it. This omission suggested that the majority had in fact rejected the presumption. Second, Justice Scalia contemplated a hypothetical situation in which state common law claims that are “parallel” could survive preemption, but he declined to address the situation in the first instance. This narrow potential carve out has left an opening for the plaintiffs bar that lower courts have grappled with, but that the Supreme Court has yet to address.
Justice Scalia’s subsequent product liability preemption decision, Bruesewitz v. Wyeth LLC, 562 U.S. 223 (2011), again found state law claims preempted by federal law. There, writing for the majority, Justice Scalia held that a preemption provision in the National Childhood Vaccine Injury Act barred state law design-defect claims against vaccine manufacturers. Even more than in Riegel, Justice Scalia parsed the statutory text, which insulates vaccine manufacturers from liability “if the injury or death resulted from side effects that were unavoidable even though the vaccine was properly prepared and was accompanied by proper directions and warnings.” Justice Scalia read the text to mean that the design of the vaccine was not subject to tort litigation. In addition, he said, the act contained a legitimate “quid pro quo:” vaccine manufacturers fund the federal administrative compensation scheme in exchange for avoiding costly tort litigation and the occasional runaway verdict. The justice underscored that as a practical matter, taxing manufacturers while leaving them subject to liability for defective design “would hardly coax manufactures back into the market.”
This decision, too, left its mark on the product liability field. First, although Justice Scalia focused on the text, the result struck an important policy balance in favor of protecting vaccine manufacturers and thereby encouraging them to continue making vaccines. Second, as in Bruesewitz, the Court declined to validate any presumption against preemption. Finally, in both of his product liability preemption decisions, Justice Scalia signaled the promise of more protection for defendants, who could thereby market drugs for consumers’ benefit. He also voted this way in other leading preemption decisions, such as PLIVA Inc. v. Mensing, 131 S. Ct. 2567 (2011) (holding that federal law applicable to generic drug manufacturers preempts state law failure-to-warn claims) and Mutual Pharmaceutical Co. v. Bartlett, 133 S. Ct. 2466 (2013) (holding that federal law preempts state law design-defect claims against generic drug manufacturers that turn on the adequacy of a drug’s warnings).
Justice Scalia’s other decisions that bear mention here curtailed the use of class actions and decided important issues applicable to product liability law.
The first of these cases is the well-publicized Wal-Mart Stores Inc. v. Dukes, 564 U.S. 338 (2011). Dukes involved employment discrimination claims asserted on behalf of 1.5 million current and former female employees. Dukes alleged that the discretion exercised by local supervisors concerning pay and promotion discriminated against women in violation of Title VII. Not a single justice believed that certification of this behemoth class was appropriate under the Federal Rules of Civil Procedure. But for our purposes, the analysis in Justice Scalia’s majority opinion merits further discussion.
Justice Scalia’s analysis of the commonality requirement of Federal Rule 23 includes important lessons applicable to all putative class actions. Per usual, Justice Scalia looked to the relevant text, which required a plaintiff to establish that “there are questions of law or fact common to the class.” But Justice Scalia also fell back on a common-sense approach because any competent plaintiff could craft a complaint that literally asserts common questions. Although this requirement had been seen as a relatively easy hurdle, the majority gave it teeth. Specifically, the putative class claims “must depend upon a common contention ... of such a nature that it is capable of classwide resolution.” In other words, determination of that common question must “resolve an issue that is central to the validity of each one of the claims in one stroke.” The centrality requirement means that lower courts can no longer find commonality satisfied when any conceivable, tangential issue exists. This decision thus imposes meaningful requirements to reign in out-of-control class actions, including in the product liability context.
Justice Scalia struck another blow to class actions in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), in which he upheld class action waivers in arbitration agreements. Writing for five justices, Justice Scalia held that the Federal Arbitration Act preempted California state law that deemed class arbitration waivers over small damages amounts unconscionable.
Unsurprisingly, Justice Scalia again emphasized the statutory text. That provision makes agreements to arbitrate “valid, irrevocable and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Justice Scalia noted that although the savings clause preserved general contract defenses, it did not suggest an intent to preserve arbitration-specific rules that obstruct the act’s goals. He read the act to require equal treatment for arbitration agreements and other contracts. Justice Scalia emphasized that the California rule to the contrary “interfere[d] with fundamental attributes of arbitration.” At bottom, Justice Scalia explained that class arbitration compromised the informality of the arbitration process and, as a practical matter, did not constitute arbitration at all.
The Concepcion decision has significant implications for product liability law because its reasoning applies to sellers of all kinds of goods and services. We should continue to see an increasing number of class action waivers given Justice Scalia’s green light. This is especially so after American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013), in which Justice Scalia’s opinion held class arbitration waivers enforceable even when the individual’s cost of pursuing a claim exceeds the economic value of the potential recovery. Together, these decisions establish that businesses who desire to pursue arbitration, not class litigation, have a wideranging ability to include class action waivers in their arbitration agreements.
As evidenced above, Justice Scalia consistently adhered to a close, literal reading of the text at issue. That theory of interpretation, however, played out for plaintiffs when it came to punitive damages, even though he could not garner a majority.
Justice Scalia’s punitive damages decisions prompted two of his trademark dissents in BMW of North America Inc. v. Gore, 517 U.S. 559 (1996) and State Farm Mutual Automobile Insurance Co. v. Campbell, 538 U.S. 408 (2003). The majority opinions in those cases imposed limits on punitive damages based on the due process clause of the 14th Amendment. Justice Scalia, however, dissented on a fundamental level: he believed that the Court’s review of punitive damages verdicts was “an unjustified incursion into the province of state governments.” According to Justice Scalia, the due process clause guarantees some opportunity to contest the reasonableness of a damages judgment in state court but does not provide any federal guarantee that a damages award in fact be reasonable. For that proposition, Justice Scalia turned characteristically to the text, where he found no “secret repository of substantive guarantees against ‘unfairness.’”
Justice Scalia’s product liability jurisprudence is just one area in which the late justice had an impact. While one may not agree with all (or even most) of his opinions, he made important contributions to product liability law and his presence will be missed.
Published by Appellate Law360, Class Action Law360, and Product Liability Law360 on March 18, 2016.