Daniel Troy's Poison Pill

How a former Bush appointee has the high court poised to wipe out consumer suits over dangerous medical products—and possibly much more.

| Fri Mar. 7, 2008 1:00 AM PST
When it comes to notorious Bush political appointees, Daniel Troy's name doesn't usually make the top-10 list, overshadowed as he is by more high profile cronies such as FEMA's Michael Brown. But for three years in the president's first term, Troy served as the chief counsel to the Food and Drug Administration (FDA), where he quietly advanced a legal revolution that is playing out in earnest in the U.S. Supreme Court this year. This revolution has the potential to affect the health and safety of the nation's citizens for years to come, all while making Troy a rich man. In fact, his career is an illustration of how the Bush administration's revolving door has allowed industry lawyers to radically reshape regulatory agencies to benefit the big businesses they once represented and then profit from those changes when they return to the private sector.

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Back in 2001, when the president tapped Troy for the FDA, Bush made history for turning the general counsel's job into a political appointment, when most of the previous occupants of the position had been civil servants. The appointment was a sign that the president intended to impose a political agenda on the agency. A former clerk to Robert Bork, Troy was a die-hard conservative who had spent most of his career suing the FDA on behalf of drug and tobacco companies over regulations those industries didn't care for. Before going to the FDA, he had worked at the D.C. powerhouse law firm of Wiley, Rein & Fielding, where he represented a number of pharmaceutical companies, including Pfizer, which paid the firm more than $350,000 for Troy's services the year he was appointed to the FDA. A year after the ban on working on matters involving former clients had passed, Troy quickly got to work helping out the drug companies who used to pay his fees.

Under Troy's leadership, the FDA started showing up in state courts, offering briefs in civil cases on the side of drug companies being sued by people who'd been injured by dangerous prescription drugs and other medical devices. In an unprecedented move, agency lawyers argued that because those products had been approved by the FDA, such lawsuits were "preempted" by federal law and should be dismissed.

Troy's FDA was promoting the idea that tort lawsuits in state court interfere with federal regulatory authority by letting judges and juries second-guess decisions over drug labeling and approval made by the experts in federal agencies. The drug companies were arguing, with the agency's help, that FDA approval for a product should be the gold standard and that if companies meet that standard, they shouldn't be subjected to the rules of 50 different states trying to impose their own health and safety standards through lawsuits.

Promoting preemption is a radical new policy for the FDA, which has long believed that, far from interfering with its mission, state tort lawsuits actually enhanced public safety by providing a financial incentive for companies to comply with federal regulations. Troy's predecessor, Margaret Porter, a career official, wrote in 1997 that the agency had a long-standing policy against preemption, because "even the most thorough regulation of a product such as a critical medical device may fail to identify potential problems presented by the product.... Preemption of all such [tort liability] claims would result in the loss of a significant layer of consumer protection."

The Bush administration has embraced preemption largely because it allows the White House to use its regulatory power to achieve what big businesses haven't been able to do through legislation, which is immunize themselves from lawsuits over defective products. In recent years, federal agencies, dominated by industry insiders, have written preemption language into safety regulations, from rules issued by the Consumer Products Safety Commission governing mattress flammability to those introduced by the National Highway Traffic Safety Administration on seat-belt placement and automobile-roof strength. In fact, while the NHTSA was run by a former lawyer for DaimlerChrysler, it issued a roof-strength regulation that was so weak the only possible explanation for its issuance was that it was designed to help auto manufacturers head off lawsuits. Even the EPA has gotten into the act, once filing a brief on behalf of Dow chemical supporting its preemption defense in a case before the Supreme Court in 2005.

But no federal agency has pursued a preemption agenda as aggressively as the FDA did when Troy worked there. In 2003, he appeared at a conference of defense lawyers and in-house legal counsels from drug companies and publicly invited them to contact his office if they had a case the FDA could help them out with. "We can't afford to get involved in every case," he said, according to an affidavit written by someone who was there. "We have to pick our shots…so make it sound like a Hollywood pitch."

During Troy's tenure, between August 2001 and November 2004, the FDA participated in several private lawsuits, including one involving Pfizer, and argued that state courts and juries were illegally usurping federal regulatory power by trying to impose safety standards on drugs or medical devices approved by the FDA. The results of Troy's intervention in the state court suits were mixed, but, to be sure, the FDA's position bolstered the drug companies' position.

Troy's work at the FDA didn't go unnoticed. In 2004, after he attracted some negative publicity for coming to the aid of his former client Pfizer in a lawsuit, Rep. Maurice Hinchey (D-N.Y.) attempted to defund his office. In November of that year, Troy retreated to private practice, where he continues to counsel companies regulated by the FDA. But before he left, he ensured that the preemption doctrine was firmly enshrined at the FDA in regulatory language covering drug labeling.

The "preemption preamble," as it's known, states that this rule preempts all state tort lawsuits against manufacturers who make drugs approved by the FDA. The regulation allows drug companies to invoke the FDA's approval to beat back lawsuits without actually having to get the agency to enter the case. This is a hedge against future Democratic presidents who might want to institute a change of course. The preamble was inserted into the regulation without any public input. Since then, lawyers have repeatedly invoked it when defending companies against personal-injury lawsuits.

The courts have not swallowed Troy's work whole hog. Several courts have rejected the preemption argument outright, and as a result the Supreme Court, which has not been especially sympathetic to injured plaintiffs, recently decided to clear up the confusion. Its most significant ruling arrived in late February in Riegel v. Medtronic. The case was filed by the family of Charles Riegel, who was injured when a balloon catheter burst during an angioplasty. He later died, and his wife sued the manufacturer, alleging that the catheter was defective.

The court ruled for the manufacturer in an 8-1 decision, siding with Troy, who filed an amicus brief on behalf of the medical-device industry arguing that because the device had received premarket approval from the FDA, private lawsuits in state court were preempted. The decision effectively wipes out pending litigation over everything from faulty pacemakers to defective insulin pumps. But the decision is a huge boon to Medtronic, a company whose conduct in the marketplace has hardly been stellar. Not only has it been accused of bribing surgeons to use its products, but the FDA has recalled a host of the company's products. Now, people who have been injured by some of Medtronic's products will have no way of forcing the company to pick up the tab.

Last week, the Supreme Court heard arguments in a second preemption case, Kent v. Warner-Lambert, which was filed by Michigan residents injured by the recalled diabetes drug Rezulin. Michigan bans lawsuits against drug and medical-device manufacturers for products approved by the FDA, but it has an exemption allowing suits to proceed if the manufacturer won approval of a product by engaging in fraud. Troy's firm represents Warner-Lambert in the case. On behalf of the government, the U.S. solicitor general argued that even conning the FDA into approving a product wasn’t a good enough reason to allow a suit proceed. On Monday, the court upheld a Second Circuit court decision permitting the case to move forward.

But the decision was hardly a reason for plaintiffs and consumer advocates to rejoice. The only reason the defendants didn't prevail was because Chief Justice John Roberts owns stock in Warner-Lambert's parent company, Pfizer, and had to recuse himself. In all likelihood, he would have voted with the other conservatives in favor of the manufacturer. The 4-4 decision doesn't bode well for the plaintiffs in another coming drug case that the justices decided to take up, much to the surprise of veteran court watchers. The plaintiff in Wyeth v. Levine is a musician who won a multimillion-dollar jury verdict after her arm was amputated due to an improperly administered drug. The drug company, Wyeth, is arguing that the verdict should be overturned because the FDA's 2006 preemption preamble on drug labeling bans such lawsuits. If Wyeth wins, essentially all private, state-court lawsuits over dangerous drugs and medical devices will be wiped out—and a window into the workings of the companies poorly regulated by the FDA will be boarded up.

Indeed, the underlying assumption behind preemption is that federal regulatory agencies actually do a good job of protecting the public, when there is a host of evidence suggesting that's not the case. In fact, it's been the very private lawsuits that big companies want to eliminate that have often led to major efforts to strengthen the nation's health and safety net.

If the Supreme Court follows Troy's lead, it won't just be pharmaceutical and medical-device lawsuits that are affected. A ruling for the drug company in Levine could also limit lawsuits over everything from toxic chemical exposure to tainted beef—a pretty grim scenario for the average consumer. And there’s reason to believe the court will do just that.

During the oral arguments in the Kent case last week, Justice Stephen Breyer, one of the high court's most liberal justices, showed little sympathy for the plaintiffs or confidence in juries. "Who would you rather have make this decision as to whether this drug is, on balance, going to save people or, on balance, going to hurt people?" he asked. "An expert agency, on the one hand, or 12 people pulled randomly for a jury role who see before them only the people whom the drug hurt and don't see those who need the drug to cure them?"

The arguments showed how successful Troy and other preemption advocates have been in changing the focus on the legal debate, from providing recourse to those injured by faulty products to protecting the companies that make them. They have launched a legal revolution that is as profound as the consumer protection movement Ralph Nader touched off in the 1960s and '70s, only the beneficiaries are the big corporations that want to escape the last remaining check on their work: private lawsuits. The Supreme Court's decision in Riegel and its move to take up the other preemption cases suggests that the revolution is indeed having a transformative effect.

Photo by flickr user rodrigo senna used under a Creative Commons license.

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