Imagine running a restaurant where you need 51 different menus. Not because your customers want them, but because trial lawyers in each state and Washington, D.C., demand them.
That’s what could happen for some businesses if the Supreme Court decides, in an upcoming case, to let states impose laws that cover the same products as federal law but set out different labeling requirements. The U.S. Chamber of Commerce and other business groups urged the high court to step in to review a lower-court decision that did just that. So did the federal government and 15 state attorneys general. The court granted review and will now hear oral arguments in April.
If the lower court’s decision is affirmed, a business busy complying with federal law could still face legal jeopardy because one state sets different standards. In a time when affordability is front and center for every American, this case should be on your radar.
The legal question centers on the Federal Insecticide, Fungicide, and Rodenticide Act, the federal law that governs pesticide labeling and sales.
Under FIFRA, the Environmental Protection Agency reviews and approves pesticide labels. FIFRA contains an express preemption provision that forbids states from imposing different or additional labeling requirements once a label is approved. Plaintiffs argue glyphosate-based products are problematic, but the EPA has spent decades studying the safety of glyphosate and has found that it does not cause the very illness that the plaintiffs claim the manufacturer should have included a warning label about. However, lawsuits have already resulted in multimillion-dollar verdicts.
As a general proposition, the same product should not require different labels in different states, much less labels that the federal regulator overseeing the product disagrees with and forbids. Compliance shouldn’t be a moving target. And it shouldn’t be impossible.
Yet inconsistency is exactly what plaintiffs’ lawyers are banking on. They seek hyper-regulatory jurisdictions to secure high payouts, then flood the airwaves with ads to find more clients. Here, they claim the product label should have included additional warnings under state law, even after federal approval. They argue this even though the EPA has explicitly said that the product didn’t need such a warning label and, moreover, that the EPA wouldn’t approve it. If their claims are accepted, then companies would have to violate federal law in order to comply with state law.
People who are actually harmed by unlawful conduct should be eligible for appropriate compensation. Business owners don’t want to excuse wrongdoing. The problem is punishing companies that are simply following the rules.
This case reaches far beyond pesticides or farming. Medical devices, cosmetics, over-the-counter drugs, meat, and even egg products operate under federal statutes with express preemption language that is the same as, or very similar to, FIFRA’s language.
If the Supreme Court holds that federal law preempts state warning labels in cases such as this one, thousands of costly lawsuits could be affected.
But if a Supreme Court decision results in a fragmented regulatory landscape, this would invite similar suits across the economy. Litigation costs would rise. Businesses would spend more on legal defense, settlements, and insurance. Instead of investing in employees or equipment, they’d be setting aside money for lawsuits.
These increased costs would show up as higher prices and higher premiums, not to mention job cuts and reduced innovation. Americans already see an average of $4,200 in “hidden costs” due to our lawsuit system, with fraudulent and meritless lawsuits contributing to the costs. Imagine piling more costs on top of that.
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If such a system comes into being, companies will decide whether it’s worth the legal and regulatory headaches to keep products on the market. It will mean fewer choices for you.
The stakes are enormous. Lower courts are split. Cases are pending across state and federal courts. The Supreme Court has a chance to affirm a simple principle: when businesses follow uniform federal labeling laws, they shouldn’t pay a price. And neither should American consumers.
Stephen Waguespack is the president of the U.S. Chamber of Commerce’s Institute for Legal Reform.