Most Important Supreme Court Case in Decades

The Supreme Court handed down a 8-1 decision today that may mark an important inflection point in our regulatory lives. The court sided with Fridley Minnesota based Medtronic in a decision that eliminates a companies liability for personal injury on devices that have been approved by and meet FDA standards. No more suits for coated stents, pacemakers or other devices no matter what kind of damages they have caused, as long as the FDA has approved them anyway. The New York Times has a decent article on the case and it's ramifications.

When the state, in this case the FDA, takes responsibility for "approving" the safety of a product they have in fact made a legal claim that the reward outweighs the risk for that product. That claim must hold true for the products producer as well its user. Therefore if an injury occurs it was an injury that was pre-approved by the government as part of the overall risk/reward equation.

This is the natural progression of a regulatory society. A society in which the government assumes some responsibility away from individuals can, and maybe should, also remove their accountability. The fact that it is impractical to sue the state, the rewards for doing so are very limited, means those injured by a bad medical product are given no recourse. Now imagine what this means not only for the soon to be heard case on pharmaceuticals but other areas where the state has regulatory approval procedures for products. Everything from cars to buildings where government provides a preemptive approval based on certain criteria is going to be open to this same logic.

Two possible directions we may go from here are quite different. There could be a push to eliminate many of the current regulations and allow those creating the products in question to be responsible for the liabilities involved or, agencies like the FDA can drastically increase the rigor of their approval processes. The first would be politically unpopular with those on the left that feel that agencies like the FDA are the only thing between the ogres that produce products for money and mere humans as well as the companies who would become responsible for their own products. Funny how both "sides" in the battle want protection from the same entity. The second is more likely but sure to put a chill into all affected industries as it would increase the cost of producing products and reduce the time in which those costs can be recovered. In turn reducing the number of medical innovations available to all of us.