Federal Preemption of State Law

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Issue: Federal Preemption of State Law

Impact:

In an effort to establish national policies on health care access and medical cost containment, members of Congress have introduced bills repeatedly in successive Congressional sessions to federalize and alter litigation procedures in health care lawsuits.  In addition, bills have been introduced to federalize certain aspects of trade secret enforcement. Despite the tradition of state law primacy, a number of legislators have begun to call for the recognition of a private federal right to sue those who acquire trade secrets by improper means.  Some proposals would preempt state laws.

Position:

State court leaders have repeatedly urged Congress to be mindful of federalism principles when considering any legislation seeking to make uniform practices and procedures. 

Summary:

Following patterns in previous Congresses, the House in the 115th Congress is considering several bills to create uniform national mandates with respect to “health care lawsuits”.  Such proposals would federalize in significant ways many state policies and practices, as provided in statutory and common law, including provisions to: (1) establish a nationwide limit and calculation formula for non-compensatory and punitive damages, (2) repeal the collateral source rule, (3) limit contingency fees for claimant attorneys,  (4) institute a uniform 3-year statute of limitations for health care lawsuits, and (5) create a safe harbor from tort claims for medical professionals who follow standard of care definitions promulgated by statutorily created professional commissions.

Status:

The ULC State & Federal Relations Committee continues to meet two times per year to plan outreach to the federal government and organizations concerning federalism issues. NCSC staff participates in the meetings.  The ULC State & Federal Relations Committee met again in Washington, DC in November.

On 6/29/17, the House adopted the Protecting Access to Healthcare Act of 2017 (HR 1215) and referred the bill to the Senate.  The bill would make sweeping reforms to medical malpractice litigation and preempt many state practices.  For example, the bill would preempt state laws that conflict with the bill’s statute of limitations, curbs on the use of periodic payments for future damages, immunization of healthcare provider use of products cleared by the FDA, mandate on plaintiff attorneys filing certificates of merit at case filing, limitations on attorney contingent fees, setting qualifications on expert witnesses, outlawing of the collateral source rule, and caps on noneconomic damages.  House members who opposed the bill claim that it intrudes on state sovereignty by preempting several areas of tort law that traditionally have been governed by the jurisprudence of each individual state or by state legislatures.  Given the grave federalism implications of HR 1215, at its August annual meeting, the CCJ adopted a resolution urging the Congress, especially the Senate, to proceed cautiously with any further action on the House bill.  The Senate has not taken any action on the legislation.