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SPILL Act Spills Over: An Intended Consequence?

By James M. Beck and Mark Herrmann

We?re off to cheer on the United States in the World Cup, but first we wanted to share this recent proposed legislation. The Securing Protections for the Injured from Limitations on Liability Act (or SPILL Act) is sponsored by Representative John Conyers. As the acronym suggests, it relates to the Gulf Coast oil spill. It is ostensibly designed to amend the Death on High Seas Act, a century-old law, to allow families of the deceased oil workers to recover non-pecuniary damages such as pain and suffering, and loss of care, comfort, and companionship.

So what does the SPILL Act have to do with drug and device law? As it turns out, quite a bit. Tucked into the SPILL Act is Section 5, an ?Amendment to Class Action Fairness Act.? This proposed amendment redefines ?class action? to exclude actions ?brought by a State or subdivision of a State on behalf of its citizens.? In other words, the amendment would allow state AGs to avoid federal jurisdiction ? which is appropriate in most class action contexts, thanks to the Class Action Fairness Act (CAFA) ? and try to maximize their home field advantage by pursuing parens patriae actions in state court.

Those of you who have been paying attention might remember that we blogged about this issue a month ago, when a federal court here in the Eastern District of Pennsylvania (properly) recognized that a West Virginia parens patriae action should stay in federal court because it was just a dressed-up class action. But this proposed amendment, buried in the middle of the SPILL Act, would undo that decision and allow state AGs to continue flag-waving in their home courts.

Congress passed CAFA, and it has the power to amend the act to exclude parens patriae actions from CAFA?s jurisdictional reach. If you want to look at this in a ?glass half full? way, the amendment confirms that CAFA as currently constructed can apply to parens patriae actions ? so if the bill fails (or this proposed amendment is stricken), parens patriae actions should continue to be largely subject to federal jurisdiction. Overall, though, we say thumbs down to the amendment. Fundamentally, we don?t like supercharging state AG actions by allowing them to proceed in a potentially partisan forum. There's also something a bit sly about trying to sneak this amendment through on the coat-tails of a bill that ostensibly has a different focus. The preamble says it best ? this is a proposed bill ?[t]o revise laws regarding liability in certain civil actions arising from maritime incidents, and for other purposes.? Those nebulous ?other purposes? appear to include efforts to rewrite CAFA so broadly that state AGs can escape federal jurisdiction in any parens patriae case. Sure, the state AGs would rather litigate parens patriae actions relating to the oil spill in state court ? but if the bill passes, they?ll also be able to litigate their parens patriae drug and device cases in state court. And we realize we?re spitting in the wind here, because riders are a time-honored Congressional tradition?but it doesn?t mean we have to like it.

Full post as published by Drug and Device Law on June 23, 2010 (boomark / email).