Julie Samia Mair, Michael Mair


Biosecur Bioterror. 2003;1(3) 

In This Article

Approaches to Vaccine Liability

There are four important historical precedents to handling vaccine liability, which are not always mutually exclusive: (1) the government can substitute itself as defendant and accept liability on behalf of the participants in the vaccination program; (2) the government can decide that no one needs to be held liable and establish a no-fault compensation program; (3) the government can indemnify (i.e., reimburse) vaccine manufacturers and distributors, providers, and other participants after they have been sued and a judgment issued against them; or (4) the government can alter the normal rules of litigation and/or compensation. Each of these methods has its proponents and critics, each will affect various stakeholders differently, and each alleviates different concerns.

Under the historic legal doctrine that "the king can do no wrong," the federal government is immune from all liability and cannot be sued without its consent.[5] Recognizing the inherent inequities that resulted from such sweeping protection, the federal government has waived its sovereign immunity in some circumstances. With the enactment of the Federal Tort Claims Act (FTCA)[6] in 1946, the federal government agreed to substitute itself as defendant when federal employees, who were acting within the scope of their office or employment, are sued in tort.[7] Tort has been defined as a "private or civil wrong or injury, including action for bad faith breach of contract, for which the court will provide a remedy in the form of an action for damages."[8] When the government substitutes itself as defendant under the FTCA, federal employees cannot be sued in tort and special rules govern the lawsuit -- for example, the lawsuit must be brought in federal court,[9] there is no right to a jury,[10] and punitive damages (i.e., damages that "punish" intentional or egregious misconduct)[11] are not allowed.[12] The Swine Flu Act[13] -- the law that established the National Swine Flu Immunization Program in 1976-77 and provided liability protection to vaccine manufacturers and other participants in the program -- was initially based solely on this approach,[14] as was Section 304.

Laws that waive government immunity are construed narrowly by the courts. The rationale is that because the government is otherwise immune from liability unless it explicitly waives that immunity, the government, not the courts, should decide the extent of that waiver. Therefore, federal courts interpreting Section 304 and other laws that invoke the FTCA will tend to limit the circumstances under which the government accepts liability. But as no court has yet interpreted Section 304, the extent of liability protection is not yet known.

In addition, different federal courts do not always interpret the same law the same way. Starting from the highest court, the federal court system consists of the U.S. Supreme Court, 13 Courts of Appeals, including the Federal Circuit, and more than 90 district courts.[15] District courts fall under the supervision of the Courts of Appeals. For example, Maryland, Virginia, West Virginia, and North and South Carolina are in the Fourth Circuit Court of Appeals. Texas, Mississippi, and Louisiana are in the Fifth Circuit. If a case is brought in a district court in Virginia, an appeal is filed with the Fourth Circuit Court of Appeals; if it is brought in a Texas district court, the Fifth Circuit Court of Appeals will review the decision.

Although Circuit Court of Appeals decisions can be appealed to the U.S. Supreme Court, the Supreme Court hears only the cases it agrees to hear. When disagreement exists on the interpretation of a particular federal law among the Circuits and the disagreement is important, the Supreme Court often reviews the issue, presumably settling the matter once and for all. Therefore, the ultimate extent of liability protection under the Homeland Security Act may not be known for years.

The term "no-fault compensation" means that compensation is provided without a showing that someone did something wrong. Compensation is a concept closely related to but different from liability. In this context, compensation refers to the amount of money a vaccine recipient who experiences an adverse reaction will receive, whereas liability refers to who will be held legally responsible for the adverse reactions of the smallpox vaccine and the extent of that responsibility.

The National Vaccine Injury Compensation Program (VICP)[16] is an example of a no-fault compensation scheme. In the early 1980s, increased numbers of lawsuits were filed related to DTP vaccines (diphtheria, tetanus, pertussis) and other childhood vaccines. Vaccination rates among children fell, and vaccine manufacturers left the market, causing vaccine shortages that threatened the nation's health.[17] In response, Congress passed the National Childhood Vaccine Injury Act of 1986[18] establishing the VICP. The VICP covers vaccines that the Centers for Dis-ease Control and Prevention (CDC) recommends for routine administration to children, including DTP, measles, mumps, rubella, and polio.[19]

To receive compensation, an individual or individual's family claiming an injury or death resulting from a qualifying childhood vaccine must first file a petition with the U.S. Court of Federal Claims. The petitioner must show that: (1) the injury that occurred is listed on the Vaccine Injury Table and was not due to an alternative cause; or (2) the vaccine caused the condition; or (3) the vaccine significantly aggravated a preexisting condition. A physician at the U.S. Department of Health and Human Services (DHHS) reviews the petition to determine if the petitioner is eligible for compensation and issues a report. A Department of Justice attorney files the report with the Federal Claims Court and represents DHHS's position in hearings before a "special master," who decides whether compensation should be awarded. That decision can be appealed. If the petitioner is found ineligible for compensation or is dissatisfied with the award, the petitioner can then sue the vaccine manufacturers and/or administrators of the vaccine directly in state or federal court subject to modifications of state tort law.[20]

The VICP has been criticized,[21,22] and there have been repeated efforts to amend it.[23,24] For example, it has been argued that the VICP has become highly adversarial, that proving causation is extremely difficult, and that the limitations on attorneys' fees and expenses make experienced attorneys unwilling to represent claimants.[25]

In the same legislation that amended Section 304, the Smallpox Emergency Personnel Protection Act of 2003, Congress passed a new law providing no-fault compensation to eligible smallpox vaccine recipients.[26] A detailed discussion of these compensation provisions and of compensation issues in general is beyond the scope of this article, but the interaction of Section 304 with the compensation provisions of the Smallpox Emergency Personnel Protection Act is discussed below.

Indemnification is a third option potentially available to Congress. With indemnification, a vaccine manufacturer, for example, would remain the defendant in a lawsuit and could be found liable, but the government contractually agrees to reimburse the manufacturer for damages awarded against it. Indemnification can take many forms. The government could agree to pay all or part of an award and may or may not pay the cost of litigation.

With respect to smallpox vaccine liability, it had been proposed that indemnification could be provided through Executive Order 10789,[27] as amended in October 2001,[28] which allows DHHS to enter into certain contracts in connection with national defense. Some have argued that Executive Order 10789 in particular, and indemnification in general, does not give enough protection to the vaccine industry.[29,30] For example, it was stated in written testimony submitted to Congress in 2001 that Executive Order 10789 is a "very crude plan" and "severely limited" because it is discretionary, restricted to liability costs later judged to be reasonable, and applies only where the plaintiff obtained the vaccine directly from the government.[31]

As of late 2002, pursuant to Executive Order 10789, as amended, DHHS purportedly had entered into indemnifi-cation agreements with two smallpox manufacturers, Wyeth and Aventis Pasteur, and was negotiating with a third, Acambis Baxter.[32] However, a February 2003 amendment to Executive Order 10789[33] may limit this option. Executive Order 10789 now states that after March 1, 2003, with limited exceptions, no executive department or agency (including DHHS) shall enter into such indemnification agreements with respect to any matter -- such as vaccines -- that has been or could be designated "qualified anti-terrorism technology" under the Support Anti-terrorism by Fostering Effective Technologies Act of 2002, or "SAFETY Act,"[34] which is discussed below.

Congress could adjust the rules of litigation through legislation. The SAFETY Act, enacted by different sections of the Homeland Security Act,[35] allows the Secretary of Homeland Security to designate any product, equipment, service, device, or technology as "qualified anti-terrorism technology" after several criteria are considered.[36]

Manufacturers of vaccines against potential bioweapon agents theoretically could meet the criteria if the vaccines are considered products that, for example, "would be effective in facilitating the defense against acts of terrorism"[37] or there existed an "extraordinarily large or extra-ordinarily unquantifiable potential third party liability risk exposure."[38] Once a product qualifies as anti-terrorism technology, a series of restrictions and special rules apply to lawsuits filed against the seller of the product with respect to acts of terrorism. For example, the lawsuit must be brought in federal court,[39] punitive damages or other damages not intended to compensate for actual loss, as well as interest prior to judgment, are not allowed,[40] liability can be no greater than the limits of liability insurance "reasonably available,"[41] and the socalled government contractor defense (which shields a contractor from tort liability if its product is manufactured in accordance with government specifications) is strengthened in some cases.[42] In addition, once a product is deemed qualified anti-terrorism technology, liability for all claims "arising out of, relating to, or resulting from an act of terrorism"[43] with respect to the anti-terrorism use of such technology is capped at the limits of liability insurance coverage required under the SAFETY Act. Because no court has ever interpreted the SAFETY Act, the liability exposure is uncertain.[44] Nevertheless, the seller of the qualified anti-terrorism technology is still sued under more favorable rules and will not pay a judgment against it above what insurance would pay.

Congress also could have drafted legislation similar to the Price-Anderson Act,[45] which deals with injury and death related to nuclear incidents and, among other things, places a cap on liability. In addition, the government could have simply prohibited all or most lawsuits against vaccine manufacturers and other participants in the smallpox vaccination program. For example, legislation is now before Congress that would prohibit most lawsuits against gun manufacturers and others in the gun industry, including some alleging willful misconduct.[46] The lawsuits that still would be permitted appear to be relatively few and subject to strict limitations. This is a drastic measure, as access to the courts is severely restricted and there are no alternative defendants to pursue (e.g., a suit against the government in place of the protected industry).


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