Mayer Brown's



2001 Term, Number 3 / October 29, 2001

Today the Supreme Court granted certiorari in two cases of potential interest to the business community. Amicus briefs in support of the petitioners are due on Thursday, December 13, 2001, and amicus briefs in support of the respondents are due on Monday, January 14, 2002. Any questions about these cases should be directed to Eileen Penner (202-263-3242) in our Washington office.

Americans with Disabilities Act — Threat to Self. The Supreme Court granted certiorari in Chevron U.S.A., Inc. v. Echazabal, No. 00-1406, to determine whether the Americans with Disabilities Act ("ADA"), 42 U.S.C. §§ 12112 et seq., requires an employer to hire an applicant who has a medical condition that would result in the applicant facing a serious risk to health or life in carrying out the essential functions of the job.

Mario Echazabal applied for a job as a plant helper in a Chevron refinery in California. After Chevron offered him the job, a medical examination revealed that Echazabal had chronic active Hepatitis C and significantly elevated liver enzymes. Chevron's written job description explained that the plant helper job required the ability to withstand exposure to liver-toxic chemicals. After consulting its own and Echazabal's physicians, who advised that Echazabal should not be exposed to liver toxins, Chevron determined that Echazabal could not perform the essential functions of the plant helper position without posing a serious risk to his own health, including the risk of death. Chevron therefore withdrew its offer of employment.

Echazabal sued, alleging that Chevron had discriminated against him in violation of the ADA. The ADA prohibits an employer from discriminating "against a qualified individual with a disability because of the disability," 42 U.S.C. § 12112(a). However, the ADA allows an employer to establish, as "a defense to a charge of discrimination," that it denied an applicant employment because it applied "qualification standards" that are "job-related and consistent with business necessity." Id. at § 12113(a). The statute further provides that appropriate qualification standards "may include a requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace." Id. at § 12113(b). In its regulations, the EEOC has specified that an employer appropriately may also require, as a qualification standard, that an individual not pose a direct threat to his or her own safety. 29 C.F.R. § 1630.2(r). In an unpublished order, the district court granted Chevron's motion for summary judgment, holding that Echazabal failed to introduce evidence raising a genuine issue as to whether Chevron's determination that his employment constituted a "direct threat" to his own health was reasonable. 

The Ninth Circuit reversed. 226 F.3d 1063 (9th Cir. 2000). The majority rejected the EEOC's regulation recognizing a "direct threat to self" defense on the grounds that it is inconsistent with the ADA and unduly paternalistic. Id. at 1068-69. The majority also rejected Chevron's argument that an applicant who cannot establish that he or she can do the job without serious risk of harm to self is not a "qualified individual" entitled to the ADA's protection. Id. at 1070-72. In dissent, Judge Trott protested that the court of appeals' decision will "require employers knowingly to endanger workers," will put employers at "legal peril" as a result of "conflicting responsibilities under different labor laws," such as OSHA and state worker protection laws, and will engender "long, expensive, and unpredictable litigation." 226 F.3d at 1074 (Trott, J., dissenting).

The Ninth Circuit's decision conflicts with rulings of the Tenth and Eleventh Circuits that an employer may establish as a defense to ADA liability that an employee's disability would pose a direct threat to his or her own safety in carrying out essential job responsibilities. See Borgialli v. Thunder Basin Coal Co., 235 F.3d 1284 (10th Cir. 2000); Moses v. American Nonwovens, Inc., 97 F.3d 446 (11th Cir. 1996). The decision also conflicts with the position of the Fifth and Seventh Circuits that a person whose medical condition would seriously endanger that person on the job is not a "qualified individual." See EEOC v. Exxon Corp., 203 F.3d 871 (5th Cir. 2000); Koshinski v. Decatur Foundry, Inc., 177 F.3d 599 (7th Cir. 1999).

This case is significant to all employers subject to the ADA. The Court will determine whether, consistent with the ADA, an employer may deny employment to an applicant — and, by extension, whether it may fire or reassign an existing employee — whose medical condition seriously endangers his or her own safety on the job. The Court is likely also to address the question whether such threats are to be analyzed exclusively in terms of the "direct threat" defense (as to which the employer bears the burden of proof), or whether they may also be considered in determining if a plaintiff has proved that he or she is "qualified" for a job. Mayer, Brown & Platt is counsel for the petitioner.

First Amendment — Commercial Speech — Pharmaceuticals. The Supreme Court granted certiorari in Thompson v. Western States Medical Center, No. 01-344, to determine whether the First Amendment is violated by the limitation of certain Food, Drug, and Cosmetic Act exemptions to pharmacists who refrain from soliciting prescriptions for or advertising specific compounded drugs.

Plaintiffs are a group of licensed pharmacies that have prepared and distributed written promotional materials to inform patients and physicians of the uses and effectiveness of specific compounded drugs. "Compounding" is a process by which a pharmacist combines, mixes or alters ingredients to create a medication for a patient. In general, compounding is used to create medications that otherwise are not commercially available (for example, where a patient is allergic to a particular drug ingredient). In 1997, Congress amended the Food, Drug, and Cosmetic Act to exempt compounding from certain regulatory requirements. The amendments, however, tied the exemption to several conditions, including that pharmacies refrain from soliciting prescriptions for compounded drugs from physicians, and from promoting or advertising particular compounded drugs. See 21 U.S.C. §§ 353a(a) and (c).
Plaintiffs sought a judgment declaring that the advertising and solicitation restrictions violate their free speech rights under the First Amendment. On plaintiffs' motion for summary judgment, the district court held that the restrictions do not meet the test for acceptable government regulation of commercial speech set forth in Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557, 566 (1980). See Western States Medical Center v. Shalala, 69 F. Supp. 2d 1288 (D. Nev. 1999). 

The Ninth Circuit affirmed. 238 F.3d 1090 (2001). Analyzing the issue under the four-part test set forth in Central Hudson, the Ninth Circuit concluded that, "[a]lthough the government has asserted substantial interests in support of the advertising and solicitation restrictions, they have failed to demonstrate that the speech restrictions directly advance those interests or that they are narrowly tailored to those interests." Id. at 1093. The Ninth Circuit reasoned in part that the government had failed to adduce evidence demonstrating how the challenged limitations on advertising and promotion of compounded drugs furthered the asserted governmental interests of "reduc[ing] the type of consumption of compounded drugs that is harmful." Id. at 1094.

As this case involves the regulation of drug compounding, it obviously is of great interest to the pharmaceutical industry. The case also is of importance to the business community more generally, as it involves the critical and recurring issue of the extent of the government's authority to regulate commercial speech.

This Mayer, Brown, Rowe & Maw Supreme Court Docket Report provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

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