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Kai Ryssdal: On Monday morning, the Supreme Court is going to take up a case that could test the idea of who knows best when it comes to consumer protections -- the state or federal regulators. The specific issue at hand is whether or not to overturn a punitive damage award to a major pharmaceutical company. But the case could eventually put an end to product liability lawsuits.

Marketplace's Janet Babin reports now from North Carolina Public Radio.

Janet Babin: In 2000, Diana Winn Levine was a healthy musician in Vermont, making music like this: [tape of music] One day, she got a migraine. She received a drug called Phenergin made by Wyeth Pharmaceuticals. She'd received it before.

Diana Levine:: Only this time, instead of by a shot in the butt, they gave it to me by a method called "IV Push."

Through that method, the Phenergin leaked from her vein. She got gangrene. Her right arm had to amputated. Levine says Wyeth should be held responsible.

Levine: You know, I've got one index finger left, and I'm pointing it at them, and I'm saying this is your fault, you made a mistake so now fix it.

Levine won a multimillion dollar judgment that was appealed to the Vermont Supreme Court. It found that Wyeth's warning label should have been stronger.

The company argues it complied with Food and Drug Administration rules and should be immune from lawsuits. It even argues it can't change the label without FDA approval. Here's Wyeth's attorney Bert Rein.

Bert Rein:: We used the federally approved label, and we were very open with the FDA about the risks of the drug, as reflected in the label itself.

Wyeth's case is important for millions of businesses. The court could rule that federal regulations should preempt state law. Preemption, as it's called, would give companies one set of rules to follow. But Fordham law professor Benjamin Zipursky says the decision could limit lawsuits.

Ben Zipursky: That effectively would cut off virtually all pharmaceutical liability for prescription drugs.

Internal documents show some FDA scientists believe state lawsuits can reveal flaws in drug labels. Consumer advocates worry that if Wyeth wins, manufacturers will have less incentive to make their products as safe as possible.

I'm Janet Babin for Marketplace.