Alston + Bird

Third Circuit Upholds Dismissal of Food Labeling False Advertising Claim Based on Preemption

Fri, 10 May 2013 14:00:53 GMT

On May 9, 2013, the Third Circuit Court of Appeals issued a non-precedential opinion affirming a New Jersey District Court’s dismissal of plaintiff Thomas Young’s class action complaint against Johnson & Johnson (“J&J”) on preemption grounds. According to Plaintiff, J&J deceptively advertised its Benecol® Regular Spread and Benecol® Light Spread butter/margarine substitutes (collectively “Benecol”) as containing “NO TRANS FATS” despite the fact that the product was not completely free from trans fats. Plaintiff also alleged that J&J’s claim that Benecol was “Proven To Reduce Cholesterol” was also deceptive. Plaintiff filed a complaint asserting violations of the New Jersey Consumer Fraud Act, the New York General Business Law, breach of express warranties, breach of implied warranty of merchantability, and unjust enrichment. In dismissing Plaintiff’s claims, the District Court held that Plaintiff had not adequately pled an injury-in-fact and therefore lacked standing, and that Plaintiff’s claims were expressly preempted by the Food, Drug and Cosmetic Act (“FDCA”) as amended by the Nutrition Labeling and Education Act (“NLEA”).

As to Benecol’s “Trans Fat” claims, Plaintiff’s primary contention was that labeling Benecol as containing “NO TRANS FAT” was deceptive because Benecol was, in fact, not trans fat free because it contained a small amount of trans fats. In affirming the District Court’s decision, the Third Circuit noted that the FDA’s regulation pertaining to nutritional labeling of trans fats provides that “[i]f the serving contains less than 0.5 grams [of trans fat], the content, when declared, shall be expressed as zero.” Because Benecol® contains less than 0.5 grams of trans fat per serving, the court held that Benecol’s label “properly discloses that it contains ‘0g of trans fat’ per serving in the Nutrition Facts box.” The Third Circuit went on to note that although the regulations “do not specifically say a product can advertise itself as containing ‘NO TRANS FAT’ when it has an insignificant amount of fat, they do allow ‘nutrient content claim[s]’ such as claims that a product contains ‘no fat’ or ‘no saturated fat’ without reference to a per-serving limitation, provided that the product indeed contains less than 0.5 grams per serving.” Ultimately, the Third Circuit held that because Benecol® contained less than 0.5 grams of trans fat per serving, any claim that its “trans fat” labeling was deceptive was preempted by the FDA’s regulations. For similar reasons, the Third Circuit also held that Plaintiff’s allegation that Benecol’s claim that it was “Proven to Reduce Cholesterol” was preempted. According to the Third Circuit, Benecol’s® “Cholesterol Claims are authorized by FDA regulations and are not false or misleading. Because [Plaintiff]’s state law action seeks to impose standards that are not identical to those set forth in the regulations, it is expressly preempted by the NLEA as it relates to those claims.”

New York Court Considering Equitable Claim for Medical Monitoring

Tue, 07 May 2013 12:46:38 GMT

The New York Court of Appeals may soon have to decide whether an independent equitable claim for medical monitoring is a recognized claim in New York. In Caronia, et al. v. Philip Morris USA, Inc., plaintiffs filed claims against a cigarette manufacturer alleging that its cigarettes contain unnecessarily dangerous levels of carcinogens. For relief, the plaintiffs sought, in part, for the court “to require Philip Morris to fund a program of medical monitoring for longtime smokers of Marlboro cigarettes who have not been diagnosed with, but are at risk for, lung cancer.” The Second Circuit affirmed the lower court’s summary judgment in favor of the defendants on the claims of negligence, strict liability, and breach of implied warranty of merchantability, but certified questions of law regarding the medical monitoring claim to the New York Court of Appeals.

Court Orders FDA to Provide Deadlines for FSMA Rules

Tue, 23 Apr 2013 17:57:41 GMT

On April 22, 2013, a federal judge issued an order ruling that the U.S. Food and Drug Administration (FDA) had violated the Food Safety and Modernization Act of 2010 (FSMA) by “failing to promulgate the FSMA regulations by the statutory deadlines.” The case, Ctr. for Food Safety v. Hamburg, No. 12-4529 (U.S. Dist. Ct., N.D. Cal., filed August 29, 2012), had been brought by the Center for Food Safety and the Center for Environmental Health, who jointly filed a complaint in California federal court against the FDA seeking declaratory and injunctive relief for “failure to act” and to compel FDA to promulgate and finalize the required regulations by certain dates (e.g., stipulated deadlines or expedited dates).

Florida May Adopt Daubert Standard of Admissibility

Thu, 18 Apr 2013 18:08:09 GMT

The Florida Senate Judiciary Committee voted 6-3 this week to advance a bill that, if passed, would move Florida's admissibility of expert witness testimony standard from a Frye to a Daubert standard. This action would bring Florida in line with various states and federal courts, which use the stricter Daubert standard.

Under Daubert, expert witness testimony is admissible if the expert's methodology is relevant to the facts at issue and is scientifically valid based on factors such as "whether the theory or technique in question can be and has been tested, and whether it has been subjected to peer review and publication," among others. The Frye standard, on the other hand, allows for the admissibility of expert opinions based on whether the principles or techniques presented have gained general acceptance in their respective fields. Alternatively, several states also employ a hybrid model that takes elements from both standards.

Opponents of the bill fear the backlog that would result if Florida courts were made to hold Daubert hearings, during which a judge would hear challenges to expert witness testimony, thus prolonging the litigation process. They similarly argue that the more scientifically complicated issues a case presents, the greater the burden is on the state court hearing the matter. Conversely, proponents of the bill laud the proposed shift to the Daubert standard as a means of eliminating the potential inclusion of unreliable scientific evidence into a trial.

Please see Florida Senate Bill SB 1412: Expert Testimony for more information.

CPSC Wants More Than Just Your Money

Thu, 18 Apr 2013 18:00:24 GMT

The CPSC’s recently announced settlement agreement with Kolcraft may signal a new strategy for the agency with respect to penalties for untimely reporting of substantial product hazards. In the past, settlements for untimely reporting were comprised only of civil penalties, which in 2012 ranged from $400,000 to $1,500,000. With the Kolcraft settlement, however, Kolcraft agreed to pay a $400,000 civil penalty and agreed to implement and enforce a comprehensive compliance program that had the following elements:

1) written standards and policies,
2) a mechanism for confidential employee reporting of compliance related questions to a compliance officer or to other senior manager,
3) training on company compliance-related policies and procedures to all employees,
4) a senior manager responsible for compliance,
5) board oversight of compliance (if applicable), and
6) retention of all compliance-related records for at least five years.

Finally, Kolcraft agreed to provide, upon request, written documentation of the compliance processes and programs. Many commentators, as well as Commissioner Nord, the sole CPSC Commissioner who objected to the non-monetary penalties in settlement agreement, have been critical of the expansion of compliance and reporting requirements beyond what is found in the Consumer Product Safety Act, Consumer Product Safety Improvement Act, and accompanying regulations. There is a concern that the Kolcraft settlement agreement marks a new era of CPSC involvement in internal compliance processes, which have traditionally been up to the discretion of the business. Click here to view a complete copy of the settlement agreement.

Recent European Union Timber Regulation Requires That Companies Conduct “Due Diligence” Assessments of Timber and Wood Products Not Already Placed In The European Market or Face Stiff Penalties

Mon, 15 Apr 2013 08:44:28 GMT

Because of the impact that illegal logging has on the European economy, environment and society, the European Commission passed the EU Timber Regulation (EUTR) which came into force on March 3, 2013. It bans illegal timber in the EU and requires those companies that place wood and wood products on the EU market (for the first time) to assess the risk that those products may have come from an illegal source and act to mitigate any identifiable risks. This is known as the “Due Diligence” requirement. Such Due Diligence must happen before a company buys the product and it has to be undertaken even if the product is certified.

Council For Responsible Nutrition Releases Recommended Guidelines For Caffeine-Containing Dietary Supplements

Fri, 05 Apr 2013 09:29:55 GMT

On April 3, 2013, the Council for Responsible Nutrition (“CRN”) proposed voluntary guidelines for the labeling of dietary supplements containing caffeine, recommending that companies include a disclaimer discouraging children, and others from consuming more highly-caffeinated products. The guidelines also advise supplement makers to disclose the caffeine content in their products, from both added caffeine and naturally-occurring sources, such as green tea extract, guarana, and cocoa extract.

CRN’s member companies produce a large portion of the dietary supplements that are marketed in the United States, and globally, through natural food stores and direct selling companies. In releasing these recommended guidelines, CRN explains that it is expanding its self-regulatory initiative that encourages best practices within the supplement industry and promotes the safe use of dietary supplements by consumers.

Center for Food Safety Demands Court Enforcement of FDA Deadlines

Fri, 29 Mar 2013 09:32:00 GMT

While the U.S. Food and Drug Administration (“FDA”) proposed two new food safety regulations in January 2013 in an effort to combat the steady rise of foodborne illnesses, the agency is still under fire for its alleged failure to adhere to statutory deadlines imposed by Congress in implementing major provisions of the 2011 Food Safety Modernization Act (“FSMA”). In a suit filed in August 2012, the Center for Food Safety and the Center for Environmental Health alleged that the FDA has missed several critical deadlines for implementing the FSMA, a law that completely changed the face of food safety regulations. Seeking “the timely implementation of FSMA and its urgently-needed improvements to food safety,” the Center for Food Safety argues that “without its implementing regulations, the [FSMA] is an empty vessel.”

Pesticide Registration Process Adds New Stakeholder Procedures for Endangered Species Act Consultations

Thu, 28 Mar 2013 13:33:26 GMT

The Environmental Protection Agency (EPA) is adding new stakeholder input procedures to its pesticide registration review process and consultations under the Endangered Species Act (ESA), including a broader role for the U.S. Department of Agriculture (USDA). EPA released a paper discussing these changes entitled, “Enhancing Stakeholder Input in the Pesticide Registration Review and ESA Consultation Processes and Development of Economically and Technologically Feasible Reasonable and Prudent Alternatives.” The paper was put together by the EPA, the USDA, the National Marine Fisheries Service (NMFS) and the U.S. Fish and Wildlife Service (USFWS).

What are the new changes?

The EPA will offer a new upfront “Focus” meeting at the beginning of each pesticide registration review for each active ingredient, as well as more opportunities for informal input from outside stakeholders in the consultation between the agencies. The “Focus” meeting will look at the current uses of the pesticide, product label clarity, and consider the potential for minimizing exposure and reducing risk early. The EPA will also initiate the ESA consultation process later on in the registration review process in hopes that more information will be available for ecological risk assessments and it will allow for more thorough dialogue with stakeholders.

Advice: Watch Closely as this New Process Develops

This is a complicated process already, with serious technical issues and the difficult political and public policy tradeoffs between the missions of the competing agencies involved. Those interested in the pesticide registration process should watch this closely as it’s about to become more complicated.

EPA Announces Chemicals for Risk Assessment in 2013

Wed, 27 Mar 2013 13:26:53 GMT

The U.S. Environmental Protection Agency (EPA) announced it will begin assessments on 23 chemicals, with a focus on flame retardant chemicals. Of the 23 chemicals, 20 are flame retardant chemicals and are used in products such as furniture, textiles and electronic equipment. These assessments are part of the Toxic Substances Control Act (TSCA) Work Plan. Four of the flame retardants will receive a full risk assessment, three of which are on the TSCA Work Plan and one that was the subject of an Action Plan developed under TSCA. The chemicals are: 2-Ethylhexyl ester 2,3,4,5- tetrabromobenzoate (TBB); 1,2- Ethylhexyl 3,4,5,6-tetrabromo-benzenedicarboxylate or (2-ethylhexyl)-3,4,5,6 tetrabromophthalate (TBPH); Tris(2-chloroethyl) phosphate (TCEP); and Hexabromocyclododecane (HBCD). For more information on the TSCA Work Plan and risk assessments visit the EPA website.

Two Hydraulic Fracturing Related Bills Introduced

Mon, 25 Mar 2013 13:23:41 GMT

Rep. Cartwright (D-PA) introduced the “Focused Reduction of Effluence and Stormwater runoff through Hydrofracking Environmental Regulation” (FRESHER) Act on March 14, which would remove a provision in the Clean Water Act (CWA), added by the Energy Policy Act of 2005, that exempts oil and gas sites from stormwater permitting requirements. The exemption applies to all uncontaminated runoff from oil and gas sites of any acreage. The FRESHER Act, if passed, would also require the Department of Interior (DOI) to study the impact of stormwater from oil and gas sites on surface water, groundwater and drinking water.

The “Bringing Reductions to Energy’s Airborne Toxic Health Effect (BREATHE) Act” was also introduced on March 14 by Rep. Polis (D-CO), would remove a so-called “loophole” from the Clean Air Act’s (CAA) aggregation provision. This loophole designates each well site as an individual source of a pollutant, rather than taking into account all well sites in a specific area. The BREATHE Act would also add hydrogen sulfide to the CAA’s list of hazardous air pollutants.

Supreme Court Denies Expert Witness’s Personal Request To Review Exclusion Of Testimony

Fri, 22 Mar 2013 14:12:04 GMT

On March 18, 2013, the United States Supreme Court declined to review the case of an expert witness who was personally seeking to challenge the decision of a trial court excluding his testimony in a personal injury lawsuit.

Dr. David Egilman had been offered as an expert witness to link Plaintiff’s respiratory injury to the chemical diacetyl, which is blamed for “popcorn lung.” The California federal judge presiding over the case at the trial level refused to allow Dr. Egilman’s testimony, explaining that he had failed to provide proper scientific support for his opinions and relied upon “foundational assumptions.”

Dr. Egilman, independently and through personal counsel, sought review of the trial judge’s decision by the Ninth Circuit Court of Appeals. He claimed the trial judge had issued “baseless and defamatory attacks” in determining his testimony to be unreliable. Dr. Egilman argued that the refusal to admit his testimony, as well as the accompanying criticism of his opinions, damaged his reputation and prospects of future employment as a forensic expert. The Ninth Circuit dismissed the appeal, holding that Dr. Egilman did not have standing to seek review of the trial court’s decision because he was not a party to the underlying action.

Subsequent to the Ninth Circuit’s dismissal of his appeal, Dr. Egilman petitioned the United States Supreme Court for certiorari. The Supreme Court, however, denied the petition, ending Dr. Egilman’s quest to have the trial court’s ruling reviewed.

Race to the Finish Line: DTSC Releases 15-Day Notice For Documents Added To The Safer Consumer Product Regulations Rulemaking File

Thu, 14 Mar 2013 13:19:20 GMT

Today, the Department of Toxic Substances Control issued a 15-day notice to submit comments on: (1) nine new external scientific peer review reports; and (2) the California Environmental Policy Council resolution on the need for a multimedia life cycle evaluation adopted February 28, 2013. The public notice and associated documents can be accessed here. The public comment period will commence on March 13, 2013 and close on March 28, 2013.

Circulating these documents for review and comment appears to be DTSC’s final effort at bolstering the administrative record for the Safer Consumer Product Regulations rulemaking, and signals imminent adoption of the draft circulated for 30-day public comment on January 29, 2013. See our January 29, 2013 blog here. Notwithstanding, the release of these documents continues a disturbing trend toward procedural piecemealing (See our December 21, 2012 blog on this issue here, which makes it very difficult for anyone in the supply chain to understand what is truly at issue, or their rights with respect to any future challenge. Stay tuned…

CPSC Commissioners in Flux

Thu, 14 Mar 2013 12:49:02 GMT

As we have reported in the past, two of the five commissioner spots at the CPSC are currently vacant. The democrat that was nominated by President Obama for one of these open seats in January 2012 was re-nominated in January 2013, but so far, there has been no action on her nomination, and the President has yet to nominate someone for the other vacant seat (which by statute, must be filled by a Republican so that there are no more than 3 commissioners of one party). On the heels of these openings, Chairman Tenenbaum announced during her keynote address at the International Consumer Product Health and Safety Organization’s annual meeting in Washington, DC that she will not seek re-nomination when her term expires in October. Commissioners may serve for one additional year beyond their term if their seat is not filled, so there is little likelihood that the Commission will be down to two commissioners if the two existing vacancies are not filled by the time Tenenbaum’s term expires in October. Nevertheless, these vacancies may bring about a change in the agenda and priorities of the Commission, as up to three new Commissioners could be confirmed in the next 18 months.

Our monthly publication, the CPSC Recall Snapshot, is a useful tool that can help keep you up-to-date on the activities of the CPSC. Click here to subscribe to the Snapshot.

FTC Updates Online Advertising Disclosure Guidelines

Thu, 14 Mar 2013 08:50:21 GMT

This week, the Federal Trade Commission updated .Com Disclosures, the Agency's online advertising guidelines, acknowledging the vastly different online marketplace than the regulator confronted in 2000.

The general principles are the same--advertising must be truthful, not misleading, and adequately substantiated. But the facts have changed. In 2000, there was essentially no such thing as mobile shopping; social media meant insular, mostly static "boards"; and Internet Explorer reigned supreme. Today, American e-commerce is increasingly phone-based, social media is everywhere, and different browsers can offer very different viewing experiences.

All of which means that the regulated community has to speak to fragmented audiences through multiple channels, some of which can leave little room for error. A required disclosure can eat into Twitter's 140-character limit fairly quickly, for example.

Those affected by the new guidelines should assess their compliance across channels, particularly given that the document's release may set the stage for enforcement action. They are available here.

New York Supreme Court Strikes Down Law Aimed at Controlling Container Size of Sugary Drinks

Tue, 12 Mar 2013 08:35:35 GMT

In response to America’s and New York’s growing concern about obesity, New York City enacted § 81.53 of the New York City Health Code on September 13, 2012. Specifically, this city ordinance sought to limit the container size of sugary drinks to 16 ounces. It provided that “[a] food service establishment may not sell, offer, or provide a sugary drink in a cup or container that is able to contain more than 16 fluid ounces” and that “[a] food service establishment may not sell, offer, or provide to any customer a self service cup or container that is able to contain more than 16 fluid ounces.” N.Y. City Health Code §81.53. Legislators hoped that this “Portion Cap Rule” would “address the super-size trend and reacquaint New Yorkers with smaller portion sizes, leading to reduction in consumption of sugary drinks.” N.Y. Statewide Coalition of Hispanic Chamber of Commerce, et al. v. The New York City Department of Health and Mental Hygiene, et al., Case No. 653584/12, at slip op. 5 (N.Y Sup. Ct, N.Y. County, Mar. 11, 2013).

Industry groups and unions subsequently challenged this Portion Cap Rule after its passage and sought to enjoin and permanently restrain New York City from enacting it. These interested parties argued that the Portion Cap Rule was “an exercise in futility on practical and science based grounds,” and that the New York City Health Department “exceeded [its] authority and impermissibly trespassed on legislative jurisdiction” when it passed the ordinance. (slip op. 9-10).

Second Round of Reporting Data Available for Washington’s Children’s Safe Product Act

Mon, 11 Mar 2013 13:16:21 GMT

In 2008, the state of Washington adopted the Children’s Safe Product Act (CSPA). As part of that act, the Washington Department of Ecology (DOE) was tasked with developing draft regulations to implement the act. Under the regulations, companies “whose annual aggregate gross sales, both within and outside of Washington, are more than one billion dollars, based on the manufacturer's most recent tax year filing are required to report,” if their product includes a chemical on the state chemical of concern list. The first round of reporting data concluded in August of 2012. The second round of reporting data has now been concluded and it is now available through the Washington DOE site.

We previously issued an advisory on the Children's Safe Product Act.

Multiple States Considering Changes to Asbestos Transparency Laws

Fri, 08 Mar 2013 13:12:09 GMT

On December 20, 2012, Ohio Governor John Kasich signed into law House Bill 380, making a significant change to asbestos litigation in Ohio and possibly signifying the beginning of a larger shift. Ohio Rev. Code § 2307.953 is designed to prevent “double dipping” by asbestos claimants who file lawsuits after already filing claims against one of the several asbestos bankruptcy trusts.

It is estimated that these trusts control more than $36 billion in assets. Because claims against the trusts are filed outside of the litigation process, there was previously little visibility into whether a plaintiff already had been compensated for alleged asbestos injuries through a trust. Additionally, the lack of transparency has led to fraud by claimants. In some cases, plaintiffs have filed contradictory exposure allegations, or allegations that would require them to have been in multiple places at the same time, or inconsistent work histories.

Asbestos plaintiffs in Ohio are now required, within 30 days of commencement of discovery, to disclose all such trust claims made by them or on their behalf. Defendants may file a motion to stay the proceedings if they can show credible evidence that plaintiff did not disclose relevant trust claims in accordance with the new law.

Despite being on the books for only two months, the Ohio legislation is showing signs of influencing reform in other states. Madison County, Illinois is the busiest asbestos docket in the United States with 1,563 cases filed in 2012 alone (an annual record). Approximately 90% of these claims are brought by out of state residents, whose tenuous connection to Illinois leads to a lack of transparency into their previous claims against the asbestos trusts. State Rep. Dwight Kay has introduced a bill, currently before the Illinois Judiciary Committee, that mirrors the new Ohio law. Given the size of the asbestos docket, Kay says that it is “necessary to take proactive steps to ensure the transparency of asbestos claims.” A bill recently introduced in the Mississippi House also tracks the Ohio law.

And on March 6, 2013 a similar bill was introduced in the U.S. House of Representatives. Taking a slightly different approach to the same issue, the Furthering Asbestos Claim Transparency (FACT) Act of 2013 would require the asbestos trusts themselves to disclose the individuals who have filed claims against that trust, their exposure histories, and any payments made to the claimant.

Asbestos defendants and legal practitioners should stay tuned as it appears that the above changes may be just the tip of the iceberg in asbestos transparency reform.

IC2 Releases Draft Guidance for Alternatives Assessment & Risk Reduction

Thu, 07 Mar 2013 13:11:41 GMT

The Interstate Chemicals Clearing House (IC2) has released a draft entitled, "Guidance for Alternatives Assessment and Risk Reduction.” IC2 consists of member states: California, Connecticut, Massachusetts, Michigan, Minnesota, New Jersey, New York, Oregon and Washington. The draft defines an alternatives assessment (AA) as “a process for identifying and comparing potential chemical and nonchemical alternatives that can be used as substitutes to replace chemicals or technologies of high concern. The purpose of the alternative assessment guidance on which the states are working is to address these issues from a product perspective although other uses are possible.” The document goes on to say that the object of an AA is to replace chemicals of concern (COCs) in products or processes with inherently safer alternatives in order to protect human health and the environment. The draft is open for public comment until Friday, April 19, 2013. For more information visit the IC2 website.

Companies File Suit to Keep BPA off of California’s Prop 65 List

Thu, 07 Mar 2013 12:22:31 GMT

Last Friday, companies filed a lawsuit to prevent California EPA from putting bisphenol A (BPA) on the state’s Proposition 65 list. The Prop 65 list is for chemicals that are potentially dangerous to human health. The American Chemistry Council (ACC) opposes an Office of Environmental Health Hazard Assessment (OEHHA) proposal that would include BPA on the list as a reproductive toxin. ACC believes OEHHA is trying to find a way to bypass a previous finding by scientific experts that reviewed the same evidence and concluded BPA should not be on the Prop 65 list. How could the agency ignore the advice of its own scientific panel and choose to do something different? And if the agency is going to do such a thing, how can companies trust decisions they have made previously or will make in the future? That is exactly what ACC wants the answers to and they are hopeful that this suit will answer them and thwart OEHHA’s attempt to list BPA on the Prop 65 list.

Fifth Circuit Upholds Mississippi’s Cap on Noneconomic Damages

Fri, 01 Mar 2013 14:14:41 GMT

On February 27, 2013, in a significant victory for proponents of tort reform, the Fifth Circuit upheld Mississippi’s $1 million cap limit on jury-awarded noneconomic damages. In doing so, the appeals panel held that the cap did not violate the Mississippi Constitution’s jury guarantee or separation of powers provisions.

The plaintiff, Lisa Learmonth, was injured in an automobile collision with a van operated by an employee of defendant Sears, Roebuck and Co. Invoking diversity jurisdiction, plaintiff brought suit in federal court and received a jury verdict in her favor in the amount of $4 million. After the district court entered judgment in the amount of $4 million, Sears filed a motion seeking, in part, to apply Mississippi’s statutory $1 million cap to the award’s noneconomic damages. Because neither party requested a special verdict itemizing damages, the jury’s award was set out in a general verdict from which the parties stipulated that $2.2 of the award encompassed noneconomic damages. The district court denied Sears’ request for a new trial or remittitur, but it did reduce the noneconomic damages to $1 million.

Plaintiff appealed the reduction of noneconomic damages, arguing that the cap violated the Mississippi Constitution’s jury trial guarantee and separation of powers provisions. The Fifth Circuit certified this constitutional question to the Mississippi Supreme Court, but the Supreme Court declined the request.

Following rebriefing on the issues, the Fifth Circuit held that the $1 million cap did not invade the jury’s constitutional fact finding role and that Learmonth “failed to establish that the jury’s award represents the remedy to which she is entitled at law.” Further, the circuit court held that the cap did not constitute legislative interference with judicial remittitur in violation of the separation of powers clause.

The case is Learmonth v. Sears Roebuck & Co., No. 09-60651 (5th Cir. Feb. 27, 2013).

Putative Consumer Fraud Class Action Against Anheuser-Busch Alleging Watered Down Beer May Itself Be Watered Down

Wed, 27 Feb 2013 12:37:39 GMT

Earlier this week, plaintiffs from California, Pennsylvania, and New Jersey brought putative consumer fraud class action lawsuits against Anheuser-Busch Companies, LLC (“AB”) alleging that the company “adds extra water to its finished products to produce malt beverages that consistently have significantly lower alcohol content than the percentage displayed on its labels.” See Giampoli v. Anheuser-Busch Companies, LLC, Case 3:13-cv-00828-NC (N.D. Cal. filed Feb. 22, 2013); Greenberg v. Anheuser-Busch Companies, LLC, Case 2:13-cv-01016-TON (E.D. Pa. filed Feb. 25, 2013); Case 1:13-cv-01122-NLH-AMD (D.N.J. filed Feb. 25, 2013). Notably, none of the complaints identify the basis for that claim. Could it be that the plaintiffs had the alcohol content of AB’s products tested in the lab? Apparently not. According to a story from National Public Radio, “[t]ests conducted on Budweiser, Bud Light Lime, and Michelob Ultra this week by San Diego’s White Labs found that ‘the alcohol percentages inside the cans were the same as what was stated on the can.’” When NPR confronted the attorney for the plaintiffs with these testing results, he brushed them aside and indicated that once he gets his hands on AB’s internal testing, he will have a strong case. Indeed, in a separate article plaintiffs’ attorney confirmed that neither he nor the plaintiffs have conducted any independent testing of any of the products at issue to confirm whether his allegations are true. Instead, his lawsuit appears to be based upon unconfirmed statements of former AB plant workers.

But could the plaintiffs simply have misunderstood what AB’s former employees told them? Based on the complaint, it appears that plaintiffs have learned from former AB employees that AB engages in “high-gravity brewing,” a process by which the alcohol content of the brewed beer is higher than the alcohol content of the beer intended to be distributed. Just before bottling, water is added by the brewer to achieve the target alcohol content. While this process does allow a brewer to stretch its beer, it doesn’t inherently impact the quality of the final product. More importantly, it doesn’t necessarily result in beer with less alcohol content than is represented on the label. Given the fact that the plaintiffs admittedly have failed to test any of the alleged products at issue, and that testing appears to have confirmed the accuracy of the alcohol content of at least three of the products at issue, one can’t help but wonder whether the only things that have been watered down are the plaintiffs’ complaints.

Brand-Name Drug Manufacturers to Alabama Supreme Court: “If ever a case demanded oral argument, this one does.”

Thu, 21 Feb 2013 16:33:58 GMT

We recently wrote about the Alabama Supreme Court decision holding that a consumer can bring a failure-to-warn claim against the brand-name drug manufacturer, even though the consumer only took the generic version of the drug. See Wyeth Inc. et al. v. Weeks et al., No. 1101397 (Ala. Jan. 11, 2013).

On Monday, appellants and brand-name drug manufacturers Pfizer Inc and Schwarz Pharma moved for a rehearing of the issue, arguing in their brief that “[t]he majority opinion dramatically expands Alabama tort law by holding that a brand-name drug manufacturer may be liable — seemingly indefinitely — for injuries caused by products that it neither made nor sold.” They are not the only ones urging the court to do so. Many organizations filed amicus curiae briefs in support of them, including the U.S. Chamber of Commerce, who argued in its brief that “[t]he decision’s potential implications are already reverberating nationally” and that it “threatens to unleash the plaintiff bar’s most creative and damaging suits on all businesses in Alabama – particularly those in Alabama’s burgeoning automotive, aerospace, and health-care industries.”

Others outside the industry have expressed surprise over the court’s decision as well. Moreover, there is buzz that the FDA is considering changing the rules that require generic drug manufacturers to use the same labels as corresponding brand-name drugs. This, as well as the proposed Patient Safety and Generic Labeling Improvement Act (S.2295, 112th Cong. (2d Sess. 2012)), would chip away at, if not supersede entirely, PLIVA v. Mensing, 131 S. Ct. 2567 (2011), the U.S. Supreme Court decision upon which the Alabama Supreme Court relied in Wyeth.

CPSC Amends Complaint to Include Former CEO as Defendant, Both Individually and as CEO

Thu, 21 Feb 2013 12:38:46 GMT

As we have reported in the past, the CPSC has filed suit against several manufacturers of high-powered magnet sets seeking to have the products declared “substantial product hazards” so that it may to force a recall of the products. Last week, the CPSC amended its complaint against Maxfield & Oberton to name the dissolved company’s former CEO as a defendant, both “individually and in his capacity as CEO.” In its brief to amend the complaint, the CPSC noted that the former CEO consistently identified himself to the CPSC as the principal decision maker of M&O, was the author of M&O’s 15(b) report to the CPSC, and “personally lobbied members of Congress and the President of the United States . . . on issues related directly, and solely, to the matter at issue [in the Complaint].” The CPSC’s brief also noted that the CEO had issued press releases critical of the CPSC’s actions that stated “We are fighting the CPSC action because we believe they are wrong.” Many CPSC watchers are concerned by this development, particularly because there has been no finding that M&O explicitly violated any statutory provisions.

State’s High Court: Washington Product Liability Act Permits Emotional Distress Damages in the Absence of Physical Injury

Wed, 13 Feb 2013 09:59:35 GMT

The Washington Supreme Court recently held that the state’s strict liability statute, the Washington Product Liability Act, “permits relief for emotional distress damages, in the absence of physical injury, caused to the direct purchaser by being served and touching, but not consuming, a contaminated food product, if the emotional distress is a reasonable response and manifest by objective symptomatology.” Bylsma v. Burger King Corp., No. 86912-0, *6 (Wash. Jan. 31, 2013).

The question was certified to the court by the Ninth Circuit after a plaintiff appealed the district court’s dismissal of his case. The plaintiff, a sheriff’s deputy, sued Burger King Corporation over allegations that its employees spit on his food. While on his lunch break, he drove his marked police car through the drive-thru of the restaurant and ordered a hamburger. After having an “uneasy feeling” that “was so strong that he felt he should check his burger,” he examined his food and found what appeared to be saliva. Later DNA testing confirmed that the saliva belonged to one of the employees who served the plaintiff his food. The plaintiff claims that he now suffers ongoing emotional trauma from the incident, including vomiting, nausea, food anxiety, and sleeplessness. He also claims that he has sought treatment by a mental health professional due to the incident.

In reaching its holding, the Washington Supreme Court explained that “Washington courts have balanced the right to compensation for emotional distress against competing interests in preventing fraudulent claims and ensuring that tortfeasors are held responsible only insofar as is commensurate with their degree of culpability.” (Id. at *5-6). The court reasoned that in this situation, “[c]ommon sense tells us that food consumption is a personal matter and contaminated food is closely associated with disgust and other kinds of emotional turmoil. Thus, when a food manufacturer serves a contaminated food product, it is well within the scope of foreseeable harmful consequences that the individual served will suffer emotional distress.” (Id. at *7).

Click here to read the full opinion of the court.

CPSC Recall Snapshot 2012 Year End Review

Fri, 01 Feb 2013 10:03:19 GMT

The CPSC initiated a total of 308 recalls in 2012 - a little over 25% of these recalls involved children’s products. In addition, the CPSC issued $4,275,000 in civil penalties, the vast majority of which were for failure to timely report a product hazard. In light of these numbers, and democratic majority on the Commission, businesses can expect the CPSC to continue to be very active in 2013. Click here to access the CPSC Recall Snapshot Year-End Review.

To receive regular updates about recall activity, subscribe to our monthly CPSC Recall Snapshot. For additional information or questions about CPSC issues, please email: jenifer.keenan@alston.com.

FDA Will Not Challenge Second Circuit Off-Label Promotion Decision

Fri, 01 Feb 2013 09:46:54 GMT

The U.S. Food and Drug Administration (FDA) has issued a statement stating that it will not seek review of a Second Circuit decision, which held that a pharmaceutical representative’s “truthful” off-label promotion of a narcolepsy drug was protected speech. In U.S. v. Caronia, the Second Circuit vacated a criminal conviction that found a Oprhan Medical Inc. sales representative guilty of “conspiring to introduce a misbranded drug into interstate commerce.”

In Caronia, the pharmaceutical representative told physicians that the narcolepsy drug, Xyrem, could be used for off-label purposes, such as for treating chronic fatigue, chronic pain, or Fibromyalgia. In noting that the employee’s speech was “not misleading” and “related to a lawful activity,” the Second Circuit held that the criminal conviction violated the representative’s First Amendment right to freedom of speech.

In its statement after the ruling, the FDA stated that the “[Caronia] decision does not strike down any provision of the [Food, Drug, and Cosmetic Act] or its implementing regulations, nor does it find a conflict between the act's misbranding provisions and the First Amendment or call into question the validity of the act's drug-approval framework." Through its statement, the FDA evades bringing this issue before the U.S. Supreme Court, which has traditionally taken a broad approach to First Amendment jurisprudence and could have potentially expanded the Second Circuit’s ruling.

For more information, please refer to U.S. v. Caronia, No. 09-5006, in the U.S. Court of Appeals for the Second Circuit.

DTSC Issues 30 Day Comment Period Notice for Revised Consumer Products Regulations

Tue, 29 Jan 2013 12:32:12 GMT

The Department of Toxic Substances Control (DTSC) has issued a 30-day notice to submit comments on proposed revisions to its Safer Consumer Products Regulation. The changes establish the process for identifying and prioritizing consumer products and their chemicals of concern, evaluating alternatives and imposing regulatory responses. As mentioned in our advisory, the revised text will be open for public comment until February 28, 2013. A summary of the significant changes to the regulations can be found here. At first glance, some positive changes in this latest draft include elimination of the requirement to employ certified assessors to perform the regulatory work, introduction of the distinction between contaminants and intentionally-added chemicals found in consumer products, and establishment of a PQL (practical quantitation limit) as the analytical chemistry threshold for determining whether compliance obligations are triggered.

Click to view our previous advisory on the original regulations and analysis of the public comment period.

The Ninth Circuit Court Of Appeals Holds That Arizona State Law Failure-To-Warn Product Liability Claims Involving A Medical Device Was Not Pre-Empted By The Medical Control Device Amendments To The Food, Drug, And Cosmetic Act

Wed, 23 Jan 2013 11:11:18 GMT

On January 10, 2013, the Ninth Circuit Court of Appeals held that amendments to a federal statute did not preempt Arizona state law failure-to-warn product liability claim that involved a medical device. Stengel v. Medtronic Inc., __ F.3d __, 2013 WL 106144, 13 C.D.O.S. 365 (9th Cir. 2013).

In Stengel, plaintiff Richard Stengel had a Medtronic EL Pump and Catheter surgically implanted in his abdomen to deliver pain medication directly into his spine. Mr. Stengel later experienced complications that included decreased sensation in his right leg and was later diagnosed with ascending paralysis. After the device was removed Mr. Stengel became a paraplegic.

Thereafter, plaintiff and his wife filed a lawsuit claiming that the EL Pump and Catheter caused Mr. Stengel’s paralysis. Plaintiffs alleged that Medtronic knew of the risks associated with the device before Mr. Stengel was paralyzed, but it did not inform the FDA of the risks. The FDA sent a warning letter to Medtronic stating that Medtronic "misbranded" its pain pump by concealing known risks. Medtronic later sent a Medical Device Correction Letter and recalled the device. Medtronic filed a motion to dismiss plaintiffs’ complaint on the ground that the Medical Control Device Amendments (”MDA”) to the Food, Drug, and Cosmetic Act (“FDCA”) preempted plaintiffs’ Arizona state law claims. The plaintiffs also filed a motion for leave to file an amended complaint. The district court granted Medtronic’s motion and denied plaintiffs’ motion for leave and dismissed the Stengels’ complaint. Stengel v. Medtronic, No. CV 10-318-TUC-RCC, 2010 WL 4483970, at *3-4 (D. Ariz. Nov. 9, 2010). The Stengels appealed the denial of their motion and the Ninth Circuit affirmed. 676 F.3d 1159 (9th Cir. 2012). The Ninth Circuit granted re-hearing en banc. Ultimately, the Ninth Circuit reversed the district court’s order and remanded, holding that amendments to the FDCA did not preempt plaintiffs’ Arizona failure-to-warn product liability claims.

U.S. District Court Dismisses Suit Against Biotronik, Inc. For Defective Defibrillator Lead Wires

Wed, 16 Jan 2013 16:47:33 GMT

On January 15, 2013, U.S. District Court Judge William H. Walls dismissed, without leave to amend, a products liability lawsuit against Biotronik, Inc. for allegedly defective defibrillator components, finding that Plaintiffs’ state law claims were preempted by the Medical Device Amendments (“MDA”) to the Federal Food, Drug & Cosmetics Act (“FDCA”), 21. U.S.C. § 360c et seq.

On June 1, 2012, Plaintiffs filed an Amended Complaint in the U.S. District Court for the District of New Jersey that named Biotronik as a defendant. Plaintiffs brought state law claims against Biotronik under New Jersey’s Product Liability Act (“NJPLA”) for, inter alia, negligence, defective design and failure to warn. Plaintiffs alleged that Biotronik’s defibrillator lead wire (a component of Plaintiff’s surgically implanted cardiac defibrillator) was fractured, delivered over 20 electrical shocks to his heart, and caused him to experience convulsions and ventricular tachycardia (a dangerously fast heartbeat).

However, the lead wire was designed, manufactured and labeled in a way the Federal Drug Administration (“FDA”) had deemed safe and effective through the premarket approval process. State law claims are preempted by the MDA if: (1) the Federal Government has established “specific requirements applicable to a particular device;” and (2) the plaintiff’s claims are based on “state requirements” related to safety and effectiveness that are “different from, or in addition to” the federal requirements.

The court found that the federal government had established specific requirements applicable to Biotronik’s lead wires when the FDA granted it premarket approval on January 27, 2006, under PMA Number P980023. Further, Plaintiffs could only prevail on their NJPLA claims if they proved that the lead wire, as designed, manufactured, and distributed, was defective and dangerously unreasonable. However, such a finding would constitute “a requirement different from, or in addition to,” the standards required by federal authorities – so the court found that this is the exact situation where the MDA requires preemption. Therefore, Plaintiffs’ claims were expressly preempted.

Alternatively, Plaintiffs sought leave to amend the Complaint to allege a claim that Biotronik deviated from federal requirements and, consequently, their claims were parallel state claims. However, Plaintiffs admitted that they could not meet the necessary pleading hurdle without discovery. Consequently, the court declined leave to amend because Plaintiffs could not allege facts necessary to establish a claim that would parallel a violation of federal law or meet the federal pleading standard. Additionally, Plaintiffs’ emotional distress claims were preempted because the underlying claims could not stand.

Alabama Supreme Court: Brand-Name Drug Manufacturers Can be Liable for Patient’s Injuries Caused by Generic Drug

Mon, 14 Jan 2013 10:49:34 GMT

A few months ago, Congress introduced the Patient Safety and Generic Labeling Improvement Act (S.2295, 112th Cong. (2d Sess. 2012)), promulgated in response to the U.S. Supreme Court’s decision in PLIVA v. Mensing, 131 S. Ct. 2567 (2011). In PLIVA, the Supreme Court held that state law tort claims against generic drug manufacturers alleging harm resulting from inadequate labeling were preempted by federal law. Critics claim that the Supreme Court’s decision effectively created dual drug labeling standards for brand-name and generic drug manufacturers. While brand-name drug manufacturers have to demonstrate to the Food and Drug Administration that a new drug is safe and effective and that the proposed label is accurate and adequate, generic drug manufacturers do not have to meet quite the same burden. They are simply required to show that the label for their generic drug is the same as the label for the corresponding brand-name drug that already has received FDA approval. The bill now seeks to hold generic drug manufacturers to the same standards as the manufacturers of the brand-name drugs they mimic. Should the bill pass, generic drug manufacturers would no longer be automatically spared from state law failure-to-warn claims. They would have to satisfy their burden of showing that their labels are accurate and adequate as well.

Brand name drug manufacturers probably think this change cannot come soon enough, especially in light of a recent case in Alabama holding that a consumer can bring a failure-to-warn claim against the brand-name drug manufacturer, even though the consumer only took the generic version of the drug. Wyeth Inc. et al. v. Weeks et al., No. 1101397, (Ala. 2013).

FDA Proposes Highly Anticipated Food Safety Regulations

Fri, 11 Jan 2013 10:21:33 GMT

In an effort to combat the steady rise of foodborne illnesses, on Friday, January 4, 2013, the U.S. Food and Drug Administration (FDA) proposed the first two of five new food safety regulations, establishing standards for food manufacturers and farmers who process, grow, harvest, package, and store food and produce for human consumption.

The first proposed rule for Preventive Controls for Human Food specifically targets facilities that manufacture, process, package, or store human food. Aimed at reducing contamination risks at those facilities, this rule sets forth standards that would require the facilities to implement a written food safety plan that: (1) evaluates known or reasonably foreseeable hazards (such as disease causing organisms); (2) outlines preventive controls that will be put in place to avoid such hazards; (3) establishes a plan for monitoring the preventive controls; (4) establishes procedures for correcting problems when they arise; and (5) implements activities to verify and ensure the effectiveness of the preventive controls. The facilities are also required to keep records of their written plan, as the FDA will evaluate the plan and perform audit inspections of the facilities.

Public Comments on External Scientific Peer Review (ESPR) on Safer Consumer Products Regulations Now Available

Wed, 09 Jan 2013 12:36:00 GMT

The California Department of Toxic Substances Control (DTSC) has published public comments submitted regarding the External Scientific Peer Review (ESPR) on the Safer Consumer Product Regulations. In total 14 comments were submitted. Those that commented are the American Chemistry Council, American Cleaning Institute, American Forest & Paper Association, Amway, CA Council Environmental & Economic Balance, CA Industrial Hygiene Council, CHANGE, Consumer Specialty Products Association, the European Union, Grocery Manufacturers Association, Rubber Manufacturers Association, SNR Denton, Unifrax and the Western States Petroleum Association.

For more information on the Safer Consumer Products Regulations, please see our advisory.

Electronic Waste Recycling Prosecution Highlights Calls for Stricter Regulations

Tue, 08 Jan 2013 12:38:06 GMT

Illustrating a rare example of criminal enforcement under electronic waste (e-waste) regulations, the U.S. Attorney in the federal district of Colorado has successfully prosecuted a recycling business called Executive Recycling for allegedly exporting e-waste containing lead to foreign countries, including China. On December 21, 2012, a jury found Executive Recycling, its CEO, and Vice President of Operations guilty on several counts, including exporting glass video display components known as Cathode Ray Tubes (CRTs), often found in TV monitors and computers, in violation of the Resource Conservation and Recovery Act (RCRA) and Colorado’s authorized hazardous waste program. Defendants are scheduled to be sentenced in April, but plan to appeal the jury verdict.

Despite existing regulations, a coalition of over 70 U.S. companies called the Coalition for American Electronics Recycling has pushed for legislation with stricter controls for e-waste exports, calling for e-waste recycling with better security protections and sustainability practices. Known as the Responsible Electronics Recycling Act, HR2284 was introduced with its companion bill S1270 in the 112th Congress. Neither bill passed, yet the 113th Congress may pick the legislation up where the 112th left off.

The case of U.S. v. Executive Recycling is Criminal Case No. 11-cr-00376-WJM. The texts of S1270 and HR 2284 can be found here and here.

Georgia Court of Appeals Revises Opinion, But Fails to Answer Ultimate Question

Thu, 03 Jan 2013 09:30:16 GMT

On December 14, 2012, the Georgia Court of Appeals revised its prior opinion in Dailey v. Abdul-Samed, No. A12A1109, that suggested that defendants bore the burden of showing that the “gross negligence” emergency room standard applies in applicable cases. The Dailey court issued its original opinion on November 28, 2012 – the same time it issued its opinion in another Georgia case involving the emergency room statute, Johnson v. Omondi, discussed herein on November 29, 2012 and December 20, 2012.

The Dailey plaintiffs sued various defendants alleging that “Dr. Abdul-Samed and her staff delayed referring Mr. Dailey to a hand surgeon, left his hand injury untreated for a protracted period, and caused a partial amputation of his finger,” after Mr. Dailey accidentally injected himself with paint thinner. 2012 WL 6217643, at *1 (Ga. Ct. App. Nov. 28, 2012). At the trial court level, the defendants moved for summary judgment arguing that there was no clear and convincing evidence demonstrating that the defendants were “grossly negligent” as required under Georgia’s emergency room statute, O.C.G.A. § 51-1-29.5(c). The trial court granted summary judgment and plaintiff appealed alleging that there were factual questions regarding whether the emergency room statute applied to the case.

Colorado Lone Pine Case Could Be Important for Hydraulic Fracturing Litigation—and Maybe Smaller-Scale Toxic Tort Litigation Generally

Wed, 02 Jan 2013 15:18:33 GMT

The Colorado case of Strudley v. Antero Resources Corp., No. 2012 CA 1251 (Colo. Ct. App.), centers on the use of a so-called Lone Pine order in the context of hydraulic fracturing litigation. Lone Pine orders tend to be used as trial management devices in complex mass tort cases, where evidence of causation will be hard fought. The defendants sought and obtained one in Strudley, which involved localized claims of water contamination from hydraulic fracturing. Plaintiffs were unable to put forth sufficient evidence, and the trial court dismissed their claims, indicating the wisdom of issuing the Lone Pine order.

Plaintiffs, however, feel cheated by having to produce evidence to support their novel claims, and are seeking review in the Colorado Court of Appeals. It is difficult to predict the outcome of the case—seemingly, the Lone Pine ruling should be insulated by abuse of discretion review, but even so the appellate court may find that it was inappropriate here. If the order is upheld, though, it could have important ripple effects. Presumably, other hydraulic fracturing defendants will point to Strudley. And thinking more broadly, so should other defendants in smaller-scale cases involving complex causation issues.

Piecemealing Public Comment: DTSC Proposes Cascading Sets of Reviews of Various Pieces of Its Proposal to Regulate World Commerce

Fri, 21 Dec 2012 12:41:00 GMT

In its quest to regulate the global supply chain for over 3,000 ingredients in products sold in California, the California Environmental Protection Agency’s Department of Toxic Substances Control is making it very difficult for anyone in that supply chain to understand how they may be affected by the proposed rules and precluding effective public comment. In its latest piecemealing activity, the California government has released a revised initial statement of reasons, or ISOR, for public comment on December 20, 2012 with comments due by January 22, 2013. See notice here. Only three weeks ago on November 30, 2012, it released a set of 10 scientific peer review documents and requested comment by January 4, 2013. See notice here. The revised draft regulations are expected to be released on January 2, 2013 and the public is likely to be required to provide comment in cascading form in another three weeks. This pattern of piecemealing parts of this ambitious regulatory proposal has been ongoing for years, and as we have previously blogged, has a questionable legal foundation (see here).

This procedural piecemealing effectively denies the public due process of law, and is compounded by the fact the draft regulations released on July 27th (see here) do little more than provide an outline for procedure that the agency intends to follow, while disclosing almost none of the substance of what product manufacturers, importers, and retailers, will have to face – further diluting the ability of impacted parties to meaningfully participate in the process.

Merry Christmas world. California’s gift is coal in our stockings.

Plaintiffs File Petition Requesting Constitutional Review of Georgia’s Emergency Medical Care Statute

Thu, 20 Dec 2012 09:30:12 GMT

We recently wrote about the Georgia state case Johnson et al. v. Omondi et al., in which plaintiffs filed medical malpractice and wrongful death claims arising out of treatment their son received in a hospital emergency room (“ER”). Plaintiffs brought their son to the ER after he complained of pain on the left side of his chest that was worse in a recumbent position. Two weeks after being discharged, he died from a bilateral pulmonary embolism. The case was resolved in defendants’ favor when the Court of Appeals affirmed summary judgment, holding that plaintiffs had presented insufficient evidence that defendants committed gross negligence. The Court applied Georgia’s emergency care statute, O.C.G.A. § 51-1-29.5.

Earlier this week, plaintiffs petitioned the Georgia Supreme Court to review the constitutionality of applying the statute to their case. They noted in their petition that although the Supreme Court “upheld the statute against facial constitutional challenges in Gliemmo v. Cousineau, 287 Ga. 7 (2010), it has never reviewed an actual application of the statute.” The petition requests the Court to clarify a number of aspects regarding the statute, including the definition of “gross negligence” as used by the statute, the use of expert witness testimony in meeting the gross negligence standard, and how the statute’s “clear and convincing evidence” standard relates to the summary judgment standard of O.C.G.A. § 9-11-56.

EPA and CPSC Collaborate on Nanomaterials

Thu, 13 Dec 2012 12:44:12 GMT

The U.S. Environmental Protection Agency (EPA) and the U.S. Consumer Product Safety Commission (CPSC) have agreed to a collaborative effort for worldwide research to determine any potential impacts nanomaterials have on health and the environment. Nanomaterials are present in a number of household products. Dr. Tina Bahadori, national program director for EPA’s Chemical Safety for Sustainability Research said in a statement, “Nanotechnology and nanomaterials used in the development of these products improve our everyday lives, but it is important that we understand how humans are exposed to nanomaterials and to assess the risks they may pose to people’s health and the environment.”

The collaborative research is part of a larger international effort. That larger effort targets five areas. Among them are: identifying, characterizing and quantifying the origins of nanomaterials; determining how nanomaterials interact with the human body and the environment; and sharing knowledge through online applications which will allow for research to progress much faster. The CPSC is also working with other federal agencies to address public health concerns. They are developing protocols to assess the potential release of nanomaterials from consumer products; developing rules for consumer product testing to better evaluate exposure; and determining the potential health impacts of nanomaterials used in consumer products.

Court Dismisses Putative Class Action Alleging Defective Tires

Wed, 12 Dec 2012 11:43:56 GMT

On November 28, 2012, the U.S. District Court for the District of New Jersey dismissed a putative class action against BMW of North America (“BMW”) and Bridgestone Firestone North American Tire, LLC, Bridgestone Americas Tire Operations LLC, and Bridgestone Americas Inc. (collectively “Bridgestone”) in which the plaintiff alleged that the Potenza Run Flat Tires installed on certain BMW automobiles were defective. According to plaintiff’s allegations, the tires installed on his BMW developed sidewall bubbles that “made for a ‘distractingly loud,’ ‘[un]controlled,’ and ‘dangerous’ ride.” However, as the court noted, plaintiff did not allege any damage to his car or injury to himself.

Court Defers to FDA in Dismissing Plaintiff’s False Advertising Claim

Tue, 11 Dec 2012 15:34:18 GMT

A court recently dismissed a putative class action alleging that General Mills and Yoplait ("Defendants") violated the Minnesota Prevention of Consumer Fraud Act, the Minnesota Unlawful Trade Practices Act, and the Minnesota Uniform Deceptive Trade Practices Act by advertising and selling “Yoplait Greek" yogurt that was “neither yogurt nor Greek, as those terms are used in the industry and as defined by regulation.” According to Plaintiff, instead of straining its "Greek" yogurt naturally to obtain Greek yogurt's traditional thick and creamy texture, and higher protein content, General Mills added Milk Protein Concentrate (“MPC”) to obtain the same result. According to Plaintiff, because FDA's "standard of identity" that defined "yogurt" did not specifically permit the addition of MPC to yogurt, Defendants' Greek yogurt was mislabeled.

CPSC Files Another Suit

Tue, 11 Dec 2012 14:04:58 GMT

Earlier this month, the CPSC filed a suit against the makers of Nap Nanny infant recliners after the manufacturer would not agree to conduct a voluntary recall of the product. The CPSC reported that it had received reports of four infants who died in the recliners and over 70 additional incident reports of children nearly falling out of the product. This suit comes on the heels of a similar suit filed by the CPSC against the makers of Buckyballs, a manipulative magnetic desk toy intended for adults, and is only the third time in the past eleven years that the CPSC has filed suit seeking a stop-sale order and mandatory recall. Click here to find more information on the suit against Nap Nanny.

Georgia’s Emergency Medical Care Statute

Thu, 29 Nov 2012 10:10:43 GMT

Emergency medical care provided in hospital emergency rooms is different from medical care provided in other settings. This has been acknowledged in Georgia by both the judiciary and the legislature. To help promote the availability of quality health care services, in 2005, the legislature enacted an emergency medical care statute establishing a standard of care and a burden of proof that reduces the potential liability of the providers of such emergency care. The constitutionality of this statute has been upheld by the Supreme Court of Georgia, and the statute has been applied and interpreted in several cases. A recent interpretation of this statute by the Georgia Court of Appeals sheds some light on the type of protection this statute provides to emergency care physicians. Relying upon the standard and burden provided by the statute, the Court of Appeals affirmed a trial court’s grant of summary judgment in favor of the defendants in Johnson et al. v. Omondi et al., a case in which the plaintiffs filed suit against a physician after their son died from a pulmonary embolism two weeks after being treated by the physician.

The California Supreme Court Brings the Admissibility of Expert Testimony One Step Closer to the Federal Daubert Standard

Tue, 27 Nov 2012 10:23:04 GMT

On November 26, 2012, in a matter involving a claim for breach of contract and lost profits, the California Supreme Court, in a major decision, reversed the judgment of the court of appeals, which had held the trial court erred in excluding expert testimony regarding plaintiff’s lost profits. Sargon v. USC (Case No. S191550) The Sargon decision will have significant implications in cases concerning the admissibility of expert witness testimony and contractual loss profit claims.

Georgia Court of Appeals Rules that Judges Can Deny Defense Access to Treating Physicians

Mon, 19 Nov 2012 14:51:13 GMT

In a November 16, 2012 decision, a panel of the Georgia Court of Appeals ruled that trial judges have discretion to refuse to grant defense counsel the right to interview non-party treating physicians without plaintiffs’ permission.

The court of appeals affirmed a trial court ruling denying the defense’s motion for a protective order to interview several doctors regarding care provided to the decedent. Defendants had argued that the decision should be overruled on the basis that without the interviews, they would be unable to adequately prepare the doctors for trial, thus causing defendants to look bad in front of the jury and denying them a fair trial.

Said the panel: “Despite presenting such an impassioned argument outlining the potential dire consequences of an adverse ruling from this Court, however, the defendants have failed to support it with any evidentiary or legal authority, nor have they shown that these alleged consequences cannot be avoided by utilizing the other discovery methods and trial preparation techniques that remain available to them, instead, this argument constitutes mere speculation and conjecture about possible future events that cannot fulfill their burden of demonstrating harm by the record."

Citing the Georgia Supreme Court case Baker v. WellStar Health Systems, the court of appeals noted that trial judges should limit defendants to discussing only the medical conditions at issue in the litigation. The defendants in the instant case had proposed an order which would allow them to question treating physicians about a much broader range of medical topics.

A disappointed counsel for the defense commented that the restriction on access to treating physicians is “a unique situation in civil litigation – it’s the only situation where one party is not permitted to go and conduct a witness interview.” He added that a lawyer can always go interview a witness to a car wreck or similar incident.

The case is Tender Loving Health Care Services of Georgia v. Ehrlich, No. A12A0892.

FDA Requests More Power

Thu, 15 Nov 2012 09:50:04 GMT

At a recent congressional hearing spurred by the recent outbreak of fungal meningitis, the Food and Drug Administration (“FDA”) requested more power to regulate compounding pharmacies.

Dr. Margaret Hamburg, Commissioner of Food and Drugs at the FDA, explained at the hearing that compounded drugs are currently exempted from certain provisions of the Food, Drug, and Cosmetic Act, including (1) the premarket approval requirement for “new drugs,” (2) compliance with current good manufacturing practice, and (3) the requirement that the drugs bear adequate directions for use (in certain circumstances). According to Dr. Hamburg, these limitations, along with other gaps and ambiguities in the law, have suppressed the FDA’s ability to adequately regulate compounding. Dr. Hamburg requested a broad range of powers that would give the FDA increased jurisdiction over compounders, particularly nontraditional compounders. She also expressed that pharmacies should be prohibited from compounding certain products “under any circumstances,” including copies of FDA-approved drugs already available from other manufacturers, and certain complex dosage forms.

The FDA’s request for more power was met with mixed reviews. Some members of Congress indicated they may try to pass legislation by the end of the year, while others were adamant that the FDA already has enough authority - it just fails to properly exercise its powers to their full extent.

Federal Circuit Upholds Dismissal of Flu Vaccine Suit

Fri, 09 Nov 2012 12:26:21 GMT

On Friday, November 2, 2012, the Federal Circuit affirmed dismissal of a lawsuit by a plaintiff who alleged that a flu vaccination caused her to develop dysautonomia (a neurological disorder). In upholding the dismissal, the appellate court held that the plaintiff must show that the vaccine directly caused her injury.

The plaintiff was administered a flu vaccination in 2003 and subsequently developed an autonomic disorder. She filed for compensation under the National Childhood Vaccine Injury Act of 1986 (“Vaccine Act”) in 2007. A special master assigned to the plaintiff’s claim determined its validity by relying on the Federal Circuit’s decision in Althen v. Secretary of Health and Human Services, in which the court held that a plaintiff must show: "(1) a medical theory causally connecting the vaccination and the injury; (2) a logical sequence of cause and effect showing that the vaccination was the reason for the injury; and (3) a showing of a proximate temporal relationship between vaccination and injury." The special master examined expert testimony and found that the plaintiff could not meet her burden in proving that her autonomic disorder was linked to a vaccine-triggered immune response, failing to establish the second Althen factor.

On appeal before the Federal Circuit, the plaintiff argued that it was “improper” for the special master to focus on the second, “actual causation,” Althen factor and “exclude” the other factors; that the court imposed an “unduly high burden of proof” on her to link the vaccine to her injury; and that the special master’s conclusion denying her compensation under the Vaccine Act was arbitrary and capricious. The appellate court rejected these arguments, finding no error in the examination of the Althen factors and stating that it was proper for the special master to determine “based on the record evidence as a whole and the totality of the case, whether it has been shown by a preponderance of the evidence that a vaccine caused the [petitioner's] injury.” Because the special master’s findings were not “wholly implausible” and were articulated with a “rational basis for his decision,” the appellate court ruled that the special master’s findings were “fatal” to plaintiff’s petition for compensation under the Vaccine Act.

For more information, please refer to Hibbard v. Secretary of Health and Human Services, No. 2012-5007, in the U.S. Court of Appeals for the Federal Circuit.

Manufacturers of Automotive Parts, Musical Instruments, Flooring, Tub/Shower Units and Sports Equipment Take Note: You May Need to Add a Prop 65 Label to Your Products as Two Chemicals Added to California Prop 65 List

Mon, 05 Nov 2012 12:46:46 GMT

The California Office of Environment Health Hazard Assessment announced they have added two chemicals known to cause cancer to the Prop 65 list. Alpha-methylstyrene (CAS No. 98-83-9) and 1,3-dinitropyrene (CAS No. 75321-20-9) have been added to the list effective November 2, 2012. The listing was carried out via a mechanism in the Labor Code based up on IARC 2B listing.

Alpha-methylstyrene is used in the manufacturing of plasticizers, resins and polymerization production process. For example, it can be used as an injection mold in the making of floor tiles, sports equipment (snow skis), plastics, floor polishers, tub/shower units, as a resin for stringed musical instruments (violins) and in automobiles allowing the vinyl to be more flexible and more resistant to heat.

1,3-dinitropyrene is a nitrated pyrene that has been found in some carbon blacks and particulate emissions from diesel engines, kerosene heaters and gas burners.

California Federal Judge Tosses Out Putative False Adverting Class Action Filed Against General Nutrition Centers, Inc.

Fri, 02 Nov 2012 13:53:09 GMT

On October 12, 2012, U.S. Federal District Court Judge Otis D. Wright dismissed a putative false advertising class action against General Nutrition Centers, Inc. (“GNC”) involving allegations of mislabeling of a dietary supplement under the Magnuson-Moss Warranty Act. Judge Wright also dismissed the remaining non-federal consumer protection claims for failure to establish diversity jurisdiction. Bates v. General Nutrition Centers Inc. et al., Case Number 2:12-cv-01336-ODW(AJWx) (C.D. Cal.)

In Bates, plaintiff Lynnette Bates alleged that GNC and Cullucor Sports Nutrition sold a dietary supplement called C4 Extreme that contained a dangerous drug known as 1,3 dimethylamylamine (“DMMA”) that is synthetic and not derived from geraniums, as advertised, thus breaching its warranty under the Magnuson-Moss Warranty Act. The class action lawsuit sought $5 million in damages for consumers who purchased C4 Extreme thinking that they were purchasing a natural dietary supplement.

GNC filed a motion to dismiss the lawsuit contending that the Magnuson-Moss Warranty Act was inapplicable to plaintiff’s breach of warranty claim. The Court agreed and threw out the suit.

Chemicals Must be Known to Cause Cancer to be Listed under California’s Prop 65

Fri, 02 Nov 2012 12:48:01 GMT

The California Court of Appeals of the Third Appellate District held on Wednesday chemicals that fall under Proposition 65’s coverage must be known to cause cancer or reproductive toxicity. Proposition 65 (“Prop 65”) prohibits businesses form discharging chemicals known to the state to cause cancer or reproductive toxicity into drinking water and requires businesses to warn the public if they knowingly and intentionally expose individuals to such chemicals.

After groups challenged the listing of two chemicals, California’s Office of Environmental Health Hazard Assessment (“OEHHA”) charged with implementing Prop 65 argued the list of Prop 65 chemicals should include a group of chemicals called “Group 2B,” identified by the International Agency for Research on Cancer (“IARC”) as chemicals that are “possibly” carcinogenic to humans.

The Court rejected OEHHA’s argument, recognizing chemicals may be in IARC Group2B with less than sufficient evidence of carcinogenicity in either humans or experimental animals. Looking closely at the legislative intent and statutory language of Prop 65, the Court held the language is clear that the Prop 65 list of chemicals is limited to chemicals determined by OEHHA or through a prescribed method in the Labor Code “known to cause cancer or reproductive toxicity.” Since inclusion in the IARC’s Group 2B chemicals does not meet that statutory standard, OEHHA cannot include chemicals on the Prop 65 list solely based on the IARC’s Group 2B classification.

For more information on our Prop 65 Practice Group, please visit our site.

CPSC Prohibited from Publishing Report on Saferproducts.gov Database; Case To Proceed Under Seal

Tue, 30 Oct 2012 17:14:57 GMT

Over the last year, we have reported on a suit filed under seal by a company challenging the CPSC’s decision to publish a complaint on the CPSC’s saferproducts.gov database that the company alleged was materially inaccurate. Last week, the U.S. District Court for the District of Maryland published its highly anticipated opinion on the issue. In a very lengthy and detailed 73 page opinion, the Court chastised the CPSC for its continued efforts to publish the report and granted the company’s motion for summary judgment, thereby permanently preventing the CPSC from publishing the report. The Court also granted the company’s right to proceed under seal and heavily redacted its opinion so that neither the plaintiff nor the product that was the subject of the report could be identified. Further information on this important case is contained in the following Law 360 article, which came out last week.

Fifth Circuit Refuses to Hold Brand-Name Drug Manufacturers Liable for Harm Caused by Generic Drugs

Mon, 29 Oct 2012 10:50:37 GMT

On Thursday, October 25, 2012, the Fifth Circuit refused to revive the claims of a plaintiff alleging neurological harm from a generic version of Reglan, a heart-burn medication. The plaintiff specifically alleged that brand-name drug manufacturers were liable for generic forms of their products, and cited the U.S. Supreme Court’s ruling in PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), as support for her claim.

According to Plaintiff, the Mensing decision eliminated legal immunity for branded drug manufacturers because the immunity was grounded in consumers’ ability to bring state failure-to-warn claims against generic drug manufacturers. The Fifth Circuit rejected Plaintiff’s argument in its entirety, explaining that Plaintiff misinterpreted the state of the case law preceding Mensing. Citing the Fourth Circuit’s ruling in Foster v. American Home Products Corp., 29 F.3d 165 (1994), the court clarified that pre-Mensing case law preventing generic drug consumers from suing brand-name manufacturers was based on interpretation of specific Maryland state law, and not on any outright ability of consumers to sue generic drug-manufacturers. The court, however, noted that it could not “view Mensing as overruling Foster because the court in Foster did not reach its holding by relying on the ability of a plaintiff to sue generic manufacturers.” The Foster court, instead, interpreted Maryland law to conclude that “a name-brand manufacturer has no duty of care to consumers that are not using the manufacturer’s product.” The court further opined that the assumption that generic drug-makers could be sued was no longer valid in light of Mensing; however, the court held that “this fact does not impose on name-brand manufacturers a duty of care to customers using generic products.” Accordingly, the court ruled that decisions in Louisiana relying on Foster were still valid after Mensing, especially considering that the “Fourth Circuit decision about Maryland law would have no effect on Louisiana law.”

The court, therefore, held that the U.S. Supreme Court’s ruling in Mensing did not impose liability on brand-name drug manufacturers for claims arising from generic versions of their products.

For more information, please refer to Demahy v. Schwarz Pharma, Inc., No. 11-31073, 2012 WL 5261492 (5th Cir. Oct. 25, 2012).

QVC Wins A $2 Million Award Against MJC America For Faulty Heaters

Thu, 25 Oct 2012 15:12:13 GMT

On October 22, 2012, and after a bench trial was held in early January 2012, U.S. District Court Judge Thomas N. O’Neill, Jr. awarded QVC, Inc. almost $2 million in damages against MJC America, Ltd. d/b/a Soleus International, Inc. (“Soleus”) for supplying it with faulty space heaters that caused fires in QVC’s customer homes in 2007 and 2008. According to pleadings filed in the case, faulty crimping of wires inside some of the heaters resulted in sparking, smoking, and, in some cases, fires after more than 19,000 of the heaters were sold to QVC’s customers from December 2007 to March 2008.

In March 2008, after receiving a number of complaints about the heaters, QVC hired a third-party to evaluate them to determine whether any defects were present. In April 2008, QVC contacted the U.S. Consumer Product Safety Commission (“CPSC”) regarding a recall of the heaters through CPSC’s fast-track recall program. QVC then brought a breach of contract action against Soleus in the Eastern District of Pennsylvania, seeking damages and other relief.

Public Comments on California Safer Consumer Products Regulations Posted

Wed, 24 Oct 2012 12:51:46 GMT

The California Department of Toxic Substance Control (DTSC) has published the written comments they received on their Green Chemistry Safer Consumer Product Regulations. The regulations were open to comment from late July, 2012 until October 11, 2012. In all, DTSC received thousands of pages of comments, attachments, and redlines but was only able to post 1120 pages worth of the comments on their website. Among those to submit comment on the regulations were the American Chemistry Council, the Alliance of Automobile Manufactures, BASF, CA Department of Public Health, Dow Chemical Company, the European Union, the Japanese Government, the Sierra Club, a number of concerned citizens and many others. In an effort to help highlight common themes expressed in the comments we are working on a detailed review. Our review will be published on our green chemistry page in the coming days.

Court Reverses $32 Million Judgment in Lung Disease Case Over Statute of Limitations Issue

Wed, 10 Oct 2012 13:46:33 GMT

Recently, the Illinois Fourth District Appellate Court reversed a $32 million judgment against BASF Corp., which had been found liable for the plaintiff’s lung disease. The plaintiff had developed bronchiolitis obliterans that allegedly resulted from exposure to diacetyle. The diacetyle, which was distributed by BASF, was traced to the plaintiff’s work at a plant that produced powdered flavoring, such as butter popcorn flavoring.

BASF claimed that the claim was barred because it was not filed within the two year statute of limitations for personal injury cases in Illinois. The trial court, however, accepted the plaintiff’s argument that because he was not diagnosed with bronchiolitis obliterans until 2006, and the suit was filed in 2007, the case was viable.

On appeal, the appellate court determined that an official diagnosis date is not necessarily the date upon which the statute of limitations period begins to run. Noting that the two year limitation period begins when the plaintiff “knew or should have known” of his injury, the appellate court reversed the trial court’s decision and remanded the case for a new trial. Relying upon evidence of lung testing performed at the plaintiff’s workplace, and his subsequent lung-related work restrictions in 2005, the appellate court determined that it was for the jury to determine whether the plaintiff knew, or should have known, of his injury prior to his 2006 diagnosis, and thus, whether the case was filed within the limitation period.

The case is Gerardo Solis v. BASF Corp., case number 1-11-0875, in the Illinois Fourth District Appellate Court.

There Is Still Life—And Power—in Frye

Tue, 09 Oct 2012 19:13:54 GMT

Much of the admissibility action occurs under Daubert, but it’s good to remember that Frye still holds sway in several important states. In that regard, the Pennsylvania Supreme Court’s decision in Betz v. Pneumo Abex, LLC, 44 A.3d 27 (Pa. 2012), is a reminder that Frye, can, when properly applied, approach the rigor of a good Daubert ruling.

The expert testimony in Betz involved the infamous “every fiber” opinion, under which every single exposure to asbestos—no matter the circumstances—is deemed a substantial contributing factor to disease causation. Although a few courts tolerate that opinion as a matter of practice, a number of judges who have faced the issue head-on have rejected it as utterly devoid of scientific support and, frankly, at odds with the implicit notion in substantial factor causation that some factors are not substantial.

What is significant about Betz joining that list (earlier decisions had forecast the result as to the “every fiber” opinion) is the searching application of Frye the Court endorsed. The trial judge ably walked through the gaps in the expert’s reasoning and the limits of the bases for his opinion, refusing to defer to an expert’s vague claims to be practicing a scientific methodology. As under Daubert, that kind of open-eyed, fulsome review will knock out junk science. Betz reminds us that, whatever its flaws, at 89 years and counting, Frye can still punch.

FTC Releases Final Revisions to Green Marketing Guides

Tue, 02 Oct 2012 15:33:24 GMT

As consumers have become more environmentally conscious, manufacturers have increasingly used environmental benefit marketing claims to promote sales of their products. The Federal Trade Commission (FTC) has created guidelines, known as the Green Guides, to aid marketers in properly utilizing environmental benefit claims, out of concern that consumers’ perceived environmental benefit may exceed the actual environmental benefit provided by the manufacturer. On October 1, 2012, the FTC released its final revisions to its Green Guides after a multiyear investigatory process, which included reviewing comments submitted by companies, trade organizations, government entities and individuals. This advisory outlines the major changes contained within the final revisions to the Green Guides.

These final revisions seek to encourage clarity and specificity in marketers’ environmental benefit claims to avoid causing confusion to consumers. While not having the force of law, the Green Guides provide guidance on how to avoid false or misleading environmental marketing claims in violation of Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices.

The FTC’s Revised Green Guides Available October 1, 2012

Sun, 30 Sep 2012 15:41:13 GMT

The Federal Trade Commission will announce final revisions to its “Green Guides” on October 1, 2012. The Green Guides seek to help marketers avoid making deceptive marketing and advertising claims by outlining general principles that apply to all environmental marketing claims, as well as provide specific guidance about how consumers are likely to interpret particular claims. As part of releasing the final revisions to the Green Guides, Jon Leibovwitz, the FTC Chairman, will hold a phone-in media briefing at noon. The Green Guides were last revised in 1998, with proposed revisions issued for public comment in October 2010.

When proposed revisions were issued in October 2010, the revisions focused on three topics: (1) revisions to previously established Green Guide provisions; (2) entirely new Green Guide provisions; and (3) matters for which the FTC has declined to provide guidance. The common thread throughout these topics is the FTC’s desire to encourage more specificity in marketers’ claims to avoid causing confusion to consumers. While not having the force of law, the Green Guides provide guidance to the public on how to avoid false or misleading environmental marketing claims in violation of Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices.

Manufacturers and marketers should note the FTC’s final revisions to the Green Guides and beginning the process of evaluating and updating current marketing claims. For more general information on the agency’s modifications visit the FTC’s dedicated “green” website at http://www.ftc.gov/green.

Ninth Circuit Finds Vaccine-Related Design Defect and Failure to Warn Claims are Federally Preempted

Thu, 27 Sep 2012 10:11:01 GMT

On September 25, 2012, the Ninth Circuit found that vaccine-related strict products liability and negligence claims based on design defect and failure to warn are federally preempted, upholding a grant of summary judgment in favor of Merck & Co., Inc. Plaintiffs brought a wrongful death suit against Merck, alleging that their child died as a result of having taken a vaccine, M-M-R II, that was manufactured and distributed by Merck.

The appeals court ruled that Plaintiffs’ design defect and failure to warn claims were preempted by the National Childhood Vaccine Injury Act of 1986. Congress enacted the Act to balance protecting the stability of the U.S.’s vaccine program against the need for vaccine-injured persons to obtain compensation. The Act established a “no fault” compensation program, whereby injured parties could easily obtain damage awards from “Vaccine Courts.” However, parents/legal representatives are not allowed to file for compensation in Vaccine Court for their individual damages.

House Passes Contaminated Drywall Safety Act of 2012

Fri, 21 Sep 2012 10:44:35 GMT

On September 19, 2012, the U.S. House of Representatives passed a bill “To designate drywall manufactured in China a banned hazardous product, and for other purposes.” H.R. 4212, presently titled the “Contaminated Drywall Safety Act of 2012,” would treat Chinese drywall as a banned hazardous substance under the Federal Hazardous Substances Act (15 U.S.C. 1261 et seq.) and as an imminent hazard under section 12 of the Consumer Product Safety Act (15 U.S.C. 2061). According to H.R. 4212, scientific studies of contaminated drywall manufactured in China between 2001 and 2009 show that such drywall creates a corrosive environment for fire safety alarm devices, electrical distribution components, gas service piping and fire suppression sprinkler systems.

Though driven in part by the desire to prospectively limit the import of such contaminated drywall into the U. S., the bill is also squarely aimed at existing litigation concerning the drywall’s alleged defects. Consequently, the bill states that the U.S. Secretary of State should insist that the Chinese government, which has an ownership interest in the targeted drywall manufacturers, have the companies (1) meet with the U.S. government about providing a remedy to homeowners that have contaminated drywall in their homes; and (2) submit to jurisdiction in U.S. federal court and comply with decisions issues in regards to the contaminated drywall litigation.

The bill would also require the Consumer Protection Safety Commission to establish procedures to exempt certain drywall deemed non-hazardous and establish procedures regarding the disposal and testing of such drywall. Any violation of the proposed legislation would be treated as a violation under the Federal Hazardous Substances Act. The bill now moves on to the Senate for consideration.

Court Has Jurisdiction Over Chinese Drywall Manufacturer

Wed, 05 Sep 2012 14:19:05 GMT

A Florida state court recently ruled that it has personal jurisdiction over a Chinese drywall manufacturer. The manufacturer’s drywall purportedly caused a decrease in homeowners’ property values for a number of reasons, including wire and pipe corrosion and a buildup of rancid sulfuric fumes in the homes. Similar claims have also been raised against this Chinese drywall manufacturer, and a number of others, by other plaintiffs in other courts throughout the country. Accordingly, this decision is important for a few reasons.

Primarily, this is the first court to rule that it has jurisdiction over one of the Chinese drywall manufacturers involved in the nationwide drywall litigation. This leads to the second reason this opinion is important. The court’s opinion lays out in detail the reasoning upon which the court based its decision. Although this particular manufacturer may have had more extensive dealings in Florida than other manufacturers have had in Florida or other states, this opinion provides an avenue for other courts to follow in the similar cases pending before them. It is not uncommon for courts to look to rulings from other jurisdictions when dealing with novel issues. The third reason why this opinion is significant is the potential impact it can have on other types of litigation, especially if other courts choose to follow the path paved by this court. In a global economy such as ours, foreign companies frequently sell their products in the U.S and have various levels of interaction with particular states. Consequently, this decision could not only influence the Chinese drywall litigation, but it could also impact other future litigation involving foreign manufacturers.

The case is Lennar Homes LLC et al. v. Knauf Gips KG et al., No. 09-07901-CA-42, in the Florida Circuit Court of the Eleventh Judicial Circuit of Miami-Dade County.

SEC Adopts Final Rules Related to Conflict Minerals

Mon, 27 Aug 2012 16:39:09 GMT

In March we noted the U.S. Securities and Exchange Commission’s (SEC) efforts to promulgate disclosure and reporting regulations on the use of certain minerals—including tantalum, tin, gold and tungsten—from the Democratic Republic of Congo and neighboring countries. On August 22, 2012, the SEC adopted final rules related to these “conflict minerals.”

Companies that file reports with the SEC, including domestic issuers, foreign private issuers and smaller reporting companies, are subject to the rules if conflict minerals are “necessary to the functionality or production” of a product manufactured by a reporting company. Such companies must determine, following a “reasonable country of origin inquiry,” whether their conflict minerals did in fact originate in a covered country. For more information, please click here to read about the rules in our firm’s August 24, 2012 issue of the Securities Law Advisory.

Will California’s New Liability Rule Increase Likelihood of Settlements?

Sat, 25 Aug 2012 09:23:15 GMT

On August 23rd, the California Supreme Court issued an opinion that changed the long-standing California rule concerning joint liability cases. Under the old law, a plaintiff’s settlement with, and release from liability of, one joint tortfeasor also released from liability all other joint tortfeasors. Known as the “common law release rule,” the rule had been based on the common law rationale that a single party should be compensated only once for the same injury, therefore payment by any single party satisfied the plaintiff’s entire claim.

Aware of the rule’s potential for unjust results, California courts in the mid-twentieth century began to permit plaintiffs to skirt the rule by settling claims with a single defendant and then entering into a “covenant not to sue” rather than a release of claims. By removing the release language from the settlement, the plaintiffs were allowed to continue to pursue the remaining defendants for additional compensation. After more than half a century, the California Supreme Court finally eliminated the need for this legal fiction, by abrogating the “common law release rule” last week.

Now non-settling defendants remain jointly and severally liable for plaintiff’s damages, regardless of the settlement or release status of any other defendant. According to some commentators, this change may lead to an increase in the willingness of plaintiffs to enter into settlements because they will no longer face the prospect of extinguishing their claims against remaining defendants.

The case is Aidan Ming-Ho Leung v. Verdugo Hills Hospital, case number S192768, in the Supreme Court of the State of California.

California Court Of Appeals Holds That Employers Do Not Owe A Duty Of Care To A Family Member Of An Employee Who Gets Secondary Exposure Of Asbestos.

Fri, 24 Aug 2012 16:01:00 GMT

On May 21, 2012, the California Court of Appeal for the Second Appellate District reversed a jury verdict that found Ford Motor Company (Ford) owed a duty to protect family members of employees from secondary exposure to asbestos used during the course of an employer’s business. Campbell v. Ford Motor Company, 206 Cal. App. 4th 15 (2012).

In Campbell, plaintiff Eileen Honer filed a premises liability lawsuit against Ford claiming that she was diagnosed with mesothelioma as a result of her exposure to asbestos when she washed her father’s and brother’s asbestos-covered clothing. Both her father and brother worked for Ford installing asbestos insulation in one of Ford’s buildings during 1947 and 1948. The case went to trial and the jury found Ford 5% liable. Plaintiff Eileen Honer later died and the action was continued by her daughter Mary Campbell.

Ford appealed the jury verdict claiming that it did not owe a duty of care to plaintiff and the Court of Appeal agreed and reversed the jury verdict.

California Proposes Regulations for Mercury-filled Thermostats

Mon, 20 Aug 2012 11:33:13 GMT

The California Department of Toxic Substances Control(DTSC) released proposed regulations, which “establish performance goals for the collection and recycling of used thermostats containing toxic mercury,” according to a DTSC press release. In 2006 California banned the sale of new mercury-added thermostats, but there are still millions of them in use. These regulations would require manufactures to collect and recycle over 65,000 mercury containing thermostats in 2013. Recycling goals would increase until 2017, when the state would have a goal of 75% collection and recycling rate, which would be an estimated 147,000 thermostats. As part of the proposed regulations, manufacturers who formerly sold mercury thermostats would be required to meet the recycling goals of the Thermostat Recycling Corporation (TRC), either through participation or joining a similar program.

The DTSC will hold a hearing on October 2, 2012 at the Cal/EPA Building in Sacramento, CA. Written comments must be submitted to the DTSC by no later than 5:00 p.m. on October 2, 2012. For more information on green chemistry related issues please visit our webpage.

California DTSC Extends Comment Period for Proposed Safer Consumer Product Regulations

Mon, 20 Aug 2012 11:31:06 GMT

The California Department of Toxic Substances Control(DTSC) has announced a 30 day extension for the comment period on their proposed Safer Consumer Product regulations. The proposed regulations were released in late July and we blogged about them here. The new deadline for submitting comments is 5 p.m. on October 11, 2012. The public hearing on September 10, 2012 will take place as scheduled.

EPA Releases Final Rule for Air Standards for Hydraulic Fracturing Operations

Mon, 20 Aug 2012 11:29:15 GMT

EPA published the final rule, “Oil and Natural Gas Sector: New Source Performance Standards and National Emission Standards for Hazardous Air Pollutants Reviews,” last week. The rule, which was finalized in April, and we blogged about here, sets the first air pollution standards for hydraulic fracturing operations. For hydraulic fracturing, the rule will require owners/operators to use reduced emissions completions, also known as RECs, and a completion combustion device to reduce VOC emissions beginning on January 1, 2015. Up until January 1, 2015 owners/operators may flare gas to reduce emissions. The new rule not only addresses hydraulic fracturing, it also includes performance standards for other modified oil and gas operations, such as centrifugal compressors, storage vessels, and pneumatic controllers. The final rule is effective on October 15, 2012.

Better Make Sure your 510(k)s are Complete

Thu, 16 Aug 2012 15:10:07 GMT

New draft guidance provided by the FDA now makes it easier for the FDA to refuse to accept medical device approval applications if the applications fail to provide certain information. Citing that the previous FDA guidance resulted in the FDA accepting numerous inadequate submissions and investing significant time in requesting additional information from manufacturers to make 510(k) applications complete, the FDA’s revised guidance provides a standardized checklist for application reviewers to use to determine if the 510(k) application is complete. Preliminary questions that FDA reviewers will ask when determining the completeness of a 510(k) application include:

Is the product a device (per section 201(h) of the FD&C Act) or a combination product (per 21 CFR 3.2(e)) with a device constituent counterpart?
Is the application with the appropriate Center?
Is a 510(k) the appropriate regulatory submission?
Is there a pending PMA for the same device with the same indications for use?
If clinical studies have been submitted, is the submitter the subject of the Application Integrity Policy (AIP)?

The draft guidance further provides a checklist of organizational elements that must be complied with for the 510(k) application to be accepted. A copy of the draft guidance regarding the FDA’s Refusal to Accept Policy for 510(k)s can be found here.

New Jersey State Court Upholds the Learned Intermediary Doctrine Protecting Pharmaceutical Manufacturers from Inadequate Warning Claims

Fri, 10 Aug 2012 16:28:11 GMT

In a ruling significant to pharmaceutical manufactures, a New Jersey state court judge has dismissed a lawsuit brought by the husband of a woman who passed away from a blood clot to her lung allegedly caused by a birth control patch. The patch, called Ortho Evra, is manufactured by Ortho-McNeil Pharmaceutical, Inc. In this instance, the husband of the decedent, Djuna Hayes-Jones, brought suit alleging that the product’s warning was insufficient, and that Ortho-McNeil had a duty to warn consumers, in addition to physicians, about the risks of the product.

Judge Jessica Mayer granted summary judgment in favor of Ortho McNeil. Based upon the testimony of the prescribing nurse practitioners, Judge Mayer determined the product contained an adequate warning that the estrogen level in the patches exposed the user to a greater risk of blood clots than birth control pills. Judge Mayer explained that, “[w]arnings can always be made better, either by the FDA or the manufacturer. However, the relevant standard is not the best possible warning. The standard is a reasonably adequate warning.”

Additionally, Judge Mayer was not persuaded by the Plaintiff’s claim that the manufacturer had a duty to directly warn consumers, in addition to the medical community. In doing so, the court upheld New Jersey’s learned intermediary doctrine, which prevents pharmaceutical manufacturers from being held liable in failure-to-warn claims so long as the user’s physician had been properly advised of the risks associated with the drug at issue.

Federal Judge Denies Class Certification to Ford Minivan Owners

Wed, 08 Aug 2012 14:19:55 GMT

On Tuesday, July 31, 2012, the U.S. District Court for the District of Minnesota denied class certification to a putative class of owners and lessees of Ford Freestar and Mercury Monterey minivans who brought suit against Ford Motor Company for alleged transmission failures in their 2004-2006 minivan models. Plaintiffs alleged that the transmission failures were caused by a defective design in the minivans’ torque converters, a component that acts as a bridge between the engine and the transmission. Plaintiffs argued that Ford’s failure to disclose a defect in the torque converters resulted in purchases or leases of the class vehicles at a higher price than Plaintiffs would have purchased or leased the vehicles had they known of the defect.

In denying class certification, the court held that the named plaintiffs could not demonstrate that their action was an appropriate class action under Federal Rule of Civil Procedure 23(b)(3). Specifically, the court held that Plaintiffs’ breach of warranty claims required individualized poof, particularly because: (1) the express warranty upon which Plaintiffs relied was limited and individual proof was required with respect to the question of whether the warranty was in effect for each class member; and (2) the implied warranty claim was dependent upon when the class member purchased the vehicle or the vehicle’s mileage at the time of purchase. The court further held that adjudication of Plaintiffs’ implied warranty claims by way of class certification was not warranted because implied warranty laws differed in the three states in which Plaintiffs sought to certify subclasses: Minnesota, Maryland, and Florida. The court also rejected Plaintiffs’ unjust enrichment claims and held that elements of an unjust enrichment claim cannot be proven through class-wide evidence and, therefore, individual issues predominate.

In addition to denying class certification, the court granted Ford’s Motion for Summary Judgment on Plaintiffs’ express and implied warranty and unjust enrichment claims. Please see the opinion, Diagle v. Ford Moto Co., Case No. 09-CV-3214 (MJD/LIB) (July 31, 2012), for additional details.

California Court of Appeal Finds that the California Consumer Legal Remedies Act’s Ban on Class Action Waiver is Trumped by the U.S. Supreme Court’s Ruling in AT&T Mobility, LLC v. Concepcion

Fri, 03 Aug 2012 16:54:31 GMT

On July 30, 2012, the California Court of Appeals for the Fourth District (“COA”) found that the United States Supreme Court’s (the “Court”) decision in AT&T Mobility, LLC v. Concepcion (“Concepcion”) trumps the California Consumer Legal Remedies Act’s (“CLRA”) prohibition on class action waivers. The COA overturned an Orange County Superior Court decision that prevented Mercedes Benz from exercising an arbitration clause in its contract with one of its car buyers, Lee Anne Caron. The COA found that the precedent on which the trial court’s decision was based, Fisher v. DCH Temecula Imports, LLC (“Fisher”), is superseded by Concepcion.

California Releases Proposed Green Chemistry or Safer Consumer Product Regulations

Fri, 27 Jul 2012 11:35:22 GMT

Today, the California Department of Toxic Substance Control (DTSC) released their proposed “Safer Consumer Product Regulations.” The proposed regulations have narrowed down the set of applicable chemicals to 1200, down from the recent 3000. Included in this draft, the DTSC announced that they will only select 5 products to go through this onerous regulatory process in the first work plan. How they will select the 5 products remains unclear, but they will be selected within 6 months of the effective date of the regulations.

This is the 8th iteration of the draft regulations to implement the green chemistry laws passed in 2008. There will now be a 45 day public comment period to challenge the regulations. Two notable vulnerabilities are they have issued themselves an exemption from CEQA (you may recall that the AB 32 regulations were held up for their failures to comply with CEQA ), and prepared a flimsy economic analysis. The comment period ends on September 11, 2012. A public hearing will be held on the regulations on September 10, 2012.

We issued an advisory on the previously released regulations in November 2011. For more information visit the DTSC Safer Consumer Product Regulations page.

Senate Committee Set to Hold Markup on TSCA Reform Legislation Tomorrow

Tue, 24 Jul 2012 11:37:19 GMT

The Senate Environment and Public Works(EPW) Committee is set to hold a markup tomorrow on Sen. Lautenberg’s “Safe Chemicals Act” legislation. S. 847, would reform the 1976 Toxic Substances Control Act(TSCA), which has yet to be reformed since it became law. The bill gives EPA broader authority to require any data so that it can more easily determine the safety of chemicals. It would make the EPA block chemicals that are deemed high risk to the public.

The concept of toxic chemical reform does have bipartisan support; however GOP leadership feels blindsided by the move to markup Sen. Lautenberg’s legislation. Earlier this summer, GOP leadership approached Sen. Lautenberg about working on a bipartisan bill led by Sens. Lautenberg and Vitter, according to a letter from GOP leadership to Sen. Lautenberg. They hoped to develop a new piece of legislation that “will protect American consumers; enhance confidence in the federal regulatory system; and ensure American manufacturers can continue to innovate, compete in the global economy, and grow and create jobs here at home.”

It will be interesting to see how the markup plays out tomorrow, and how many amendments are taken on the legislation. The bill will most likely move through the committee on a party line vote. The markup will begin at 10 a.m. in 406 Dirksen.

Recent State Agency Actions in Maine, Oregon and Washington to Regulate Consumer Product Ingredients

Fri, 20 Jul 2012 11:46:18 GMT

The state of Washington’s Department of Ecology has proposed an amendment to its Children’s Safe Products Reporting Rule. The amendment would add tris(1,3-dichloro-2-propyl)phosphate(TDCPP)(CAS #13674-87-8) to its chemical of high concern to children(CHCC) list. TRIS is a flame retardant, and is on other state’s chemicals of concern lists. The amended rulemaking was initiated in response to a petition filed to add TDCPP to the CHCC list. The Department of Ecology’s Director decided to proceed with this rule making based on two pieces of criteria:

1. Clear evidence that the chemical in question, TDCPP, meets the relevant criteria to be considered a Chemical of High Concern to Children.
2. Exemption criteria 3(d), “necessary to protect public health, safety, and welfare or necessary to avoid an immediate threat to the state’s natural resources,” outlined by Office of Financial Management.

This comes on top of Washington preparing for the first reporting cycle of the Children’s Safe Product Reporting Rule coming at the end of August, which we recently wrote about here.

Maine also moved forward recently as The Maine Department of Environmental Protection(DEP) met a deadline set by the legislature to release a list of chemicals of high concern by July 1, 2012. The list was put together by Maine’s DEP, the Maine Department of Health and Human Services(HHS) and the Maine Center for Disease Control and Prevention(CDC). The list contains 49 chemicals of high concern that are present in every day products and considered dangerous to children. The DEP was allowed to include up to 70 chemicals on the list. The DEP is open to adding or subtracting chemicals to the list, one just has to file a petition on a specific chemical for it to be addressed. For more information on visit our previous blog.

And in Oregon, the Department of Environmental Quality is exploring new regulations and is currently receiving comment until August 24, 2012 on “Materials Management in Oregon: 2050 Vision and Framework for Action.” Part of the plan calls for the Department of Environmental Quality to adopt a Toxics Reduction Strategy, which will include a priority list of toxic chemicals and 25 actions to reduce and assess toxics in Oregon. The plan states that products or packaging which currently contain toxics can impede recycling and harm public health. It also notes that current investment in green chemistry research, development and education is limited.

FDA Announces Ban on BPA in Infant-Feeding Products, While Representative Markey Files Petition for FDA to ban BPA Use in Packaging for Infant Formula

Fri, 20 Jul 2012 11:41:32 GMT

The Food and Drug Administration (FDA) has completed its review of a petition filed by the American Chemistry Council (ACC) and announced a ban of bisphenol A (BPA) in infant-feeding products, such as baby bottles and children’s sippy cups. Most manufacturers of these products in the United States have already removed BPA, but the final rule, which amends FDA’s food additive regulations, provides certainty according to the ACC. Steven G. Hentges, Ph.D., of the Polycarbonate/BPA Global Group of ACC said, “FDA action on this request now provides certainty that BPA is not used to make the baby bottles and sippy cups on store shelves, either today or in the future.”

Not everyone is pleased with FDA’s current stance on BPA. The Natural Resources Defense Council (NRDC), which had a petition to ban BPA in all food packaging denied earlier this year, wants to see more action from FDA. Dr. Sarah Janssen, a senior scientist in the public health program at the NRDC, said in a statement: “This is only a baby step in the fight to eradicate BPA. To truly protect the public, FDA needs to ban BPA from all food packaging. This half-hearted action—taken only after consumers shifted away from BPA in children’s products — is inadequate. FDA continues to dodge the bigger questions of BPA’s safety.”

The FDA also published in the Federal Register a notice of petition from Representative Markey(D-MA) seeking an amendment to the food additive regulations. Rep. Markey is asking the FDA to amend the food additive regulations to ban the use of BPA-based epoxy resins “as coatings in packaging for infant formula because these uses have been abandoned.” The notice is open for public comment until September 17, 2012.

Consumer Warranties: Keeping Pace with Technology

Thu, 19 Jul 2012 14:01:46 GMT

By now, it is well understood that the law often plays catch-up when it comes to changes in the commercial marketplace and elsewhere enabled by technological advances. Such appears to be the case with product warranties.

The Magnuson-Moss Act requires that, to the extent manufacturers offer warranties for consumer products, they must be provided to consumers in writing. Historically, the practice was to provide warranties in paper form, since that was until recently the only practical option for giving a written document to someone. In 2009, the Federal Trade Commission, charged with enforcing Magnuson-Moss, issued staff guidance indicating that it is permissible to provide warranties on a CD or DVD. That is a reasonable interpretation of Magnuson-Moss, and would appear to have a number of economic and environmental benefits.

It might now be appropriate to extend that logic to the Internet and permit manufacturers to provide warranties in e-form. The economic and environmental cost savings would be even greater if an email with the warranty attached could be sent with the receipt and order information. This particularly would be the case for consumer products that are purchased online – as increasing numbers are – as consumers could have access to the warranty information as they would with a printed or CD copy, but they may be even more likely to retain a copy of the warranty if it is in their email account.

Maine Releases Chemicals of High Concern List

Fri, 13 Jul 2012 12:49:49 GMT

The Maine Department of Environmental Protection (DEP) met a deadline set by the legislature to release a list of chemicals of high concern by July 1, 2012. The list was put together by Maine’s DEP, the Maine Department of Health and Human Services(HHS) and the Maine Center for Disease Control and Prevention(CDC). According to the DEP website, chemicals already listed on Maine’s chemical of concern list maybe included on the chemicals of high concern list if, “there is a determination of strong, credible scientific evidence that the chemical is a reproductive or developmental toxicant, endocrine disruptor or human carcinogen, and there is strong, credible scientific evidence that the chemical meets one or more of the following criteria:

The chemical has been found through biomonitoring studies to be present in human blood, human breast milk, human urine or other bodily tissues or fluids;
The chemical has been found through sampling and analysis to be present in household dust, indoor air or drinking water or elsewhere in the home environment; or
The chemical has been added to or is present in a consumer product used or present in the home."

The list the DEP released included 49 chemicals of high concern that are present in every day products and are considered a danger to children. The DEP was allowed to develop a list of up to 70 chemicals according to the legislature; however only listed 49 chemicals were listed, which led a number of health groups to voice their displeasure and call for more chemicals to be added to the list. The DEP is open to adding more chemicals to the list, and anyone is allowed to petition the DEP to either add or drop chemicals from the list.

Apportioning Fault to All Liable Parties in Premise Liability Cases

Mon, 09 Jul 2012 18:20:00 GMT

In Couch v. Red Roof Inns, No. 1:10-cv-00045 (N.D. Ga.) the plaintiff was violently attacked by an unknown assailant while staying at defendant’s hotel. Plaintiff sued the hotel for failing to keep its premises safe. After plaintiff filed a motion in limine in the trial court to exclude the appearance of a non-party criminal assailant on the verdict form, the Northern District of Georgia certified the question of whether a jury can apportion fault to a non-party or third-party criminal assailant to the Supreme Court of Georgia. See Couch v. Red Roof Inns, Inc., No. S12Q0625 (Ga. July 9, 2012). On July 9, 2012, the Supreme Court answered that “the jury is allowed to apportion damages among the property owner and the criminal assailant.” (Slip Op. at 2).

First Reporting Cycle Fast Approaching for Washington’s Children’s Safe Product Reporting Rule

Mon, 02 Jul 2012 12:53:01 GMT

The Children’s Safe Product Act (CSPA) of the state of Washington consists of two parts. The first part limits the amount of lead, cadmium and phthalates allowed in children’s products sold in Washington after July 1, 2009 and the second part requires the Department of Ecology to work with Department of Health to develop a list of chemicals that manufacturers must report.

Under CSPA, the Department of Ecology adopted a final rule for manufacturers to report if their products included any of the chemicals of concern. The first cycle for reporting is set to end on August 31st, 2012. During this cycle, only companies “whose annual aggregate gross sales, both within and outside of Washington, are more than one billion dollars, based on the manufacturer's most recent tax year filing are required to report, ” according to an email from the state. The first reporting cycle also only calls for manufacturers of children’s products intended to be put into a child’s mouth, applied to the child’s body, or any “mouthable children’s product” intended for children three years old or younger.

For more information on the rule please visit here.

Eleventh Circuit Holds Manufacturers' Extensive Warnings Adequate for Non-English-Speaking Consumers

Fri, 29 Jun 2012 14:47:59 GMT

On June 21, 2012, the Eleventh Circuit affirmed the grant of summary judgment in favor of the defendants in Farias v. Mr. Heater, Inc., No. 1:09-cv-23789-JLK, 2012 WL 2354369 (11th Cir. June 21, 2012). In Farias, the plaintiff alleged that the defendants negligently failed to warn her of the danger that could result from the indoor use of two propane gas-fired infra-red portable heaters. The plaintiff used the portable heaters inside her home, failed to close the valve on one of the propane gas tanks, and then went to sleep. The resulting fire caused approximately $300,000 in damages. According to the plaintiff, the heaters, manufactured by Enerco Group, Inc. and Mr. Heater, Inc., and sold at Home Depot, contained inadequate warnings because such warnings were ambiguous and not provided in Spanish. Ruling on the defendants’ motion for summary judgment, the U.S. District Court for the Southern District of Florida held that defendants were not required under Florida law to provide the warnings in Spanish, and that, as a matter of law, the English-language warnings, instructions and graphic depictions provided with the heaters were adequate to warn consumers of the dangers of indoor use.

Texas Supreme Court Affirms Learned Intermediary Rule for Prescription Medications

Thu, 21 Jun 2012 10:28:56 GMT

Earlier this month in Centcor, Inc. v. Hamilton, No. 10-0223 (decided June 8, 2012), the Texas Supreme Court ruled for the first time that Texas's "learned intermediary" doctrine "generally applies within the context of the patient-physician relationship and allows a prescription drug manufacturer to fulfill its duty to warn end users of its product's potential risks by providing adequate warning to the prescribing physician," placing Texas "alongside the vast majority of other jurisdictions that have considered the issue." Perhaps more significantly, the Court rejected an exception to the learned intermediary doctrine created by the Texas court of appeals when a manufacturer has marketed the prescription drug through direct-to-consumer (DTC) advertising.

Judicial Review of Agency Warning Letters

Fri, 15 Jun 2012 09:39:38 GMT

The U.S. Supreme Court has been asked to hear an issue that could have great impact on how federal agencies interact with those who they deem not to be in compliance with their regulations and applicable statutes. The Holistic Candlers and Consumer Association filed a petition in the U.S. Supreme Court in April of this year, which was recently made public. In it, the petitioners request that the Court decide “[w]hether an agency’s warning letters, subsequent statements, and previous enforcement actions constitute ‘final agency action’ subject to judicial review under the Administrative Procedure Act.”

Does Product Liability Make Us Safer?

Fri, 08 Jun 2012 15:19:34 GMT

That is the question raised in an interesting new article written by Vanderbilt Law professor W. Kip Viscusi for the CATO Institute’s Spring 2010 issue of Regulation. Professor Viscusi begins his discussion by agreeing that product liability law can provide a useful role in penalizing companies whose products fall below the efficient level of safety, and thus push the level of safety closer to its efficient level. However, he goes on to state that a review of empirical data and case studies suggests that while product liability theoretically can have the above-desired effect, its effectiveness in real world application is more of a mixed bag. While products in general have become tremendously safer over the last 100 years, accident rate trends bear no apparent relation to temporary surges in liability costs. Professor Viscusi also finds that higher liability costs actually may stifle the innovation that leads firms to design safer products, as he reviews at least one study that finds that decreases in the role of product liability led to increased safety. His conclusion is that products liability regimes are not all bad, citing their success in increasing motor vehicle safety, but that oftentimes products liability law has unintended adverse consequences. Click here to read the entire article.

Supreme Court of Pennsylvania Rejects "Every Fiber" Causation

Fri, 01 Jun 2012 13:30:09 GMT

Last week the Supreme Court of Pennsylvania rejected the notion that “each and every fiber” of asbestos amounted to a substantial cause of a given plaintiff’s disease and affirmed a trial court’s ruling excluding such testimony. Betz v. Pneumo-Abex, LLC, et al., No. 38 WAP 2010 (May 23, 2012). In the lengthy opinion, the Court concluded that an expert’s testimony that “each and every” fiber of asbestos was a substantial cause of disease was in irreconcilable conflict with itself: “one cannot simultaneously maintain that single fiber among millions is substantially causative, while also conceding that a disease is dose responsive.” Id. at p. 48. In making this finding, the Court observed that while the expert in question had himself testified that three factors (potency, concentration, and duration) needed to be considered in estimating the relative effects of different exposures, the expert did not consider those three factors in arriving at his opinions. Id. at 48-49. The Betz opinion is in line with other Pennsylvania precedent, including Summers v. CertainTeed Corp., 606 Pa. 294 (2010); Gregg v. V-J Auto Parts Co., 596 Pa. 274 (2007); and In re: Asbestos Litigation, No. 0001, 2008 Phila. Ct. Com. Pl. LEXIS 229 (C. P. Philadelphia, Sept. 24, 2008).

Children’s Product Testing Groups To Be Audited

Fri, 25 May 2012 11:11:53 GMT

As part of implementing the Consumer Product Safety Act, as amended by the Consumer Product Safety Improvement Act of 2008, the United States Consumer Product Safety Commission issued a final rule requiring periodic audits of children’s product testing organizations. Children’s product testing organizations analyze the safety of many children’s toys currently on the market and the newly required audits will be a condition for a testing organization’s continuing accreditation.

As required by the final rule, the periodic audit will examine whether the testing organization continues to meet the requirements for accreditation and then require resubmission of the lab accreditation form to the CPSC. These audits seek to ensure that the testing organizations are free from undue influence regarding technical judgment and that testing organizations are competent to perform their testing services.

While third party testing organizations will have an opportunity to make any necessary corrections revealed during an audit, the CPSC can take whatever action it deems necessary, including withdrawing accreditation, if a testing organization fails to rectify any problems identified.