On June 19, 2017, the U.S. Supreme Court issued a decision clarifying the circumstances in which a lawsuit “arises out of” or “relates to” a corporation’s contacts with a particular jurisdiction, such that it can be sued there. In Bristol-Myers Squibb Co. v. Superior Court, writing for an 8-1 majority, Justice Alito held that California state courts do not have jurisdiction to hear the product liability claims of non-California residents against Bristol-Myers Squibb Co., a foreign corporation. The Court reasoned that the nonresident plaintiffs “do not claim to have suffered harm in that state” from their use of BMS’ drug Plavix, and “all the conduct giving rise to the nonresidents’ claims occurred elsewhere.” The Supreme Court found insufficient BMS’ substantial sales in California, including through its use of 250 sales representatives in that state.
FTC Moves Ahead Enforcing Endorsement Cases
A few months ago, acting Federal Trade Commission Chairwoman Olhausen stated that the FTC should shift focus to cases of actual harm, leaving many to wonder whether FTC would still actively enforce endorsement cases. However, in April, the FTC sent out ninety letters to brand influencers and marketers reminding those influencers and marketers to clearly and conspicuously disclose their relationship to brands. On the heels of these April letters, the FTC filed a complaint and ultimately reached entered a proposed settlement order (“order”) with two brothers that relied on deceptive endorsements and misleading review websites to sell Infinity and Olympus Pro brand trampolines.
On June 7, the U.S. Consumer Product Safety Commission provided administrative law followers a fascinating case study. For the first time in two decades, the CPSC’s five Commissioners heard an appeal put on by CPSC staff in administrative litigation. In its appeal, the staff seeks to overturn an administrative law judge’s opinion finding that Zen Magnets’ controversial high powered, small rare earth magnets (SREMs) are not defective and are not a substantial product hazard when sold with appropriate warnings. Novel already, what made this argument all the more interesting was an additional wrinkle: four of the five Commissioners who heard the appeal had voted previously to approve a final safety standard that has the practical effect of banning such magnets outright.
2017 continues to be the year of the Food Safety Modernization Act, as the U.S. Food and Drug Administration, having completed its roll-out of the major rules implementing this land-mark food safety legislation, moves in earnest with inspections to check on compliance.
To help manufacturers prepare for this and other issues confronting the food industry, on Tuesday, June 13th, the American Bar Association Food & Supplements Subcommittee is hosting a Workshop in Hershey, Pennsylvania. One topic of discussion will be FSMA inspection preparedness as a panel of industry representatives will talk about what they’re seeing from the latest FDA inspections, and what manufacturers should expect when agency investigators come knocking this summer and fall.
In addition to talking about how to prepare for an FDA inspection, the panel plans to examine what FDA has said about its expectations during its first round of visits focused on FSMA compliance. It will also talk about how manufacturers can have their FSMA documents in order for investigator review, and how to prepare for the flurry of environmental samples FDA is likely to take. Crowell & Moring partner John Fuson will be presenting as part of the panel. Additionally, Laura Cordova will be speaking on a panel regarding ethical issues in parallel criminal and civil proceedings. Michelle Gillette is one of the program organizers for the workshop.
For more information, visit the ABA website.
The Food Safety Modernization Act, which was signed into law by President Obama on January 4, 2011, promised sweeping reform of food safety practices from farm to fork, and shifted FDA’s regulatory posture from reacting to food contamination to proactively preventing it. While the Trump administration has vowed to eliminate two regulations for every new regulation, at this year’s Food and Drug Law Institute’s Annual meeting, Dr. Susan Mayne, the Director of FDA’s Center for Food Safety and Applied Nutrition, made clear that FSMA is the law of the land and FDA fully intends to continue its implementation and enforcement of it.
CPSC Reaches Civil Penalty Agreement with Viking Range and Middleby Corporation; Firms to Pay $4.65 Million to Resolve Late Reporting Allegations Over Defective Gas Ranges
The U.S. Consumer Product Safety Commission (CPSC) has announced a civil penalty settlement with Viking Range, LLC of Greenwood, Mississippi and its parent company, The Middleby Corporation of Elgin, Illinois. The companies have agreed to pay a civil penalty of $4.65 million to resolve charges that they knowingly failed to immediately report allegedly defective gas ranges to the Commission under Section 15(b) of the Consumer Product Safety Act (CPSA). This civil penalty, the second of 2017, follows the Commission’s $5.8 million civil penalty levied against Keurig Green Mountain in February. Both penalties underscore that the Commission’s general approach to civil penalties, and desire to increase the amount of penalties imposed for violations, will not change overnight with new agency leadership. Indeed, the Acting Chairman actually voted against the settlement agreement, proposing instead an amendment to reduce the amount of the civil penalty to $2 million.
Presidential advisor Steve Bannon famously told the Conservative Political Action Conference (CPAC) that the Trump Administration seeks to “deconstruct” the regulatory state. The President has issued several Executive Orders (EOs) on regulations designed to implement this policy, including the “two for one” EO, an EO on enforcing the regulatory agenda, and an EO on reorganizing the executive branch. The three orders collectively promote a policy of deregulation and wholesale elimination of administrative functions deemed overly burdensome to business, redundant, or outdated.
This week, the White House followed through on that agenda by publishing a proposed budget that would impose sweeping budget reductions on almost every federal agency, with the exception of the Departments of Defense and Homeland Security.
The key consumer protection agencies—the Federal Trade Commission, Federal Communications Commission, and Consumer Financial Protection Bureau—are not directly subject to any of these EOs or addressed in the President’s Budget Request. But that does not mean these agencies are in the clear in terms of budget-cutting or deregulatory efforts. Rather, it seems more likely that the administration is preoccupied with bigger fish at the moment; in the meantime, they are treading carefully. Which raises the question: what else is in store for these agencies once they regain the Trump Administration’s focus?
This past Wednesday, in her first public remarks as Acting Chair of the U.S. Consumer Product Safety Commission (CPSC), Ann Marie Buerkle announced her top three priorities. As our readers know from our previous post, on February 9, then Commissioner Buerkle became Acting Chair of the CPSC after Commissioner Elliot Kaye stepped down as Chairman. Speaking to the annual conference of the International Consumer Product Health and Safety Organization (ICPHSO), Acting Chair Buerkle announced that her top three priorities include: (1) collaborating with all product safety stakeholders; (2) taking a balanced and reasonable approach to regulation; and (3) expanding product safety education and awareness for consumers.
The overarching theme of Chairman Buerkle’s remarks could not have been more clear: the core mission of product safety does not change with respect to who is in the White House—the focus needs to remain on safety, data, and science, and, to further that mission, all product safety stakeholders should remove their stereotypes of different groups within the community and work collaboratively and creatively to further a common goal.
To that end, Chairman Buerkle stated that she will continue to approach product safety as she has done since taking her seat on the Commission in 2013 in order to further the agency’s mission—she will strive for good governance, build relationships across the safety community, take advantage of available data and science, and rely upon the expertise available inside and outside of the Commission.
Acting Chair Buerkle’s top three priorities include: Continue Reading CPSC Acting Chair Buerkle Announces Top Priorities at Product Safety Conference
On July 26, 2016, FDA issued an updated warning on beauty products, warning consumers to avoid certain “skin creams, beauty and antiseptic soaps, and lotions,” particularly those boasting “anti-aging” or “skin lightening” benefits, as potentially containing mercury. While the dangers of mercury exposure are well-known, mercury’s ubiquity in certain beauty products is not. Products that claim to “remove age spots, freckles, blemishes, and wrinkles,” including products targeting teenagers enduring acne, may contain mercury. Checking the label can help—look out for words like “mercurous chloride,” “calomel,” “mercuric,” “mercurio,” or of course, “mercury”, but it’s not fool-proof. As FDA points out, many of these beauty products are often made abroad and can be sold illegally in the U.S., without any labels. FDA continually monitors products like these, but is unable to catch all of them, especially due to their dubious channels of trade. For those that FDA does catch, FDA sets up an import alert to prevent future influxes of such products. Check here for all Consumer Updates from FDA. Thus, retailers should do their due diligence to know what the chemical content is of the products they sell beyond the labels.
In its warning, FDA again mentioned one of its growing complaints levied against cosmetics – that the product may actually be an unapproved new drug under the law. Continue Reading Beauty with a Side of Mercury?
Many universities and local governments have installed synthetic turf made with “crumb rubber” – ground up tires – on playing fields and playgrounds in recent years to obtain the advantages of all-season use and lower maintenance costs. In recent months, however, the media and a growing group of critics contend that the crumb rubber used in these fields contains carcinogens and is potentially dangerous to children and other users. While the scientific evidence to date shows no basis for these concerns, the movement against crumb rubber is nevertheless escalating, due in large part to media reports from NBC, ESPN, and others, followed by Members of Congress calling for an investigation by the CPSC and EPA. The article at the link below surveys the crumb rubber debate, the current science and existing health investigations of crumb rubber, and the litigation risk arising from ongoing investigations and media pressure.