Category: Product Liability

Food Safety Bill Leaves Senate with Unanimous Consent, House Vote Tuesday

Update yesterday from National Law Review guest blogger William Marler of the Marler Blog:  

Perhaps the President will bring the Bill with him to Hawaii for Christmas – It’s a short flight from Seattle.  Thanks to Republican and Democratic Staff for this great Summary of the House and Senate version of the Bill:

Noteworthy

· S. 510 is intended to respond to several food safety outbreaks in recent years by strengthening the authority of the Food and Drug Administration (FDA) and redoubling its efforts to prevent and respond to food safety concerns.

· The legislation expands current registration and inspection authority for FDA, and re-focuses FDA’s inspection regime based on risk assessments, such that high-risk facilities will be inspected more frequently. The bill also requires food processors to conduct a hazard analysis of their facilities and implement a plan to minimize those hazards.

· The bill requires FDA to recognize bodies that accredit food safety laboratories domestically and third-party auditors overseas. The bill enhances partnerships with state and local officials regarding food safety outbreaks, and establishes a framework to allow FDA to inspect foreign facilities.

· The bill does NOT change the existing jurisdictional boundaries between FDA and the Department of Agriculture, and includes protections for farms and small businesses.

· The bill gives the FDA the power to order mandatory food recalls, in the event that a food company cannot or does not comply with a request to recall its products voluntarily.

Title I – Prevention

Records Inspection: Expands and clarifies FDA’s records inspection authority, such that FDA can inspect records regarding an article of food “and any other article of food that [FDA] reasonably believes is likely to be affected in a similar manner, will cause serious adverse health consequences or death to humans or animals.”

Registration: Requires facilities to renew registration with the FDA every two years, and to agree to potential FDA inspections as a condition of such registration. Gives the FDA Commissioner the power to suspend facilities’ registration in the event FDA determines the facility “has a reasonable probability of causing serious adverse health consequences or death.” A suspended facility shall not be able to “introduce food into interstate or intrastate commerce in the United States. A hearing would occur within two business days on any suspension. If the suspension is found warranted, the facility must submit a corrective action plan before its suspension could be lifted. The bill also states that the commissioner cannot delegate to other officials within FDA the authority to impose or revoke a suspension.

Small Entity Compliance Guides: Requires FDA to develop plain language small entity compliance guides within 180 days of the issuance of regulations with respect to registration, hazard analysis, safe production, and recordkeeping requirements.

Hazard Analysis: Requires facilities to analyze at least every three years their potential hazards and implement preventive controls at critical points. Further requires facilities to monitor the effectiveness of their preventive controls, take appropriate corrective action, and maintain records for at least two years regarding verification of compliance. The bill gives FDA the authority to waive compliance requirements in certain instances, and allows FDA to exempt facilities “engaged only in specific types of on-farm manufacturing, processing, or holding activities that the Secretary determines to be low risk.” The language also delays implementation for smaller establishments for up to three years.

Performance Standards: Requires FDA to review evidence on food-borne contaminants and issue guidance documents or regulations as warranted every two years.

Produce Safety: Establishes a process to set standards for the safe production and harvesting of raw agricultural commodities (i.e. fruits and vegetables). Requires FDA to promulgate regulations regarding the intentional adulteration of food—applying to food “for which there is a high risk of intentional contamination”—within two years, and issue compliance guidance as appropriate. Includes delayed implementation of up to two years for smaller establishments.

Fees for Non-Compliance: Imposes fees on facilities only in cases where a facility undergoes re-inspection to correct material non-compliance, or does not comply with a recall order and thereby forces FDA to use its own resources to perform recall activities. Importers would be subject to fees for annual re-inspections or for participation in the voluntary qualified importer program established under title III of the bill. Requires FDA appropriations funding to keep pace with inflation in order for fees to be collected. The bill gives FDA the authority to lower fee levels on small businesses through a notice-and-comment process.

Safety Strategies: Requires FDA, the Department of Agriculture, and the Department of Homeland Security to coordinate to create an agriculture and food defense strategy, focused on preparedness, detection, emergency response, and recovery. Requires reports from FDA on building domestic preventive capacity—including analysis, surveillance, communication, and outreach—and requires FDA to issue regulations on the sanitary transportation of food within 18 months of enactment.

Food Allergies in Children: Requires FDA to work with the Department of Education to develop voluntary guidelines to manage the risk of food allergy and anaphylaxis in schools and early childhood education programs. Authorizes new grants of up to $50,000 over two years for local education agencies to implement the voluntary guidelines.

Dietary Ingredients and Supplements: Requires FDA to notify the Drug Enforcement Administration if FDA believes a dietary supplement may not be safe due to the presence of anabolic steroids.

Refused Entry: Requires FDA to notify the Department of Homeland Security, and by extension the Customs and Border Protection Agency, in all cases where FDA refuses to admit foods into the United States on the grounds that the food is unsafe.

Title II – Detection and Response

Targeted Inspections: Requires FDA to prioritize inspection of high-risk facilities, based on a risk profile that includes the type of food being manufactured and processed, facilities’ compliance history, and other criteria. Requires FDA to inspect high-risk facilities once in the five years after enactment, and every three years thereafter; low-risk facilities would be inspected once in the seven years after enactment, and every five years thereafter. Foreign facility inspections would be required to double every year for five years.

Laboratory Testing: Requires FDA to establish within two years a process to recognize organizations that accredit laboratories testing food products, and to develop and maintain model standards for accrediting bodies to use during the accreditation process. Requires food testing for certain regulatory purposes to be conducted in federal laboratories or those accredited by an approved accrediting body, with results sent directly to FDA. Includes reporting and other provisions designed to support early detection among laboratory facilities.

Traceback and Recordkeeping: Establishes a series of pilot projects within nine months of enactment on “methods to rapidly and effectively identify recipients of food to prevent or mitigate a foodborne illness outbreak.” Requires FDA to issue within two years a notice of proposed rulemaking regarding recordkeeping requirements for high-risk foods. Permits FDA to request that farm owners “identify immediate potential recipients, other than consumers,” in the event of a foodborne illness outbreak. Delays implementation of regulations for up to two years for smaller establishments.

Surveillance: Directs FDA to enhance foodborne illness surveillance systems to improve collection, analysis, reporting, and usefulness of data on foodborne illnesses, and establishes a multi-stakeholder working group to provide recommendations. Reauthorizes an existing program of food safety grants through fiscal year 2015.

Mandatory Recall Authority: Provides FDA the authority to order recall of products if the products are adulterated or misbranded “and the use of or exposure to such article will cause serious adverse health consequences or death.” Requires FDA to provide an opportunity for voluntary recall by the manufacturer or distributor prior to ordering a recall and provides the responsible party the opportunity to obtain a hearing within two days regarding any FDA order for a mandatory recall. Requires federal agencies to establish and maintain a single point of contact regarding recalls, and requires FDA to take appropriate actions to publicize mandatory recalls through press releases, an internet Web site, and other similar means. Also gives FDA authority to order the administrative detention of food products when the agency has “reason to believe” they are adulterated or misbranded. Directs that only the commissioner has the authority to order a mandatory recall, a power that may not be delegated to other FDA employees.

State and Local Governments: Directs FDA, working with other federal departments, to provide support to state and local governments in response to food safety outbreaks. Requires the Department of Health and Human Services to set standards and administer training programs for state and local food safety officials. Creates a new program of food safety centers of excellence, and amends an existing program of food safety grants to fund food safety inspections and training, with an extended authorization through fiscal year 2015.

Food Registry: Permits FDA to require the submission of reportable food subject to recall procedures (excepting fruits and vegetables that are raw agricultural commodities). Requires grocery stores with more than 15 locations to post information about reportable foods prominently for 14 days.

Title III – Food Imports

Foreign Supplier Verification Program: Requires importers to undertake a risk-based foreign supplier verification program to ensure that imported food meets appropriate federal requirements and is not adulterated or misbranded. Requires FDA to establish regulations for the foreign supplier verification program within one year of enactment. Importers’ records relating to foreign supplier verification would be maintained for at least two years.

Voluntary Qualified Importer Program: Directs FDA to establish within 18 months a voluntary program of “expedited review and importation” for importers. Eligibility would be determined by FDA using a risk assessment based on such factors as the type of food being imported, the compliance history of the foreign supplier, and the compliance capacity of the country of export.

Import Certification: Permits FDA to require as a condition of importation a certification “that the article of food complies with some or all applicable requirements” under the Food, Drug, and Cosmetic Act. Requires FDA’s determination of certification requirements to be made based on risk assessments. Requires notices for imported food to list any country that previously refused entry for that food. Permits FDA to review foreign countries’ controls and standards to verify their implementation.

Foreign Government Capacity: Requires FDA to “develop a comprehensive plan to expand the technical, scientific, and regulatory capacity” of foreign entities exporting food to the United States. Permits FDA to inspect foreign food facilities, and requires the refusal of imported food if a registered exporter refuses entry of FDA inspectors into an overseas facility. Directs FDA to establish a system to recognize bodies that accredit third-party auditors to certify eligible foreign food facilities meet federal compliance requirements. Requires FDA to establish overseas offices in countries selected by FDA to “provide assistance to the appropriate governmental entities of such countries with respect to measures to provide for the safety of articles of food.”

Smuggled Food: Requires FDA to work with the Department of Homeland Security and Customs officials to develop a strategy to identify smuggled food and prevent its entry.

Title IV – Other Provisions

Funding and Staffing: Authorizes such sums in funding for fiscal years 2011 through 2015. The bill also sets staffing goals of 4,000 new field staff in fiscal year 2011, and a total of 17,800 through fiscal year 2014.

Employee Protections: Creates a new process intended to prevent employment discrimination against individuals reporting food safety violations. The Department of Labor is directed to review and investigate complaints of such discrimination through an administrative process, subject to appeal in federal court.

Jurisdiction: The bill notes that nothing within its contents shall be construed to alter the division of jurisdiction between the Department of Health and Human Services and the Department of Agriculture. Likewise, the bill notes that it shall not be construed in a manner inconsistent with American obligations under the World Trade Organization and other relevant international treaties.

Summary of Tester Amendment as Modified (Included in Harkin Substitute Amendment as passed the Senate):

· Clarifies that a “retail food establishment” shall not include the sale of food products at a roadside stand or farmer’s market, the sale of food “through a community supported agriculture program,” or the sale of food through any other “direct sales platform” designated by the Secretary.

· Exempts from recordkeeping and hazard analysis requirements a “very small business” as defined by the Secretary, as well as those facilities whose direct sales (to consumers and local restaurants) exceed their sales to distributors AND whose annual sales total fewer than $500,000 (adjusted for inflation). Requires such facilities receiving exemptions to submit documentation to FDA that the owners have identified potential food hazards OR are in compliance with state and other applicable food safety laws. Permits FDA to revoke exemptions in the event of a food outbreak directly linked to the facility or to protect the public health.

· Requires a study by FDA and the Department of Agriculture to help define the terms “small business” and “very small business” for purposes of the statute’s regulatory requirements.

· Requires facilities receiving exemptions under the amendment to “include prominently and conspicuously…the name and business address of the facility where the food was manufactured or processed,” either on food labels or at the point of purchase.

· Amends the timeline for the new hazard analysis requirements to specify that small businesses will have an additional six months to comply with the hazard control regulatory requirements (down from two years in the base bill) and very small businesses will have an additional 18 months to comply (down from three years in the base bill).

· Exempts from new produce safety guidelines those farms whose direct sales (to consumers and local restaurants) exceed their sales to distributors AND whose annual sales total fewer than $500,000 (adjusted for inflation). Requires farms receiving exemptions under the amendment to “include prominently and conspicuously…the name and business address of the facility where the food was manufactured or processed,” either on food labels or at the point of purchase. Permits FDA to revoke exemptions in the event of a food outbreak directly linked to the facility or to protect the public health.

Copyright © Marler Clark

 

Class Action Defense Cases–American Honda v. Allen: Seventh Circuit Court Reverses Class Action Certification Order Holding District Court’s Daubert Analysis Inadequate And Expert Testimony Inadmissible

National Law Review’s featured blogger Michael J. Hassen of Jeffer, Mangels, Butler & Mitchell LLP provides some insight on a recent 7th Circuit class action case which addresses expert testimony:

District Court Erred in Granting Class Action Certification because Expert Testimony Establishing Rule 23(b)(3)’s Predominance Prong was Unreliable and District Court’s Daubert Analysis Inadequate Seventh Circuit Holds

Plaintiffs filed a putative class action against American Honda and Honda of America (collectively “Honda”) alleging product defect liability concerning Honda’s Gold Wing GL1800 motorcycle; specifically, the class action complaint alleged that a design defect in the steering assembly causes the motorcycle to “wobble.” American Honda Motor Co., Inc. v. Allen, 600 F.3d 813, 814 (7th Cir. 2010). Plaintiffs moved the district court to certify the litigation as a class action under Rule 23(b)(3), relying heavily on an expert’s opinion that common issues predominate; Honda opposed class action treatment and challenged the expert opinion relied upon by plaintiffs in their motion. Id. Defense attorneys moved under Daubert v. Merrell Dow Pharms., Inc., 509 U.S. 579 (1993), to strike plaintiffs’ expert report on the grounds that the expert’s “wobble decay standard was unreliable because it was not supported by empirical testing, was not developed through a recognized standard-setting procedure, was not generally accepted in the relevant scientific, technical, or professional community, and was not the product of independent research.” Id. The district court agreed to rule on the admissibility of the report prior to ruling on class certification because the report was central to the motion, id. But while the court announced “definite reservations about the reliability of [the expert’s] wobble decay standard,” it refused to exclude the report entirely “at this early stage of the proceedings.” Id., at 814-15. The district court granted class action certification, id., at 815, and Honda sought leave to appeal, id., at 814. The Seventh Circuit granted Honda’s request and reversed.

The Circuit Court explained that the issue before it was “whether the district court must conclusively rule on the admissibility of an expert opinion prior to class certification in this case because that opinion is essential to the certification decision.” American Honda, at 814. The Court summarized the expert’s “wobble decay” opinion, which was based on a standard the expert himself had devised and that he himself characterized as “reasonable.” Id. The expert opinion was important because “most of Plaintiffs’ predominance arguments rest upon the theories advanced by [their expert].” Id. (quoting Allen v. Am. Honda Motor Co., 264 F.R.D. 412, 425 (N.D. Ill. 2009)). In response to Honda’s objections and following the Daubert hearing, the district court “noted that it was concerned that, among other things, [the expert’s] wobble decay standard may not be supported by empirical evidence, the standard has not been generally accepted by the engineering community, and [his] test sample of one may be inadequate to conclude that the entire fleet of GL1800s is defective.” Id., at 814-15. Nevertheless, the lower court believed it was too early in the litigation to dismiss the expert’s opinion in its entirety, and so it granted class action treatment without prejudice to Honda moving to exclude the expert’s opinion. Id., at 815.

As a matter of first impression in the Seventh Circuit, the Court “specifically addressed whether a district court must resolve a Daubert challenge prior to ruling on class certification if the testimony challenged is integral to the plaintiffs’ satisfaction of Rule 23’s requirements.” American Honda, at 815. The Circuit Court held “that when an expert’s report or testimony is critical to class certification, as it is here…, a district court must conclusively rule on any challenge to the expert’s qualifications or submissions prior to ruling on a class certification motion.” Id., at 815-16. Thus, in the Seventh Circuit’s view, “the district court must perform a full Daubert analysis before certifying the class if the situation warrants.” Id., at 816. This includes not only the expert’s qualifications, but “any challenge to the reliability of information provided by an expert if that information is relevant to establishing any of the Rule 23 requirements for class certification.” Id.

In this case, the district court “started off on the right foot by beginning to undertake what might have become a fairly extensive Daubert analysis,” and both acknowledged “and largely agreed with” Honda’s concerns about the reliability of the testimony of plaintiff’s expert, “[y]et the district court ultimately declined, without further explanation, ‘to exclude the report in its entirety at this early stage of the proceedings.’” American Honda, at 816. The Circuit Court explained at page 816 that the district court’s analysis (or lack thereof) constituted an abuse of discretion: “The court’s effective statement of admissibility here is not even conclusory; it leaves open the questions of what portions of [the expert’s] testimony it may have decided (or will decide) to exclude, whether [the expert] reliably applied the standard to the facts of the case, and, ultimately, whether Plaintiffs have satisfied Rule 23(b)(3)’s predominance requirement. As a result, the district court never actually reached a conclusion about whether [the] expert report was reliable enough to support Plaintiffs’ class certification request. Instead it denied Honda’s motion to exclude without prejudice and noted that the case was in an ‘early stage of the proceedings.’”

Reviewing the expert’s report on the merits, the Seventh Circuit held that “our examination of the record reveals that exclusion is the inescapable result when the Daubert analysis is carried to its conclusion.” American Honda, at 817. The issue here was one of reliability rather than qualifications, but the Circuit Court noted that “even the most ‘supremely qualified expert cannot waltz into the courtroom and render opinions unless those opinions are based upon some recognized scientific method and are reliable and relevant under the test set forth by the Supreme Court in Daubert.’” Id. (citing Clark v. Takata Corp., 192 F.3d 750, 759 n.5 (7th Cir.1999)). Based on the Court’s analysis, the expert’s testimony was unreliable, see id., at 817-18, and “expert testimony that is not scientifically reliable should not be admitted, even ‘at this early stage of the proceedings,’” id., at 819 (citation omitted). Because the expert’s testimony formed the foundation for Rule 23(b)(3)’s predominance test, class action certification could not stand. Id. Accordingly, the Seventh Circuit granted Honda’s petition for leave to appeal and vacated the denial of Honda’s motion to strike and the district court’s order grant of class action treatment. Id.

NOTE: In response to plaintiffs’ request that the Circuit Court deny leave to appeal, the Seventh Circuit explained, “Given the uncertainty surrounding the propriety of conducting a Daubert analysis at the class certification stage, and the frequency with which this issue arises, we find the question to be one appropriate for resolution under Rule 23(f).” American Honda, at 815 (citation omitted).

© 2010 Jeffer Mangels Butler & Mitchell LLP. All rights reserved.

About the Author:

Michael J. Hassen is a Litigation Partner at Jeffer Mangels Butler & Mitchell LLP with more than 23 years experience in general business and commercial litigation, including class action defense and matters involving intellectual property, securities and unfair competition.  415-984-9666 / www.jmbm.com

Class Action Defense Cases–Donovan v. Philip Morris: Massachusetts Federal Court Certifies Class Action Seeking Medical Monitoring For Lung Cancer Of 20-Year Marlboro Smokers

This week’s featured blogger at the National Law Review is Michael J. Hassen of Jeffer, Mangels, Butler & Mitchell LLP who writes for the Class Action Defense Blog.

Class Action Against Tobacco Company Alleging Unfair Trade Practices and Breach of Implied Warranty and Seeking Medical Monitoring for Lung Cancer on Behalf of Class of Smokers who have not been Diagnosed with Lung Cancer and who are Asymptomatic Warranted Class Action Certification under both Rule 23(b)(2) and (b)(3) Massachusetts Federal Court Holds

Plaintiffs filed a putative class action against Philip Morris alleging “unfair or deceptive” trade practices in violation of Massachusetts state law, breach of implied warranty, and negligence; specifically, the class action complaint “allege[d] that Philip Morris designed, marketed, and sold Marlboro cigarettes that delivered an excessive and dangerous level of carcinogens.” Donovan v. Philip Morris USA, Inc., ___ F.Supp.2d ___ (D.Mass. June 24, 2010) [Slip Opn., at 1]. According to the allegations underlying the class action complaint, “plaintiffs have no apparent symptoms of lung cancer, and as such, are not seeking damages.” Id. Thus, this class action “diverges from a typical tobacco suit,” id. Instead of seeking damages, the class action sought to compel Philip Morris to pay for medical monitoring – “that is, regular screenings to determine whether they have early signs of the disease” based on the argument that “if [class members] do eventually develop lung cancer, these screenings will increase their likelihood of survival almost six-fold.” Id., at 1-2. Plaintiffs sought certification of a class action “on behalf of Massachusetts residents, age fifty and older, who have smoked Marlboro cigarettes for at least twenty pack-years.” Id., at 1. Further, “No class member may be diagnosed with lung cancer or be under a physician’s care for suspected lung cancer, and all must have smoked Marlboro cigarettes within the Commonwealth of Massachusetts.” Id., at 2. Defense attorneys opposed class action treatment. In a 56-page order, the district court granted plaintiffs’ motion for class action certification.

In analyzing whether to grant class action treatment, the district court noted that “the motion was not easily resolved because it raised threshold issues of Massachusetts products liability law.” Donovan, at 2. First, the class action certification motion presented a set of issues tied to “the unusual remedy plaintiffs seek, a supervised medical monitoring program using Low-Dose Computed Tomography (‘LDCT’) scans.” Id. Plaintiffs argued that unlike x-rays, which could only detect lung cancer “when it had reached an advanced stage,” the new LDCT-scanning technology allowed for much earlier detection “significantly increasing survival rates from about fifteen percent to eighty-five percent.” Id. (Plaintiffs argued that monetary damages would not adequately compensate class members for the cost of medical monitoring, id., at 3.) Second, the class action certification motion presented the question of whether the named plaintiffs had standing to prosecute the class action because “[b]y definition, plaintiffs who seek medical monitoring to determine whether they have cancer are asymptomatic.” Id. And third, the class action presents a “novel issue [that] pertains to the timing of plaintiffs’ claims and the related issue of claim preclusion.” Id. “Typically, toxic tort exposure cases put the plaintiffs on the horns of a dilemma. If they bring a claim when they are aware of their exposure – assuming the standing issues are resolved – they take the risk that they cannot recover if they develop cancer in the future under the ‘single controversy rule.’ If they wait until they develop cancer to bring a claim, the statute of limitations will have expired because they knew of the risks at an earlier time.” Id. Here, plaintiffs argued that this dilemma was avoided because “The statute of limitations should run from the date that plaintiffs develop subcellular changes that substantially increase their risk of cancer and where that increase triggers a medically-accepted form of screening.” Id., at 4.

The district court noted that, in light of these novel issues, it certified two questions to the Supreme Judicial Court of Massachusetts: “(1) Does the plaintiffs’ suit for medical monitoring, based on the subclinical effects of exposure to cigarette smoke and increased risk of lung cancer, state a cognizable claim and/or permit a remedy under Massachusetts state law? (2) If the plaintiffs have successfully stated a claim or claims, has the statute of limitations governing those claims expired?” Donovan, at 4. In a unanimous opinion, the Supreme Judicial Court answered “yes” to the first question, and “no” to the second. Id.; see Donovan v. Philip Morris, 914 N.E.2d 891, 894-95 (Mass. 2009). The federal court summarized that opinion at pages 4 and 5 as follows:

On the first question, the court held that subclinical effects on lung tissue constituted a legally cognizable injury on which plaintiffs’ medical monitoring claim could be based and outlined what comprised proof of such a claim. On the second question, the court held that the statute of limitations began to run only after the plaintiffs suffered “physiological change[s] resulting in a substantial increase in the risk of cancer” due to their smoking and “that increase, under the standard of care, triggers the need for available diagnostic testing . . .” Id. at 903. Finally, the Supreme Judicial Court held that there would be no claim preclusion under the “single controversy rule.” Litigation of the plaintiffs’ medical monitoring claim in this action would not preclude a future action for damages if plaintiffs eventually contract lung cancer.

Armed with the Supreme Judicial Court’s decision on the novel issues presented by the class action certification motion, the federal court granted class action treatment under both Rule 23(b)(2) and Rule 23(b)(3) to plaintiffs’ unfair trade practices and implied warranty claims, but denied class action treatment as to plaintiffs’ negligence claim. Donovan, at 6. Moreover, in light of Seventh Amendment concerns, the federal court held that the class action would proceed as a jury trial. Id.

© 2010 Jeffer Mangels Butler & Mitchell LLP. All rights reserved.

About the Author:

Michael J. Hassen is a Litigation Partner at Jeffer Mangels Butler & Mitchell LLP with more than 23 years experience in general business and commercial litigation, including class action defense and matters involving intellectual property, securities and unfair competition. 415-984-9666 / www.jmbm.com

The National Law Review is proud to be a media sponsor of the 3rd Annual Automotive Product Liability Conference in Chicago Sept. 22-23

The National Law Review is proud to be a media sponsor of the 3rd Annual Automotive Product Liability Conference in Chicago Sept. 22-23 – Sutton Place Hotel http://www.americanconference.com/Automotive.htm  Entering priority service code NLR1795 on the registration form entitles you to a $400 discount.  Kathy & Jennifer will be there from the National Law Review.