Consumer Product Matters

A product safety and consumer related regulation and litigation blog

Cloture Filed on Adler Nomination; Burgess Named Subcommittee Chairman

Posted in Consumer Products, U.S. Congress

Commissioner of the Consumer Product Safety CommissionYesterday evening, Senate Majority Leader Harry Reid (D-NV) filed cloture on the re-nomination of Robert Adler to be a Commissioner of the Consumer Product Safety Commission (CPSC).  If cloture is invoked—meaning three-fifths of the full Senate, or 60 votes, supports the attempt for cloture (assuming the “nuclear option” is not used)—the Senate will proceed to vote on the Adler nomination on or about Tuesday, December 2.  The nominee is then confirmed by a majority vote.  It is worth noting that the invocation of cloture and confirmation of Commissioner Adler is not a given in the current post-election political climate and after the President’s speech on immigration reform last night.  As our readers will recall from a previous blog post, while the Senate Commerce, Science and Transportation Committee voted Commissioner Adler’s nomination out of committee in July, seven Republican Senators reportedly voted no. Continue Reading

Class Action Defense Counsel adding ‘The Pick Off’ to Their Playbooks

Posted in Consumer Products, Drugs & Cosmetics, Litigation, Product Class Actions, Retailers, State Consumer Protection Laws, State Unfair Competition Laws, Uncategorized

The Pick Off DefenseIn recent years, we’ve noticed a new maneuver that class-action defense counsel have increasingly added to their playbooks: The Pick Off.  This is how the play is run: Offer the named plaintiff(s) full relief through a Rule 68 offer of judgment and, even if the plaintiff(s) reject the offer, argue that the fact that they were offered full relief nevertheless moots the case and requires dismissal.

For reference, Rule 68 of the Federal Rules of Civil Procedure allows a defendant to “serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued.”  If the plaintiff rejects the defendant’s Rule 68 offer of judgment and the judgment ultimately obtained by plaintiff “is not more favorable than the unaccepted offer,” then the plaintiff is liable for any costs the defendant incurred after the offer was made.

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CPSC Focusing on Three Areas for Reduction of CPSIA Testing Burdens

Posted in Consumer Product Safety Commission (CPSC), Consumer Product Safety Improvement Act (CPSIA), Consumer Products, Federal Regulations, Manufacturers, Private Labelers, Retailers, U.S. Congress

Consumer product safety testingAt their April Senate confirmation hearing, both incoming CPSC Chairman Elliot Kaye and Commissioner Joe Mohorovic pledged to Senator John Thune (R-SD) to submit plans for reducing third party testing burdens within 60 days of confirmation. Rather than send separate plans, Kaye and Mohorovic submitted a joint letter to Senator Thune recently made public on the website for the U.S. Senate Committee on Commerce, Science, and Transportation.

The letter outlines three areas of focus for the agency to reduce testing burdens: Continue Reading

A Taste of Things to Come? Whole Foods Feels Sting of “Non-GMO” Litigation

Posted in Advertising, Consumer Products, Food & Drug Administration (FDA), Food and Beverage, Litigation, Manufacturers, Product Class Actions, Retailers, State Consumer Protection Laws

Non-GMO Labeling BadgeAs we’ve explored in past posts, mandatory GMO-labeling legislation has, at best, a spotty track record among state legislatures. Nevertheless, the GMO issue continues to draw the public’s attention, and it is becoming clear that the “Non-GMO” label now appeals to at least certain segments of the consumer base. Some companies in the food and beverage space will doubtlessly have good business reasons to capitalize on this market trend voluntarily by providing products that are labeled and advertised as “Non-GMO.”

But a recent lawsuit against Whole Foods in California illustrates the risk for companies hoping to take advantage of this market opportunity. With all the public controversy now surrounding GMOs, could “Non-GMO” become the new “all natural”—a labeling claim that is routinely challenged by private class actions?

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November Elections Impact the Food & Beverage Industry (Part 1)

Posted in Civil & Criminal Penalties, Food & Drug Administration (FDA), Food and Beverage, Litigation, Manufacturers, State Regulations, Uncategorized

Bids to require mandatory labeling of foods containing genetically modified organisms (GMO) were voted down in Colorado and Oregon on Tuesday.  Colorado voters rejected Proposition 105, with nearly 70% of voters saying no; while Oregon voters rejected Measure 92, with only 50.9% against the initiative, and 49.1% in favor of it.  As we have blogged about in the past, California and Washington voters have both defeated state propositions to require labeling of GMO ingredients in food.

Meanwhile, voters in Maui County, Hawaii approved an initiative to temporarily ban genetically engineered crops, passing by a 50% vote in favor of the initiative and 48% against it.  As discussed in a previous blog post , Hawaii was previously in the news on the GMO front because a Federal Court found a Kauai County ordinance requiring disclosure of GMOs by large-scale agricultural operations to be preempted by state law.

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CPSC Announces Largest Civil Penalty to Date for Alleged Failure to Timely Report

Posted in Consumer Product Safety Commission (CPSC), Consumer Product Safety Improvement Act (CPSIA), Consumer Products, Federal Enforcement, Importers, Manufacturers, Private Labelers, Retailers

Baja BikeOn October 28, 2014, the U.S. Consumer Product Safety Commission (CPSC) announced that Baja Inc., and its corporate affiliate, One World Technologies Inc., of Anderson, S.C., agreed to pay a $4.3 million civil penalty to resolve charges that it knowingly failed to immediately report certain defects and an unreasonable risk of serious injury involving some of the company’s mini-bikes and go-carts. To our knowledge, this is the largest civil penalty ever agreed to be paid by a company entering into a settlement agreement with the CPSC.

In this case, CPSC staff alleged that Baja failed to report immediately to the Commission that it had information which reasonably supported that certain of its mini-bikes and go-carts were equipped with: (1) gas caps which could leak or detach from the fuel tank, posing fire and burn hazards to consumers, and (2) a throttle that could stick due to an improperly positioned fuel line and throttle cable, posing a sudden acceleration hazard. CPSC staff also alleged that by the time Baja reported to the Commission, the firm had received four reports of fires from leaking gas caps and burn injuries to consumers, including a serious burn injury to a child, and two dozen reports of stuck throttles. Continue Reading

FDA and the Center for Food Safety Reach Settlement Regarding FDA’s GRAS Rule

Posted in Consumer Products, Federal Regulations, Food & Drug Administration (FDA), Food and Beverage, Litigation, Manufacturers

Consumer Products FDAOn October 20, 2014, FDA reached a settlement with the Center for Food Safety (“CFS”) in litigation pending in the U.S. District Court for the District of Columbia.  This litigation is related to FDA’s rule for food additives that are “generally recognized as safe” (“GRAS”).  In 1997, FDA issued its proposed GRAS rule, under which manufacturers could notify FDA that a food additive was generally recognized among qualified experts as safe under the conditions of its intended use.

Once manufacturers submitted this notice, called a “GRAS exemption claim,” they could market their products without receiving pre-approval from the agency.  FDA instituted this procedure in 1998 under the terms of its proposed (not final) rule.  One basis for an exemption claim was that the food additive in question, such as sugar or gelatin, had already been designated as GRAS by FDA.  Even if FDA had not already designated the additive in question as GRAS, manufacturers could petition FDA to designate the additive as GRAS based on published studies, and FDA would then decide whether the additive was safe based on manufacturers’ assertions and cited studies.

In February 2014, CFS filed a lawsuit against FDA, amended in March 2014, in which CFS alleged that FDA’s GRAS procedure violated the Administrative Procedure Act (“APA”), which governs agency rulemaking.  CFS argued that because the GRAS rule was never actually finalized and never went through the requisite notice and comment period, it violated the APA.  CFS also alleged that FDA had endangered consumer health and safety by allowing manufacturers to market potentially unsafe food additives that FDA did not adequately examine before the products hit the market.

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Battle of the Experts Still Brewin’ in Starbucks Trial

Posted in Distributors, Federal Enforcement, Federal Regulations, Food and Beverage, Importers, Private Labelers, Prop 65, Retailers, State Consumer Protection Laws, State Product Safety Laws, State Regulations

Starbucks and CERTIn April 2010, the Council for Education and Research on Toxics (CERT) sued Starbucks Corp. and other coffee sellers alleging they violated California’s Safe Drinking Water and Toxic Enforcement Act, passed by California voters in 1986 as Proposition 65, by failing to warn consumers about carcinogens in their products as required under the act.  In July 2013, Los Angeles Superior Court Judge Elihu M. Berle denied CERT’s motion for summary adjudication, saying the lawsuit would essentially boil down to a battle of experts.

Since then, the battle of the experts has continued to brew.  We are now a month into the bench trial that will culminate in Judge Berle’s ruling on the three affirmative defenses asserted by Starbucks and several other defendants: Continue Reading

GAO Releases Report on CPSC Response to New and Emerging Hazards

Posted in Consumer Product Safety Commission (CPSC), Consumer Products, Federal Enforcement, Federal Regulations, Importers, Manufacturers, Product Liability, Retailers, Supply Chain Risk Management, U.S. Congress

CPSC new and emerging risksOn October 14, the Government Accountability Office (GAO) published a report entitled “Consumer Product Safety Commission: Challenges and Options for Responding to New and Emerging Risks.”  The report analyzes the timeliness of the Consumer Product Safety Commission’s (CPSC) response to “new and emerging” safety risks from new or existing consumer products.  It is based upon a review of current product safety laws and regulations, related literature and studies, timeliness related to the regulation of specific consumer products, and interviews with CPSC officials, including current and former Commissioners, industry representatives, consumer groups and other subject-matter and legal experts.

According to the report, although the CPSC uses a multifaceted approach to reduce the risk of injury to consumers from immediate and future problems, the CPSC faces hurdles and challenges in responding timely to emerging risks because “the CPSC was established to respond to risks after products have been introduced into the market.”  The report concludes that the timeliness of the agency’s response to new and emerging risks is affected by factors such as:

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The Incredible Shrinking Red Bull Refund: How Should Courts Verify Class Membership?

Posted in Consumer Products, Food and Beverage, Litigation, Product Class Actions

Red bull wingsA recent class action settlement has brought fresh attention to two age-old questions. The first: does Red Bull actually give you wings? The second: how carefully should courts screen out bogus claimants from proposed classes of refund-seeking consumers?

Earlier this month, a federal court in Manhattan conditionally approved a settlement in two related class actions brought against Red Bull North America and Red Bull GmbH, makers of the eponymous–and ubiquitous–energy drink. The class actions allege that Red Bull falsely advertised the energy benefits of its products through advertising claims such as the slogan “Red Bull Gives You Wings.” Continue Reading