Source: https://www.wilsonelser.com/services/69-product_liability_prevention_government_compliance?view=publications
Timestamp: 2019-04-18 18:33:33+00:00

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In a recent press release, outgoing FDA Commissioner Scott Gottlieb reinforced the FDA’s position that it is unlawful to introduce food containing added CBD or THC into interstate commerce, or to market CBD and THC dietary supplements. While the availability of CBD products dramatically increased over the past several years, many unanswered questions and potential health risks remain.
FDA Commissioner Scott Gottlieb’s resignation came only days following his testimony before the House Appropriations Committee regarding the FDA’s regulatory plans for CBD (cannabidiol). Congress also heard testimony from the Secretary of the U.S. Department of Agriculture on the status of industrial hemp cultivation pursuant to the 2018 Farm Bill.
With new legislation looming, some observers expect New Jersey to act soon to prevent New York from gaining a first-mover advantage in legalizing adult-use recreational cannabis in the lucrative tri-state market. On the other hand, last year’s optimism proved to be premature and the many predictions of imminent action never came to fruition.
Governor Andrew Cuomo has signaled his intent to legalize recreational marijuana within the coming months. Since the New York Legislature must approve the budget by April, New York could see adult-use cannabis much sooner than expected.
Will California’s Cannabis Regulation Limit Commercial Activity Between Licensed and Unlicensed Entities?
Will California’s Section 5032 Disrupt the Cannabis Market?
Whatever one’s position on California Section 5032, there is no disputing it will serve to disrupt the current California cannabis market and cause many existing business relationships to change or cease. While the industry waits for clarity, the prudent course is to embrace full disclosure.
Taken together, New York’s newly issued FAQ and CBD processing agreement forecast the state’s intent to strictly regulate CBD products intended for human consumption. Industry members already processing and selling hemp-derived CBD products as well as those looking to enter the market should seek guidance on the quickly evolving regulatory environment.
A recent speech by Deputy Attorney General Rod Rosenstein described policy changes in the Department of Justice’s (DOJ’s) corporate enforcement priorities and processes relating to individual criminal and civil liability and cooperation credit for corporate defendants. Any corporation subject to DOJ scrutiny should be aware of these policy modifications.
Ultimately, the new federal protections contained in the 2018 Farm Bill will move the CBD-based food and supplement industry closer to unrestricted national and international distribution of hemp-derived CBD products. Until approved by the FDA, however, CBD as an ingredient in foods and supplements will continue to be risky.
Cannabidiol, or CBD, is a naturally occurring cannabinoid constituent of cannabis. It was discovered in 1940 and initially thought not to be pharmaceutically active. CBD is now known to have significant medical benefits, as is medical-use marijuana.
Businesses that seek to obtain and preserve contracts with the U.S. government, or to deal in certain enumerated defense articles and services, are subject to strict privacy regulations. These include the Defense Federal Acquisition Regulation Supplements, which impose stringent minimum security requirements and reporting obligations, and the International Traffic in Arms Regulations, which contain approval, registration and records maintenance requirements.
Unlike any other agricultural business, cannabis cultivators that use pesticides are faced with the dangerous nexus of inadequate federal research and oversight, rapidly evolving state regulations, onerous testing standards and high levels of potential legal liability.
Cannabidiol (CBD) now may be legally distributed, sold, imported or exported without restriction so long as it is from properly sourced industrial hemp, but CBD may be added to food products only if it is derived from marijuana. It is difficult to logically reconcile this “schizophrenic” state of the law.
To comply with California’s Cannabis Track and Trace METRC system, business operators must maintain a large amount of valuable data throughout the cannabis life cycle and down the supply chain, increasing the risk of liability in the event of a cybersecurity incident. Cannabis companies would be wise to consider implementing additional best practices to decrease their exposure to data security threats.
Is FAA Drone Licensure a Thing of the Past or Just in a Holding Pattern?
The DC Circuit Court of Appeals has upheld a challenge by a drone user who claims the Federal Aviation Administration’s drone Registration Rule ran afoul of a clear mandate found in the FAA Modernization and Reform Act of 2012. The issue hinges on the fact that drones are classified as model aircraft, when not being used commercially.
The Robots Are Coming: Are We Ready for Robot Liability?
Where’s the Beef in the Food Regulation Smorgasbord?
Most statutory laws governing extended warranty contracts pertain to consumer products, and in that context are regulated for the protection of the consumer. Since commercial buyers would not need the same protections, any licensure or registration requirements would not apply to the manufacturer in the commercial context, suggesting that the seller of the extended warranty would not be required to be licensed or registered.
The Connecticut Supreme Court has joined the majority of jurisdictions that recognize the right of minor children to bring parental consortium claims, which are likely to become commonplace under the decision to be officially released on October 6, 2015. However, the Court placed certain restrictions on the ability to bring suit and right of recovery.
In addition to tailoring prescription drugs to the needs of particular classes of patients, 3D printing opens the possibility of tailoring each tablet to the needs of one specific patient, regardless of the physical location of the printer. Until now, this has not been financially feasible with mass-produced medications.
Substantial advances in biotechnology and accompanying additional regulation have led to uncertainty in agency jurisdiction and lack of predictability, creating unnecessary costs and inhibiting innovation. The Office of Science and Technology Policy aims to correct these problems with the process outlined in a July 2015 memorandum.
It's a Bird, It's a Plane, It's Drone Product Liability!
The FDA has approved the first "biosimilar" agent under abbreviated procedures outlined in the Biologics Price Competition and Innovation Act of 2009. The approval heralds a new era of less-expensive biologics, a class of therapeutic agents that are among the most expensive in the U.S. market, and foreshadows a new era in product liability law, as plaintiffs’ attorneys are likely to exploit the unique statutory and regulatory status of biosimilar agents in pursuing product liability claims against manufacturers.
The rising use of drones that weigh less than 55 pounds brings with it a host of legal issues manufacturers and operators need to take into account. Though the relevant fields of law are slow to catch up to the technological advancements, manufacturers and operators may still be hit with product liability, aviation and privacy claims.
Effective January 1, 2015, a new law in Florida takes a step in the right direction by modifying the state’s child safety restraint seat laws and providing for $60 fines and three points on the driver's licenses of offenders. Parents and caregivers should be aware that the law is the minimum requirement that must be followed.
Sophisticated Intermediaries: Should the “Sophisticated User” Defense Apply to Sophisticated Intermediaries?
Foreign Corporations Subject to Jurisdiction in U.S.
The U.S. Supreme Court has held that a defendant will be subject to general jurisdiction in a state only if its connections with the state are so continuous and systematic as to render the defendant “essentially at home” in the forum state. The decision demonstrates that the Supreme Court is clarifying and rationalizing the circumstances under which a foreign corporation can be subject to jurisdiction in the United States.
In a recent decision, Pennsylvania’s Supreme Court confirmed municipalities’ constitutional right to limit gas drilling activities through local zoning rules and imposed a more structured state decision-making process to grant waivers from setbacks required for certain bodies of water.
While a recent decision by the California Court of Appeal is unfavorable to defendants, it does not completely close the door to the viability of the “sophisticated intermediary” defense. The Court says it is not enough for a supplier defendant to simply show the plaintiff was an employee of a sophisticated intermediary to avoid liability. The supplier must also show it had sufficient reason to believe the ultimate user knew or should have known of the hazards.
The Illinois Supreme Court’s April 18, 2013 decision regarding the exercise of specific personal jurisdiction over a nonresident manufacturer may impact future products liability litigation. Under the court’s latest proclamation, more foreign defendants may find it difficult to extricate themselves from Illinois lawsuits through the Illinois Long-Arm Statute, even if they are not directly in contact with the plaintiff.
If Florida H.B. 7065 – passed by both houses of the Florida Legislature – is signed into law, the changeover to the Daubert standard for evaluating the admissibility of expert witness testimony will go into effect July 1, 2013, and would likely apply to pending cases.
The Supreme Court of Florida noted that the numerous exceptions to the economic loss rule demonstrate that the expansion of the rule beyond its origins has proved to be “unwise and unworkable in practice.” The court’s recent ruling in Tiara Condominium v. Marsh & McLennan is meant to return the economic loss rule to its intended purpose – to limit actions in the products liability context.
Estimated at between $56 million and $85 million, budget cuts will impact the amount of time it takes to bring matters before the courts. . With as many as ten courthouses in Los Angeles County closing, congestion will slow the court’s entire caseload.
The California Court of Appeal affirmed a lower court decision that bystander liability is allowed only in cases where the plaintiff was able to observe the event and perceive that the defective product was the cause of pain or injury to their relative. While noting that the lines restricting bystander recovery are “arbitrary,” the Court of Appeal stated that, nevertheless, those lines are binding.
A recent decision by the Connecticut Supreme Court sets a precedent for lawsuits brought by the State of Connecticut outside of certain statutes of limitations and statutes of repose codified in the Connecticut General Statutes. The far-reaching implications of allowing the state to sue when the statutes of limitations and repose have long passed cannot be overestimated.
California’s governor has signed Assembly Bill 1875, which limits the length of depositions in civil cases. The new law will go into effect on January 1, 2013.
This edition of the Product Liability Newsletter includes an update on litigation exposure and emerging legislation tied to the growing use of hydraulic fracturing and a Texas Supreme Court case that formally reaffirmed the principle that a physician is in the best position to evaluate a treatment and weigh the potential risks and benefits of a drug.
Nicastro and its Progeny: Did the U.S. Supreme Court Usher in a New Liability Landscape 25 Years After Asahi?
The Bloomberg Law newsletter, Product Safety and Litigation Reporter, has published an article written by David Ross that examines the U.S. Supreme Court’s divided opinions on personal jurisdiction.
June 8, 2012, the Texas Supreme Court formally adopted the learned intermediary doctrine and reaffirmed the principle that a physician (the “learned intermediary”) is in the best position to evaluate a treatment and weigh the potential risks and benefits of a drug.
In a case of national first impression, the Arkansas Supreme Court held that foreign manufacturers of products that end up in the United States through the “gray market” will not be subject to “general” jurisdiction in the forum state unless they have “continuous, systematic and substantial” general business contacts with that state, which is fairly atypical. In addition, the decision impacts U.S. subsidiaries of foreign manufacturers with gray market issues that are dragged into products liability litigation simply by virtue of having a name similar to that of the manufacturer.
The California Court of Appeal has reaffirmed that, absent extraordinary circumstances, the suppliers of raw materials and component parts cannot be held liable for negligence or strict products liability to a manufacturer's employee who is injured while using the raw materials in the manufacturing process. The trial court ruled in favor of the defendants, who moved for judgment on the pleadings on the basis of the raw materials and component parts defenses.
Foreign defendants should keep abreast of developing case law stemming from J. McIntyre Machinery, Ltd. v. Nicastro, which may clarify what activities are most likely to give rise to personal jurisdiction under the still developing precedent.
In the Federal Courts Jurisdiction and Venue Clarification Act of 2011, Congress clarifies many issues that are often subject to conflicts between (and sometimes within) the various circuits of the federal courts. The new law applies, prospectively only, to cases commenced in state or federal court on or after January 6, 2012.
The October issue of the Product Liability Newsletter highlights a California case in which the Court of Appeal overturned a decision that would require corporations to bring witnesses from other states or abroad for depositions or trials. Two cases before the U.S. Supreme Court dealt with jurisdictional defenses. Other articles cover the influence of circumstantial evidence on product defect and causation in a Connecticut case and the defense of “inherently dangerous products” in New York.
On August 22, 2011 the California Supreme Court made claims by injured workers against general contractors more difficult when it held in Seabright Insurance v. U.S. Airways that the hirer of a subcontractor presumably delegates to the subcontractor any duties that arise regarding a safe workplace for the subcontractor’s employees.
The August 3, 2011, California Court of Appeal ruling in Mansur, et al. v. Ford Motor Company, et al. will further strengthen manufacturers’ efforts to exclude the vague consumer expectations test in complex product liability cases where alleged defects go beyond the common knowledge of laypersons.
A recent decision issued by New York’s Court of Appeals strips manufacturers of inherently dangerous products of the defense that everyone knows the product is dangerous and it is labeled as such. Going forward they may need to defend the reasonableness of marketing such a product for use by lay persons.
On Thursday, June 23, 2011, Florida Governor Rick Scott signed into law the heavily debated Senate Bill 142. The new law is retroactive, meaning it applies to pending cases.
In an opinion issued on June 27, 2011, the United States Supreme Court, in a plurality opinion, upheld the specific jurisdiction test set forth in International Shoe Co. v. Washington, 326 U.S. 310 (1945).
On June 28, 2011, Pennsylvania governor Tom Corbett signed into law a bill known as the "Fair Share Act" (Senate Bill 1131). This legislation, which is effective immediately but does not apply retroactively to pending actions, effects a major revision to the doctrine of joint and several liability.
The U.S. Supreme Court has ruled that generic drug makers cannot be sued for failure to warn consumers of possible side effects if they reproduce the exact warnings in brand-name equivalent packaging. The FDA is likely to weigh in, as it does hold all manufacturers responsible for language on their packaging.
Both houses of the Florida Legislature have passed a bill that would allow defendants in "enhanced injury" product liability cases to present evidence relating to the fault of anyone whose negligence may have contributed to an underlying accident. Governor Rick Scott is expected to sign the bill into law.
This issue of the Wilson Elser Product Liability Newsletter presents a variety of important topics that may have an impact on your business: The CPSC's new public database that allows consumers to research and report on product safety issues and manufacturers and retailers to swiftly respond; the viability of the federal preemption defense for generic drug manufacturers in product liability cases; Wisconsin's new tort reform measures. and the recently-signed Food Safety Modernization Act.
A bill pending in the Florida Legislature could change the litigation landscape in product liability cases where the "crashworthiness" of a motor vehicle is involved.
On March 30, 2011, the U.S. Supreme Court is scheduled to hear oral arguments on the issue of whether federal law preempts a state tort claim when a generic drug approved by the U.S. Food and Drug Administration (FDA) is inadequately labeled. How will the Supreme Court handle this continuing controversy related to generic drug manufacturers' obligations under the FDA regulations?
Manufacturers will need to keep on top of reports of product safety issues posted on a new government website. The U.S. Consumer Product Safety Commission will give companies a chance to challenge complaints made on its website, but response needs to be rapid, especially when there is a concern about the accuracy of a complaint.
CPSC Clarifies the Definition of "Children's Product"
The U.S. Consumer Product Safety Commission has issued a formal definition of "children's product" that resolves the dispute over age cutoffs.
This Product Liability Newsletter discusses aftermarket parts, suits against foreign manufacturers in the U.S., first enforcement of a Chinese judgment by a U.S. Court under review, and more.
On March 11, 2011, the U.S. Consumer Product Safety Commission (CPSC) will implement a public database that will provide information on potentially harmful products. The database will be available through a CPSC website, www.saferproducts.gov. It will allow consumers to research and report product safety issues – and manufacturers and retailers to comment on those issues.
"Comparative responsibility is not admissible to apportion liability for enhanced injury." "Bartkowiak v. Regeneration Technologies, Inc.: Fourth Department affirms dismissal of plaintiff’s complaint in bone implantation case." "CPSC finds 'a strong association with imported Chinese drywall and toxic fumes." "The Foreign Manufacturers Legal Accountability Bill S. 1606 of 2009." "Hot liquid liability: decision on Starbucks Corporation’s motion for summary judgment in Moltner v. Starbucks."
In a long-awaited decision, on March 4, 2009, in Wyeth v. Levine, the United States Supreme Court found by a 6 to 3 vote, that the Food and Drug Administration's approval of a warning label on a prescription drug did not preempt state law tort claims.

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