Morrison Foerster’s Class Dismissed blog provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class actions lawsuits and product liability issues that affect consumer-facing companies. Through Class Dismissed, attorneys from our nationally recognized Consumer Class Action and Products Liability practices offer a real-time assessment of the developments in matters that are shaping the industry. This blog examines the full spectrum of consumer-related class action and product liability lawsuits ranging from false advertising, privacy, consumer product safety, ADA, food misbranding, TCPA, environment, retail, and government actions as well as nationwide and multidistrict litigation class actions.<h2>ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Partner

Julie Park protects her clients’ products no matter what kind of product issue they face—whether it is planning for new product development, recalling an existing product, or defending clients against product liability or consumer class actions. Drawing on her deep technical and legal expertise, Julie counsels clients on consumer product safety regulation and pharmaceutical and medical device preemption while also managing complex and multijurisdictional litigation both in state and federal court.

Julie Y. Park

<div class="videoWrapper"><iframe frameborder="0" class="sticky-video" allowfullscreen="1" title="Meet Penny Preovolos, Litigation Partner" src="https://www.youtube-nocookie.com/embed/hv7hYn-Bl7c?rel=0&showinfo=0;vq=hd1080" title="iframe"></iframe></div>Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products. According to Chambers USA, Penelope has a “great reputation for antitrust and product liability work” and is a “superb all-around antitrust lawyer.”Penelope was named the 2019 Antitrust Lawyer of the Year by the Antitrust, UCL, and Privacy Section of the California Lawyers Association. She was co-chair of MoFo’s antitrust practice for 14 years. She has served as chair of the Antitrust and Trade Regulation Section of the State Bar of California and as a member of the Ninth Circuit Advisory Committee on Local Rules and Operations. She is an editor of and frequent contributor to Morrison & Foerster’s <a href="https://classdismissed.mofo.com/">Class Dismissed blog</a>, as well as a frequent speaker about class action and antitrust issues.More About PenelopePenelope clerked for the Honorable Charles M. Merrill, United States Court of Appeals for the Ninth Circuit. She graduated cum laude from Harvard Law School, where she was executive editor of the Harvard Civil Rights – Civil Liberties Law Review. Penelope was a member of Phi Beta Kappa at the University of California, Berkeley. She was awarded the University Medal, the highest undergraduate honor at the university, as well as the English Departmental Citation (awarded to the outstanding graduate in that department).

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Senior Counsel

Penelope has served as lead counsel in major consumer class actions and antitrust cases for more than 35 years, successfully representing high-profile defendants in antitrust, consumer fraud, and product defect matters. Her clients span a range of industries, including consumer electronics, technology, retail, publishing, food and beverage, cosmetics, and household products.

Penelope A. Preovolos

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class action lawsuits. Claudia also regularly counsels clients in the food, cosmetics, retail, and technology industries. She represents companies in false advertising disputes before the National Advertising Division (NAD) of the Council of Better Business Bureaus, Inc.<h5>More about Claudia</h5>Claudia is active in MoFo’s pro bono efforts, and recently traveled to El Paso, Texas, to work with families separated and detained at the border. She is also supervising a pro bono collaboration with Equal Rights Advocates, a nonprofit fighting for gender justice in work places and schools across the country. The initiative will help students who have been victims of sexual assault, attempted assault, or harassment find support and seek justice. Claudia is also a board member of Bay Area Legal Aid and a former board member of Equal Rights Advocates. Claudia is an editor and frequent contributor to MoFo’s <a href="https://classdismissed.mofo.com/">Class Dismissed</a> blog, which provides reports about the latest defense news, developments, and trends in class action lawsuits and product liability issues that affect consumer-facing companies. Her perspectives are also respected in the larger legal community: Claudia has published articles about class action and false advertising issues, and is a co-author of Chapter 7 — “Unfair Competition in California Business Litigation 2016” — of The Recorder. She also regularly speaks at conferences on class action and advertising trends. Claudia is currently serving as a Lawyer Representative for the Northern District of California. She received her J.D. degree in 2004 from Berkeley Law (Boalt Hall School of Law), where she was an associate editor of the Berkeley Technology Law Journal.

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Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy matters. She is currently representing numerous consumer goods manufacturers and retailers in false advertising and mislabeling class actions.

Claudia M. Vetesi

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office.Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.Alexandra has significant trial experience. She has first-chaired a one-week jury trial and second-chaired a five‑week jury trial, both involving multiple claims and witnesses. She also has extensive experience in alternative dispute resolution, representing clients at mediations, mandatory settlement conferences, and early neutral evaluations.Alexandra enjoys tracking developments and keeping her clients updated on product liability and personal injury claims, frequently writing or presenting on emerging areas such as autonomous vehicles and smart devices. Alexandra’s experience also extends to professional liability, warranty claims, eminent domain, and construction law.Alexandra earned her J.D. from the University of San Diego School of Law. While in law school, the San Diego Law Review published her comment on the recovery of damages by plaintiffs in a persistent vegetative state, and she also served as a comment editor. She received her B.A. from the University of California, Los Angeles, where she majored in Political Science and minored in Spanish. A San Diego native, she attended a Spanish immersion school through the eighth grade. Alexandra is active in the San Diego community, advising students at a local college. She is also a member of several legal organizations in San Diego, including Lawyer’s Club, the Association of Business Trial Lawyers, and Wallace Inn of Court.

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Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, consumer products, automobiles, and AI. Alexandra’s litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow is a partner in the Litigation Department of Morrison Foerster’s San Diego office. Alexandra litigates product liability matters involving medical devices, pharmaceuticals, automobiles, AI, and robotics. Alexandra's litigation expertise spans the entire case life cycle in both state and federal courts. She handles all phases of discovery, including fact investigation and expert discovery. Alexandra has taken over twenty-five depositions, including experts, plaintiffs, treating physicians, and third-party witnesses. She drafts and argues motions of all types, including motions for summary judgment, motions to quash, and motions for preliminary injunction.

Alexandra Barlow

Adam J. Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.Mr. Hunt has extensive experience representing consumer products companies, financial institutions, and technology firms in class action cases and complex commercial disputes before state and federal trial courts, as well as in arbitrations. Clients seek Mr. Hunt’s counsel for his creative, strategic thinking in high-stakes, high-profile matters. He has represented clients facing claims under false advertising, antitrust, and privacy laws throughout the country, securing wins at the pleading stage, summary judgment, and trial, in addition to negotiating favorable settlements, often early in the case. Representative experience includes successfully securing rulings dismissing two putative false advertising class action cases against one of the best-known consumer electronics companies in the world; obtaining a complete win on summary judgment for a major shipping and logistics company in a multimillion-dollar commercial dispute; appearing as counsel at trial for a leading financial institution in a $100 million commercial dispute, winning a bench trial verdict; and prevailing on motions to dismiss false advertising class actions against a leading Greek yogurt company.Mr. Hunt is also an editor of the firm’s <a href="https://classdismissed.mofo.com/" target="_self">Class Dismissed blog</a>, which provides insights, recommendations, and timely reports on the latest defense news, developments, and trends in the most current class action lawsuits that affect consumer-facing companies.Mr. Hunt maintains an active pro bono practice and is the recipient of the New York State Bar Association’s 2017 President’s Pro Bono Service Award for the First Judicial Department, the 2018 Public Service Award from New York University School of Law, and Morrison Foerster’s Kathi Pugh Award for Pro Bono Services.Mr. Hunt received his B.A. with honors from Swarthmore College and his J.D. cum laude from New York University.

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Adam Hunt is a partner in the Litigation Department of Morrison Foerster’s New York office. His practice focuses on complex litigation, with an emphasis on class action and commercial litigation.

Adam Hunt

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Alexandra Preece Barlow

Adam J. Hunt

The Future of Section 230: Protection Against Product Liability Claims?

New Wave of PFAS Legislation Aimed at Consumer Products

CPSC Releases Annual Report on Deaths and Injuries Involving Nursery Products

CPSC Proposes New Safety Rules for Infant Rockers

CPSC Commissioners Abstain from Retracting Infant Sleep Product Statements

Last week, the U.S. Food and Drug Administration (FDA) took yet another step to encourage production of basic medical supplies in the battle against COVID-19. On Friday, March 20, FDA published two new guidance documents communicating its policy on the manufacture of certain alcohol-based hand sanitizers. Recognizing the significant supply disruptions for hand sanitizers, and that compounders and manufacturers are better equipped than ordinary consumers to formulate safe and effective hand sanitizer products, FDA is providing flexibility in manufacturing such products during the COVID-19 public health emergency.Guidance for CompoundersThe first of the two guidance documents—Policy for Temporary Compounding of Certain Alcohol-Based Hand Sanitizer Products During the Public Health Emergency—is specifically directed at pharmacists in state-licensed pharmacies or federal facilities and registered outsourcing facilities (referred to collectively as “compounders”). This guidance covers the formulation of hand sanitizer for both consumer and healthcare professional use, replacing a previous version initially released on March 14 that only covered a formulation for consumer use.The guidance explains that FDA will exercise enforcement discretion for compounders that prepare alcohol-based hand sanitizers for consumer use and for use as healthcare personnel hand rubs for the duration of the public health emergency, as long as the following specific requirements are followed:<ol><li>The hand sanitizer contains the following USP grade ingredients, consistent with WHO recommendations, and no additional active or inactive ingredients: <ol type="a"><li>Alcohol, which may be either ethanol (80% v/v) in an aqueous solution denatured according to the Alcohol and Tobacco Tax and Trade Bureau regulations (27 CFR part 20) or isopropyl alcohol (75% v/v) in an aqueous solution</li><li>Glycerol (1.45% v/v for ethanol, but for isopropyl alcohol, 0.725% may be more effective)</li><li>Hydrogen peroxide (0.125% v/v)</li><li>Sterile distilled water or boiled cold water</li></ol></li><li>Extra caution is exercised to ensure that the active ingredient is correct, and that the correct amount of the active ingredient is used</li><li>The hand sanitizer is prepared under the same conditions as similar nonsterile drugs compounded by the compounder, including current Good Manufacturing Practices or USP &lt;795&gt; (as applicable) and proper sanitary conditions</li><li>The hand sanitizer is labeled according to one of the four appendices provided in the guidance: <ol type="a"><li>Appendix A (Labeling for Ethyl Alcohol Formulation Consumer Use)</li><li>Appendix B (Labeling for Isopropyl Alcohol Formulation Consumer Use)</li><li>Appendix C (Labeling for Ethyl Alcohol Formulation Health Care Personnel Handrub Use)</li><li>Appendix D (Labeling for Isopropyl Alcohol Formulation Health Care Personnel Handrub Use)</li></ol></li></ol>Additionally, the hand sanitizers must not make pathogen-specific disease claims or include false or misleading advertising and promotion.Guidance for Entities Not Currently Licensed as Drug ManufacturersFDA set forth those same formulation and labeling requirements for firms that are not licensed drug manufacturers in a second guidance, Temporary Policy for Preparation of Certain Alcohol‑Based Hand Sanitizer Products During the Public Health Emergency (COVID-19). The guidance provides that FDA will not take enforcement action against entities that prepare alcohol-based hand sanitizers for consumer use and for use as healthcare personnel hand rubs for the duration of the public health emergency. In addition to the requirements set forth for compounding pharmacists, these firms must also:<ul><li>Document the controls and steps taken to assure consistency with the prescribed formula;</li><li>Test samples to ensure that the alcohol content of the finished product is verified prior to distribution; and</li><li>Register their facility and list their hand sanitizer products in FDA’s Drug Registration and Listing System (DRLS). Firms may begin manufacturing hand sanitizer immediately after receiving the automatic registration confirmation from FDA.</li></ul>Like the compounded hand sanitizers, the manufactured hand sanitizers must not make pathogen-specific disease claims or include false or misleading advertising and promotion.FDA has slightly modified the requirements for firms that are not licensed drug manufacturers and therefore may not be familiar with drug manufacturing protocols. For example, those firms may use either U.S. Pharmacopeia (USP)-grade or Food Chemical Codex-grade ethanol, whereas compounding pharmacists must use USP-grade ethanol. Also, non-drug manufacturers must merely manufacture the product under sanitary conditions and ensure their equipment is fit for that purpose, while compounders must comply with FDA’s current good manufacturing practices or USP chapter 795’s standard for compounding nonsterile preparations. With these compromises come additional oversight: unlike compounders, firms must develop a process for accepting adverse event reports related to the products they manufacture and must submit those reports to FDA.Industry TakeawaysThis is yet another FDA move to bolster the medical product supply chain to meet public need and soaring demand, consistent with the Administration’s recent focus on essential prevention products like N95 respirators and test kits. Last week, FDA announced that it would allow states to approve their own COVID-19 test kits and testing laboratories and allowed some of those kits to be marketed before an emergency use application was expressly approved. The Department of Health and Human Services also rallied drug and device manufacturers to develop coronavirus vaccines and therapies by issuing a <a href="https://classdismissed.mofo.com/product-liability/prep-act-declaration-emboldens-drug-and-device-industry-to-innovate-in-the-face-of-a-growing-crisis/">PREP Act declaration</a>, waiving tort liability for those novel products.With store shelves empty, various how-tos and instructions for DIY hand sanitizer are circulating the Internet, encouraging average consumers to concoct their own hand sanitizer products. To ensure safety and efficacy, allowing pharmacists to compound and sell their own sanitizing solutions makes sense. But even more significant is the effort to enlist new participants to the medical drug and device market. The new guidance will encourage firms with existing relevant capability to retool their production lines for hand sanitizers. This is a huge opportunity for certain industries. Cosmetics companies and alcohol breweries and distilleries—whose usual businesses will be hit hard by the recent stay-home and business closure orders around the country—are particularly suited for the task.Producers should note that this move is consistent with FDA’s recent policy to decentralize and defer regulatory scrutiny in the interest of getting low-risk, prevention-focused products into consumer hands. While it may be relaxing traditional pre-market requirements that can be costly and time consuming, FDA is still keeping watch over these goods. It has provided pharmacists and manufacturers with a formula for the disinfectant, some quality control guidelines, and the precise labeling that should accompany the sanitizers. Deviations from these terms will likely result in FDA intervention.The Administration is keeping an even closer eye on non-medical firms that decide to manufacture sanitizer products. Unlike compounding pharmacists, these firms must register their facilities with FDA, list their sanitizing products, and implement additional quality control measures. They must also set up adverse event reporting: a post-market safety measure commonly used in the drug and device industry to ensure that products are safe even after obtaining FDA approval.We will continue to monitor and report on further FDA guidance and implications for the product industry.

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Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin M. Bosman

Erin Bosman is chair of MoFo’s Class Actions and Mass Torts Practice Group and is a founder and co-head of the Artificial Intelligence Group. Clients value her business strategy, seeking her comprehensive counsel throughout the product life cycle, especially in high-stakes litigation and product recalls.

Erin Bosman

An orthopedic implant company

A children&rsquo;s monthly subscription service product

A fertility company

A major technology company

A smart fitness equipment company

Julie Park provides analytic and strategic counsel for issues in product life cycle, product liability and defective products, consumer class actions, and more.

Julie Park

Julie Park | Product Liability Lawyer

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FDA Calls “All Hands on Deck” to Keep Hand Sanitizer Stocked

Using Waivers to Curb COVID-19 Legal Exposure

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Last week, the U.S. Food and Drug Administration (FDA) took yet another step to encourage production of basic medical supplies in the battle against COVID-19. O

FDA Calls “All Hands on Deck” to Keep Hand Sanitizer Stocked

COVID-19 is, quite literally, putting the medical supply industry to the test. Manufacturers are being pushed to develop novel products like therapies and vaccines to combat the disease as quickly as possible. The Public Readiness and Emergency Preparedness (PREP) Act encourages drug and medical device companies to increase production of existing products currently in short supply, and to develop new innovative COVID-19 therapies and treatments by limiting tort liability for the goods.Medical companies typically spend years of development and testing in cooperation with the U.S. Food and Drug Administration (FDA) before a new product reaches consumers. While there are economic and reputational incentives for a company to quickly develop these products, there is one looming concern that risks chilling product manufacturers’ race to bring products to market: product liability litigation.In order to limit exposure to private litigation when companies respond to public health emergencies, Congress enacted the Public Readiness and Emergency Preparedness (PREP) Act in 2005. The PREP Act allows the Department of Health and Human Services (HHS) to provide defined liability immunity for recommended activities regarding covered countermeasures for particular public health emergencies.The current pandemic is exactly the type of emergency that the PREP Act contemplates. In response to COVID-19, the HHS Secretary issued a PREP Act declaration. The declaration was published in the Federal Register on March 17, 2020, but was backdated to February 4, 2020. It will remain in effect until October 2024. Now, firms at any stage of the product life cycle can continue development and marketing knowing these additional protections will apply when their COVID-19 therapies reach consumers.The PREP Act confers immunity from suit and liability under state and federal law for any claims caused by, arising out of, relating to, or resulting from the administration or use of certain medical products. 42 U.S.C. § 247d-6d. While injured parties cannot maintain private lawsuits, they may be able to recover from the Countermeasures Injury Compensation Program (<a href="https://www.hrsa.gov/cicp/index.html">CICP</a>), a fund designed to compensate individuals for injuries sustained by PREP Act-protected products. The declaration defines the following parameters:<ul><li>Covered Persons: The United States, manufacturers, distributors, program planners, qualified persons, and their officials, agents, and employees.</li><li>Recommended Activities: Manufacture, testing, development, distribution, administration, or use of approved countermeasures. Willful misconduct is not protected by a PREP Act declaration.</li><li>Covered Countermeasures: Any antiviral, drug, biologic, diagnostic, device, or vaccine used to treat, diagnose, cure, prevent, or mitigate COVID-19 or its transmission. This includes any device used to administer such a product. Covered countermeasures must be: <ul><li>A qualified pandemic or epidemic product, which includes specific drugs, biologics, or devices that require FDA review by definition;</li><li>A security countermeasure, which is either a drug or device as defined by the Food, Drug, and Cosmetics Act (FDCA), or a biological product as defined by the Public Health Service Act; or</li><li>A drug, biological product, or device authorized for emergency use under the Food, Drug, and Cosmetics Act.</li></ul></li></ul>The PREP Act has been invoked several times in the past, most notably during outbreaks of Ebola, Zika, and other diseases, and for potential biological warfare emergencies presented by anthrax and certain nerve agents. While the PREP Act is not a novel protection, the COVID-19 pandemic has ushered in other unprecedented measures to bring medical products to market. This week, FDA announced <a href="https://lifesciences.mofo.com/topics/FDAs-New-Guidance-Novel-Coronavirus-COVID19-Diagnostic-Tests.html">a new policy</a> whereby states are responsible for authorizing test kits and laboratories, manufacturers can distribute test kits before obtaining emergency use authorization from FDA, and companies can distribute serological tests without FDA review. These measures follow FDA’s cooperation with manufacturers like Abbott Laboratories, Roche, and Thermo Fisher Scientific to rapidly review and issue emergency use authorizations for testing kits. FDA also issued <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-issues-guidance-conducting-clinical-trials">guidance</a> with recommendations for product developers dealing with disruptions to clinical trials.This declaration will also encourage firms to increase production of existing preventative products that are in short supply. For example, certain products like N95 respirators were initially not covered by this PREP Act declaration because they are regulated by the National Institute for Occupational Safety and Health (NIOSH), not FDA. But Congress <a href="https://www.law360.com/productliability/articles/1253313/covid-19-relief-bill-includes-protections-for-face-masks?nl_pk=e2e6a684-d4a3-4f8d-8490-29768a3c4854&utm_source=newsletter&utm_medium=email&utm_campaign=productliability">extended PREP Act protection</a> to those respirators this week in the Families First Coronavirus Response Act.Products for treating and preventing COVID-19 are in critical demand. These measures should incentivize manufacturers to spend more resources on those products. Product manufacturers should expect federal agencies and Congress to continue supporting and encouraging companies to bring products to market swiftly and to keep them stocked once they do hit store shelves. But companies and the public should not interpret these steps as a trade-off on product safety. As we have reported, FDA and the Federal Trade Commission are still taking <a href="https://classdismissed.mofo.com/consumer-products/fda-and-ftc-send-warning-letters-to-companies-marketing-products-to-treat-coronavirus-state-attorneys-general-follow-suit/">enforcement measures</a> against companies making unsupported or misleading claims. And companies can still face liability for willful misconduct even if the PREP Act otherwise applies to their activities.We also advise manufacturers to remain informed and stay flexible. Continued policy changes, guidance, and incentives are sure to come as the COVID-19 pandemic progresses. We will continue to provide updates on these developments as they arise.

PREP Act Declaration Emboldens Drug and Device Industry to Innovate in the Face of a Growing Crisis

COVID-19 is, quite literally, putting the medical supply industry to the test. Manufacturers are being pushed to develop novel products like therapies and vacci

PREP Act Declaration Emboldens Drug and Device Industry to Innovate in the Face of a Growing Crisis

The rapid spread of coronavirus has spawned prolific marketing claims that any number of products can treat or prevent coronavirus. It comes as no surprise then that the Food and Drug Administration (FDA) and Federal Trade Commission (FTC) recently issued their first round of joint warning letters to several companies claiming their products—teas, essential oils, tinctures, and colloidal silver—could prevent or treat COVID-19.Warning Letters to Seven Companies The warning letters were sent to Vital Silver, Quinessence Aromatherapy, Xephyr, GuruNanda, Vivify Holistic Clinic, Herbal Amy, and The Jim Bakker Show on March 6, 2020. The joint letters and separate, corresponding press releases are available <a href="https://www.fda.gov/news-events/press-announcements/coronavirus-update-fda-and-ftc-warn-seven-companies-selling-fraudulent-products-claim-treat-or">here</a> (FDA) and <a href="https://www.ftc.gov/news-events/press-releases/2020/03/ftc-fda-send-warning-letters-seven-companies-about-unsupported">here</a> (FTC).The companies claimed their products could be curative or healing, claims that were both directly and indirectly targeting coronavirus. For example, Quinessence Aromatherapy marketed “eucalyptus radiate,” an essential oil, as having “a powerful antibacterial, antifungal and anti-infectious action, which makes it extremely useful for all types of infection.” Quinessence Aromatherapy also alluded to COVID-19 in other marketing materials, including claims that it had the “most powerful anti-virus essential oils to provide defence against coronavirus.”The agencies also addressed products that more directly claimed to treat coronavirus, too. Herbal Amy, which sells teas and tinctures, was targeted by the agencies for the following claims about its product:“Corona virus treatment . . . All the herbs are specific in one way or another for this virus. A number of the herbs are strongly antiviral for corona viruses . . . . The formulations are preventative as well as specific for acute infections . . . .”In the jointly issued warning letters, the agencies ordered each company to cease selling products claiming to prevent or treat COVID-19, noting that the products lack competent and reliable scientific evidence, much less regulatory approval, supporting the companies’ claims. FDA stressed that these letters were part of its broader campaign requiring urgent measures to protect consumers from products that claim to mitigate, prevent, treat, diagnose, or cure COVID-19 in people.FTC stated that, according to FDA, there are no approved vaccines, drugs, or investigational products currently available to treat or prevent COVID-19.Numerous state attorneys general are also taking action against unauthorized and unsupported product claims. For example, Missouri Attorney General Eric Schmitt sued The Jim Bakker Show for selling “Silver Solution,” a dietary supplement, as a “coronavirus cure,” and New York Attorney General Letitia <a href="https://ag.ny.gov/sites/default/files/bakker_cease_and_desist_letter_notification.pdf">James issued</a> a “cease and desist” order to Bakker for the same. Washington Attorney General Bob <a href="https://www.atg.wa.gov/news/news-releases/ag-ferguson-statement-price-gouging-public-health-emergency">Ferguson announced</a> that his office “is investigating price gouging in the wake of the COVID-19 public health emergency.”Takeaways for Consumer-Facing Product Manufacturers <ul><li>Avoid sales of unapproved products. Avoid selling products that claim to prevent or treat COVID-19 without approval, clearance, and/or authorization under the FD&C Act. The warning letters covered diverse products including teas, essential oils, tinctures, and colloidal silver. In its corresponding press release, FDA also warned consumers that fraudulent COVID-19 products could include dietary supplements and other foods, as well as products purporting to be drugs, medical devices, or vaccines.</li><li>Avoid making claims without evidence. Avoid claiming that products can prevent or treat COVID-19 without competent and reliable scientific evidence under the FTC Act. FTC may consider a “misbranded” product unlawful. While there are investigational COVID-19 vaccines and treatments under development, these investigational products are in the early stages of development and have not completed testing for safety or effectiveness.</li><li>Be proactive. Review marketing statements contained on websites, social media, and other sales channels. An FDA cross-agency task force was established to closely monitor for fraudulent products related to COVID-19, and it has already worked with major retailers and online marketplaces to remove more than three dozen product listings.</li><li>Assess potential exposure. With respect to FDA, failure to correct the FD&C Act violations may result in an injunction and seizure. On the other hand, failure to correct the FTC violations may result in an injunction and order to pay back money to consumers. Further, agency warning letters can often spawn consumer lawsuits, adding to companies’ potential legal exposure for unsupported claims.</li><li>Follow agency guidance. FDA and FTC are motivated to halt production of products with unapproved or unsupported claims because they can cause consumers to delay or stop appropriate medical treatment, leading to serious and life-threatening harm. Companies should continue to closely track agency-issued guidance.</li></ul>Conclusion In the coming days and weeks, we can expect more of these types of warning letters from FDA and FTC relating to COVID-19, as well as from state attorneys general. We will continue to provide updates as the federal agencies and state offices issue more guidance in the face of this rapidly evolving health crisis.

FDA and FTC Send Warning Letters to Companies Marketing Products to Treat Coronavirus; State Attorneys General Follow Suit

The rapid spread of coronavirus has spawned prolific marketing claims that any number of products can treat or prevent coronavirus. It comes as no surprise then

FDA and FTC Send Warning Letters to Companies Marketing Products to Treat Coronavirus; State Attorneys General Follow Suit

Courts scrutinize class action settlements to ensure they result from arms-length negotiations and are fair and reasonable to absent class members. Applying that standard to a nationwide settlement of a privacy lawsuit against Facebook, on March 3, 2020, the Ninth Circuit provided a helpful roadmap for parties seeking approval of class action settlements where the primary benefit afforded to the class is injunctive relief, not money damages. See Campbell v. Facebook, Inc., No. 17-16873 (9th Cir. Mar. 3, 2020). The Court also held that a violation of the Electronic Communications Privacy Act (“ECPA”), 18 U.S.C. § 2510 et seq., and California Invasion of Privacy Act (“CIPA”), Cal. Penal Code § 630 et seq., may be sufficient to confer Article III standing without further allegations of harm.Case BackgroundIn December 2013, two Facebook users filed a class action alleging that the company captured, read, and used website links (URLs) in users’ private messages without consent in violation of the ECPA and CIPA, among other laws. The plaintiffs moved for certification of both a damages class under FRCP 23(b)(3) and an injunctive relief class under FRCP 23(b)(2). The district court certified an injunctive relief class but refused to certify a damages class. Thereafter, the parties reached a classwide settlement through mediation.In the settlement agreement, Facebook acknowledged that it had already made several changes to its practices and agreed for one year to add a 22-word disclosure regarding its collection and use of URLs to a Help Center page on its website. The agreement provided no monetary benefit to absent class members. Class counsel was permitted to seek an award of $3.89 million in fees and costs, which Facebook agreed not to oppose.Over an objector’s challenge, the district court found the settlement to be fair and reasonable and awarded class counsel the full $3.89 million in fees and costs requested. The objector appealed the decision to the Ninth Circuit. The appeal raised primarily two issues:  (1) whether the plaintiffs had standing; and (2) whether the district court abused its discretion in approving the settlement.Violation of ECPA and CIPA Is a “Concrete” InjuryThe Ninth Circuit held that the plaintiffs had Article III standing to assert claims under the ECPA and CIPA based on the allegedly unconsented to interception, cataloguing, and use of URLs the plaintiffs had shared in private messages.First, the Court concluded that the plaintiffs’ alleged injury – an intangible harm linked to a statutory violation – was sufficiently “concrete” to confer standing. It reasoned that the ECPA and CIPA expressly provide a private right of action and protect against the viewing or using of private communications, which are analogous to harms traditionally covered by the tort of intrusion upon seclusion. It further reasoned that the plaintiffs need not allege any further harm to have standing because, historically, under common law privacy torts, the intrusion itself was sufficient to render the defendant liable. And by creating private rights of action, the legislatures indicated that the ECPA and CIPA are modernizations of the privacy protections available at common law. Joining the Third Circuit, the Ninth Circuit held that those statutes codify a substantive extension of the right to privacy and the alleged violations constitute a “concrete” injury.Second, the Court concluded the plaintiffs had standing to seek injunctive relief and post-filing developments did not moot the case. At the time the plaintiffs filed their complaint, the company had ended some, but not all, of the challenged uses of private message URL data. In addition, the company continued to retain the data collected and thus could have resumed the discontinued uses of the data. That “combination of continuing harm plus likelihood of future harm” conferred standing upon the plaintiffs to seek injunctive relief. The case was not moot for similar reasons, since it was not absolutely clear the allegedly wrongful practices would not recur. The Court thus had jurisdiction and moved on to the merits.Ninth Circuit Affirms the Approval of Injunctive Relief-Only SettlementThe Ninth Circuit affirmed the district court’s approval of the settlement as “fair, reasonable, and adequate” under FRCP 23(e)(2), but along the way articulated useful guidance regarding several factors that impact the approval of classwide settlements that provide only injunctive relief.First, the Court rejected the contention that the settlement provided only “worthless” injunctive relief. It found that the year-long disclosure Facebook agreed to add to its website provided real value to class members in the form of “information to users about Facebook’s message monitoring practices, making it less likely that users will unwittingly divulge private information to Facebook or third parties in the course of using Facebook’s messaging platform.” The Court balanced the value of that relief against the likelihood plaintiffs may have obtained no benefit for the class had the case proceeded because the district court had refused to certify a damages class and plaintiffs faced numerous “doctrinal hurdles” to obtaining any other classwide relief. Accordingly, “[g]iven how little the class could have expected to obtain if it had pursued claims further . . . (and, correspondingly, how little it gave up in the release),” the “modest value” of the settlement was not “unreasonable.”Second, the Ninth Circuit rejected the objector’s argument, based on In re Bluetooth Headset Prods. Liab. Litig., 654 F.3d 935 (9th Cir. 2011), that the settlement unfairly prioritized class counsel’s interests over those of the class. In so doing, the Court addressed the “warning signs” that allegedly may indicate class counsel colluded with defense counsel to settle a case improperly and dismissed each of them. It first rejected the notion that class counsel received a disproportionate share of the settlement. Although absent class members received no monetary relief, the Court explained that that was a function of the district court’s certification of an injunctive relief only class and affirmed the finding that the class’s interests were vindicated by the non-monetary relief obtained through the settlement. The Court emphasized that “[t]here is no blanket rule foreclosing parties from agreeing that the class will receive only injunctive relief.”Next, the Court explained that where the benefits to the class are difficult to quantify (e.g., in an injunctive-relief only settlement), “district courts have discretion to award fees based on how much time counsel spent and the value of that time” without needing to estimate how the amount compares to the value of the recovery for the class. The Court found that the district court reasonably exercised that discretion because class counsel received a fee award of just over half of what would have fully compensated them for their time on the case; the district court had already declined to certify a damages class; the settlement agreement did not release the absent class members’ potential rights to damages; and the district court had an understanding of the injunctive relief’s value as a result of the hard-fought litigation prior to settlement. On that basis, “the district court did not abuse its discretion by concluding that the value of what the class received was reasonable not only in proportion to what the class gave up . . . but also in proportion to what class counsel received.”Finally, the Ninth Circuit rejected the contention that the fact the settlement agreement did not contemplate any formal notice to the class proved the settlement was unfair, noting that the district court required the parties to provide notice by posting information about the settlement on class counsel’s websites before final approval.Key TakeawaysAlthough the Ninth Circuit ultimately gave the stamp of approval to the settlement at issue in Campbell, it provided several warnings that parties should keep in mind in the course of negotiating and seeking approval of class settlements that confer primarily injunctive relief:The benefit obtained for absent class members should be commensurate with the release of claims by which absent class members will be bound. Settlements where class members receive no or very little monetary relief but release all money damages claims are subject to the highest scrutiny.Injunctive relief value should be proportional to the fee award. “[I]n a case where the class primarily receives non-monetary relief, but class counsel obtain millions of dollars, it may be an abuse of discretion not to at least attempt to approximate the value of injunctive relief and use that valuation in an assessment of disproportionality.”Consider some form of class notice for a Rule 23(b)(2) class settlement. Although the settlement in Campbell provided only injunctive relief and did not release claims for damages, the Court found it “odd that the parties repeatedly emphasized the informational value of the settlement while simultaneously arguing that it was unnecessary to provide class members formal notice that this information exists.”Settlements reached before a class is certified are subject to a higher standard of fairness. Campbell involved a post-certification settlement. As the Ninth Circuit reaffirmed, a “higher standard of fairness” applies when parties settle a case before certification, which places a premium on the proportionality of the fees requested by plaintiffs’ counsel to the benefit conferred on the class.Parties settling class actions affording primarily injunctive relief should take heed of the Ninth Circuit’s guidance in Campbell. It could mean the difference between a district court approving a classwide settlement or rejecting it and sending the parties back to the drawing board.

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Ninth Circuit Weighs In on Standing Requirements for Privacy Claims and Approval of Injunctive Relief-Only Class Settlements

Ninth Circuit Weighs In on Standing Requirements for Privacy Claims and Approval of Injunctive Relief-Only Class Settlements

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Courts scrutinize class action settlements to ensure they result from arms-length negotiations and are fair and reasonable to absent class members. Applying tha

This week, President Trump announced that he intends to nominate Nancy Beck as Chair and Commissioner of the Consumer Product Safety Commission (CPSC). The five-person CPSC has been short a member since the end of September 2019, when former Acting Chair <a href="https://classdismissed.mofo.com/consumer-products/nomination-of-a-new-chairman-at-the-cpsc/">Ann Marie Buerkle</a> stepped down and then-Vice-Chair <a href="https://classdismissed.mofo.com/consumer-products/outnumbered-but-in-charge-democrat-commissioner-robert-adler-elected-to-vice-chair-of-cpsc/">Robert Adler</a> assumed the role of Acting Chair. Dr. Beck is currently at the Office of Chemical Safety and Pollution Prevention of the Environmental Protection Agency (EPA). She spent nearly 10 years at the Office of Management and Budget under the Clinton, Bush, and Obama administrations. Dr. Beck, who holds a Ph.D. in Environmental Health, would be the only scientist among her potential future colleagues, all of whom are lawyers. She would also break the 2-2 political stalemate, tipping the balance of the CPSC to Republicans. Before that can happen, however, the Senate must confirm Dr. Beck’s forthcoming nomination, which may be more challenging in an election year.

Is This Seat Open? Nancy Beck Tapped to Chair CPSC

This week, President Trump announced that he intends to nominate Nancy Beck as Chair and Commissioner of the Consumer Product Safety Commission (CPSC). The five

Is This Seat Open? Nancy Beck Tapped to Chair CPSC

Earlier this month, a California federal judge certified six classes asserting state consumer protection statute claims in a multidistrict litigation alleging that The Coca-Cola Co. misled consumers about artificial flavors and added preservatives in its Coke products. See In re: Coca‑Cola Products Marketing and Sales Practices Litigation (No. II), 4:14-md-02555, N.D. Cal. Plaintiffs did not secure a complete victory, however, because the court declined to certify the classes’ common law claims.Case BackgroundIn this case, plaintiffs claim that a Coke marketing campaign misled consumers about the healthiness and naturalness of Coke’s products. The plaintiffs allege that Coke’s statements that the products had “no artificial flavors” and “no preservatives added” are misleading because the products contained phosphoric acid at the time these statements were made. And while Coke no longer includes those labeling claims in its marketing campaigns, the products’ ingredient list still does not include phosphoric acid as a preservative.Following the consolidation of various state lawsuits, plaintiffs sought class certification in 2017, seeking to certify individual classes of buyers from California, Florida, Illinois, Massachusetts, New Jersey, and New York.Court Grants in Part and Denies in Part Plaintiffs’ Motion for Class CertificationIn its opposition to plaintiffs’ motion for class certification, Coke made the argument that plaintiffs lack standing because it’s unclear if they will ever buy the Coke products again and, relatedly, that they cannot be misled going forward because they know now that phosphoric acid is in Coke products. Plaintiffs countered that all named plaintiffs would consider buying Coke if it were accurately labeled.United States District Court Judge Jeffrey S. White agreed with plaintiffs, finding that each class had standing because at least one named plaintiff from each of the classes said they would purchase “properly” labeled Coke. Accordingly, each class had standing to seek an injunction to force Coke to change its labeling.The court also concluded that, because the state consumer protection statutes relevant to each class premise liability on the reasonable consumer standard, the classes for each state could proceed without requiring individual inquiries into whether plaintiffs relied on Coke’s labels when purchasing the sodas.Conversely, the court denied class certification of the common law claims. It found that plaintiffs cannot show that they meet the requirements for certification of those claims because plaintiffs seek damages that are not “incidental” to the injunctive relief they also seek.TakeawayThis decision on class certification reinforces that plaintiffs do not have standing for injunctive relief claims unless they assert that they would purchase the products at issue in the future. Plaintiffs often forget to do so and even sometimes make assertions to the contrary thinking that doing so supports other arguments. When they do, defendants should use those very statements to preclude class certification.

Nature's Path Foods

Suja Juices

Unilever USA Inc.

Nature’s Path Foods and Sprouts Farmers Market

Iovate Health Sciences, International

Claudia focuses her practice on the defense of consumer class actions and on complex commercial litigation, including unfair business competition, false advertising, product liability, and privacy mat

Claudia Vetesi

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Is the Coke Half Full or Half Empty?

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Earlier this month, a California federal judge certified six classes asserting state consumer protection statute claims in a multidistrict litigation alleging t

Is the Coke Half Full or Half Empty?

On January 10, 2020, the Supreme Court granted certiorari to review the Fourth Circuit’s decision to strike the Telephone Consumer Protection Act’s (TCPA) “government-debt exemption.” See Am. Ass’n of Political Consultants, Inc. v. FCC, 923 F.3d 159 (4th Cir. 2019). Because this federal statute is heavily litigated, the Court’s decision may have a significant impact on federal dockets.The TCPA was enacted in 1991 to impose certain requirements regarding the use of “automated telephone dialing systems” (ATDS) and prerecorded phone calls. § 2(10), 105 Stat. 2394. In the decades since Congress enacted the TCPA, thousands of lawsuits have been filed alleging billions in damages, and TCPA lawsuits continue to weigh heavily on the dockets of federal courts across the country. In 2015, Congress added a new exemption to the TCPA, sparking several constitutional challenges to the TCPA on First Amendment grounds. This most recent exemption permitted automated calls to be made “solely to collect a debt owed to or guaranteed by the United States”—the so-called “government-debt exemption.” Bipartisan Budget Act of 2015, Pub. L. No. 114-74 Tit. III, § 301(a)(1)(A), 129 Stat. 588. The exemption was estimated to save the government $120 million over 10 years. See Office of Mgmt. & Budget, Exec. Office of the President, Fiscal Year 2016: Analytical Perspectives of the U.S. Government 127 tbl. 11-3, 128 (2015), https://go.usa.gov/xUtw2.Fourth Circuit ChallengeThe government-debt exemption has faced scrutiny in multiple circuits. In the Fourth Circuit, challengers of the government-debt exemption—an association of political organizations (including fundraisers and pollsters)—sued the attorney general and the Federal Communications Commission (FCC) in the Eastern District of North Carolina in 2016. See Am. Ass’n of Political Consultants, Inc. v. FCC, 923 F.3d 159 (4th Cir. 2019). The challengers asserted that the government-debt exemption was a form of content-based discrimination that violated the First Amendment. The district court agreed with the challengers that strict scrutiny applied to the exemption because it was a content-based form of speech discrimination; however, the court held that the exemption was narrowly tailored to serve a compelling government interest and therefore survived strict scrutiny.The plaintiffs appealed to the Fourth Circuit. Like the lower court, the Fourth Circuit applied strict scrutiny. This time, however, the court was persuaded by the plaintiff’s assertion that the government-debt exemption was an unconstitutional violation of the First Amendment. The Fourth Circuit found the exemption was “fatally underinclusive” and opted to sever the exemption in lieu of invalidating the entire TCPA. Similarly, in June 2019, the Ninth Circuit struck down the exemption while maintaining the remainder of the TCPA. See Duguid v. Facebook, Inc., 926 F.3d 1146 (9th Cir. 2019).Supreme Court ReviewEarlier this month, the Supreme Court granted the attorney general’s petition for certiorari in the Fourth Circuit case.The potential outcomes have a range of potential impacts on the current TCPA landscape.First, the Court may overturn the Fourth Circuit. The government asserts that the Fourth Circuit was incorrect in applying strict scrutiny, arguing that the government-debt exemption “does not depend on the content of the speech at issue. Rather, it depends on the call’s economic purpose.” Brief for Petitioner at 6, Barr v. Am. Ass’n of Political Consultants, Inc., No. 18-1588 (emphasis added). In applying strict scrutiny, the Fourth Circuit reasoned that “a private debt collector could make two nearly identical automated calls to the same cell phone using prohibited technology, with the sole distinction being that the first call relates to a loan guaranteed by the federal government, while the second call concerns a commercial loan with no government guarantee.” Am. Ass’n of Political Consultants, Inc., 923 F.3d at 166. In response, the government argues that two calls “having precisely the same content” would be “treated differently . . . depending on the precise nature of the economic activity on which the caller was engaged.” Brief for Petitioner at 7-8, Barr v. Am. Ass’n of Political Consultants, Inc., No. 18-1588. If the Court agrees with the government’s argument and applies a lower level of scrutiny, the government-debt exemption has a stronger chance of surviving Supreme Court review.Second, the Court may uphold the Fourth Circuit’s decision and sever the government-debt exemption. While the government vigorously disputes the application of strict scrutiny, it agrees with the Fourth Circuit’s remedy of severability. The Fourth Circuit noted the Supreme Court’s “strong preference” for severance. See Nat’l Fed’n of Indep. Bus. v. Sebelius, 567 U.S. 519 (2018) (“[W]e do not believe Congress would have wanted the whole [Affordable Care] Act to fall” if one provision of the Act is struck down). The Fourth Circuit explained, “Congress has explicitly mandated that, if a TCPA provision is determined to be constitutionally infirm, severance is the appropriate remedy.” Am. Ass’n of Political Consultants, Inc., 923 F.3d at 171. If the Court takes this approach, its holding would be narrow and less likely to affect the broader field of TCPA litigation because the core function of the statute would remain in effect.Third, as some observers believe, the Court may invalidate the TCPA altogether, finding that the statute’s restriction on which mediums can be used for speech contravenes the First Amendment. By taking this approach, the Court would upend the entire TCPA landscape, providing a defense for companies and organizations that have faced decades of lawsuits. It would remain to be seen whether such a decision would lead to new legislation.Once again, TCPA litigation has set the stage for an important decision by the Supreme Court. See PDR Network, LLC v. Carlton & Harris Chiropractic, Inc., 139 S. Ct. 2051 (2019) (remanding the case to the Fourth Circuit to determine if a 2006 FCC rule prohibiting unsolicited advertisements offering free goods or services was binding on the courts); see also Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) (holding that a federal contractor did not share the government’s unqualified immunity from liability and could be sued for TCPA violations and also holding that a rejected settlement offer does not moot a plaintiff’s individual or class claims). This latest TCPA case is poised to further define the bounds of First Amendment protections in a new era of technology and communication.