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.

Social

Search

Editors

park_julie_blog_150x150.png

park_julie_common_640x280.jpg

park_julie_heroretina_2700x1160.jpg

park_julie_mobileretina_750x1040.jpg

park_julie_social_600x600.jpg

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).

preovolos_penelope_blog_150x150.png

preovolos_penelope_common_640x280.jpg

preovolos_penelope_heroretina_2700x1160.jpg

preovolos_penelope_mobileretina_750x1040.jpg

preovolos_penelope_social_600x600.jpg

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.

vetesi_claudia_blog_150x150.png

vetesi_claudia_common_640x280.jpg

vetesi_claudia_heroretina_2700x1160.jpg

vetesi_claudia_mobileretina_750x1040.jpg

vetesi_claudia_social_600x600.jpg

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.

preece_alex_blog_150x150.png

preece_alex_common_640x280.jpg

preece_alex_heroretina_2700x1160.jpg

preece_alex_mobileretina_750x1040.jpg

preece_alex_social_600x600.jpg

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.

hunt_adam_blog_150x150.png

hunt_adam_common_640x280.jpg

hunt_adam_heroretina_2700x1160.jpg

hunt_adam_mobileretina_750x1040.jpg

hunt_adam_social_600x600.jpg

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

favicon.ico

favicon-16x16.png

favicon-32x32.png

apple-touch-icon.png

MoFo Favicons

Morrison Foerster’s Class Dismissed blog provides insights and reports on the latest news, developments, and trends that affect consumer-facing companies. Subscribe to receive the latest updates by attorneys from our nationally recognized Consumer Class Action and Product Liability practices.

Welcome to Class Dismissed

class-dismissed-welcome-image.jpeg

class-dismissed-welcome-image

Morrison Foerster’s Class Dismissed blog provides insights and reports on the latest news, developments, and trends that affect consumer-facing companies. 

Class Action

Blog - Terms of Use

Blog - Privacy Policy

Blog - Blog Disclaimer

Blog - Attorney Advertising

morrison-foerster-blog-logo.png

Brings together legal insights and in-depth analyses on trends and complex issues shaping the global technology industry.

MoFo Tech

Equips our clients with the most up-to-date and relevant information on employment and labor law issues.

Employment Law Commentary

Stay on top of emerging issues and stay informed of developments related to the law and business of social media.

Socially Aware

In-depth analysis of developments and trends impacting government contracting.

Government Contracts Insight

The latest news and insights from the nationally recognized Consumer Class Action and Product Liability practices of Morrison & Foerster.

Class Dismissed

  Linkedin

MoFo LinkedIN

Class Dismissed Blog - RSS

Stay Connected

By submitting your data to subscribe to this blog, you approved Morrison & Foerster LLP to email you future information about MoFo news and events. You may opt-out at any time by sending a request to <a href="mailto:mofonews@mofo.com">mofonews@mofo.com</a>. To learn more about how Morrison & Foerster LLP uses and protects your personal data, please view our <a href="https://www.mofo.com/about/privacy-policy.html">Privacy Policy</a> at <a href="https://www.mofo.com/">www.mofo.com</a>.

Never miss a post from Class Dismissed. Enter your email below to stay up-to-date.

Subscribe

Class Action and Product Insights for Your Business

Morrison Foerster - Footer

Blogs -  Home Button

Home

Blog - Topics

TCPA

Announcements & Press

Antitrust

Appellate & Supreme Court

Arbitration

Autonomous Vehicles & Robotics

Aviation & Drones

Class Certification

Consumer Products

Coronavirus (COVID-19)

CPSC

Drug & Medical Device

Emergency Use Authorization (EUA)

Environmental Law

False Advertising

FCRA

Food Misbranding

Government Actions

Internet of Things

Mass Torts

Pharmaceutical & Medical Devices

Privacy

Product Liability

Public Readiness and Emergency Preparedness Act (PREP Act)

Retail

Trials

Topics

Blog - Editors

Blog - About

About

Blog - Subscribe

More

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

LinkedIN

On December 20, 2017, the Ninth Circuit refined the injunctive standing requirements in the misbranding context in Victor v. Bigelow and Khasin v. Bigelow (collectively, “Bigelow”), finding that injunctive standing is limited and requires a current intent to purchase challenged products in the future. See Victor v. Bigelow, No. 16-16639 (9th Cir. argued Nov. 15, 2017); Khasin v. Bigelow, No. 16-16641 (9th Cir. Argued Nov. 15, 2017).These decisions demonstrate the Ninth Circuit’s evolving standards on injunctive relief since its last decision on the issue in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017).  (See <a href="https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/">https://classdismissed.mofo.com/consumer-products/ninth-circuit-finds-lower-court-erred-in-flushing-flushable-wipes-false-advertising-claims/</a>.)  As we noted in our December 4, 2017 post on the case, the Ninth Circuit in Davidson found that the fact that a plaintiff now knows the “truth” of an allegedly false advertisement does not foreclose injunctive standing.  In Bigelow, the Ninth Circuit threads the needle to carefully avoid conflict with this decision, thereby further defining the scope of injunctive standing.We discuss the panel’s holding in Bigelow, as well as key takeaways, below.Case Background. Plaintiffs Victor and Khasin both alleged that defendant R.C. Bigelow (“Bigelow”) mislabeled its black tea by including the phrase “healthful antioxidants” on its products’ labels. See Khasin v. R.C. Bigelow, Case No. 12-cv-02204-WHO, 2016 WL 4502500 (N.D. Cal. Aug. 29, 2016); Victor v. R.C. Bigelow, Case No. 13-cv-02976-WHO, 2016 WL 4502528 (N.D. Cal. Aug. 29, 2016).  The district court granted summary judgment to Bigelow on plaintiffs’ injunctive relief claims, concluding that plaintiffs lacked Article III standing to seek an injunction preventing Bigelow from selling “mislabeled” tea.Injunctive Relief Unavailable If No Intent to Purchase. In appealing the district courts’ orders, the plaintiffs relied heavily on Davidson, arguing that the decision means plaintiffs have injunctive standing the moment they allege a labeling is misleading, regardless of whether they intend to purchase products again in the future or if the company changes its labels. See <a href="https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000012555">https://www.ca9.uscourts.gov/media/view_video.php?pk_vid=0000012555</a> (Bigelow oral argument).In an unpublished opinion, the three-judge panel — which included Judge Berzon, who had sat on the Davidson panel — disagreed with plaintiffs’ argument, holding that plaintiffs were not entitled to injunctive relief because they did not face a threat of future harm.  While plaintiffs both stated that they would consider buying Bigelow tea again, they testified that they would only do so if they received an injunction first.  Both also stated that they would not consider purchasing the tea with updated and accurate packaging.  “Because they will not consider buying even properly labeled tea until they receive an injunction,” the panel reasoned, “[the plaintiffs] will not be harmed by wondering if the tea is still mislabeled or by buying the tea without knowing if it is still mislabeled.”  The panel accordingly held that the plaintiffs “did not face a real or immediate risk of being harmed again in the same manner and so lack Article III standing to seek injunctive relief.”Takeaway. Davidson and Bigelow demonstrate that injunctive standing is not an “all or nothing” standard.  Instead, whether a plaintiff has standing to pursue an injunction will depend largely on the facts, and particularly on a plaintiff’s deposition testimony.  As the panel noted in Bigelow, this raises concerns that plaintiffs’ attorneys may attempt to influence deposition testimony to ensure their clients testify in accordance with the requirements for injunctive standing.By highlighting testimony that does and does not satisfy these requirements — i.e., the “future intent to purchase and fear of mislabeling” that sufficed in Davidson versus the “intent to purchase only if an injunction is granted” that failed in Bigelow — the decisions also help define the contours of injunctive standing in the misbranding context, and put to rest disagreement in the Ninth Circuit as to the fundamentals of these standing requirements: knowledge that an advertisement is false does not foreclose standing, but a present intent to purchase — coupled with fear that the product will continue to be mislabeled — is required.

Reading the Tea Leaves: Ninth Circuit Further Clarifies Injunctive Standing Issues in Bigelow Tea Cases

On December 20, 2017, the Ninth Circuit refined the injunctive standing requirements in the misbranding context in Victor v. Bigelow and Khasin v. Bigelow (coll

Reading the Tea Leaves: Ninth Circuit Further Clarifies Injunctive Standing Issues in Bigelow Tea Cases

“Make fine lines and wrinkles disappear!”  “Reduce the visibility of fine lines and wrinkles!”  At first read, these claims sound one in the same.  But for decades, a slight difference in phrasing of cosmetics claims—created as a function of current cosmetics regulations—has been responsible for allegedly confusing customers and complicating regulations.  Lawmakers have tried and failed to reform federal cosmetics regulations in the past and are now gearing up for another attempt.Current FDA Regulation of Cosmetics (or Lack Thereof)The U.S. Food and Drug Administration (FDA) regulates both drugs and cosmetics under the Food, Drug, and Cosmetic Act (FDCA).  The FDCA defines a “cosmetic,” in part, as “articles intended to be rubbed, poured, sprinkled, or sprayed on, introduced into, or otherwise applied to the human body or any part thereof for cleansing, beautifying, promoting attractiveness, or altering the appearance.”  21 U.S.C. § 321(i).  The FDCA’s definition of “drug” includes “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man . . . ,” and “articles (other than food) intended to affect the structure or any function of the body of man . . . .”  21 U.S.C. § 321(g)(1).Certain products can meet the definitions of both cosmetics and drugs under the FDCA depending on their intended uses.  The claims made about a certain product are determinative of whether the product is regulated as a cosmetic, drug, or both.  For <a href="https://www.fda.gov/Cosmetics/GuidanceRegulation/LawsRegulations/ucm074201.htm">example</a>, a shampoo is a cosmetic because its intended use is to cleanse hair.  An anti-dandruff treatment is a drug because its intended use is to treat dandruff.  An anti-dandruff shampoo is therefore both a cosmetic and a drug, and is regulated by the FDA as both.  Unlike drugs or medical devices, however, cosmetic products and ingredients (with the exception of color additives) currently do not require FDA approval before they go to market.  For this reason, a cosmetic product containing the same ingredients as a drug product can enter the market without premarket oversight as long as the product is not advertised as having therapeutic uses.But drug claims and cosmetic claims can sound indistinguishable to a consumer.  Take anti‑aging products for <a href="https://www.fda.gov/Cosmetics/ProductsIngredients/Products/ucm388826.htm" target="_blank" rel="noopener">example</a>.  If a product is intended to make lines and wrinkles less noticeable by moisturizing the skin, it is a cosmetic because moisturizing is a cosmetic claim.  On the other hand, products intended to affect the structure of the skin are drugs even if they affect the appearance.  So a product that is intended to remove wrinkles or increase the skin’s production of collagen is a drug.  And the slight difference in the way these two products are advertised can create large disparities in the level of premarket regulations such as mandatory good manufacturing practices.Further, under present cosmetics regulations, cosmetics companies are not required to report postmarket adverse events.  The lack of premarket oversight and mandatory adverse event reporting has contributed to consumer concerns over the safety of the products they use every day.  For example, the FDA is currently investigating reports of hair loss and rashes linked to the use of WEN by Chaz Dean Cleansing Conditioner products.  By November 15, 2016, the FDA received 1,386 adverse event reports from consumers about these products, the largest number of reports ever associated with any cosmetic hair cleansing product.  However, the FDA also became aware of over 21,000 complaints reported directly to Chaz Dean, Inc. and the product distributor, Guthy Renker, LLC, during inspections of the companies’ facilities.  Had these companies been required to submit these reports to the FDA—as drug companies are—it is almost certain that far fewer customers would have been affected.Due to the fine line between the definitions of drugs and cosmetics, as well as the significant difference in FDA regulations for the two categories of products, stakeholders have been calling on lawmakers to reform cosmetics regulations for many years now.  Some believe this long‑overdue legislation is right around the corner.Two Senate Bills on Cosmetics Regulation ReformIn May 2017, Senator Dianne Feinstein (D-CA) reintroduced the Personal Care Products Safety Act, S. 1113, 115th Cong. § 1 (2017), which was originally introduced to the Senate in April 2015 with co‑sponsor Senator Susan Collins (R-ME).  Later in October 2017, Senator Orrin Hatch (R-UT) introduced the FDA Cosmetic Safety and Modernization Act, S. 2003, 115th Cong. § 1 (2017), to the Senate.  Both proposed bills include the following proposed regulations for cosmetics:Mandatory reporting requirements.  Both bills would require cosmetic manufacturers and distributors to report “serious adverse events” to the FDA within 15 business days of receipt of notice.  As defined by both bills, this would include adverse events associated with the use of a cosmetic product, ranging from disfigurement to death.  This is similar to the existing mandatory reporting requirement for drugs, see 21 C.F.R. § 314.80(c)(1), but adverse event reporting is currently voluntary for cosmetics.  The Feinstein‑Collins bill also includes an annual report requirement, under which companies would have to submit to the FDA a yearly report summarizing all adverse events for each cosmetic product marketed during that year.Registration of cosmetics facilities.  Both bills would require cosmetics manufacturing facilities to register with the FDA and would also give the FDA the authority to suspend a facility’s registration if its products have a reasonable probability of causing serious adverse health consequences or death.  The Feinstein‑Collins bill includes a registration fee based on a company’s annual gross sales of cosmetics.  By contrast, registration under the current regulatory scheme is voluntary, through a program that the FDA administers to collect information on product ingredient listings and registration of manufacturers, packers, and distributors on a voluntary basis.Submitting ingredients to the FDA.  The Feinstein‑Collins bill would also require companies to submit cosmetic ingredient statements for each cosmetic product to the FDA.  The Hatch bill does not contain an analogous provision.  Under the authority of the Fair Packaging and Labeling Act (FPLA), 15 U.S.C. § 1451 et seq., the FDA already requires a list of ingredients for cosmetics marketed on a retail basis to consumers.  21 C.F.R. § 701.3.  Cosmetics that fail to comply with the FPLA are considered misbranded under the FDCA.  15 U.S.C. § 1456.Ingredient review.  Both bills would require the FDA to review the safety of certain cosmetic ingredients and non-functional constituents (incidental components of the ingredients) through a notice and comment process.  The Feinstein‑Collins bill would require the FDA to review at least five ingredients a year and goes as far as to set out the first five ingredients for review:  (1) Diazolidinyl urea; (2) Lead acetate; (3) Methylene glycol/methanediol/formaldehyde, propyl paraben; and (5) Quaternium-15.  The Hatch bill, on the other hand, would have the FDA, in conjunction with industry and consumer groups, identify ingredients for safety review based on public health concerns.  The Hatch bill also provides for accredited third‑party review of these selected ingredients.Good manufacturing standards.  Under both bills, the FDA would be required to establish mandatory good manufacturing practices, and, under the Hatch bill, a cosmetics manufacturers’ noncompliance would constitute the cosmetics being adulterated.  The FDA’s good manufacturing practices for cosmetics manufacturers are currently voluntary.  Both bills would provide small businesses with additional time to comply with the good manufacturing practices—one year under the Feinstein‑Collins bill and two years under the Hatch bill.Mandatory recall authority.  The Feinstein‑Collins bill would give the FDA the authority to order mandatory recalls, while the Hatch bill does not.  The FDA only has the authority to oversee voluntary recalls at this time.Past Failures on Cosmetics Regulation ReformWhile some are encouraged by the bipartisan support for cosmetics regulation reform, the fact that similar bills have previously died in Congress casts doubt on whether either of the Senate bills have any hope of becoming law.Just earlier this year, Representative Pete Sessions (R‑TX) reintroduced his bill, the Cosmetic Modernization Amendments of 2017, as H.R. 575.  This bill was first introduced in November 2015 as the Cosmetic Modernization Amendments of 2015, H.R. 4075.  Before this, similar legislation included the Cosmetic Safety Amendments Act of 2012, introduced by Representative Leonard Lance (R‑NJ), H.R. 4395; the Cosmetics Safety Enhancement Act of 2012, introduced by Representative Frank Pallone (D‑NJ), H.R. 4262; and the Safe Cosmetics Act of 2011, introduced by Representative Jan Schakowsky (D‑IL), H.R. 2359.Not one of these bills has passed.Looking AheadCosmetics companies should consider proactively adopting some of the proposed practices described above regardless of whether either of the currently pending bills becomes law in the near future.  As the two proposed bills indicate, any future FDA regulation of cosmetics would build upon the existing voluntary programs for cosmetics and mandatory reporting schemes for drugs, including the Voluntary Cosmetic Registration Program, existing adverse event reporting system, and Good Manufacturing Practices guidelines.  Efforts to employ these programs therefore would not be in vain.  Early adopters can also develop compliance programs at a predictable pace as opposed to an accelerated or unknown schedule set by future legislation.  Lastly, there is little doubt that consumers are demanding self‑regulation in this space in the absence of government action.  Premarket considerations can effectively minimize costly litigation down the road.

Fertility Center Litigation

Fitbit

MicroPort

Leading Healthcare, Pharmaceutical, and Medical Device Company

Lethal Injection Matters – Major Pharmaceutical Company

Pain Pump Matters – Large Pharmaceutical Company

Major Technology Company

Leading Chemical Company

Security Device Company

In re Air Crash Near Peixoto de Azevedo, Brazil

bosman_erin_blog_150x150.png

bosman_erin_common_640x280.jpg

bosman_erin_heroretina_2700x1160.jpg

bosman_erin_mobileretina_750x1040.jpg

bosman_erin_social_600x600.jpg

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

makeup-gettyimages-648954620-600px_thumbnail.jpg

Makeup Shake Up: Potential New Federal Cosmetics Regulations

Makeup Shake Up:  Potential New Federal Cosmetics Regulations

makeup-gettyimages-648954620-600px_image.jpg

“Make fine lines and wrinkles disappear!”  “Reduce the visibility of fine lines and wrinkles!”  At first read, these claims sound one in the same.  But for deca

On December 4, 2017, a panel of the California Court of Appeal unanimously affirmed a trial court’s denial of class certification for alleged violations of California’s unfair competition, consumer protection, and false advertising laws.  In so doing, the court upheld the lower court’s conclusions that the proposed class for Plaintiff’s UCL and FAL claims was not ascertainable and that common questions did not predominate among class members for the CLRA claim.Case background.  Plaintiff James Noel alleged that an inflatable kid’s swimming pool purchased at Defendant’s drugstore was smaller than it appeared on the pool’s packaging box.  The box also displayed the pool’s dimensions, which Noel did not contend were inaccurate.  He sued the drugstore on behalf of all consumers who had purchased the pool, claiming violations of California’s unfair competition, consumer protection, and false advertising laws.The trial court denied Noel’s motion for class certification, finding that the proposed class for the UCL and FAL claims was not ascertainable because Noel failed to establish that the other purchasers of the pool could be identified.  The court further concluded that common questions did not predominate as to the CLRA claim.  The court reasoned that some members of the class may not have relied on the picture of the pool on the packaging box but instead looked to the advertised pool dimensions.  This prevented the questions of reliance and causation from being litigated on a classwide basis.Absent class members not ascertainable under UCL and FAL classes.  On appeal, Noel insisted the proposed class was ascertainable because his class definition was clear: “All persons who purchased the Ready Set Pool at a Rite Aid store located in California within the four years preceding the date of the filing of this action.”  But the court explained that the class definition was “beside the point”; the problem was that Noel adduced no evidence of records through which to identify class members, as required by Sotelo v. Medianews Group, Inc., 207 Cal. App. 4th 639 (2012).  “While Noel was not required to actually identify the 20,000-plus individuals who bought pools,” the panel explained, “his failure to come up with any means of identifying them was a legitimate basis for denying class certification.”  The court attributed this failure to Noel’s premature filing of the class certification motion without first taking sufficient discovery to learn what records could be used to identify the purchasers.The court recognized that its reasoning existed in tension with another recent Court of Appeal decision, Aguirre v. Amscan Holdings, Inc., 234 Cal.App.4th 1290 (2015).  According to the court, Aguirre held that a class plaintiff need not establish a means of identifying absent class members at the class certification stage; rather, the method for identifying class members need only be set forth at the remedial stage when it becomes necessary to prove class membership or damages.  The court disagreed with Aguirre: “To ignore the issue of identifying class members for notice purposes gives short shrift to due process considerations in play at the certification stage.”  While recognizing that some class actions must ultimately dispense with personal notice, the court preferred a “more pragmatic and flexible approach” to class certification that leaves the trial court discretion to determine whether a method for identifying absent class members must be established during class certification proceedings.Common issues did not predominate for CLRA class.  Noel next argued that the trial court erred in finding that class issues did not predominate over individual issues for the CLRA claim.  In affirming the trial court’s denial of class certification, the Court of Appeal explained that Noel had to establish that the misrepresentation would have been material to any reasonable person; otherwise, the issues of reliance and causation would vary among consumers and thus would not be subject to common proof.  The court found reasonable the trial court’s conclusion that some consumers may have relied on the advertised dimensions instead of on the pictures on the pool’s packaging.Denial of a continuance.  At the class certification hearing, Noel’s counsel requested the opportunity to conduct further discovery so that he could more fully develop facts to support his motion.  On appeal, Noel argued the trial court erred in denying his request, citing the general rule that continuances should be liberally granted.  The court rejected this argument, succinctly explaining that “Noel’s counsel was in control of the litigation; no one forced him to file a premature class certification motion.”Takeaways.  The Court of Appeal summarized the case’s takeaway: “What occurred here provides an object lesson in the risks of brushing the issue [of ascertainability] aside in connection with class certification and leaving it to be addressed at the conclusion of the proceedings.”  A plaintiff who fails to take sufficient discovery prior to moving for class certification may be unable to show how absent class members can be identified.

kiddiepool-shutterstock_272970755-600px-2_thumbnail.jpg

California Appellate Court Upholds Denial of Class Certification on Ascertainability Grounds

California Appellate Court Upholds Denial of Class Certification on Ascertainability Grounds

kiddiepool-shutterstock_272970755-600px-2_image.jpg

On December 4, 2017, a panel of the California Court of Appeal unanimously affirmed a trial court’s denial of class certification for alleged violations of Cali

On October 20, 2017, a unanimous Ninth Circuit panel in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017), resolved a circuit-wide split on injunctive standing requirements in the misbranding context.  The panel addressed whether a plaintiff allegedly deceived by false advertising has Article III standing to enjoin a false statement despite knowing the statement’s “true” meaning.  The panel answered in the affirmative, reversing the district court’s decision and reviving plaintiff’s “flushable” wipes false advertising claims.  The panel also held that plaintiff had adequately alleged that defendants’ wipes advertisements were false and that she had suffered an economic injury as a result.Case Background.  Kimberly-Clark and affiliates manufacturer pre-moistened wipes, which they market and sell as “flushable.”  Plaintiff Jennifer Davidson alleged that that this “flushable” label was false and misleading, and she sued Kimberly-Clark for violations of California consumer protection laws.  Plaintiff sought restitution and damages in the form of the price premium resulting from the “flushable” label, as well as an injunction requiring Kimberly-Clark to discontinue labeling the wipes as “flushable.”Kimberly-Clark moved to dismiss plaintiff’s first amended complaint.  The district court granted the motion, finding that: (1) plaintiff lacked standing to seek injunctive relief because she was unlikely to purchase defendants’ flushable wipes in the future; (2) plaintiff had failed to adequately allege why the representation “flushable” on the package was false; and (3) plaintiff had failed to allege damage under the UCL, FAL, CLRA, or common law fraud causes of action because she had not alleged that she suffered any harm due to her use of the wipes.  Plaintiff appealed.Knowledge that an Advertisement Is False Does Not Foreclose Injunctive Relief.  The crux of the panel’s decision addressed the split in district court decisions as to whether a plaintiff seeking an injunction requiring a company to cease allegedly deceptive labeling can establish Article III standing once he or she understands the truth of an alleged misrepresentation.  On one side, courts would conclude that a plaintiff lacked standing because, now aware that an advertisement is false, he or she could not be misled by it in the future.  On the other side, courts would conclude that a plaintiff has standing because “the plaintiff may be unable to rely on the defendant’s representations in the future, or because the plaintiff may again purchase the mislabeled product.”The panel resolved the split in favor of plaintiffs seeking injunctive relief, holding that a consumer who is aware that a label is falsely advertised still suffers an actual threat of future harm necessary for Article III standing because, without an injunction, he or she may be unable to rely on the labeling in the future or might reasonably, but incorrectly, believe that the product has improved.  “Either way,” the panel held, “we are ‘not persuaded that injunctive relief is never available for a consumer who learns after purchasing a product that the label is false.’”  (citation omitted).  The panel noted that its decision alleviated concerns that the opposite conclusion would effectively gut California’s consumer protection laws as an injunction is the primary form of relief under those statutes.The First Amended Complaint Adequately Alleged Why the Term “Flushable” Was False and Alleged Sufficient Harm.  The panel also reversed the district court’s holding that plaintiff failed to allege that “flushable” was false and failed to allege sufficient economic harm.  As to the former, the panel found that plaintiff had adequately alleged that the term “flushable” was false by claiming that the wipes did not “disperse and disintegrate within seconds or minutes.”  Dismissal on this basis was therefore inappropriate.  As to the latter, the panel held that plaintiff had sufficiently pled an economic injury by alleging that she was exposed to false information about a product, which caused the product to be sold at a higher price, and that absent the misrepresentation, she would not have purchased the product or would have paid less for it.  This is all that California law requires, the panel confirmed.Takeaway.  Davidson forecloses the argument that a plaintiff lacks injunctive standing because he or she now knows the truth about an allegedly false advertisement.  But the panel’s decision may be cabined to the facts:  a situation where a plaintiff expresses interest in buying a product but cannot rely on the label because the company continues to use the allegedly false statement.  But what if a plaintiff has no interest in purchasing a challenged product again or if a company voluntarily discontinues use of a challenged statement?  Davidson doesn’t speak to whether a plaintiff would have injunctive standing under these circumstances.  In fact, the Ninth Circuit is addressing whether a plaintiff has injunctive standing based on these facts in the Victor v. Bigelow and Khasin v. Bigelow appeals, which were heard on November 15, 2017.  The plaintiff in Bigelow relied heavily on Davidson, but the Bigelow panel suggested that Davidson was distinguishable.  See Victor v. Bigelow, No. 16-16639 (9th Cir. argued Nov. 15, 2017); Khasin v. Bigelow, No. 16-16641 (9th Cir. Argued Nov. 15, 2017).Davidson nevertheless helps define the contours of injunctive standing in the misbranding context and puts to rest disagreement in the Ninth Circuit as to the fundamentals of these standing requirements.  The Ninth Circuit will continue to refine these standards in the Bigelow and similar appeals addressing different factual circumstances.  We will provide relevant updates when these decisions are released.

wetwipe-gettyimages-476331938-600px_thumbnail.jpg

Ninth Circuit Finds Lower Court Erred in Flushing “Flushable” Wipes False Advertising Claims

Kimberly-Clark Seeks Supreme Court Review in “Flushable” Wipes Case

wetwipe-gettyimages-476331938-600px_image.jpg

On October 20, 2017, a unanimous Ninth Circuit panel in Davidson v. Kimberly-Clark Corp., 873 F.3d 1103 (9th Cir. 2017), resolved a circuit-wide split on injunc

Ninth Circuit Finds Lower Court Erred in Flushing  “Flushable” Wipes False Advertising Claims

With the holidays and end of the year quickly approaching, here is what food and beverage manufacturers and sellers need to know before the temporary Proposition 65 safe harbor warning for Bisphenol A (BPA) exposures expires on December 30, 2017.Read our <a href="https://media2.mofo.com/v3/assets/blt5775cc69c999c255/bltb25a3161dc0c3b74/627315568e09542a15b7de57/171128-prop-65-safe-harbor.pdf" target="_blank" rel="noopener noreferrer">Law360 article</a>.

gettyimages-95060931_small_thumbnail.jpg

Expiring Soon: Temporary BPA Warning Regs Under Prop. 65

Expiring Soon: Temporary BPA Warning Regs Under Prop. 65

gettyimages-95060931_small_image.jpg

With the holidays and end of the year quickly approaching, here is what food and beverage manufacturers and sellers need to know before the temporary Propositio

A federal district court in Wisconsin recently hit Spectrum Brands Inc. (Spectrum) with civil penalties of $1.9 million for violations of the Consumer Products Safety Act (CPSA).<a href="#_ftn1" name="_ftnref1">[1]</a>  The court’s 23-page opinion is a strong reminder of how devastating the impact can be for waiting to report violations and also shows the consequences of failing to implement robust CPSA compliance and recall programs.This judgment provides insight into the costs and benefits of litigation versus settlement following a CPSC civil penalties investigation.  Companies may benefit from the court’s analysis of effective compliance programs when attempting to shore up their own product safety compliance and product recall procedures.  And for companies looking to acquire another company or its product line, this decision also provides strong incentives to double down on CPSA due diligence to make sure they are not acquiring a significant liability.Case BackgroundIn November 2014, Spectrum, a consumer products company, merged with Applica Consumer Products, Inc., which owned and sold a Black & Decker SpaceMaker line of coffee machines.  Applica began selling the SpaceMaker in 2008.  About a year later, customers started complaining to Applica that the SpaceMaker’s carafe handle was suddenly cracking and breaking.  By May 2009, Applica had received 60 reports of broken handles and 4 reports of burns.  CPSC contended that this triggered Applica’s obligation to “immediately” report a product hazard to CPSC within 24 hours.  16 C.F.R. § 1115.14(e).  Applica did not report for almost three years, until April 2012.  By that time, they had been sued in a consumer class action and had received over five dozen reports of injury.  In addition, Applica inadvertently sold an additional 641 units after recalling the SpaceMakers.So where does Spectrum fit into all of this?  In the 2014 merger, Spectrum assumed all of Applica’s assets and liabilities.  So when CPSC and DOJ teamed up in 2015 to file an enforcement action against Applica, Spectrum was on the hook.During the enforcement litigation, Spectrum admitted liability for the sale of recalled products but contested liability for failure to report timely. As we <a href="http://classdismissed.mofo.com/consumer-products/court-decision-cpsc-enforcement-action">reported previously</a>, the court ruled against Spectrum on the government’s failure-to-report claim, holding it liable for failing to submit a timely report to CPSC.  On September 29, 2017, after holding a hearing to determine the appropriate amount of civil penalties and injunctive relief for these reporting and sale violations, the Wisconsin federal court ordered Spectrum to pay the government $1.9 million in civil penalties and granted the government injunctive relief.  Here we walk through the court’s penalty calculation for key takeaways.Penalty CalculationPenalty Cap: $15 Million, Post-CPSIA Statutory Maximum AppliedThe CPSA’s current statutory maximum penalty for “any related series of violations” is $15 million.  15 U.S.C. § 2069(a)(1).  And because Spectrum’s violations (late reporting to CPSC and sale of recalled products) counted as two separate “related series of violations,” the court held that the maximum penalty could not exceed $30 million (adjusted for inflation).Notably, Spectrum did not persuade the court that the much lower $1.25 million penalty cap—which existed before the Consumer Product Safety Improvement Act of 2008 (CPSIA), and was in effect when Spectrum’s obligation to report arose—applied to the reporting violation.  The court dismissed this as a “thinly recast version of [Spectrum’s] unsuccessful argument” (<a href="http://classdismissed.mofo.com/consumer-products/statute-of-limitations-taking-the-steam-out-of-cpsc-backed-enforcement-action/" target="_blank" rel="noopener">which we covered previously</a>) that the government’s claims were time barred.  Because Spectrum did not actually report until 2012, long after CPSIA was enacted, the post-CPSIA $15 million penalty cap applied.Art, Not Science: CPSA and Regulatory Factors AppliedThe court next considered the CPSA’s guidance to CPSC regarding an appropriate civil penalty.  Those congressionally identified factors are:  the nature, circumstances, extent, and gravity of the violation, including the nature of the product defect; the severity of the risk of injury; the occurrence or absence of injury; the number of defective products distributed; and the appropriateness of such penalty in relation to the size of the business.The court also looked to the CPSA’s regulatory guidance about civil penalties, which exist to promote policies of deterring violations, providing just punishment, promoting respect for the law, and protecting the public, among others.Finally, the court considered four specific regulatory factors:  (1) safety/compliance program and/or system relating to a violation; (2) history of noncompliance; (3) economic gain from noncompliance, and (4) failure to timely respond to CPSC’s requests for information or remedial action.Limited Evidence on Penalty Factors Mitigated DamagesInterestingly, the court found that most of the factors weighed in Spectrum’s favor, due to the lack of sufficient evidence to substantiate the government’s position.For example, although the carafe handles were clearly defective, the severity of the defect was unclear.  The government did not show how far the broken handles separated from the carafe, making it difficult to assess the risk of “catastrophic failure” that could lead to severe injuries from broken glass or hot coffee.On injury, the government also provided “no evidence regarding any injuries that a customer actually sustained by virtue of a failed handle (as opposed to those self-reported by customers),” and the court pointed out that only “one customer indicated receipt of medical attention.”Similarly, the government provided “no evidence” on whether Spectrum had a history of failing to comply with the CPSA or whether it responded appropriately to CPSC correspondence.No Robust Compliance Program a Big Factor in the Penalty PhaseThe biggest  issue for Spectrum related to its safety and CPSA compliance programs.  The court found that although Spectrum had systems in place, they were inadequate.  The court noted that those systems failed to (a) flag the defect, (b) prompt Spectrum to report timely that information was accumulating on failed coffee makers, and (c) identify “the dangerous trend emerging from the sale of the defective carafes over time.”The court specifically pointed out the disconnect between information being gathered by Spectrum’s engineers about quality, and the information being gathered by consumer complaint specialists about safety.Penalties for Selling Recalled Products Exceed Those for Untimely ReportingFor untimely reporting, the court imposed a graduated penalty scale, with higher penalties per complaint received as time went on and complaints mounted.  For each complaint received in the first six months after Spectrum’s reporting obligation arose, the court set the per-complaint penalty at $10, which represented the “rough profit on the sale of [each of] those defective products.”  For complaints received in the next six months, the court increased the per-complaint penalty to $75, representing the defective product’s purchase price.  And for each six-month period after that, the per-complaint penalty doubled ($150 per complaint, then $300, then $600, and so on) to reflect the “increasingly egregious failure to report.” All told, the final penalty for the reporting violation was $821,675.For selling recalled products—which the court found to be the more egregious violation—the court imposed a $1,000 and $2,000 per-unit-sold penalty (the more expensive one for later shipments).  The final penalty for selling recalled products was $1,115,000, or 56% of the total penalty.  This more punitive per-unit amount was justified, the court said, given “Spectrum’s size and sophistication,” its lack of “defined procedures for executing the recall,” lack of “pro-active material oversight on recalled product,” and lack of “automation to prevent outbound shipments” of recalled coffee makers.Injunctive Relief Focused on Compliance Programs and Education Spectrum was also ordered by the court to maintain “sufficient systems, programs, and internal controls to ensure compliance with the CPSA” and its regulations, including reporting requirements.  Spectrum was required to file a notice with the court indicating the improvements implemented.Additionally, the court ordered Spectrum to send a copy of its civil penalty and summary judgment opinions and orders to its directors, officers, management-level employees, and in-house attorneys involved in the sale, manufacture, distribution, or importation of consumer products.ConclusionSpectrum’s $1.9 million penalty and injunctive order highlight the need for consumer products companies to regularly audit their safety, compliance, and recall procedures to ensure they quickly identify, escalate, report, and remediate potential consumer hazards.  This case also underscores the need for high-level company management and in-house counsel to be familiar and comfortable with CPSA requirements so they can quickly mobilize if the company identifies a product hazard, triggering a reporting obligation or recall.  Finally, Spectrum serves as a warning to consumer products companies involved in mergers or product line acquisitions.  Performing robust due diligence on a target product or company regarding CPSA compliance can prevent acquisition of a significant liability down the road in the event of a CPSC investigation and increasingly common enforcement action.<a href="#_ftnref1" name="_ftn1">[1]</a> United States v. Spectrum Brands, Inc., No. 15-CV-371-WMC, 2017 WL 4339677, at *9 (W.D. Wis. Sept. 29, 2017).

gettyimages-155556909_small_thumbnail.jpg

Fortune Favors the Quick (to Report): Judge Slaps Spectrum Brands with $1.9 Million Penalty in DOJ/CPSC Tag-Team Enforcement Action

Fortune Favors the Quick (to Report): Judge Slaps Spectrum Brands with $1.9 Million Penalty in DOJ/CPSC Tag-Team Enforcement Action

gettyimages-155556909_small_image.jpg

A federal district court in Wisconsin recently hit Spectrum Brands Inc. (Spectrum) with civil penalties of $1.9 million for violations of the Consumer Products 

Advertisers and purveyors of sugar-sweetened beverages can rest a little easier now.  The Ninth Circuit recently ordered a district court to issue a preliminary injunction to enjoin the 2015 San Francisco Ordinance requiring inclusion of a warning on all advertisements for sugar-sweetened beverages.<a href="#_ftn1" name="_ftnref1">[1]</a>  The Ninth Circuit found that the required warning likely impinged on the beverage purveyors’ First Amendment rights and would impermissibly chill commercial speech.<a href="#_ftn2" name="_ftnref2">[2]</a>The Ordinance:  In June 2015, San Francisco enacted a citywide ordinance requiring that advertisements for sugar-sweetened beverages within San Francisco include the following statement:WARNING: Drinking beverages with added sugar(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.S.F. Health Code § 4203(a).  Not only was the warning required on all advertisements, the ordinance also mandated it to take up 20% of the advertisement and be set out with a black rectangular border.  Id. § 4203.The Holding:As an initial matter, the Ninth Circuit found that framework set out in Zauderer v. Office of Disciplinary Counsel of Supreme Court of Ohio, 471 U.S. 626 (1985) extended beyond the consumer protection context and applied it to the challenged ordinance.<a href="#_ftn3" name="_ftnref3">[3]</a>Zauderer’s general rule is that a purely factual and uncontroversial disclosure that is not unduly burdensome will withstand First Amendment scrutiny so long as it reasonably related to a substantial government interest.<a href="#_ftn4" name="_ftnref4">[4]</a>In applying the Zauderer framework, the Ninth Circuit found that:<ul><li>The warning was at least controversial, because it conveyed that the beverages would necessarily contribute to the named health conditions regardless of quantity of consumption, which is contrary to statements by FDA that added sugars are generally recognized as safe;<a href="#_ftn5" name="_ftnref5">[5]</a></li><li>The warning was also misleading, because it focused on one product, suggesting that sugar-sweetened beverages were more likely to cause weight gain than other products with equal or greater amounts of added sugars and calories, which is not supported by the weight of evidence;<a href="#_ftn6" name="_ftnref6">[6]</a> and</li><li>The warning was unduly burdensome, because the required warning would effectively take over the message of any advertisement.<a href="#_ftn7" name="_ftnref7">[7]</a></li></ul> What’s Next?<ul><li>The Ninth Circuit’s ruling may open the door to challenges to other required disclosures.</li><li>The San Francisco City Attorney has vowed to fight on…</li></ul><a href="#_ftnref1" name="_ftn1">[1]</a> <a href="http://cdn.ca9.uscourts.gov/datastore/opinions/2017/09/19/16-16072.pdf">Am. Beverage Ass’n v. City and Cnty of San Francisco, No. 16-16072 (9th Cir. Sept. 19, 2017)</a><a href="#_ftnref2" name="_ftn2">[2]</a> Id., Slip Op. at 24-25.<a href="#_ftnref3" name="_ftn3">[3]</a> Slip Op. at 14-15.<a href="#_ftnref4" name="_ftn4">[4]</a> Id. at 14 (citing Zauderer, 471 U.S. at 651.)<a href="#_ftnref5" name="_ftn5">[5]</a> Slip Op. at 20 (citing 21 C.F.R. § 184.1866; 81 Fed. Reg. 33, 742, 33,760 (May 27, 2016)<a href="#_ftnref6" name="_ftn6">[6]</a> Id. at 21-22.<a href="#_ftnref7" name="_ftn7">[7]</a> Id. at 23.

Ninth Circuit Nixes San Francisco Soda Warning

Advertisers and purveyors of sugar-sweetened beverages can rest a little easier now.  The Ninth Circuit recently ordered a district court to issue a preliminary

Ninth Circuit Nixes San Francisco Soda Warning

California’s innovative Safer Consumer Products regulations, also known as the Green Chemistry Initiative, are ready for another step forward with the proposed inclusion of Spray Polyurethane Foam (SPF) Systems containing Unreacted Methylene Diphenyl Diisocyanates (MDI) as a Priority Product. These SPF systems are used for insulation, roofing, or sealants and raise safety concerns because of their widespread use by both professional contractors and “do-it-yourself” users for home repairs. This is the second Priority Product proposed for listing, following the inclusion of children’s foam-padded sleeping products with fire retardants.

shutterstock_113396650-converted-01_thumbnail.jpg

California Adds New Priority Consumer Product for Green Chemistry Regulation

California Proposes Next Group of Priority Products Under Its Green Chemistry Initiative

shutterstock_113396650-converted-01_image.jpg

California’s innovative Safer Consumer Products regulations, also known as the Green Chemistry Initiative, are ready for another step forward with the proposed 

California Adds New Priority Consumer Product for Green Chemistry Regulation

We have entered the next chapter in the ongoing saga of the Consumer Product Safety Commission’s (“CPSC”) regulation of high-powered, small, rare earth magnet sets (“SREMS”).<a href="#_ftn1" name="_ftnref1">[1]</a>  On March 1, 2017, CPSC met and unanimously approved removing the Magnet Sets Safety Standard from the Code of Federal Regulations.<a href="#_ftn2" name="_ftnref2">[2]</a>  On separate motion, the Commissioners split 3-2 along partisan lines in favor of revisiting rulemaking for magnet sets.  This decision follows the United States Court of Appeals for the Tenth Circuit’s November 2016 decision to vacate and remand to the Commission its earlier standard that effectively banned SREMS from sale in the U.S.<a href="#_ftn3" name="_ftnref3">[3]</a>Fight Over Safety Standard for Magnet SetsAs defined by CPSC, magnet sets are “[a]ny aggregation of separable magnetic objects that is a consumer product intended, marketed or commonly used as a manipulative or construction item for entertainment, such as puzzle working, sculpture building, mental stimulation, or stress relief.”  16 C.F.R. § 1240.2.  In 2014, CPSC issued a Final Rule on Safety Standard for Magnet Sets restricting the size and strength of the individual magnets in these sets.  Id. §§ 1240.1-1240.5.  While not categorically banned under the 2014 Safety Standard, SREMS could not be sold due to the standard’s severe size and strength restrictions.<a href="#_ftn4" name="_ftnref4">[4]</a>  Last November, Zen Magnets, LLC (“Zen”)<a href="#_ftn5" name="_ftnref5">[5]</a> successfully challenged CPSC’s regulation in the Tenth Circuit.  Zen Magnets, LLC v. Consumer Prod. Safety Comm’n, 841 F.3d 1141, 1155 (10th Cir. 2016).  The Tenth Circuit vacated and remanded CPSC’s 2014 Safety Standard for further proceedings consistent with the court’s finding that CPSC failed to meet the Consumer Product Safety Act’s requirements.  The court based its ruling on CPSC’s incomplete and inadequately explained factual findings.  Id. at 1144.Removal of Standard Following Court’s Vacatur CPSC’s vote to remove the 2014 Safety Standard was a procedural formality needed to remove the vacated magnet set standard from the Federal Register.  82 Fed. Reg. 12716-01 (Mar. 7, 2017).Regardless of CPSC’s action or response, the Tenth Circuit’s decision vacating the standard had the force of law immediately after the court filed its order on November 22, 2016.  Id.Motion to Revisit Magnet Set Safety Standard RulemakingDuring the March 1st decisional meeting, Commissioner Elliot Kaye separately moved to direct staff to prepare a draft notice of proposed rulemaking addressing the issues raised in the Tenth Circuit’s holding.<a href="#_ftn6" name="_ftnref6">[6]</a>  Commissioner Kaye’s motion directed CPSC staff to utilize CPSC’s existing data, as opposed to conducting further fact-finding.<a href="#_ftn7" name="_ftnref7">[7]</a>  During questions on the motion, Commissioner Robert Adler identified the issues in the Tenth Circuit opinion that needed to be addressed in the draft notice:  (1) CPSC’s use of an incorrect time frame for the data set in its cost-benefit analysis, Zen Magnets, 841 F.3d at 1149; (2) CPSC’s reliance on injury reports that only “possibly” involved magnet sets, id. at 1152; and (3) CPSC’s failure to consider the utility of magnet sets, id. at 1152-53.<a href="#_ftn8" name="_ftnref8">[8]</a>  CPSC estimated that it will take 11 staff months to prepare the draft notice.<a href="#_ftn9" name="_ftnref9">[9]</a>The Future of SREMS Regulation in Light of Shifting Tides at CPSCThis reshaping of magnet set regulation comes during an interesting time at CPSC.  As <a href="http://classdismissed.mofo.com/consumer-products/same-enforcement-trend-new-cpsc-leadership/">previously reported</a>, CPSC’s political makeup has recently shifted following CPSC’s February 9, 2017 announcement of Republican Ann Marie Buerkle as Acting Chairman.  Although the partisan balance of CPSC is likely to shift to the Republicans later this year, Acting Chairman Buerkle currently heads a Commission with three Democrat Commissioners.  At the March 1st meeting, the two Republicans, Acting Chairman Buerkle and Commissioner Joseph Mohorovic, cast the two votes against revisiting rulemaking for magnet sets.  Commissioner Mohorovic strongly opposed new safety standards, stating:I think this has gotten so personal with this agency of having a rule being . . . thrown out that we are ready to hurl ourselves headlong back into rulemaking. . . . We’re doing this without taking the time to either learn the lessons about why we failed the first time or to figure out if there’s still any need for the rule. . . . I think this is a factor of pure ego and this agency has taken the thoughtful opinion of the Tenth Circuit personally and we just want to win for winning’s sake.<a href="#_ftn10" name="_ftnref10">[10]</a>When Democrat Commissioner Marietta Robinson’s term ends in October 2017, President Trump will appoint a new commissioner, and Acting Chairman Buerkle and Commissioner Mohorovic’s position on magnet sets likely will become the majority view at CPSC.We will continue to monitor CPSC’s actions with regard to magnet sets and provide updates on any new proposed standards in light of the Tenth Circuit opinion in Zen Magnets and the shifting roster at CPSC.<a href="#_ftnref1" name="_ftn1">[1]</a>  For background regarding CPSC’s prior enforcement activity regarding SREMS, see our prior post.<a href="#_ftnref2" name="_ftn2">[2]</a>See 82 Fed. Reg. 11347-02 (Feb. 22, 2017) (notice of meeting).<a href="#_ftnref3" name="_ftn3">[3]</a>  Reported in full in our prior post.<a href="#_ftnref4" name="_ftn4">[4]</a>  Under the safety standard, SREMS that fell within the size sold by companies like Zen had to have a flux index of 50 kG2mm2 or less.  See 16 C.F.R. § 1240.3.  The SREMS in Zen Magnets had a magnetic flux index of 400 to 500 kG2mm2.  Zen Magnets, 841 F.3d at 1144.<a href="#_ftnref5" name="_ftn5">[5]</a>  Zen was the last remaining importer and distributor of SREMS by the time CPSC issued its 2014 Safety Standard.  See id. at 1146.<a href="#_ftnref6" name="_ftn6">[6]</a>  Video, Commission Meeting: Decisional Matter: Magnet Sets Safety Standard – Removal from the Code of Federal Regulations, Consumer Product Safety Commission (posted Mar. 2, 2017), <a href="https://cpsc.gov/Newsroom/Video/commission-meeting-decisional-matter-magnet-sets-safety-standard-removal-from-the">https://cpsc.gov/Newsroom/Video/commission-meeting-decisional-matter-magnet-sets-safety-standard-removal-from-the</a>.<a href="#_ftnref7" name="_ftn7">[7]</a>  Commission Meeting Video (posted Mar. 2, 2017).<a href="#_ftnref8" name="_ftn8">[8]</a>Id.<a href="#_ftnref9" name="_ftn9">[9]</a>Id.<a href="#_ftnref10" name="_ftn10">[10]</a>Id.