Product Stewardship and Textiles

By Christopher Bell on April 27, 2017 Posted in EPA

The environmental parameters associated with textiles continue to attract both regulatory and value chain attention. In an interesting development, Vietnam just relaxed its chemical testing rules for exported textiles (e.g., textiles and apparel exported to the U.S. and EU markets), specifically for formaldehyde and aromatic amines. Formaldehyde is frequently used in treating textiles, including popular “no-iron” and “permanent press” textiles. Aromatic amines are present in some common dyes used in textiles and include chemicals that are either known or suspected to be carcinogens.

The presence of these chemicals in textiles is relatively unregulated at the federal level in the United States, though there has been some attention at the state level. For example, formaldehyde is subject to California’s Proposition 65, and some crafts/textile stores in California post Proposition 65 warnings for their imported textiles. Washington, Maine, and Minnesota have statutes with reporting requirements for what are typically described as “high priority” chemicals, including formaldehyde, intentionally added to children’s products (though not all of these encompass apparel). There has been occasional litigation based on claims of skin irritation allegedly caused by the presence of formaldehyde in apparel.

Perhaps more importantly than formal regulation, the chemical content of apparel, including formaldehyde, receives a certain amount of attention in social media. This reverberates into market impacts, with some companies trying to leverage this into a competitive advantage by advertising “chemical-free” clothing. This leverage could increase if major buyers begin to drive chemical content requirements through their value chains. Some of the most prominent retailers, including Walmart, have already launched initiatives to decrease or remove certain chemicals, including formaldehyde, from a range of products, including personal care, cosmetics and cleaning products. Some major buyers and brands, including Walmart, Levi Strauss, and VF have signed on to policies and standards associated with sustainable forestry and agriculture that affect the value chain for a variety of raw materials for textiles, including rayon and cotton.

Decisions by Vietnam to impose more stringent chemical content standards for apparel on its own market than it does for its strong apparel export market might increase public and retailer attention to this issue. The most likely ongoing pressure points will probably be from social media, consumers, and companies seeking to leverage this issue for competitive advantage. And even if increased federal regulation is viewed by some as less likely under the current administration, that will not restrict state regulators from taking action (the preemption provisions of the newly amended Toxic Substances Control Act will operate, roughly speaking, in inverse proportion to the degree of EPA regulation of specific chemicals: the less active EPA is, the more freedom of movement at the state level).

Medical Monitoring Claims in Illinois, Part 2

By Caitlyn E. Haller on April 13, 2017 Posted in Litigation

In our last post, we discussed Illinois Appellate Court decisions concerning medical monitoring claims. Plaintiffs have been similarly unsuccessful at the trial court level. Judge Leroy Martin in the Circuit Court of Cook County (Chancery) dismissed a medical monitoring claim pursuant to defendants’ 735 ILCS 5/2-615 motion to dismiss. See Pierscionek v. Ill. High Sch. Ass’n, 2015 Ill. Cir. LEXIS 24 (Ill. Cir. Ct. October 27, 2015). The court likened plaintiff’s claim for medical monitoring to Lewis I and dismissed the complaint:

The court in Lewis was concerned with some of the same issues presented in the case at bar—a plaintiff who fails to allege the existence of a present injury and the fundamental difference between a claim seeking damages for an increased risk of future harm and one that seeks compensation for the cost of medical examinations. Ultimately, the Lewis decision determined that plaintiffs had failed to plead tort claims because they failed to establish a causative link between the tortious acts of a specific defendant and damages sought — the cost of screening for lead poisoning….The complaint before this court seeks ongoing medical monitoring as opposed to screening for a medical condition but the pleading fails to establish a causative link between IHSA and the damages sought.

The opinion further stated, unequivocally, “Illinois law does not recognize a medical-monitoring-only cause of action.” Pierscionek, 2015 Ill. Cir. LEXIS 24, *11 (Ill. Cir. Ct. Oct. 27, 2015).

In furtherance of the Jensen court’s admonishment that that Lewis I does not support the viability of medical monitoring only claims, the Illinois Appellate Court has also supported the rejection of such claims. See Campbell v. A.C. Equip. Serv. Corp., Inc., 242 Ill. App. 3d 707 (4th Dist. 1993) (where the court did not recognize a cause of action to recover expenses for medical monitoring absent present physical injury); Betts v. Manville Personal Injury Settlement Trust, 224 Ill. App. 3d 882 (4th Dist. 1992) (where the court rejected medical monitoring damages in an asbestos case absent proof of present injury).

While the Illinois Supreme Court has not yet recognized this type of claim, several federal district court opinions have concluded that Illinois would recognize independent claims for medical monitoring. Stella v. LVMH Perfumes & Cosmetics USA, Inc., 564 F. Supp.2d 833, 836 (N.D. Ill. 2008); Gates v. Rohm & Haas Co., 2007 WL 2155665, at *4-5 (E.D. Pa. July 26, 2007) (applying Illinois law); Muniz v. Rexnord Corp., 2006 WL 1519571, at *6-7 (N.D. Ill. 2006); Carey v. Kerr-McGee Chemical Corp., 999 F. Supp. 1109, 1119 (N.D. Ill. 1998)(predicting that the Illinois Supreme Court would uphold a claim for medical monitoring without requiring plaintiffs to plead and prove a present physical injury).

If the Illinois Supreme Court allows medical monitoring claims for plaintiffs without a present physical injury, the court should provide instructions for how a defendant can establish and manage a fund for medical monitoring. Such questions include whether a defendant must monitor for other medical issues, time limitations, administrative authority, size of fund, and adapting to increased costs of health care. Without guidance as to these fundamental issues, the courts may be faced with increased litigation over the proper way for a defendant to establish and manage a medical monitoring fund.

D.C. Circuit Limits the FCC’s Rulemaking Authority Under the TCPA … and the FCC Chairman Agrees

By Frank Citera, Gregory E. Ostfeld and Aaron S. Klein on April 10, 2017 Posted in Internet and Technology, Litigation

On March 31, 2017, the D.C. Circuit held that the Federal Communications Commission (FCC) lacked authority under the Telephone Consumer Protection Act, as amended by the Junk Fax Prevention Act (collectively, the TCPA), to issue a rule, known as the “Solicited Fax Rule,” requiring businesses to include opt-out notices on solicited fax advertisements. Bais Yaakov of Spring Valley, et. Al. v. Federal Communications Commission and United States of America, No. 14-1234 (D.C. Cir. Mar. 31, 2017). Following this ruling, FCC Chairman Ajit Pai issued a statement praising the ruling, reiterating his earlier criticism that the FCC’s approach to interpreting the law in the Solicited Fax Rule reflected “convoluted gymnastics.” The decision in Bais Yaakov and Chairman Pai’s statement may have implications beyond the Solicited Fax Rule, as other FCC interpretations of the TCPA arguably deviate from the statutory text in a manner similar to the Solicited Fax Rule. Accordingly, Bais Yaakov may signal an opportunity for TCPA defendants to pursue new challenges to the FCC’s rulemaking authority in opposition to questionable agency interpretations.

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Medical Monitoring Claims in Illinois, Part 1

By Caitlyn E. Haller on April 6, 2017 Posted in Litigation

Medical monitoring has yet to gain traction in Illinois. Plaintiffs with medical monitoring only claims – seeking future testing to determine whether defendants’ alleged negligence has caused the injuries feared – have been unsuccessful in Illinois. Although the Illinois Supreme Court has not ruled specifically on medical monitoring, existing Illinois law does not allow for medical monitoring absent a present physical injury.

The Illinois appellate court first explored a remedy for medical monitoring without proof of present physical injury in Lewis v. Lead Industries Ass’n (793 N.E. 2d 869 (Ill. App. Ct. 2003) (Lewis I). The Lewis plaintiffs sought to recover damages for defendants’ alleged manufacture, distribution, and promotion of paint containing lead. The Lewis case was dismissed for failure to state a claim, but the plaintiffs appealed the dismissal. On appeal, the court accepted the plaintiffs’ theory that the cost of lead testing or assessment could constitute compensable damage, but held that plaintiffs failed to state a claim because they had not adequately pled the requisite causation element. The plaintiffs argued that the complaint contained causation allegations because they had alleged that “the risk of poisoning from exposure to lead pigments in paint such as that promoted and supplied by the defendants is so significant that it has become medically necessary that all children six months through six years of age residing in the State of Illinois be tested” under the Lead Poisoning Prevention Act (410 ILCS 45/1 et seq. (West 2000)). The court disagreed, holding that the plaintiffs had failed to identify a specific manufacturer and therefore failed to allege the required causal link between a specific defendant’s acts and the plaintiff’s injuries. The appellate court reversed the decision in part, but did not reject medical monitoring absent physical injury. See Lewis v. NL Indus., 2013 IL App (1st) 122080 (Lewis II). However, in Jensen v. Bayer AG, the court found that the plaintiff’s claim for medical monitoring for potential future harm, where no present injury is shown, could not proceed. 371 Ill. App. 3d 682, 693 (1st Dist. 2007). The Jensen plaintiffs brought a claim for medical monitoring without alleging a present injury, arguing that taking medication for cholesterol increased their risk of developing a disease in the future. In response to plaintiffs’ reliance on Lewis I, the court stated that Lewis I did not address whether a plaintiff may bring a claim for medical monitoring for potential future harm where plaintiff does not allege a present injury. The Jensen court further cautioned that Lewis did not provide trial courts with guidance on the elements necessary to state an independent claim for medical monitoring absent present injury.

In HPF, L.L.C. v. Gen. Star Indem. Co., 338 Ill. App. 3d 912, 913 (1st Dist. 2003), the court examined the duty to defend suits for medical monitoring. The insured was a distributor of herbal dietary supplements (Herbal Phen-Fen) marketed as safe and effective treatments for obesity. The insured’s policy provided coverage for “those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies.” Id. at 916. The underlying complaint sought an injunction against the insured based on misleading marketing and unlawful distribution of an alleged ineffective supplement. The complaint did not seek damages based on bodily injury, but, in the prayer for relief, sought to establish a medical monitoring fund for users of Herbal Phen-Fen to test for future negative health effects. Absent allegations of bodily injury to plaintiffs, the insurance carrier denied that it had a duty to defend or indemnify the insured. The court agreed, finding that the underlying complaint did not seek damages for bodily injury and did not fall within the insured’s coverage policy. Id. at 918.

The most recent case involving medical monitoring before the Illinois Appellate Court was dismissed due to a statute of limitations issue. See Allen v. YRC Worldwide Inc., 2015 IL App (1st) 143053. Defendants filed a 2-619.1 motion to dismiss plaintiffs’ complaint alleging the defendants were responsible for contaminating the village water supply with vinyl chloride. Defendants’ 2-615 motion sought to dismiss the claim for failure to state a cause of action for medical monitoring, while Defendants’ 2-619 motion sought dismissal based on statute of limitations. The plaintiffs’ complaint requested that defendants fund periodic medical monitoring for plaintiffs to determine whether plaintiffs were suffering from any of the increased risks associated with vinyl chloride. The Allen court found that the statute of limitations was not tolled and barred Plaintiffs’ medical monitoring claim against defendants for allegedly contaminating residents’ water supply. Based on this finding, the court did not determine whether the plaintiffs stated a claim for medical monitoring.

To read Part 2, click here.

GT Attorneys to Address Prop. 65 in Practice – Lessons Covering Hot Topics and Recent Developments Affecting Consumer Product Companies

By Greenberg Traurig on March 31, 2017 Posted in Event, Prop 65

On Tuesday, April 4, 2017, at 1:00 pm ET, Greenberg Traurig Attorneys Anthony Cortez and Greg Sperla will be presenting a webinar hosted by AudioSolutionz entitled “Proposition 65 – Hot Topics and Recent Developments Affecting Consumer Product Companies.” This webinar will assist attendees to better understand the Impact of Proposition 65 on retail business and get practical strategies for compliance.

Proposition 65 now covers all industries doing business in California, but retail and CPG are in the crosshairs. To make matters worse, 2017 is likely to bring more litigation. Taking steps now to avoid a lawsuit could save thousands later on. This session will help participants to understand what changes have occurred and what potential costly proposals are in the works. Guidance will be given on Prop. 65, and practical examples of real-life scenarios will be discussed.

Session highlights will include:

Proposition 65 covers nearly every retail and CPG company doing business in California
Consumer product businesses hit hard in recent years, but 2017 could be worse
Major changes to Proposition 65 warnings adopted in 2016, but compliance should start now
Retailers have a wide variety of new obligations and compliance options
New chemicals listed in 2015 will result in even more litigation in 2017
New litigation trends in 2017 mean potentially more lawsuits for retail/CPG

Anyone interested in registering can do so here. You may apply coupon code “PROP40” to get $40 off at checkout.

Greenberg Traurig’s Food & Beverage Group Presents at Natural Products ExpoWest

By Greenberg Traurig on March 28, 2017 Posted in Event, Food & Beverage Industry, Prop 65

Greenberg Traurig’s Food & Beverage practice group recently gave a very well-attended presentation at the world’s largest natural, organic, and healthy products show of the year in Anaheim, California, Natural Products ExpoWest. The presentation, entitled “All Natural to Zero Calories: The A to Z of Claims,” addressed claims made for products in the food and beverages category, and the effects these claims can have on a variety of areas. Justin Prochnow, a shareholder in GT’s Denver office, kicked off the presentation, discussing the regulation of claims used in labeling and advertising, as well as some of the claims that have been frequently targeted by class action plaintiffs lawyers. Rick Shackelford, Los Angeles shareholder and co-chair of GT’s Class Action practice group, followed with a discussion about some of the recent class action lawsuits in the sector and what to do when presented with a demand letter or Complaint from a plaintiff’s lawyer. Anthony Cortez, a shareholder in the Sacramento office, next talked about Proposition 65 issues affecting the food, beverage, and supplement industries, including the disclosure of BPA in packaging. Finally, Ed Schultz, a Corporate practice shareholder in the Los Angeles office, provided some insights on factors that private equity groups and other investors might be looking at when investing in food and beverage businesses and considerations for owners looking to raise funds or sell their company. The result was a great opportunity to provide some valuable insights as well as outline the depth of experience and range of services that GT attorneys can provide to companies in the food, beverage, and supplement industries. Please do not hesitate to reach out to any of the GT attorneys who were involved in the panel discussion with questions related to the food and beverage sector.

Key Class Action Takeaways From Briseno v. ConAgra Foods

By Rob Herrington, Rick L. Shackelford and Jeff E. Scott on February 8, 2017 Posted in Class Action Litigation

In Briseno v. ConAgra Foods, Inc., ___ F.3d ___ (9th Cir. Jan. 3, 2017), the Ninth Circuit held that Rule 23 does not require plaintiffs to establish an “administratively feasible” means of identifying putative class members, expressly rejecting decisions like Carrera v. Bayer Corp., 727 F.3d 300, 306-08 (3d Cir. 2013). But the decision goes well beyond administrative feasibility. Plaintiffs counsel will argue that the decision also endorses aggregate liability and damages determinations in consumer fraud cases to be followed by a “claims process” overseen by claims administrators. The impact of the decision remains to be seen, but Briseno is bad news for class action defendants, as it likely will make class certification easier in the Ninth Circuit. This article discusses the Briseno decision and offers key takeaways for future cases.

The Ninth Circuit’s Briseno Decision

The Briseno case is one of many class actions challenging food labels. These cases have become substantially more popular in the plaintiffs’ bar, because they do not usually present any opportunity for defendants to move them into arbitration based on class action waivers in arbitration agreements. Customers who buy off the shelf do not agree to arbitrate their claims.

The Briseno plaintiffs claim that a “100% Natural” label is false or misleading because Wesson oils are made from bioengineered ingredients, which the plaintiffs argue are not “natural.”

Greenberg Traurig’s Gretchen Miller Chairs Defense Research Institute’s Annual Product Liability Conference

By Greenberg Traurig on January 19, 2017 Posted in Event

Gretchen N. Miller, Products Liability & Mass Torts shareholder at Greenberg Traurig, is serving as Program Chair for the Defense Research Institute’s (DRI) 2017 Products Liability Conference. The annual event will take place Feb. 8-10, 2017, at the Cosmopolitan of Las Vegas. Miller will be welcoming conference attendees on Wednesday, Feb. 8, at 8:15 a.m., and providing additional remarks on Thursday, Feb. 9, at 8:15 a.m. In addition to Miller, Greenberg Traurig Intellectual Property & Technology Practice Group Shareholder Ed Chansky will be speaking on “Citizen Enforcers, Consumer Activists and ‘Mommy Bloggers’” on Feb. 8, at 11:30 a.m. To read the full press release, click here.

EPA: Research Shows Herbicide Glyphosate Unlikely to Cause Cancer

By Frank Citera and Aaron S. Klein on September 28, 2016 Posted in EPA

Introduction

The Environmental Protection Agency (EPA) recently concluded that the available data at this time suggest that the herbicide, glyphosate, is “not likely to be carcinogenic to humans.”

The EPA’s Office of Pesticide Programs (OPP) undertook the glyphosate study as part of its periodic review of pesticides registered under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), the federal statute governing the registration and use of pesticides. These reviews are conducted at least every fifteen years to determine if pesticides (a term which encompasses herbicides like glyphosate) still meet the criteria for FIFRA registration.

According to the report, “In epidemiological studies, there was no evidence of an association between glyphosate exposure and numerous cancer outcomes; however, due to conflicting results and various limitations identified in studies investigating [non-Hodgkin’s lymphoma], a conclusion regarding the association between glyphosate exposure and risk of [non-Hodgkin’s lymphoma] cannot be determined based on the available data.” U.S. EPA Off. of Pesticide Programs, Glyphosate Issue Paper: Evaluation of Carcinogenic Potential, at § 6.7 (Sept. 12, 2016). The report goes on to state: “Overall, animal carcinogenicity and genotoxicity studies were remarkably consistent and did not demonstrate a clear association between glyphosate exposure and outcomes of interest related to carcinogenic potential.” Id. The release of the 227-page issue paper precedes an EPA-organized meeting of independent scientists that is scheduled for October 18. At the meeting, which will take place at the OPP headquarters in Arlington, Virginia, outside scientists will review the EPA’s findings.

Background

Glyphosate is a non-selective, phosphonomethyl amino acid herbicide registered to control weeds in various agricultural and non-agricultural settings. An herbicide with a broad range of agricultural, commercial, and household applications, glyphosate has been the subject of intense debate surrounding its potential link to non-Hodgkin’s lymphoma and various other forms of cancer.

In March 2015, the International Agency for Research on Cancer (IARC), a subdivision of the World Health Organization (WHO), determined that glyphosate was a probable human carcinogen. The IARC also recommended that the Joint Meeting on Pesticide Residue (JMPR), another arm of the WHO, reevaluate glyphosate in light of the IARC’s findings.

Later, in November 2015, the European Food Safety Authority (EFSA) determined that glyphosate was unlikely to pose a carcinogenic hazard to humans. Additionally, in response to the IARC’s recommendation, the JMPR released its evaluation in May 2016, concluding that glyphosate was unlikely to pose a carcinogenic risk to humans from exposure through diet.

Moving Forward

The EPA’s October 18 meeting will have significant implications for food manufacturers and agrochemical companies alike. Following the meeting, the EPA plans to release its final report in early-2017. In the report, the EPA is expected to make its final determination as to whether companies may continue to use and sell glyphosate and, if so, create guidelines for doing so. We intend to closely monitor this meeting and plan to outline the EPA’s final report on our blog once it is released.

*Not admitted to the practice of law.

Will Ninth Circuit Class Actions Force Resolution of Ascertainability Circuit Split?

By David E. Sellinger and Aaron Van Nostrand on August 31, 2016 Posted in Class Action Litigation, Litigation

“Ascertainability” in the context of civil litigation involves the identification of individuals who qualify for membership in a putative class action. Although not an explicit requirement under Rule 23, since the US Court of Appeals for the Third Circuit refused to certify a class due to difficulties in objectively and efficiently identifying class members in Carrera v. Bayer Corp., 727 F.3d 300 (3d Cir. 2013), lower federal courts have been sharply divided over the meaning and extent of the ascertainability requirement for certifying a class.1 The ascertainability issue has taken on particular importance in low-value consumer class actions involving inexpensive retail products, as these cases have become an increasing burden for manufacturers, distributors, and retailers in the current litigation environment—involving a flood of class actions over labeling on consumer products.

Unfortunately, especially for companies that operate nationwide, the US Supreme Court has not yet intervened in this quagmire. After having denied certiorari in two cases last term that addressed ascertainability, the next spate of cases from the Ninth Circuit likely will not ripen for consideration by the Supreme Court until the 2017 Term. Thus, uncertainty and forum-shopping by plaintiffs’ lawyers exploiting the split among the courts are likely to persist for the foreseeable future.

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Please note that this Legal Backgrounder is presented for informational purposes only and it is not intended to be construed or used as general legal advice nor as a solicitation of any type.