New York City Advances Breathtakingly Broad Concept of “Government Speech” in Tobacco Warning Case

Cross-posted by Forbes.com on WLF contributor site

Imagine a law requiring cupcake shops to display a large sign near their cupcake display informing their sweet-toothed customers: “Eating Cupcakes Can Lead to Obesity and Diabetes.  Stop Eating Cupcakes Today.”  Or a law requiring car dealers to display the following sign in their showrooms:  “Automobile accidents kill over 35,000 people each year.  Stop Driving Cars Today.”

However well-intentioned such a law might be, the notion of forcing retailers to actively participate in encouraging their customers not to purchase their own products seems not only unfair, but unthinkable.  Given the importance the Supreme Court has placed on the First Amendment right to speak and to refrain from speaking, it would be surprising for the Government to attempt to uphold and enforce such a law.  But that’s precisely what New York City is asking the U.S. Court of Appeals for the Second Circuit to do in the case of 23-34 94th St. Grocery, Corp. v. New York City Board of Health. Continue reading “New York City Advances Breathtakingly Broad Concept of “Government Speech” in Tobacco Warning Case”

Nutella Class Action Settlement: Not Part of a Balanced Civil Justice System

Cross-posted by Forbes.com at WLF’s contributor site

We’ve commented twice before (here and here) on the indigestion-causing class action suits that were filed in New Jersey and California against Ferrero, the maker of Nutella. The gist of the complaints is that Ferrero misled consumers with statements and images on the product label and in ads that Nutella was “healthy” by not being sufficiently transparent about the sugar and fat it contained.

Ferrero has decided to settle both cases. The terms of the now preliminarily approved California settlement and the proposed NJ settlement inspired some reasoned venting at the Consumer Class Actions and Mass Torts blog. Given our coverage of the cases and our larger concerns with food/beverage regulation-through-litigation, we offer below some (reasoned) venting of our own.

The Monetary Awards. Plaintiffs’ class counsels in New Jersey are proposing Ferrerro create a fund of $2.5 million from which anyone who claims they purchased Nutella thinking it was “healthy” can seek reimbursement. In California, the proposed amount is $550,000, and is limited to state residents. Members of the “settlement class” can claim up to $20 each (four bucks for each Nutella jar, up to five jars). If there is cash left over in the funds after a period of time, the claimaints may receive more money and/or money may be “put to a cy pres use that will benefit the Class.”

If crusading against “disfavored” foods and beverages would “benefit the Class,” we wouldn’t be suprised to see cy pres disbursement applications by the academic and nonprofit institutions on this list from WLF’s Eating Away Our Freedoms project. We hope the presiding judges resist any such entreaties. Continue reading “Nutella Class Action Settlement: Not Part of a Balanced Civil Justice System”

Finger on the Pulse: From Our Blogroll and Beyond

  • California legislator revives idea of state taxation of punitive damage awards (California Punitive Damages)
  • The changing world of shareholder class action securities litigation (D&O Diary)
  • Supreme Court’s Mensing generic drug preemption ruling might benefit non-drug defendants (Drug & Device Law)
  • Not that it should or will matter to the Justices, but a majority of Americans want ObamaCare’s individual mandate found unconstitutional (Volokh Conspiracy)
  • The broader implications of Supreme Court’s Golan v. Holder copyright decision (Patently-O)
  • Are requirements for agencies to do notice-and-comment rulemaking biased towards established business interests? (RegBlog)
  • State and local hydraulic fracturing bans threaten natural gas extraction (Fracking Insider)
  • Is Europe’s “right to be forgotten” censorship masquerading as privacy protection? (Tech Liberation Front)
  • Despite long-standing myth to the contrary, OSHA does have regulatory authority over businesses with 10 employees or less (OSHA Law Update)

Second Circuit Ruling: All Is Not Lost for Chevron in Ecuador Battle

Cross-posted by Forbes.com at WLF contributor site

Chevron Corp. suffered a setback yesterday in its efforts to prevent enforcement of a $17.2 billion judgment issued by an Ecuadorian court based on charges that Chevron is responsible for environmental damages in the Ecuadorian Amazon. The U.S. Court of Appeals for the Second Circuit in New York issued an opinion explaining its decision to overturn a district court injunction barring enforcement of the judgment outside of Ecuador. But while yesterday’s decision is a setback for Chevron, it still has numerous effective means of resisting enforcement efforts.

Chevron filed suit in federal district court in New York in February 2011, alleging that the Ecuador judgment was the product of a fraud perpetrated by the Ecuadorean plaintiffs and their lawyers and that the Ecuadorian courts are corrupt. Chevron seeks damages from the defendants – who include all of the Ecuadorian plaintiffs; many of their lawyers; and the Amazon Defense Front (ADF), the group slated to collect and administer any funds collected on the Amazon judgment. Chevron charged the defendants with, among other things, fraud and violation of the federal anti-racketeering law. Chevron also included a claim under New York’s Recognition Act. Pursuant to that claim, Chevron sought an injunction barring the defendants from attempting to collect their Ecuadorian judgment. Continue reading “Second Circuit Ruling: All Is Not Lost for Chevron in Ecuador Battle”

FDA’s Way or the Highway: Its Unlawful Alteration of “Device” Definition

DSW in action

In a single response to a request from one company in 2009, and then subsequently in 2011 through a draft guidance document, the Food & Drug Administration (FDA) is sweeping aside decades of agency practice on how it determines what is a “medical device” and what is a “drug.” The distinction is a critical one for health product companies, as the drug approval process in generally far lengthier and more expensive than the device process. Equally or more important, however, is that FDA’s decision-making approach evaded public and legislative accountability.

 
The statutory definitions of “drug” and “device” are very similar, with one provision in the law providing the key difference – it’s a device if the product “does not achieve its primary intended purposes through chemical action within or on the body of man or other animals and . . . is not dependent upon being metabolized for the achievement of its primary intended purposes.”
 
In 2009, Prevor, a company which produces products that address chemical risks and exposure, asked FDA to categorize its Diphoterine® Skin Wash (DSW) as a device. DSW’s “primary intended purpose” is to protect workers from toxic chemicals by displacing the chemicals from skin following an accidental spill. That is done through propelled liquid. The liquid contains 4% diphoterine, which can help neutralize some chemical agents on the skin. Prevor’s studies showed that this feature accounted for 10% of its therapeutic value. In its response in which it categorized DSW a “drug,” FDA wrote that this 10% was enough to indicate that DSW works, “at least in part” through chemical action. Continue reading “FDA’s Way or the Highway: Its Unlawful Alteration of “Device” Definition”

WLF Video, Paper Assesses Who’s Liable When a “Reprocessed” Medical Device Fails

On January 20, Washington Legal Foundation released a new Working Paper which details a precedent-setting court decision on medical devices and product liability. Kapps v. Biosense Webster: Who Is Liable When A Reprocessed Medical Device Causes Injury? was authored pro bono by Hollingsworth LLP attorneys Stephen Klein and Andrew Reissaus.  Mr. Klein also addressed the issues in the Kapps case and their broader significance in a new WLF LegallyBrief video that appears below.

Fail to Use Non-Existent Biofuel, Earn Fine: A Snapshot of Government Incomptence

At Washington Legal Foundation (WLF), we routinely make constitutional objections to government’s interference in the private market place.  For example, in the coming weeks we’ll file an amicus brief in Florida v. HHS that will argue the Constitution prevents the government from forcing Americans to purchase a product they don’t want.  Similarly, on January 13, we published a paper by Charles M. English that questions the constitutionality of government-mandated speech.

But we’re also bothered by government regulation and market interference simply because the government is too frequently incompetent.  As we noted in an “In All Fairness” advertorial feature we published in the March 30, 2009 edition of The New York Times:

The same government which has given us abysmal veterans’ medical care, a disgraceful Hurricane Katrina response, an estimated 13 million illegal aliens, and the Postal Service now wants to fix our health care system.  Can the American patient really trust government bureaucracy with such complex surgery?”

If your response is anything other than a definite “No,” then take a look at this recent EPA action:

As reported by the The New York Times on January 9, 2012, “When the companies that supply motor fuels close the books on 2011, they will pay about $6.8 million in penalties to the Treasury because they failed to mix a special type of biofuel into their gasoline and diesel as required by law.”  The only problem, as the article notes in the next paragraph, is that the required biofuel doesn’t exist – it simply hasn’t been produced.  (“A Fine for Not Using Biofuel That Doesn’t Exist”) Continue reading “Fail to Use Non-Existent Biofuel, Earn Fine: A Snapshot of Government Incomptence”