Monsanto Uses the Constitution to Challenge Warning Labels for Herbicide

Monsanto has, at least temporarily, lost its fight to avoid a Prop 65 warning label on its products containing glyphosate, a chemical used in the popular herbicide Roundup. On January 27, 2017, a California judge tentatively dismissed Monsanto’s claims that the State of California unconstitutionally turned to an unelected, European organization to decide whether glyphosate posed a cancer risk.

 

Background
Prop 65, also known as Proposition 65 or the Safe Drinking Water and Toxic Enforcement Act of 1986, was passed through California’s ballot initiative process in 1986 and codified in California’s Health and Safety Code. It prohibits businesses from releasing chemicals “known to the state to cause cancer or reproductive toxicity” into drinking water, and from exposing people to these chemicals without providing “clear and reasonable” warnings. The state publishes and frequently revises a “Prop 65 List” of chemicals covered by Prop 65’s warning label requirements. The list currently includes more than 900 chemicals.

In September 2015, California’s Office of Environmental Health Hazard Assessment (OEHHA) issued a notice of intent to list glyphosate as a Prop 65 chemical. That notice was based on a March 2015 report by the International Agency for Research on Cancer (IARC) that re-classified glyphosate as “probably carcinogenic to humans.” The IARC is a specialized agency that identifies as part of the World Health Organization. IARC uses this category when there is limited or inadequate evidence showing that a chemical causes cancer in humans, yet there is sufficient evidence demonstrating that the chemical causes cancer in animals.

The listing process at issue here—sometimes referred to as the Labor Code listing mechanism—involves the interplay of two code sections, one in the state’s Health and Safety Code and one in its Labor Code. OEHHA has interpreted these sections to require the agency to add any chemical IARC identifies as a carcinogen to the Prop 65 list.

The Lawsuit
On January 21, 2016, Monsanto petitioned for a review of the listing and sued OEHHA to prevent it from listing glyphosate as a Prop 65 chemical. Monsanto’s arguments invoked various constitutional provisions:

  • First, automatically listing IARC carcinogens as Prop 65 chemicals violates the “non-delegation doctrine” because it gives law-making power to IARC, an “unelected, undemocratic, unaccountable, and foreign body.”
  • Second, OEHHA’s listing process violates Monsanto’s due process rights because the listing process lacks safeguards and government oversight, and does not prevent against arbitrary action.
  • Third, the listing process violates the state Constitution because it gives IARC, a “private corporation,” power over the listing process.
  • Fourth, the listing process violates the Guarantee Clause of the U.S. Constitution, guaranteeing a “Republican Form of Government,” because it gives IARC, an unelected and unaccountable foreign body, law-making authority.
  • Fifth, Monsanto argued that giving IARC law-making power is a “radical change” to California government that requires a constitutional amendment.
  • Last, the listing violates Monsanto’s free speech because scientists at OEHHA had previously determined glyphosate was unlikely to cause cancer, and the warning would therefore require Monsanto to put a false or misleading statement on its product.

On January 27, 2017, the California Superior Court of the County of Fresno issued a tentative ruling dismissing the complaint. All of Monsanto’s claims were rejected:

  1. OEHHA has not unconstitutionally delegated law-making authority to IARC because the voters and legislature made the basic policy decisions about Prop 65, and IARC is an outside agency that does technical fact-finding but lacks law-making authority.
  2. There is no due process violation because due process does not apply to OEHHA’s listing process, which is a “quasi-legislative” act.
  3. There is no violation of the California Constitution because Monsanto did not allege facts showing IARC is a “private corporation.” The evidence shows it is an international agency formed by the World Health Organization, and the listing mechanism does not give IARC special power or privilege.
  4. Monsanto’s Guarantee Clause claim fails because the Guarantee Clause is enforced by Congress, not the courts.
  5. The argument that OEHHA’s interpretation of Prop 65 is a “radical change” requiring a constitutional amendment is a reframing of the unconstitutional delegation of power claim, which the court had already rejected.
  6. The free speech claim is premature, because Monsanto can still avoid Prop 65 labels if its products satisfy exceptions to Prop 65’s warning requirements.

Takeaways
Many regulatory agencies—including OEHHA and EPA—and scientists have previously determined that it is unlikely that glyphosate presents a cancer risk to humans. When the California state court’s ruling becomes final, it may be troubling for companies like Monsanto. While companies that make products including glyphosate will have 12 months to comply with Prop 65 warning requirements after the chemical is added to the Prop 65 list, a label may deter farmers and individuals from using products containing glyphosate. And other companies—in addition to Monsanto—that make products containing glyphosate will need to place cancer-related labels on their products or else face civil suits under Prop 65.

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Hotel California: Supreme Court Will Review Whether Plaintiffs Can Check in to California Courts from Afar

On January 9, 2017, the United States Supreme Court granted review over a case from the California Supreme Court that could affect whether plaintiffs can bring product liability and mass tort claims in states where they don’t live and didn’t suffer an injury.

In Bristol-Myers Squibb Co. v. Superior Court of California, San Francisco County, No. 16-466, the Court will decide whether the California courts properly asserted jurisdiction over Bristol-Meyers Squibb (BMS). It will consider where companies that operate nationwide businesses can be sued, and how their activities in a state—including marketing or sales—could expose them to a lawsuit there.

If the Court decides that California courts have jurisdiction over BMS in this case, then companies could face more nonresident plaintiff lawsuits, particularly in California. For companies, these lawsuits could mean facing potentially plaintiff-friendly laws and courts and the inconvenience of defending a case in another part of the country.

Background
In Bristol-Meyers Squibb, 575 non-California residents joined 86 California residents suing BMS in San Francisco Superior Court. They alleged product liability and other claims stemming from the heart medication, Plavix. The nonresident plaintiffs were not treated by doctors in California, nor did they suffer any alleged injuries in the state.

The parties disagreed about whether those nonresident plaintiffs’ claims belong in a California court. The California Supreme Court determined that they did, holding that BMS had a significant presence in the state, and that the nonresident plaintiffs’ claims were related enough to the company’s business in California to satisfy due process. BMS had argued that the plaintiffs’ claims were not connected to its contacts with the state.

Those Summons Are Coming from Far Away
Bristol-Meyers Squibb arises out of the constitutional due process requirements courts must follow when claiming personal jurisdiction over a party. If a party has “minimum contacts” with a state, then the court there may have jurisdiction over it.

Courts can find personal jurisdiction in one of two ways: general or specific. When a business is operating in multiple states, courts will ask whether the business’s contacts in the forum state were “general” enough to warrant jurisdiction over any claim filed there, or “specific” in relating to the underlying claims in a particular lawsuit. The Supreme Court has set a high bar for general jurisdiction, holding that it applies only when a company’s contacts are so “continuous and systematic” that it is “at home” in the forum state.

The standard for determining specific jurisdiction—referred to as the “relatedness” requirement—is murkier. In its petition, BMS identified three tests used by courts to assess whether a claim is related to a company’s contacts in the state. Two tests base jurisdiction on whether a company’s contact with a state actually or legally caused a plaintiff’s injury. According to BMS, nine circuits follow this approach, making it the majority rule.

The third test—which California, Texas, and DC state courts, and the Federal Circuit use—is referred to as the “sliding scale.” The sliding scale approach considers how significant a company’s contacts with a state are. If a company has very minor contacts with a state, then the claim must be closely related to those contacts to obtain jurisdiction. Conversely, if a company has substantial contacts with a state, then a state court could find it has jurisdiction over a party even if the contacts are not related to the claim.

Applying the sliding scale in Bristol-Meyers Squibb, the California Supreme Court in a 4-3 ruling decided that it had jurisdiction over BMS and the plaintiffs’ claims. Though the court acknowledged that the nonresident plaintiffs’ claims were not directly related to BMS’s contact with California, it stressed the substantial contacts BMS had with California, particularly its nationwide marketing and distribution plans for Plavix.

The court further determined that BMS’s marketing and distribution in California related to the resident plaintiffs’ claims, and that because the same marketing and distribution plans existed in the nonresident plaintiffs’ home states, their claims were substantially connected to BMS’s contacts in California. BMS has now urged the U.S. Supreme Court to interpret “relatedness” to mean a direct causal relationship between a company’s contacts with a state and the underlying claim in the lawsuit.

Such a Lovely Place—to File a Lawsuit
The big issue here is how this decision will affect plaintiffs’ attempts to file complaints in jurisdictions that provide them legal or tactical advantages, known as “forum shopping.” California is known for having plaintiff-friendly courts, it has the largest economy in the United States, and many companies have business operations there. The Court’s decision will clarify whether companies must face a lawsuit brought by nonresidents as a cost of doing business in the Golden State.

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Food Fight: More Labeling Litigation in 2017

Food labeling litigation increased significantly last year, with many consumer groups alleging that products were misleadingly labeled and violated U.S. Food and Drug Administration labeling requirements. Consumers targeted phrases like “all natural,” “preservative-free,” or having “no preservatives.”

But FDA rules are unclear as to what these terms mean, which will likely spur more labeling litigation in 2017. Here we look at three main reasons for the anticipated increase in litigation.

Unclear Labeling Requirements
Currently, there are labeling-related lawsuits over frozen pizzas, jarred cucumbers, frozen fruit, coconut oil, coffee grounds, and pasta, to name just a few. Ambiguities in FDA regulations are in part fueling this litigation.

Here’s one example: the FDA regulates what types of additives are considered preservatives, but it does not provide guidance about how manufacturers should label a product when a preserving agent is used for another purpose, like flavor. One current lawsuit alleges that certain frozen pizzas are labeled as having “no preservatives,” even though the pizzas contain an additive, citric acid.

Manufacturers argue that this label is not misleading. Citric acid is a commonly used, FDA-allowed preservative in many foods. In the case of these pizzas, manufacturers argue that citric acid is added as a flavoring, not as a preservative—after all, frozen pizzas are preserved by being frozen.

In another case, a consumer alleged that certain frozen berry products were misleadingly labeled as “all natural fruit.” The allegations were based on the fact that the frozen berries were mixed with supposedly synthetic versions of citric acid and ascorbic acid (known as Vitamin C). Ascorbic acid, like citric acid, is a naturally occurring substance that is sometimes used as a preservative, but may also be used for its flavor and antioxidant properties.

The court dismissed this case based on the manufacturer’s argument that its “all natural” labeling referred to the actual fruit only, and that its suppliers used naturally synthesized citric and ascorbic acids in its products.

The Trump Administration’s Anti-Regulatory Stance
The new administration has indicated that it is likely to take a relatively anti-regulatory position. One of President Trump’s frontrunners to take over as head of the FDA has already called for fewer FDA regulations regarding pharmaceuticals.

The new administration will likely have similar attitudes towards the FDA’s food regulations. In this context, consumers may file more lawsuits based on federal and state laws to fill the perceived gap left by the FDA.

Recent Plaintiff-Friendly Ninth Circuit Decisions
Just this month, the Ninth Circuit issued a decision affirming class certification in a case alleging that oil products were misleadingly labeled as “100% Natural” even though the oil contained bioengineered ingredients. The Ninth Circuit’s decision held that Federal Rule of Civil Procedure 23 does not have an “administrative feasibility” requirement, meaning a court does not have to deny class certification just because there may be better alternatives.

This decision will likely encourage plaintiffs to file more food-labeling class actions in the Ninth Circuit, which is already known as the “Food Court” for its high volume of food-related lawsuits.

Looking ahead, consumers will likely continue to bring labeling-related litigation until the FDA clarifies its regulations. But new regulations appear to be far off in the future. In 2015, the FDA published a request for comments on the use of the term “natural” in food labeling.  But after the comment period closed in May 2016, the FDA did not issue any follow-up information or rulings on the use of “natural.” And regulations over the use of “no preservatives” or “preservative-free” are even more distant because the FDA has not yet issued a similar request for comments on the use of those terms in labels.

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Truly Exonerated? NHTSA’s Tesla Autopilot Investigation

When the fatal car crash involving a Tesla Model S sedan made headlines last fall, we posted about the accident and predicted that government authorities would classify the crash as being caused by driver error rather than an issue with the “Autopilot” system.

Our prediction turned out to be correct.  The National Highway Traffic Safety Administration (NHTSA) was still investigating the incident when we first posted about it, but on January 19, NHTSA closed its preliminary evaluation, which found that driver error was responsible.

Still, the performance of Automated Driver Assistance Systems, or ADAS, is an area of intense regulatory interest, and it was therefore not surprising to see NHTSA’s Office of Defect Investigation deploy a special crash investigations team to reconstruct the accident.

Several news reports have characterized NHTSA as having “exonerated” or “cleared” Tesla of any wrongdoing in connection with the crash. Officially, NHTSA merely closed the investigation, noting that it reached no conclusion about whether a defect existed and retained its right to reopen the investigation later.

That said, NHTSA was clearly satisfied with the performance of Tesla’s ADAS system during the crash, which allowed the agency to close its investigation.

NHTSA Guidance on Future Crashes Involving ADAS
The NHTSA report provides useful guidance on how the agency — and certainly vendors of ADAS equipment — can properly assess future crashes involving ADAS systems.

First, NHTSA emphasized the Tesla ADAS system’s “state of the art” performance in detecting situations requiring automated braking events.  Some crash events are almost impossible to detect, including so-called “Straight Crossing Path” incidents like the Florida crash. In the Florida accident, Tesla’s system did not detect the tractor-trailer that cut across the Tesla’s path. But because no other current systems can meaningfully detect these events, NHTSA did not fault Tesla’s system.

Second, NHTSA reinforced that a typical ADAS braking system still requires active driver monitoring. NHTSA spent several paragraphs analyzing the warnings provided by Tesla and other manufacturers that remind drivers to use automated braking systems as a driving aid, not a crutch. Tesla’s disclosures seemed less detailed than NHTSA would have liked, but NHTSA still determined they were reasonable, particularly based on Tesla’s post-incident improvements.

Lastly, NHTSA did not seem concerned that Tesla had deployed safety improvements after the accident in the ordinary course, as opposed to doing so as part of a “safety bulletin” or “recall.” Safety agencies tend to be wary of companies that provide supplemental safety information outside the context of a formal recall, sometimes labeling these efforts unacceptable “stealth recalls.” With ADAS systems, however, over-the-air updates are key to improving the algorithms that drive their functionality.  As a result, it would be imprudent for companies to withhold routine safety improvements or for safety agencies to demand a recall every time a company could improve safety at no additional consumer cost.

All in all, NHTSA’s investigation report provides a useful window into how NHTSA may investigate ADAS-involved crashes and the factors that will inform NHTSA’s thinking as to whether a defect is present. In an arena evolving as quickly as automated vehicle technologies, this is good news for auto suppliers, who likely appreciate any guidance they can get.

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Medical Device Manufacturers Face A Cybersecurity “Heartache”

Medical device manufacturers are now facing a new challenge: managing the cybersecurity of their products.

On January 9, the FDA issued a Safety Communication setting out potential risks that could be caused by a cybersecurity vulnerability in certain St. Jude Medical cardiac devices. A growing number of devices – including St. Jude Medical’s implantable cardiac devices and corresponding Merlin@home Transmitter – transmit data directly to physicians to allow direct patient and device monitoring.

These highly connected devices promise to vastly improve patient care. The monitoring features allow constant observation by physicians, which increases patient safety and reduces the number of office visits.

But do these devices also pose potential risks? The FDA stated that there have not been any reports of patient harm related to the vulnerabilities in St. Jude Medical’s devices. Still, the agency warns that such vulnerabilities could allow an unauthorized user to remotely access the device. The device’s programming could then be altered, causing rapid battery depletion or administration of inappropriate pacing or shocks to the heart.

St. Jude Medical’s multi-pronged approach to addressing patients’ safety concerns and mitigating reputational harm appears to have been successful, and it could provide a roadmap for other manufacturers navigating this complex field.

Background

The FDA’s Safety Communication is the latest development in an already complex story. Back in August 2016, the investment researcher Muddy Waters Research, together with cybersecurity research firm MedSec, released a report that claimed to have uncovered vulnerabilities in St. Jude Medical cardiac devices that could allow cyber-attacks. The report claimed – without factual basis – that the devices would likely be pulled from the market and independently called for a product recall. It also advised users to unplug the remote monitoring.

The FDA disagreed with the Muddy Waters report. It concluded instead that the benefits of continued use of monitoring features outweighed any potential vulnerability. But Muddy Waters did not back off. It then released a video of an alleged attack on a St. Jude Medical pacemaker. University of Michigan researchers disputed the video’s validity.

St. Jude Medical quickly fought back. On September 7, 2016, St. Jude Medical sued Muddy Waters and MedSec for defamation. St. Jude Medical claims that Muddy Waters, which held a short position in St. Jude Medical stock, was acting in self-interest and failed to comply with “ethical standard practices in the cybersecurity community and FDA guidance.” The complaint alleged that Muddy Waters sought financial gain “by publicly disseminating false and unsubstantiated information” that frightened and misled patients. St. Jude Medical asserted that “defendants must be held accountable so that such activity will not be incentivized and repeated in the future.”

St. Jude Medical did not stop with the defamation suit. It took additional measures to assure patients that cybersecurity was a priority. In October, St. Jude Medical announced that it had formed a Cybersecurity Medical Advisory Board. Further, when the FDA announced that it had identified cybersecurity vulnerabilities, St. Jude Medical responded the same day with a statement and a software fix that had received the FDA’s stamp of approval.

Takeaways

Cybersecurity in medical devices is a developing field. Standard practices and guidance are still being established, and it was only in December 2016 that the FDA published guidance addressing cybersecurity for medical devices that are already on the market. The FDA guidance calls on manufacturers to monitor devices on the market, assess how vulnerabilities could affect patients, use software patches and the like to mitigate risk before an attack occurs, and work with researchers to understand potential cyber threats.

St. Jude Medical has incorporated these elements into its response to cybersecurity concerns about its products.

In a recent post on the Agency’s blog, the FDA’s Associate Director for Science and Strategic Partnerships indicated that the FDA anticipates that cybersecurity threats will become more sophisticated as technology evolves. The agency intends to update and adjust its post-market cybersecurity guidance as the field evolves.

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When Santa Brings a Dud

Most holiday seasons, an “it” toy stands at the top of children’s wish lists. With this instant rise in popularity frequently comes a corresponding rise in consumer complaints. Years ago, the consumer complaints might get some media attention—but that attention usually focused on the consumer competition to acquire the demand-exceeds-supply product.

Now, people turn to social media to detail in words, pictures, and video any perceived problem with their much-hyped purchase. This contributes to a manufacturer’s nightmare, trying to quickly determine which complaints are just disappointed expectation and which might actually be a consumer safety issue. Can manufacturers likewise use social media to help calm the storm?

This year, children wanted Hatchimals and the complaints quickly followed.  

Like most years, Christmas 2016 brought a new “it” toy. Hatchimals were created by Spin Master, a Canadian company, and released in October 2016. Spin Master, a 20-year-old company, is no stranger to hit toys. It has also created other popular toys, including Air Hogs remote control cars, Moon Sand, and Bakugan action figures.

Big box retailers and toy review sites hyped Hatchimals as the holiday must-have toy. By early December, they were scarce. Although the toy retails for $59.99, Hatchimals were selling on eBay for over $200 in the weeks leading up to Christmas. Nobody wants a disappointed child on Christmas morning, even if that means paying three times the price.

But the highly anticipated Hatchimals resulted in sad children and angry parents when the toys did not do what the children expected upon arrival.

Here is what a Hatchimal is supposed to do: It starts as a brightly colored egg, then hatches into a robotic bird-like creature after 10-40 minutes. Children assist in the hatching process by holding, rubbing, and tapping their eggs. Once hatched, the creatures learn to walk, talk, and play games. Though Hatchimals initially speak gibberish, they learn words and phrases by mimicking those around them.

For many, the toy did not live up to its promises on Christmas morning. Some Hatchimals failed to ever start cracking out of their shells. Others started the pecking process, but then stopped mid-way through. Still others stopped working immediately after hatching.

A social media storm

Parents communicated their anger quickly. They flocked to social media and Spin Master, angrily telling Spin Master that their “child[ren] cried on Christmas morning.” Some asked the company for help because their children had attempted to hatch the creature for hours. Parents flooded You-Tube, Facebook, and Twitter with videos of their sad children and unresponsive Hatchimals.

Spin Master used social media in response. It released a statement on Christmas Day on its Facebook page. In the days following, the company told customers it “more than doubled” its customer care team, and extended hours to help parents. Spin Master also added troubleshooting tips to its website and a how-to video to assist customers in hatching the toy.

As of now, no legal action has been taken

 Spin Master’s public statement explained that “global demand exceeded [its] most aggressive projections.” It addressed consumer complaints quickly with customer support and apologies. As of now, it looks like this response may have helped stave off lawsuits. One Canadian consumer has threatened a class action lawsuit, but nothing has been filed.

Consumer response to the failed toy provides a telling lesson to other manufacturers: With the megaphone of social media, angry customers have an endless platform to voice their complaints. That same platform lets manufacturers respond to those complaints quickly and possibly avert legal action.

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Forum Shopping in Talc Cases

This past August, we wrote about potential legal challenges facing manufacturers and sellers of baby powder containing talc, a mineral that some argue may be linked to ovarian cancer. Today we look at some reasons why recent talc cases have had wildly different outcomes.

Although talc litigation is relatively new, over 1,700 cases have been filed, and the litigation has already taken twists and turns. In 2013, the first talc case went to trial and a South Dakota jury found Johnson & Johnson (“J&J”) negligent in failing to warn the plaintiff of the potential link between talc and ovarian cancer but declined to award any damages. Fast forward to this year when three Missouri juries also found against J&J, but this time awarded the plaintiffs damages of approximately $197 million.

On the other hand, on September 2, 2016, a New Jersey judge granted summary judgment to J&J, dismissing two cases that contained similar allegations to the Missouri cases before trial.

Why the different results?

  1. Location, Location, Location

The current wave of talc litigation demonstrates the significance of forum. All three of the cases that went to verdict were litigated in St. Louis. Approximately 1,200 talc cases have been brought in Missouri. There are at least three reasons why.

First, Missouri has a reputation for being a plaintiff-friendly jurisdiction. Missouri juries have frequently awarded plaintiffs multimillion-dollar verdicts in products liability cases. Second, plaintiffs’ attorneys in Missouri have undertaken an aggressive advertising program in and around St. Louis to recruit potential plaintiffs and influence potential jurors. According to J&J, 23% of national talc litigation advertising ran in the St. Louis area between March and May of this year. Third, as discussed more in the next section, Missouri has a relatively “flexible” standard for admitting expert testimony. This standard is especially important for talc litigation because the science behind the alleged dangers of talc is much less settled than for certain other products.

  1. Letting the Experts Speak

An important reason for these different outcomes is the scope of expert testimony allowed. Neither New Jersey nor Missouri has adopted the Daubert standard governing expert testimony. Both states, however, have rules of evidence that closely track or are identical to the Federal Rules. The main difference between the rules in these two states is in how the courts apply their “gatekeeping function.” In practice, Missouri courts reportedly apply a much more “flexible” procedure in allowing experts to testify. For example, in the three Missouri talc cases, the trial courts did not have pre-trial hearings regarding the admissibility of expert testimony, nor did the judges hear the expert testimony before it was presented to the juries.

Conversely, in the New Jersey talc cases, Judge Johnson delivered a 33-page reasoned opinion stating that the court had reviewed “approximately 100 treatises relating to talc, cancer, and miscellaneous related scientific issues” before and during its hearings to determine whether the expert testimony would be allowed.[1] Judge Johnson also highlighted specific portions of plaintiffs’ expert testimony that seemed to be internally inconsistent. For example, although plaintiffs’ experts testified that inflammation in the affected area is a hallmark of talc-caused ovarian cancer, on cross-examination those same experts admitted that no inflammation was observed in plaintiffs’ tissue samples.

Judge Johnson’s decision will immediately affect the other 200 or so talc cases that have been consolidated before him. Nationwide, however, it’s unclear how his decision will affect the course of talc litigation. Some commentators are calling talc the “new tobacco” and compare it with asbestos, DES, and other mass tort litigation. But Judge Johnson’s opinion may cause other courts to take a harder look at plaintiffs’ science and find that there simply isn’t enough proof to back up plaintiffs’ claims.

[1] Carl v. Johnson & Johnson, et al., No. ATL-L-6546-14 at 3 (N.J. Super. Ct. Sept. 2, 2016).

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TSCA and Asbestos—a New Approach or One That Reveals the Same Old Problems?

On November 29, EPA announced that it will review the hazard and exposure risks caused by asbestos. Asbestos will be one of the first ten substances to be evaluated under the TSCA amendments commonly referred to as the Lautenberg Act. As we have discussed elsewhere, TSCA now requires EPA to produce a risk evaluation work plan for these substances by June 2017 and complete its evaluation within three years following. If EPA determines any of these substances pose unreasonable risks, then EPA must take further action to mitigate any risks.

Asbestos is different from the other substances on EPA’s list and poses different challenges from the others, which all are more traditional industrial chemicals. In contrast to the other chemicals, “asbestos” is not really manufactured itself even when it’s used in products because in raw form it exists in nature; has been the focus of massive product liability litigation for a generation; and presents a different set of compliance challenges for industry.

Certain types of “asbestos”—usually defined as a group of silicate minerals with fibrous properties—have historically been component parts of many industrial products because asbestos functions as an insulator. Litigation over asbestos-containing products has driven more than 100 companies bankrupt. Plaintiffs in these cases argue that asbestos in commercial products causes chronic health conditions like asbestosis and mesothelioma.

Yet EPA has never banned asbestos. More than 25 years ago, EPA sought to phase out the use of asbestos in commercial products but was defeated by the Fifth Circuit’s decision in Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir. 1991), which held that EPA had failed to adequately justify the ban. Since then, no regulatory or legislative ban has been enacted.

Instead, as of today, TSCA limits “asbestos-containing materials” to be those containing more than one percent asbestos. See 15 U.S.C. § 2642. TSCA further defines “asbestos” to include only six particular varieties of asbestos, namely chrysotile, crocidolite, amosite, anthophyllite, tremolite, and actinolite. See id. § 2642(3). In the most significant criminal litigation about asbestos—United States v. W.R. Grace et al.—a primary defense was that the “asbestos” fibers at issue were not among the substances that had been defined as “asbestos” but instead were winchite and richterite (also known as “Libby vermiculite”).” See United States v. W.R. Grace, 455 F. Supp. 2d 1122 (D. Mt. 2006). While the Ninth Circuit rejected this argument in favor of an undefined yet broader definition of “asbestos,” see United States v. W.R. Grace, 504 F.3d 745 (9th Cir. 2007) (rejecting the “six-fiber” definition in favor of one from the Chemical Abstract Service Registry, under which “asbestos” is “a grayish non-combustible material”), the TSCA definition has never been changed.

This creates some confusion surrounding EPA’s November 29 announcement, which refers to just “asbestos.” EPA’s 2014 Work Plan, referenced in the announcement, in turn refers to “asbestos & asbestos-like fibers.”

Should asbestos be regulated by EPA, and if so, how? There are several open questions:

First, how should EPA regulate a natural substance like asbestos? By any definition, asbestos is a natural material and is ubiquitous in the environment. That raises questions like how any ban could be implemented. While some substances can be “banned” simply by halting production, the same cannot be said for asbestos. Because asbestos occurs in nature, requiring product manufacturers or producers to certify that their product contains zero asbestos may not be feasible. Other countries have addressed this problem in different ways: European regulations generally ban manufacturers from adding asbestos to products, while Australian regulations specifically exclude naturally occurring asbestos not added for a particular application.

Second, how should regulations treat “non-asbestiform” minerals like serpentine, which is the California state rock? When “asbestos” has been regulated in the past, the regulations accounted for the fact that there are some minerals which are chemically similar to asbestos but also occur in different physical configurations or morphologies. In 1992, OSHA determined that non-asbestiform rock particles could be appropriately excluded from the definition of asbestos because they did not pose similar health effects. See OSHA, Final Rule: Occ. Exposure to Asbestos, 57 Fed. Reg. 24310. Legislators have tried and failed to distinguish among these substances. Nine years ago, the Senate passed Senate Bill 742, which included mineral definition criteria that would separate asbestiform from non-asbestiform minerals. It is not clear yet whether these efforts will continue.

Third, how will EPA address the “six-fiber” definition of asbestos in TSCA? EPA sought throughout the Grace litigation to use a broad definition of asbestos. We don’t now know what precisely will constitute “asbestos” for EPA’s TSCA evaluation.

Fourth, how will regulators deal with pressures from parties whose primary interest in asbestos relates to product liability litigation? Regulators should use sound science to decide how to regulate asbestos and other products. And there’s a danger that the medical doctors, geologists, and toxicologists with expertise in asbestos issues who have appeared in asbestos personal injury litigation will be perceived as partial to one side or the other.

For information on these or other facets of the Lautenberg Act implementation, please consult a member of the Environmental Group.

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Federal GMO Disclosure Law Creates Uniform Standards for Food Manufacturers & Provides Options for Disclosure

This summer President Obama signed a new federal law requiring food manufacturers to disclose information regarding genetically modified organisms (GMO). The new law is different from the 2015 proposed GMO legislation which restricted states from enacting GMO labeling laws but didn’t contain federal labeling requirements.

The law represents a compromise between consumer groups and food manufacturers: it gives consumers access to information, and manufacturers flexible means of compliance and the benefit of a uniform federal standard.

The federal law, titled The National Bioengineered Food Disclosure Standard, leaves many issues unsettled. Two areas are attracting the most attention: the law’s digital disclosure methods and the definition of bioengineered food.

Background

The July 2016 law (P. Law 114-216) preempts state GMO labeling laws, which had been passed in Vermont, Connecticut, and Maine. Pro-labeling groups argued that federal action was necessary to prevent a confusing system of state requirements, and manufacturers agreed. After the law passed, the Grocery Manufacturers Association stated that a “consistent national standard is far better than a costly and confusing patchwork of different state labeling.”

The USDA has two years to develop and implement the new federal law, including deciding what must be labeled. The law immediately preempted state GMO laws.

Digital Disclosures on Food Products

Many food companies support the law because it gives them multiple labeling options. Manufacturers may use text, symbol, websites, 1-800 numbers, and QR codes –bar codes that consumers can scan with smartphones – on their products. If manufacturers use QR codes or websites, they must include instructions on the package like “scan for more information.”

The federal law is a clear departure from the state laws it preempts. Those laws required the words “genetically modified” on bioengineered food labels. Now manufacturers need not write “GMO” on their food products. Many are already voluntarily complying by using QR codes on food.

Certain pro-labeling organizations are unhappy with this labeling option, arguing that it disadvantages low-income consumers who may not have the technology needed to obtain disclosure information.

But the law recognizes digital links may not be workable and requires the USDA to conduct a study in the first year on “whether consumers would have access to the […] digital disclosure methods.” If the study results indicate consumers do not have access to the digital disclosures, the USDA will provide “comparable options” for disclosure.

Not All GM Ingredients Require Disclosure

The law gives the USDA discretion to determine the amount of GMO material that triggers disclosure. The law also provides exceptions for certain food products:

  1. Oils and Starches: Food manufacturers are not required to disclose highly refined products like corn syrup and soybean oil. These products fall outside the law’s definition of bioengineered food because they contain no genetic “material.”
  2. Certain animal products: Manufacturers need not disclose products made from animals that are fed bioengineered feed.

The second exception mirrors the EU’s GMO disclosure law, but raises a significant point of disagreement among scientists and food activists. Labeling of GMO fed livestock was the basis for a consumer class action lawsuit against Chipotle in 2015. There customers claimed Chipotle’s non-GMO claims were false because Chipotle used ingredients from GMO-fed animals. These claims against Chipotle are still pending, though the plaintiff is struggling to show any injury suffered from consuming GMO-fed animal products.

These exceptions point to the broader GMO debate. Scientists argue that there is no health or safety difference between bioengineered food and non-bioengineered food. But organic food organizations say more testing is needed, and urge manufacturers to disclose all genetically modified ingredients.

A Look to the Future

There are more labeling debates ahead.  Many pro-labeling organizations express concern that the law is too lenient and leaves out significant amounts of bioengineered food. The Organic Trade Association voiced support for the law, calling it “a constructive solution to a complex issue,” but one that requires improvement. It plans to stay involved as the USDA develops the law’s specifics. Food manufacturers are staying involved in the process as well to ensure their interests are represented.

 

*Hannah will be sworn in to the Illinois Bar on November 10, 2016. This article was authored under the supervision of Amy Rubenstein.

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