December 2011

Co-authored by Brian Gross 

A company’s interest in protecting its brand by providing a safe product to consumers, in conjunction with the increased regulatory requirements set forth under the Food Safety Modernization Act (FSMA) require that entities active in the food supply chain take appropriate measures to verify that their suppliers comply with Current Good Manufacturing Practices (cGMPs).   It is incumbent upon every business involved in the food supply chain to perform its own due diligence with respect to its suppliers, including, confirming FDA registration, making Freedom of Information Act (FOIA) requests for documentation generated or retained during FDA inspections of suppliers’ facilities, reviewing suppliers’ Food Safety Control plans, Hazard Analysis and Critical Control Point (HACCP) plans and/or Allergen Control Programs, and conducting regular audits of their facilities.  Not every business, however, has the internal expertise to personally audit their suppliers’ facilities.  Furthermore, the current market demands, in which consumers expect local, organic foods, means that many businesses must purchase their products from a larger, more diverse group of suppliers.  This creates an issue because many businesses lack the resources to perform regular audits of all their suppliers’ facilities.  Companies cannot rely upon the FDA to audit their suppliers, as it lacks the funding necessary to audit food processing companies both domestic and abroad with the regularity necessary.   In fact, the FSMA only requires that the FDA inspect domestic high-risk facilities once by 2016, and at least every three years thereafter.  Third-party audits provide a cost-efficient alternative which, if properly regulated, can ensure a high quality of food without the insurmountable costs associated with having to individually audit each supplier.  For that reason, third-party audits will inevitably play a larger role in future food safety.

The failures of the third-party audit system are well documented.

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Co-authored by Brian Gross 

Over the top warning labelAs a defense attorney, one of the most common allegations my product liability clients face is a claim that the company “failed to warn” the end user of a potential defect in its product.  With the Christmas season upon us, and due to the fact that so many of the products we purchase for our friends and family contain a wide variety of warning labels to avoid such a lawsuit, I felt it prudent to address this rather important issue in this week’s blog installment.

A warning is a statement which is meant to make someone aware of a potential danger associated with a particular product or action.  A manufacturer must provide a warning when the product has a danger that cannot be removed.  Generally, however, a manufacturer is not required to provide a warning for dangers which are obvious and understood.  Despite that fact, due to the increase in product liability lawsuits over the past few years, manufacturers are taking care to add warnings that may seem a little outrageous – even downright laughable – to their products to avoid ending up in litigation for “failure to warn.”  Some of these over-the-top warnings include:

Label: May cause drowsiness.
Product: Nytol sleeping pills.

Label: Do not use while sleeping.
Product: Vidal Sassoon hair dryer.

Label: This product is not intended for use as a dental drill.
Product: Dremel Multipro’s rotary tools.

Label: This product moves when used.
Product: Razor scooter.

Why are manufacturers taking such steps to warn the consumer of the such obvious dangers or potential dangers associated with such obvious misuse of their products?  Much of it has to do with the plaintiff’s bar and the endless supply of consumers willing to sue.  Even “questionable” product liability cases can lead to costly legal fees and damages.  Bloomberg recently analyzed the 50 largest jury verdicts over the past few years. In 2010 alone, 15 verdicts involving “failure to warn” claims topped $25 million (up 7 from the previous year).  In fact, juries in the five largest product liability cases awarded damages of $1.1 billion, a substantial increase from previous years.  Several factors can be attributed to this increase in damages awarded by jurors, such as:

  • The public’s view of “Big Business” and its failure to protect Joe Consumer (think BP oil spill and the recent massive Toyota automobile recall).
  • High unemployment rates.
  • Instability of the stock market.
  • America’s stagnant real estate sales.
  • America’s struggling banking industry.
Arguably many factors have driven our current “crisis of confidence” in Corporate America, some rightly deserved and some perpetuated by the media. Nevertheless, a case can be made that as a result of these feelings, jurors are using the courtroom as a vehicle to right the perceived wrongs of Corporate America.  Of course there are plaintiffs’ counsel ready, willing and able to show them how, supporting the contention that levying astronomical verdicts will “punish” big business.  In doing so, juries are hurting these companies right where it counts

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