June 2013

As discussed in prior blog posts, the Food Safety Modernization Act (FSMA) aims to prevent contamination of the United States food supply by requiring that food facilities be in compliance with a series of regulations in order to distribute products in the U.S.  The FSMA was signed into law by President Obama on January 4, 2011.    

 The FSMA requires that all food facilities, domestic and foreign, be registered with the US Food and Drug Administration (“FDA”) in order to manufacture, process, pack, or store food for animal or human consumption in the US.[1]  If a facility fails to comply with the registration requirements, products manufactured by foreign facilities will be refused entry into the U.S. and domestic facilities will be unable to legally sell products in interstate commerce.[2]  Every two years, every food facility must renew its registration.[3]  Facilities that registered prior to October 1, 2012 must renew their registration. [4]

The FSMA has granted the FDA greater authority to hold imported foods to the same standard as domestic foods—making it even more difficult for companies who wish to import into the US food from other companies.[5]  Importers are now required to verify that any foreign suppliers have controls in place to guarantee that the food they produce is safe.[6]  Qualified third parties are now able to certify that foreign food facilities are in compliance with U.S. food safety standards.[7]  Foreign facilities that produce foods that are at a high risk of contamination may be required to receive third-party certification or another form of compliance in order to be admitted into the US.[8]  The FDA is able to refuse entry to food from any facility that has denied the FDA inspection access or is located in a country that has denied the FDA access.[9]

Although the FSMA presents challenges to food companies, if companies educate themselves on the registration requirements and pay close attention to their suppliers, they will be in compliance.  Additionally, importers that are offering food from program-certified facilities are able to participate in a program that expedites the process.[10]

Continue Reading

Court Ruling

In Melendrez v. Superior Court (download), 214 Cal.App.4th 1343 (2013), the California Court of Appeals, Second District, recently resolved the issue of who may verify discovery responses on behalf of a bankrupt entity with no directors or officers.  The decision also reaffirms prior cases which hold that attorneys cannot waive the attorney-client privilege on behalf of their clients.  Rather, insurers hold the privilege in instances where no corporate representative exists.  If an insurer decides to waive the privilege to allow the attorney to verify responses, the waiver is only for the identity of the sources of the information contained in the responses.

Factual Background

Plaintiffs brought a wrongful death action against numerous defendants in which they alleged that decedent died of mesothelioma as a result of exposure to asbestos.  Defendant Special Electric Company (“SECO”), a manufacturer and supplier of asbestos-containing products and supplier of raw asbestos fibers, had filed for bankruptcy years prior to the instant suit, and as a result of the reorganization, was reduced to a shell for the sole purpose of processing asbestos lawsuits.

Plaintiffs propounded discovery on defendants.  SECO provided unverified responses to Requests for Admissions (“RFAs”), and Plaintiffs moved to deem the RFAs admitted and to compel verifications, as case law provides that unverified responses are tantamount to no response at all.  The trial court denied the motion to deem the RFAs admitted, and at the request of SECO, it deemed the responses verified.  Plaintiff subsequently served SECO with Form Interrogatory 17.1, which requires the responding party to provide substantive responses for all RFAs not unequivocally admitted.  SECO provided substantive, unverified responses to Form Interrogatory 17.1, and Plaintiffs, again, moved to compel verifications.  The trial court again denied Plaintiffs’ motion.  Plaintiffs appealed.

The Court of Appeals Decision

The court distilled the issue in the case to this:

 “‘Who can waive the privilege on behalf of a dissolved corporation with no officers, directors, or employees?’ It may be that although SECO had no officers or directors, a means may have existed by which a director could have been elected or appointed.  If that is not the case, we believe that the privilege, in the somewhat unique circumstances of this case, would have passed to SECO insurers.”

The court noted that Civil Code § 2033.240(b) allows for an attorney acting as an agent of the party to verify responses.  When an attorney does so, however, the party “waives any lawyer-client privilege and any protection for work product . . .concerning the identity of the sources of the information contained in the response.”  The court further recognized that the client corporation is the holder of the attorney-client privilege and an attorney cannot waive the privilege.  That means that although the attorney for a defendant corporation is an agent of the corporation capable of verifying discovery on its behalf, executing a verification requires a limited waiver of the attorney-client privilege, which, the attorney cannot do absent the consent of the client.  This creates a Catch 22 in
Continue Reading