October 30, 2006
First U.S. Beef Shipment Arrives in South Korea after Lifting of Import Ban
According to an AP article Sunday in the International Herald Tribune, the South Korea Agriculture Ministry has said the first shipment of U.S. beef arrived in South Korea on Monday ater the country lifted a nearly three-year-old import ban that was triggered by mad cow disease fears. The nine-ton shipment will be released in about 15 days after a thorough quarantine inspection. The import ban was imposed in December of 2003 after the first reported case of mad cow disease in the U.S. Prior to that time, South Korea was the third largest importer of U.S. beef. In January of this year South Korea agreed to a limited lifting of the ban, accepting only boneless meat and only meat from cattle less than 30 months old, based upon beliefs that mad cow disease is less likely to be present in younger cattle and that some material in bones could be dangerous for consumption. In September, South Korea said the problems were addressed and approved the resumption of imports. The delay in the resumption of imports was due to the time it took to adopt measures to ensure meat safety. The main problems were that some of the U.S. slaughterhouses designated to handle meat for export to South Korea either did not separate American and foreign beef, or failed to differentiate between tools used to slaughter old and young cattle.
October 28, 2006
New Farm Safety Law in China
Beginning November 1, the date China's first law on farm product safety becomes effective, China will ban the sale of farm products that fail to meet specified safety standards, according to An Jian, deputy director of the Commission of Legislaive Affairs of the National People's Congress Standing Committee. The law will establish a farm product safety supervision and management system, in addition to a farm product source registration system to ensure food safety. A farm product safety risk analysis and appraisal system and an identification system to ensure high quality, pesticide-free farm products will also be established. China View
October 27, 2006
FDA Warns of Dangers of Using Decorative Contact Lenses
In an October 27 press release the FDA has reminded consumers of the serious dangers of using decorative contact lenses without consulting an eyecare professional. The lenses, sometimes called Plano or non-corrective lenses, are not intended to correct vision but solely to change the appearance of the eye. They nonetheless carry serious risks, including permanent eye injury that may lead to blindness. The FDA has received reports of the lenses being marketed and distributed without a prescription directly to consumers through sources such as beauty salons, flea markets, convenience stores, beach shops and the Internet. The marketing of the lenses may increase during the Halloween season. The lenses carry the same risks as corrective contact lenses, including conjunctivitis (pink eye); corneal (the eye's outermost layer) ulcers; corneal abrasion; and vision impairment or blindness. The FDA has received reports of corneal ulcers associated with the wearing of decorative lenses, especially if worn overnight.
Consumer Group Says Insurance Rates Drop Irrespective of Tort Reform
According to the Americans for Insurance Reform, a national consumer advocacy group, commercial insurance rates have stabilized or dropped in almost every sector, including medical malpractice, not as a result of tort reform legislation but due to the property/casualty insurance industry's economic cycle. Falling rates, according to AIR, are due to a soft market that follows the large price hikes that hit most lines of insurance during the 2000-2003 period. The rate decline has occured despite large losses such as those resulting from the hurricanes of 2004 and 2005. "[L]osses do not determine the rates that insurers charge," according to this analysis. According to the group, rate hikes have little, if anything, to do with the legal system. Earlier studies have documented this cyclical phenomenon and attribute it in large part to insurer's investment practices and in smaller part to their claims experience.
October 26, 2006
Supreme Court To Revisit Punitive Damages Limits
On October 31, the Supreme Court will hear argument in the case of Philip Morris v. Williams, No. 05-1256, a case in which the court is asked to review for excessiveness an Oregon jury's punitive damages award. In deciding the matter, the Court will presumably apply its "guideposts," first established in BMW of North America v. Gore and more recently elaborated-upon in State Farm Mut. Auto Ins. Co. v. Campbell. One of those guideposts is the proportionality of the punitve damages to the compensatory damages award. In the Williams case, the jury awarded $79.5 million in punitive damages but a much more modest $821,000 in compensatory damages (reduced to $500,000 by Oregon's statutory wrongful death damages cap). In State Farm, the majority said that punitive awards should rarely exceed a single digit ratio compared to the compensatory award, i.e., only in unusual cases should the ratio exceed 9:1. Williams' punitive award is approximately 100 times the compensatory award. An important question in Williams, therefore, is whether this is one of those unusual cases which justify a greater-than-single-digit ratio of punitive damages to compensatory damages, and if so, why?
Another of the Gore guideposts is the reprehensibility of the defendant's conduct. In Williams, the jury found the plaintiff 50% at fault for his 45-year history of smoking but also found that Philip Morris had committed fraud. The Oregon Supreme Court, in its review of the punitive damages award, decided that the defendant's long history of concealing the risks of smoking could justify a jury's finding that such conduct was so reprehensible that it justified the very large award. The other important question for the Supreme Court, raised by the Oregon trial court's jury instructions, is whether, in determining reprehensibility, a jury can consider the defendant's conduct toward nonparties. In other words, could the jury consider the fraud perpetrated against all Oregon smokers, or only the defendant's behavior towards Williams?
The Supreme Court's answers to these two questions is eagerly anticipated, not only by the parties and those who filed the numerous amicus briefs, but by consumer protection advocates and business leaders in general.
October 24, 2006
Sony Recalls Laptop Batteries
In a press release dated October 23, 2006, the Consumer Product Safety Commission announced the voluntary recall of 340,000 laptop computer lithium ion batteries manufactured by Sony Energy Devices Corp., of Japan because of the danger of overheating. The batteries were used in Fujitsu Computer Systems Corporation, Gateway Inc., Sony Electronics Inc., and Toshiba America Information Systems Inc. notebook computers. All of these reported incidents and injuries were associated with earlier recalls of notebook computer batteries containing these Sony cells. There were no incidents involving the computer manufacturers who voluntarily participated in the CPCS announcement.
Consumer Product Safety Commission Halloween Tips
The Consumer Product Safety Commission has posted tips for a safe Halloween. The tips cover costumes, decorations, and treats.
October 23, 2006
Japan To Establish Consumer Product Safety Commission
As part of its continuing development of products liability law, Japan is planning to establish a new governmental body that will centralize the gathering of information on consumer-related accidents, analyze the information, and decide on measures to prevent recurrences. This accident information is currently reported to several ministries and agencies. The Japanese Government intends to model the new organ on the U.S. Consumer Product Safety Commission. The government will also revise the Consumer Product Safety Law to more comprehensively require product manufacturers to report accidents related to their products to the government.
October 20, 2006
Merck Ordered to Divulge Vioxx Defense Costs Records
Merck & Co. has been ordered to release records of how much it spent on a trial involving its Vioxx painkiller. New Jersey Superior Court Judge Carol Higbee made the order in response to a request from plaintiffs' lawyers that Merck pay their legal fees and expenses of about $5.6 million for a trial that combined two cases in which the plaintiffs alleged that taking Vioxx had caused their heart attacks. When Merck balked at the plaintiffs' trial expenses, the plaintiffs' lawyers asked how much Merck spent on the trial.
The jury found that Vioxx had caused one man's heart attack but not the other's. The jury also found that Merck had committed consumer fraud in its marketing of Vioxx, a finding that allows for recovery by plaintiffs of their attorneys' fees. So far, Merck has reserved $970 million for legal costs and spent $285 million of that last year as it pursues its pledge to try each Vioxx case. See Theresa Agovino's story for the Associated Press.
October 19, 2006
ALI Council Draft on Economic Loss
The American Law Institute has released the Council draft of portions of the Restatement (Third) of Torts: Economic Torts and Related Wrongs. This draft portion of the Restatement concerns tort - including product liability - actions not involving injuries to persons or property. The general economic loss rule (section 8) bars recovery for purely pecuniary loss in "negligence, strict liability, and products liability actions." This general bar is subject to some exceptions such as for negligent misstatement but only when the plaintiff has justifiably relied upon the misstatement (section 9). Liability under section 9 is also limited to proximately-caused harms where the defendant had the ability to disclaim such losses and where "the claimed loss is not indeterminate" (section 10).
Perhaps the most notable portion of this draft, in light of the mixed reception that the courts have given to medical monitoring cost claims, is Section 21 which provides an action to recover certain "preventive expenses" such as medical monitoring costs or certain repair or removal costs so long as those costs would prevent serious bodily injury and the liability is "not indeterminate."
A (copyrighted) copy of the draft is available from the ALI: www.ali.org.