TSCA Reform Bill May Move Forward

The U.S. Senate appears to be moving closer to acting on a bill that would update the Toxic Substances Control Act. We have posted about this long effort several times

A version of the bill was passed by the House last June (TSCA Modernization Act, H.R. 2576), and the Senate version (now known as the "Frank Lautenberg Chemical Safety for the 21st Century Act" after the late Senator from NJ) came out of the Environment and Public Works Committee in the Spring. Recently the number of Senate co-sponsors jumped to approximately 60, suggesting movement may come. 

Both versions are intended to update TSCA, and the Senate bill will likely include  increased funding for EPA from fees on industry,and simplification of the waiver process for states. Possible sticking points include the degree of preemption of state law, a feature that really is necessitated by the need to have some national uniformity.

 

State Passes Mandatory Cy Pres Law

Oregon has enacted controversial legislation affecting damages in class actions in the state.  House Bill 2700 was recently signed into law by Gov. Brown, following passage on largely party lines.

The law addresses the not uncommon situation of leftover class action funds.  Sometimes unclaimed funds will revert to the defendant, which makes sense given the purpose of compensatory damages is to compensate persons injured by wrongful conduct. Sometimes the unclaimed funds are allocated in a form of "cy pres," which we have posted about before.

Oregon's new plan is for half of unclaimed or unpaid damages in Oregon class actions to be paid to the state bar's Legal Services Program and the other half to a court-determined entity that benefits the "interests" of class members -- so partly a tax, and partly a cy pres distribution.

The law says it is effective immediately, including for pending actions.  Any amount awarded as damages or to be paid in settlement that the court finds either hasn’t been timely claimed by class members, or when it is simply “not practicable” to pay the full amount to class members, must be distributed in the following fashion:  “At least 50 percent of the amount not paid to class members" must be paid “to the Oregon State Bar for the funding of legal services provided through the Legal Services Program.”  The "remainder of the amount not paid to class members” must be handed over to an entity chosen by the court for purposes that are “directly related to the class action or directly beneficial to the interests of class members.”

Class action observers have noted that cy pres awards are often used by class counsel to enhance the appearance of benefit recovered in the case in order to justify a higher fee award. Another huge problem is that use of cy pres can eliminate the incentive for class counsel to ensure that all absent class members, the allegedly injured parties,  get the compensation they have been awarded or earned in settlement.  Trying to enhance funding for Legal Services programs seems like a great goal, but this does not seem like a wise way to do it. 

Wisconsin Passes Asbestos Trust Reform

We posted before about the legislative effort in Wisconsin to level the asbestos playing field with regard to claims against asbestos trusts and remaining solvent defendants.  Earlier this month the state Senate passed a version of the bill that would require plaintiffs in asbestos personal injury actions to disclose whether they have filed a claim against any personal injury trust.

This week, the Wisconsin Assembly passed the bill (A.B.19), a version that will also create a setoff for defendants of the amount recovered from the trust.  The bill now goes to Gov. Scott Walker (R) for approval.  Published reports suggest the governor will sign the measure.

A.B. 19 imposes a series of new requirements in asbestos-related claims, including:

(a) the plaintiff shall provide to all parties a sworn statement identifying each personal injury claim he or she has filed or reasonably anticipates filing against an asbestos trust, including the amount claimed by the plaintiff, the date that the plaintiff filed the claim, the disposition of the claim and whether there has been a request to defer, delay, suspend, or toll the claim against the asbestos trust.
(b) For each personal injury claim he or she has filed against an asbestos trust, plaintiff shall provide a copy of the final executed proof of claim, all trust documents, including trust claims materials, trust governance documents, any documents reflecting the current status of the claim and, if the claim is settled, all documents relating to the settlement of the claim.
(c)  Trust claims materials and trust governance documents are admissible in evidence. No claims of privilege apply to trust claims materials or trust governance documents.
(d) Trust claim materials that are sufficient to entitle a claim to consideration for payment under the applicable trust governance documents may be sufficient to support a jury finding that the plaintiff may have been exposed to products for which the trust was established to provide compensation and that such exposure may be a substantial factor in causing the plaintiff's injury that is at issue in the action.
(e) If a verdict is entered in favor of the plaintiff in an action subject to this section and the defendant is found to be 51 percent or more causally negligent or responsible for the plaintiff's entire damages, the plaintiff may not collect any amount of damages until after the plaintiff assigns to the defendant all pending, current, and future rights or claims he or she has or may have for a personal injury claim against an asbestos trust.

 

UPDATE- The governor signed the bill. (reminder check our disclaimer page, we don't always update posts!)

 

House Committee Approves Asbestos Bill

Quick note for our readers who follow asbestos mass tort issues:  the House Judiciary Committee decided in a 17–14 party-line vote this week to reject  various proposed amendments to the Furthering Asbestos Claim Transparency Act of 2013 (H.R. 982).  The FACT Act would require the various asbestos settlement trusts to make public disclosures detailing the claims to the trust and to provide certain information about claims on request (but not confidential medical records).  The amendments were proposed by Democrats opposing the bill.

The Full Committee Markup of H.R. 982 is here.  Hearing information regarding the 3/13 hearing on the bill is here

Passage of the Fact Act would allow defendants to properly assess a plaintiff’s complete exposure history. As it stands, plaintiffs often hide behind trust confidentiality to make solvent defendants believe that their products were far more responsible for the plaintiff’s disease than the true picture.  As asbestos liabilities force more and more companies to file for bankruptcy, legislators need to preserve assets for appropriate claimants; the secrecy and abuse associated with the trusts undermines this as well.

 

Foreign Manufacturer Liability Act Unlikely to Pass Soon

We have posted before about efforts to pass legislation that would impact the ability of U.S. consumers to sue foreign manufacturers.

As the end of the year approaches, it appears that the latest version, the Foreign Manufacturers Legal Accountability Act (FMLAA) of 2011, will not be approved. Senate Bill 1946 and House of Representatives Bill 3646 are among the latest attempts to impact suits against foreign product makers.  Both would require foreign manufacturers importing products into the U.S. to establish a registered agent to accept service of process. And the registration of the agent would constitute consent to the personal jurisdiction in the U.S.  

Earlier versions of the legislation gained support in the wake of issues relating to products from China and, especially, the Chinese drywall litigation. Supporters of the legislation included some domestic industries, such as textiles. They also garnered opposition from foreign governments, some U.S. manufacturer groups, and non-U.S. manufacturers in the European Union and the Confederation of Indian Industry, and others. Even supporters noted that the bills did not directly address another related issue, the enforcement of U.S. judgments overseas. 

 

Industry Weighs in on "Safe Chemicals" Bill

A variety of companies and chemical industry trade groups weighed in last week on a bill to amend the decades-old Toxic Substances Control Act.   

Several dozen interested parties, including the National Association of Manufacturers, American Chemistry Council, and American Petroleum Institute, sent a letter to the U.S. Senate noting their objections to S. 847 — dubbed the Safe Chemicals Act -- that the Environment and Public Works Committee recently sent to the Senate floor. 

We have posted about this bill before.  It would give the EPA revised authority to regulate a broader range of potentially toxic chemicals.  But it would establish an unworkable safety standard, and would require an enormous amount of additional government resources to implement. The bill would also dramatically increase the time it would take for EPA to review new chemicals and undermine long-standing protections of trade secrets, seriously hampering innovations in new products and technologies.

In their letter, the groups said that the bill that did not reflect the input of the Republican Senators or many of the stakeholders on all the very complex issues involved in updating TSCA. On July 25th, the EPW Committee held a markup of S. 847, and then voted along party lines to approve the bill.

The industry groups said they wholeheartedly support the continuation of a bipartisan process to discuss the right concepts needed in legislation to effectively reform the Environmental Protection Agency’s ability to regulate chemicals. But they believe that S. 847 as reported by the Committee does not accomplish this goal.  They continue to support sound, science and risk-based legislation to update TSCA, and will work with Senators on such new legislation.


 

 

TSCA "Reform" Bill Moves To Senate Floor

Over the past several years, Congress has wrestled with chemical safety and possible ways to modernize TSCA. Chemical business leaders, public officials, scientists, doctors, academics, and liberal environmental organizations have expressed support for varied methods of reforms to this principal toxic substance law. 

Recently, a U.S. Senate committee advanced yet another bill that would revise the decades-old  regulation for chemicals. The Senate Committee on Environment and Public Works voted 10-8 (along party lines) to move S. 847, the so-called Safe Chemicals Act, to the Senate floor.

The bill would require the Environmental Protection Agency to establish new minimum data sets for chemical substances; identify required testing of any chemical substances; create various hurdles for a manufacturer before making any new chemical substance;  update a list of chemical substances warranting placement within one of three priority classes regarding risk management; and, importantly, requires substance manufacturers and processors to bear the burden of proving that chemical substances meet applicable safety standards.  The bill would also establish an Internet-accessible, public database of information on the toxicity of, use of, and exposure to chemical substances.  The bill would also drastically narrow the conditions under which data about chemical substances may be treated as confidential business information.

The chemical Industry remains committed to working with the Senate Committee on Environment & Public Works to pursue reform of TSCA, but views this as a partisan markup of a bill that is inconsistent with balanced reform.  Specifically, the bill would establish an unworkable safety standard, and would require an enormous amount of additional government resources to implement. The bill would also dramatically increase the time it would take for EPA to review new chemicals and undermine long-standing protections of trade secrets, seriously hampering innovations in new products and technologies.

 

 

House Passes FDA Reauthorization Bill

The House of Representatives last week passed a bill (387 to 5 vote) that would reauthorize the Food and Drug Administration's user fee programs and amend the rules regarding marketing exclusivity, medical device safety, drug importation, and other FDA programs. The "FDA Reform Act of 2012," H.R. 5651, reauthorizes and amends various user fee statutes, creates new and additional user fees, reauthorizes the Best Pharmaceuticals for Children Act and the Pediatric Research Equity Act, changes the rules for public comment on draft guidance documents, and contains new provisions dealing with drug shortages.  The fees are supposed to reflect agreements negotiated between the FDA and industry regarding about $2.8 billion in user fees over five years.

The vote came shortly after the Senate approved its own version of FDA legislation, S. 3187 (the FDA Safety and Innovation Act). The Senate bill was also passed with bipartisan support.

The differences between the House and Senate bills now must be worked out in conference. The bills differ in a variety of ways, such as which antibiotics will be eligible for incentives, which include a five-year extension of market exclusivity. The bills also differ on the details of a national  track-and-trace system for drugs. The Senate bill also included language about Risk Evaluation and Mitigation Strategies (REMS) which is not in the House version. See a comparison of the bills here.  Various observers report that House and Senate leaders expect to have a compromise bill for the President to sign in early July.

 

Tort Reform Continues in Arizona

As always at MassTortDefense we are happy to note tort reform victories.

Earlier this month Arizona Governor Brewer signed legislation limiting punitive damage awards in product liability defect suits in the state.

The bill, H.B. 2503, was passed by wide margins in both chambers of the state legislature earlier in the Spring.  It states that punitive damages generally cannot be awarded in a civil suit in Arizona when a product is designed, manufactured, packaged, labeled, sold, or represented in relevant and material respects in accordance with a federal agency's approval, clearance, or determination.

The legislation does not exempt punitive damages if the company that sells a product does so after a final order is given from a government agency to withdraw or recall the item from the market.

Supporters had indicated that the measure was important to discourage the practice of seeking punitive damages simply as a lever to force a defendant to settle, as insurance typically does not cover punitives. Businesses that manufacture products in compliance with all relevant health and safety standards should not be held liable for punitive damages in product liability cases. Laws like this one give clients the security to be innovative. When creating new products, businesses can be assured that by complying with mandated guidelines they will not be subject to unjust punitive sanctions. 

 

State Committee Misses Opportunity for Class Action Reform

Readers of MassTortDefense recognize that one of the most challenging jurisdictions for potential class actions defendants is California, given the substantive law, some state courts' take on certification issues, and the aggressive plaintiffs' bar.  It is no surprise that advocates of a balanced and appropriate role for class actions have from time to time attempted legislative reform in this state.

One idea that has been proposed is a requirement that class action advertisements (and there are plenty) include appropriate disclosures that potential plaintiffs could be liable for attorneys’ fees if a defendant prevails.

Unfortunately, the state Assembly's Judiciary Committee last week rejected such a proposal in a vote along party lines.  Proposed A.B. 1954 would have required ads soliciting plaintiffs for a class action to disclose that they might be held responsible for part of a defendant's legal fees if the defendant prevails under certain conditions. The legislation also would have permitted the state's Department of Consumer Affairs to impose a fine of up to $2,000 for an ad that failed to include the notice provision.

Supporters of the bill expressed concern about what they see as a flood of class action solicitations, which are seen as a serious impediment to doing business in California.  The bill was supported by the Civil Justice Association of California and the California Building Industry Association, as well as the California Chamber of Commerce.  Our readers know that some potential plaintiffs see class actions like purchasing a lottery ticket - no risk, high reward.  Opponents argued that in the state, orders directing named plaintiffs of a class to pay for a prevailing defendant’s fees happens only in rare cases. But it can and does happen, and what's wrong with letting potential plaintiffs know this? Such a bill would increases transparency and thus protect consumers; it might cut down on the number of "shakedown" class actions that only disclose promises of huge settlements without the potential other side of the coin. 

 

Regulatory Reform Bills Pass House

We have posted before about legislative attempts to limit the harmful effects of excessive federal regulation on product sellers.  Readers know how those regulations can have an indirect but real impact on product liability litigation as well. The House passed two bills on this topic last week, and the White House indicated it would veto them if they passed the Senate.

The Regulatory Accountability Act (H.R. 3010) passed by a vote of 253 - 167.  It would require an agency to consider any reasonable alternatives for a proposed rule, and the potential costs and benefits associated with such alternatives. The Regulatory Flexibility Improvements Act (H.R. 527) passed by a vote of 263 - 159. It would require agencies to conduct initial and final regulatory flexibility analyses to describe alternatives to a proposed rule that minimize any adverse significant economic impact or maximize the beneficial significant economic impact on small business entities.

Republican sponsors have argued that the bills would help prevent oppressive agency regulations and force federal agencies to choose the least costly alternative when developing new  regulations. Federal regulations cost businesses more than $1.5 trillion each year, which has an obvious effect on job creation.

Given the current makeup, the Senate versions (S. 1606 and S. 474) are expected to face stiff Democratic opposition.  The bill is not listed among the Senate Majority's current legislative priorities. 

Mexico Passes Class Action Legislation

Readers with connections to Mexico may wish to take note that in March, 2012, enabling legislation will take effect permitting class action litigation in this southern neighbor.

While Mexico’s Consumer Protection Law had allowed for certain limited collective actions in consumer matters to be brought by the Federal Consumer Protection Agency, this marks a significant change. In April, 2010, the Mexican Congress passed an amendment to the Constitution permitting of class actions in federal courts in Mexico and requiring that class action implementing legislation be enacted within one year of the amendment’s effective date. The amendment was ratified by the required number of state legislatures, and Congress went to work.  The Senate approved a class action bill in December, 2010, as we alerted you. The House approved one in April, 2011. The law was published in the Official Gazette on Aug. 30, 2011, with an effective date of March, 2012.

Class actions will be available for consumer products and services claims, environmental claims, and certain financial services and antitrust claims.  The law recognizes three types of class actions:  diffuse actions to protect rights that belong to everyone, such as environmental issues; collective actions to protect rights that belong to a class linked by a non-contractual relationships; and homogeneous individual right-type class actions on behalf of a group linked by contract. Class actions that involve diffuse rights will be opt-out; and the class action will be opt-in if they involve collective rights or individual homogeneous rights. Significantly, the opt-in period can run up to 18 months following a final judgment or settlement.

In addition to individual actions (numerosity minimum 30); the law gives standing to a variety of federal agencies, such as the Federal Consumer Protection Agency, Federal Environmental Protection Agency, National Commission for the Protection of Users of Financial Services, and the Federal Antitrust Agency; and to certain civil not-for-profit associations whose function is to protect the collective rights of their members.

Plaintiffs must show commonality, and a notion of standing, and there is a general exception (perhaps like superiority/manageability?) for cases in which handling the dispute on a class-wide basis would be "improper."

Other features of note:

  • quick turn around on certification pleadings and the court's ruling on class certification
  • required settlement conference after certification, before trial
  • limits on attorney's fees for plaintiffs
  • modified loser pays provision
  • the court may order notice to class members “through the most suitable resources for that purpose”

In cases in which individual class members seek damages, the law adopts a two-stage procedure consisting of a class-wide trial followed by individualized mini-proceedings on damages. The law prohibits payments to individual class members through a class representative. Individualized evidence need not be submitted during the class-wide phase of the trial proceedings.

Time will tell how the federal courts of Mexico apply the new law beginning in 2012.  It is clear from the debate on the legislation that there is concern about class action abuse (American-style).  Certainly, the legal risks have been raised for those doing business in these sectors in Mexico.
 

 

Democrats Release Discussion Draft of FDA Bill

Five Democratic Congressmen released a discussion draft of possible legislation that would alter the powers of the U.S. Food and Drug Administration.  The bill would increase FDA's authority and funding to regulate the importation of foreign-manufactured drugs, and also give the FDA the authority to mandate recalls for unsafe drugs.

Rep. John D. Dingell, Chairman Emeritus of the Energy and Commerce Committee, Rep. Henry A. Waxman, Chairman of the Energy and Commerce Committee, Rep. Frank Pallone, Chairman of the Subcommittee on Health, and Rep. Bart Stupak, Chairman of the Subcommittee on Oversight and Investigations, released a discussion draft proposal, which builds on H.R. 759, the Food and Drug Globalization Act, which was introduced by Dingell, Pallone and Stupak last year.

The discussion draft calls for "parity" between foreign and domestic drug facility inspections, would increase the number of pre-approval drug inspections, and would prohibit the importation of drugs into the United States lacking appropriate documentation of safety.  The legislation would also require manufacturers to take steps to ensure the safety of their supply chain.

The sponsors noted that the byproduct of Internet communications and a rapidly-evolving international marketplace is an increase in the purchase of medications from foreign sources. Cong. Pallone claimed that, “One of the downsides is quality control and one of the dangers is the threat to the health and safety of consumers. We need to find the best ways to vest the FDA with the ability and the authority to ensure the safety of medications consumed by Americans.”

Cong. Waxman said he would work with the FDA "and all stakeholders to move this legislation forward as soon as possible." But the current Congress is heading home for the November elections, and the measure's fate is unclear if Republicans take control of the House next year.

NRDC Sues FDA Over BPA

The Natural Resources Defense Council brought suit last week against the FDA for allegedly failing to take timely action in response to its petition asking the agency to ban the chemical bisphenol A. NRDC v. Sebelius, D.C. Cir., No. 10-1142 (filed 6/29/2010).

NRDC is one of a number of advocacy groups who allege that this important chemical, used to make polycarbonate plastics in water bottles and epoxy resins used to line cans containing food, causes harmful health effects, particularly to infants and children, including early puberty, reproductive abnormalities.

However, both the scientific process and the public interest are better served by allowing the FDA to complete its ongoing review of the science surrounding the safety profile of BPA -- at its own pace.  Just this January, the U.S. Department of Health and Human Services and the FDA made it clear that BPA has not been proven to harm children or adults.  EPA released its bisphenol A Action Plan in March 2010. Importantly, the agency clearly indicated that it does not intend to initiate regulatory action under TSCA at this time on the basis of human health concerns.

This observation is consistent with a draft assessment issued by FDA in 2008, and the scientific conclusions of many other government regulatory agencies around the world. In January 2010, the German Federal Institute for Risk Assessment (BfR, Bundesinstitut für Risikobewertung) wrote, “Following careful examination of all studies, in particular the studies in the low dose range of bisphenol A, BfR comes to the conclusion in its scientific assessment that the normal use of polycarbonate bottles does not lead to a health risk from bisphenol A for infants and small children. BfR is not alone in this assessment. The European Food Safety Authority (EFSA) and the U.S. Food and Drugs Administration (FDA) share this opinion. Japan, which has conducted its own studies on bisphenol A, does not see any need for a ban either.”
 

In January 2010, FDA Deputy Josh Sharfstein was quoted as noting the FDA does support the use of baby bottles with BPA because the benefits of sound infant nutrition currently outweigh the known risks from BPA. Nevertheless, and perhaps not surprisingly, the California Assembly passed legislation last week to ban the use of bisphenol A in children's food and drink containers beginning in 2012.  The bill passed by a vote of 43-31 vote. The Toxics-Free Babies and Toddlers Act (S.B. 797) moves to the state Senate for approval, since the Senate initially passed a different version early last month.

The bill provides that if the state Department of Toxic Substances Control begins to regulate the chemical through its “green chemistry’’ initiative, S.B. 797 would be repealed.  In the meantime, the law would would limit the level of BPA in baby bottles, toddlers' cups, and food and drinking containers.  Infant formula manufacturers would have until July, 2012, to stop using BPA in the coatings used to line their metal containers.

 

Gulf Oil Spill Litigation

More than 100 federal and state court actions have been filed against BP PLC, Transocean Ltd., and other companies in connection with the Deepwater Horizon drilling rig accident in the Gulf of Mexico.  (The API has a Q&A on the accident, and the Unified Command on the incident offers updates.)  Like many mass accident scenarios, the spill has generated a variety of kinds of actions. The claims so far fall into several main categories, including personal injury/wrongful death, maritime torts, property damage/lost profits, shareholder claims, and environmental law actions.

The wrongful death actions arise from the 11 workers missing and presumed dead in the accident.  These cases were filed in federal and state courts in Louisiana and Texas.  Gulf-front property owners, fishermen, shrimpers, harvesters, seafood processors, and restaurants in Louisiana, Alabama, Mississippi and Florida are among the entities suing over alleged harm to their businesses and their economic livelihoods. Many of these suits are class actions with overlapping class definitions.  The plaintiffs typically allege that defendants knew of the dangers associated with deepwater drilling and failed to take appropriate safety measures to prevent damage to marine or coastal environments, where they work and earn their income.

These claims potentially implicate caps on damages under the Limitation of Liability Act, and the Oil Pollution Act, which currently caps certain oil spill liability at approximately $75 million.  Plaintiffs have asserted that there are various exemptions from this reach of the Oil Pollution Act, for gross negligence and certain cleanup costs.  Also, the Obama administration and Democrats in Congress have advocated raising the caps retroactively. Bills S. 3305  (the so-called Big Oil Bailout Prevention Liability Act of 2010) and H.R. 5214 would raise the liability for economic damages to $10 billion per spill from the current $75 million. In a Senate hearing, Interior Secretary Ken Salazar warned that raising the trust fund's liability cap to $10 billion would prevent smaller and mid-sized energy companies from operating offshore. Perhaps most importantly, there is some case law suggesting that the Oil Pollution Act will not preempt state common law tort liability.

The administration is also proposing a tax increase, to support the Oil Spill Liability Trust Fund, of a further 1 cent per barrel on petroleum. It is interesting that the administration has been criticized for the slowness of some of its responses to the spill, but is very quick to propose tax hikes, without an opportunity for all stakeholders to be heard and without careful consideration of the availability of the fund for future incidents. A White House summary of its proposals for legislation on oil spill response is available.

Some plaintiffs have proposed that the federal cases be coordinated in an MDL proceeding in the Eastern District of Louisiana.  In Re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL No. 2179 (filed 4/30/10). Certain defendants have suggested instead that the Southern District of Texas host the MDL. A large group of plaintiffs' attorneys had met in New Orleans early in the month to plot out litigation strategy.  Interestingly, the Mississippi Bar issued a statement advising potentially affected parties of the risk of improper solicitation by plaintiff attorneys.It will be fascinating to see if the defendants can remain similarly coordinated and avoid unnecessary finger-pointing.  The testimony of various executives for BP Plc, Transocean Ltd., and Halliburton in front of the Senate Energy and Natural Resources Committee and the Senate Environment and Public Works Committee that pointed out the responsibilities of the other companies, raises this issue. 

Another type of pending action is by various shareholders alleging securities fraud in a class action that asserts that defendants made false and misleading statements about their safety procedures. Allegedly as a result of the statements and the company's supposed failure to disclose prior safety issues, the stock prices had been inflated, tumbling after the accident.  Several shareholder derivative lawsuits were also filed against certain officers and directors of the defendants, claiming that they breached their fiduciary duties by supposedly ignoring critical safety issues. The suits also allege that defendants lobbied governmental authorities to reduce the extent of safety  regulation of the companies' gulf operations. (one would think that was protected speech)

Some litigation has named Interior Secretary Salazar and the U.S. Department of the Interior for their oversight of off-shore drilling operations. These case point to the rules regulating the oil companies' blowout and worst-case oil spill preparations.  Some have gone so far as to seek a halt to BP's operations at other oil drilling platforms.  Still others have focused on the oil companies' environmental impact statement posture as in violation of  the National Environmental Policy Act, and their seismic surveys and drilling operations as in violation of the Marine Mammal Protection Act and the Endangered Species Act.

Democratic Senators are pressuring the Justice Department to to open a criminal probe into the accident, and BP's statements to the federal government regarding its ability to respond to oil spills. Earlier this month, Florida Gov. Crist appointed two former Florida state attorneys general to head a newly formed legal team that will represent the state on issues related to the spill.

 

Safe Chemicals Bill Introduced in Senate

Sen. Frank R. Lautenberg, D-N.J., chair of the Senate Subcommittee on Superfund, Toxics
and Environmental Health, introduced this week the "Safe Chemicals Act of 2010," which would
amend the the Toxic Substances Control Act of 1976.

Over the last several months, Congress has held a series of hearings focusing on chemical safety and possible ways to modernize TSCA. Chemical business leaders, public officials, scientists, doctors, academics, and liberal environmental organizations have expressed support for varied methods of reforms to the principal toxic substance law. The “Safe Chemicals Act of 2010” comports with the reform principles laid out by the Obama Administration and groups such as the Safer Chemicals Healthy Families Coalition, and purports to address issues with TSCA identified by the GAO.

The bill (summarized here) is supposed to:

  • provide EPA with sufficient information to judge a chemical’s safety, by requiring manufacturers to develop and submit a minimum data set for each chemical they produce, while also preventing duplicative or unnecessary testing. EPA will have full authority to request additional information needed to determine the safety of a chemical.
  • Prioritize chemicals by having EPA categorize chemicals based on risk, and focus resources on evaluating those most likely to cause harm.
  • Place a new burden of proof on chemical manufacturers to prove the safety of their chemicals, including all foreseeable uses, before the chemical may enter the market or continue to be used.
  • Create more access to chemical information, by establishing a public database to catalog the information submitted by chemical manufacturers and the EPA’s safety determinations. The EPA will impose requirements to ensure the information collected is "reliable."
  • Promote innovation and development of green chemistry, through grant programs and research centers to foster the development of safe chemical alternatives, and bring some new chemicals onto the market using an expedited review process.


     

It is clear that safety must be the primary goal of chemical regulatory reform, and the scientific and technological advances made since the passage of TSCA should allow industry and the regulatory agency to achieve a high degree of safety.  Certainly,  the need to prioritize chemicals for evaluation, a proper risk-based approach to EPA safety reviews, and a reduction in animal testing, are all aspects that should generate bi-partisan support. However, the bill’s proposed decision-making standard may be both legally and technically impossible to meet. Readers know how the articulation and application of the burden of proof can be outcome determinative. It is impossible to prove that something is "safe,” if one means risk-free. Every substance, even water, is hazardous to health at some levels in some exposure contexts. It would be devastating for our economy if this bill was merely a back-door attempt to make the so-called precautionary principle the law in this country, as it is in Europe. It is simply scientifically false that every chemical that is dangerous at high doses is also hazardous at low doses;  it is patently false that every chemical that causes effects in lab animals will also cause those effects in human beings.

And the proposed changes to the new chemicals program could very well hamper innovation in new products, processes, and technologies. In addition, the bill undermines business certainty by appearing to allow states to adopt their own regulations and create a lack of regulatory uniformity for chemicals and the products that use them.

Congressmen Henry Waxman and Robert Rush have proposed a "discussion draft" on the House side, and that may afford an opportunity for a transparent and meaningful discussion by all key stakeholder groups to ensure that TSCA reforms are based on sound science and protect the safety of all consumers, while promoting jobs and innovation.  In these uncertain economic times, the last thing needed is another expensive government program that risks doing more harm than good.

 

Companion Bill Introduced To Ease Suits Against Foreign Manufacturers

Previously we alerted readers to the introduction of The Foreign Manufacturers Legal Accountability Act of 2009 (S. 1606),  introduced in the Senate in August 2009 by Sen. Sheldon Whitehouse (D-R.I.). The bill followed up on hearings last Spring during which witnesses testified about the perceived delays and difficulties with serving foreign manufacturers with process and establishing jurisdiction.

Last week, Rep. Betty Sutton (D-Ohio) and several co-sponsors introduced in the House their own version of the Foreign Manufacturers Legal Accountability Act of 2010 (H.R. 4678). The operative provisions of the House bill overlap those in the Senate bill, although the Senate bill also includes a section which discusses the alleged need for the legislation.

The proposed legislation would impact five categories of products: drugs, devices and cosmetics; biological products; chemical substances; pesticides; and consumer products. The bills only apply to manufactured products “in excess of a minimum value or quantity established by the head of the applicable agency" in regulations applying the legislation.

Both bills make consent to jurisdiction and service of process a condition of importing products into the United States. That is, the bills instruct several relevant product-regulating agencies to issue regulations requiring foreign manufacturers and producers to designate a registered agent. A person would not be able to import into the United States a covered product (or component part that will be used in the United States to manufacture a covered product) if such product or any part of such product (or component part) was manufactured or produced outside the United States by a manufacturer or producer who does not have a registered agent. 

Such a system which requiring an agent for service of process for every foreign manufacturer or producer who imports products into the U.S. would render the Hague Convention's  methods for service abroad unnecessary for such companies, and raises the risk that other countries may choose to create similar rules, subjecting U.S. companies to litigation in those other countries where their products may be sold.

Under the bills, a foreign manufacturer or producer of covered products that registers an agent as above thereby consents to the personal jurisdiction of the State or Federal courts of the State in which the registered agent is located for the purpose of any civil or regulatory proceeding.  Presumably, the expanded jurisdiction would also make it easier for U.S. companies to pursue indemnification claims against foreign manufacturers who were upstream suppliers.

Currently, foreseeing that one's product may enter a state is not, on its own, a sufficient basis for that state to assert jurisdiction. Asahi Metal Industry Co., Ltd. v. Superior Court, 480 U.S. 102, 112(1987); but cf. Nicastro v. McIntyre Machinery America Ltd., No. A-29-08 (N.J. 2/2/10).  It has been argued that Congress cannot create jurisdiction where the Constitution would forbid it. And it may be that a constitutional challenge would lie to some applications of the proposed bills. E.g., Texas Trading & Milling Corp. v. Federal Republic of Nigeria, 647 F.2d 300 (2d Cir. 1981). Presumably, the sponsors are looking to bypass the due process concerns by providing for consent to jurisdiction.

It is unclear what the effect of the bills might be on countries around the world regarding their willingness to enforce judgments entered in the United States, as the issue of the lack of foreign manufacturer assets in the U.S. is not addressed by the proposed legislation.


 

 

Senate Holds Hearing on TSCA Issues

The Senate Committee on Environment and Public Works' Subcommittee on Superfund, Toxics and Environmental Health held a hearing earlier this month entitled, "Current Science on Public Exposures to Toxic Chemicals."   Readers from the chemical and energy industries in particular will want to take note of the discussion.

Chairman Lautenberg (D.N.J.) opined that  TSCA fails to give EPA the tools it needs to protect against unsafe chemicals.He claimed that in three decades EPA has tested only 200 of the more than 80,000 chemicals in the products people use every day. He mentioned unnamed "studies" that allegedly have found that as much as five percent of cancers, ten percent of neuro-behavioral disorders and 30 percent of asthma cases in children are associated with hazardous chemicals. That is why, he said, he will soon introduce a bill that will overhaul our nation’s chemical laws, with the "simple goal" to force chemical makers to prove that their products are safe before they end up in a store. 

This bill would fall into place with the ideas of other proponents of radical reform and supporters of the so-called precautionary principle.  Common sense would suggest that principles for any regulatory or statutory changes to TSCA should be based on the best available science, including risk assessment; must include cost-benefit considerations; must protect proprietary information; and must prioritize reviews for existing chemicals. Senator Lautenberg's notion would encourage litigation, allow for activist rather than government enforcement, and would compel unnecessary product substitution that will further damage our weak economy.  Indeed, it would harm small and medium-sized companies and could harm innovation.

Other witnesses at the hearing included Steve Owens, Assistant Administrator, Office of Prevention, Pesticides and Toxic Substances Environmental Protection Agency;  Dr. Henry Falk  of the CDC; and Dr. Linda Birnbaum, Director  of the National Institutes of Environmental Health Sciences.

A number of witnesses also talked about bio-monitoring, the concept to potentially identify the concentration of chemicals actually taken up by the human body and the metabolic fate of those chemicals; to identify susceptible populations or particular at-risk groups (e.g. genetic polymorphisms) for chemical toxicity; and to inform discussions regarding levels of exposure consistent with no adverse effects (thresholds). However, bio-monitoring cannot eliminate potential confounders or alternative explanations for identified associations between chemical exposure and disease.  Any environmental chemical will be present to some extent in those who ingest, inhale or otherwise are exposed to it. Thus, the rabble-rousing about  “neurotoxins”, “endocrine disruptors”, or other “harmful chemicals” is essentially meaningless, without specific relationship to dose, exposure timing, and comparison to appropriate control populations. Our ability to measure substances at very low concentrations has outstripped our ability to determine causation.

Unfortunately, bio-monitoring has been abused as a tool. The practical problem with overstating exposure-disease associations is seen every day by medical professionals who evaluate people who are fearful of being “poisoned” by the latest chemical touted in a study as the cause of the same disease blamed on another compound just the month before, noted witness Dr. Charles McKay.

Nanotechnology Legislation Introduced in Senate

Two Democratic legislators have introduced a bill that would create an FDA program to assess the potential health and safety effects of nano-technology ingredients in various consumer products.  Sens. Mark Pryor (D-Ark.) and Benjamin L. Cardin (D-Md.) introduced the "Nanotechnology Safety Act of 2010," S. 2942, last week. Their introductory remarks here.

The FDA established a Nanotechnology Task Force, which issued a report in July 2007. In the task force report, recommendations were made regarding FDA’s future direction for regulating nanomaterial-containing products. Guidance development was included as one the recommendations. The FDA’s Advisory Committee for Pharmaceutical Science and Clinical Pharmacology met In 2008. Among the agenda topics was a discussion of issues pertaining to the use of nanotechnology in drug manufacturing, drug delivery, or drug products.  Later, FDA held a public meeting to gather information that will assist the agency in further implementing the recommendations of the Nanotechnology Task Force Report relating to the development of agency guidance documents concerning nanotechnology.

The bill would create a program for the scientific investigation of nanoscale materials included or intended for inclusion in FDA-regulated products, to address the potential toxicology of such materials, the effects of such materials on biological systems, and interaction of such materials with biological systems.  Specifically, FDA would be charged to assess scientific literature and data on general nanoscale material interactions with biological systems and on specific nanoscale materials of concern to Food and Drug Administration, and collect, synthesize, interpret, and disseminate scientific information and data related to the interactions of nanoscale materials with biological systems.

Nanotechnology applications in drug development are likely to have a significant impact on the products that FDA regulates. Products containing nanomaterials are being investigated for potential applications as therapeutics, and some products containing nanoscale materials are already on the market. While some of these nanomaterials are nanoscale versions of larger materials used in approved products, other nanomaterials are novel and have never been used in drug products. In 2009, the FDA introduced the "Nanotechnology Initiative", a collaborative effort between FDA and the Alliance for NanoHealth.

The proposed law would also require a report from FDA by 2012 that includes a review of the coordination of activities under the program with other departments and agencies participating in the National Nanotechnology Initiative. The bill would send $25 million annual funding to the agency for the program. The bill was referred to the Committee on Health, Education, Labor, and Pensions,

Many readers of MassTortDefense know that nanotechnology refers to a new field of technology that seeks to manipulate and control products, really matter, on the atomic and molecular scale, typically 100 nanometers or smaller. To give some sense of scale, one nanometer is one billionth, or 10-9 of a meter. A nanometer compared to a meter is the roughly the same ratio as that of a baseball to the size of the Earth. Or another analogy, a nanometer is the length a man's whiskers grow in the time it takes him to lift his razor to his face to shave. We have posted on this topic here, here, and here.
 

Senate Hearing on Toxic Chemicals Legislation

The Senate Committee on Environment and Public Works and the Subcommittee on Superfund, Toxics, and Environmental Health held a joint hearing yesterday, entitled “Oversight Hearing on the Federal Toxic Substances Control Act.”

The Senators heard testimony from Lisa Jackson, head of EPA; John Stephenson, Director of Natural Resources and Environment for GAO; and Linda Birnbaum, head of NIEHS and the National Toxicology Program.

Administrator Jackson argued that the Toxic Substances Control Act is in urgent need of reform because of "troubling gaps" in knowledge about many chemicals that have come into wide use since. She asserted that manufacturers of various “grandfathered” chemicals weren’t required to develop and produce the data on toxicity and exposure that are needed to properly and fully assess potential risks. [In a bit of drama, EPA’s Jackson was asked about some of the troubling emails recently disclosed about the apparent concerted effort of some to quash any scientific dissent to an aggressive view of global warming.]

The American Chemistry Council has noted that updating the legislation in certain respects made good sense, favoring a comprehensive approach, rather than the current patchwork of state and federal laws governing chemicals.

GAO’s representative testified that TSCA generally places the burden of obtaining data about existing chemicals on EPA rather than on chemical companies. For example, the act requires EPA to demonstrate certain health or environmental risks before it can require companies to further test their chemicals. As a result, EPA does not routinely assess the risks of the over 83,000 chemicals already in use. Moreover, TSCA does not require chemical companies to test the approximately 700 new chemicals introduced into commerce each year for toxicity, and companies generally do not voluntarily perform such testing.

Dr. Birnbaum encouraged Congress to call for utilization of the new kind of toxicological testing that is less expensive and also gives an improved understanding of the actual effects of chemicals on humans. Toxicology is advancing from a mostly observational science using disease-specific models, she said, to a better, predictive science focused upon a broad inclusion of target-specific, mechanism-based, biological observations. This means using alternative assays targeting the key pathways, molecular events, or processes linked to disease or injury, and incorporating them into a research and testing framework.

Democratic legislators, including Sen. Lautenberg (D-NJ) have called for increased requirements for chemicals testing, and that “It's time to sound the alarm.” In an attempt to respond to industry concerns, Lautenberg argued that stronger regulations would somehow protect chemical companies from product liability suits—an ironic assertion at best as Democrats actively work to overturn express preemption for medical devices and extol the Wyeth v. Levine decision restricting implied preemption of drugs.

Of particular concern to readers of MassTortDefense would be efforts to eliminate the current risk-based review system under TSCA and force EPA to use the so-called precautionary principle.

It seems more supportable that any overhaul of TSCA should include the notion that scientific reviews must use data and methods based on the best available science and risk-based assessment; must include cost-benefit considerations for the private-sector and consumers; must protect proprietary business information, and should logically prioritize reviews for existing chemicals.