This month serves as a reminder to manufacturers, distributors, retailers and importers that consumer products carry strong liability risks when they pose risks of serious injury or death. Steps should be taken to reduce that liability, including the issuance of alerts and recalls to remove the products from the stream of commerce.
The United States Environmental Protection Agency (EPA) has imposed the first penalty for violations of its new rule limiting formaldehyde emissions from composite wood products just over one year after the rule became effective. The $544,064 penalty assessed against construction product supplier Global Sourcing Solutions, a Division of Turner Logistics, LLC (Global Sourcing Solutions), comes as part of a consent agreement between EPA and the company, which will also be required to implement a corrective action plan.
On August 8, 2019, the SEC proposed rules that would revise disclosures for Regulation S-K Item 101 (description of business), Item 103 (legal proceedings) and Item 105 (risk factors), in an effort to make disclosures more useful for investors and make compliance easier for registrants.
In a recent article in the ABA Business Law Section publication Business Law Today, Hunton Andrews Kurth insurance attorneys Syed Ahmad and Geoffrey Fehling discuss several important D&O insurance coverage issues that can have far-reaching implications with retailers and other businesses involved in mergers, acquisitions, and other M&A deals. In the article, the authors discuss the intersection of M&A and insurance and how those transactions can impact the potential risks and protections afforded by D&O and other insurance policies. A copy of the article can be found here.
As reported in an August 27, 2019 client alert by the Product Liability and Mass Tort Litigation practice, on August 23, 2019, the United States Environmental Protection Agency (EPA) designated 20 chemicals commonly found in consumer products as “high priorities” for risk evaluation and possible regulation. EPA’s identification of these chemicals comes under the authority conferred by the Frank R. Lautenberg Chemical Safety for the 21st Century Act (Lautenberg Act), which amended the Toxic Substances Control Act (TSCA) in 2016 to give EPA new powers to review and regulate chemicals.
Citing its potentially outdated 1997 Enforcement Policy Statement on US Origin Claims, the Federal Trade Commission has announced that it will hold a half-day workshop in its DC offices on Made in USA advertising on September 26, 2019. Among other things, the agency is seeking input on how consumers interpret Made in USA claims, what the costs and benefits are of the FTC’s “all or virtually all” standard for unqualified claims, whether its current requirement that 85 percent of costs must be attributable to the United States to make an unqualified claim and whether firms that advertise their products as “Made in USA” charge higher prices than their competitors whose products are not advertised in this way. The FTC also will explore how the agency should address deceptive US origin claims made to US consumers on third-party platforms by firms with no US presence. The FTC will accept comments on the topic through October 11, 2019.
As reported on the Blockchain Legal Resource Blog on August 27, 2019, The Federal Trade Commission reached a settlement with the promoters of chain-based cryptocurrency schemes—Thomas Dluca, Louis Gatto, Eric Pinkston and Scott Chandler—in which the defendants promised recruits big rewards in exchange for a small payment of bitcoin or Litecoin.
Design patents can be a useful way to complement an IP portfolio because they can protect the way a product looks instead of how it works. Many consumer products can be defined this way, either in conjunction with, or even in lieu of, utility patents. Where utility patents cover a technical innovation, design patents must claim “ornamental” designs and cannot cover a “primarily functional” design that is essential to the use of the covered product.
On July 1, 2019, the Department of Labor (“DOL”) issued an opinion letter regarding permissible rounding practices under the Service Contract Act (“SCA”). Although the SCA governs government contractors, the DOL’s guidance is nevertheless helpful to retailers because the SCA incorporates Fair Labor Standards Act (“FLSA”) rounding principles, which are applicable to them.
The Federal Trade Commission has stepped up enforcement of the Consumer Review Fairness Act of 2016 (CRFA) which prohibits companies from barring honest consumer reviews of their products and services. While enforcement of the CRFA was initially slow, that changed this year.