Regulatory Compliance Food Law FSC421 1 What are

Regulatory Compliance Food Law FSC-421 1

What are we talking about? n Judicial Enforcement n Remedies available to the consumer Products Liability n Private Actions against the Government n n Regulatory Enforcement n Remedies available to Government n Recalls, Seizures, Injunctions 2

Judicial Remedies n Products Liability n Breach of Warranty n n Negligence n n Implied or express warranties of merchanability Breach of duty of care to consumer Strict Liability without fault n 2 nd Restatement of Torts n 3

Defenses to Products Liability Actions n HACCP n n GMPs n n Written Plans Compliance with all applicable Mitigation of Damages Initiate immediate recall n Cure the defect n Public Notice n 4

Private Actions Against US n Persons damaged by administrative act of the government n n Federal Torts Claim Act n n Approval of DES Abrogates common law sovereign immunity US can be sued for acts and omissions by its investigative and enforcement officers based on assault, battery, false imprisonment, false arrest, etc. 5

Examples of Private Actions n n n Diethyl stilbesterol approval Xylocaine approval Approval of polio vaccine Death due to approval of live polio vaccine Illegal seizure Reliance on FDA certification of marketability 6

Regulatory Remedies n n n Movement of adulterated or misbranded food products are primary basis for enforcement activities by regulatory authorities Adulteration includes poisonous and deleterious substances in food Misbranding includes false and misleading statements 7

Prohibited Acts n n FDCA Sec 301 lists “prohibited acts” 301(a) sets broad prohibition n n “introduction into interstate commerce of any food …. . that is adulterated or misbranded Actual crossing of state line not required, contract for sale is violation n US v. Seven Barrels. . Spray dried whole eggs 8

Example St. Louis FDA inspector goes to Illinois defendant seller and poses as purchaser from Memphis, Tennessee, indicating he wants product for use in Tennessee. Defendant sold inspector misbranded drug product. Inspector returned to St. Louis and initiated enforcement action based on interstate shipment of misbranded product. Court said “not guilty” b/c “intent of the buyer and seller must match. Fact that drug traveled across state line was immaterial. 9

Prohibited Acts n Section 301(a) n n Section 301(b) n n n introduction or delivery of any adulterated or misbranded food into interstate commerce (I/C) adulteration or misbranding of any food in I/C covers common carriers Sec 301(c) n receipt of any…………. (rarely used) 10

Prohibited Acts n n What if food adulterated after crosses state line (tampering)? Sec 301(k) n Alteration, mutilation, destruction, obliteration or removal in whole or part of any label…. . if done while held for sale and after shipment in I/C 11

Other Prohibited Acts n 301(d) n n 301(e) n n shipment w/o a permit if required refusal to permit copying of shipping record 301(h) n Guarantee from supplier that goods not adulterated is defense to prosecution unless guarantee is false 12

Concurrent Jurisdiction n Cooperation between agencies to ensure compliance with adulteration and misbranding provisions of FDCA and other Acts n Includes Federal, State, and Foreign agencies n n agencies of foreign governments FDA, USDA, OHSA, EPA, DOJ 13

Memorandums of Understanding n MOU's issued as compliance policy n “Deals between agencies” n Defines relationships between: guides n n n two or more federal agencies U. S. agency and foreign government U. S. agency and state agency 14

Examples of MOU's n CPG 7155 a 01 is MOU between FDA and USDA/AMS for inspection of fruit and vegetable products n CPG 7155 a 16 is MOU between FDA and USDA/FSIS for inspection of facilities regulated by both agencies n Monster Rancher villian 15

Food, Drug, and Cosmetic Act n n n Primary act enforced by FDA promulgates regulations for interpretation and enforcement FDA implement compliance programs and enforcement procedures 16

Inspections n n Primary FDA compliance tool for keeping adulterated products out of I/C Inspection authority comes from Sec. 704 of FDCA n "…FDA may inspect a factory, warehouse, establishment or vehicle in which food is manufactured, processed, packed… to examine all pertinent equipment, finished and unfinished materials and labeling. " 17

Inspectors n n n Must present appropriate credentials, warrant and written notice of inspection Must conduct at reasonable times, within reasonable limits and in a reasonable manner FDA also authorized to collect samples n n n Must give receipts Copies of any analysis Authorized to make copies of interstate shipping records 18

Inspections n n FDA may not conduct an inspection without either consent or a warrant. Warrantless inspections violate 4 th amendment unless: n n n Have consent Emergency conditions exists Pervasively regulated industry n n Mining, auto junkyards, Drug manufacturing industry Is Food Industry a prevasively regulated industry so that warrantless inspections should be legal? 19

Inspections n Two types of warrants: n Criminal search warrant Broad authority to looks for evidence of a crime n Need only show "probable cause" n n Administrative inspection warrant Need specific evidence of an existing violation n Results may not be admissable at trial n 20

Inspections n Two types: 1. Comprehensive Wall to wall inspection n Covers everything under FDA jurisdiction n 2. Directed inspections Covers specific areas to certain depth (limits) n Usually in response to consumer complaint n 21

Inspections n n n n Inspection begins with "Opening Conference" Details purpose and scope of inspection Company decision to consent or require warrant Company has right to time to inspect warrant Can allow inspection and file "written protest" Inspection conducted in accordance with "Investigations Operations Manual" Ends with "Closing Conference" Inspector prepares "Establishment Inspection Report" 22

Penalties n Imprisonment up to one year and fine n Increased for subsequent convictions n Imprisonment up to 3 years and/or n Per day/per violation up to $1, 000 or both fine up to $10, 000 23

Enforcement Options n FDA cannot file criminal charges n n FDA options n n can recommend this be done by DOJ Seizures, injunctions, recalls, warning letters USDA options n Mandatory inspections, refusal of inspection 24

FDA’s Regulatory Philosophy n Objective is to insure voluntary compliance n n n cannot ensure safety of food by policing Empowered to use full force of legal system if necessary ("big stick") advising a company of violations is often sufficient n has led to increase use of warning letters 25

Warning Letter n Written communication from FDA notifying ……that the agency considers one or more products, practices or procedures to be in violation of the FDCA or other acts and that failure to take prompt and appropriate action to correct the violation may be expected to result in enforcement action without further notice. 26

Warning Letters n Criteria for issuance there is reason to believe prompt corrective action will be taken n violation is clear and not ambiguous n other enforcement action taken, if necessary n considered appropriate by District Office n n Issued by District Office without review by headquarters 27

Warning Letters n intended to encourage voluntary n if response is not timely or adequate: compliance further action can be taken (Seizure) n without contact with company (ex-parte) n n letters are public documents n available to press (neg-pub) 28

Warning Letters n Written response required n Responses become public documents should be carefully drafted n agreeing to corrective action is acknowledgment of problem n n FDA not required to reply to response 29

Seizure n n Section 304 FDCA authorizes seizure of any food that is adulterated or misbranded when introduced into interstate commerce or while held for shipment in interstate commerce Action is against the product itself, not against company or employees n n Subject matter jurisdiction Seized product destroyed after finding of adulteration or misbranding by court if not corrected 30

Seizure Process n n n Magistrate issues "Arrest Warrant" for goods US Marshalls takes actual possessions or places good "under seal" wherever he/she finds them Company must file "claim of ownership" w/n 10 days Matter handled as "civil action" with or w/o jury Notice of seizure must be published 31

Seizure n Response to seizure action n litigation is expensive n could n three result in adverse publicity basic options for response n no response - product destroyed or diverted n file a claim and litigate the order to seize n consent to seizure and negotiate to recondition product 32

Injunctive Relief n requires that cause of problem be corrected before product is shipped n n n issued against company or individual prevents violative product from entering marketplace requires corrective action 33

Injunctions n Temporary Restraining Order n n Issued ex-parte for 10 days to stop violation while government applies for injunction Preliminary Injunction (Gov must show) Substantial likelihood of success at trial n Threat of irrepairable harm n Harm outweighs result of injunction n 34

Injunction n n Used in situations which require immediate action to safeguard welfare of consumers FDA may request preliminary injunction or temporary restraining order n temporary restraining order is fastest way to remove product from the market n preliminary injunction requires a hearing 35

Injunction n Irrepairable harm shown by: n storage under insanitary conditions n noncompliance with labeling requirements n failure to follow GMPs n product requires, but does not have FDA approval 36

Injunction (cont. ) n might be avoided by: n n correcting conditions that led to Warning Letter correcting problems that caused seizure action making deliberate effort to comply with law being alert and responsive to actions that indicate inadvertent and unintentional violation 37

Injunction con't n Issued by Federal District Court n In response to recommendations by FDA District Office n FDA Headquarter’s Center n FDA Office of General Counsel n U. S. Justice Department n Assistant U. S. Attorney in District Court n 38

Injunctions n Consent Decree n Opportunity to avoid injunction trial n deficiencies must be corrected n violative products destroyed n FDA paid for filing cost n FDA may impose other requirements n Violation of injunction or consent decree punished by contempt of court finding 39

Recall n n Firm's removal or correction of a marketed product that FDA considers to be in violation of the FDCA and against which the Agency would otherwise initiate legal action Includes removal of product from: Warehouses, distribution centers, retail sales outlets, n even homes n 40

Recalls n Recalls are voluntary. FDA has no statutory authority to compel and recall. n n FDA may strongly encourage recall as alternative to stronger agency action such as seizure. Most rapid and effective method of removing widely distributed violative products which are beyond control of the recalling company from market 41

Recalls n n FDA can mandate recall of adulterated infant formulas (1986) FDA has published guidelines regarding how, when and why to initiate a recall n 21 CFR 7. 42 42

Recalls n 3 types of product removals n n “stock recovery” - product is still under control of manufacturer “market withdrawal” - product is of lower quality than desired or "technical violation" “recall” - product represents potential hazard first step is to determine type of removal 43

Recalls n Consumers may need to be alerted to potential danger n Recall should reach down to the n Market withdrawal will not go below consumer level retail outlet level 44

Classes of recalls n Class I - product will cause serious n Class II - product may cause n Class III - product not likely to cause health consequences or death temporary or medically reversible health consequences adverse health consequences; may be aesthetically displeasing 45

FDA Recall strategy n FDA will consider: evaluation of health hazard n ability to identify product in marketplace n consumer’s identification of defective product n amount of product still in marketplace n 46

Recall Information What FDA will want to know: n n n n identity of product reason and date discovered evaluation of risk total amount of suspect product distribution information company’s recall communication proposed recall procedure name, address, phone number of company 47

Termination of a Recall n n n When all reasonable efforts have been made to remove or correct the product in accordance with the recall strategy If FDA not involve = company's decision If FDA involved = company makes initial determination to terminate recall and seek FDA concurrence by submitting documentation of effectiveness and disposal 48

Recalls n Industry guidance: n have a written plan and rehearse it n have a product code system that will facilitate product removal n maintain records of product distribution 49

USDA Remedies n n n Most prohibitions in FDCA are also prohibited by Federal Meat Inspection Act (FMIA) Standard for criminal liability is same US v. Cattle King (1986) n Shipment in I/C of adulterated meat n Employees "directly involved" held liable 50

USDA Remedies n n Can seize and condemn violative meat products Rarely used b/c USDA has authority to "detain" violative product for 21 days w/o hearing Any uninspected meat n Adulterated but capable of being used as food n 51

USDA Remedies n n FMIA also authorizes injunctive relief Like FDA, USDA has authority to conduct mandatory inspections. Unlike FDA, USDA has additional authority to withdraw mandatory inspection No inspection, no distribution n b/c shipment of uninspected meat in I/C is? ) 52

Criminal Actions n n n Extensive review prior to initiation Defendant gets Sec. 305 hearing (notice and opportunity to be heard prior to formal charge) Referral to DOJ (prosecutorial discretion) Grand Jury Plea Bargaining 53

Strict Criminal liability n n n US v. Dotterwich 20 U. S. 277 (1943) Standard for proving criminal violations Gov need not prove "knew or intended to violate law" Buffalo Pharmacal Company shipped adulterated drugs in I/C President Dotterwich alleged "knew nothing" (not even about shipment) 54

Dotterwich (con't) n n Supreme Court (Justice Franfurter) Offense is committed by all those responsible for putting the product into I/C Mere proof of shipment is enough to prove violation. Any corporate officer who "stands in responsible relation to the violative act" 55

Responsible Relationship n n US v. Park 421 U. S. 658 (1975) President of Acme Supermarkets headquarters in Philadelphia FDA found violations at Baltimore wharehouse (insanitary conditions) FDA send letter of notice of conditions addressed to Park who told Vice-President to fix 56

U. S. v Park (con't) n n Park testified VP told him problem fixed so no wrongful act on his part Supreme court (Justice Burger) said: n FDCA imposes positive duty to seek out and remedy violations and to implement measures to insure violations do not occur. Public has right to expect this of those who voluntarily assume positions of authority in business enterprises 57

Summary n n Regulatory vs. Judicial enforcement FDA has authority to enforce prohibitions listed in FDCA Movement in interstate commerce of adulterated or misbranded food product is general jurisdictional prerequisite Actual movement across border not necessary 58

Summary n Regulatory enforcement mechanisms include: recalls (voluntary), seizures and injunctions n n n Warning Letters and Consent decrees being used more frequently Penalty for violation of administrative order is contempt of court Justice Department has the "Big Stick" and can file criminal actions against responsible parties. 59

Concurrent Jurisdiction n State enforcement agencies n n Scope of state inspector's authority differs according to enabling legislation of each state State inspecting officials can exercise their authority to seize product Can exercise state power to assist feds Most state laws modeled after fed 60

Conflicts of Laws n Choice of applicable law when lawsuit instituted against company? Marketing product in multi-state or national distribution chain Traditionally: Law of the location n So far, no states have conflicting laws n n where the injury took place n Laws can be complied with simultaneously 61

Example: n n Company organized in Delaware Manufacturing plant in Pennsylvania n n n Buys flour from Kansas Leavenings from Minnesota Packaging from Ohio Product sold to New York distributor Plaintiff purchases in Connecticut Consumes and becomes ill on flight home to California 62

State Enforcement n n n All 50 states have food laws: "little Acts" Traditionally, states could only enforce their own laws against food products located in that state Today, NLEA gave States authority to sue in Federal court for violations of FDCA in their own name if: n n n 30 days notice to FDA has not instituted an action FDA has not been "diligent" in pursing 63