Generic Drug Law Update -- November 2012: Expanding Liability for Ineffective Product Recalls

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[author: Kelly Savage Day]

FDA-regulated companies may face civil liability if they fail to provide adequate notice of product recalls to their customers via information gathered in company customer databases.  A group of California plaintiffs sued a national grocery chain in Hensley-Maclean v. Safeway, Inc., No. 11-1230 (U.S. Dist. Ct., N.D. Cal., SF Div. (2011), for failing to provide e-mail notice of tainted food recalls. The plaintiffs allege that the grocer had sufficient information to notify them of the recalls via e-mail because the company, through its “club card” loyalty program, collected contact information and a history of the purchases for participating customers. The plaintiffs further allege that the company violated California’s Consumer Legal Remedies Act and Unfair Competition Law by selling unsafe goods while leading customers to believe they were safe for consumption and of a particular quality. The Northern District of California recently refused to dismiss the case or stay the proceedings under the primary jurisdiction doctrine or on equitable abstention grounds “until and unless regulatory agencies have the opportunity to consider and adopt appropriate rules governing the obligations a grocery store has with respect to providing its customers notice of such recalls.”  The court held that it would not await further administrative action, “because there is no indication that anything the FDA may choose to do or not do will resolve the claims plaintiffs are making in this action, in whole or in part.” According to the most recent docket report, the plaintiffs just filed their motion for class certification, which the federal district court will hear on February 14, 2013.

 

The grocer’s fate in this case remains unclear, but this case highlights the importance of notifying consumers about a product recall.  With the increased use of social media, e-mail, text messaging and the Internet, traditional methods of communication (e.g., newspapers, radio announcements, and press releases), while useful and important, may no longer be sufficient. Companies providing notice of recalls would be well advised to consider using modern methods of communication as part of the overall notice effort.

 

Published In: Administrative Agency Updates, Civil Procedure Updates, Civil Remedies Updates, Consumer Protection Updates, Products Liability Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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