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Boston jury delivers $81 million punitive damages verdict against Lorillard
Thursday, December 16th, 2010
FOR IMMEDIATE RELEASE
Contact: Edward L. Sweda, Jr. or Mark Gottlieb (617) 373-8462 or (617) 373-2026
A Suffolk Country jury, after finding Lorillard liable on December 14, 2010 for the wrongful death of a woman who was given free Newport cigarettes by the company as a child growing up in a Boston public housing project, today issued a punitive damages verdict of $81 million against the maker of Newports.
The jury heard testimony from an economist and an accountant who discussed the assets of Lorillard and its ability to pay. The plaintiff called forensic economist Robert Johnson who testified that Lorrilard’s net sales this year came out to about $81 million for a 5 day work week. He also noted that Lorillard was on track to make a profit of over a billion dollars this year. On cross-examination, Johnson was asked about presentations he has given at conferences organized by PHAI’s Tobacco Products Liability Project.
The defense called local certified public accountant, Robert H. Temkin, who suggested that Lorillard’s ability to pay was less than what Johnson suggested.
The defense’s closing argument, delivered by Shook, Hardy & Bacon’s Walter Cofer, told the jury that, although he shares a name with his grandfather, they are not the same man. Likewise, he reasoned, the Lorillard of today is not the same company that parked a truck next to a playground and gave free cigarettes to children.
The purpose of punitive damages is to punish bad conduct and deter future bad conduct. Cofer argued that that because the tobacco industry is now regulated the the U.S. Food and Drug Administration, the regulatory agency will ensure that no future bad conduct takes place. As for the punishment, Cofer analogized that it was sometimes necessary to “whack a mule on the rump” to get it moving in the right direction. But, he said, once that mule was heading the right way, there was no need to keep whacking it. Lorillard now admits that its products are addictive and deadly, so “whacking it again and again is not necessary.”
Michael Weisman of Davis, Malm & D’Agostine in Boston told the jury that just because Lorillard is now subject to new federal regulatory authority, it does not get them off the hook for what they did and what they do not now do, like make a serious commitment to keep kids from smoking today.
The jury was instructed by judge Elizabeth M. Fahey to consider the character, duration, and nature of Lorillard’s conduct; the actual harm to the victim in this case; the the magnitude of the harm to potential victims in the future. The jury retired to lunch and, about 90 minutes later, returned the verdict in the amount of $81 million, bringing the total liability in the trial to $152 million.
Judge Fahey has yet to rule on the question of Lorillard’s liability under Massachusetts consumer protection law, which could increase the defendant’s total liability. Lorillard is expected to seek a reduction in the amount in its post-trial motions. It will then likely appeal to the Massachusetts Appeals Couort, then the Massachusetts Supreme Judicial Court, and, if necessary, to the U.S. Supreme Court.
Mark Gottlieb, Director of the Tobacco Products Liability Project at Northeastern University School of Law, who was present for today’s hearing, noted that: “the total verdict of $152 million is currently the largest verdict in an individual smoking and health case. Larger verdicts in California and Florida were later reduced. The jury’s message to Lorillard was clear: ‘What was done to Ms. Evans was totally unacceptable.’ More cases involving addicting children with free samples will almost certainly be filed as a result of this case.”
Senior Attorney Edward L. Sweda, Jr., noted, “Today’s award of $81 million in punitive damages clearly reflects this American jury’s outrage at the predatory conduct of Lorillard Tobacco Company – conduct that was a legal cause of Marie Evans’ death from lung cancer at age 54.”
Plaintiff Willie Evans emerges from the courtroom after the verdict
Discovery of Elevated Fructose Levels in Popular Soft Drinks Raises Important Legal Questions for Regulators and Consumers
Wednesday, October 27th, 2010
Prepared by Cara Wilking, J.D., Staff Attorney
What kinds of High Fructose Corn Syrup Are Generally Recognized as Safe for Use in the Food Supply?
Substances “reasonably expected to become a component of food” are food additives subject to premarket approval by the Food and Drug Administration (FDA), unless they are as generally recognized as safe (GRAS).[1] In 1983, the federal government listed high fructose corn syrup (HFCS) as GRAS, and the FDA affirmed that decision in 1996. Federal law defines HFCS as “a sweet, nutritive saccharide mixture containing either approximately 42 or 55 percent fructose.”[2] Accordingly, HFCS typically is commercially available as HFCS-42 (42% fructose) or HFCS-55 (55% fructose). The basic rationale behind granting HFCS GRAS status was that it contains essentially the same ratio of fructose to glucose as table sugar (table sugar is 50% fructose and 50% glucose). Consistent with this logic, in its 1996 review of the GRAS status of HFCS, the FDA expressly rejected a proposal to expand the definition of HFCS to include “HFCS-90” (90% fructose), “primarily because HFCS-90 does not contain approximately equimolar amounts of glucose and fructose.”[3] HFCS-90 does not have GRAS status, and FDA food labeling laws require that HFCS be listed as an ingredient separate from other sweeteners.[4]
Do Fructose Levels in Popular Soft Drinks Containing HFCS Conform to the GRAS Standard?
In a recent study published in the journal Obesity, Ventura et al. purchased a mix of twenty three bottled and fountain dispensed sweetened-beverages and had them tested by an independent laboratory to determine, among other things, the fructose to glucose ratio of popular full-calorie soft-drinks. Laboratory testing revealed that bottled full-calorie Pepsi, Coca-Cola and Sprite had fructose estimates of 64-65%, well in excess of the upper-level of 55% fructose generally recognized as safe by the Food and Drug Administration.[5] The study extrapolated from this finding that the elevated fructose levels equated to “18% higher fructose consumption than would be estimated assuming the value of 55% HFCS.”[6] This preliminary finding has potentially important public health implications,[7] and is important because a key part of the GRAS process is to estimate the population-wide consumption of the substance being evaluated. [8]
What Legal Issues Would Be Implicated by Elevated Fructose Levels in Popular Soft-Drinks?
Ventura et al.’s study reflects a very small sample size. Elevated fructose levels in popular soft drinks, if confirmed by additional testing implicate a number of legal issues for regulators and consumers.
Federal Prohibition of False and Misleading Food Labeling
The Federal Food Drug and Cosmetic Act prohibits false and misleading food labeling, and “food is misbranded if its labeling is false or misleading in any particular.”[9] Federal law specifically defines HFCS “as mixture containing either approximately 42 or 55 percent fructose.”[10] These are the only HFCS formulations that are GRAS and permitted for widespread use in the food supply without prior approval. Absent another source of fructose disclosed in the ingredients list, it would be false and misleading to list “HFCS” on the ingredient list when the product in fact contains a higher ratio of fructose to glucose than required by the legal definition of the ingredient. As such, under federal law the product would be misbranded.
Federal Prohibition of Adulterated Foods
The FDA summarized its adulterated food policy in a guidance document to the food industry as follows:
“Any substance added to a beverage or other conventional food that is an unapproved food additive (e.g., because it is not GRAS for its intended use) causes the food to be adulterated under section 402(a)(2)(C) of the FFDCA (21 U.S.C. 342(a)(2)(C)). Adulterated foods cannot be legally imported or marketed in the United States.”[11]
HFCS that does not conform to the GRAS ratio of no more than 55% fructose is not GRAS for widespread use in the food supply. Under a plain reading of the FDA’s adulterated food policy, use of such a sweetener in a beverage would constitute the use of an unapproved food additive rendering the product adulterated.
False and Misleading Advertising
Federal and state laws generally prohibit false and misleading advertising. In 2008, the Corn Refiners Association launched a national multimedia advertising and public relations campaign called “Changing the Conversation about High Fructose Corn Syrup.”[12] The central message of the campaign is that HFCS is essentially the same as table sugar with respect to the ratio of fructose to glucose and is therefore safe:
“High fructose corn syrup is nearly identical in composition to table sugar — both contain approximately 50% glucose and 50% fructose. Sugar and high fructose corn syrup have the same number of calories as most carbohydrates; both have four calories per gram. Because they are nearly compositionally equivalent, the human body cannot tell the difference between high fructose corn syrup and sugar.”[13]
If additional testing of foods and beverages sweetened with HFCS reveals widespread actual fructose levels in excess of 55%, then the representation that HFCS is “compositionally equivalent” to table sugar could amount to false and misleading advertising requiring action by the Federal Trade Commission and State Attorneys General.
REFERENCES
[1] US FDA, Determining the Regulatory Status of a Food Ingredient, http://www.fda.gov/Food/FoodIngredientsPackaging/FoodAdditives/ucm228269.htm (Oct. 8, 2010).
[2] 21 CFR § 184.1866(a).
[3] Direct Food Substances Affirmed as Generally Recognized as Safe; High Fructose Corn Syrup, 61 Fed. Reg. Volume 165, 43448 (Friday, August 23, 1996) (to be codified at 21 CFR pt. 182-184).
[4] See US FDA, Letter to Food Manufacturers about “And/Or” Ingredient Labeling of Nutritive Sweeteners in Soft Drink Products, http://www.fda.gov/Food/LabelingNutrition/FoodLabelingGuidanceRegulatoryInformation/InspectionCompliance/WarningOtherLetters/ucm110252.htm (July 5, 2005).
[5] Emily E. Ventura, Jaimie N. Davis & Michael I. Goran, Sugar Content of Popular Sweetened Beverages Based on Objective Laboratory Analysis: Focus on Fructose Content, __Obesity__, 5 (2010) .
[6] Id. at 6.
[7] See id. at 5-6 (discuss the various health consequences of the metabolic process triggered by fructose vs. glucose).
[8] US FDA, Guidance for Industry: Estimating Dietary Intake of Substances in Food, http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/FoodIngredientsandPackaging/ucm074725.htm (August 2006).
[9] US FDA, Guidance for Industry: Factors that Distinguish Liquid Dietary Supplements from Beverages, Considerations Regarding Novel Ingredients, and Labeling for Beverages and Other Conventional Foods, http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/DietarySupplements/ucm196903.htm (Dec. 2009).
[10] 21 CFR § 184.1866(a).
[11] US FDA, Guidance for Industry: Factors that Distinguish Liquid Dietary Supplements from Beverages, Considerations Regarding Novel Ingredients, and Labeling for Beverages and Other Conventional Foods (Dec. 2009).
[12] Corn Refiners Association, Our Mission, http://www.sweetsurprise.com/about-us/our-mission.
[13] Corn Refiners Association , High Fructose Corn Syrup Myths, http://www.sweetsurprise.com/myths-and-facts/top-hfcs-myths.
[1] US FDA, Determining the Regulatory Status of a Food Ingredient, http://www.fda.gov/Food/FoodIngredientsPackaging/FoodAdditives/ucm228269.htm (Oct. 8, 2010)
[1] 21 CFR § 184.1866(a).
[1] Direct Food Substances Affirmed as Generally Recognized as Safe; High Fructose Corn Syrup, 61 Fed. Reg. Volume 165,43448(Friday, August 23, 1996)
(to be codified at 21 CFR pt. 182-184).
[1] See US FDA, Letter to Food Manufacturers about “And/Or” Ingredient Labeling of Nutritive Sweeteners in Soft Drink Products, http://www.fda.gov/Food/LabelingNutrition/FoodLabelingGuidanceRegulatoryInformation/InspectionCompliance/WarningOtherLetters/ucm110252.htm (July 5, 2005).
[1] Emily E. Ventura, Jaimie N. Davis & Michael I. Goran, Sugar Content of Popular Sweetened Beverages Based on Objective Laboratory Analysis: Focus on Fructose Content, __Obesity__, 5 (2010) .
[1] Id. at 6.
[1] See id. at 5-6 (discuss the various health consequences of the metabolic process triggered by fructose vs. glucose).
[1] US FDA, Guidance for Industry: Estimating Dietary Intake of Substances in Food, http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/FoodIngredientsandPackaging/ucm074725.htm (August 2006).
[1] US FDA, Guidance for Industry: Factors that Distinguish Liquid Dietary Supplements from Beverages, Considerations Regarding Novel Ingredients, and Labeling for Beverages and Other Conventional Foods, http://www.fda.gov/Food/GuidanceComplianceRegulatoryInformation/GuidanceDocuments/DietarySupplements/ucm196903.htm (Dec. 2009).
[1] 21 CFR § 184.1866(a).
[1] US FDA, Guidance for Industry: Factors that Distinguish Liquid Dietary Supplements from Beverages, Considerations Regarding Novel Ingredients, and Labeling for Beverages and Other Conventional Foods (Dec. 2009).
[1] Corn Refiners Association, Our Mission, http://www.sweetsurprise.com/about-us/our-mission.
[1] Corn Refiners Association , High Fructose Corn Syrup Myths, http://www.sweetsurprise.com/myths-and-facts/top-hfcs-myths.
Report on Altria Group, Inc.’s Annual Shareholders Meeting – Richmond, Virginia, May 20, 2010
Wednesday, June 2nd, 2010
By Edward L. Sweda, Jr., Senior Attorney- PHAI
DEATH PENALTY
On May 20, 2010, the Commonwealth of Virginia executed Darick Demorris Walker, who had been convicted of murdering Stanley Beale in 1996 and Clarence Elwood Threat in 1997. Also on May 20, 2010, the Altria Group, Inc. Annual Shareholders Meeting took place in Richmond, Virginia.
During the meeting’s question and answer session, shareholder Anne Morrow Donley asked chairman and chief executive officer, Michael E. Szymanczyk the following question: “Earlier this year, the U.S. Supreme Court made a quite controversial decision, noting that essentially corporations are like people. Therefore, fair is fair. There’s a death penalty when murder is committed, so it seems only fair that there should be a corporate death penalty for this company because it admits that it is making a product that kills people. A corporate death penalty could require Altria to apologize for its weapons of mass destruction and could require Altria to cease and desist from the destruction of life. So my question is, since the company itself has admitted in legal proceedings that it makes products which kill people, and courts in various states have upheld challenges from the company saying that Altria is legally responsible for the deaths of customers, therefore, why should not Philip Morris, or Altria itself, not be subject to the death penalty?”
His response was to fall back on the tired refrain that cigarettes are a “legal product” and that people, aware of smoking’s risks, still choose to do so.
FLORIDA LAWSUITS
Having noted that Philip Morris had lost jury verdicts in seven “Engle Progeny” cases during a 15-month span, Tobacco Products Liability Project Senior Attorney Edward L. Sweda, Jr. asked Mr. Szymanczyk when his company will change its policy of refusing to settle the “Engle Progeny” cases, which number approximately 9500. His response was to declare that Altria is “bullish” about the long-term prospects of tobacco litigation in the United States. He said this even though in recent years, when state legislatures considered bills to put an artificial cap on total awards against tobacco companies in product liability cases, company lobbyists have supported such bills by portraying the company as risking bankruptcy if the caps were not imposed. Mr. Szymanczyk’s “bullish” comment became the headline in the Richmond Times-Dispatch’s account of the meeting.
ALTRIA’S ATTEMPT TO REMOVE CERTAIN PANELISTS FROM A SCIENTIFIC PANEL DESIGNED TO ADVISE THE U.S. FOOD AND DRUG ADMINISTRATION (FDA)
During his business presentation just prior to the question and answer session, Mr. Szymanczyk cited the company’s “Mission,” which includes a pledge that it will “actively participate in resolving societal concerns that are relevant to our business.” Shareholder Rev. Michael Crosby of the Interfaith Center for Corporate Responsibility, noted that, according to a report in late April in the Wall Street Journal in March 2010 Altria had attempted to remove four members of an FDA advisory panel because of alleged conflicts of interest. The FDA rebuffed Altria’s attempt to remove those panelists. Fr. Crosby said that such a power play by Altria contradicted that pledge. Mr. Szymanczyk’s response was that the company is “participating in” the FDA’s regulatory process and that “part of participating involves representing shareholder interests.’
SHAREHOLDER RESOLUTIONS
There were two shareholder resolutions considered at the 2010 Shareholders Meeting. The first, which called on the company to “commission an independent study and issue a resulting report on the affect of our company’s marketing on the purchasing practices of poor people. Shareholders ask that this report offer ways to alleviate the harm done to innocent children, such as food insecurity, by such adults who smoke. Shareholders ask that this report include recommendations as to whether our Company should continue marketing its products in census tracts with over 50% poverty.” Supporters of this resolution noted that families with at least one smoker spend 2% to 20% of their income on tobacco. In many instances, such spending deprives children of necessities such as food.
Management opposed this resolution, claiming that Philip Morris USA’s “responsible marketing practices, cessation support and the regulatory authority of the United States Food and Drug Administration (‘FDA’) are sufficient to address the concerns raised by this proposal.”
This resolution received 4.3% of the total number of shares and, thus, is not eligible to be refilled for the 2011 Shareholders Meeting.
The second resolution called on the company to create human rights protocols for itself and its suppliers. Noting that Philip Morris USA contracts with suppliers who employ migrant farm workers, the proponents cited the serious problems of Green Tobacco Sickness (GTS). GTS occurs when the skin absorbs nicotine from touching tobacco plant; the illness threatens more than 33 million tobacco farm workers globally. The shareholders supporting this resolution “request the Altria Board of Directors to commit itself to create procedures to implement the internationally agreed-upon core human rights conventions in the countries in which it operates and to find ways to ensure that its suppliers are enforcing these as well.”
Management opposed the resolution, claiming that there are already sufficient practices and programs in place in the United States that “address farm safety and working conditions.” This resolution received 20.5% support and will therefore be eligible for submission next year.
- TPLP’s Edward L. Sweda, Jr. (left), with Rev. Michael Crosby and Anne Morrow Donley of Virginia, on the morning of May 20, 2010, shortly before attending the 2010 Altria Group, Inc. Annual Shareholders Meeting at the Greater Richmond Convention Center
PHAI submits comments to FDA supporting reducing nicotine levels of smoked tobacco products to non-addictive levels
Tuesday, September 29th, 2009
In response to a request for comments, PHAI urges the FDA to prioritize smoked tobacco nicotine reduction as a potentially highly effective tool to mitigate the public health cost of smoking. Please see our complete Comments (pdf).
