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Regulatory Compliance

Regulatory Compliance. Food Law FSC-421. What are we talking about?. Judicial Enforcement Remedies available to the consumer Products Liability Private Actions against the Government Regulatory Enforcement Remedies available to Government Recalls, Seizures, Injunctions.

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Regulatory Compliance

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  1. Regulatory Compliance Food Law FSC-421

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

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

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

  5. Private Actions Against US • Persons damaged by administrative act of the government • Approval of DES • Federal Torts Claim Act • 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.

  6. Examples of Private Actions • 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

  7. Regulatory Remedies • 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

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

  9. 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.

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

  11. Prohibited Acts • What if food adulterated after crosses state line (tampering)? • Sec 301(k) - • 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

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

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

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

  15. Examples of MOU's • CPG 7155a01 is MOU between FDA and USDA/AMS for inspection of fruit and vegetable products • CPG 7155a16 is MOU between FDA and USDA/FSIS for inspection of facilities regulated by both agencies • Monster Rancher villian

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

  17. Inspections • Primary FDA compliance tool for keeping adulterated products out of I/C • Inspection authority comes from Sec. 704 of FDCA • "…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."

  18. Inspectors • 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 • Must give receipts • Copies of any analysis • Authorized to make copies of interstate shipping records

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

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

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

  22. Inspections • 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"

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

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

  25. FDA’s Regulatory Philosophy • Objective is to insure voluntary compliance • 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 • has led to increase use of warning letters

  26. Warning Letter • 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.

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

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

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

  30. Seizure • 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 • Subject matter jurisdiction • Seized product destroyed after finding of adulteration or misbranding by court if not corrected

  31. Seizure Process • 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

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

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

  34. Injunctions • Temporary Restraining Order • 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 • Threat of irrepairable harm • Harm outweighs result of injunction

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

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

  37. Injunction (cont.) • might be avoided by: • 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

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

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

  40. Recall • 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, • even homes

  41. Recalls • Recalls are voluntary. FDA has no statutory authority to compel and recall. • 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

  42. Recalls • FDA can mandate recall of adulterated infant formulas (1986) • FDA has published guidelines regarding how, when and why to initiate a recall • 21CFR 7.42

  43. Recalls • 3 types of product removals • “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

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

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

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

  47. Recall Information What FDA will want to know: • 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

  48. Termination of a Recall • 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

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

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

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