It was reported on February 20, 2013, that President Obama appears to have selected federal air regulator, Gina McCarthy, to take over for Lisa Jackson as head of the EPA.  The news indicates that the executive branch intends to build upon the agency’s recently-validated efforts to regulate greenhouse gas (GHG) emissions, in the face of persistently anemic congressional action on the issue.

The likelihood of increased regulatory, as opposed to legislative, involvement is further evidenced by the reactions of various legislators who oppose GHG controls.  For example, Sen. David Vitter (R-La.) was quoted as saying, “[t]he administration should be looking for someone who will end the standard of ignoring congressional requests, undermining transparency and relying on flawed science…Instead, it looks like they may double down on that practice.”  “Obama Expected to Tap McCarthy for EPA, Moniz for DOE,”

In other words, if President Obama is going to make climate change a legacy issue for his second term—which seems to be the case based upon statements made in his inaugural  and State of the Union addresses—he is going to have to revisit his previously-stated aversion to doing so primarily through top-down regulation.  But how is he going to go about doing that?  The issue of climate change was conspicuously absent from the topics discussed during the 2012 presidential campaign, and any increased attention it has received in recent months might deservedly be credited in significant part to Hurricane Sandy.  Nor does it help that the administration has offered up few, if any, real details about its future climate-change-related regulatory agenda (see, e.g.,

Until that plan is made public, outside observers must rely on a review of EPA’s past successes and ongoing initiatives in order to predict what the future has in store.  However, it seems clear that an emboldened EPA will likely pursue all or some of the following initiatives with increased vigor and political support in the coming months and years.

·         New Power Plants:  EPA is expected to finalize a rule, originally proposed in 2012, requiring new fossil-fuel-fired power plants to be constructed with carbon capture and sequestration technology.

·         Existing Power Plants:  Finalization of the rule governing CO2 emissions from new power plants will force EPA to address the same issue with respect to existing facilities.  EPA is expected to address this by requiring each state to adopt its own emission standards pursuant to guidelines issued by the federal agency.

·         Refineries:  The terms of a 2010 settlement agreement required EPA to issue a GHG rule for refineries by November 2012.  The agency did not comply with that deadline and expected to act on the issue this year.

·         Oil & Gas Operations:  EPA finalized emission standards for oil and gas operations in 2012.  Several states subsequently filed a notice of intent to sue the agency for its failure to include provisions that directly regulate methane.  EPA has indicated that it will revise the final rule in 2013.

·         Mobil Sources:  EPA has proposed a rule designed to ensure that transportation fuel sold in the United States contains a minimum volume of renewable fuel.

·         Climate Adaptation Plan:  EPA released its draft Climate Adaptation Plan this month, which discusses the impact of climate change on the agency’s ability to fulfill its mission and describes how EPA will factor climate change adaptation into new regulations.  The public comment period runs through April 9th.

DRI’s Climate Change Task Force will continue to monitor developments in this evolving area of the law, and will submit regular blog postings and articles discussing relevant events.

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Do you talk or text while driving? If so, you better check out the status of the law in your state. Here are two links that will give you important information on these laws. And local governments are getting in on the act. For example, this Wednesday Mission, Kansas, begins the process of enacting an ordinance allowing only hands-free phones while driving.

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Rent to Own Computers and the FTC

Posted on October 12, 2012 02:19 by Chad Godwin

Wired Magazine recently reported that seven rent-to-own companies and a software manufacturer are settling charges with the Federal Trade Commission.  The charges claimed that computers rented from the rent-to-own companies used pre-installed spyware to obtain a host of data from the users.  The settlement only requires the companies to stop using the spyware, known as “Detective Mode,” which has been installed on as many as 420,000 rental computers.  In addition to secretly turning on a computer’s webcam, the software was capable of logging keystrokes, and  taking screen shots of a user’s activity.  The software then transmitted the secretly gathered information to the manufacturer, DesignerWare, who forwarded the material on to the rent-to-own company, all without the user’s knowledge.  The settlement still allows the rent-to-own companies to employ the software so long as they notify the renters.  Further, the FTC lacks criminal jurisdiction, so the companies have yet to face any criminal charges.  However, the FTC acknowledged that criminal activity appears to have occurred in a nod to the potential for ongoing investigations. 

The computers at issue collected everything from addresses, photos and video of often compromising situations, to phone numbers, email and social media passwords and financial logins, begging the question of what type and how much information a user should feel comfortable entering on a computer they don’t own.  In the case of someone renting a computer, it can be easy to see how a user operates under the impression that they have unfettered access to the machine for the term of the rental.  Nonetheless, there are measures that such parties can take in an effort to secure their privacy.  There are free firewall programs, such as Zone Alarm and Windows Firewall, that allow users to designate and monitor every program that accesses and/or attempts to access outbound internet connections.  Had the renters correctly configured and employed such a program, they would have known that a program, by whatever name, was attempting to send information from the subject computer.  In the event that renters were unable to install or configure (in the case of pre-installed Windows Firewall) such programs, it should serve as a red flag to carefully consider the manner in which to employ a rental or loaner computer. 



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As to whether the punishment fit the crime in the imposition of punishment on current student-athletes and coaches that had no fault here, it is difficult to equate Jerry Sandusky's heinous actions and subsequent cover-up with standard NCAA violations that go to competitive advantage. Therefore, I can see why many people are having trouble with the punishment being levied against the innocent members of the football program in Happy Valley. Let's put that aside for the moment, though, to clear away some of what I consider to be misinformation and misinterpretations of this latest NCAA headline. In addition to punishment itself, Mark Emmert's executive declaration of Penn State's punishment on Monday left many on the sidelines enraged over (1) a lack of "due process" and (2) setting a bad precedent for future NCAA enforcement matters. As to (1), "due process" is not accorded to member institutions in the NCAA process, and I do not believe that (2) should concern current and future alleged rule-breakers in standard areas of violation such as recruiting, benefits, academic eligibility, amateurism, etc.

As to the due process issue, the NCAA administrative law process does not accord Federal or state constitutional due process protection for those parties that go through enforcement proceedings, be it student-athlete reinstatement (SAR) or infractions. The U.S. Supreme Court made it clear that the NCAA is not a governmental actor and thus is not obligated to provide due process. Nat’l Collegiate Athletic Ass’n v. Tarkanian, 488 U.S. 179, 179 (1988). The NCAA is a private association made up of members that include schools and conferences. Those schools and conferences agreed to abide by the Association rules, including potential punishments for violations of Association rules, analogous to a country club and its members. (Bylaw Schools and conferences are voluntary members of the NCAA, and therefore must abide by the associated rules and regulations. See, Hispanic Coll. Fund, Inc. v. Nat’l Collegiate Athletic Ass’n, 826 N.E.2d 652 (Ind. Ct. App. 2005) (holding that the NCAA’s decisions regarding organization were not subject to trial court’s review absent allegations of fraud or illegality, because the organization was a voluntary member of NCAA). Furthermore, “[t]he articles of incorporation and bylaws of a not-for-profit corporation are generally considered to be a contract between the corporation and its members and among the members themselves.” Id, at 658. Therefore, member schools are under an enforceable contract with the NCAA and subject to its rules, regulations, and any punishment it may sentence. Bylaw 19.5.2 lists all the appropriate penalties for major violations, including (l): other penalties as appropriate. 

Courts have been, and remain, reluctant to accept challenges to the substance of NCAA enforcement decisions; the Oliver case being one of the few exceptions. See e.g. Justice v. Nat'l Collegiate Athletic Ass’n, 577 F. Supp. 356 (D. Ariz. 1983) (upholding NCAA sanctions for recruiting violations and denying student-athletes’ constitutiona land antitrust claims); but see Oliver v. Natl. Collegiate Athletic Assn., 2008-Ohio-7144, 155 Ohio Misc. 2d 1, 920 N.E.2d 190. Further, membership must tread lightly in either going to court to challenge a decision or, more likely, abiding by a court ruling overturning a NCAA decision pursuant to injunctive relief sought by a student-athlete, since the NCAA reserves the right to punish a member institution should an appellate court later reverse alower court’s ruling overturning a NCAA decision. See, e.g. Nat’l CollegiateAthletic Ass’n v. Jones, 1 S.W.3d 83 (Tex. 1999) (holding that the NCAA’s appeal from an injunction granted at the trial court level was not moot as to the applicability of retroactive penalties). Challenges to the NCAA administrative law process are for when the NCAA is not following its own “fair process.” So, the question applicable to Penn State is whether the NCAA did, in fact, follow its own fair process. 

The fair process established by the NCAA can be found in Article 32. From start to finish, including investigations and hearings, the infractions process takes over a year in most cases. The process includes a preliminary investigation, the possibility of summary-disposition, notice of inquiry, notice of allegation, institution investigation, written responses to the allegation, hearing, final Committee report and possible appeal. For example, allegations of impermissible recruiting and student-athletes receiving benefits from professional agents at the University of South Carolina first came to light in July 2010. The Public Infractions Report was issued two years later on April 27, 2012. On the other hand, the overall process with Penn State took about nine months. 

However, with Penn State, the NCAA did not follow the infractions process established in Article 32. So, does the NCAA's failure to follow its already-established process of investigation, enforcement, hearing, deliberation, decision, and possible appeal violate the fair process that it is bound to follow? Yes and no. A "quick look" analysis reveals that punishment was delivered by the NCAA President without regard for the existing NCAA enforcement structure; something not specifically articulated in NCAA bylaws, and certainly not something for which we see any precedent. However, the only party with standing to challenge the NCAA's declaration is Penn State, and Penn State consented to this punishment; ergo we now have a moot challenge.

As someone who regularly represents parties in NCAA processes, knowing what information is public thus far, if I am Penn State, I do not think going through the infractions process would have been a better process for the Penn State community. Sure, the punishments might not have been as severe, but Jerry Sandusky's actions were not just corruptions of the NCAA's principles of amateurism, competitive fairness, and academic integrity, but acts of profound evil. As such, as the infractions process drags on, Sandusky's acts and any cover-up of those acts would be continually relived. Further, there is a cost in terms of counsel like myself to be involved in the process. Let's go back to the South Carolina example. The school said that it spent $535,667.50 in connection with the NCAA investigation. Finally, as to those who believe that Penn State would find relief only at the appellate level in the infractions process, there is no guarantee that Penn State would have taken the case this far. My friend, Jerry R. Parkinson, who served as a member of the NCAA Division I Committee on Infractions from 2000 until very recently (including service as the committee’s first coordinator of appeals), cited in a law review article that only thirty-four of the ninety major infractions cases that went to a hearing from 2000 to 2009 were appealed. 

While I believe the less controversial route would have been an expedited infractions process that would necessarily include a summary disposition (the July 12, 2012 Freeh Report helps in this regard), for the Penn State community to heal, I have to think ripping the band-aid off quickly in the manner done here with Emmert's decision yesterday, while not ideal, is preferable to a drawn out infractions process.

Reposted with permission - orginally posted July 25, 2012 on Sports Law Blog 

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In the wake of the recent tragedy in Aurora, Colorado, retailers, restaurants and other establishments open to the public must be ever vigilant to the actions of “third-parties” to ensure, first and foremost, the safety of their patrons, as well as protect themselves from potential liability stemming from such actions.

In most states, New York included, businesses have a duty to maintain their premises in a reasonably safe condition, which includes taking minimal precautions to protect members of the public from the reasonably foreseeable criminal acts of third-persons.  Often in cases a plaintiff will allege that the proprietor should have anticipated the criminal actions of a third-party due to some advanced notice, such as specific comments or threats made, a highly publicized event, the expectation of an excessive number of people attending an event, and so on.  While many such lawsuits are typically broadly worded so as to “state a cause of action” and pass any initial dismissal challenges, few make it to a jury due to the difficult burden of establishing that a third-party’s criminal actions were or should have been anticipated.

With the horrible set of circumstances that are coming to light in Colorado, which seem too frequent lately, one must ask the question, will Courts eventually require proprietors to expect the unexpected?  For now, it is wise for proprietors to take any information they perceive or receive seriously to prevent such tragedies and avoid the legal system.


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As a recent post on noted, the Tenth Circuit recently affirmed the convictions of Howard O. Kieffer.  Kieffer, who for several years practiced criminal defense law, had a problem - he never went to law school and had no license to practice law.  A California resident, Kieffer held himself out as a criminal defense attorney via a domain name with a Virginia company, which also hosted the web site.  The government argued that the web site he maintained, which was accessed by two of his victims, in Colorado and Tennessee, was a “wire communication in interstate commerce” sufficient to establish jurisdiction under the federal wire fraud statute.

One aspect, in particular, of the Tenth Circuit decision raises eyebrows.  The issue is what constitutes an interstate wire for the purpose of the wire fraud statute.  The White Collar Crime Professor Blog identified this as a particularly important issue in the cyber-connected world we now live in.  This issue has been evolving for some time, as shown in United States v. Phillips, 376 F. Supp2d 6 (D. Mass. 2005).  There, the court rejected the government argument that “in order to satisfy the elements of the wire fraud offense, it was not necessary to present evidence that the pertinent wire communications themselves actually crossed state lines, as long as the communications (whether interstate or intrastate) traveled via an ‘instrument of an integrated system of interstate commerce,’ such as the interstate phone system.”  More recently, the Tenth Circuit, in United States v. Schaefer, 501 F.3d 1197 (10th Cir. 2007), held that one person’s use of the internet, “standing alone” was insufficient evidence that the item “traveled across state lines in interstate commerce.”

Therefore, it is now somewhat surprising to read in Kieffer that the Tenth Circuit changed its position.  The court noted that before the website could reach the local host server, it had been uploaded by Kieffer to the Virginia company, and then transmitted from Virginia to Colorado and Tennessee. Based on those facts, the court held that "[t]he presence of end users in different states, coupled with the very character of the internet” permitted the jury to infer transmission across state lines.  Now, under Kieffer, an allegation that a web site was used to perpetrate fraud would give rise to federal wire fraud jurisdiction in nearly every case.  Stated differently, given the “the very character of the internet,” it is unlikely that a defendant will reside in the same state as his web site host and victims. 

Now, as Paul F. Enzinna noted, unless other courts reject Kieffer, the potential exists for a surge in federal wire fraud prosecutions.  With Kieffer seemingly establishing such minimal interstate contact requirements, it would seem that virtually any viewing or use of a web site could be used to trigger federal jurisdiction.

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Since 2010, the beauty and cosmetic business was afire with the news that the “Brazilian Blowout” hair treatment released the known carcinogen formaldehyde when used. (Brazilian Blowout is the trademark of GIB, LLC (GIB) but is commonly used generically to describe keratin-based hair straightening products such as Brazilian Blowout (Acai Professional Smoothing Solution, Professional Brazilian Blowout Solution), Brasil Cacau Cadiveu, Keratin Complex Smoothing Therapy (Natural Keratin Smoothing Treatment, Express Blow Out, Natural Keratin Smoothing Treatment Blonde) and Marcia Teixeira (Advanced Brazilian Keratin Treatment, Extreme De-Frizzing Treatment).) It was a story that created a media blitz and caused consumer backlash. The treatment was exposing consumers to carcinogens and further, the Brazilian Blowout treatment was labeled “formaldehyde free,” when it was not.

In the midst of the media frenzy and for the first time, the cosmetics industry officially declared formaldehyde unsafe at any level in chemical hair straightening products, commonly referred to as keratin-based or the Brazilian Blowout. On September 21, 2011, the Cosmetic Ingredient Review (CIR), an unbiased advisory board established by the leading cosmetic manufacturers, declared that formaldehyde and methyl glycol are unsafe for use in the Brazilian Blowout and similar hair straightening or smoothing products. This came in the aftermath of several state and federal investigations, including the federal Occupational Safety and Health Administration (OSHA) and Food and Drug Administration (FDA) into the safety of these products to salon workers and consumers.

After a comprehensive review of the safety data, CIR scientists, dermatologists, pharmacologists and toxicologists evaluated the safety of methylene glycol and formaldehyde in hair straightening products on a number of factors, including the concentration of formaldehyde and methylene glycol, the amount of product applied, the temperature used during the application process, and the ventilation provide at the point of use. CIR concluded that under present practices of use and concentration, formaldehyde and methylene glycol are unsafe in hair straightening or smoothing products.

In early 2010, Brazilian Blowout and similar keratin-based hair straightening products initially came under fire when Oregon OSHA investigated a complaint from a salon worker who had nosebleeds, eye irritation, and trouble breathing while using a Brazilian Blowout product labeled “Formaldehyde-free.” After testing 100 samples of keratin-based hair straightening or smoothing products, including Brazilian Blowout, Oregon OSHA determined that many contained formaldehyde, a chemical associated with the salon worker’s complaints. Specifically, the products contain the chemical compound methylene glycol, an aqueous solution that is created when formaldehyde is hydrated. OSHA reported that when methylene glycol is heated during the product application, it reverts back into gas formaldehyde.

On October 8, 2010, Oregon OSHA published a hazard alert and alerted federal OSHA finding the hazard information listed on the products were incorrect and failed to meet federal OSHA requirements. FDA was also alerted and called into action to determine whether the products were unsafe and improperly labeled by failing to include formaldehyde as one of the products’ ingredients. Additionally, FDA acknowledged consumer complaints on its website and stated it was working with federal OSHA to determine the composition of the products and whether the products or ingredients would be likely to cause health problems. Studies by the Department of Health and Human Services, OSHA, FDA and several action groups, including the Environmental Working Group and the American Chemistry Council, began investigating the safety concerns and practices in salons.

FDA set the task of assessing the safety of formaldehyde and methylene glycol ingredients to the CIR Expert Panel, under the aegis of the U.S. Personal Care Products Council. The CIR had previously reviewed the use of formaldehyde as a preservative agent in cosmetic products in 2005 and concluded it safe in levels not to exceed 0.2 percent. However, it did not evaluate formaldehyde safety in cosmetic products intended to be aerosolized – which is precisely what occurs during the application of the hair straightening or smoothing product. The application process requires the hair to be heated and dried at high temperatures which thereby causes the product to emit formaldehyde gas into the air. The hair straightening product fumes may be inhaled by the customer or salon worker and cause harm. 

Despite complaints, investigations and media attention, Brazilian Blowout and other manufacturers continued to tout their products as “formaldehyde-free.” (Initially in 2010, Brazilian Blowout asserted that the products were formaldehyde-free since they contained methylene glycol, an organic compound wholly distinct from formaldehyde. After researchers pointed out that methylene glycol is simply formaldehyde mixed with water, Brazilian Blowout changed its position. Brazilian Blowout revised its position stating their products contained less than 0.2 percent formaldehyde, levels deemed safe for cosmetic use—a statement in line with the 2005 formaldehyde evaluation.) Called into action by consumer complaints to address concerns, FDA conducted a sample analysis of Brazilian Blowout. The results revealed contradictory information and confirmed the presence of methylene glycol at levels ranging from 8.7 to 10.4 percent. 

On August 22, 2011, FDA sent an official Warning Letter to the Brazilian Blowout manufacturer GIB citing violations of adulteration and misbranding for failing to include the presence of a “deleterious substance,” methylene glycol. Specifically, FDA cited the product adulterated by containing methylene glycol, a liquid form of formaldehyde, and misbranded by stating on its label that it does not contain formaldehyde.

Specifically, FDA noted that the product is adulterated within the meaning of Section 601 (a) of the Federal Food, Drug and Cosmetic Act [21 U.S.C. § 361 (a)] for containing a poisonous or deleterious substance that may render it injurious to users. That substance methylene glycol was found by the FDA at 8.7–10.4 percent in an analysis of 50 mg samples. 

According to the Warning Letter, formaldehyde is released into the air when the product is applied to the hair and heated by a blow dryer and a flat iron, as directed on the product's packaging. The inhalation of formaldehyde reacts with biological tissues, particularly the mucous tissues lining the respiratory tract and the eyes, which can cause a number of adverse events, including eye irritation, nervous system disorders and respiratory problems.

The product was found to be misbranded within the meaning of Section 602(a) of the act [21 U.S.C. § 362(a)]. Specifically, the product was considered misbranded for declaring on its label that it contains "No Formaldehyde and is "Formaldehyde Free." FDA found this to be a false and misleading statement, given that the product contains methylene glycol. FDA also noted that the product also is misbranded for not disclosing information on the product's label about the release of formaldehyde as a result of heating the product.

The Warning Letter gave the manufacturer, GIB, 15 days to advise the agency of steps to correct labeling and content violation, specifically the “Formaldehyde Free” claim and the unacceptable formaldehyde levels. FDA also demanded assurance of future regulatory compliance and documentation that the corrections have been achieved.

GIB broadcasted a public response to the FDA’s warning letter. On August 24, 2011, GIB sent salon owners a letter and issued a statement on its website indicating that the company would be working directly with the FDA to clear up the controversy. The statement also included GIB’s own testing analysis, which differed from the FDA sample analysis. GIB suggested that possibly the media inaccurately reported that its product contained 8–10 percent formaldehyde when “the measure of potential formaldehyde released at that level never occurs in a real world application.” GIB further stated that federal OSHA was aware of the only accurate testing method for formaldehyde exposure— “controlled air monitoring”—and that its product fell beneath even the most stringent OSHA safety standards when measured in this way. 

OSHA promptly sent a letter on September 22, 2011, to GIB refuting the manufacturer’s safety assertions as misleading. GIB’s statement was completely contrary to OSHA’s previous findings that workers using the Brazilian Blowout “were exposed to formaldehyde levels that exceeded OSHA’s 15 minute short term exposure limits of 2 ppm.” OSHA followed up and issued a revised hazard alert to hair salon owners and workers about potential formaldehyde exposure from working with certain hair straightening products, including Brazilian Blowout. The OSHA news release stated that the revised alert was prompted by the agency investigation results, FDA warning letter, and factually incorrect information sent to salons by the Brazilian Blowout manufacturer. According to the revised alert, OSHA air tests revealed formaldehyde levels above OSHA’s limits in salons using Brazilian Blowout. The revised alert further listed the various health hazards of formaldehyde and how salon workers could protect themselves while using hair straightening or smoothing products that contain or release formaldehyde.

Bolstering FDA and OSHA warnings, the CIR concluded its intensive study and made its official findings available on September 26, 2011, deeming the hair straightening products unsafe. Brazilian Blowout and other hair straightening products containing formaldehyde continue to be available in salons across the country, despite FDA warnings. FDA typically urges such manufacturers to initiate a voluntary recall, and if they do not comply, FDA has other measures at its disposal to force a recall. In order to prompt a mandatory recall, FDA must pursue action through the Department of Justice in federal court to remove the adulterated and misbranded products from the market. In addition, FDA can request a federal district court to issue a restraining order against the manufacturer to prevent further shipment of the product. However, there is no indication that this has or will occur.

Brazilian Blowout and FDA are at a stalemate with neither side making any moves towards removal of the unsafe products. Formidable cosmetic action groups such as the Campaign for Safe Cosmetics and the National Healthy Nail and Beauty Salon Alliance urged FDA to take action and initiate a mandatory recall of the Brazilian Blowout’s products. Congressional members Jan Schakowsky (D–IL), Ed Markey (D–MA) and Earl Blumenauer (D–OR) also have demanded that GIB voluntarily remove its product from the market, to no avail. Nonetheless, GIB refused to recall its product, stating “We’re going to continue to offer a product that gives people the hair of their life . . . .” 

In addition to the FDA warning letter, GIB also was sued by the state of California, where the company is headquartered. In February 2012, GIB settled and agreed to cease advertising two of its products as formaldehyde free and safe. The company also agreed to make changes to its website and pay $600,000 in fees, penalties and costs. 

To date, FDA has taken no action against Brazilian Blowout. FDA neither requested a voluntary recall of the products, nor made steps to initiate judicial intervention to remove the products from the market. Respecting its limited authority over the cosmetics industry, FDA continues to provide consumers updated safety information to reduce health risks associated with formaldehyde hair treatment products, suggesting consumers limit exposure and products labels with formaldehyde, formalin and methylene glycol. Likewise, GIB revised its product use materials to include the updated safety information. 

On March 27, 2012, the Congressional Subcommittee on Health held a hearing—Examining the Current State of Cosmetics—gathering FDA, industry trade groups and other organizations to debate whether there is a need for a national standard, preemption of state legislation and an overall renewal of FDA’s regulatory authority over the personal care and cosmetic industry. This ongoing debate comes on the heels of the proposed “Safe Cosmetics Act of 2011,” which sought to give FDA authority to demand pre-market safety assessments of cosmetics ingredients, issue recalls of unsafe products and ban the use of ingredients linked to cancer and birth defects. It also would mandate ingredient labels on cosmetics and post-marketing testing, and would allow individual states to pass their own regulatory laws. The Safe Cosmetics Act was initially proposed in 2010. It was revised and resubmitted in 2011, but has yet to be approved by Congress. The cosmetics industry would see more benefits with a nationwide safety standard for their products that would preempt state laws that could vary from state to state. It would be difficult for cosmetic companies to formulate innovative products if different standards apply in different states.

Yet, while the proposed legislation appears reasonable on its face, it arguably would impose costly and unnecessary restrictions on the cosmetics industry. There is a legislative mechanism already in place regulating cosmetics. Cosmetic companies are already bound by the existing “Food, Drugs and Cosmetics Act of 1938,” which requires manufacturers to list most of the ingredients on product labels, and to substantiate the safety of their products before marketing. 

While the Brazilian Blowout battle may seem trivial to most cosmetic manufacturers, those who already make great efforts to ensure product safety, it could have broad implications to the cosmetics industry. The obligation to assure cosmetic safety lies squarely on the shoulders of the cosmetic companies. The cosmetic industry remains largely self-regulated. In order to be effective, cosmetic companies must try to be transparent and forthcoming in providing consumers with specific information as to what their safety testing entails and standards utilized in testing. From a pragmatic perspective, cosmetic products that use known, safe ingredients will be less likely to face difficulties like those facing Brazilian Blowout. In keeping up with cutting-edge trends and science, companies may want to consider extra safety precautions when introducing innovative ingredients to their products. But most importantly, cosmetic product labeling should be comprehensive and conspicuous to allow consumers to consider the ingredients before using the product. 

For hair straightening manufacturers, many companies have considered the risks and are looking to distance themselves from their “Brazilian” roots. Many have altered their product lines to be formaldehyde free—removing methylene glycol, formol, formalin or any other substance that produces formaldehyde from their products. Some other companies have gone as far as changing their packaging to include a “Proven Safe by OSHA” stamp to verify product safety. Then again, the Brazilian Blowout treatment containing formaldehyde remains popular because consumers simply like the treatment—even with the knowledge that it contains a carcinogen. At the end of the day, consumers have the right to use any products they choose, and should be allowed to buy those products, provided they understand any potential risks. 

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Suppose your client, a lawyer, has been sued for malpractice. Could the alleged malpractice be a basis for discipline? Alternatively, is a disciplinary complaint likely to give rise to a malpractice suit? This article will attempt to shed some light on the distinction between attorney malpractice on one hand and professional misconduct on the other, as well as the types of conduct that may constitute both.

1. What is attorney malpractice?

Simply stated, attorney malpractice is a failure to exercise ordinary skill and knowledge, where that failure damages a client. “To state a cause of action to recover damages for legal malpractice, a plaintiff must allege: (1) that the attorney ‘failed to exercise the ordinarily reasonable skill and knowledge commonly possessed by a member of the legal profession’; and (2) that the attorney's breach of the duty proximately caused the plaintiff actual and ascertainable damages.” Schurz v. Bodian, 2012 WL 502680, *1 (N.Y. App. Div. 2012) (internal citations omitted). See also Legacy Healthcare, Inc. v. Barnes & Thornburg, 837 N.E.2d 619, 624 (Ind. Ct. App. 2006). (attorney malpractice claim involves “failure of the attorney to exercise ordinary skill and knowledge (the breach of the duty).”).

2. What is attorney misconduct?

By contrast, attorney misconduct is the failure to comply with the rules of conduct adopted by a court to which an attorney has been admitted to practice. Because all states except California have adopted some version of the American Bar Association’s Model Rules of Professional Conduct (the “Rules of Professional Conduct”), they will be the focus of this article. A failure to abide by the rules subjects the attorney to discipline by the highest court of that jurisdiction. “Failure to comply with an obligation or prohibition imposed by a Rule is a basis for invoking the disciplinary process.” Rules of Professional Conduct, Preamble, ¶ 19. See also Rule 9, American Bar Association’s Model Rules for Disciplinary Enforcement (“Enforcement Rules”) (“It shall be a ground for discipline for a lawyer to: (1) violate or attempt to violate the [State Rules of Professional Conduct], or any other rules of this jurisdiction regarding professional conduct of lawyers…”). The Enforcement Rules also provide for discipline for refusal to cooperate in the disciplinary process itself. See Enforcement Rule 9 (3), providing for discipline for disobeying a subpoena or order from a bar disciplinary authority.

Of course, the potential consequences of an attorney discipline case are very different from those of an attorney malpractice case. In the worst outcome of an attorney malpractice case, the attorney must pay monetary damages to the plaintiff. By contrast, attorney discipline actions place the attorney’s law license in jeopardy. An attorney who has been found to have violated the Rules of Professional Conduct faces a range of sanctions from a private reprimand up to disbarment, depending on the severity of the violation. See Enforcement Rule 10.

3. Does malpractice equal misconduct, or vice versa?

As noted above, attorney malpractice occurs where an attorney fails to exercise ordinary skill and care, and thereby causes damage to a client. Rule of Professional Conduct 1.1 provides "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."

Furthermore, Rule of Professional Conduct 1.3 provides "A lawyer shall act with reasonable diligence and promptness in representing a client."

Thus, it would seem that Rule 1.1 and Rule 1.3 may codify the requirement that an attorney exercise ordinary skill and care, and that failure to do so may constitute misconduct as well as malpractice. It is difficult to imagine a failure to exercise ordinary skill and care that is not also a failure to employ the “legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.”

Some courts have indeed treated isolated mistakes as misconduct and punished it accordingly. For instance, in Board of Professional Responsibility, Wyoming State Bar v. Vreeland, 2012 WL 662236 (Wyo. 2012), an attorney represented a client in a criminal trial. Id. at *1. The jury returned a conviction on February 4, 2010. Wyoming Rule of Criminal Procedure 29(c) required that a motion for judgment of acquittal be made within 10 days of the jury’s verdict, and Rule 33(b) required a motion for new trial to be filed within 15 days of the verdict. However, Vreeland did not file the motions for judgment of acquittal and for a new trial until March 3, 2010; hence, the motions were untimely. Id. The Wyoming Supreme Court found that Vreeland violated Rules 1.1 and 1.3 of the Wyoming Rules of Professional Conduct (based on the Model Rules) and imposed a sanction of public censure. Id. at *2. See also Board of Professional Responsibility, Wyoming State Bar v. Dunn, 262 P.3d 1268 (Wyo. 2011) (attorney received public reprimand for failing to file timely governmental claims notice and complaint); In the Matter of Brown-Williams, 2012 WL 366587 (Ga. 2012) (attorney received public reprimand for missing statute of limitations in workers' compensation case).

By contrast, some courts have explicitly held that an isolated mistake is not a proper basis for discipline. For instance, in In the Matter of the Application for Disciplinary Action Against William E. McKechnie, 656 N.W.2d 661 (N.D. 2003), the Supreme Court of North Dakota addressed a mistake similar to the mistake made by Vreeland, but found that the mistake did not constitute misconduct. "In this case, McKechnie gave Follman incorrect legal advice about the statute of limitations and Follman's case was dismissed for failure to file within the limitations period. This evidence shows nothing more than an isolated instance of ordinary negligence, or error of judgment. We conclude there is no clear and convincing evidence that McKechnie violated N.D.R. Prof. Conduct 1.1." Id. at 669.

Even in jurisdictions whose highest courts have not specifically stated that isolated attorney mistakes should not give rise to discipline, attorneys are not typically sanctioned under Rule 1.1 or 1.3 for simple negligence. More commonly, it appears that attorneys are disciplined for violations of Rule 1.1 or 1.3 in addition to numerous other violations of the Rules of Professional Conduct that involve intentional misconduct, dishonesty, ongoing failure to communicate with clients, or chronic neglect of clients’ interests. For instance, in In Re Adinolfi, 934 N.Y.S.2d 94 (N.Y. App. Div. 2011), an attorney was sanctioned for violating New York Rule of Professional Conduct 1.3 where at least 26 of the attorney’s 103 cases before the Second Circuit Court of Appeals had been dismissed for failure to file a brief. 95.

Finally, the Preamble to the Rules themselves suggest that isolated mistakes should not subject a lawyer to discipline: “Moreover, the Rules presuppose that whether or not discipline should be imposed for a violation, and the severity of a sanction, depend on all the circumstances, such as the willfulness and seriousness of the violation, extenuating factors and whether there have been previous violations.” Rules of Professional Conduct, Preamble, ¶ 19. Thus, those courts that have either explicitly stated that an isolated mistake is not a basis for discipline, or at least typically decline to sanction lawyers for such mistakes, appear to employ an approach more in keeping with the spirit of the Rules.

What about the reverse question: can an act or omission that constitutes attorney misconduct give rise to a malpractice action? The Preamble to the Rules of Professional Conduct provides that violation of a Rule should not in itself give rise to a cause of action. “Violation of a Rule should not itself give rise to a cause of action against a lawyer nor should it create any presumption in such a case that a legal duty has been breached.” However, violation of a Rule can be evidence of the breach of the standard of ordinary care. The Preamble provides that though “[the Rules] are not designed to be a basis for civil liability,…[n]evertheless, since the Rules do establish standards of conduct by lawyers, a lawyer's violation of a Rule may be evidence of breach of the applicable standard of conduct.” Furthermore, some kinds of attorney misconduct have nothing to do with attorney malpractice. For instance, a felony conviction for operating a vehicle while intoxicated will certainly result in discipline, but would provide no basis for a malpractice claim.

Dina M. Cox is a partner with Lewis Wagner, LLP in Indianapolis, who focuses her practice on the defense of complex litigation, including legal malpractice, drug and medical device, product liability, consumer class actions, and insurance coverage and bad faith lawsuits.

Neal Bowling, attorney with Lewis Wagner, LLP, focuses his practice on complex business litigation as well as defense of lawyers in malpractice and disciplinary matters. He has extensive experience advising and representing clients in complex and challenging litigation including: securities matters; employment litigation involving breach of noncompete and wrongful termination claims; and representation of lawyers in malpractice actions and disciplinary investigations and proceedings. 

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Yesterday's Wall Street Journal had three stories on the Marketplace page about events which will influence the practices of DRI members and the lives of all of us over time.

First, Continental Airlines was found criminally liable for apparently improperly maintaining an airliner resulting in the crash of a Concorde outside Paris in 2000. Second, GNC an American vitamin retail chain is on the verge of being bought by a Chinese state backed company for more than $2 billion. Finally, Wal-Mart will receive a hearing at the Supreme Court which will address whether class action litigation is appropriate for employment cases where individual acts predominate.

In the first case, it's the criminalization of acts where there is was no criminal intent when the plane was maintained. Our tort system was designed to address private wrongs and seldom has the criminal process been used to punish mere negligence. We are seeing increased efforts in financial cases, products cases, and in other controversial situations to involve criminal prosecution to precede or augment tort suits. The Dodd-Frank act has put even more muscle behind criminal and civil suits involving financial fraud and at the same time it has created an even greater arena for whistle blowers and their lawyers to profit from uncovering questionable acts. The linking of criminal and civil proceedings isn't new, but it is becoming more prevalent, as evidenced by the Continental case.

If foreign governments take a greater stake in our businesses, on top of buying our debt, will our dispute resolution system survive? How will our regulatory system work with increased foreign ownership of companies which dominate the American marketplace? These foreign influences can impact our commercial and tort systems and bring new interests to the table when decisions need to be made. This is what can happen when more acquisitions like GNC occur.

Finally, if the scales shift the balance in dispute resolution to the aggregation of claims as opposed to a fact by fact, case by case, method of evaluating causation and damages, our system of justice will also change in ways never imagined when we were in law school. That is what is at stake in the Wal-Mart case.

These changes are going to affect all of us, our firms and our practices.  We should all work within DRI to be sure to share what we know and develop effective strategies to effectively represent our clients in the coming years in this very changed world. DRI has been very effective at helping its members do just that for the past 50 years and with your interest and commitment together we can make sure DRI help us all meet these new challenges, too.

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Categories: Criminal Liability | Torts

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When is a "Breach of the Standard of Care" medical liability and when is it criminal liability?  To my mind, that is the central question lying within the case of Dr. Conrad Murray and the death of Michael Jackson.
Lawyers who defend health care professionals every day are comfortable with the fluid nature of the concept of the "Standard of Care" for the administration of any treatment, or for that matter any drug or drugs.  There are few hard and fast rules in medicine for good reason; creativity and flexibility are often at the heart of effective treatment regimens.  Off label uses of drugs--sometimes entirely unaddressed by the FDA or the medical literature--can occasionally be magic bullet treatments.  Sometimes only a physicians' knowledge of how drugs work and interact in relation to a cluster of symptoms, and her willingness to try an untested or little tested protocol, will ease a patient's suffering or reverse the course of a disease.  But, too often, if the outcome of a well intentioned effort to use a drug in a novel way is poor or unanticipated someone will claim that a deviation from well accepted and documented treatment methods is a breach of The Standard of Care."  These become the Medical Liability cases we defend often and fully understand.  And, no one suggests seriously that the practice of medicine become so hidebound that each healthcare provider's choices be limited by the FDA or a manufacturer or a certain body of literature to practice and prescribe in certain ways.  Most knowledgeable observers agree than many commonly accepted practices in medicine are not evidence based and need review.  But, Dr. Murray's case might be outside the range of even the most creatively acceptable medical judgment.  Here, we see the unique use of Protocol--a powerful and fast acting Hypnotic frequently used in 'monitored anesthesia' (MAC) outpatient surgical procedures--as a sleep agent in combination with other drugs.  There is no suggestion that electronic monitors were being used or that supplemental oxygen was being provided. There is also no suggestion that a trained anesthetist was present. More...


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