Tropical concoctions with names like Mango-a-go-go, Strawberries Wild, Caribbean Passion, Orange Dream Machine, and Razzmatazz may remind you of a carefree day at the beach, but Jamba Juice—the national smoothie chain and purveyor of these fruity smoothie kits—has been undergoing a much less relaxing experience.

Jamba Juice is currently involved in an “all natural” labeling litigation that has spanned almost two years, and counting.   The case is Lilly v. Jamba Juice Co., Case No. 13-cv-02998-JST (N.D. Cal.).  Plaintiffs initially filed a proposed class action under a variety of consumer-friendly California statutes: the California Consumer Legal Remedies Act, the California False Advertising Law, the California Unfair Competition Law, the California Business and Professional Code, and the California Commercial Code. Last September, Judge Tigar certified a class of all persons in California who purchased one of the above-referenced Smoothie Kit Products.  Plaintiffs alleged that the smoothie kits were labeled “all natural” despite containing ascorbic acid, xantham gum, gelatin, steviol glycosides, and modified corn starch.  Just last week, Judge Tigar issued an order granting preliminary approval of a class action settlement for injunctive relief in connection with these smoothie kits. [click to continue…]

The Maryland state Senate chamber was abuzz last week on a topic that we frequently write about here at the Monitor–hydraulic fracturing, or “fracking.”  Fresh off the heels of former Maryland Governor Martin O’Malley’s decision to permit fracking in the state (subject to significant regulation), Senate Democrats are attempting to push through legislation that would implicitly, if not expressly, impose strict liability on drilling companies.

At issue is Senate Bill 458, sponsored by Senator Robert A. “Bobby” Zirkin, D-Baltimore County. As originally drafted, the bill likely could not be more draconian.  Among other things, the legislation would (1) impose strict liability on a drilling company for “any injury, death, or loss to person or property that is caused by the hydraulic fracturing activities”; (2) remove as a defense any argument that a company complied with industry standards, state or federal law, or the conditions of any permit issued to the permittee by a state or federal agency; and (3) create a rebuttable presumption that the hydraulic fracturing activities of the permittee are the proximate cause of any injury, death, or loss to person or property alleged if the plaintiff is located within a certain proximity of the drilling activity.

As Drew Cobbs, executive director of the Maryland Petroleum Council, put it — “This would be the strictest liability bill of anywhere in the country regarding hydraulic fracturing . . . The intent is, in essence, to stop or essentially ban [hydraulic fracturing] in Maryland.” Parts of Maryland sit atop the Marcellus shale, and a Towson University study found that fracking in the Marcellus shale could generate billions of dollars into the western Maryland economy.

As recently reported, there was a frenzied Senate debate over the language of the bill, with particular opposition coming from legislators from western Maryland. While a Senate committee ultimately struck the “strict liability” language from the bill, they inserted a description of the process as “an ultra-hazardous and abnormally-dangerous activity.”

Of course, as many may remember from their law school days, “ultra-hazardous and abnormally-dangerous” are legal terms of art that typically form a basis for imposing strict liability in the first place. Indeed, the Senate decided to seek the state attorney general’s opinion on the legal significance of such language. Not surprisingly, the AG’s office weighed in with an opinion that such language would in fact trigger strict liability:

You asked “if ‘abnormally dangerous’ or ‘ultrahazardous activity’ is another way of saying ‘strict liability’ or does it even relate to strict liability”? As I explain below, strict liability is a tort theory that imposes liability on a party without the need to show negligence. Maryland, like most if not all states, has adopted the legal doctrine of strict liability for ultrahazardous or abnormally dangerous activities, The bill defines hydraulic fracturing as an ultrahazardous or abnormally dangerous activity, thus imposes liability on a person who holds a permit to conduct hydraulic fracturing if the injured person proves the activity caused the harm, regardless if the permit holder exercised reasonable care.

Thus, removing the words “strict liability” from the bill and replacing them with “abnormally dangerous and ultrahazardous” is very much a distinction without a difference. Given that fracking has been around for quite a while, the bill would appear to be driven more by politics than sound policy or science.  We will keep an eye on developments relating to this controversial bill in Maryland and report on them at the Monitor.

Back in 2013, I blogged on a Pennsylvania federal court’s dismissal of a doctor’s complaint challenging the state’s so called “Medical Gag Act,” which aimed to prohibit the disclosure of the chemicals and fluids used by oil and gas companies during fracking operations.  Specifically, the renal doctor, Dr. Rodriquez, argued that the state’s Medical Gag rules interfered with his ability to properly diagnose and treat his patients and restricted the free exchange of information required of him under the ethical obligations imposed by the medical profession.

As set forth in my previous post, in October 2013, the District Court dismissed the doctor’s complaint for lack of standing.  There, the court explained that to satisfy Article III’s standing requirements, Dr. Rodriquez was required to show: 1) he suffered an injury-in-fact that was a) concrete and particularized and b) actual and imminent; 2) the injury was fairly traceable to the challenged action of the Defendants; and 3) it was likely, as opposed to merely speculative, that the injury would be redressed by a favorable decision.  The District Court found that Dr. Rodriquez’s injury was “too conjectural” and “hypothetical” to meet the injury-in-fact element for standing.  The Court explained that he failed to assert he had been in a situation where he needed the information or even attempted to obtain the information when treating his patients.  Furthermore, he did not claim that he was forced to sign a confidentiality agreement under the Act.  As a result of that dismissal, Dr. Rodriquez amended his complaint, which was again dismissed in late June 2014 for lack of standing.

Dr. Rodriquez appealed to the Third Circuit, arguing that the District Court erred in finding he did not have standing to proceed.  Dr. Rodriquez emphasized that expert testimony at trial would establish that the Act interfered with his ability to diagnose and treat his patients and would also establish that he is ethically prohibited from signing any confidentiality agreements imposed by the Medical Gag rules. Just recently, the Third Circuit issued a decision affirming the District Court’s finding that Dr. Rodriquez had failed to show an injury-in-fact required for standing.  Notably, the Third Circuit found it insufficient to allege, as Dr. Rodriquez had, that expert testimony would substantiate his claims later at trial.  Furthermore, while Dr. Rodriquez relied on a Pennsylvania state case finding that doctors have standing to challenge the Act, the Third Circuit emphasized that such reliance was misplaced where the issue was federal – not state – standing requirements.

As always, we will continue to monitor and report on notable fracking related issues.

Circuit Courts Limit Interpretation of FCA’s Public Disclosure Bar

March 19, 2015

Here at the Monitor, we keep a close eye on the evolution and enforcement of the False Claims Act (“FCA”).  See here.  In that vein, two recent circuit court of appeals cases limiting the interpretation of the Act’s “public disclosure bar” are worth examining. The FCA imposes civil liability on defendants where false or fraudulent claims for […]

Read the full article →

Ask Your Doctor

March 16, 2015

Doctors are smart folks who want to do the right thing for their patients.   By and large, they want more information, not less.  By and large, they respect the wishes of their patients.  Ask any doctor if she would have wanted to know additional safety information when prescribing a medicine or medical device and the […]

Read the full article →