Case Briefing
The latest rulings of importance to you and your practice.
California's Prop 65 Trumped By FDA, But On Narrow Grounds
The truth is apparently no defense for the state when it comes to issuing warning labels for nicotine gums and patches. Recently, the California Supreme Court unanimously ruled in <i>Dowhal v. SmithKline Beecham Consumer Healthcare</i>, 04 C.D.O.S. 3259 that federal regulations trump state statutes when it comes to putting pregnant women on alert about the possible dangers of Nicorette' and other nicotine-replacement therapies -- even if the state warnings are legitimate. "Whether a label is potentially misleading or incomprehensible is essentially a judgment of how the consumer will respond to the language of the label," Justice Joyce Kennard wrote. "A truthful warning of an uncertain or remote danger may mislead the consumer into misjudging the dangers stemming from the use of the product, and consequently making a medically unwise decision."
Pharmaceutical Benefits Managers Get Reprieve in Maine
In a decision issued March 9 in the case of <i>Pharmaceutical Care Management Ass'n v. Rowe</i>, No. 03-153-B-W, 2004 U.S. Dist. LEXIS 3758 (D. Maine 3/9/04), U.S. District Judge John A. Woodcock Jr. delayed enforcement of a novel Maine law whose intent is to make the business practices of companies that negotiate drug prices on behalf of health plans more transparent. The preliminary injunction has at least temporarily prevented the state of Maine from implementing Maine's 2003 "Act to Protect Against Unfair Prescription Drug Practices (M.R.S.A. ' 2699), known as UPDPA, against pharmaceutical benefits managers (PBMs).
The 'New Normal': SARS Liability Implications
Without disease and illness, there would be no need for life science companies or the products that they develop. Some modern maladies and ailments present more challenges than opportunities for biotech and medical device firms. Severe Acute Respiratory Syndrome (SARS) and comparable pathogens present medical device and life science manufacturers with new and daunting risks. One such peril lies in the realm of product liability.
Sarbanes-Oxley Sentencing Guidelines
Last month, we discussed the Sentencing Table as of Nov. 1, 2003, which incorporates amendments resulting from the provisions of the Sarbanes-Oxley Act. We explained that the Act contains three overlapping provisions relating to sentencing guidelines premised on the notion that white-collar crime is not adequately punished, and that all three provisions require the U.S. Sentencing commission to "promulgate the guidelines or amendments provided for under this section as soon as practicable..." Our discussion, unless otherwise indicated, was and is based on the amended guidelines pertaining to "Theft, Embezzlement, Receipt of Stolen Property, Property Destruction, and Offenses Involving Fraud or Deceit," and the related Sentencing Table. This month, we continue this discussion by providing more material in depth.
Quarterly State Compliance Review
By now everyone is familiar with the federal legislative response to Enron and the other corporate scandals -- namely, the Sarbanes-Oxley Act. But how have the states responded? After all, the states have been, and remain, principally responsible for corporate governance. The following is a brief review of the most recent legislative responses to the corporate scandals from some of the more important incorporation states.
Nonprofit Governance Reforms
The advent of significant corporate governance reforms in response to the Sarbanes-Oxley law, as well as scandals involving several leading nonprofit institutions, has created a climate of uncertainty for the management and Boards of Directors of nonprofit organizations. Controversy has arisen as to the extent to which these entities should emulate the behavior of comparably sized public corporations, even though most of Sarbanes-Oxley does not apply to entities that do not have securities registered with the Securities and Exchange Commission.
