U.S. appeals court rules against nursing homes over COVID-19 lawsuits

By Tom Hals

(Reuters) – In a setback to nursing-home operators facing hundreds of COVID-19 negligence and wrongful-death lawsuits, a federal appeals court on Wednesday said cases against two New Jersey facilities should proceed in state courts.

The nursing homes had argued that the suits against them belonged in federal court, citing an emergency U.S. law known as the Public Readiness and Emergency Preparedness (PREP) Act, which shields those fighting the pandemic from lawsuits.

The 3rd U.S. Circuit Court of Appeals in Philadelphia affirmed a lower court ruling and rejected the nursing homes’ argument that the PREP Act was so far reaching that families’ state-law negligence claims were really federal claims that belonged in federal court.

The families “asserted only garden-variety state-law claims, so state court is where these cases belong,” the court said.

Neil Lapinski, a Gordon, Fournaris & Mammarella attorney who represented the families, said “the court has provided a clear roadmap for litigants” that was consistent with lower court rulings.

The cases were filed in state court in April 2020 by families of four residents who died of COVID-19. They sued two nursing homes operating as Andover Subacute & Rehabilitation I & II, alleging the facilities failed to take precautions to contain the spread of the virus.

The cases were among the first against nursing homes, where more than 100,000 people died during the pandemic. Like hundreds of similar wrongful death claims against care facilities, the cases stalled over which court should hear the lawsuit.

The operator said it was shielded by the PREP Act and the cases belonged in federal court. A lower federal court, however, said the case should be heard in state court, and the nursing home operator appealed.

The 2005 PREP Act is meant to jumpstart U.S. defenses against an outbreak like COVID-19 by shielding from lawsuits makers of critical products, from diagnostic tests to vaccines, as well as doctors and drug distributors. Nursing homes have said the law should shield them from liability because they were on the front line of the outbreak.

Wednesday’s ruling could help get cases moving, said Adam Pulver of Public Citizen Litigation Group, a consumer advocacy group that filed an amicus brief with the appeals court.

“By being the first appeals court to weigh in, the 3rd Circuit signaled to judges around the country that these appeals are unlikely to succeed and there is no reason to stop cases from moving forward while the nursing homes appeal,” he said.

The 3rd Circuit’s ruling said determining whether the PREP Act shields nursing homes from pandemic-related lawsuits should be determined by a state court, although other federal appeals courts are expected to address that question in the coming months.

Lann McIntyre, a Lewis Brisbois attorney who represented the nursing homes, declined to comment.

The appeal was heard by three Republican appointees – Michael Chagares, Jane Roth and David Porter, who was appointed by President Donald Trump and who wrote the opinion.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Bill Berkrot)

Trump lawsuits unlikely to impact outcome of U.S. election, experts say

By Tom Hals

WILMINGTON, Del. (Reuters) – President Donald Trump called in his lawyers to shore up his dimming re-election prospects, but legal experts said the flurry of lawsuits had little chance of changing the outcome but might cast doubt on the process.

As Trump’s paths to victory narrowed, his campaign on Thursday was ramping up legal challenges and said it was planning to file its latest case in Nevada.

On Wednesday, the campaign sued in Michigan, Pennsylvania and Georgia and asked to join a pending case at the U.S. Supreme Court.

Experts said the litigation serves to drag out the vote count and postpone major media from declaring Biden the victor, which would have dire political implications for Trump.

“The current legal maneuvering is mainly a way for the Trump campaign to try to extend the ball game in the long-shot hope that some serious anomaly will emerge,” said Robert Yablon, a professor at the University of Wisconsin-Madison Law School. “As of now, we haven’t seen any indication of systematic irregularities in the vote count.”

Trump campaign manager Bill Stepien said in a statement Wednesday the lawsuits were aimed at ensuring legal votes were counted.

“The lawsuits are meritless,” said Bob Bauer, who is part of Biden’s legal team. “They’re intended to give the Trump campaign the opportunity to argue the vote count should stop. It is not going to stop.”

Ultimately, for the lawsuits to have an impact, the race would have to hang on the outcome of one or two states separated by a few thousand votes, according to experts.

In Michigan and Pennsylvania, Trump asked courts to temporarily halt the vote counts because the campaign’s observers were allegedly denied access to the counting process.

The Michigan case was dismissed on Thursday but a Pennsylvania court ordered that Trump campaign observers be granted better access to counting process in Philadelphia.

At the Supreme Court, the campaign is seeking to invalidate mail-in votes in Pennsylvania that are postmarked by Election Day but arrive by the end of Friday.

In Georgia, the Trump campaign asked a judge to require Chatham County to separate late-arriving ballots to ensure they were not counted, but the case was dismissed on Thursday.

“There is no consistent strategy there,” said Jessica Levinson, a professor at Loyola Law School in Los Angeles. She said the campaign was “throwing theories at a wall to see if anything sticks for long enough to muck up the waters.”

Edward Foley, who specializes in election law at the Moritz College of Law, said the cases might have merit but only affected a small number of ballots and procedural issues.

“But merit in that sense is very different from having the kind of consequence that Bush v. Gore did in 2000,” said Foley.

In that case, the Supreme Court reversed a ruling by Florida’s top court that had ordered a manual recount and prompted Democrat Al Gore to concede the election to Republican George W. Bush.

The 2000 election improbably close, with a margin of 537 votes in Florida deciding the outcome.

The campaign is still challenging late arriving mail-in ballots in Pennsylvania, which according to media reports numbered in the hundreds so far, likely too few to have a meaningful impact.

In addition, it appears increasingly likely Biden can win the race even if he loses the state.

Danielle Lang, who advocates for voting rights at Campaign Legal Center, said Trump has a long history of attempting to whip up mistrust in our electoral system.

“Allegations of ‘irregularities’ — backed up by lawsuits, even frivolous ones — could potentially serve that narrative,” she said.

Experts said the lawsuits and claims of fraud might be aimed at softening the sting of being bounced from office by calling the process into question.

“The litigation looks more like an effort to allow Trump to continue rhetorically attempting to delegitimize an electoral loss,” said Joshua Geltzer, a professor at Georgetown Law’s Institute for Constitutional Advocacy & Protection.

(Reporting by Tom Hals in Wilmington, Delaware; Editing by Noeleen Walder and Aurora Ellis)

McKesson says states seek $21 billion from drug distributors in opioid settlement

By Nate Raymond

(Reuters) – McKesson Corp said on Tuesday that it and two other major U.S. drug distributors could be expected pay up to $21 billion under a new proposal by state attorneys general to resolve lawsuits alleging they helped fuel the U.S. opioid crisis.

McKesson and rivals AmerisourceBergen Corp and Cardinal Health Inc last year proposed paying a combined $18 billion to resolve the roughly 3,200 lawsuits, with drugmaker Johnson & Johnson paying another $4 billion.

That proposal, part of a settlement framework negotiated with four state attorneys general, met resistance from lawyers for local governments and several states, leading to further talks. J&J on Oct. 13 said it would now contribute $5 billion.

McKesson in a quarterly report said that under the new $21 billion settlement framework proposed by attorneys general, the San Francisco-based company would pay about $8 billion over 18 years.

The company said the proposal was subject to further negotiations and that it “has not reached a point where settlement is probable.”

AmerisourceBergen declined to comment. Cardinal Health did not immediately respond to a request for comment.

The lawsuits, largely filed by states, counties and cities, seek to hold drug companies responsible for an opioid addiction epidemic that according to U.S. government data resulted in 450,000 overdose deaths from 1997 to 2018.

The lawsuits generally accuse drugmakers of deceptively marketing opioids and distributors of ignoring red flags indicating the prescription painkillers were being diverted for improper uses. They deny wrongdoing.

McKesson on Tuesday said in addition to the $21 billion, the proposed settlement also calls for the distributors to make changes to their programs to guard against the diversion of drugs for illicit purposes.

OxyContin maker Purdue Pharma and generic painkiller manufacturer Mallinckrodt Plc previously filed for bankruptcy protection in connection with their own multibillion-dollar proposals to resolve claims against them in the litigation.

(Reporting by Nate Raymond in Boston and Manas Mishra in Bengaluru; Editing by Peter Graff and Bill Berkrot)

Sign here first: U.S. salons, gyms, offices require coronavirus waivers

By Suzanne Barlyn and John McCrank

(Reuters) – As U.S. businesses reopen after weeks of pandemic lockdowns, many have been posting coronavirus disclaimers or requiring employees and patrons to sign waivers before entering.

From hair salons and recreation centers to stock exchanges and wedding photographers, the notices have sprung up across the country, asking guests to acknowledge they might contract a disease that has so far killed over 100,000 Americans.

Companies are using signs, forms and website postings as a shield against lawsuits, but the measures do not prevent people from seeking damages due to negligence, the same way someone might sue after falling on a slippery floor or getting sick from walls covered in lead paint, experts said.

Lawyers said it would be tough to prove a business caused a customer’s illness, but concerns are so intense that a waiver may soon become the new normal.

Entities including the YMCA of Greater Oklahoma City, a real estate agency in Arizona, a racecar speedway in Seinsgrove, Pennsylvania, and the New York Stock Exchange have introduced waivers disavowing responsibility for anyone who might contract the disease onsite, Reuters has learned.

Missoula, Montana-based lawyer Paige Marie Griffith created a waiver for COVID-19, the respiratory illness related to the novel coronavirus, that business owners can buy and customize online. Events industry workers, including makeup artists and wedding photographers, are using them, she said.

“As essential as we feel, everyone getting their hair done is choosing to do so,” said Cody Brooke, who owns 10th Avenue Hair Designs in Pensacola, Florida. “We don’t want the salon or stylist to be held liable knowing that they chose to come in.”

Since reopening on May 11, the salon requires clients to sign a form stating they have no COVID-19 symptoms and have not visited a “hot spot” with high infection rates in the last 30 days. It releases the salon from liability for “unintentional exposure” to the virus.

Ryan Reiffert did not mind signing a waiver recently for the gym where he practices martial arts near San Antonio, Texas. He had symptoms in March and later learned from antibody testing that had likely contracted the virus.

“But even if I hadn’t had it,” he said, “I’d happily sign the waiver.”

A gym attendant sprayed disinfectant on Reiffer’s hands and feet before he could enter, he said.

Bigger companies are taking similar steps.

Walt Disney Co’s website cites “severe illness and death” risks for customers at its Orlando, Florida, amusement parks due to reopen on July 11th.

That warning did not deter the throngs who waited for hours to buy Mickey Mouse swag or apparel from familiar brands outside the Disney Springs shopping center that reopened on May 20.

A Disney spokeswoman did not respond to a request for comment.

New York Stock Exchange owner Intercontinental Exchange Inc and commodities exchange CME Group Inc also require entrants to sign waivers. Floor traders at the exchanges have historically shouted in close proximity to one another, sans masks, but that has changed.

“I cannot stress enough that we will not be able to guarantee the safety of traders, clerks or other trading personnel that choose to access the trading floor,” said CME Chief Executive Terry Duffy. “It will have risk and will continue to have risk until there is a vaccine or some other cure for this disease.”

(Reporting by Suzanne Barlyn and John McCrank; Editing by Lauren Tara LaCapra and Richard Chang)

COVID-19 lawsuit takes on McDonald’s like it was a rowdy bar

By Tom Hals

(Reuters) – As U.S. businesses reopen, worried workers and their advocates are borrowing a legal strategy commonly used to shut down rowdy topless bars to try and force employers to strengthen protection against further spread of the coronavirus.

Workers and their families at McDonald’s Corp’s Chicago restaurants have filed a class-action lawsuit against the fast-food chain that does not seek money for sick staff, but compliance with health guidance such as providing clean face masks.

The strategy was unsuccessful against a meatpacking plant but experts said it could work against McDonald’s and other companies, and a business group warned about a flood of cases.

“The damage done by inadequate safety practices is not confined to the walls of a restaurant but instead has broader public health consequences,” Tuesday’s lawsuit said.

Like an April lawsuit against a meatpacking plant, the case targets McDonald’s as a public nuisance, a legal strategy previously used to shutter strip clubs and the famed Limelight nightclub in Manhattan.

Typically, workplace safety is a matter for the federal Occupational Safety and Health Administration (OSHA), which has the authority to inspect businesses and issue citations. By focusing on community health, the lawsuit attempts to move outside OSHA’s jurisdiction and into the courts.

McDonald’s workers around the country have protested and demanded safety gear.

In Chicago, workers filed at least four complaints with OSHA, but the agency declined to inspect work sites, according to the lawsuit.

OSHA did not immediately respond to a request for comment. Unions have criticized the agency for lax enforcement and failing to issue mandatory standards for businesses to stem the spread of COVID-19.

“When you don’t have an assertive OSHA you get these creative approaches,” said Michael Duff, a professor at the University of Wyoming College of Law.

McDonald’s called the allegations inaccurate. The company criticized the SEIU service union that is supporting the plaintiffs and said the chain has issued a 59-page guide its restaurants must follow to protect staff and customers.

The Fight for $15 group, which campaigns to raise the U.S. minimum wage to $15 an hour, is also helping the workers.

OSHA has said it is investigating thousands of complaints nationwide and that flexible guidance is better than rigid standards.

The public nuisance doctrine stems from medieval England, where it was used to promote safer roads and to fight infectious diseases.

To prevail, plaintiffs must prove a defendant interfered with public good, like the community’s health. Unlike a typical lawsuit, it does not generally require proof that the defendant directly injured someone.

Rather than prove someone was infected with the coronavirus at McDonald’s, the workers must instead show the company created an unsafe workplace that posed an imminent threat of contributing to its spread.

A similar public nuisance lawsuit filed in April against a Smithfield Foods Inc meat processing plant in Missouri was dismissed because the judge said workplace safety was a matter for OSHA.

But Smithfield was already being investigated by OSHA and unlike McDonald’s, there were no confirmed COVID-19 cases in the Missouri plant.

The Institute for Legal Reform, an affiliate of the U.S. Chamber of Commerce business group, has warned the pandemic could prompt a flood of “abusive” lawsuits, and cited the McDonald’s public nuisance case in a call with reporters this week.

“The danger is one case survives and like moths to light you’ll see cases all over the place,” said Michelle Richards, a law professor at the University of Detroit Mercy.

Richard Ausness, a professor at the University of Kentucky College of Law, downplayed the risk of a flood of cases, but said the mere filing of such a lawsuit could push a business to help its workers.

“Who wants to be accused of maintaining a public nuisance? It just sounds awful,” he said.

(Reporting by Tom Hals in Wilmington, Delaware; editing by Noeleen Walder in New York)

Special Report: How secrecy in U.S. courts hobbles regulators

By Mike Spector, Jaimi Dowdell and Benjamin Lesser

LEBANON, Ohio (Reuters) – Something wasn’t right with the Rhino.

Reports started trickling in to the Consumer Product Safety Commission (CPSC) in 2005 of people being killed or injured in the Yamaha Motor Co off-road vehicles when they tipped over. But no clear pattern emerged, and in the rough and tumble off-road world, accidents are common. The agency took no action.

Then, in 2007, ten-year-old Ellie Sand was killed in a Rhino when it flipped in a cornfield in Warren County, Ohio. Her father, house painter John Sand, started reading up on other Rhino crashes. He spoke to other parents whose children had died or been seriously injured in similar incidents. He became convinced that Rhinos were the problem.

Using a computer in a Cincinnati law library, Sand found more than a dozen lawsuits alleging that the vehicles were dangerously unstable. Some of the lawsuits – like the one he filed against the company in 2008 – claimed that design flaws caused the Rhinos to roll over even at slow speeds on flat ground. Sand sent the results of his research to CPSC, highlighting details from the lawsuits of the tip-overs that led to deaths and injuries.

Soon after, CPSC sent a subpoena to Yamaha, forcing it to hand over a trove of information, much of which had lain hidden under judges’ protective orders in the lawsuits against the company. By then, more than 40 people, including more than a dozen children, had been killed in Rhino crashes.

The impact of Sand’s work was confirmed in a voicemail message Sand received a few months later. Yamaha had agreed to a voluntary recall covering more than 100,000 Rhinos to fix the stability problems. “As a result of the information – a lot of the information that we received from you – we’ve gotten this far, so I wanted to thank you,” Marc Schoem, then deputy director of CPSC’s compliance and field operations, said in the March 31, 2009, message, which was reviewed by Reuters.

Five years after the recall was announced, CPSC staff noted in a 2014 briefing that crashes involving the Rhino had “decreased noticeably.”

Sand told Reuters he “was elated that the work I’d done could help stop the carnage.” Still, he was surprised that it took an “average Joe” like him to flag the lawsuits to CPSC.

A CPSC spokesman said that the agency had investigated Rhino incidents and that establishing a pattern that would have supported finding the vehicles defective proved challenging. Schoem declined to comment, as did Yamaha.


CPSC is one of more than a dozen regulatory agencies tasked with protecting Americans from dangerous products. And the Rhino episode reveals a troubling dynamic in the way these watchdogs do their jobs: Sometimes the only way they can learn about and act on a possible threat to consumers is from evidence produced in lawsuits, but that evidence is often hidden behind a wall of secrecy.

Most regulators have their own reporting systems for conducting oversight. But their databases can be vast and unwieldy, stuffed with thousands and even millions of consumer complaints and reports from manufacturers of safety concerns, injuries or deaths. The reports are often rife with mistakes and inconsistencies. Not all consumers even know they can file complaints. And companies regularly flout legally mandated reporting requirements.

That leaves the courts as a conduit for alerting regulators to potential harm, and it’s far from perfect. As Reuters has documented in earlier articles in this series, a thick blanket of secrecy covers product-liability litigation in the United States. In just a handful of cases over the past several decades, hundreds of thousands of people were killed or injured by defective products – cars, drugs, guns – while information about the risks was hidden from consumers and regulators, sometimes for years, behind broad protective orders.

These orders, though meant to protect specific information such as medical records and trade secrets, often give companies wide latitude to designate as confidential material exchanged between litigants in the pretrial discovery process – internal emails, data, research, meeting minutes, sworn depositions and the like. The secrecy typically persists for the life of the case, and long after, though court documents are, by law, presumed to be public.

In an analysis of some of the largest mass defective-product cases consolidated in federal courts over the past 20 years, Reuters found 55 in which judges sealed information concerning public health and safety. And among those, only three had protective orders containing language specifically allowing information exchanged by the litigants to be shared with regulators.

Regulators may subpoena information from a manufacturer after spotting a suspicious cluster of lawsuits, or after being alerted by a consumer like Sand in the Yamaha Rhino case.

But those are rare exceptions. And regulators themselves aren’t inclined to mine court records as a means of oversight. In the 55 big cases Reuters reviewed, public court filings contained no indication that regulators had requested any information arising from the lawsuits.

A few years ago, the National Highway Traffic Safety Administration (NHTSA) and CPSC issued pleas for easier access to evidence introduced in court under protective orders. But the Environmental Protection Agency, the Food and Drug Administration (FDA) and 15 other federal departments or agencies surveyed by Reuters did not point to any explicit policy or guidance on gaining access to court evidence potentially relevant to their oversight functions.

Yet regulators have repeatedly documented the failures of existing safeguards. Since 2009, NHTSA and CPSC have fined a total of at least 90 companies for failing to meet safety-reporting requirements, while the FDA has issued more than a dozen warning letters to manufacturers of drugs and medical devices for similar lapses.

Big business and its lobbyists contend that regulators have all the tools they need to do their jobs well – including the power to subpoena information subject to a judge’s protective order.

“The protective order cannot block the government,” said Victor Schwartz, a partner at law firm Shook, Hardy & Bacon LLP who has defended companies in civil litigation. “Litigation gets publicity. If the government sees something about a case … it can use its power, the subpoena power, to find out more detail,” he said.

That argument, former U.S. regulatory officials said, doesn’t hold water when litigation is cloaked in secrecy. “It’s a catch-22,” said David Friedman, a former NHTSA official. If documents and other evidence in litigation are sealed, “how are you supposed to know about them?” Friedman said. “If you don’t know about them, you can’t get them.”


Friedman was at NHTSA during General Motors Co’s notorious 2014 recall of millions of cars with defective ignition switches, ultimately linked to 124 deaths and 275 injuries. A 2015 deferred prosecution agreement between GM and federal prosecutors showed the company scrambled for years to make sense of mounting reports of deaths and injuries while keeping regulators and the public in the dark about the switches, even after uncovering clear internal evidence they were defective.

As early as 2003, NHTSA received complaints that Saturn Ions were stalling and, by 2004, that their airbags were failing to deploy in collisions. Similar complaints soon cropped up about Chevrolet Cobalts. In the ensuing years, the agency examined several fatal Cobalt crashes, each involving switches that slipped out of position and disabled airbags.

Yet NHTSA didn’t make the connection between the switch problem and airbag failures. That was partly because its investigators misunderstood how GM’s airbag system operated, but also because NHTSA rules gave automakers a lot of leeway in how they reported certain information regarding safety risks. As a result, similar incidents were reported inconsistently. One was listed as an “engine and engine cooling” issue, for instance, while another as an “electrical” problem. That made it difficult for regulators to detect a pattern.

From the first consumer complaints and incident reports, it would be more than 10 years and scores of deaths and injuries before NHTSA and the public learned of the link between defective ignition switches and airbag failures – and then only after evidence of what GM knew emerged in litigation and prompted the automaker to pursue a recall.

In June 2011, the parents of Jennifer Brooke Melton filed a product-liability lawsuit against the company in a Georgia state court. Melton, a 29-year-old nurse, was killed in March 2010 when her Cobalt stalled on a rainy highway, crossed into oncoming traffic, collided with another vehicle and careened into a creek.

The Melton case started, as many like it do, under a veil of secrecy. In December 2011, Judge Kathryn Tanksley approved a broad protective order, keeping from the public and NHTSA any documents that GM designated “in good faith” as confidential.

Tanksley, now retired, said she approved the order because both the Meltons’ lawyer and GM agreed to the terms. “The role of litigation is not to regulate GM,” she said. When NHTSA officials want more information, she said, they “have to pursue it not through the court, but through their own power.”

The documents GM began turning over to Lance Cooper, the Meltons’ lawyer, were damning. They showed that in 2005, for example, a company engineer suggested a fix for less than $1 per vehicle, but it was rejected as too costly and not effective enough. Cooper also obtained evidence that the company modified the switches between 2005 and 2008 to keep them from slipping. The evidence built a strong case that GM had known for years that the switches were faulty.

The Meltons were eager to go public with the evidence to prevent others from dying as their daughter had, but Cooper worried that if he challenged the protective order and regulators didn’t conclude the switches were defective, it would hurt their case. GM wanted to settle.

“We thought that people needed to know. There were still people out there driving those cars,” Beth Melton told Reuters. “It’s a real shame that these things are kept secret and other people (suffer) because of it.”

Meanwhile, a Cobalt crash in Quebec, Canada, killed another driver. The airbags did not deploy. The ignition switch was later found to be in accessory mode, the position between on and off that could cut power to airbags.

GM settled with the Meltons in September 2013 for $5 million. Five months later, after conducting its own investigation, GM recalled about 600,000 vehicles with the ignition switch.

Cooper still wasn’t satisfied, based on what he had learned in the Melton lawsuit, and having obtained a settlement for his clients, he decided it was time to share evidence with NHTSA. “I basically said: ‘The hell with it,’ ” Cooper said. “If we can get this information to the federal government, they need it. Really, it was just a strategic decision to violate the protective order.”

In a letter to NHTSA , he suggested that the automaker knew about the defect far longer than its recall paperwork said and had not recalled enough vehicles. He urged the agency to investigate, citing evidence from the Melton case that he had seen as much as a year earlier.

Eventually, NHTSA, Congress and federal prosecutors all investigated, relying heavily on evidence from the Melton case. GM increased the size of the recall, which eventually covered 2.6 million vehicles.

In May 2014, NHTSA fined GM $35 million for failing to alert regulators to the defective ignition switch in a timely manner. The next year, GM entered into the deferred prosecution agreement with the U.S. Attorney’s Office for the Southern District of New York to settle criminal charges of concealing information from government officials and wire fraud. Under the deal, GM agreed to pay a $900 million fine and to submit to three years of oversight by an independent monitor. In 2018, a federal judge dismissed the charges against the company after prosecutors said the company had complied with the agreement.

“The most damning information came out in litigation,” said Kevin Vincent, NHTSA’s head lawyer at the time. Though the facts eventually came to light, Vincent said, initial confidentiality in the Melton case “stymied” the agency. “That was evidence the agency needed to see,” he said. “We could have acted sooner.”

In a statement to Reuters, GM said: “Since 2014, we have undertaken comprehensive reforms across the company to ensure that something like the ignition switch crisis never happens again.” The company hired additional safety investigators, created a new executive position charged with overseeing global safety and recalls, and launched a program aimed at giving employees and dealers easier ways to flag potential vehicle defects.

A NHTSA spokesman said the agency took 17 steps the U.S. Transportation Department inspector general recommended in the wake of the ignition-switch recall to improve collection and analysis of vehicle safety data.


In 2016, NHTSA and CPSC, seeking to address what they acknowledge is a blind spot in their efforts to safeguard consumers, issued bulletins recommending that judges and litigants agree to protective orders that would allow them to share confidential evidence pertinent to public health and safety with the relevant regulators.

“Our job is to protect consumers,” said Marietta Robinson, a CPSC commissioner at the time. “Obtaining information about an allegedly dangerous product from a lawyer representing a consumer who has been injured or killed is critically important to us doing that job.”

NHTSA’s bulletin, which cited the GM ignition-switch case, argued that keeping such information hidden from regulators clashes with federal legal requirements for courts to show “good cause” before allowing companies to keep it secret.

But the bulletins, published in the Federal Register, where the government publishes new rules, proposals and public notices, carried no enforcement power, and they have had little impact.

Judges have rarely shown willingness to grant requests from plaintiffs, expert witnesses or news organizations to share information with regulators or the public. Lawyers challenged defendants’ claims of confidentiality for material relating to public health and safety in 26 of the 55 big cases Reuters analyzed, and in most of them, judges refused to unseal the evidence. Some of those cases involved attempts to share information with the FDA.

The FDA declined to comment on specific cases for this article. In general, the agency said, its powers to inspect drug makers’ plants and launch criminal investigations, along with voluntary reporting requirements for drug makers, “provide FDA with the tools to keep patients and consumers safe and fulfill its mission to protect and promote the public health.”

However, in the case of Pfizer Inc’s popular drug Chantix, which helps people quit smoking, court secrecy excluded possibly pertinent information from the agency’s process for assessing safety.

The FDA approved Chantix in 2006. Three years later, it placed a black box warning – its strongest – on the drug’s label after receiving “reports of changes in behavior such as hostility, agitation, depressed mood, and suicidal thoughts or actions.”

Over time, Pfizer faced thousands of lawsuits blaming Chantix for such side effects. The company turned over millions of documents to plaintiffs under the condition they be kept confidential.

In 2014, after Pfizer settled most of the cases for about $300 million, two plaintiff experts decided the FDA and the public should see internal Pfizer documents and expert reports that had been introduced in litigation.

Through their lawyer, clinical psychiatrist Joseph Glenmullen and drug safety researcher Thomas Moore asked the judge overseeing the bulk of the Chantix litigation to unseal the information, which they said was important for “shedding light on Pfizer’s awareness of Chantix’s behavioral risks.”

Two days after their request was filed, U.S. District Judge Inge Johnson in Alabama rejected it. Her brief order did not address the substance of the request.

Johnson did not respond to requests for comment.

The upshot was that, two years later, an FDA advisory panel did not have access to all the information the two men had sought to make public as it considered a Pfizer request to remove the black box warning. Pfizer’s request was based on its own study claiming that Chantix did not have a significant association with depression and suicide.

The advisory panel of medical experts in September 2016 recommended in a close vote to remove the black box warning. The FDA removed the black box warning a few months later. Chantix bottles still carry a less severe warning of potential mental health side effects.

Moore acknowledged that it’s impossible to know whether the evidence he and Glenmullen sought to provide to regulators would have changed the panel’s decision. But he said he remains frustrated that information “central” to the question of Chantix’s safety never made it into regulators’ hands.

“The FDA should be able to see it,” Moore said.

Pfizer, in a statement to Reuters, said: “The FDA and its 2016 advisory panel had access to all of the data and science on Chantix, and all of the adverse events reports.” The plaintiff experts’ reports, the company noted, were not original science and instead reflected views of the underlying science that differed from the FDA and the advisory panel’s conclusions.

Members of the FDA advisory panel Reuters contacted said they were unaware of Moore and Glenmullen’s efforts.

One of them was Dr Jess Fiedorowicz, director of the University of Iowa Mood Disorders Center. He voted to remove the black box warning. He said he didn’t know whether the evidence from the two experts would have changed his mind, but, “I’m all for transparency in research.”


In September, House Judiciary Committee Chairman Jerrold Nadler, a New York Democrat, said he planned to reintroduce the Sunshine in Litigation Act to address the problem of court secrecy. The bill would allow parties in litigation to share evidence related to public health and safety with state and federal regulators, regardless of protective orders.

Nadler’s pledge came during a hearing on courtroom transparency that was called after Reuters began publishing its series on court secrecy and its impact on public health and safety. Previous iterations of the bill introduced repeatedly since the early 1990s, despite enjoying bipartisan support, have ultimately failed in the face of sustained opposition from business groups that contend it would increase the costs and burdens of litigation for companies that are already meeting regulatory reporting requirements.

However, as the Yamaha Rhino episode and others like it show, regulators and the public can’t assume manufacturers are meeting disclosure and reporting rules.

A few months after John Sand sent a packet stuffed with his research to CPSC, the agency told Yamaha it had received information indicating that the Rhino could roll over at low speeds on flat ground, posing “an unreasonable risk of injury or death to riders.” It told the company to send it all relevant information, including documents from Rhino-related litigation.

CPSC spent the next few months trying to get Yamaha to comply, at one point complaining to the company that it was sending “duplicative” material and that “the only new item seems to be a Model Year 2009 owner’s manual for the Rhino.”

Only after CPSC subpoenaed Yamaha did the company send to the agency a 70-page written response, a hard drive and 62 DVDs that contained all of the records the company had produced in years of litigation, including company documents that had been subject to protective orders.

CPSC would have known about the Rhino much earlier if Yamaha hadn’t repeatedly violated the rules for notifying the agency of a possible defect, according to William Kitzes, a former adviser to the agency and an expert witness for plaintiffs in Rhino litigation who reviewed correspondence between the regulator and Yamaha.

Companies must report to the agency immediately upon learning that a product is defective or can cause injury or death, or when a product is subject to three or more personal-injury lawsuits in a two-year period that are settled or decided in favor of plaintiffs. From 2004 to late 2008, Yamaha faced about 250 lawsuits alleging that Rhinos were unsafe.

“Certainly no later than, and by many measures well before the end of 2005 … Yamaha had adequate information to report,” Kitzes wrote in a report for plaintiffs.

CPSC didn’t fine Yamaha for failure to report Rhino incidents. The agency and Yamaha jointly announced the Rhino recall on March 31, 2009 – referred to at the time, on Yamaha’s insistence, as a “free repair program.”

In 2011, the Ohio jury hearing Sand’s case found the Rhino defective, but awarded Sand no damages. Ellie was not wearing a helmet when she was killed, and the jury determined that she, her parents and others were negligent in her death.

Yamaha stopped making the vehicles in 2013.

(Additional reporting by Erica Evans and Dan Levine. Edited by Janet Roberts and John Blanton.)

McDonald’s faces 25 new sexual harassment complaints from workers

FILE PHOTO: The logo of a McDonald's Corp restaurant is seen in Los Angeles, California, U.S. October 24, 2017. REUTERS/Lucy Nicholson/File Photo

By Jonathan Stempel

(Reuters) – McDonald’s Corp was accused on Tuesday in 25 new lawsuits and regulatory charges of condoning sexual harassment in the workplace and retaliating against employees who speak up.

The cases announced by the American Civil Liberties Union (ACLU), the labor group Fight for $15, and the Time’s Up Legal Defense Fund cover alleged misconduct at McDonald’s locations in 20 U.S. cities, including groping, indecent exposure, propositions for sex, and lewd comments.

McDonald’s is one of the world’s most recognizable brands, and the cases make the fast-food chain a primary target of a campaign to extend the #MeToo movement, which sprung from sexual harassment cases in Hollywood, to the workplace.

The Chicago-based company said it has more than 14,000 locations in the United States with some 850,000 workers.

More than 90 percent of the locations are franchised, and McDonald’s has long maintained it should not be liable for how employees in franchised restaurants behave.

Chief Executive Steve Easterbrook said his company has improved and more clearly defined its harassment policies, has trained most franchise owners, and will be training front-line employees and setting up a complaint hotline.

“McDonald’s is sending a clear message that we are committed to creating and sustaining a culture of trust where employees feel safe, valued and respected,” Easterbrook wrote in letters this week to Illinois Senator Tammy Duckworth and “Top Chef” host Padma Lakshmi, who supports the workers’ cause.

The 25 cases include three new lawsuits, two by workers who previously filed charges, and charges filed with the U.S. Equal Employment Opportunity Commission (EEOC).

McDonald’s has faced more than 50 such charges and lawsuits in the last three years, the ACLU said. Last September, McDonald’s workers in 10 cities staged a one-day strike to protest alleged sexual harassment.

Jamelia Fairley, a single mother who makes $9.60 an hour at a corporate-owned McDonald’s in Sanford, Florida, told reporters she went to the EEOC after a co-worker began groping her, rubbing against her and saying he could “give me a ride.”

She said that after she reported the harassment, McDonald’s transferred but did not fire her harasser, while her boss cut her weekly hours to seven from 25,

“Trying to raise a 2-year old on $67 a week is, well, I can’t do it,” Fairley said.

Sharyn Tejani, director of the Time’s Up fund, which is part of the National Women’s Law Center, said having to put up with workplace harassment should not be a cost of making a living.

“For McDonald’s, time is past up,” she said.

(Reporting by Jonathan Stempel in New York; editing by Bill Berkrot)

Spurned students sue U.S. colleges in admissions scandal

By Jonathan Stempel

(Reuters) – The U.S. college admissions scandal that erupted this week has spawned lawsuits accusing rich, well-connected parents and prestigious schools of conspiring to admit those parents’ children at the expense of the less affluent.

Lawsuits began emerging on Wednesday, a day after federal prosecutors said a California company made about $25 million from parents seeking spots for their children in top schools including Georgetown University, Stanford University, the University of Southern California and Yale University.

Fifty people, including 33 parents, have been criminally charged in the nation’s largest known college admissions scandal. The accused mastermind, William Singer, pleaded guilty to racketeering charges.

In one civil lawsuit, Stanford students Erica Olsen and Kalea Woods said they were denied a fair opportunity to win admission to Yale and USC because of alleged racketeering, and said their degrees from Stanford will be devalued.

Singer and eight schools, including Stanford, were named as defendants in the lawsuit, which seeks unspecified damages.

Another lawsuit by Joshua Toy and his mother said he was denied college admission despite a 4.2 grade point average, and seeks $500 billion of damages from 45 defendants for defrauding and inflicting emotional distress on everyone whose “rights to a fair chance” to enter college was stolen.

The defendants, in that case, include Singer and accused parents, including actress Felicity Huffman, actress Lori Loughlin and her fashion designer husband Mossimo Giannulli, and TPG private equity partner William McGlashan Jr.

“These class-action cases are opportunistic creatures of lawyers trying to obtain a windfall,” Donald Heller, a lawyer for Singer, said in a phone interview.

Lawyers for the plaintiffs did not immediately respond to requests for comment.

Both lawsuits were filed in California. More lawsuits are likely.

Prosecutors said Singer used his Edge College & Career Network and an affiliated nonprofit to help prospective students cheat on college admission tests and bribe coaches to inflate their athletic credentials.

The Stanford case is notable because that school is among the country’s most prestigious and selective, admitting just 4.3 percent of its applicants last year.

But Olsen and Woods said their degrees are “now not worth as much” because prospective employers might question whether they were admitted on merit, or had parents whose bribes got them in.

A Stanford spokesman said the university is reviewing the lawsuit.

(Reporting by Jonathan Stempel in New York; Editing by Scott Malone and Susan Thomas)

Exclusive: OxyContin maker Purdue Pharma exploring bankruptcy – sources

FILE PHOTO: Bottles of prescription painkiller OxyContin pills, made by Purdue Pharma LP sit on a counter at a local pharmacy in Provo, Utah, U.S., April 25, 2017. REUTERS/George Frey

By Mike Spector and Jessica DiNapoli

(Reuters) – OxyContin maker Purdue Pharma LP is exploring filing for bankruptcy to address potentially significant liabilities from thousands of lawsuits alleging the drug manufacturer contributed to the deadly opioid crisis sweeping the United States, people familiar with the matter said on Monday.

The deliberations show how Purdue and its wealthy owners, the Sackler family, are under pressure to respond to mounting litigation accusing the pharmaceutical company of misleading doctors and patients about risks associated with prolonged use of its prescription opioids.

Purdue denies the allegations, arguing that the U.S. Food and Drug Administration-approved labels for its opioids carried warnings about the risk of abuse and misuse associated with the drugs.

Filing for Chapter 11 protection would halt the lawsuits and allow the drugmaker to negotiate legal claims with plaintiffs under the supervision of a U.S. bankruptcy judge, the sources said.

More than 1,000 lawsuits accusing Purdue and other opioid manufacturers of using deceptive practices to push addictive drugs that led to fatal overdoses are consolidated in an Ohio federal court. Purdue has held discussions to resolve the litigation with plaintiffs’ lawyers who have often compared the cases to widespread lawsuits against the tobacco industry that resulted in a $246 billion settlement in 1998.

A Purdue bankruptcy filing is not certain, the sources said. The Stamford, Connecticut, drug maker has not made any final decisions and could instead continue fighting the lawsuits, they said.

“As a privately-held company, it has been Purdue Pharma’s longstanding policy not to comment on our financial or legal strategy,” Purdue said in a statement.

“We are, however, committed to ensuring that our business remains strong and sustainable. We have ample liquidity and remain committed to meeting our obligations to the patients who benefit from our medicines, our suppliers and other business partners.”

Purdue faces a May trial in a case brought by Oklahoma’s attorney general that, like others, accuses the company of contributing to a wave of fatal overdoses by flooding the market with highly addictive opioids while falsely claiming the drugs were safe. The court proceedings will be televised.

Purdue tapped law firm Davis Polk & Wardwell LLP for restructuring advice, Reuters reported in August, fueling concerns among litigants including Oklahoma Attorney General Mike Hunter that the company might seek bankruptcy protection before the trial.

(Reporting by Mike Spector and Jessica DiNapoli in New York)

California tells Trump that lawsuit over border wall is ‘imminent’

FILE PHOTO: The prototypes for U.S. President Donald Trump's border wall are seen behind the border fence between Mexico and the United States, in Tijuana, Mexico January 7, 2019. REUTERS/Jorge Duenes/File Photo

By David Morgan and David Lawder

WASHINGTON (Reuters) – California will “imminently” challenge President Donald Trump’s declaration of a national emergency to obtain funds for a U.S.-Mexico border wall, state Attorney General Xavier Becerra said on Sunday.

“Definitely and imminently,” Becerra told ABC’s “This Week” program when asked whether and when California would sue the Trump administration in federal court. Other states controlled by Democrats are expected to join the effort.

“We are prepared, we knew something like this might happen. And with our sister state partners, we are ready to go,” he said.

Trump invoked the emergency powers on Friday under a 1976 law after Congress rebuffed his request for $5.7 billion to help build the wall that was a signature 2016 campaign promise.

The move is intended to allow him to redirect money appropriated by Congress for other purposes to wall construction.

The White House says Trump will have access to about $8 billion. Nearly $1.4 billion was allocated for border fencing under a spending measure approved by Congress last week, and Trump’s emergency declaration is aimed at giving him another $6.7 billion for the wall.

Becerra cited Trump’s own comment on Friday that he “didn’t need to do this” as evidence that the emergency declaration is legally vulnerable.

“It’s become clear that this is not an emergency, not only because no one believes it is but because Donald Trump himself has said it’s not,” he said.

Becerra and California Governor Gavin Newsom, both Democrats, have been expected to sue to block Trump’s move.

Becerra told ABC that California and other states are waiting to learn which federal programs will lose money to determine what kind of harm the states could face from the declaration.

He said California may be harmed by less federal funding for emergency response services, the military and stopping drug trafficking.

“We’re confident there are at least 8 billion ways that we can prove harm,” Becerra said.

Three Texas landowners and an environmental group filed the first lawsuit against Trump’s move on Friday, saying it violates the Constitution and would infringe on their property rights.

The legal challenges could at least slow down Trump’s efforts to build the wall but would likely end up at the conservative-leaning U.S. Supreme Court.

Congress never defined a national emergency in the National Emergencies Act of 1976, which has been invoked dozens of times without a single successful legal challenge.

Democrats in Congress have vowed to challenge Trump’s declaration and several Republican lawmakers have said they are not certain whether they would support the president.

“I think many of us are concerned about this,” Republican Senator Ron Johnson of Wisconsin, who chairs the Senate Homeland Security Committee, told NBC’s “Meet the Press.”

Trump could, however, veto any resolution of disapproval from Congress.

White House senior adviser Stephen Miller told Fox News on Sunday that Trump’s declaration would allow the administration to build “hundreds of miles” of border wall by September 2020.

“We have 120-odd miles that are already under construction or are already obligated plus the additional funds we have and then we’re going to outlay; we’re going to look at a few hundred miles.”

Trump’s proposed wall and wider immigration policies are likely to be a major campaign issue ahead of the next presidential election in November 2020, where he will seek a second four-year term.

(Reporting by David Morgan and David Lawder; Editing by Lisa Shumaker)