SUMMARY

Foley Hoag LLP publishes this quarterly Update concerning developments in Product Liability and related law of interest to product manufacturers and sellers.

Included In This Update:

• Massachusetts Supreme Judicial Court Holds Face Amount of Medical Bills Admissible as Evidence of Reasonable Value of Services Rendered to Personal Injury Plaintiff, But Range of Payments Generally Accepted by Plaintiff's Providers in Satisfaction of Such Bills Also Admissible

• Massachusetts Federal District Court Certifies Medical Monitoring Injunctive and Damages Class Action for Smokers with Only Subcellular Injury, Holding Alleged Common Need for Monitoring Supported Classwide Injunctive Relief and Predominated Over Individualized Issues

• First Circuit Affirms Dismissal of Putative Class Action Against Manufacturer of Recalled Heartworm Medication, Holding Massachusetts Unfair and Deceptive Practices Statute Requires Proof of Economic Loss

• Massachusetts Federal District Court Precludes Manufacture and Design Defect and Causation Testimony From Plaintiff's Expert and Grants Summary Judgment Where Expert's Only Training and Experience Were in Accident Reconstruction

• Massachusetts Appeals Court Affirms Preclusion of Expert Testimony that Holster Was Unfit for Particular Purpose Because Expert Had No Experience With Particular Holster or Holster Design Generally

For more information about the Product Liability and Complex Tort Practice Group, please contact Dave Geiger.

SUMMARY

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act), arguably the most far-reaching package of financial regulatory reforms since the New Deal. The legislation restructures the regulatory framework for much of the U.S. financial system, and its effects will be most pronounced on the financial services industry.

However, the Dodd-Frank Act will affect all U.S. public companies by extending the federal regulation of matters relating to corporate governance and executive compensation. [more... ]

SUMMARY

Among the many elements of the massive Dodd-Frank Wall Street Reform and Consumer Protection Act are provisions applicable to public companies requiring defined “say-on-pay” votes. These are shareholder votes on

• executive compensation generally, and
• executive compensation relating to business combinations, known as “golden parachutes”.

In the United States, say-on-pay is advisory and not binding on a company’s board of directors. However, thus far in 2010, at least three companies have received negative say-on-pay votes from shareholders. Public companies would be wise to review their compensation programs with a view to how those programs will be perceived, particularly as explained in the Compensation Discussion and Analysis section of their proxy statements.   [more...]

SUMMARY

On Wednesday June 30, 2010, members of the Securities and Exchange Commission (the “SEC”) voted unanimously to approve new Rule 206(4)-5 (the “Rule”) adopted under the Investment Advisers Act of 1940 (the “Advisers Act”). The Rule is aimed at curbing so-called pay-to-play abuses resulting from investment advisors making political contributions in order to influence persons involved in selecting investment advisors to manage public pension fund assets. The final text of the Rule was published in the Federal Register on July 14, 2010.

The Rule applies to any investment adviser that is registered (or required to be registered) with the SEC, or that is unregistered in reliance on the exemption available under Section 203(b)(3) of the Advisers Act (“Section 203(b)(3)”). The Rule does not, however, apply to most advisers that are registered with state securities authorities, or advisers that are unregistered in reliance on exemptions other than Section 203(b)(3). [more...]

SUMMARY

Earlier today, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”). The Act will implement broad-based changes to the regulatory landscape governing U.S. financial markets. [more...]

SUMMARY

On July 15, 2010, the U.S. Senate (the “Senate”) voted 60-39 to approve the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Bill”). The Bill, which is expected to be signed into law by the President, will implement broad based changes to the regulatory landscape governing U.S. financial markets. Of particular importance to investment advisers managing private investment funds is Title IV of the Bill, entitled the “Private Fund Investment Advisers Registration Act of 2010,” which is summarized below.

Registration of Investment Advisers to Private Funds

Under the current regulatory regime, advisers to private investment funds (such as hedge funds and private equity and venture capital funds) often rely upon the exemption from registration provided by Section 203(b)(3) of the Investment Advisers Act of 1940, as amended (the “Advisers Act”), which exempts from registration with the Securities and Exchange Commission (the “SEC”) any investment manager that (i) had fewer than 15 clients in the prior 12 month period and (ii) does not hold itself out generally to the public as an investment adviser (the “Private Adviser Exemption”).   [more...]

SUMMARY

The U.S. Congress has passed legislation requiring companies that utilize “conflict minerals” to conduct due diligence and demonstrate that their products are not fuelling conflict in the Democratic Republic of the Congo (“DRC”). The legislation was added as an amendment to the Wall Street Reform and Consumer Protection Act, which was sponsored by Senator Christopher Dodd (D-CT) and Representative Barney Frank (D-MA), and voted into law on July 15, 2010.

SUMMARY

The U.S. Congress passed legislation that required oil, gas, mining, and other extractive industry companies to report to the Securities Exchange Commission (“SEC”) their payments to governments. The legislation was added as an amendment to the Wall Street Reform and Consumer Protection Act, which was sponsored by Senator Christopher Dodd (D-CT) and Representative Barney Frank (D-MA), and voted into law on July 15, 2010. [more ... ]

SUMMARY

On July 6, 2010, the United States Environmental Protection Agency (“EPA”) released a proposed rule designed to address the transport of certain air pollutants across state boundaries. Once finalized, the proposed rule, dubbed the “Transport Rule”, would replace the Clean Air Interstate Rule (“CAIR”), promulgated in 2005. Although still in effect, in 2008 CAIR was remanded to EPA by the U.S. Court of Appeals for the District of Columbia Circuit in North Carolina v. EPA. EPA anticipates that the Transport Rule will be finalized in the late spring of 2011. [more... ]

SUMMARY

On July 8, 2010, the Department of Health and Human Services (“HHS”) issued a notice of proposed rulemaking (“NPRM” or “proposed rule”) modifying the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) Privacy, Security, and Enforcement Rules pursuant to the Health Information Technology for Economic and Clinical Health Act (“HITECH”), which was enacted February 17, 2009 as part of the American Recovery and Reinvestment Act of 2009, Pub. L. 111-5.  [more...]

SUMMARY

On Wednesday June 30, 2010, members of the Securities and Exchange Commission voted unanimously to approve new Rule 206(4)-5 (the “Rule”) adopted under the Investment Advisers Act of 1940 (the “Advisers Act”). The Rule is aimed at curbing so-called pay-to-play abuses resulting from investment advisors making political contributions in order to influence persons involved in the selection of investment advisors to manage public pension fund assets.  [more...]

SUMMARY

The Supreme Court last week, in the case of Skilling v. United States and two companion cases, severely curtailed the reach of the federal mail and wire fraud statutes by confining the “intangible right of honest services” to only those schemes that involve bribes or kickbacks. In so doing, the Court rejected the government’s argument that honest-services fraud should apply more broadly to undisclosed self-dealing and conflicts of interests. Justice Ginsburg wrote for the Court. Three other Justices (Justices Scalia, Thomas, and Kennedy) concurred in the judgment but would have gone even further and struck down the honest-services fraud provision in its entirety, finding it unconstitutionally vague and therefore in violation of the Due Process Clause of the Fifth Amendment.

SUMMARY

The Supreme Court today affirmed the Federal Circuit’s holding that Bilski’s business method was unpatentable subject matter because it sought to claim patent protection on an abstract idea. But the Court rejected the Federal Circuit’s bright-line “machine or transformation” test as the sole test for determining whether an invention is eligible for patent protection.  [more...]

SUMMARY

On Friday June 25, 2010, House and Senate Lawmakers culminated two weeks of negotiations and approved a bill, coined the Dodd-Frank Act (the “Bill”), which implements changes to prior House and Senate approved bills to overhaul regulatory oversight of banking and financial institutions.  [more...]

SUMMARY

On June 22, 2010, the Departments of the Treasury, Labor, and Health and Human Services issued interim final regulations implementing the rules for group health plans and health insurance coverage in the group and individual markets under provisions of the Patient Protection and Affordable Care Act regarding preexisting condition exclusion, lifetime and annual dollar limits on benefits, rescissions, and patient protections. These interim final regulations are effective 60 days after publication in the Federal Register. Comments are due on or before 60 days after publication.

SUMMARY

On June 18, 2010, the Office of the National Coordinator for Health Information Technology (ONC) issued a final rule establishing a temporary certification program to test and certify health information technology (HIT), including electronic health records (EHRs). This temporary certification program will be used to ensure that “Certified EHR Technology” is available for adoption by eligible professionals, eligible hospitals and critical access hospitals (CAHs) for purposes of qualifying for incentives under the Health Information Technology for Economic and Clinical Health (HITECH) Medicare and Medicaid EHR Incentive Programs, as established under the American Recovery and Reinvestment Act of 2009 (Pub. L. 111–5).

SUMMARY

Last Thursday, the United States Supreme Court held in New Process Steel v. National Labor Relations Board that the National Labor Relations Board was not authorized to act when it had only two sitting members. The holding calls into question the almost 600 decisions issued by the two-member Board from January 2008 through March 2010.

SUMMARY

On June 14, 2010, the Departments of Treasury, Labor, and Health and Human Services published the Interim Final Rules for group health plans and health insurance coverage relating to status as a grandfathered health plan under the Patient Protection and Affordable Care Act (PPACA) with request for comments. Comments are due on or before 60 days after publication in the Federal Register.

SUMMARY

This morning, Friday, May 28, 2010, the Federal Trade Commission (FTC) announced that it was extending the deadline for enforcement of the Red Flags Rule through December 31, 2010, in order to give Congress sufficient time to amend the law to exclude certain businesses from application of the Rule.  [continues... ]

SUMMARY

On May 20, 2010, the Department of Labor’s Office of Labor-Management Standards (“OLMS”) issued a final rule requiring nearly all federal contractors and subcontractors to notify employees of their rights under the National Labor Relations Act (“NLRA”). The new rule implements President Obama’s Executive Order 13496, which requires federal departments and agencies to include a new provision in nearly all government contracts about notifying contractors’ employees of their rights under federal labor law.   [continues... ]