North Carolina Nanotechnology Commercialization Conference. March 31, 2010 Joseph S. Koury Convention Center Greensboro, N.C.
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1 North Carolina Nanotechnology Commercialization Conference March 31, 2010 Joseph S. Koury Convention Center Greensboro, N.C. 4/13/2010
2 Nanotech, Risk, Safety and the Environment William S. Rogers, Jr., Partner, Day Pitney, LLP; One International Place, Boston, MA ; 2
3 Growth of Nanotechnology in Consumer Products 3 Source: Woodrow Wilson International Center for Scholars; Courtesy of Joyce Tsuji, Exponent, Inc.
4 Nanoenabled Products Samsung is marketing a washing machine utilizing nanoscale silver as a method of disinfecting laundry. The Yamaha 2010 FZR utilizes nanoparticles in the hull to lighten and strengthen the watercraft. 4
5 Nanoenabled Products A123 is marketing a hypersonic battery pack system utilizing nanophosphate technology. The chip inside the Xbox 360 features 165 million transistors and is fabricated using IBM s 90 nanometer Silicon on Insulator (SOI) technology to reduce heat and improve performance. 5
6 Nanoenabled Products Lancôme has manufactured cosmetic products with silica nano-particles. Blue Lizard (Australia) has manufactured a sunscreen especially for infants that incorporates nanoparticles (most likely titanium dioxide). 6
7 Nanoenabled Products A consumer product inventory of over 1,000 products is available at: consumer/ 7
8 Potential for Release and Exposure 8 Source: Adapted from Tsuji et al. (2006) Courtesy of Joyce Tsuji, Exponent, Inc.
9 Where We Are Today No reported decisions from lawsuits alleging defective nanomaterials; Product liability law differs slightly across the many United States; Consensus causes of action in U.S. for defective design, manufacture, and inadequate warnings or instructions; Multiple theories: in tort, contract, warranty and consumer protection statutes covering product defects; Liability usually follows the chain-ofcommerce or distribution. 9
10 The Plaintiffs Arsenal: 1. A Host of Potential Claims. A. Negligent Design, Manufacture, and Failure to Warn claims; B. Strict Liability Claims for Defective Products; C. Express and Implied in Law Warranty Claims; D. Statutory, Regulatory and Standard's based claims; E. Consumer Protection Law claims (Private Right of Action and Enforcement by the Government); F. Mass Tort and Toxic Tort Law claims: (Environmental, End-User Consumer, Workplace Exposure, etc); G. Medical Monitoring Claims. 10
11 The Best Defense: Start Risk Management Now 1. Product Safety Programs: A documented proactive, defensible, responsible and reasonable approach by Manufacturers, Distributors, Importers, Retailers to safe design and manufacture 2. Regulatory and Industry Standards Compliance: A. Product Safety B. Workplace Safety 3. Sound Scientific Research on Product Safety, Toxicology, and Causal Relationship between Exposure and Alleged Harm or Hazard; 11
12 4. Daubert: The Court's Scrutiny of the Plaintiff's claims and the Plaintiff's Expert's Opinions And Proposed Testimony; N.C. State Law Standards. 5. Defense Experts: We must have the better science, technology and methodology on our side; 6. Warnings and Instructions: When Safe Design and Manufacture Cannot Eliminate Foreseeable Risks: We should WARN. 12
13 The Role of Industry Standards and Government Regulations in Product Litigation Legal standards often incorporate or adopt consensus industry standards, customs or governmental regulations as basis for standard of care; Objective standards of care often treat manufacturer as an expert in its field, with imputed expert knowledge and experience. Incumbent on manufacturers and others in chain-of-distribution to know applicable standard of care. 13
14 ANSI Standards American National Standards Institute (ANSI) ANSI Z Current standards for design, application, use, and placement of safety signs and labels in the United States; Compliance is technically voluntary, but manufacturers must meet or exceed industry standards in order to satisfy the legal duty to warn in court. 14
15 ISO Standards International Standards for Organization (ISO) ISO Sets forth the requirements for the design and coloring of safety labels and signs in the international arena, so as to alert as to a specific hazard and to identify how the hazard can be avoided; When dealing with products or workplaces in both the United States as well as abroad, the best solution may be a careful harmonization of ANSI and ISO standards. 15
16 ANSI-ISO and Nanotechnology: TC-229 Nanotechnologies ANSI-ISO approach for nanotechnology labeling presently being debated, formulated, and refined; A warning standard does not appear to have a consensus in the international community; ANSI-ISO vote and adoption of labeling approach will be in May-June, 2010; Final decision on whether to warn will remain a manufacturer s decision on product risk assessment and job safety assessment basis. 16
17 The Relationship Between Scientific Data, Expert Opinion and Litigation Exposure Traditional evidentiary standards requiring probability as opposed to mere possibility, speculation, surmise or conjecture; The role of the trial judge as the arbiter of evidence admissibility under appellate case law standards. 17
18 Daubert Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993) established that a Judge must act as a gatekeeper when determining whether expert testimony is admissible. In the case of scientific experts, the testimony must be based upon sufficient facts or data; the product of reliable principles and methods (e.g. the scientific method); and the witness must have applied the principles and methods reliably to the facts of the case. An inability to satisfy the standard means that such testimony is inadmissible. NOTE: Daubert and its progeny such as Kumho Tire Co. v. Carmichael, 526 U.S. 137 (1999) (applying the Daubert standard to non-scientists) have been incorporated into Federal Rule of Evidence 702; state courts may have separate standards governing the admissibility of expert testimony like N.C., Howerton v. Arai Helmet, Ltd., 358 N.C. 440 (2004). 18
19 The Role of Industry Standards and Government Regulations in Workplace Litigation The importance of general OSHA regulation is not limited to administrative proceedings; Nano-specific NIOSH Guidelines: A place to look now 19
20 20 Occupational Health & Safety Administration (OSHA) Workplace safety and health regulations administered by OSHA apply to virtually all private sector employers in the United States. OSHA is now strengthening its enforcement of the OSH Act administratively through programmed and special emphasis inspections, combined with an increase in staffing of 250 new field inspectors. Employers who are found to have violated OSHA standards are subject to substantial penalties. OSHA can seek to shut down an employer s operations in cases where it considers employees to be subject to imminent danger.
21 Organization of the OSH Act The OSH Act of 1970 is supplemented by a massive set of regulations promulgated by OSHA, located at 29 C.F.R The regulations contain requirements designed to reduce the probability of accidents and injuries in the workplace. These regulations or OSHA standards are divided into two sections: (1) those covering safety issues and (2) those covering health issues. 21
22 The General Duty Clause Section 5(a)(1) of the OSH Act The general duty clause is a catchall provision designed to redress hazardous conditions not covered by agency standard setting, and will govern exposure to nanoparticles for now. The general duty clause mandates that each employer furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or 22 serious physical harm to his employees.
23 OSHA s Hazard Communication Standard (29 C.F.R. Part ) The Hazard Communication Standard (HCS) seeks to prevent the occurrence of workrelated injuries and illnesses that are caused by all defined hazardous chemicals. Employees receive such information through effective labeling, material safety data sheets (MSDS), and comprehensive training programs. 23
24 OSHA s Hazard Communication Standard (29 C.F.R. Part ) OSHA defines hazardous chemical as any chemical that can be released during use (even in trace quantities) that has the capacity to cause a physical or health hazard. The chemical manufacturer or importer determines whether a chemical meets the definition. If such a determination is made, the downstream users are required to maintain the MSDS. OSHA defines hazard warning to mean any words, pictures, symbols, or combination thereof appearing on a label or other appropriate form of warning which conveys the specific physical and health hazard(s), including target organ effects of the chemical(s) in the container(s). 24
25 Product Liability: Duty To Warn Generally Restatement 3d of Torts: Products Liability, 2(c) (1998) Reasonableness test: A product is defective (i.e., not reasonably safe) because of inadequate instructions or warnings if 1) it poses a foreseeable risk of harm 2) which could be reduced or avoided 3) by reasonable instructions or warnings. Comment i to 2(c): Warnings also may be needed to inform users and consumers of nonobvious and not generally known risks that unavoidably inhere in using or consuming the product. 25
26 The Plan: Preparedness 1. A Frank Dialogue about Litigation Risk. 2. Under take Risk Management activity now. 3. Consider Defensive Strategies now. 26
27 1. A Frank Dialogue about Litigation Risk: A. Any time risk to human health and environment exists: There will be litigation eventually. B. Plaintiff's Bar is already at work. C. Talking about Litigation Risk is not what causes Litigation; Not talking about it leaves you less prepared for Litigation. 27
28 Risk Management Programs: Positioning yourself: Just in Case. 1. Due Diligence on the health and safety risks of your product and its component parts: A. Characterization; B. Do your own research on safety/toxicology; C. Follow the research of others on safety/toxicology. 28
29 2. Maintain Insurance Coverage: A. Advise your Carrier about your business in the Application and Renewal Process. B. Continental Western Exclusion: Who's next? C. Follow insurance industry's on-going risk assessment of Nanotechnology industry and products. 29
30 Keep Your Eyes on the Horizon Keeping up with the Joneses (Nanostyle) Industry leaders: Dupont- Environmental Defense partnership; ICON's Good Nano Guide: An Incubator for future standards? 30
31 Practical Advice: Know the scientific and toxicological data on the nanomaterials you manufacture or use; Document risk assessment process/job safety assessment process to identify foreseeable risks; If you cannot eliminate risks through design or manufacturing improvements, consider use of warning, labeling or instructions consistent with applicable standards of care. 31
32 Nanotech, Risk, Safety and the Environment William S. Rogers, Jr., Partner, Day Pitney, LLP; One International Place, Boston, MA ;
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