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358
“I should regret to find that the law was powerless to enforce the most elementary
principles of commercial morality.” Lord Herschell
Reddaway v. Banham (1896)
I. Teacher to Teacher Dialogue
consumer protection.
This chapter covers the four major sets of venues within a quadripartite of remedies
available to a wronged or injured consumer. First, there is criminal law. Victims of consumer
fraud and similar offenses have always been able to seek state-supported sanctions against
wrongdoers. This venue may provide some ephemeral satisfaction for the victim and may even, at
some financial means. As seen in the prior discussions of these areas, tort law generally, and
products liability specifically, are ripe with controversy and a great deal of uncertainty in today’s
legal environment. The major drawback to both the criminal law and tort law methods of
consumer protection is that they represent after-the-fact remedies for harm already done. They are
undesirable behavior.
The third side to our quadrilateral picture is found in contract. Contract law has the advantage
of providing the consumer with the opportunity to anticipate any problems before they befall him
or her. This notion is traditionally found in the doctrine of caveat emptor which courts of another
age used with cavalier abandon. Both the common law of contracts and its progeny, the Uniform
CONSUMER PROTECTION AND
PRODUCT SAFETY
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Consumer Protection and Product Safety
never.” Protection from harm has come a long way, but there is still no light at the end of the
tunnel.
II. Chapter Objectives
1. Describe government regulation of food and food additives.
2. Describe government regulation of drugs, cosmetics, and medicinal devices.
III. Key Question Checklist
What consumer concern is at issue—public health, product safety, services, trade practices, or
a combination of two or more of these?
IV. Text Materials
Introduction to Consumer Protection and Product Safety
The principle of caveat emptor led to abusive practices by businesses that sold adulterated food
Food Safety
The U.S. Department of Agriculture is a federal administrative agency responsible for regulating
Case 44.1 Adulterated Food: United States of America v. LaGrou Distribution Systems, Inc.
466 F.3d 585, 2006 U.S. App. Lexis 25986 (2006), United States Court of Appeals for the
Seventh Circuit
Facts: LaGrou operated a cold storage warehouse and distribution center in Chicago, IL with
over 2 million pounds of food products passing through the facility every day. The warehouse had
Chapter 44
The USDA inspector uncovered said problem and, after further intensive investigation of the
premises, ordered the warehouse closed, a large amount of product had to be destroyed, and the
Issue: Did LaGrou knowingly engage in the improper storage of meat, poultry, and other food
Decision: Yes, LaGrou had knowingly engaged in the improper storage of meat, poultry, and
other food products in violation of federal food safety laws because the unsanitary conditions
Ethics Questions: The United States Department of Agriculture (USDA) is a federal
administrative agency that is responsible for regulating meat, poultry, and other food products.
Since 1999, LaGrou’s president, managers, and several employees were aware of the unsanitary
conditions in the Pershing Road warehouse. LaGrou was aware of the rodent infestation from
Food, Drugs, and Cosmetics Safety
The Food, Drug, and Cosmetic Act (FDCA) is the federal statute that regulates the safety of
foodstuff, drugs, cosmetics, and medicinal devices.
Landmark Law: Food, Drug, and Cosmetic Act
legislative, executive, and judicial powers.
Regulation of Food – The FDCA prohibits the sale or shipment of adulterated food. It also
prohibits false and misleading labeling of food products.
Critical Legal Thinking – The FDA makes sure that Americans are not eating things that
their health.
Consumer Protection and Product Safety
Global Law: United Nations Biosafety Protocol for Genetically Altered Foods
In January 2000, 138 countries agreed that all genetically engineered foods would be clearly
labeled as such to allow consumers to make a choice regarding their purchase.
Regulation of Cosmetics – Cosmetics include any substances and preparations for cleansing,
altering appearance, or promoting the attractiveness of an individual, and are regulated by the
FDA. The FDA also requires labeling of all cosmetic products.
medicinal devices.
Product and Automobile Safety
The Consumer Product Safety Act (CPSA) established an independent federal regulatory agency
injunction under the act.
Medical and Health Care Protection
Several government programs provide health care coverage. For example, Social Security
by taxes.
Landmark Law: Health Care Reform Act of 2010
The goal of this act was to increase the number of persons who have health care insurance in this
Unfair and Deceptive Practices
The FTC Act (1914) prohibits unfair and deceptive trade practices. The FTC, a federal
for violations.
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False and Deceptive Advertising – Advertising is deemed to be false and deceptive if it contains
advertised product in stock.
Door-to-Door Sales – Most states have enacted laws that allow a consumer a short amount of
time to rescind door-to-door sales, provided that a notice of cancellation is sent timely to the
seller.
Contemporary Environment: Do-Not-Call Registry
exempted from the registry requirements.
Three federal statutes apply to the creation and enforcement of this list: the Telephone
Consumer Protection Act of 1991, the Telemarketing and Consumer Fraud and Abuse Prevention
V. Key Terms and Concepts
Adulterated food—Food is deemed adulterated if it consists in whole or in part of any “filthy,
Biosafety Protocol—A United Nations–sponsored protocol that requires signatory countries
to place the label “May contain living modified organisms” on all genetically engineered
foods.
Caveat emptor—“Let the buyer beware,” the traditional guideline of sales transactions.
safety and prohibit abusive, unfair, and deceptive business practices.
Consumer Protection and Product Safety
from most unsolicited commercial telephone calls.
Door-to-door sales—Some salespersons sell merchandise and services door-to-door. In some
door-to-door sales situations, these salespersons use aggressive sales tactics to overcome a
consumer’s resistance to the sale.
Drug Amendment to the FDCA—A federal law that gives the FDA broad powers to license
new drugs in the United States.
Federal Communications Commission—The Federal Communications Commission (FCC) is
a federal administrative agency that regulates communications by radio, television, cable,
wire, and satellite.
Federal Trade Commission (FTC)—Federal administrative agency empowered to enforce the
in 1914.
Food and Drug Administration (FDA)—Federal administrative agency that administers and
enforces the federal Food, Drug, and Cosmetic Act (FDCA) and other federal consumer
protection laws.
Food, Drug, and Cosmetic Act (FDCA)—A federal statute enacted in 1938 that provides the
drugs, cosmetics, and medicinal products.
Health Care Reform Act—A 2010 federal statute that increases the number of persons who
have health care insurance in the United States and provides new protections for insured
persons from abusive practices of insurance companies.
Medicinal Device Amendment—An amendment enacted in 1976 that gives the FDA
authority to regulate medicinal devices and equipment.
from making unsubstantiated health claims.
Patient Protection and Affordable Care Act—Amended by the Health Care and Education
Reconciliation Act. The act increases the number of persons who have health care insurance
in the U.S.
Product safety standards—Because the CPSC regulates potentially dangerous consumer
of injury.
Section 4205 of the Patient Protection and Affordable Care Act—Section 4205 of the Patient
Protection and Affordable Health Care Act of 2010 requires restaurants and retail food
establishments with twenty or more locations to disclose calorie counts of their food items
and supply information on how many calories a healthy person should eat in a day.
genetically engineered foods.
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