Legal Liability and Regulatory Challenges: Robins & Robins Case Analysis

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Legal Liability and Regulatory Challenges: Robins & Robins Case Analysis1. List any bases Robins & Robins could sue Casings, Inc., under contract theory ONLY for thedamages caused by the explosives in their drugs, over and above the cost of the capsule shells.(short answer question)Ans:It is very likely that the contract provision in section 14B.2a would be upheld In this case providedthat the contract was not the product of unconscionabiity, misrepresentation, or fraud. Robins &Robins could bring contract actions for breach of warranty depending on the other terms of thecontract. Also, Robins might also recover based on a theory of equity based on the extraordinarynature of the damagescaused. A contract is a legally enforceable agreement between two or more parties with mutualobligations. The remedy at law for breach of contract is "damages" or monetary compensation. Inequity, the remedycan be specific performance of the contract or an injunction. Both remediesaward the damaged party the "benefit of the bargain" or expectation damages, which are greaterthan mere reliance damages, as in promissory estoppels. We have the fact that when Robins &Robins' contracted with Casings, Inc., they made sure to state in the section 14B.2a that "Theremedy for defects in supplies shall be limited to the cost of the parts supplied". Vitiating factorsconstituting defenses to purported contract formation include: Unconscionability and duress.Casings Inc. has supplied the capsule casings for the medication pills tainted with small particles ofplastic explosive because of which the final product sold by Robins and Robins were found to be in adefective condition unreasonably dangerous to the user or consumer. The fact that Casting productsare damaged makes the contract's lopsidedness unconscionable. Robins and Robins has a right tomitigatehisdamages.Alsowecanconsiderundueinfluence;unconscionability;misrepresentation/fraud in this case and Robins & Robins could sue Casings, Inc on the basis ofundue influence; unconscionability; misrepresentation/fraud.2. TCO B. The FDA discovers that, during the public comment process, Robins & Robins bribed oneof the members of the administrative panel that decided to pull the rule from consideration. Themember of the panel was removed and is being charged criminally. As a result, the FDAimmediately implements an emergency order that puts into effect the “tracking bar” requirementand makes the rule retroactive, but only to Robins & Robins. Provide two arguments Robins &Robins can make to have the rule determined to be invalid under the Administrative ProceduresAct. Explain your answer. (Points : 30)Ans:

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Robins & Robins could argue that FDA's action violates the consumers right to privacy under theFifth and Fourteenth Amendment. However, they can't file a lawsuit for these claims because theylack standing based on the discovery that during the public comment process, Robins & Robinsbribed one of the members of the administrative panel that decided to pull the rule fromconsideration. . However, they could file a lawsuit on the grounds that it burdens interstatecommerce. They could argue they would lose sales all over the country and Canada because theconsumers would not want tracking on their medications. The validity of any rule may bedetermined upon petition for a declaratory judgment addressed to the Court when it is alleged thatthe rule, or its threatened application, interferes with or impairs or immediately threatens tointerfere with or impair, the legal rights or privileges of the petitioner. The FDA shall be made a partyto the proceeding; provided, that the court shall not have jurisdiction to hear any such petition fordeclaratory judgment, and no declaratory judgment may be rendered, unless the petitioner has firstrequested in writing that the sponsoring department pass upon the validity of the rule in question.Upon its receipt of any such petition the sponsoring department may elect to take no action otherthan to immediately refer the matter to the appropriate administrative appellate body withjurisdiction over the matter in question and request that such administrative appellate body respondto the petition on the department's behalf. In such a case, the administrative appellate body shallfirstdeterminewhetherithasjurisdictionoverthereferredmatterandifsofindingtheadministrative appellate body shall then pass upon the validity of the rule in question.(Ref:http://www.codepublishing.com/WA/puyalluptribe/html/PuyallupTribe02/PuyallupTribe0208.html)Robins can also argue that based on the additional research, it can be concluded thatthere wereflaws in the original research and results.1) The first ground on which to challenge an agency rule is that it is arbitrary, capricious, and abuseof discretion, or in violation of some other laws. This standard is generally applied to informalrulemaking and simply requires the agency to show evidence to support the proposed rule. Withoutsuch evidence, the rule can be held arbitrary and capricious.2) A second theory for challenging an agency`s regulation is that the regulation is unsupported bysubstantial evidence. This substantial evidence test is applied in the review of formal and hybridrulemaking. Where the arbitrary and capricious standard simply requires some proof or basis for theregulation, substantial evidence requires that more convincing evidence exist in support of theregulation than against it.3) A third ground on which to challenge an agency`s regulation involves the rule that a regulationcan be set aside if the agency did not apply with the APA requirements of notice, publication, andpublic comment or input. The procedures for rule making must be followed in order for theregulatory process and resulting rules to be valid. An agency that seeks public comment for thepurpose of drafting legislation cannot then turn the legislation into rules after the comment period.

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4) Another basis for challenging a regulation is that the regulation is unconstitutional. Manychallenges based on constitutional grounds deal with regulations that give an agency to searchrecords or that impose discriminatory requirements for licensed professionals.5) Another theory for the challenging a regulation in court is ultra vires. An ultra vires regulation isone that goes beyond the authority given to the agency in its enabling act. Although most agenciesstay clearly within their authority, if an agency tries to change the substance and purpose of theenabling through regulation, the regulations would be ultra vires.3. TCO C. Robins & Robins immediately issued a massive recall for the tainted medication uponlearning of the situation. Despite the recall, 1,400 children and 350 adults have been hospitalizedafter becoming very ill upon taking the tainted medication. Each of them had failed to note therecall after having already purchased the medication. It is quickly determined that they will needliver transplants and many of them are on a waiting list. During the wait, to date, 12 children havedied. Their families are considering suing for both 402A and negligence. The attorneys stated thatbut for the lobbying efforts, the recall process would have been automated and the people wouldnot have gotten sick or died.You are the attorney for one of the dead children’s family. List the causes of action (if any) youwould file against Robins & Robins, the FDA, and the bribed FDA member. List the elements of thecauses of action, and set forth the facts that you have that would support a lawsuit against each ofthe three named defendants. State any defenses any of the three would have. Analyze the successof the defenses.Ans:Negligence may be defined roughly as an act or omission which unreasonably does or may affect therights of others, or which unreasonably fails to protect one’s self from the dangers resulting fromsuch acts. The tort of negligence is one that applies in a variety of circumstances, but it is alwaysused when the conduct of one party did not live up to a certain minimal standard of care. The FDA,Robins and Robins and bribed FDA member all had the duty to protect and act in the best interest ofthe citizens.Here, FDA failed to get the recall done at an appropriate time. If FDA had providedsubstantial evidence citing the interest of the public uppermost using proper standards thenregulation would have stood hard on the ground in spite of all the lobbying efforts of various publicinterest groups. Once the standard of care and the duty are established under element one, theremust be a determination that the defendant fell short of that standard or breached that duty for theplaintiff to recover on the basisof negligence. Here, clearly FDA, Robins and Robins and bribed FDAmember all failed to live up to the standard of the duty which caused so many children to die andmany other adults and children would need to undergo liver transplant. After establishing a duty andbreach of duty, the plaintiff in a negligence suit must also establish that the breach of the duty wasthe cause of the damages. Here, there is no doubt that the medications tainted with small particlesof plastic explosive were the main cause ofthe children dying as well as falling utterly sick. so, thereis a clear causation here between the breach of the duty for each of these parties and the resultingeffect on the public. Under Restatement 402 A-Special liability of seller of product for physical harmto user or consumer, one who sells any product in a defective condition unreasonably dangerous tothe user or consumer or to his property is subject to liability for physical harm thereby caused to theultimate user or consumer. The rule applies although the seller has exercised all possible care in the

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