Legal News for Tues 8/13 - Google Consumer Lawsuit Dismissed, J&J and Avon Struggle with Talc Lawsuits, OSHA Proposes a Heat Safety Rule and Federal Excise Tax Reform

Minimum Competence

This Day in Legal History: Chinese Exclusion Treaty

On August 13, 1894, the U.S. Senate ratified the Chinese Exclusion Treaty, marking a significant moment in American immigration history. This treaty was an extension of the Chinese Exclusion Act of 1882, which was the first significant law restricting immigration into the United States. Under the treaty, China agreed to the exclusion of its laborers from entering the U.S., further cementing the racial and economic discrimination that Chinese immigrants faced. The treaty represented a formal diplomatic agreement between the two nations, wherein China conceded to the exclusion of its citizens in exchange for certain protections for Chinese already residing in America.

The Chinese Exclusion Treaty was part of a broader movement in the late 19th century to limit the influx of immigrants, particularly those from Asia, who were seen as economic threats and culturally incompatible by many Americans. The ratification of this treaty reinforced and prolonged the discriminatory practices against Chinese immigrants, contributing to the legal and social marginalization of Chinese communities in the U.S. It wasn’t until 1943, during World War II, that these exclusionary policies began to be dismantled, reflecting the deep-seated impact of the treaty and the exclusion laws on American legal and social landscapes.

In a recent legal development, a federal judge in California dismissed a consumer lawsuit accusing Google of unlawfully dominating mobile search markets. U.S. District Judge Rita Lin ruled that the plaintiffs failed to provide sufficient evidence showing how Google's market dominance harmed consumers. The lawsuit, originally filed in 2022, alleged that Google conspired with Apple to make its search engine the default on iPhones, restricting competition.

Although the case was dismissed, Judge Lin indicated that the plaintiffs might have another opportunity to amend their complaint. She referenced a separate ruling by U.S. District Judge Amit Mehta in Washington, D.C., which found Google had illegally monopolized the search engine market by paying billions to Apple and other companies for exclusive search engine agreements. This ruling could bolster the plaintiffs' chances if they can provide more concrete evidence of consumer harm in their amended complaint.

Despite this setback for the consumers, their attorney, Joseph Alioto, expressed intentions to revise and refile the lawsuit by the court’s September 9 deadline. Google has denied the allegations and plans to appeal the D.C. court's decision.

Google wins dismissal of US consumer lawsuit over mobile search | Reuters

Johnson & Johnson (J&J) and Avon Products Inc. are both embroiled in legal battles over the alleged harmful effects of talc in their products, leading to significant financial and legal repercussions. J&J recently made progress in its efforts to resolve thousands of lawsuits claiming that its talc-based baby powder caused cancer. Over 75% of the plaintiffs have reportedly supported J&J’s $6.5 billion settlement plan, which aims to address these claims through a pre-packaged bankruptcy filing. This plan follows J&J’s history of legal challenges, including a previous $5 billion payout over similar allegations. Despite this support, J&J still faces hurdles, as its attempts to secure bankruptcy protection have been twice denied in New Jersey courts.

Similarly, Avon Products Inc., known for its iconic beauty brand, has filed for Chapter 11 bankruptcy in Delaware due to the mounting costs of defending against talc-related lawsuits. The company is dealing with 386 individual cases and has already spent $225 million on legal fees and settlements. Avon’s financial struggles have led to its bankruptcy filing, as it seeks a permanent solution to the increasing number of lawsuits. The company plans to sell its assets, with Brazil-based Natura & Co. offering to purchase Avon for $125 million and write off $530 million in debt.

Both companies’ legal strategies highlight the significant impact of talc-related lawsuits on their operations, with J&J seeking a settlement through bankruptcy court and Avon attempting to resolve its liabilities through a similar process.

Avon Products Files for Bankruptcy to Wrangle Talc Lawsuits

J&J Gets Plaintiff Backing for $6.5 Billion Baby Powder Accord

In July 2024, OSHA proposed a new rule aimed at enhancing workplace safety by addressing heat-related hazards, which are the leading cause of weather-related deaths in the U.S. The rule, if enacted, would impact businesses with employees exposed to high temperatures, both indoors and outdoors. Key aspects of the rule include requiring employers to implement a Heat Illness and Injury Prevention Plan (HIIPP), which would mandate rest breaks, access to shade, drinking water, heat acclimatization procedures, and ongoing heat monitoring.

One notable provision is the requirement for employers to provide a paid 15-minute rest break every two hours on days when the heat index reaches 90°F or higher. This has raised questions about how such breaks would interact with the Fair Labor Standards Act, particularly regarding overtime calculations. Additionally, following the recent Supreme Court decision in Loper Bright Enterprises v. Raimondo, which limits agency authority, there may be legal challenges to OSHA’s ability to enforce such mandates.

The proposed rule has yet to be published in the Federal Register, but once it is, the public will have the opportunity to provide feedback before it is finalized. OSHA has encouraged public participation to ensure the final rule effectively protects workers while being feasible for employers.

OSHA Proposes Rule to Regulate Work Heat-Related Hazards

In my column this week, I discuss how applying the marketplace facilitator model, which has improved state sales tax compliance, could similarly enhance federal excise tax collection. Federal excise taxes, particularly on sporting equipment like fishing rods and archery gear, often go uncollected, especially when these items are sold online by foreign merchants. The Government Accountability Office (GAO) recently reported that this lack of compliance has resulted in significant revenue loss, funds that are crucial for wildlife conservation efforts.

Currently, the responsibility to remit these taxes falls on the consumer, a system that is both confusing and inefficient. To address this, I advocate for legislation that would require online marketplaces like Amazon and eBay to collect and remit these taxes on behalf of consumers. This approach would simplify the process, ensuring more consistent revenue collection and leveling the playing field for domestic sellers who are currently at a disadvantage.

Additionally, I propose that the IRS develop a centralized tax calculator accessible to these marketplaces. This tool would automate tax calculations at the point of sale, further reducing administrative burdens and ensuring accurate tax collection. An accompanying information campaign could also educate consumers on their tax obligations and the positive impact of these funds on conservation efforts.

To implement these changes effectively, the IRS should consider launching a pilot program, similar to its Direct File initiative, to test the feasibility of this system. This streamlined approach not only promises increased compliance but also ensures that vital conservation projects receive the funding they need to thrive.

Streamline Excise Tax on Sporting Equipment to Help Conservation

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