Recalls, and plans for them, are key crisis tools

Legal Impact

November 12, 2015

5 Min Read
Recalls, and plans for them, are key crisis tools

The June recall of several Tylenol products was a stark reminder of at least two things: the importance of packaging to product safety, and of the need for companies to have an effective recall plan before trouble hits.

The importance of packaging was obvious because, as manufacturer McNeil Consumer and Specialty Pharmaceuticals reports, it was problematic packaging and labeling that inspired the recall. McNeil reported, "The blister package design, as well as the information on the blister and on the blister and bottle cartons, may be confusing and may lead to improper dosing, including over-dosing."

Specifically, for some Children's Tylenol Meltaways and SoftChews, "The package design includes blister cavities that contain one tablet while other cavities contain two tablets," says McNeil in a press release. Those blister packages were intended to make it convenient for parents to provide different doses depending on the age and weight of different children. However, the variety in blisters, combined with label statements on the blister backing and labeling, were thought to possibly confuse users about the amount of active ingredient delivered by each tablet.

The types of problems that can result in a company undertaking a voluntary recall are essentially infinite. After all, the legal definitions of "misbranded" or "adulterated" are broad and multi-faceted.

FDA cannot order food or drug recalls, so all recalls are technically voluntary. Often, when FDA has knowledge of a situation, the company takes its "voluntary" action under the threat of more severe action from FDA—seizure of product, injunction against further manufacture or shipment, or criminal prosecution—which reduces the degree to which the action is truly voluntary.

Moreover, in situations where a company discovers a product problem and is deciding on its own whether to conduct a recall, it has in mind a potential for later regulatory penalties for the marketing of an adulterated or misbranded product, as well as potential civil liability to consumers who might be hurt by a dangerous product or even just misled by a misbranded one.

Government guidelines recognize three classes of recalls, and companies are well advised to be guided by them in their own decision-making as well. A Class I recall is a situation in which there is a reasonable probability that the use of or exposure to a violative product will cause serious adverse health consequences or death. Class II involves a violative product that may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote. Class III involves violative product not likely to cause adverse health consequences.

The FDA and USDA offer their assistance to companies conducting recalls, and it is sometimes useful for a company to work together with the government to effectuate a recall. However, companies should always remember that their interests are not always fully aligned with those of the government, and should always consider carefully, on a case-by-case basis, whether it is advisable to do so.

Companies need to be careful and thorough with product recalls, and whether or not they get an agency involved, they need to conduct follow-up activities to confirm the completeness of the recall. As noted in the space in January 2005, a government report found that in 2003, "about 38 percent and 36 percent of recalled food was ultimately recovered in recalls overseen by USDA and FDA, respectively." (PD, Jan. 2005, p. 20).

The types of problems that can result in a company undertaking a voluntary recall are essentially infinite. After all, the legal definitions of "misbranded" or "adulterated" are broad and multifaceted.

When a company receives information that suggests that some of its product may be in violation of law, or even dangerous to health, a prepared, written crisis management plan should indicate who needs to be involved, and how to contact them immediately. These usually include senior management, attorneys, technical and product safety specialists and public relations and communications personnel. Each person's or position's area of responsibility should be clearly set forth so that everyone knows in advance what is expected of them in such situations. Home and cell phone numbers are routine parts of such written plans, because you never know what time of day a crisis will arise, and so are back-up personnel for each key person, in case they cannot be reached in a pinch.

A company must consider whether to halt shipment, whether to recall product (and if so, how much of it and how far down the chain of commerce to go), what, if any, statement to make to customers, what, if any, statement to make to media, what, if any, statement to make to FDA or USDA or state agencies, what, if any, statements to make to employees, and finally what changes might make sense for Good Manufacturing Practices programs to avoid similar problems in the future.

Because recalls usually involve communications with a company's business customers, distributors, and consumers, it is important to try to communicate clearly and quickly in order to minimize the potential health and business effects.

It is also important to remember that in the modern marketplace, many recalls, handled responsibly, can actually reinforce a trusting relationship with customers, rather than damage them. The goal is to use the recall event to communicate your commitment and responsibility, rather than allowing it to be perceived as an error made by a callous corporate citizen.

When a crisis occurs, you usually have less control over the situation than you may think. It is therefore imperative that you be prepared in advance with a thorough crisis plan. When the crisis hits, you should collect information, and keep collecting it, so that you can constantly reevaluate the situation in light of new facts as they come to your attention, and take the appropriate action.

Eric F. Greenberg is principal attorney with Eric F. Greenberg, PC, with a practice concentrated in food and drug law, packaging law and commercial litigation. Visit his firm's website at Contact him by e-mail at [email protected], or by phone at 312/977-4647.

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