Letter to CA Attorney General Bill Lockyer Requesting to Investigate Metabolife

October 2, 2002

Attorney General Bill Lockyer
Department of Justice
Office of the Attorney General
1300 I Street, Suite 1740
P.O. Box 944255
Sacramento, CA 94244-2550

Dear Attorney General Lockyer,

Consumers Union requests that you investigate whether Metabolife International, Inc. ("Metabolife"), and its managers, including officers and executives, have violated the California Corporate Criminal Liability Act (Penal Code §387). Metabolife's apparent failure to alert state officials to the serious, concealed health danger associated with Metabolife, containing the herbal supplement ephedra, may violate Penal Code §387.

The California Corporate Criminal Liability Act was inspired by the need for greater accountability from businesses and individual managers to prevent the concealment of dangers in products or workplace settings that could put consumers or workers at risk of death or injury. The Act was needed to assure that individual managers would not make decisions that could cause death or great harm to consumers based on a cost-benefit type analysis of a company's interests. The Ford Pinto was a major impetus behind the passage of the Act; the legislative history of Penal Code §387 contains references to stopping the kind of decision making by corporate executives in that case.

The statute, in pertinent part, reads:

Any corporation, limited liability company, or person who is a manager with respect to a product, facility, equipment, process, place of employment, or business practice, is guilty of a public offense punishable by imprisonment…or by a fine…or by both that fine and imprisonment… if that corporation, limited liability company, or person does all of the following: 1) Has actual knowledge of a serious concealed danger that is subject to the regulatory authority of an appropriate agency and is associated with that product or a component of that product or business practice. 2) Knowingly fails during the period ending 15 days after the actual knowledge is acquired, or if there is imminent risk of great bodily harm or death, immediately, to do both of the following: a) Inform the Division of Occupational Safety and Health in the Department of Industrial Relations in writing…b) Warn its affected employees in writing…(Penal Code §387).

According to recent news reports, the Federal Drug Administration (FDA) has been seeking cooperation from Metabolife for several years to ascertain what adverse medical events had been reported to the company concerning its ephedra products. The company reportedly had refused to cooperate with the FDA. In August 2002, Metabolife finally turned over to the FDA 13,000 health complaints dating as far back as 1997, some apparently involving deaths and hospitalizations associated with the product.

Ephedra, an herbal supplement also known as "ma huang," may be the most hazardous of the popular diet and sports supplements. It acts as an amphetamine. Many of these supplements combine ephedra with at least one other stimulant, usually caffeine. Nearly two decades ago, the FDA found the combination of ephedra and caffeine so dangerous that it banned it from over-the-counter drugs.

Serious concerns are mounting about the health risks of weight loss and sports supplements that contain ephedra products, particularly their ill effects on children. The American Medical Association has called on the FDA to initiate proceedings to remove dietary supplements containing ephedrine alkaloids from the marketplace because of the risks associated with their use. The National Football League (NFL), the National Collegiate Athletic Association (NCAA), and the International Olympic Committee have banned ephedrine use by their players. Canada has warned its citizens to avoid using ephedra-based products. And at least ten U.S. states and several local governments have imposed various restrictions on ephedra sales, such as requiring a prescription, outlawing sales to minors, or limiting the maximum dose. Consumers Union has supported several of these measures, and has testified in support of them. In fact, SB 1884 (Speier), a California bill just signed into law, bans the sale and distribution of ephedrine products to individuals under the age of 18, requires these products to contain the toll-free number for FDA "Medwatch" to enable consumers to report adverse events, and requires specific warning labeling.

Two recent independent studies in peer-reviewed journals scrutinized more than 1,000 adverse event reports filed with the FDA between 1995 and 1999. Of those, the researchers found dozens of cases of abnormal heartbeats, strokes, and heart attacks they felt were likely related to ephedra use. Twenty-four of the victims died, and forty seven suffered strokes and other serious injuries. See Haller, CA and Benowitz, NL, "Adverse Cardiovascular and Central Nervous System Events Associated with Dietary Supplements Containing Ephedra Alkaloids," New England Journal of Medicine, 2000; 343:1833-1838; Samenuk, D, Link, MS, Homoud MK et al., "Adverse Cardiovascular Events Temporally Associated with Ma Haung, an Herbal Source of Ephedra," Mayo Clinic Proceedings, 2002; 77:12-16.

We understand that the federal Department of Justice is pursuing an investigation of Metabolife's failure to cooperate with the FDA. At the same time, the company has an independent obligation to disclose to state officials evidence in its possession of harm related to its product under Penal Code §387. If Metabolife managers had actual knowledge of a serious concealed danger in the product, or in its use, and failed to give the notice required by Penal Code §387, they may have violated the California Corporate Criminal Liability Act. If that is true, prosecutions should be brought to hold the responsible individuals accountable to the law--and to community standards of moral behavior.

Consumers Union was instrumental in creating the California Corporate Criminal Liability statute, signed into law by then-Governor George Deukmejian in 1990, as an appropriate law enforcement tool aimed at preventing socially unacceptable acts by the people who run businesses. A victim is not required in order to prosecute under Penal Code § 387; proof of knowledge of a concealed danger (as defined by the statute) and failure to report it are the necessary elements. To our knowledge, California is the only state with a law that requires individuals within businesses, which could include Chief Executive Officers, to report known, hidden dangers in the products or workplaces under their management. Failure to notify the appropriate state agency could be a felonious act under the statute.

Since its inception, the statute has been used to prosecute only the most egregious cases of corporate negligence and misconduct. Our most recent research of cases brought under Penal Code §387 showed that, to date, there have been a handful of cases prosecuted under the statute. Despite the measured use of this law, there have been three business-sponsored attempts to repeal the law (one in 1995 and two in 1998), all of which Consumers Union and numerous District Attorneys have successfully fought. Three reports published on the Corporate Criminal Liability Act are attached for your information.

The deaths and injuries reported in the case of Metabolife once again remind us of the need for greater accountability, both by corporations and by the people who run them, when they knowingly sell dangerous, defective products to consumers. Over the last decade, according to news reports there have been dozens of lawsuits related to Metabolife. Many of those lawsuits reportedly were settled with protective orders in place, keeping that critical safety information from the public. However, Metabolife officials had knowledge of the lawsuits and settlements. If these officials had reported the defects to Cal-OSHA pursuant to Penal Code § 387, that would have triggered the statutory requirement for Cal-OSHA to report the defect to the FDA. See Penal Code § 387 (a) (2) (A).

We urge you to investigate whether there have been violations of the California Corporate Criminal Liability Act in the Metabolife matter, and if so, to prosecute on behalf of California consumers.

Sincerely,

Elizabeth Imholz, Director
West Coast Regional Office
Consumers Union West Coast Regional Office

_____

(1) Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization, serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.

(2) In 1992, The Everhart Company published a study, prepared for the National Resources Defense Counsel, entitled "The California Corporate Criminal Liability Act, A One Year Perspective." In 1995, Legislative Research Incorporated published a study, prepared for Consumers Union, entitled "The California Corporate Criminal Liability Act of 1991, A Multi-Year Perspective." In 1996, in response to an effort to repeal the Act in the California Legislature, Consumers Union published a report, entitled "Concealed Danger: Who Is Really Behind the Bid to Kill The California Corporate Criminal Liability Act."

View Files Sorted By Office: Consumers Union OPI, New York - Washington DC Office
West Coast Regional Office - Southwest Regional Office - Consumer Policy Institute

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