In our civil society, many non-governmental entities certify various things.  We’ve all heard of the Good Housekeeping Seal of Approval, which has been around for over a century.  Then there is Consumers Union/Consumer Reports – a magazine that does nothing but rate products, and recommends those it rates particularly highly rated or as providing a particularly good value.  There are a host of private standards testing organizations like the ASTM International, the American National Standards Institute, and the International Standards Organization, which in their respective fields create and maintain voluntary industrial standards for any number of commercially related operations.  These entities determine things such as what the “N95” in an N95 facemask means.  A myriad of other industry, medical, and online organizations certify and rate an almost endless variety of goods and services.  Heck, even lawyers get rated.

Recently, we have become concerned about personal injury plaintiffs deciding to sue these kinds of organizations because they don’t like some standard that stands between them and the pot of gold at the end of the litigation rainbow.  This goes beyond the attacks on industry groups for disseminating information that plaintiffs didn’t like, which we had previously thought to be a liability frontier.  See, e.g., In re Asbestos School Litigation, 46 F.3d 1284, 1295 (3d Cir. 1994) (attempts to sue industry groups into silence over their view of product risks barred by First Amendment); Klein v. Council of Chemical Associations, 587 F. Supp. 213, 223-24 (E.D. Pa. 1984) (dismissing action attacking “research” conducted by industry group).

But this is worse.  Standard setting organizations are the referees, not interested parties.  If these neutral organizations “can be mulcted in damages” for injuries caused by every product or service that they evaluated, because they didn’t catch something or didn’t set a standard “high enough,” they probably could not survive, since to do what they do “would be a most pecuniarily hazardous enterprise.”  Henderson v. National Drug Co., 23 A.2d 743, 748 (Pa. 1942).

We first started thinking of this problem after reading the disturbing opinion, Russell v. Educational Commission for Foreign Medical Graduates, 2020 WL 1330699 (E.D. Pa. March 23, 2020), vacated, 15 F.4th 259 (3d Cir. 2021) (hence the Pennsylvania reference above).  Apparently, a fraudulent foreign-trained “doctor” treated the plaintiffs, none of whom claimed malpractice or any physical injury whatsoever.  Of course, when one sees this kind of ridiculous no-injury claim, one knows a class action is involved – why we’ve repeatedly advocated the abolition of Fed. R. Civ. P. 23 in its current form.

Anyway, this fraudulent “doctor” allegedly “touched them without informed consent” and caused them “emotional distress.  Id. at *2.  Instead of suing the (probably judgment-proof) fake doctor, these plaintiffs sued the Educational Commission for Foreign Medical Graduates (“ECFMG”), which is:

a non-profit based in Philadelphia.  It certifies international medical graduates (“IMGs”) − i.e., individuals who received a medical education outside of the United States and Canada − to practice medicine in the United States.  It verifies that IMGs received a degree from an appropriate institution and administers tests of medical knowledge and English proficiency.  For qualified IMGs, it issues a certification, which IMGs can then use to apply to residency and other graduate medical education programs and to apply for state medical licenses.

Id. at *1.

The unfortunate truth is that ECFMG was also a victim of this fake doctor’s fraud.  According to the opinion, he repeatedly sought to defraud the ECFMG − using several false names, social security numbers, diplomas, transcripts, and letters of recommendation.  Id.  ECFMG twice caught him and revoked his certifications, but on the third try, he snuck through.  Id.  After that, over the next decade, he also defrauded the State of Maryland and at least two hospitals.  Id.  They weren’t sued either (at least not in this action).

Against a non-profit agency that certified the credentials of immigrant doctors, the Russell class’ primary cause of action was “Good Samaritan” liability under Restatement (Second) of Torts §324A (1965), whereby a person who “undertook” to do something it had no duty to do can be liable for “increasing the risk” by “negligently” conducting that activity.  We’ve already described that liability theory as the “last refuge of a scoundrel” in posts concerning manufacturer hotlines and medical publishers, due to its potential to deter socially useful activities.  Here, furthering anti-immigrant animus, the liability theory in Russell would effective deter anyone from certifying doctors from overseas.

Unfortunately, Russell did not dismiss this action.  Far from it – it went way out of the way to let this dangerous theory proceed, even certifying an unprecedented (in the Third Circuit, see id. at *3) Rule 23(c)(4) partial class.  The class certification was appealed, and in Russell v. Educational Commission for Foreign Medical Graduates, 15 F.4th 259 (3d Cir. 2021), the Third Circuit reversed.  The underlying cause of action was not directly at issue but the appellate discussion of causation sheds light on one reason why suits for negligent certification are bogus:

Many other actors played a role in [the “doctor’s”] fraud, including the residency programs that admitted and trained him, the state medical boards that licensed him, the hospitals that gave him privileges, the specialty board that certified him, and the law enforcement officers (state and federal) who investigated him.

Id. at 272.

On remand, Russell turned into a significant decision on negligent infliction of emotional distress, holding that no such claim could lie where plaintiffs alleged only that “they learn[ed] new information about some prior event.”  Russell v. Educational Commission for Foreign Medical Graduates, ___ F. Supp.3d ___, 2022 WL 1592444, at *4 (E.D. Pa. May 19, 2022).

There was no ongoing threat or risk that caused any of their distress.  Rather, their distress is a product of reconceiving their memories in light of new information.  The Court predicts that the Pennsylvania Supreme Court would not recognize such a claim.

Id. at *5.  “[T]here are too many ways that someone can suffer trauma as a result of viewing a memory through a new prism,” so that plaintiffs’ theory “would impose limitless liability.”  Id. at *6.  That’s all well and good – and indicative of the flimsy rationale for holding standards-setting organizations liable – but nowhere did the court expressly recant of its earlier willingness to entertain such liability.

A second decision, DeLong v. American Home Furnishings Alliance, 464 F. Supp.3d 727 (E.D. Pa. June 2, 2020), also from Pennsylvania, but applying Florida law, came down a few months after the first Russell decision.  This time, the result was better.  DeLong should have been a product liability involving a tippable piece of furniture, but the plaintiff’s adventurous counsel instead targeted “non-profits American Home Furnishings Alliance, Inc. and the American Society for Testing and Materials” claiming that they “negligently issued and promoted voluntary furniture safety standards.”  Id. at 728.  Purportedly, they could be liable for “negligently” promulgating a voluntary industry standard – itself a valid product liability defense in most states.  So if compliance with an industry standard is a defense, this plaintiff went a step further and sued the organizations that created the standards.  DeLong advanced two liability theories, direct negligence in creating the standard, and good old §324A negligent assumption of a duty to third-party product buyers.  Id. at 729.

DeLong rejected both of them.

A standards setting agency owes no “direct” duty to the customers of third-party manufacturers who chose to offer products that comply with those standards.

I conclude [that Florida courts] would hold that the law does not impose on a trade association issuing voluntary industry standards a duty to the end users of products manufactured in accordance with the standards.

Id. at 730 (presumably the Florida plaintiff sued in Pennsylvania for jurisdictional reasons).  There was little law on this novel cause of action, but that precedent overwhelmingly supported dismissal.  Id.  DeLong cited (id. at *3):

  • N.N.V. v. American Ass’n of Blood Banks, 89 Cal. Rptr.2d 885 (Cal. App. 1999):

[W]e believe imposition of liability here would have adverse consequences to the public by chilling scientific and medical debate on important issues and leaving these matters to the often slow and cumbersome processes of governmental agencies or to the equally slow process of published medical journal articles and annual conferences. . . .  We believe the public benefits from having private medical and scientific societies coordinating research, debating the merits of various scientific and medical information and technologies, and making recommendations to its members and the community at large. . . .  Additionally, we note imposition of liability could hinder reconsideration of established standards.

Id. at 904-05.

  • Bailey v. Edward Hines Lumber Co., 719 N.E.2d 178 (Ill. App. 1999):

Such organizations serve many laudable purposes in our society.  They contribute to the specific industry by way of sponsoring educational activities, and assisting in marketing, maintaining governmental relations, researching, establishing public relations, standardization and specification within the industry, gathering statistical data and responding to consumer needs and interests.  Furthermore, trade associations often serve to assist the government in areas that it does not regulate.

Id. at 183 (quoting Meyers v. Donnatacci, 531 A.2d 398, 404 (N.J. Super. L.D. 1987)).

  • Sizemore v. Hardwood Plywood & Veneer Ass’n, 114 F.3d 1177, 1997 WL 295644, at *4 (Table) (4th Cir. 1997) (trade association neither “owed a duty of care [n]or assumed a duty not otherwise owed to end users of a product allegedly manufactured by one of [its] members”) (applying South Carolina law), affirming, 1996 WL 498410, at *4-5 (D.S.C. March 8, 1996).
  • Beasock v. Dioguardi Enterprises, Inc., 494 N.Y.S.2d 974, 978 (N.Y. Sup. 1985):

The only products [the trade association] is responsible for placing in the stream of commerce are its publications.  Although these publications contained the dimensional specifications for the [product] in question, the publications themselves did not produce the injuries and thus cannot serve as the basis for the imposition of liability. . . .  The purpose of [the association’s] existence is limited to the approval and dissemination of norms, or the establishment of a consensus, within the industry . . . it had neither the duty nor the authority to control what the manufacturers produced.

Id. at 978-79.

  • Gunn v. Big Dog Treestands, Inc., 2015 WL 6393869 (S.D. Miss. Oct. 21, 2015):

Mississippi does not recognize any cause of action against a voluntary non-profit trade association like TMA. . . .  [T]he majority rule cited by Defendants is that there is no cause of action against non-profit trade associations . . . [and] no Mississippi court has ever been faced with this issue and decisively ruled on it.

Id. at *2 (citation omitted).

Because it’s what we do, we checked for subsequent citations to these cases (other than in DeLong) that reject the sort of duties at issue in that case.  We found:  Allgood v. R.J. Reynolds Tobacco Co., 80 F.3d 168, 170-71 (5th Cir. 1996) (“only actual sellers are liable for breach of warranty, not trade associations”) (applying Texas law); McCants v. National Collegiate Athletic Ass’n, 201 F. Supp.3d 732, 745 (M.D.N.C. 2016) (association’s “adoption of rules, policies, and procedures . . . is insufficient as a matter of law to impose a legal duty based on the voluntary undertaking doctrine”); Padilla v. Hunter Douglas Window Coverings, Inc., 2012 WL 3265002, at *5 (N.D. Ill. Aug. 8, 2012) (“For claims against trade associations in particular, public policy is ‘part of the legal mix’ and favors not imposing a duty.”); Lockman v. S.R. Smith, LLC, 2010 WL 11566367, at *7 (N.D. Ga. May 14, 2010) (“Defendant [standards institute’s] standards are voluntary, consensus standards, and Defendant . . . has no power to enforce compliance”), aff’d, 405 F. Appx. 471 (11th Cir. 2010); In re Welding Fume Products Liability Litigation, 526 F. Supp.2d 775, 799 & n.114 (N.D. Ohio 2007) (“courts have repeatedly held that trade associations, themselves, have no duty to users of products in that trade”); Commerce & Industry Insurance Co. v. Grinnell Corp., 1999 WL 508357, at *3 (E.D. La. July 15, 1999) (“nonprofit, standards setting association” was “too remote to warrant the imposition of a legal duty” because it “had no control over which of its minimum standards were incorporated”); Evenson v. Osmose Wood Preserving, Inc., 760 F. Supp. 1345, 1349 (S.D. Ind. 1990) (trade association had “no relationship upon which plaintiff may base a claim for negligence”); Friedman v. F.E. Myers Co., 706 F. Supp. 376, 383 (E.D. Pa. 1989) (trade association “owes plaintiffs no legal duty” and undertook no “specific task for the benefit of plaintiffs”); Gunsalus v. Celotex Corp., 674 F. Supp. 1149, 1157 (E.D. Pa. 1987) (trade association’s “corporate purposes” created no duty and constituted no undertaking); Howard v. Poseidon Pools, Inc., 506 N.Y.S.2d 523, 527 (N.Y. Sup. 1986) (trade association “did not have the duty or the authority to control the manufacturers who did produce the product here in question”), aff’d in pertinent part, 522 N.Y.S.2d 388, 389 (N.Y.A.D. 1987), aff’d mem., 530 N.E.2d 1280 (N.Y. 1988).

In DeLong, the only contrary precedent were exceptions in a couple of states that had gone to the extreme of clothing their blood bank associations with quasi-governmental powers, effectively displacing state authority.  See Snyder v. American Ass’n of Blood Banks, 676 A.2d 1036, 1050 (N.J. 1996) (defendant not “merely advisory”; New Jersey “required blood banks to meet . . . [defendant’s] standard,” “accepted [defendant’s] inspection reports in lieu of making its own inspections,” and denied licenses to entities that failed the defendant’s annual inspections); Weigand v. University Hospital, 659 N.Y.S.2d 395, 399 (N.Y. Sup. 1997) (same as to New York; adopting Snyder).

DeLong also gave the boot to the plaintiff’s “Good Samaritan” theory.  Negligent undertaking allegations cannot “be used to establish a broad duty to the public.”  464 F. Supp.3d at 732.

Courts would likely impose liability for [the decedent’s] tragic death on [the product manufacturer], the entity primarily responsible for the harm its [product] may have caused.  That reasoning compels the conclusion that Florida Courts would not impose §324A liability on Defendants here.  Courts in other jurisdictions have also rejected §324A liability in analogous circumstances. . . .  Scholars confirm that, to avoid discouraging beneficial activities, many courts have limited the scope of so-called “undertaker,” or “Good Samaritan” liability.

Id. at 733 (citing several of the cases mentioned above).

The third decision involving a voluntary standards organization is City of Charleston v. Joint Commission, 473 F. Supp.3d 596 (S.D.W. Va. 2020), leave to amend denied, 2021 WL 4267667 (S.D.W. Va. Sept. 20, 2021).  In Charleston the defendant was “a not-for-profit organization that accredits and certifies . . . public and private health care organizations (“HCOs”) and programs in the United States.”  Id. at 603.  Both state and federal governments allegedly relied on the defendant “accreditation process to help evaluate HCOs.”  Id. at 604.  The defendant was allegedly liable for improperly certifying certain drug prescription standards in its “Comprehensive Accreditation Manual for Hospitals:  The Official Handbook.”  Id. at 606.

Charleston rejected the plaintiffs’ contention that the standards organization owed duties them as entities indirectly suffering injury (“in the form of increased health care, insurance, social services, emergency, and other costs,” id. at 612-13) as a consequence of physicians following its recommendations – and seeking to require the defendant organization to change its standards to conform to what plaintiffs demanded.  Id. at 609 (seeking to force defendant to “refrain from promulgating, utilizing, or enforcing [its] Standards”).  Charleston held that this attempt to overturn generally applicable medical standards through third-party litigation had no basis in law.  It would “open[] defendants up to ‘limitless liability’ to the whole public.”  Id. at 619

[D]efendants here had no control or responsibility over the manufacturing or distributing of [the drugs]. . . .  Moreover, defendants argue persuasively that independent standards organizations like themselves do not generally owe a duty to the intended recipients of those standards, let alone third parties.

Id. at 621 (citing many of the case discussed above).  Unlike the few contrary cases, “strict compliance” with the defendant’s standards was not shown to be “a necessary precondition of accreditation.”  Id. at 622 (distinguishing Snyder).

The language of [defendant’s] Standards indicates that they were designed to influence HCOs, their medical professionals, and patients.  There are no allegations to show that plaintiffs themselves were invited to rely upon [those] Standards.

Id.  “[T]rade associations, themselves, have no duty to users of products in that trade.”  Id. (quoting Welding Fume, 526 F. Supp.2d at 800 n.114).

Further, plaintiffs’ demand for extensive liability against non-profit standards setting organizations for pharmaceutical prescription practices implicated “policy considerations.”  Charleston, 473 F. Supp.3d at 623.  “[T]he consequences of imposing this duty on defendants would expose them to a liability to the public at large with no manageable limits.”  Id. (citation omitted).  Under the learned intermediary rule:

[W]here the independent medical practitioners assumed ultimate responsibility for advising patients about [drug] risks . . . [standards setting organizations] are at least one step further removed from the individual patients.

Id. at 624 (describing the state legislature’s reaffirmation of the learned intermediary rule, as we’ve discussed here).  When it comes to prescription drugs, “physicians exercise their independent clinical judgment in patient evaluations, including when deciding whether to prescribe.”  Id. at 625.  “Because plaintiffs fail to establish the element of duty necessary to their negligence claim, the claim must be dismissed.”  Id.

Claims against a trade association were most recently dismissed in In re Johnson & Johnson Talcum Powder Products Marketing, Sales Practices, & Products Liability Litigation, 553 F. Supp.3d 211 (D.N.J. 2021).  First, a trade association could not be liable under New Jersey’s product liability statute:

As a trade organization, [defendant] did not have any control over the talc products at issue, and if I were to adopt Plaintiffs’ position that [a trade association] can be held liable as a “product seller” under the [statute], that would extend liability to [defendant] for harm caused by any cosmetic products made by its represented manufacturers.  Clearly, that is not what was intended by the statute.  Tellingly, Plaintiffs cite to no case, nor is the Court aware of any, in which courts have found a trade association . . . to be a “seller” under the [New Jersey statute].

Id. at 223.

Nor could a trade association be liable for common-law negligence in either jurisdiction:

  • “[P]ublication of testing standards and ingredient definitions did not create any legal duty to the general public.”
  • Plaintiffs present no evidence that would suggest that if the [association’s expert committee] determines that an ingredient is unsafe for use, manufacturers must cease using that ingredient.  Such power rests solely with the FDA.”
  • The association’s “public statements espousing aspirational goals, statements of generic intent, or statements vowing or acknowledging that it has a duty do not constitute promises that would create a legal duty based on a voluntary undertaking.”
  • The association “does not have a legal duty to consumers to ensure that its members’ products are safe for consumer use.  [It] is a voluntary trade association that has no control over the ingredients used by [its members]. [It] is in no way involved in the manufacture of [their] products . . ., and it does not purport to test its members’ products for safety and warrant that safety to the general public.

Id. at 229-30 (citations and quotation marks omitted).  Typically overblown MDL claims for “fraud” and “conspiracy” also failed.  Id. at 230-33 (no reliance; no underlying tortious act).

We are as gratified by the more recent decisions in DeLong, Charleston, and Talcum Powder as we were initially dismayed by the leeway given a similar cause of action in Russell.  They all involve the same basic problem – plaintiffs, dissatisfied with applicable industry standards, go beyond the well-recognized limit of product liability and seek to sue the advocates of the other side of scientific or technological debates into submission.  We think that the California Court of Appeal in N.N.V. got it exactly right when it held:

[D]eference should be given to professional associations that are making these sorts of policy decisions based on evolving medical and scientific knowledge.  We believe public policy and the needs of the community are best served by encouraging free scientific and medical debate unhindered by threats of liability; the medical and scientific community, rather than the judicial system, is better situated for discussion and debate of emerging medical and scientific knowledge and for determining medical standards and policy.  As long as a professional medical association acts in good faith in setting standards when medical and scientific knowledge is in a state of debate, we believe, as a matter of public policy, liability should not be imposed.

89 Cal. Rptr. 2d at 909 (emphasis added).  We could not agree more.