Opuscula Advisen FPN, More than just Insurance news

I love Advisen Front Page News (FPN). Advisen focuses on things of interest to the insurance industry.

I was a subscriber for many years when I worked as an enterprise risk management practitioner. Insurance always was part of my plans.

I’m now retired, but my weekday is not complete sans Advisen FPN in my in-box.

There almost always is something worth sharing. Today (4 SEP 2020) there are several.

Sometimes the articles are amusing. Sometimes they are scary. Always they are interesting.

The following are snippets, excerpts, from the full articles. All original sources are identified.

 

From the Advisen FPN email for 4 September 2020:

INSURANCE: If you buy it, READ THE SMALL PRINT

Florida federal court upholds virus exclusion in COVID-19 BI case

By Erin Ayers, Advisen

A Florida federal court ruled that the virus exclusion of commercial property policy bars recovery for COVID-19 business interruption claims by a dental practice in a switch from other cases that have focused on the lack of physical damage.

In Mauricio Martinez DMD v. Allied Insurance Company of America, the U.S. District Court for the Middle District of Florida granted the insurer’s motion to dismiss because “the insurance policy expressly excludes coverage from damages caused by a virus.” Allied Insurance is a subsidiary of Nationwide.

Source: Advisen FPN @ https://tinyurl.com/yyddv7no

The Gap Hit with Board Diversity Derivative Lawsuit

By Kevin M. LaCroix, RT ProExec

This post was originally published on LaCroix’s The D&O Diary.

On September 1, 2020, a plaintiff shareholder filed a shareholder derivative lawsuit in the Northern District of California against the fourteen members of the board of directors of The Gap, as well as against the company itself as nominal defendant. The gist of the complaint is that despite numerous public statements about the company’s commitment to diversity, “Gap failed to create any meaningful diversity at the very top of the Company,” as the company’s board “lacks a single African American director.”

In the latest in a series of lawsuits against high-profile companies alleging that the companies’ boards lack African-American directors, a plaintiff shareholder has filed a shareholder derivative lawsuit against the board of directors of the clothing retailer, The Gap. The lawsuit is substantially similar to the lawsuits filed by the same plaintiffs’ law firm against Oracle (here), Facebook (here), Qualcomm (here), and NortonLifeLock (here). A copy of the lawsuit against The Gap’s board can be found here.

(To see the “here” links above, you must go to the Advisen or The D&O Diary site.)

Source: Advisen FPN @ https://tinyurl.com/yy96fcen

Shareholder sues Tribune Publishing and its board, alleges 'poison pill' takeover defense plan is 'overreach of corporate power'

Publication Date 09/03/2020

Source: Chicago Tribune (IL)

A Tribune Publishing shareholder is suing the Chicago-based newspaper company and its board, alleging the adoption in July of a so-called poison pill is “an extremely aggressive overreach of corporate power.”

The provisions are “so draconian as to … severely hobble or shut down the ability of any stockholder or group of stockholders to seek to influence the direction of the company,” the lawsuit alleges

The lawsuit, filed Friday in Delaware Chancery Court on behalf of the Vladimir Gusinsky Revocable Trust, seeks class-action status and a court order preventing Tribune Publishing from invoking the plan.

The same family trust filed a separate lawsuit Friday against suburban Chicago-based aviation services company AAR, challenging its poison pill plan. Bloomberg Law was first to report on the lawsuits.

Source: Advisen FPN @ https://tinyurl.com/y2xpdpkr

Saks Fifth Avenue countersues Bal Harbour Shops after eviction proceedings

Publication Date 09/03/2020

Source: Miami Herald (FL)

Sep. 3--Saks Fifth Avenue has filed a lawsuit against Bal Harbour Shops and its CEO, Matthew Whitman Lazenby, claiming the mall broke confidentiality agreements and defamed the upscale chain after filing eviction proceedings in August for $1.9 million in unpaid rent.

The complaint, filed Sept. 1 in Miami-Dade civil court, argues that Lazenby breached a confidentiality contract in the store's lease by revealing the dollar amount Saks owes in back rent in an interview with Women's Wear Daily. The store's rent is determined using a percentage rate of its monthly sales.

The lawsuit also argues that Lazenby made defamatory statements that damaged the chain's reputation and sales by claiming Saks used the pandemic "as a convenient excuse to evade their financial obligations."

Source: Advisen FPN @ https://tinyurl.com/y2a9okc3

Legal bunfight: McDonald's accuses Hungry Jack's of ripping off Big Mac

Publication Date 09/03/2020

Source: Guardian Web

The Hungry Jack’s chain controlled by billionaire Jack Cowin is in a legal pickle – on a sesame seed bun – after rival burger group McDonald’s accused it of ripping off the famous Big Mac.

In a federal court lawsuit filed on Monday, companies in the McDonald’s group claim Hungry Jack’s “deliberately adopted or imitated” the “distinctive appearance or build” of the Big Mac, as well as its ingredients and the advertising tagline “two all-beef patties, special sauce, lettuce, cheese, pickles, onions – on a sesame seed bun”, which has been used to promote the greasy treat since at least 1974.

Hungry Jack’s Big Jack burger is promoted online as containing “two flame-grilled 100% Aussie beef patties, topped with melted cheese, special sauce, fresh lettuce, pickles and onions on a toasted sesame seed bun”.

Source: Advisen FPN @ https://tinyurl.com/yyv5jm3v

NOTE: If a provided SOURCE link fails, search the internet for the headline (e.g., Legal bunfight)

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PLAGIARISM is the act of appropriating the literary composition of another, or parts or passages of his writings, or the ideas or language of the same, and passing them off as the product of one’s own mind.

Truth is an absolute defense to defamation. Defamation is a false statement of fact. If the statement was accurate, then by definition it wasn’t defamatory.

Web sites (URLs) beginning https://tinyurl.com/ are generated by the free Tiny URL utility and reduce lengthy URLs to manageable size.

 

Comment on Advisen FPN

Enterp[rise Risk Management, BC, COOP Keep handbook Up to date Or face a judge

AN ARTICLE ON THE FISHER PHILLIPS¹ web site, Can You Be Held Personally Liable In An Employment Lawsuit? The Answer Lies Down A Rabbit Hole should prove interesting to anyone in any management position.

The article has two paragraphs that every Enterprise Risk Management, Business Continuity, and Continuity Of Operations (COOP) practitioner should take to heart and impress on the client/employer.

The article’s last two paragraphs are important to ERM, BC, and COOP practitioners and read:

To better protect yourself and the company, you should ensure your employee handbook accurately reflects the ever-changing laws related to protected classes and all forms of harassment. Second, you should schedule annual harassment and discrimination training with managers and non-managers. These training will act as a defense in the event of a discrimination or harassment lawsuit. Also, the training will put employees on notice that they may be personally liable for violations of both state and federal employment statutes.

Finally, there must be an emphasis, from the top down, to take responsibility for the company’s workplace culture. Remaining complacent exposes both companies and individuals to a disgruntled employee exclaiming “off with their heads!”

As usual, Advisen FPN² provided the link to this article.

Employee handbooks and other employee-related documentation often are overlooked by practitioners who only are concerned with “the usual suspects”: fire, environment, and perhaps a product failure.

These practitioners hopefully will intern with an experienced person. Taking an exam for certification is NOT the same as “real world” experience.

There are, an experienced practitioner knows, a number of employee-related risks every employer – and that includes the employer’s managers – faces.

Something as simple as completing an I-9 correctly.

Specifying the penalties for violating the rules set down in the employee documentation. It’s one thing to have prohibit sexual harassment in the workplace, but if there is no consequence if the prohibition is breached, the courts might look with a jaundiced eye at an employer’s defense.

I am not a lawyer or judge, nor do I play one on tv.

Management training needs to be included in all risk management recommendations. While in many cases, managers are exempt from personal liability, the employer still is on the hook for any damages that may be awarded. (Even having to defend is costly and takes critical personnel away from their normal duties.)

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Sources

1. http://tinyurl.com/yaag2zcf

2. https://www.advisen.com/fpn_home/

PLAGIARISM is the act of appropriating the literary composition of another, or parts or passages of his writings, or the ideas or language of the same, and passing them off as the product of one’s own mind.

Truth is an absolute defense to defamation. Defamation is a false statement of fact. If the statement was accurate, then by definition it wasn’t defamatory.

Comments on Employee Handbook

ERM, BCP, COOP Train injuries Responsibility Lies with whom?

ADVISEN FPN¹ – ONE OF MY FAVORITE risk-related sites provided an bountiful selection of things to consider on Friday (5/18).

Three that got my attention were

1. Laborers on a ‘Billionaires’ Row’ Tower Cheated of Wages, D.A. Says
2. A Burger King worker thought a black man’s $10 bill was fake. He was arrested. Now he’s suing
3. Amputees sue railroad in Iowa, saying it creates danger

EACH ARTICLE had something an enterprise risk management practitioner should consider.

For example

Laborers on a ‘Billionaires’ Row’ Tower Cheated of Wages, D.A. Says

According to the New York Times²,

The laborers were doing concrete work on the luxury Steinway Tower at 111 West 57th Street, a needlelike skyscraper set to open next year full of condominiums for some of the world’s wealthiest people. But the company employing the $25-an-hour workers, the authorities said, was cheating them out of hundreds of thousands of dollars in wages by purposely shorting their hours and failing to pay them overtime.

The Manhattan district attorney, Cyrus R. Vance Jr., said on Wednesday that the company, Parkside Construction, and its affiliates stole more than $1.7 million in wages over three years from about 520 workers at the tower and seven other high-rise buildings. The company also hid nearly $42 million in wages from state insurance officials to avoid paying millions in workers’ compensation premiums.

Many of the cheated workers were undocumented immigrants from Mexico and Ecuador, Mr. Vance said. When the workers complained, they were falsely told the money would be in their next check or were encouraged to find work elsewhere.

Where is ICE (the Department of Homeland Security Immigration and Customs Enforcement )?

One of the things I learned from an HR assistant (the manager apparently was oblivious to the issue) is that lack of I-9 Employment Eligibility Verification forms can prove costly for employers.

According to the Garvey - Schubert - Barer (GSB)³ and the Fisher Phillips⁴ web sites,

With no fanfare and minimal notice, the government has significantly increased the penalties that can be assessed for a variety of offenses related to the Employment Eligibility Verification Form I-9.

A “mere” error on the paperwork, such as failure to check a box or confirm that the employee dated the document, can result in a penalty of between $216 and $2,156. Previously, the penalty ranged from $110 to $1,100. This almost doubling of the penalty range is significant because penalties for paperwork errors can be the largest aspect of government fines, even for the best of employers.

The penalties for knowingly hiring or continuing to employ unauthorized individuals have gone up, too. The “old” penalties for a first violation ranged from $375 to as much as $3,200 for each worker for a first-time offense. Under the new, current protocol, the penalty range is from $539 to as much as $4,313 for a first offense. An employer that gets audited and cited a third time can be ordered to pay as “little” as $6,469 and as much as $21,563 per unauthorized worker. (GSB)

If there’s any good news, it begins with the fact that the U.S. Citizenship and Immigration Services released a new Form I-9 (dated November 14, 2016). Using the new form became mandatory as of January 21, 2017. While this new form should help employers eliminate errors in completing the forms, it creates fewer excuses for employers who fail to execute it properly.

The new form provides clearer instructions for employees and employers on the correct way to complete it. For those employers completing the form electronically, the new I-9 provides “smart fields” which will limit errors by those entering the data into the form. This new form, which replaced the version in existence since 2013, will be valid until August 31, 2019. After January 21, 2017, all previous versions of the Form I-9 are invalid for new hires, re-hires, and re-verification purposes.(Fisher Phillips)

Since New York already has established that many Steinway Tower workers are illegal immigrants, ICE should be knocking at the door of their employers. Anything else will simply encourage scofflaws.

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A Burger King worker thought a black man’s $10 bill was fake. He was arrested. Now he’s suing

This is a case that never should have happened and the error was compounded apparently by the local police.

The first link I found was to a Washington Post article headed A Burger King worker thought a black man’s $10 bill was fake. He was arrested. Now he’s suing.⁵.

As a former reporter and editor, the WashPost’s headline (and the article that followed) rated a D minus for clarity. Who was arrested? The worker or the black man? Who is suing? The worker or the black man? It only got worse from the headline on.

Fortunately, the Chicago Tribune⁶ and SFGate⁷ did a much better job.

Basically, this homeless black man walks into a Boston-area burger joint and orders breakfast. He offers a $10 bill in payment.

The burger flipper decides the bill is counterfeit and calls the cops. The cops arrive and haul the guy to jail; charge: probation violation (for trying to pass funny money).

THREE MONTHS LATER, the Secret Service determined the bill was good and the man is released from jail.

Now he’s suing the burger joint for almost a $1 million.

All this could have been avoided had the restaurant’s owners had the good sense to train their employees how to recognize counterfeit cash.

The cops should have delayed an arrest until the $10 bill was taken to a nearby bank where it could be checked; the banks are as good at detecting funny money as the feds, and faster, too.

The black dude still might have sued, but probably not for close to $1 million.

Oh, and by the way, he never got his $10 back.

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Amputees sue railroad in Iowa, saying it creates danger

According to The State⁸, two women are suing someone for loss of limbs when, as they tried to get from Point A to Point B by going between railroad cars, the train started to move.

The article failed to state that the women were suing the Canadian National Railway (I don't know where the head writer got that idea; not from the story) and its subsidiaries.

The women could be suing the the city (Waterloo) for several things. The city has an ordinance that prohibits trains from blocking crossings for more than 10 minutes, an ordinance apparently not enforced.

Since 1991, at least five people have lost hands, arms or legs while trying to climb through a stopped freight train that started moving unexpectedly, according to The State.

A Canadian National spokesman shifted the focus to the actions of the injured women, saying that trespassing on railways tracks and property "is illegal and very dangerous."

Since this is a recurring problem, and since the city failed to enforce the law, it could have avoided the accident by providing a pedestrian overpass. (The nearest unblocked crossing is said to be about a mile away.)

In their lawsuits, the women say they waited an unspecified "reasonable amount of time" before they tried to climb through long-stopped trains, which didn't sound any audible warnings before starting to move. They argue that the railroad has taken no other steps to protect the public at the site, such as building a footbridge over the rails or separating the trains at crossings when they are stopped.

Waterloo Mayor Quentin Hart, who said his complaints to the railroad and GOP U.S. Senator Chuck Grassley's office about the blockages have gone nowhere.

Since this “accident-waiting-to-happen” has been ongoing since at least 1991, the city should have sued the railroad to force construction of a pedestrian overpass or built an overpass on the taxpayers’ dollars. The senator seems to have turned a deaf ear to the city but Iowa has two senators (the other being GOP Senator Joni Kay Ernst ) and Republican U.S. Rep. Rod Blum. (President Trump carried District 1.)

Bottom line for Waterloo: A risk manager would have told the city government to act for the safety of its citizens rather than waiting for Gadot (railroad and federal aid).

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Sources

1. https://www.advisenltd.com/front-page-news/

2. http://tinyurl.com/ycbxqlsy

3. http://tinyurl.com/yd5ubpwf

4. http://tinyurl.com/n92j2xo

5. http://tinyurl.com/ybofh26o

6. http://tinyurl.com/y7mlemgt

7. http://tinyurl.com/y823jhzw

PLAGIARISM is the act of appropriating the literary composition of another, or parts or passages of his writings, or the ideas or language of the same, and passing them off as the product of one’s own mind.

Truth is an absolute defense to defamation. Defamation is a false statement of fact. If the statement was accurate, then by definition it wasn’t defamatory.

Comments on 3 From Advisen

Opuscula Place time limit On filing complaint Of criminal actions

I LIKE ADVISEN Front Page News (FPN). It lands in my email five days-a-week, and it almost always has something thought provoking for an enterprise risk management practitioner, even though Advisen FPN is targeted to the insurance industry.

Today’s edition (Monday, August 14, 2017) caused me to think about harassment — sexual and otherwise — including bullying and hazing in schools and on the job and all the claims finding their way into the media and into courts.

It should be clear to everyone, albeit probably not the perpetrators, that harassment in any form at any venue is illegal.

I am against laws prohibiting harassment against this group or that, and laws that protect this group or that. There should be one (1) law that prohibits and protects all people of all groups without exception. Harassment is illegal. Discrimination is illegal. Specifying this group or that waters down the law — if it’s illegal to discriminate against women, then it is equally illegal to discriminate against men (yes, men often are victims of discrimination), infirm, seniors, etc. and et al. If it is illegal to harass a person at work, it equally is illegal to harass (bully) a person at school.

We all know that discrimination and harassment exist, and most would agree that the perpetrators should pay a price for their actions.

However, the victims of the attacks have some “due diligence” obligations.

There is a “statute of limitations” for most crimes. That’s fine and, unless you are a victim of the crime, the limitation probably seems legitimate.

I believe there should be a statute of limitations on reporting the crime.

For example, if a person is raped, unless that person is incapacitated or held captive, the crime should be reported promptly — within 24 hours. The same with harassment and discrimination.

By failing to report the crime within a reasonable time — that does not mean 20 years after the crime allegedly took place — the violated person loses the right to make a complaint.

This does NOT apply to a child whose parents or guardian failed to report a crime; a child must be allowed to file a complaint within a reasonable time once reaching adulthood — say by age 25.

The courts are seeing too many claims of sexual misconduct dating back 15, 20, or more years ago, claims that are only now being lodged. The Bill Cosby accusations are but one example.

I am NOT suggesting criminals should escape punishment. All I am suggesting that there should be a statute of limitations on REPORTING a crime. Promptly reporting gives law enforcement a far better chance of apprehending the culprit.

Common sense forces most reasonable people to look askance on complaints filed 20 years after the fact (again, with the caveat that the statute of limitations for crimes against minors is a much longer).

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PLAGIARISM is the act of appropriating the literary composition of another, or parts or passages of his writings, or the ideas or language of the same, and passing them off as the product of one’s own mind.

Comments on Limitations

ERM-BC-COOP Workplace safety and Hackers in your home

FIVE DAYS A WEEK I get Advisen FPN in my email. Advisen focuses on insurance issues. It claims that Every business day, Advisen’s editors sift through more than 60,000 articles from more than 4,000 domestic and international news sources to find up to 15 of the most relevant articles to commercial insurance professionals. Advisen delivers these top news stories directly to your inbox via Front Page News.

While selling insurance policies never was my business, following insurance issues via Advisen FPN helped me stay up-to-date on current threats to my clients’ “business as usual” operations.

WORKPLACE SAFETY

Under the heading Workplace Safety – 3 Strategies to Stay Ahead of Conflict readers are provided steps to avoid or mitigate workplace violence. The article begins:

In light of the recent news of tragic shootings and workplace violence around the country, employers are left wondering how they can protect their operations and employees from such events. Rightfully so – employers also have a duty to protect their employees, clients and customers from harm and can be held liable for failing to do so.

Beginning steps:

Establish a written policy on workplace safety. Policies must mandate a zero tolerance message and should require employees to report threats and comments that suggest suspicious or concerning behavior.

Establish a clear reporting component. Employees are the eyes and ears of the organization. Employers should have or implement an “Open Door” policy that encourages employees to report concerns to their supervisors or human resources. This allows employers to identify, investigate and assess employee concerns as soon as possible.

Use of background checks to assist employers in identifying job applicants with violent histories that indicate risk for dangerous behavior. However, the Equal Employment Opportunity Commission (EEOC) has issued guidance regarding an employer’s use of criminal background checks in hiring. That guidance discourages employers from following a policy of outright refusing to hire ex-offenders.

Employers should expect employees at times may encounter difficult periods in their lives that could serve as triggers for violent and disruptive behavior. For this reason, employers are encouraged to consider formal Employee Assistance Programs (EAP).

Between the hammer and the anvil

All of the above must be implemented with federal and state laws and union restrictions else he organization could find itself having to fend off legal actions. Including an employment law specialist, or inviting EEOC participation in program development is a good investment.

HACKERS IN YOUR HOME

Beware of your refrigerator.

Be suspicious of your thermostats.

Know that your cameras see more than you do.

According to a San Diego (CA) Union-Tribune article,

Devices in people’s homes and offices that are connected to the Internet — things such as routers and cameras, rice makers and thermostats — could increasingly be taken over by hackers in the coming weeks and used to commit crimes or even paralyze businesses and government institutions.

Cybersecurity experts have been issuing the warning since last week, when a piece of software involved in a major cyber attack was publicly released for anyone to tap.

The article includes a graphic that details The ‘open windows’ that let hackers into your home”

The Times-Union notes that

There’s yet another related threat, one that hasn’t been getting much attention. It involves profiling people.

“Anyone with access to a fully connected home can build a detailed profile about the occupants,” said Alfred Chung, senior product manager at Guidance Software in Pasadena.

“They can gather data about the time of day when the home is occupied, the number of people inside the home at various times, personal details like age, appearance and gender of those living in the home …. With connected appliances, they can even tell what food occupants store in their fridge.”

Consider what this information might mean to a thief. Consider what it might mean to a kidnapper who wants information about a client’s business.

I’m not a software guru, but I will provide one bit of advice, one I practice: Change passwords frequently, but not always at the same date; be unpredictable. Use the longest, most complicated password the device being protected will accommodate. 3uvWef=-ANmn4%vb!$kQx@U+d&%2 is far better than MyC0ffeep0t.(I use passutils.exe to generate all of my critical passwords. There are other password generators available as well.)

Convenience has its price. The minimum price to pay is the “inconvenience” of frequently resetting passwords on Internet-connected devices.

ERM-BC-COOP: Smoking, selling e-cigs? Product could be explosive

 

YESTERDAY I CAUTIONED manufacturers AND merchants to perform "due diligence" on their products.

Today (March 12, 2015) Advisen FPN has a headline reading Smokin’ hot: Man claims e-cig batteries sent sparks ‘shooting from his crotch area’

The man is suing the store that sold the batteries. There was no mention in the article that the batteries' manufacturer also was named in the suit. (If the manufacturer is an off-shore operation - likely - then the importer should be contacting a defense counsel about now.) The battery manufacturer and production location were omitted from the news article.

According to the article in the Arlington (TX) Star-Telegram, the store had a warning posted on its wall stating that batteries not in use should be stored in their protective box. The batteries that exploded in the man's trousers were loose in a pocket. (Were they sold lose? A question for the courts.)

Battery safety is an issue that has found it's way to the Internet in the e-cigarette forum blog where the e-cigs are euphemistically called Advanced Personal Vaporizers or "APVs."

The article notes that battery malfunctions are known within the fire and safety field citing a report from the U.S. Fire Administration in October discussed the dangers associated with e-cigarette fires and explosions. It quoted media reports citing at least 25 incidents involving e-cigarette batteries from 2009 to 2014.

Media reports generally characterized those incidents as explosions accompanied by a loud noise, a flash, smoke, flames, and the vigorous ejection of the battery and other parts.

Eighty percent of the incidents reportedly occurred while the batteries were being charged. A variety of charging sources were reported, including laptop, automobile and desktop USB ports.

Another on-line site, ecigarette Reviewed suggests that the e-cig equivalent of the old "roll your own" is where the greatest danger lies. Under the heading Minimizing the Risk of E-Cig Mod Explosions the site tells readers:

Switching from beginner-level electronic cigarettes and eGos to e-cig mods is a step up in terms of performance, but it brings some additional concerns with it.

The battery you use ceases to be provided with the device itself; you have to find one yourself. But lithium-based batteries, as we discussed earlier in the series, can all fail and in some cases it is catastrophic. There have been reports of bottle-rocket and pipe bomb-style explosions with mods, but the problem extends to all other lithium-dependent consumer products such as cell phones and laptops too.

Understanding the process of “thermal runaway” and what you can do to minimize the risk of e-cigarette mod explosions is essential for all vapors venturing into APV (Advanced Personal Vaporizer) territory.

Photo courtesy of ecigarette Reviewed

While the majority of e-cigarette batteries are from China, batteries also are manufactured by many other countries, including the U.S. and Canada. A comprehensive list of points or origin is available on the Alibaba.com site. The batteries' manufacturer was not identified in the Star-Telegram article.

Among the questions the court probably will hear are

1. Did the merchant do any research on the product's safety history?
2. Was the warning sign to keep batteries in a box prominently displayed?
3. Was the customer warned about potential dangers?
4. Was any sampling done by the merchant or did the merchant have evidence that sampling was done at any point from the manufacture of the battery to the time it was sold?
5. Did the customer keep the batteries in a battery box?
6. How much responsibility do each of the players have - the merchant, the customer?

Unfortunately, it is unlikely that there will be a post-decision article in the Star-Telegram; that. sadly, is the nature of most newspapers. Perhaps a court watcher in the Arlington TX area will follow the case.

ERM-BC-COOP Everyone gets sued For dangerous product

 >

Dangerous Chinese products in news - again

 

AN ARTICLE FROM ADVISEN FPN titled First-party coverage for toxic flooring cases: Chinese-manufactured drywall cases may provide insight reminds manufacturers and merchants that if they want to avoid the hassle and expense of legal actions against them, they need to pro-actively test vendor-provided components.

Business Law 101 rules that if you sue over a faulty or dangerous product, you sue EVERYONE in a search for "deep pockets."

While the Advisen FPN article focuses on the latest Chinese import - flooring - it also sees a relationship to another Chinese product that brought both dangers to health and a lot of legal activity - drywall.

The article fails to mention dangerous toys and tires made in China, both of which caused a flurry of legal action.

The question for manufacturers that use vendor-supplied components in products bearing their name, and to a slightly lesser extent, merchants who sell the products, is not "Is the product safe?" but "Did we do due diligence to prove the product is safe.

The U.S. government generally is quality and safety conscious (one exception being the Challenger disaster).

I once worked for a company (Leslie Controls) that made valves; its primary customer was the U.S. Navy. The valves ranged in size from 1/4-inch diameter to 48-inch diameter, "diameter" being the size of the hole through which fluid or gas passed.

All vendor products were sampled. No exceptions. Small threaded fasteners (a/k/a "screws"), gaskets, metal castings - nothing got past Leslie's inspectors.

Samples ranged from a very small percentage of a vendor's product to inspection of each unit. The vendor's past history with Leslie determined the sample size.

And then the Navy sent ITS inspector; the sailors even inspected the product's documentation.

If a Leslie product failed at least the company could prove it did its "due diligence." Needless to write, the more critical the valve, the more severe the inspection of parts and finished product. Leslie valves are used to catapult planes off carriers and to control a submarine's dive and surfacing, among other things.

If a valve failed, Leslie might still have to defend itself in court, but it could prove it DID do its "due diligence" and that might be sufficient to at least reduce its liability.

I've written in the past that manufacturers have an obligation to assure that the parts used in their products are safe and suitable for the product's function.

I've also written about a merchant's obligation to inspect incoming product.

The first 35 mm camera I ever bought was a - full name - Honeywell Asahi Pentax H3v.

This was back in the day when Japanses products were still of questionable quality.

Honeywell, in order to protect its name, inspected each Pentax that bore its logo on the pentaprism.

My H3v went from my hands to a friend's, then to the friend's son-in-law. Were it not for the convenience of no-film digital cameras, I suspect the H3v still would be in use.

I suspect Honeywell home thermostats are made in China, but because I know Honeywell's reputation for protecting its name, I would reluctantly buy this Chinese product.

The old expression "the best defense if a good offense" applies to products as well. The best assurance that a product safely meets its purpose is for it to be checked at the component level and checked again as a finished product. If the merchant selling the product is less than 100% certain the company putting its name on the product performs its own QA/QC, the merchant, especially names such as Wal-Mart, Target, Lumber Liquidators, Boeing, and Northrop-Grumman need to do their own QA/QC sampling. It makes no difference if the product is a small toy (covered in lead-based paint) or flooring or a jumbo jet, being able to prove due diligence is critical.