UNIVERSITI TEKNIKAL MALAYSIA MELAKA FACULTY OF INFORMATION TECHNOLOGY AND COMMUNICATION

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1 UNIVERSITI TEKNIKAL MALAYSIA MELAKA FACULTY OF INFORMATION TECHNOLOGY AND COMMUNICATION SEMESTER 1 SESSION 2013/2014 MPSW 5053QUALITY SYSTEMS MANAGEMENT ASSIGNMENT PRODUCT LIABILITY OF JOHNSON & JOHNSON BABY PRODUCTS PREPARED BY: LEONG PUI HUANG LAU HONG SHENG NOR AIZA MOKETAR NOR SYUHADA CHE KHALID M M M M PREPARED FOR: DR. ZULISMAN BIN MAKSOM

2 Johnson & Johnson's Baby Product Liability Application and Case Studies: A Review Leong Pui Huang, Lau Hong Sheng, Nor Aiza Moketar, Nor Syuhada Che Khalid Universiti Teknikal Malaysia Melaka, Malaysia Abstract This paper focuses on the Johnson and Johnson s baby product liability in practice and related case studies. It represents an overview of how Johnson & Johnson s baby product liability and clarifies the problems occurred to consumer. Product liability is the related parties responsibility along the manufacture chain of any product for damage caused by that product. It is useful to protect consumer from unnecessary risks and problems from harmful end product, or mischievous parties involved for the sake of business profit. The case studies of Johnson & Johnson in baby product liability malpractices and issues are beneficial to give important information to consumer to handle the similar situation and improvement suggestion to manufacturer on how to avoid similar problems and satisfy the consumer for better and healthy production. Keywords: Product liability, Johnson & Johnson, consumer. Introductions Product liability is a big responsibility to manufacturer to ensure the consumer safety, especially in the baby product because baby is young and delicate human and needed extra care from hazardous product. All parents want their children to grow up in healthy and strong bodies, without mortal factors that could drive the children to death. The mortal factors that against the product liability such as harmful,poisonous and flammable chemicals. Theyshould be removed to avoid danger to baby. Several problems of product liability by Johnson & Johnson are reviewed in this paper. Johnson & Johnson s Background and Baby Products This section has introduced about Johnson & Johnson s organization background and the baby products. 1. Organization Background Johnson & Johnson is a U.S multinational medical device, pharmaceutical and consumer packaged goods manufacturer founded in Its common stock is a component of the Dow Jones Industrial Average and the company is listed among the Fortune 500. Figure 1 shows Johnson & Johnson logo. 2

3 Figure 1: Johnson & Johnson Logo Johnson & Johnson is headquartered in New Brunswick, New Jersey with the consumer division being located in Skillman, New Jersey. The corporation includes some 250 subsidiary companies with operations in over 57 countries and products sold in over 175 countries. Johnson & Johnson had worldwide sales of $65 billion for the calendar year of 2011.Figure 2 shows the Johnson & Johnson headquarters at New Brunswick, New Jersey. Figure 2: The Johnson & Johnson Headquarters at New Jersey Johnson & Johnson s baby product have included some precautions and safety tips at the back of the packaging, which includes the following: Keep out of reach of children Do not use if quality seal is broken Warning: Keep powder away from child s face to avoid inhalation, which can cause breathing problems Avoid contact with the eyes For external use only Avoid contact with open flame Based on the case study, it shows that there are some ingredients in the product that are flammable, poisonous and harmful if swallowed, inhaled or absorbed by skin. Therefore, these precautions are included to warn and inform the consumers on possible hazard of the product, as well as to protect themselves from legalproduct liability lawsuit. There are numerous products produced by Johnson & Johnson Company. Among its wellknown consumer products are the Band-Aid Brand lines of bandages, Tylenol medications, Johnson's baby products, Neutrogena skin and beauty products, Clean & Clear facial wash and Acuvue contact lenses. Since there are numerous of products produced by Johnson & Johnson Company, this report will focus on one of the largest products which are Johnson Baby products. 3

4 2. Johnson & Johnson Baby Products Every product in the Johnson Baby range is specially formulated for baby s delicate skin, and clinically proven to be mild, gentle and safe to use. Figure 3 shows the Johnson & Johnson Baby shampoo products, Figure 4 shows the Johnson & Johnson Baby powder products, Figure 5 shows the Johnson & Johnson Baby lotion products, Figure 6 shows the Johnson & Johnson Baby cream products and Figure 7 shows the Johnson & Johnson Baby overall products. Figure 3: The Johnson & Johnson Baby Shampoo Products Figure 4: The Johnson & Johnson Baby Powder Products Figure 5: The Johnson & Johnson Baby Lotion Products 4

5 Figure 6: The Johnson & Johnson Baby Powder Products Figure 7: The Johnson & Johnson Baby Overall Products Product Liability Products liability refers to the liability of any or all parties along the chain of manufacture of any product for damage caused by that product. This includes the manufacturer of component parts (at the top of the chain), an assembling manufacturer, the wholesaler, and the retail store owner (at the bottom of the chain). Products containing inherent defects that cause harm to a consumer of the product, or someone to whom the product was loaned, given are the subjects of products liability suits. The Australian Consumer Law (ACL) for example, aims to protect consumers and ensure fair trading in Australia. Under the ACL, consumers have the same protections and businesses have the same obligations and responsibilities across Australia. In a case of product liability, it is necessary for the victim to prove that a product was defective, which in turn made it unreasonably dangerous. Any product could be defective in the following ways: Defective in Design:Such a defect means that the product had some kind of defect in its design itself, even before it was manufactured, which made it dangerous. Defects in Manufacturing: When a product is not made or assembled as per its design or according to the manufacture s specifications, then such a product is said to have defects in its manufacturing. 5

6 Defects in Marketing: A product has marketing defects if it was not marketed with the correct labels, or if it does not have sufficient instructions for use, or if the manufacture has failed to warn the consumers about any dangerous aspect of the product that is not apparent. Misrepresenting the product on purpose can also be grounds for a product liability cases. Consumers that had suffer loss or damage because of defects in a manufacturer s goods can take the manufacturer to court. A court can award compensation to cover these losses, or make a complaint to a consumer protection agency, which may take action on the consumer s behalf.a consumer can seek compensation from the manufacturer who has supplied defective goods, if the goods caused lossor damage. The loss and damage can include injuries or economic losscaused by damage to, or destructions of another goods, land or a building. The court will consider the safety of the goods by looking at all relevant circumstances, including: Marketing of the goods Packaging of the goods The warnings and instructions for use What may reasonably be expected to be done with the goods? Review of Application and Case Studies of Johnson & Johnson's Baby Product Liability In this section, the application of Johnson & Johnson s baby product liability practices and case studies have been recorded. 1. Application Johnson & Johnson s Company actually faced several issues regarding the product liabilities. Figure 8 shows the packaging labels of Johnson s Baby Shampoo products whereas figure 9 shows the packaging labels of Johnson s Baby Powder products. Figure 8: The Packaging Labels of Johnson s Baby Shampoo Products 6

7 Figure 9: The Packaging Labels of Johnson s Baby Powder Products Based on Figure 8 and figure 9, the product labels clearly stated that the products are: Clinically proven mild 100% soap-free Hypoallergenic and dermatologist tested Keep out of reach of children Do not use if quality seal is broken Our dermatologist tested formula is made with pure cornstarch and clinically proven to be gentle and mild on the skin Warning: Keep powder away from child s face to avoid inhalation, which can cause breathing problems Avoid contact with the eyes For external use only Avoid contact with open flame However, in recent years the company's reputation has been adversely affected by product recalls, fines for pharmaceutical marketing practices, litigation with a group of shareholders, and other legal issues despite of the promises made. 2. Case Studies Case 1 and Case 2 below are two evidences proving the products did not fulfill the product liabilities whereby cause harmful to the users. 7

8 Case 1 Johnson s Baby Shampoo a Cancer Risk According to an international coalition of health and environmental groups, there are two chemicals considered harmful to babies remain in Johnson's baby shampoo sold in the U.S. and some other countries, even though the company already makes versions without them. Furthermore, according to the report obtained by The Associated Press, one of the suspect chemicals, quaternium-15, is a preservative that kills bacteria by releasing formaldehyde. Formaldehyde, used as a disinfectant and embalming fluid, was declared a known human carcinogen this past June by the U.S. National Toxicology Program. Formaldehyde also is a skin, eye and respiratory irritant. Figure 10 shows the label of product ingredients with quaternium-15 whereas figure 11 shows the side effects of formaldehyde. Figure 10: The Label of Product Ingredients with Quaternium-15 Figure 11: The Side Effects of Formaldehyde 8

9 In addition, Quaternium-15 is still an ingredient on Johnson's Baby Shampoo sold in the U.S., Canada, China, Indonesia and Australia. The second chemical, 1,4-dioxane, is considered a likely carcinogen. It's a by-product of a process for making chemicals more soluble and gentler on the skin. Currently, the coalition is urging consumers to boycott Johnson & Johnson s baby products until the company agrees to remove the chemicals from its baby products sold around the world, including in China and the U.K. Moreover, the campaign sent Johnson & Johnson s a letter, signed by about 25 environmental, medical and other groups representing about 3.5 million people in the U.S. and other countries urging the company to publicly removing the chemicals from all personal care products worldwide.below are among of the 63 Johnson & Johnson s Baby Care Products to boycott from the Consumer and Health Care Division for the greatest impact: 1 Desitin Rapid Relief Cream 2 Johnson's Bedtime Bath 3 Johnson's Baby Shampoo 4 Johnson's Baby Lotion 5 Johnson's Head to Toe Baby Wash In response to the campaign and boycott, Johnson & Johnson s said in a statement that formaldehyde-releasing preservatives are safe and approved by regulators in the U.S. and other countries, but that it is gradually putthe company out of its baby products. Since then, the company has launched a baby shampoo called Johnson's Naturals, sold in the U.S., that does not include 1,4-dioxane. But original Johnson's baby shampoo, which costs about half as much, has not been reformulated for the U.S. market, according to the campaign.analytical Sciences tested multiple J&J baby product samples from the U.S. for the first report, finding low levels of the chemicals. After that, according to Archer, consumer groups in South Africa, Sweden and Japan contacted the group to note that quaternium-15 was not being used in products in their countries. Case 2 Cancer Causing Agent Found in Johnson & Johnson s Baby Powders The other Johnson s baby product which proven to be hazardous to the users are Johnson & Johnson s Baby Powders.Figure 9 shows the packaging label of Johnson & Johnson s Baby Powders. It shows that the Johnson & Johnson s Baby Powdersdid not list all the ingredients used to produce the products. However, it was tested to containethylene Oxide which is very important material used in large-scale chemical production. It also produces ethylene glycol, one of the components used in plastics. Ethylene Oxide has been used globally to produce solvents, lubricants, paint thinners and detergents. Ethylene Oxide is a very dangerous chemical as at room temperature, the chemical is flammable, carcinogenic, mutagenic, and irritating. It is an anesthetic gas with a misleading pleasant smell. Hence, unprotected and constant exposure to ethylene oxide can cause genetic mutation or DNA alternation which leads to cancer. It can damage the lungs and the cardiovascular system. Physical manifestation after exposure includes headache, vomiting, dizziness, sleep disturbances, leg pain, weakness, stiffness, sweating, liver enlargement and suppression of antitoxic functions of the body. 9

10 In response to the tested results, the famous cosmetic brand manufacturer Johnson & Johnson loses its license in India due to an ordered case by the Food and Drug Administration after 15 batches of baby powder products was found sterilized by an irritant and cancercausing component. Moreover, Food and Drug Administration (FDA) cancelled the license of Johnson & Johnson India to produce the product at their Mulund plant. The order will come to effect on June 24, "While ethylene oxide can be used for sterilization, the company did not bother to carry out a test after the process to check the amount of residue in the product. The products are used for new born babies. It is must for the company to follow all measures," said by FDA joint commissioner KB Shende quoted by Pune Mirror. Discussions Johnson & Johnson s baby product have included some precautions and safety tips at the back of the packaging, which includes the following: Keep out of reach of children Do not use if quality seal is broken Warning: Keep powder away from child s face to avoid inhalation, which can cause breathing problems Avoid contact with the eyes For external use only Avoid contact with open flame Based on the case study, it shows that there are some ingredients in the product that are flammable, poisonous and harmful if swallowed, inhaled or absorbed by skin. Therefore, these precautions are included to warn and inform the consumers on possible hazard of the product, as well as to protect themselves from legalproduct liability lawsuit. As consumers, the legal action by current laws is useful to protect them in product liability malpractice. The manufacturers, in another side, should increase their awareness and provide best product without harmful chemicals. They should consider providing consumer and organic products or product contents such as herbs and plants. Furthermore, although baby product packaging has not mention in this paper, the manufacturers should consider on how to produce eco-friendly packaging such in shampoo bottle or powder container to reduce nonbiodegradable waste. The non-biodegradable waste could affect the environment. Therefore, the product liability practice could bring the benefit to both sides, either the consumers or manufacturers. 10

11 Conclusions The products liability has become a very important issue for both consumers and manufacturers. Every year, millions of people adversely affected by defective products, and manufacturers and sellers pay huge amounts for products-liability insurance and damages. The law has responded with causes of action to regulate the safety of consumer goods and product related services. The manufacturers or distributors are responsible to provide a safety warning notice about their product s risk to alert the consumers. References license-cancer-causing-baby.htm#.upyrodjmim4 Australian Consumer Law, Product safety: A Guide For Businesses and Legal Practitioners, 2010, K. Ross, Location of Warnings: On Product or in the Manual?, 2008, LocationofWarningsOnProductorintheManual.pdf 11