Multinational Monitor

NOV 2001
VOL 22 No. 11


Pentagon Spending Spree: The Wartime Opportunists on High Alert
by William Hartung

Too Cheap to Deter: The Nuclear Power Industy Pushes Ahead Post 9-11
by Charlie Cray

Fear of Flying: The Political Economy of Airport Security
by Todd Paglia


The Great Game: Oil and Afghanistan
an interview with
Ahmed Rashid

A Resource War
an interview with
Michael Klare

A Corporate Tax Break Feeding Frenzy
an interview with
Nancy Watzman

The Corporate Attack on Electronic Privacy
an interview with
Chris Hoofnagle

Insuring a Fair Deal
an interview with
Robert Hunter


Behind the Lines

The Corporate State and the Public Interest

The Front
The Cipro Rip-Off

The Lawrence Summers Memorial Award

Names In the News


Names In the News

Saipan Sweat Suit

A federal judge in October gave the go-ahead to a major class action suit alleging sweatshop conditions on the western Pacific island of Saipan, a U.S. territory.

The lawsuit alleges that more than 13,000 garment workers in Saipan often work 12-hour days, seven days a week, in unsafe, unclean conditions that violate U.S. labor laws and international treaties.

In a 55-page decision, U.S. District Judge Alex R. Munson held that these allegations, if proven at trial, were sufficient to establish liability of both the factories employing the workers and the retailers who contract with them, for engaging in a “conspiracy” to use indentured labor in violation of racketeering laws.

One of the lawsuit’s primary claims is that the Saipan garment industry employs foreign workers, primarily young women from the People’s Republic of China, who were required to sign “shadow contracts” waiving their basic human rights. These workers were also allegedly forced to pay “recruitment fees” as high as $7,000 just to come to the U.S., creating an indentured status that has been illegal in the United States since the Civil War.

In seeking to be dismissed from the suit, the retailers claimed they could not be legally responsible for the actions of factory owners since they were just “customers.” The judge rejected this argument.

Since the case was filed in 1999, 19 retailers have settled the claims against them and agreed to a rigorous system of independent monitoring at the Saipan factories of contractors that produce their clothes. But the factory owners, together with The Gap, Target, JC Penney, Levi Strauss and others, have blocked the other retailers’ settlements by using delay tactics in the courts.

The Cipro Payoff

An agreement between Bayer, Barr Laboratories, and two other generic drug companies is blocking access to adequate supplies and cheaper, generic versions of Cipro, one of the leading antibiotics used to treat anthrax, according to the Prescription Access Litigation (PAL) project, a coalition of over 60 organizations in 29 states, which has sued to undo the agreement.

The lawsuit asks the court to put aside the agreement, opening the way for generic forms of Cipro to enter the market.

The plaintiffs charge that Bayer Corporation has unlawfully paid three of its competitors — Barr Laboratories, Rugby, and Hoechst-Marion Roussel — a total of $200 million to date to abandon efforts to bring cheaper generic versions of Cipro to the market, manipulating the price and supply of a drug that has suddenly become a crucial weapon in the fight against bio-terrorism.

Because of these payments, the generic companies abandoned their argument that Bayer’s patent was invalid and unenforceable.

“This is simply wrong on the face of it,” says PAL spokesman Stephen Rosenfeld. “On the one hand you have people throughout the country worrying that public health officials may not have sufficient supplies of Cipro available. At the same time Bayer is paying Barr and two other companies millions of dollars to not produce the drug.”

With the lawsuit, the consumer groups have joined an existing federal lawsuit filed last year in the Eastern District of New York to have Bayer’s agreement with the three generic companies declared illegal. In that case, U.S. District Court Judge Trager has ruled that the plaintiffs’ antitrust claim is plausible and deserves to go to trial.

Bayer has marketed Cipro in the United States since October 1987.

In 1991, Barr applied to the Food and Drug Administration to bring ciprofloxacin to market, asserting that Bayer’s patent on Cipro was invalid and unenforceable. In 1995 Barr received tentative FDA approval to manufacture and market generic Cipro, pending the resolution of the patent litigation.

Beginning in 1997, however, Bayer paid Barr and the two other generic firms millions of dollars in exchange for their agreement to not manufacture the generic drug.

Wheels of Misfortune

Bridgestone/Firestone Inc. will pay $51.5 million to settle charges brought by U.S. state attorneys general over alleged misrepresentations regarding particular tires that had high rates of separations and alleged misrepresentations made during the company’s tire replacement process.

The payment is in addition to approximately $450 million already spent by Bridgestone/Firestone to replace tires. Among the practices which Bridgestone/Firestone agreed to cease in the settlement:

  • Misrepresenting characteristics, use or durability of tires — by making advertising claims such as “Hunting, Fishing, or camping — wherever you’re going, these rough, aggressive tires can take you there” — but then disallowing warranty claims because of “consumer abuse;”
  • Failing to disclose that its tires are defective or to disclose secret warranty programs to customers;
  • Falsely claiming as appropriate a tire’s use on sport utility vehicles; and misrepresenting the number of miles or years the tires would be useful; and
  • Making misrepresentations about a recall or customer satisfaction program, such as engaging in bait and switch, and charging consumers for items promised or promoted as free.

— Russell Mokhiber



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