Food Defense SummitFood Defense Summit

Denver, ColoradoDenver, Colorado

March 22, 2010March 22, 2010

Legal Risks and Responsibilities for Legal Risks and Responsibilities for Producing Safe Food – Are we doing enough?Producing Safe Food – Are we doing enough?

How Big is the ProblemHow Big is the Problem

CDC reports that CDC reports that yearly 48,000,000 yearly 48,000,000 are sickened, are sickened, 125,000 are 125,000 are hospitalized and hospitalized and 3,000 die as a result 3,000 die as a result of eating foodof eating food

Recent estimates Recent estimates $152,000,000 in cost $152,000,000 in cost to victimsto victims

Not counting Not counting Business LossBusiness Loss

Civil Litigation – How it Really Civil Litigation – How it Really WorksWorks

Strict liabilityStrict liability

• It is their fault – It is their fault – Period!Period!

NegligenceNegligence

• Did they act reasonably?Did they act reasonably?

Punitive damagesPunitive damages

• Did they act with Did they act with conscious disregardconscious disregardof a known safety risk?of a known safety risk?

Strict Liability for Food – a Bit(e) of Strict Liability for Food – a Bit(e) of HistoryHistory

““… … a manufacturer of a food product under a manufacturer of a food product under modern conditions modern conditions impliedlyimpliedly warrants his warrants his goods… and that warranty is available to all who goods… and that warranty is available to all who may be damaged by reason of its use in the may be damaged by reason of its use in the legitimate channels of trade…legitimate channels of trade…””

Mazetti v. Armour & CoMazetti v. Armour & Co., 75 Wash. 622 ., 75 Wash. 622 (1913)(1913)

Who is a Manufacturer?Who is a Manufacturer?

A A ““manufacturermanufacturer”” is defined as a is defined as a ““product seller who product seller who designs, produces, designs, produces, makes, fabricates, makes, fabricates, constructs, constructs, or remanufactures or remanufactures the relevant product the relevant product or component part or component part of a product before of a product before its sale to a user or its sale to a user or consumer….consumer….””

RCW 7.72.010(2); see also Washburn v. Beatt Equipment Co., 120 Wn.2d 246 (1992)

The Legal Standard: Strict The Legal Standard: Strict LiabilityLiability

STRICT LIABILITY IS LIABILITY STRICT LIABILITY IS LIABILITY WITHOUT WITHOUT REGARD TO FAULT.REGARD TO FAULT.

The focus is on the product; not the conductThe focus is on the product; not the conduct

They are liable if:They are liable if:

• The product was The product was unsafeunsafe

• The product The product causedcaused the injury the injury

Why Strict Liability?Why Strict Liability?

Puts pressure on those Puts pressure on those (manufacturers) that (manufacturers) that most likely could correct most likely could correct the problem in the first the problem in the first placeplace

Puts the cost of Puts the cost of settlements and settlements and verdicts directly onto verdicts directly onto those (manufacturers) those (manufacturers) that profit from the that profit from the productproduct

Creates incentive not Creates incentive not to let it happen againto let it happen again

Litigation In Action – A History Litigation In Action – A History Lesson Lesson

Jack in the Box-1993 Odwalla - Odwalla - 1996

Jack in the BoxJack in the Box

1992 and 19931992 and 1993 Nearly 600 people sickened Nearly 600 people sickened

in six States – in six States – most children - 50 HUS – most children - 50 HUS – 4 deaths4 deaths

Two Class Actions - Two Class Actions - Hundreds of Individual Hundreds of Individual SuitsSuits

Shareholders Litigation, Shareholders Litigation, Congressional InvestigationCongressional Investigation

Settlements in Excess Settlements in Excess of $100,000,000of $100,000,000

Cause - knowingly Cause - knowingly undercookingundercooking

OdwallaOdwalla

19981998 Over 70 people sickened 5 HUS, 1 deathOver 70 people sickened 5 HUS, 1 death Multiple lawsuitsMultiple lawsuits Criminal Investigation and PleaCriminal Investigation and Plea Knowingly sold contaminated Apple JuiceKnowingly sold contaminated Apple Juice Settlements over $20,000,000Settlements over $20,000,000 Stock Price fell and they were purchasedStock Price fell and they were purchased

OdwallaOdwalla

Leafy GreensLeafy Greens

25 25 E. coliE. coli outbreaks outbreaks since 1995 with at since 1995 with at least 1,000 reported least 1,000 reported illnesses and 7 deathsillnesses and 7 deaths

Fresh or fresh-cut Fresh or fresh-cut lettuce or spinach lettuce or spinach implicated as implicated as outbreak vehicle - 8 outbreak vehicle - 8 outbreaks traced back outbreaks traced back to produce from to produce from Salinas, CaliforniaSalinas, California

In 2006 alone, Dole In 2006 alone, Dole Spinach, Taco Bell Spinach, Taco Bell and Taco Johns - and Taco Johns - between 400 - 750 illbetween 400 - 750 ill

Prior FDA WarningsPrior FDA Warnings

1998 – FDA 1998 – FDA ““Guide to Minimize Guide to Minimize Microbial Food Safety Hazards Microbial Food Safety Hazards for Fruits and Vegetablesfor Fruits and Vegetables”” • Specifically designed to assist Specifically designed to assist

growers and packers in the growers and packers in the implementation of safer implementation of safer manufacturing practicesmanufacturing practices

2004 – FDA letter to the lettuce 2004 – FDA letter to the lettuce and tomato industriesand tomato industries • To To ““make them aware of [FDAmake them aware of [FDA’’s] s]

concerns regarding continuing concerns regarding continuing outbreaks associated with these outbreaks associated with these two commodities and to two commodities and to encourage the industries to encourage the industries to review their practicesreview their practices””

Imports - Hepatitis AImports - Hepatitis A

Chi-ChiChi-Chi’’s restaurant in s restaurant in Pennsylvania – Pennsylvania – 660 people sickened, 660 people sickened, 4 deaths, 100 4 deaths, 100 hospitalized, 1 liver hospitalized, 1 liver transplanttransplant

BankruptcyBankruptcy Settlements - Settlements -

$50,000,000$50,000,000 Green Onions Green Onions

imported and grow imported and grow ““in in conditions of squalorconditions of squalor””

Chi-ChiChi-Chi’’s Hepatitis-A Outbreaks Hepatitis-A Outbreak

““The ice water in the bucket became, The ice water in the bucket became, essentially, essentially, "hepatitis soup,""hepatitis soup," said Dr. Michael said Dr. Michael Osterholm, an epidemiologist at the University Osterholm, an epidemiologist at the University of Minnesota who has investigated many of Minnesota who has investigated many hepatitis outbreaks.hepatitis outbreaks.””

““Government Makes It Official: Blame Scallions for Outbreak,Government Makes It Official: Blame Scallions for Outbreak,”” by Denise Grady, NEW YORK TIMES, November 22, 2003by Denise Grady, NEW YORK TIMES, November 22, 2003

What is the Problem?What is the Problem?

IndustrializatioIndustrialization of our food n of our food supply?supply?

Technological Technological Advances in Advances in Surveillance?Surveillance?

Bugs are Bugs are bigger, bigger, stronger, stronger, faster?faster?

When Products Are Manufactured When Products Are Manufactured OverseasOverseas

Free Market?Free Market?

Regulation?Regulation?

Litigation?Litigation?

Criminalize?Criminalize?

How to Solve the Problem?How to Solve the Problem?

Free MarketFree Market

What made you ill?What made you ill? Does poisoning 1 Does poisoning 1

or 1,000 customers or 1,000 customers cause you to lose cause you to lose market share?market share?

Can you buy - Can you buy - advertise your way advertise your way out?out?

Does it depend Does it depend on the size of the on the size of the company?company?

Restaurant Hospitality Restaurant Hospitality Magazine – July 2004Magazine – July 2004

““We don't have to tell you that We don't have to tell you that operating a restaurant is a risky operating a restaurant is a risky proposition.  But if you want to proposition.  But if you want to ascertain just how sensationally risky it ascertain just how sensationally risky it really is, connect to the Internet, really is, connect to the Internet, swallow hard, and type swallow hard, and type www.marlerclark.comwww.marlerclark.com into your into your browser's address line.browser's address line.””

RegulationRegulation

Does Does ““Big BrotherBig Brother”” have have the answers?the answers?

Are the standards Are the standards correct?correct?

What Political Influences?What Political Influences?

LitigationLitigation

Lawsuits would seem to provide important feedback Lawsuits would seem to provide important feedback to these firms about how much they should invest in to these firms about how much they should invest in food safety.food safety.””

““[However,] much of the costs of illness borne by [However,] much of the costs of illness borne by people who become ill … are not reimbursed by food people who become ill … are not reimbursed by food firms responsible for an illness.firms responsible for an illness.””

““In short, the legal system provides limited In short, the legal system provides limited incentives incentives for firms to produce safe foods.for firms to produce safe foods.””

CriminalizationCriminalization

Again, getting caught is an issueAgain, getting caught is an issue In 17 years only a handful of people have been In 17 years only a handful of people have been

fined and only two jailedfined and only two jailed Where is the incentive to produce safe food?Where is the incentive to produce safe food?

My Top Eleven with Help from My Top Eleven with Help from FSMAFSMA1.1. Improve surveillanceImprove surveillance

2.2. Government Agencies Government Agencies work togetherwork together

3.3. Train, certify, Train, certify, vaccinate vaccinate food handlersfood handlers

4.4. Increase food Increase food inspectionsinspections

5.5. Whistleblower Protection Whistleblower Protection - add Sarbanes Oxley- add Sarbanes Oxley

My Top ElevenMy Top Eleven

6.6. Reform agencies at Reform agencies at every level to be more every level to be more proactiveproactive

7.7. Legal consequencesLegal consequences

8.8. Technology to make Technology to make food more traceablefood more traceable

9.9. Promote researchPromote research

10.10. Provide tax breaksProvide tax breaks

11.11. Improve consumer and Improve consumer and business understandingbusiness understanding

What Will a Jury Think?What Will a Jury Think?

A Jury = 12 Consumers

Questions?Questions?

For More InformationFor More Information

Marler Clark, The Food Safety Law FirmMarler Clark, The Food Safety Law Firm

1301 Second Ave, Suite 28001301 Second Ave, Suite 2800

Seattle, WA 98101-3808Seattle, WA 98101-3808

206-346-1888206-346-1888

www.marlerclark.comwww.marlerclark.com

www.marlerblog.comwww.marlerblog.com