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Pure and Wholesome: Is Food a Risky Business? PowerPoint Presentation
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  1. Pure and Wholesome: Is Food a Risky Business? A Lawyer’s perspective William D. Marler, Esq.

  2. Strict Product Liability In the US, the manufacturer of a defective product is liable if the defect rendered the product unreasonably dangerous, and the defective product caused the victim’s injuries.

  3. “Manufacturer” • Many states exclude product sellers who are not manufacturers • Working definition: entity that designs, constructs, or fabricates the product

  4. Key Elements • Milk is a “product”—raw or pasteurized • Contaminated milk is “unreasonably dangerous” • Thus, the “manufacturer” – i.e. the dairy – is strictly liable for injuries caused

  5. Jack in the Box • 1992 and 1993 • Nearly 600 people sickened in six States - most children - 50 HUS - 4 deaths • Two Class Actions - Hundreds of Individual Suits • Shareholders Litigation, Congressional Investigation • Settlements in Excess of $100,000,000 • Cause - knowingly undercooking

  6. Jack in the Box

  7. Odwalla • 1998 • Over 70 people sickened - 5 HUS, 1 death • Multiple lawsuits • Criminal Investigation and Plea • Knowingly sold contaminated Apple Juice • Settlements over $20,000,000 • Stock Price fell and they were purchased

  8. Odwalla

  9. Petting Zoos • Over Two Dozen reported outbreaks in 10 years • Thousands of children sickened - many with HUS • CDC and other Health recommendations ignored • Dozens of settlements in excess of $1M. • Cause - refusal to see changing nature of bacterial threat

  10. Leafy Greens • 21 E. coli outbreaks since 1995 with at least 1,000 reported illnesses and 7 deaths • Fresh or fresh-cut lettuce or spinach implicated as outbreak vehicle - 8 outbreaks traced back to produce from Salinas, California • In 2006 alone, Dole Spinach, Taco Bell and Taco Johns - between 400 - 750 ill

  11. Leafy Greens, cont.. • Spinach - 25 lawsuits, 41 settlements thus far • Lettuce - 13 lawsuits, 8 settlements thus far - damages will exceed Jack in the Box • CEO testified under oath before Congress • Cause - keeping animals away from growing vegetables • Recent outbreak in Hawaii

  12. Imports - Hepatitis A • Chi-Chi’s restaurant in Pennsylvania - 660 people sickened, 4 deaths, 100 hospitalized, 1 liver transplant • Bankruptcy • Settlements - $50,000,000 • Green Onions imported and grow “in conditions of squalor” • Important --- don’t be too focused on imports

  13. Salmonella Chili’s • 305 persons confirmed ill • 9 hospitalized, and 179 sought medical care • Restaurant closed for 11 days • 28 employees tested positive for salmonella • Depressed sales in region due to bad publicity • 8 months after outbreak, store closed for good “The investigation revealed environmental factors such as loss of hot water, loss of all water, the large number of ill employees at the facility, a general lack of handwashing and dish-machine sanitizer failure …contributed to/exacerbated the spread….

  14. Salmonella - Sheetz • 450 sickened • Tomatoes produced by Coronet - family business operating for 75 years • Bankruptcy • Millions in settlements • Since 2004 - two additional outbreaks sickening another 400

  15. Salmonella - Peter Pan • Salmonella Tennessee - 2007 • 450 culture positive • Likely 40 time that number • Plant had positive test in 2004 • 30 Class Actions, 100 other suits • Cause - 75,000,000 jars produced yearly at Georgia Plant

  16. What is the Problem? • Industrialization of our food supply? • Technological Advances in Surveillance? • Bugs are bigger, stronger, faster?

  17. How to Solve the Problem? • Free Market? • Regulation? • Litigation? • Criminalize?

  18. Free Market • What made you ill? • Does poisoning 1 or 1,000 customers cause you to loose market share? • Can you buy - advertise your way out? • Does it depend on the size of the company?

  19. Regulation • Does “Big Brother” have the answers? • Are the standards correct? • What Political Influences?

  20. Litigation “Lawsuits would seem to provide important feedback to these firms about how much they should invest in food safety.” “[However,] much of the costs of illness borne by people who become ill … are not reimbursed by food firms responsible for an illness.” “In short, the legal system provides limited incentives for firms to produce safe foods.”

  21. Criminalization • Again, getting caught is an issue • In 14 years only a handful of people have been fined and only two jailed • Where is the incentive to produce safe food?

  22. What about Morality? • The “Golden Rule”

  23. Questions? Marler Clark LLP, PS 6600 Columbia Center 701 Fifth Avenue Seattle, Washington 98104 (206) 346-1888 www.marlerclark.com