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Product Liability – Protect Yourself and Protect Your Business. Kenneth Odza, Esq. Strict Liability. Focus is on the product , not fault or lack of care. Farm. Processor and Manufacturer. Restaurant or Store. Strict Liability – Who’s L iable ?.
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Product Liability – Protect Yourself andProtect Your Business Kenneth Odza, Esq.
Strict Liability Focus is on the product, not fault or lack of care
Farm Processor and Manufacturer Restaurant or Store Strict Liability – Who’s Liable? Anyone “engaged in the business of selling or otherwise distributing” the defective food product. - Restatement Third, Torts: Product Liability § 7
Legal Ramification$ • $15.6 million settlement in the Jack in the Box E. coli food poisoning outbreak. • $12 million settlement with Odwalla after E. coli-contaminated Odwalla apple juice caused illness. • $4.6 million jury award in the Finley Elementary School (Finley, Washington) E. coli food poisoning infections. • $6.25 million settlement after an outbreak traced to green onions served at a Chi-Chi’s restaurant.
Consumer Confidence Spinach sales in 2005 & 2006 Hallman, W.K., Cuite, C.L., Nucci, M.L. Pleasant, A.F. Chess, C. 2008. “Examining the 2006 Spinach Crisis from Multiple Perspectives,” Food Policy Institute, New Jersey Ag Exp Station, http://www.foodpolicyinstitute.org/news/default.asp?id=9.
ListeriaMonocytogenes • Pregnant women, newborns, and adults with weakened immune systems • Kills 20-30 percent of those hospitalized – more than any other food-borne pathogen • Also worry about Salmonella, STECs, etc.
Number of Outbreaks by Food, 1990-2005 Source: Outbreak Alert! Center for Science in the Public Interest, 2007
An Ounce of Prevention • Agreements with Suppliers and Vendors • Insurance • Strategic / Crisis Preparation • Product Safety Programs
Careful Review of Supplier/Vendor Agreement Seller agrees to defend, indemnify and hold harmless Buyer [… for the recovery of damages… arising out of or alleged to have arisen out of (a) the delivery, sale, resale, labeling, use or consumption of any Product…]
Careful Review of Supplier/Vendor Agreement(cont.) Seller’s insurance described herein shall be primary and not contributory with Buyer’s insurance Buyer shall be named as an additional insured waivers of subrogation
Example of What to Look Out for in Insurance Coverage ORGANIC PATHOGENS EXCLUSION 1. Any actual, alleged or threatened exposure to, existence of, presence of, ingestion of, inhalation of or contact with any “biological agents” whether or not occurring alone.
Product Testing (Necessary But Crude) • Negative Tests Don’t Prove Absence • Testing Is Still Pretty Crude and Narrow (don’t look for full spectrum of organisms) • No Government Standards
What To Do • Log events, actions and communications • Record all reported injuries • Document investigation • Institute litigation “hold” on the destruction of any company documents or e-mails (including back-up media) • Retain recalled product for future testing • Cooperate and communicate with government officials
Reportable Food Registry (RFR) • “Reportable Food”: • “reasonable probability” of “serious adverse health consequences to humans or animals.” • “Responsible Party”: • FDA registered facility where product is “manufactured, processed, packed, or held.” • Requirement: • Report to FDA within 24 hours
New Laws and Regulations On The Way • S.510/H.R. 2749 Pending • FDA Moving Forward Now • New Preventative Requirements • Written Food Safety Plan • Risk Based Procedures, Practices and Processes, Etc. • Traceability • Mandatory Recalls • Expanded FDA Access To Records • Fees • And Much, Much MORE!
Questions? www.foodliabilitylaw.com Twitter:@KenOdza