Marler Clark, LLP PS

3. Marler Clark, LLP PS • Since 1993 Marler Clark has represented thousands of food illness victims in the U.S. Settlements and Verdicts – nearly $500,000,000 • We only bring forward a fraction of the victims who contact our offices.

4. Civil Litigation – How it Really Works • Strict liability • It is their fault – Period! • Negligence • Did they act reasonably? • Punitive damages • Did they act with conscious disregardof a known safety risk?

5. Strict Liability for Food – a Bit(e) of History “… a manufacturer of a food product under modern conditions impliedlywarrants his goods… and that warranty is available to all who may be damaged by reason of its use in the legitimate channels of trade…” Mazetti v. Armour & Co., 75 Wash. 622 (1913)

6. Who is a Manufacturer? A “manufacturer” is defined as a “product seller who designs, produces, makes, fabricates, constructs, or remanufactures the relevant product or component part of a product before its sale to a user or consumer….” RCW 7.72.010(2); see alsoWashburn v. Beatt Equipment Co., 120 Wn.2d 246 (1992)

7. The Legal Standard: Strict Liability • The focus is on the product; not the conduct • They are liable if: • The product was unsafe • The product caused the injury • STRICT LIABILITY IS LIABILITY WITHOUT REGARD TO FAULT.

8. Why Strict Liability? • Puts pressure on those (manufacturers) that most likely could correct the problem in the first place • Puts the cost of settlements and verdicts directly onto those (manufacturers) that profit from the product • Creates incentive not to let it happen again

9. Jack in the Box-1993 Odwalla - 1996 Litigation In Action – A History Lesson

13. Odwalla

14. 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

15. Leafy Greens, cont.. • Spinach - 25 lawsuits, 75 settlements thus far- damages will exceed Jack in the Box • Lettuce - 13 lawsuits, 12 settlements thus far • CEO testified under oath before Congress • Cause – not keeping animals away from growing vegetables • Recent outbreak in Washington

16. 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

17. Salmonella Chili’s • 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 hand washing and dish-machine sanitizer failure …contributed to/exacerbated the spread…. • 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

18. Salmonella Tomatoes- Sheetz • 450 sickened • Tomatoes produced by Coronet - family business operating for 75 years • Bankruptcy • Millions in settlements • Since 2004 – four additional outbreaks sickening another 1000

19. Salmonella - Peter Pan Peanut Butter • Salmonella Tennessee – 2007 • 714 culture positive • Likely 40 times that number • Plant had positive test in 2004 • 30 Class Actions, 100 other suits • Cause - 75,000,000 jars produced yearly at Georgia Plant

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

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

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

23. Restaurant Hospitality Magazine – July 2004 “We don't have to tell you that operating a restaurant is a risky proposition.  But if you want to ascertain just how sensationally risky it really is, connect to the Internet, swallow hard, and type www.marlerclark.com into your browser's address line.”

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

25. 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.”

26. 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

27. 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

28. Criminalization • Again, getting caught is an issue • In 15 years only a handful of people have been fined and only two jailed • Where is the incentive to produce safe food?

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

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