"Canada is Next"
Anyone interested in trends in cross-border mass-torts litigation and the nightmare this is becoming should read a recent article in Bloomberg Law Reports entitled "Brave New World: The Dawn of Hyper-Complex Litigation"In the article, appears the following:
"The Canadian Double-Down"
"At a January 2008 products liability symposium, a well-regarded New York City plaintiffs’ attorney stood before a room of lawyers and in-house counsel. The topic of his presentation was, in part, to forecast the next direction of mass tort litigation. His message to those listening was clear. 'Canada is next.' "
The article goes on to explain that the threshold for mass tort class actions in Canada may now be lower than in the U.S.: "in certifying the class, the [Canadian] court was not troubled by the fact that class members could not prove a present physical injury or a 'foreseeable and recognizable psychiatric illness' as a result of the alleged product defect."
The bottom line advice in the Bloomberg article, as it has been in this blog, is that businesses (especially those in the food industry) need to continue to re-double efforts at risk avoidance and crisis management. As courts outside the U.S. become more open to mass tort claims, exposure for businesses selling products internationally only amplifies.
King County Menu Labeling Goes into Effect August 1, 2008--Yet Another Call for Preemption?
Effective August 1, King County, Washington, will impose the strictest menu labeling law in the nation. King County’s law imposes menu labeling requirements, on restaurant chains that have the following characteristics: 1. The same name.
2. Operating permits from Public Health—Seattle and King County.
3. Fifteen or more locations in King County or nationwide—this legislation does not affect food establishments with 14 or fewer locations.
4. Gross annual revenues of $1 million or more.
5. Standardized menu items that use standard recipes.
The county won’t start imposing fines until January 2009. Yet for small restaurants that just meet the 15-restaurant and $1 million thresholds, or for franchise owners, these requirements can be onerous, especially if the restaurant maintains a large menu or large variety of seasonal foods. Costs for nutritional testing on a variety of products can be prohibitively expensive. Will this law have the perverse effect of limiting consumer choice and use of seasonal, local products on menus?
Even for larger restaurant chains that already provide nutritional information, King County’s law will impose requirements that may increase costs because King County’s rules may be inconsistent with nationwide distribution and marketing.
Restaurants in both New York City and San Francisco faced with similar (though arguably less onerous) local regulations are challenging the laws in those cities. Among other things, there are serious First Amendment issues (though lawyers in New York City are apparently relying on the King County law to show how it could be made to comply with First Amendment speech protections).
Menu laws are also being challenged on grounds of federal preemption (even though the FDA has apparently taken the position that its laws do not preempt local menu regulations). I have written several times on this blog about the need for federal preemption. No area demands federal preemption more than regulation of chain restaurant menus.
For evidence why the federal and not local governments should be regulating nutrition, look at King County’s self-stated reasons for passing its law: “rising health care costs, our growing number of obese, diabetic and chronically ill residents, and a lack of information to inform choices that improve our health.” Are any of these reasons unique to King County? The studies relied on by King County are national and not unique to King County. The restaurants targeted are national and are generally not King County-based restaurant chains.
Only the national government has the resources to investigate the obesity epidemic—something that has baffled scientists and for which there is no proven cause or cure. Before our restaurant industry is impacted and consumer choice is further limited, shouldn’t we devote the full resources of the federal government to the problem? Do we expect the obesity epidemic be solved by an inconsistent patchwork of local county laws?
Good Time To Review Crisis Management Plans
Incredibly, the Salmonella Saintpaul outbreak remains unsolved. First reported onset of illness date was April 10, yet the traceback is still not complete.
Personal injury and economic damage claims await for the FDA and CDC to determine causation. Produce industry, particularly in Mexico, stands to suffer long lasting injury.
Whether or not your business stands to be impacted (or has been impacted) by the current outbreak, now is a great time to review and rehearse your crisis management plan. I recommend that your team include the following (whether in-house personnel or outside consultants):
Personal injury and economic damage claims await for the FDA and CDC to determine causation. Produce industry, particularly in Mexico, stands to suffer long lasting injury.
Whether or not your business stands to be impacted (or has been impacted) by the current outbreak, now is a great time to review and rehearse your crisis management plan. I recommend that your team include the following (whether in-house personnel or outside consultants):
- Scientific - Epidemiology, Microbiology, Infectious Disease - Quantifies risks, assists public health officials and supports litigation;
- Accounting - Estimates costs of response options and manages system for customer reimbursement;
- Public Relations - Coordinates all internal and external communications and develops a plan to limit impact to the brand;
- Quality Assurance - Assists in conducting traceback;
- Sales and Marketing - Notifies suppliers and buyers, monitors recall effectiveness and coordinates product returns;
- Legal - Assists with fact investigations, assists coordination with regulatory officials, addresses liability issues, deals with issues of insurance coverage and prepares for litigation;
- COORDINATOR/TEAM LEADER - selecting a member of the team that can bridge a diversity of disciplines and demonstrate leadership is critical.
