Five New Year's Resolutions
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Unfortunately, 2009 does not promise to be any easier than 2008 in protecting your business against food liability claims. Many argue that threats will only increase in the new year. Here are five things you can do to reduce exposure in the coming year:
1. Review Insurance Coverage and Limits Carefully – Both the variety and size of claims are escalating fast. For example, just a couple of years ago consumer claims from non-O157 E. coli, melamine, diacetyl or organic labeling seemed far-fetched, but all are now a grave reality. Federal, state and local governments will continue improving detection techniques since the rash of large, national food-borne illness outbreaks in 2006-08. The Obama administration will likely make increased funding in this area a priority. The odds that your company will be targeted in a nationwide outbreak resulting in claims in the hundreds of millions of dollars are increasing. Because of the exposure, insurance companies now more than ever will be looking for ways to reduce their coverage.
2. Review and Revise Supply Chain Agreements – Aside from insurance, one of the most effective ways to reduce, spread and mitigate risk is to ensure that those in your supply chain provide adequate insurance and indemnity for problems related to their products. But just because your supply agreement happens to mention insurance and indemnity does not necessarily mean those clauses will help when you need them. The only way to ensure that they will be honored and enforced is to ensure that your legal team (experienced in litigating these clauses) drafts these carefully.
3. Reassess Suppliers – Your choice of suppliers may be key to avoiding or reducing risk. Even if you demand sufficient insurance and indemnity from a supplier, a supplier of sufficient size may not be able to access insurance or have assets available to satisfy indemnity obligations. As important as your food safety, HAACP and other programs may be, they are really only as strong as your suppliers’ programs. Careful audit and assessment of your suppliers’ food safety programs is important.
4. Increase Scrutiny Against Fraudulent Imports – Melamine, tainted rice and now “laundered honey” are all good examples of how fraud in the global food chain can dramatically affect unsuspecting U.S. food sellers. [add more advice here?]
5. Review, Update and Rehearse Crisis Management Plans – How your company is prepared to respond to a crisis is a good predictor of how your company will weather the crisis. With the stakes increasing, you need to be prepared to face the worst. Continual review, updating and rehearsal of your crisis management plan is key. Everybody on the crisis management team needs to understand his or her role and be ready for different scenarios.
The Latest On The Battle Over Federal Preemption of State Salmon Labeling Claims. . .
The Supreme Court signaled last fall it may review a California Supreme Court decision finding that federal law does not preempt claims for violations of state consumer protection laws concerning “selling artificially colored farmed salmon without disclosing to . . . customers the use of color additive.” It invited the justice department to comment on the petition for certiorari.
Not surprisingly, the Bush Administration through its solicitor general took the side of those who seek to uphold the California Supreme Court’s decision finding no federal preemption. The petitioners filed a brief responsive to the government. Their argument is in part that:
In its brief, the United States never explains thequestion at the heart of this case: why Congresswould expressly prohibit private actions and even unsupervised state government actions to enforce the FDCA, but allow unregulable private actions toenforce state laws identical to the FDCA. Permitting private litigants to enforce state laws that admittedly“mirror” FDCA requirements cannot be squared with Congress’ intent that such requirements be enforced by government entities alone andthat control over such litigation be federally centralized.
It appears that the Supreme Court’s decision whether to accept review of this case will come earlier in the new year. Most Supreme Court watchers give this case a strong chance of receiving review. The decision could change the landscape of food liability law dramatically.
Practical Advice for Litigating the Food Case
Click here for the slides from a presentation I gave recently with Shawn Stevens entitled ".jpg)
Practical Advice for Litigating the Case: Retaining Experts, Assessing Damages and Planing Trial Strategy." Two threads of my part of the presentation were organization and relationships (I believe that these were also central to Obama's campaign hence the campaign log).
In the coming months, I intend to use this blog to continue my series on the anatomy of complex, multi-party consumer based claims. Building organization and relationships will be discussed heavily as central to positioning a case succussfully for trial (and settlement).
Is It Really A Food-Borne Illness?
At a recent presentation, Dr. Alan Melnick, a public health officer in both Oregon and Washington, provided a useful list of alternative causes of symptoms to consider when someone claims a food-borne illness. Other causes of symptoms that might be confused for food-borne illness include (but may not be limited to):
- Irritable bowel syndrome (IBS)
- Inflammatory bowel disease
- Malignancies
- Antibiotic use
- Gastro-intestinal surgery or radiation
- Malabsorption syndromes
- Immune deficiency
Another practical piece of advice offered by Dr. Melnick: When assessing a food-borne illness claim, determine whether the incubation period is compatible with the illness. Incubation periods (along with other useful information) were provided by Dr. Melnick (relying upon the CDC) as follows:
|
Pathogen |
Incubation |
Symptoms |
Duration |
Source |
| Bacillus cereus |
1-6 hours (vomiting); 6-24 hours (diarrhea) |
Nausea and vomiting or colic and diarrhea | 24 hours (short form); 24-48 hours (long form) | Soil organism found in raw, dry and processed foods, e.d. rice |
| Campylobacter | 2-10 days; usually 2-5 days | Diarrhea, cramps, fever and vomiting; diarrhea may be bloody | 2-10 days | Raw and undercooked poultry, unpasteurized milk, water |
| Clostridium botulinum (botulism) | 2 hours to 8 days; usually 12-48 hours | Vomiting, diarrhea, blurred vision, double vision, difficulty swallowing, descending muscle weakness | Variable (days to months) | Home-canned food, improperly canned commercial foods |
| Clostridium perfringens | 6-24 hours | Cramps, diarrhea | 24-48 hours | Meats, poultry, gravy; foods kept warm |
| Enterro-hemorrhagic E. coli, including E. coli O157:H7 and other Shiga toxin-producing E. coli (STEC) | 1-10 days; usually 3-4 days | Diarrhea, frequently bloody; abdominal cramps (often severe); little or no fever; 5-10% develop Hemolytic-uremic syndrome (HUS) and average of 7 days after onset, when diarrhea is improving (more common in children, elderly and immune-compromised) | 5-10 days | Ground beef, unpasteurized milk and juice, raw fruits and vegetables, contaminated water, sprouts, person to person |
| Listeria | 9-48 hours for GI symptoms; 2-6 weeks for invasive disease | Fever, muscle aches and nausea or diarrhea; pregnant women may have flu-like illness and stillbirth; elderly, immune-compromised and infants infected from mother can get sepsis and meningitis | Variable | Fresh soft cheeses, unpasteurized or inadequately pasteurized milk, ready-to eat deli meats and hot dogs |
| Salmonella | 6 hours to 10 days; usually 5-48 hours | Nausea, diarrhea, cramps, fever | 4-7 days | Poultry, eggs, meat, unpasteurized milk or juice, raw fruits and vegetables (e.g., sprouts), person to person |
| Shigella | 12 hours to 6 days; usually 2-4 days | Abdominal cramps, fever and diarrhea; stool may contain blood and mucus | 4-7 days | Contaminated food or water, raw foods touched by food workers, raw vegetables, egg salads, person to person |
| Staph (toxin) | 30 minutes to 8 hours; usually 2-4 hours | Nausea, cramps, vomiting, diarrhea | 24-48 hours | Custards, cream fillings, potato or egg salad, sliced meats |
| Vibrio cholerae | 1-5 days | Profuse watery diarrhea and vomiting, severe dehydration | 3-7 days | Contaminated water and shellfish, street vended food |
| Vibrio parahaemolyticus | 4-30 hours | Watery diarrhea, abdominal cramps, nausea, vomiting | 2-5 days | Undercooked or raw seafood (fish and shellfish) |
| Vibrio vulnificus | 1-7 days | Vomiting, diarrhea, abdominal pain; more severe in patients with liver disease or who are immune-compromised; can cause invasive infection (sepsis) | 2-8 days | Raw seafood, particularly oysters, harvested from warm coastal waters |
| Yersinia | 1-10 days; usually 4-6 days | Appendicitis-like symptoms (diarrhea and vomiting, abdominal pain) | 1-3 weeks | Undercooked pork, unpasteurized milk, contaminated water |
Crisis Management So Simple Even A Pre-Schooler Could Do It. . .
Last week’s ACI conference included a great session on crisis management. David Hermann from the GMA gave a presentation on “Effective Crisis Leadership: 5 Basic Rules You Learned as a Kid.” His presentation reflected a proactive approach and showed ways to build an effective crisis-management plan. Mr. Hermann’s points were as follows:
1. Clean up your mess.
- Take action and assume control of the situation.
- Mitigate your damages.
- Hire independent investigators if needed.
- Respond to the emotional needs of the public.
2. Share.
- Get the facts out before the rumors start.
- Cooperate with regulatory authorities.
3. Tell the truth.
-Honesty is not just the BEST policy, it’s the ONLY policy.
4. Apologize.
- Accept responsibility.
- An apology is not necessarily synonymous with liability.
5. Keep your hands to yourself.
- Resist the urge to “hit back.”
- Blaming others is not conducive to crisis closure.
Who should lead a crisis-management team was another interesting part of the discussion. Several in-house lawyers thought that the CEO should not take the helm. They believed that the team should be headed by another executive, such as the VP, because the CEO may not be as fully immersed and familiar with the product and also has other ongoing responsibilities that will reduce his or her focus on the crisis.
2009 Priorities for USDA in Food Safety
I just returned from ACI’s Second National Forum on Food-Borne Illness, which included several interesting presentations and discussions. One was by Dan Engeljohn, Deputy Assistant Administrator of the Office of Policy and Program Development at the Food Safety and Inspection Service (“FSIS”). Mr. Engeljohn spoke about FSIS’s priorities for “2009 and beyond.” Takeaways from this presentation include:
Non-O157 STECs
FSIS is increasingly concerned with strains of E. coli other than O157:H7. Non-O157:H7 strains such as E.coli O121:H19 and O111 are growing more prevalent in the environment. FSIS is putting additional resources into developing methodology for detection of non-O157 STECs.
As FSIS, CDC, FDA and local health departments develop this methodology, the industry can expect more reported outbreaks and more liability exposure. Most experts believe that many non- O157:H7 outbreaks go undetected. Increased focus on detection of non-O157 E. coli strains is yet another reason to examine the sufficiency of your companies' insurance limits.
Frozen, Not Ready to Eat Meals
According to Mr. Engeljohn, because of recent salmonella scares, FSIS remains concerned about “frozen, not ready to eat” meals and specifically “frozen, not ready to eat” poultry meals. He explained that “evidence is mounting that these products cannot be safely prepared unless salmonella is controlled in the source materials.” In other words, FSIS now believes that no amount of package labeling or consumer education can prevent consumers from undercooking these meals.
FSIS jurisdiction over salmonella in poultry is limited. FSIS attempts restrict the sale of “frozen, not ready to eat” meals or impose more stringent standards against salmonella in poultry may be a reach for the agency. As discussed in Supreme Beef Processors v. USDA Salmonella, "is not an adulterant per se, meaning its presence does not require the USDA to refuse to stamp such meat 'inspected and passed.'" Absent statutory reform, FSIS action in this area may be challenged.
Listeria
Mr. Engeljohn stated that FSIS is “deeply concerned” about listeria. It believes that gains made in recent years at meatpacking plants may be undone by problems at supermarket deli counters. FSIS believes that little is being done to address critical control points at the retail level, such as proper cleaning and sanitizing of meat slicers. FSIS may be exploring ways to exercise more jurisdiction to regulate supermarket delis.
Dramatic Shift in Plaintiffs' Burden of Proof for Food-Borne Illness Claims?
A California Court of Appeal panel recently issued a lengthy decision in Sarti v. Salt Creek Ltd. (2008 WL 5006537) reversing a trial court’s grant of judgment notwithstanding the verdict (JNOV) in a food-borne illness case involving campylobacter. Sarti is alarming. The California court substantially lightened the plaintiff’s burden of proof by requiring her to come forth with only enough evidence to “infer” a causational nexus between her illness and the defendant’s food. Close examination of the facts in Sarti reveals that the plaintiff in that case may not have proven anything to establish a causational nexus.
Sarti involves a woman who allegedly became ill with campylobacter the morning after she consumed a raw ahi tuna appetizer at the defendant’s restaurant. According to the Cleveland Clinic, campylobacter has a two- to five-day incubation period. The court does not explain in its decision what, if any, expert testimony was introduced to explain how the incubation period was compatible with the plaintiff’s allegations. Without expert testimony explaining away the apparent insurmountable problem of the incubation period, plaintiff's case should fail as a matter of law. In other words, the plaintiff’s case should never have survived summary judgment.
Not only does the incubation period make the plaintiff’s claim problematic, but other sources of contamination were identified. For example, the court explained that “Sarti herself worked as a supermarket checker the day she became ill, and could, at least in theory, have picked up campylobacter from a leaking bag of raw chicken she might have scanned.”
The plaintiff’s expert offered some theories about how the tuna dish could have become cross-contaminated. According to the health department, “Wipe down rags were not being sanitized between in wiping down surfaces. There was also an insufficient amount of sanitizer in the dishwasher. Chicken tongs were sometimes uses for other food. Raw vegetables were stored under ‘raw meat.’”
The Sarti decision does not indicate whether the plaintiff’s expert could identify any of these theories as more or less likely than sources having nothing to do with the defendant’s restaurant (and, in fact, given the incompatibility of the incubation period, one would think that the defendant’s restaurant should be discounted as the cause). The court does not explain how a reasonable jury could conclude that the plaintiff’s cross-contamination theories were any more likely than the alternative theories for the plaintiff’s illness.
Instead of citing evidence or expert testimony, the Sarti court relies upon a series of food-borne illness cases in California going back nearly a century that address issues of causation. All of the cases relied upon predate DNA serotyping of bacteria, pulsed-field gel electrophoresis, modern techniques of epidemiology, microbiology and medicine. Sarti is seemingly a reversion to the dark ages of food science when it was reasonable to believe that the last thing a person ate is what made the person sick. The Sarti court ignores the science and believes that a jury should be able to do the same.
