Yesterday, the U.S. Department of Agriculture’s (USDA) Animal and Plant Health Inspection Service (APHIS) issued a news release (PDF) announcing that a genetically engineered (GE) variety of wheat was found growing on an Oregon farm. APHIS was first notified of the issue by an Oregon State University (OSU) scientist who reported that initial tests of wheat samples from an Oregon farm indicated the possible presence of GE glyphosate-resistant wheat plants.
Here’s what you need to know:
Earlier in April 2013, an Oregon farmer noticed wheat plants that had germinated and developed in a place where they had not been intentionally planted, so-called “volunteer” plants. The farmer also found that these wheat plants were resistant to glyphosate, a systemic herbicide used to kill weeds known to compete with commercial crops. The farmer then sent the samples to OSU for analysis, which later tested positive for the glyphosate trait.Continue Reading...
Today begins the annual NWFPA Expo event that draws food processors from around the world. The three day event is taking place at the Portland Convention Center and will include educational sessions as well as an exhibition hall. Stoel Rives attorneys will be attending the event and hope to see you there.
Hat tip to the Renewable + Law blog. We hear the American Bar Association Law Journal is now accepting nominations for Blawg 100 Amici, its annual list of 100 best legal blogs. We’d appreciate any support our readership can give on behalf of Food Liability Law Blog. Filling out the online nomination form should take no more than five minutes of your time. Nomination deadline is September 7, 2012.
Submitting additional nominations for your other favorite blogs is also kosher. So let the ABA folks know who you like to read and why. Cheers from all your Food Liability Law bloggers!
The Delaware Bankruptcy Court has approved procedures for a sale of AFA Investment, Inc. and its affiliates’ assets. As approved, the procedures are largely as reported here on April 20, 2012, with some changes:
· AFA has until June 11, 2012 to identify a stalking horse bidder. If one isn’t identified, AFA must file its own proposed form of asset purchase agreement on that date.
· Qualifying bids are due by June 19, 2012 at 4:00 p.m.
· If an auction is held, it will be on June 21, 2012 at 10:00 a.m.
AFA Investment Inc. and its affiliates, including AFA Foods, American Foodservice Corporation, United Food Group, LLC, and American Fresh Foods (together "AFA"), one of the largest ground beef processors in the United States, have filed for Chapter 11 bankruptcy protection.
AFA cited growing negative publicity over the use of boneless lean beef trimmings (identified as "lean finely textured beef" or "pink slime" in some articles) as well as lower retail demand for beef products, costly product testing programs, and a change of customer base from foodservice to retail customers as events causing the filing.
Ron Allen, AFA's Interim CEO, stated that the companies have hired an investment banker to market their assets and plan to idle their Los Angles, California processing facility this week. AFA reported consolidated booked asset value of $219 million against $197 million of liabilities. The companies currently have 850 full-time employees and operate facilities in Georgia, New York, Pennsylvania, and Texas, in addition to the California facility.
AFA requested approval of $60 million in "Debtor in Possession Financing" to be advanced by the companies' current first-priority lenders. One lending covenant would require AFA to file a motion to sell all of the companies' assets within the next 14 days. AFA also requested permission to continue to honor customer programs including rebates and returns, to pay certain "critical vendors" immediately, and to institute procedures for receiving and handling priority claims of vendors under the Bankruptcy Code.
Check back at the blog for additional information regarding the AFA bankruptcy as it becomes available.
We at the Food Liability Law Blog, and at Stoel Rives, are extremely pleased that David Goodnight, one of our most noted trial lawyers, has agreed to join the team as a point person for food and beverage litigation. David brings a wealth of trial experience as well as an incredibly calm "bedside manner" to the team. He's the perfect person to talk to if there's someone standing outside your door with what appears to be a subpoena or a warrant. He not only will know what you should do, he'll help to lower your anxiety level.
Here's what one of his food and beverage clients just said about David:
Stoel Rives, under David Goodnight's leadership, provided absolutely outstanding legal counsel for our small business. The partners at our firm marveled at his ability to litigate a very complex arbitration case to a successful outcome and then help connect us to the deep resources of Stoel Rives to solve the varied corporate and tax challenges we face as a small business. We were very impressed by the breadth and depth of legal counsel at Stoel Rives and have recommended your firm to a number of our friends who own small businesses and people that were in need of professional legal advice. Truly, we can't thank David Goodnight and the legal team at Stoel Rives enough for what they have done for our company.
And here's another testimonial from a client in the pharmaceutical industry:
I could not have been more fortunate than to have the opportunity to work with David as our attorney to handle a legal matter for my company. His expertise and clear explanation of options, strategies, possible outcomes, and recommendations helped me to make the right decisions for our company. I never felt worried about our position with David on our team. He helped me and our company to take a strong position in a difficult legal matter without putting us at risk to overspend or overextend ourselves at anytime. His calm, strong, and thoughtful attitude made me feel that he was working for our good at all times. Thanks to David, we achieved success in the legal matter that he handled for us. If our company or I am ever in the position to need an attorney with David’s expertise, I would not hesitate to call on him again. He’s remarkable.
David's clients include GE, Amazon.com, International Paper, Qwest Corporation, Century Link and Weyerhaeuser Company. He has been selected numerous times as one of Washington's top 100 lawyers, is recognized by Chambers and selected as a litigation star by Benchmark and Washington CEO. We're extremely pleased to have him join our team.
Please join us in welcoming David to the blog.
As you might have heard, I’m leaving Stoel Rives LLP this month, my professional home for almost 14 years (and parts of three decades). I am honored and humbled to have been asked by The Kellogg Company to join them as their in-house food safety and quality lawyer.
My departure from Stoel Rives is bittersweet. I will miss greatly my colleagues, clients and friends. Without doubt, Stoel’s food practice is the strongest in the region. This blog is among the most read in the industry. In my absence, you can look forward to continued discussion of the relevant issues in the industry from these and other Stoel attorneys:
- Rick Goldfarb, one the nation’s foremost commercial lawyers, who has decades of involvement with the food industry;
- Lee Smith, who is focused on the Food Safety Modernization Act, California Proposition 65 and other regulatory compliance issues; and
- Anne Glazer, who is focused on counseling her clients on food labeling and marketing issues.
The FDA asserts in its inspection manual its right to photograph in your plant. Yet the FDA does not have statutory authority to photograph. The manual cites the following cases as authority for its right to photograph the inside of a plant: Dow Chem. Co. v. United States, 476 U.S. 227 (1986), and United States v. Acri Wholesale Grocery Co., 409 F. Supp. 529 (S.D. Iowa 1976). But these cases rely on the theory of implied consent or a minimal expectation of privacy. These cases do not hold that FDA has the right to photograph the interior of a food facility when the facility has a strict policy against photography and does not consent to the photography.
So, should you resist FDA's request to photograph?
The first thing you need to do is to ask yourself the following two questions:
- Do you have a policy against photography in your plant?
- If you do, is the policy strictly enforced?
If the answer to either question is no, then you're on shaky footing in resisting the FDA's request. By not having a policy or by not strictly enforcing the policy, FDA's legal authority based on implied consent is that much stronger.
Assuming your plant does have a no-photography policy that is strictly enforced, you need to assess whether the photography is worth the fight. It may be. Resisting the request for photos may be worthwhile to protect potential disclosure of trade secrets and to prevent out-of-context photographs from being used adversely by FDA. The problem is that the harder you push against FDA, the more likely that it will seek more information and the more likely that it will seek enforcement action.
In a future entry, we'll explore what legal remedies might be available to prevent the FDA from photographing the inside of your plant.
The Food Safety Modernization Act ("FSMA") significantly expands the FDA's ability to access a food company’s records.
The expanded authority is found in three places in the statute:
- FSMA § 101 amends 31 USC § 350c(a) and allows the FDA to obtain records related not only to a product that the FDA believes "will cause serious adverse health consequences or death to humans or animals" but also those related to "any other article of food" that the FDA believes is "likely to be affected in a similar manner."
This statute may allow FDA to "access and copy" all records in any format and at any location of products that are not known to be contaminated but that might share similar ingredients or be produced in a shared facility or that could otherwise be affected in a "similar manner" as products thought to be contaminated.
Section 101 was effective immediately on FSMA becoming law in January 2011.
- FSMA § 103 requires that FDA facilities (with certain exceptions) implement "Hazard Analysis and Risk-Based Preventative Controls." As part of this section, Congress requires the affected FDA facilities to keep "records documenting the monitoring of the preventative controls" and to keep a "written plan that documents and describes the procedures used by the facility to comply with the requirements of this section." Congress requires that these records "be made promptly available" to the FDA upon "oral or written request." The statute also requires that records be kept for at least two years.
Note that unlike in section 101, Congress did not use the term "copy" in section 103. This section instead says that records must "be made promptly available."
The question remains open whether the FDA interprets "be made promptly available" to mean copy and whether such a broad interpretation will be held up by the courts. Section 103 is effective in July 2012.
- FSMA § 202 requires the FDA by January 2013 to create a "program for the testing of food by accredited laboratories." By July 2013, section 202 will require testing by an "owner or consignee (i) in response to a specific testing requirement under this Act or implementing regulations, when applied to address an identified or suspected food safety problem; and (ii) as required by the Secretary, as the Secretary deems appropriate, to address an identified or suspected food safety problem.“
Test results from the FDA-accredited lab "shall be sent directly to the [FDA]" unless exempted by regulation.
The big questions under section 202 are whether:
a. Routine product and environmental testing accomplished for the purpose of a food safety plan under section 103 will be considered "in response to a specific testing requirement . . . when applied to address an identified or suspected food safety problem" and
b. The FDA will exempt certain testing records under this provision.
So, what should you do to prepare for the FDA's considerable expansion of its ability to access your records?
Here are five things that a food company should consider:
- Understand what records the FDA does not have the right to access (recipes, financial, pricing, research, personnel or certain sales data), and maintain these separate from records the FDA can access.
- Create and enforce a document destruction policy that conforms with FSMA.
- Create a standard FOIA letter to present to the FDA when it requests letters explaining that it considers information provided to be trade secrets, confidential and proprietary.
- Create and train employees on a confidential FDA inspection policy that involves legal counsel and therefore can be cloaked in the attorney-client privilege.
- Understand what finished product and environmental testing is needed and not needed for a section 103 food safety plan.
Thank you to Parker Smith & Feek for inviting me to speak to about FSMA and how it’s changing the status quo. My slide-deck can be viewed here.
Following my talk, Marty Bask from Parker Smith & Feek led a very interesting discussion about the pros and cons of product recall and contamination coverage. A link to our recent discussion on this blog on what to ask when purchasing this kind of coverage is here.
A 60-minute webinar broadcast on April 29 on the Food Safety Modernization Act (and a short discussion of implications of the Japanese earthquake, tsunami and resulting nuclear disaster on food safety) is available for replay at this link. The webinar was sponsored by AON. My gratitude to AON for inviting me to participate. As always, I'm interested in your feedback and questions.
It's Passover, a time when Jews think more about their food than we usually do, which is a lot. I was raised in a kosher home where we had four sets of dishes, meat and milk each for chametz and Passover. Every year, cupboards were lined, closets were closed, and the house was prepared for Passover. My mother was not obsessive, even allowing my brother and I to eat Easter dinner once at the home of a close friend; I only partially expected lightning to strike when I ate something breaded.
The title of this entry is a pun, because quinoa is pronounced "Kin Wa". That's appropriate because in Hebrew the word for Passover is also a pun, meaning both "pass over" and "lamb", denoting the sign of the lamb on the doorposts of the Jews designating that the angel of death would pass over their homes on his way to foment the tenth and last plague on the Egyptians. There is a great debate about quinoa, a grain not known in Biblical places in Biblical times. Can we eat quinoa? A New York Times article on Sunday stated the state of the debate. Since I doubt anyone was in a position to take a four-day trek into the Bolivian wilderness to inspect quinoa processing operations in time for a holiday that began Monday night, the decision to eat quinoa or not must be left to the individual conscience. Assuming you know where you can get quinoa anyway.
Which brings up the larger point, as the New York Daily News asks, why do Seders, indeed Passover in general, put the "fun" in dysfunctional? Growing up, I remember Seders with my entire extended family at my great aunt's house, the only time during the year everyone would be together at once, but I also remember how little I understood of the davening in Ashkenazic Hebew at warp speed (the term hadn't been invented yet) and how so many of us little kids would end up being disciplined because we couldn't sit still through the hours of reading the entire Haggadah. The most wonderful Seder I remember was the first one, as an adult and a parent, where we had four children and eight adults (one child per family) and all the children made it through the entire service (much in English, much shortened), each one participating and no one leaving the table. At the end we all agreed to do it again together every year. Which we did until my own son, the eldest of the children, left for college, with additional children, another family, wandering members of extended families and the effects of one divorce bending but not breaking the group. The last time we were all together, the group strained the size of our dining room, but it was a happy strain.
One thing we did every year was read passages from 1001 Questions About Pesach, where we learned that a certain Ashkenazic rabbi believed that someone somewhere would soak fresh garlic in beer, so garlic was not permitted at Passover. And we would talk about these things, adults and children. We resolved the garlic thing against the rabbi's ruling, by the way.
My mother, like many others, has long sought to find ways to make cakes, breads and rolls in ways that meet the strict Passover requirements. Our family has rebelled against this idea. Many Orthodox families will stress over the preparations for the holiday for a month or more before. Our family has resolved this differently. Our view is that the Jews in Egypt got no notice of the Exodus, that was why they didn't have time to prepare. So we eat things that can be hastily prepared; our typical Passover meal is a fritata made with fresh vegetables.
Okay, so what's the "food liability law" angle to this? Well, there was one other key article this week, this from the Wall Street Journal, about the different degrees of preparation certain rabbis insist upon. There are different organizations with different certification standards, each with a different mark. And if you are not someone who accepts a particular mark, it is as though the food contained ham, cheese and, for Passover, French bread. If you invite a particularly observant Jew to your home, and assure him or her that all the food will be Kosher for Passover, do not be surprised if instead of a simple thank you, you are subjected to a cross-examination about every item.
Is there consensus? Yes, it is pretty clear that an unpeeled piece of fruit, which can be washed by the eater himself or herself, wll be acceptable. Better yet, an unpeeled banana, which need not be washed to be eaten.
Stoel Rives food liability attorney Ken Odza discussed with NutraIngredients-USA.com the significance of a rise in activism from consumer lobby groups combined with food manufacturers pushing the envelope with more aggressive health claims. General Mills recently lost its bid to invalidate class action certification at the Eleventh Circuit of Appeals in a Florida lawsuit involving digestive claims for Yo-Plus, a probiotic yoghurt product.
Odza said that plaintiff attorneys who have made fortunes out of asbestos and pharmaceutical lawsuits are now turning their attention to the food industry, and predicted that “these kind of [health claims] are going to explode.” He added that the Yo-Plus case was “pretty unusual” in that it wasn’t prompted by an investigation by the FDA (Food and Drug Administration) or the FTC (Federal Trade Commission). “Usually you see a warning letter rapidly followed by a class action piggy-backing off of that.”
“Class Action Lawsuits Set to Explode in Health Claims Arena” was published by NutraIngredients-USA.com, April 1, 2011.
I’ll be speaking at several events over the next two months on the Food Safety Modernization Act (FSMA) and how this comprehensive and far reaching legislation affects the status quo for food companies. Two of these events are free, and all promise to address relevant and critical issues for those involved in the food industry.
a. May 24 at Parker Smith Feek's offices in Bellevue for a discussion of the new FSMA, the Reportable Food Registry and how to survive a food product recall (event was rescheduled from March 22). Registration is free and coming soon. Contact me if you’re interested and I’ll get a spot reserved.
b. April 29 webinar sponsored by AON on FSMA. Link to the free registration is here.
c. May 12-14 Northwest Food Processors Association’s Executive Business Retreat in Coeur d'Alene, Idaho.
d. June 15-16 ACI Food Safety Regulatory Compliance Summit in Chicago. I'll be speaking specifically on "Curtailing Downstream Liability Arising Out of On-Site Inspections: How to Prepare and What to Do Should the Government Come Knocking." If you register by April 15, I can arrange for a discount. Just let me know.
If you can't make these events or would like a customized in-house presentation on FSMA, the Reportable Food Registry, recalls or other food liability topics, please let me know. Also, stay tuned for new blog entries addressing such topics as the Reportable Food Registry (RFR), restaurant menu labeling, and strategies to defeat food marketing/labeling putative class claims.
The Napa County Farm Bureau held its first water forum in five or six years on March 9, in St. Helena, California. Kicked off by Bureau President Jim Lincoln, the event was well attended, with over 100 concerned stakeholders listening to the most recent updates in California water issues.
Phillip Miller, the Deputy Director of Napa County Public Works, discussed a recent study by the County designed to compile countywide data, establish a framework for reporting, and provide recommendations related to any future groundwater permitting and monitoring program.
Of most interest was the presentation by Paula Whealen, a principal at the engineering firm of Wagner & Bonsignore. Ms. Whealen gave a general overview of new requirements for surface water users from the California State Water Resources Control Board (“SWRCB”), including:
- All reports of licensees and progress reports by permittees and pre-1914 water right diverters are now due annually by July 1;
- Reports must provide the monthly amount taken from the source;
- They must state the monthly amount beneficially used;
- They must be filed electronically as of this year; and
- Filings will require high-speed internet access.
Because all new reports must be filed electronically, the prior “fudge factor” regarding timelines for reporting will no longer exist. The SWRCB will be able to tell on July 2 who hasn’t filed the necessary reports. Failure to file all necessary reports constitutes non-compliance with the underlying water license/permit and can lead to fines and/or other administrative actions. It was also stated that, given the increase in the number of enforcement officers (25) and the establishment of a water rights enforcement office in Santa Rosa, California, there will be a significant increase in site inspections in the North Coast region.
A bit of sage advice to be taken from the Forum is for all vineyard and winery owners operating under a license/permit to take it out, read it, and understand it. If you don’t understand your water right permit, find someone who does, and most importantly, make sure you are in compliance. In addition, even for those sources that are not required to be reported (i.e., reclaimed water), it behooves vineyards and wineries to keep records of all water that is used on the property.
The Industry Acrylamide Coalition (Coalition) filed suit against the State of California Office of Environmental Health Hazard Assessment (OEHHA), the agency that manages and revised the Prop 65 list to include 4-metheylimidazole (4-MEI), as a carcinogen. 4-MEI is often found in cooked foods. The Coalition argues that the third party report on which the listing was based, from the National Toxicity Program (NTP), is insufficient to support a valid Prop 65 listing. The complaint, which was filed in Sacramento, alleges that OEHHA failed to consider the entire file of evidence before making its decision. The Coalition’s complaint also indicates that 4-MEI is created during normal cooking of food and ingredients and cannot easily be removed. The Coalition includes the American Beverage Association, the California League of Food Processors, and the Grocery Manufacturers Association of USA.
Acrylamide – In Your Coffee?
In a similar manner, the National Coffee Association is coordinating the joint defense of a number of coffee roasters and retailers with respect to a 60-day notice served on 40 roasters. The chemical at issue is acrylamide, which is formed when certain proteins are heated. Original scrutiny for this chemical concentrated on potato products such as french fries, but apparently the same chemical reaction occurs in coffee when it is roasted. In addition, other beverages that also contain caffeine, such as soft and energy drinks, have also received 60-day notices.
Dietary Supplements and Prop. 65
A dietary supplement company has been ordered to pay 2.65 million as part of a joint settlement with district attorneys in California. This is one of the larger suits filed and settled by a public enforcement entity, other than the California Attorney General. People v. Irwin Naturals, Inc., Orange County Superior Court, Case No. 30-2011-00445453.
Irwin Naturals was alleged to have made false and misleading representations with respect to the marketing and sales of its products. The products were advertised as having Hoodia Gordonii, an alleged appetite suppressant; however, lab results found that the chemical was not present and triggered a mislabeling suit. Additionally, the suit alleged that many of the products also exceeded the Prop. 65 level of proposed Maximum Allowable Dose Level (“MADL”) of .5 micrograms/dA1. Most of the indicated products were green tea products, sold without the Prop. 65 warning as required.
As part of the settlement, 1.95M in penalties were paid to help enforce state consumer protection laws, $100,000 in restitution, and $600,000 in set aside for investigation costs. Reportedly, prosecutors felt that this prosecution was necessary in part because the FDA does not regulate dietary supplements.
Many who track FDA's implementation of the Food Safety Modernization Act (FSMA) believe that a priority for FDA is Section 105, “Standards for Produce Safety” (FDCA section 419), in particular, the leafy greens regulations.
Farms are exempt under FSMA's produce safety rules if:
(A) during the previous 3-year period, the average annual monetary value of the food sold by such farm directly to qualified end-users during such period exceeded the average annual monetary value of the food sold by such farm to all other buyers during such period; and
(B) the average annual monetary value of all food sold during such period was less than $500,000, adjusted for inflation.
"Qualified End User" is defined as:
(i) the consumer of the food; or
(ii) a restaurant or retail food establishment (as those terms are defined by the Secretary for purposes of section 415) that is located—
(I) in the same State as the farm that produced the food; or
(II) not more than 275 miles from such farm.
The fear among many small farm and "ag-in-the-middle" proponents who are not exempt is that FDA will impose standards similar to those adopted by the National Leafy Greens Marketing Agreement (NLGMA) proponent group. Even the proponent group concedes that "the metrics developed by LGMA are not appropriate in every area and must be modified to address unique risks presented in different regions as well as varying production practices across the country."
Those non-exempt farms who cannot logistically or financially possibly comply with NLGMA metrics should consider the following action steps:
1. Be ready for the rule-making process. Marshal your case why your operation is low risk and should be treated differently from larger-scale operations and for those in California and Arizona the standards were developed for.
2. Start now laying the ground work with your state department of agriculture to seek a state variance for the FDA rules. The FSMA allows that:
A State or foreign country from which food is imported into the United States may in writing request a variance from the Secretary. Such request shall describe the variance requested and present information demonstrating that the variance does not increase the likelihood that the food for which the variance is requested will be adulterated under section 402, and that the variance provides the same level of public health protection . . . .
3. Call your congressional delegation. FDA has significant reporting obligations to Congress, which will have a significant role to play (funding, oversite, etc.) in how the FSMA gets implemented. Start educating your Congress people now on the fears that exist by "ag-in-the-middle" about the produce safety rules.
The Food and Drug Law Institute's ("FDLI") Update Magazine just published our article addressing the FTC's proposed regulations on green marketing: "New Green Guides Lay Out Rules for Environmental Marketing," available here. Authored by Ken Odza, Anne Glazer, and Joseph Eckhardt, the article reviews the scope of the new proposed Green Guides and describes best practices to avoid challenges to green marketing claims.
Last week, the FDA issued its first annual report on the Reportable Food Registry (RFR). The report provides statistics on the first year of the RFR (2240 entries, 229 "primary reports," a breakdown of the report by hazards, etc.).
Beyond the statistics, the FDA report should be noted by food companies for two reasons:
- Food Safety Plans
FDA Deputy Commissioner for Foods Michael Taylor says that “[s]everal key U.S. industries are already re-evaluating their hazard and preventive controls, core principles of the Food Safety Modernization Act recently passed by Congress. We also anticipate improved reporting as we continue our vigorous outreach to food facilities through federal, state, local and foreign agencies, to help us expand the positive effect of the RFR on the safety of the U.S. food supply.”
The new hazard analysis and preventative controls requirements in the Food Safety Modernization Act (FSMA) are not effective for 18 months following passage. Deputy Commissioner Taylor's comments suggest that industry standards may already be moving in that direction . To mitigate exposure and risk, FDA enforcement actions, product liability claims, supply chain contract claims and recalls, food manufacturers may want to consider updating and/or creating food safety plans that address the hazard analysis and preventative controls prescribed by the FSMA.
- Allergen Controls
The FDA reports undeclared allergens/intolerances accounted for 34.9 percent of the primary reports. Industry experts assert that the FDA believes that the industry does not in general have good control over the issue of undeclared allergens. These experts believe that the FDA will give special attention to the issue of undeclared allergens/intolerances in promulgating regulations under the FSMA's requirements for hazard analysis and preventative controls (see point 1 above). In anticipation of the FDA's concern, manufacturers should consider now how they can change manufacturing processes to address the undeclared allergen issue.
We here at the Food Liability Law Blog like to end the year on a positive, or at least humorous, note, so two items in Tuesday's Wall Street Journal caught our eye.
Everyone, of course, has been barraged with Christmas movies the last month, but I am a big fan of New Year's movies. "The Apartment" is probably the best film that culminates on New Year's, but the 1983 Dan Aykroyd/Eddie Murphy classic "Trading Places" is set up so that New Year's Eve is a huge part of the plot. For those of you who haven't seen it (and if you haven't, it will be on Comedy Central on January 2), Aykroyd is Louis Winthorpe III, a smug Philaelphia commodities broker whose bosses contrive to have him trade places with street person Billy Ray Valentine (Murphy) to settle a wager the stakes of wihch are one crisp dollar bill. When the boys learn they've been taken for a ride, they team up and try to steal a key market report from the bosses' operative during a New Year's Eve train ride from Washington to Philadelphia. Hilarity ensues, unless you're the guy who ends up in the gorilla suit.
In one scene, Valentine uses his street smarts to explain to the Duke Brothers (played by Don Ameche and Ralph Bellamy) why the price of pork bellies will drop:
Okay, pork belly prices have been dropping all morning, which means that everybody is waiting for it to hit rock bottom, so they can buy low. Which means that the people who own the pork belly contracts are saying, "Hey, we're losing all our damn money, and Christmas is around the corner, and I ain't gonna have no money to buy my son the G.I. Joe with the kung-fu grip!
I appreciate why lawyers practice defensively. We are risk adverse as a profession. But is this what our clients want from us? After all, our clients are usually in a risk-taking position when they seek our advice in the first place. In today's business climate, competition in almost ever sector is fierce to say the least. Our business clients are often in the position where they need to innovate, stay ahead of the competition or go extinct. For them, a "blue ocean" strategy is often the only pathway for survival.
Here's a common scenario in the practice of business law: client asks a question or poses a problem to his lawyer. Lawyer responds with a menu of options to solve problem. Lawyer goes through pros and cons of each but backs away from making a strong recommendation (or recommends the most risk-adverse solution). Lawyer feels that it’s the client's choice (which it is) and also wants to avoid blame if the recommendation is wrong (lawyer will be blamed anyway). Client feels dissatisfied because:
a. Client may not share the expertise/experience of his lawyer and wants a stronger recommendation; or
b. Client feels that lawyer may not be interested in really understanding the problem and/or the client's business; or
c. Client feels that lawyer is unwilling to put "skin in the game" and share the risk with the client; or
d. All of the above.
In litigation, defensive practice of law often comes in the form of "scorched earth" discovery and unnecessary motion practice. Attorneys tell their clients that they can't leave a stone unturned to prepare the case for trial (though they might not have a clue as to their trial strategy). Lawyers tell their clients that they can forgo the deposition but it's "risky." Although the lawyer advises the client that failure to conduct expensive discovery practice is "risky," the lawyer may be reluctant to help quantify the risk for the client. And if the lawyer is paid hourly, little incentive exists for the lawyer to make hard decisions in litigation as to what's necessary to try the case and what may not be. So the end result may be bloated fees and a disgruntled client (and often a bad result).
As outside counsel, we need to ask why clients hire us. Do they hire us to prescribe multiple choice solutions without a real recommendation or a path of scorched-earth litigation? Or do our clients hire us because (1) we have expertise, creativity and time that the client may not have in house and (2) the client expects us to solve its problem? With the legal monopoly threatened (look no further than the dramatic changes in professional rules in Great Britain), don't we have to provide clients the service they want? Your comments and thoughts are most welcome.
We're honored that LexisNexis has included this blog among its initial nominees for "Top 25 Blogs 2010, Business Law Communities." Please consider submitting to LexisNexis as soon as possible your comments on this blog and whether you think it should be included among the Top 25. Go to this link and insert your comments on the bottom of the page. (Note that you'll need to be a registered LexisNexis Community member and be logged in. If you haven't previously registered, follow this link. Registration is free, and LexisNexis promises that it does not result in sales contacts.)
By Guest Blogger David Pache
We are excited to announce the Sixth Annual Nutrition Law Symposium presented by Stoel Rives LLP and the Association of Corporate Counsel, Mountain West Chapter. The Symposium will be held at the Thanksgiving Point Golf Club in Lehi, Utah from 8 a.m. to 1:30 p.m. on Friday, September 17, 2010. The agenda features panel discussions on the FTC Advertising Guidelines and Better Business Bureau’s National Advertising Division procedures, as well as a Worldwide Regulatory Update. The keynote speaker will be announced soon. The Symposium will be followed by an afternoon golf scramble.
For more information, contact Melanie Williamson, Stoel Rives Business Development Coordinator, at (801) 715-6662 or email@example.com.
In a May 25, 2010, Federal Register Notice, the Federal Trade Commission (the “FTC”) announced its intention to issue compulsory process orders to 48 food and beverage manufacturers, distributors, marketers, and quick service restaurant companies. The proposed orders seek information concerning the companies’ marketing expenditures targeted toward children and adolescents, and nutritional information about the companies’ food and beverage products marketed to children and adolescents.
The proposed orders, issued under Section 6(b) of the Federal Trade Commission Act, 15 U.S.C. § 46(b), will seek information in six categories, including:
• The categories of foods marketed to children (ages 2-11 years) and adolescents (ages 12-17 years);
• The types of measured and unmeasured media techniques used to market food products
to children and adolescents;
• The amount spent to communicate marketing messages about food products to children and adolescents;
• The nature of the marketing activities used to market food products to children and adolescents;
• Marketing to children and adolescents of a specific gender, race, ethnicity, or income level; and
• Marketing policies, initiatives, or research in effect or undertaken relating to the marketing of food and beverage products to children and adolescents.
By procuring this information, the FTC will be able to evaluate the impact of self-regulatory efforts on the nutritional profiles of foods marketed to children and adolescents. In addition, the FTC seeks to determine and analyze how companies allocate their promotional activities and expenditures among various media and for different food products. Interested parties may submit comments on or before June 24, 2010.
This FTC action is a follow-up to its July 2008 report entitled, Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities, and Self-Regulation. That report represented the findings of a 2006 FTC study of promotional activities related to food and food products targeted toward children and adolescents. It found that, while room for improvement existed, the food and beverage industries had made significant progress on this front since the FTC and the Department of Health and Human Services co-sponsored a Workshop on Marketing, Self-Regulation & Childhood Obesity in 2005. As everyone from the First Lady to the World Health Organization is focused on the impact of marketing on childhood obesity, the results of this FTC action will bear monitoring.
Our colleague Mike Mangelson and a team of Stoel Rives lawyers spanning numerous practice specialties have recently launched the Essential Nutrition Law Blog. Stoel Rives attorneys work closely with companies engaged in the research, development, production, and sale of dietary and nutritional supplements, energy and nutrition beverages, herbal supplements and functional foods, and the Essential Nutrition Law Blog will be an excellent resource for interested parties to look to for the most recent legal developments in the field. We at the Food Liability Law Blog are happy to add another member to our blogroll, and are looking forward to learning from and working with our colleagues at the Essential Nutrition Law Blog to deliver timely and consequential reports on the hot topics in our fields.