Defeating a Consumer Fraud Putative Class Case Early

Last week at the DRI products liability conference in New Orleans, Lara White from Adams and Reese and I presented "Regulatory Compliance Alone Is Not Enough: Understanding and Mitigating Consumer Fraud Claims." Our presentation dealt with putative class claims aimed at the marketing and labeling of food products. A link to the slide-deck can be found here. A link to the paper we submitted at the conference can be found here.

In our presentation we discussed the kinds of consumer fraud claims that have been litigated recently against the food industry and what can be expected going forward.

We also discussed effective strategies for defeating putative class claims at the earliest possible stage. While some preemption arguments in a limited number of cases may still be viable, lawyers and clients should be aware that preemption defenses are eroding. Even when a preemption argument appears to be on ”all fours” it may be worth focusing instead on a challenge to the plausibility of the pleadings.

The U.S. Supreme Court in its Iqbal and Twombly decisions said that a court must disregard conclusory allegations and scrutinize the complaint’s factual allegations to determine whether it nudges the alleged wrong-doing “across the line from conceivable to plausible.” In other words, the complaint must have meat on its bones. In the case of a consumer fraud class complaint, the plaintiffs’ counsel, to survive a motion to dismiss, must include references to evidence or other substantiation for the claim such as consumer surveys or perhaps a government finding. Bare allegations of consumer behavior, nutrition, or damages may be subject to challenge in a Rule 12 motion to dismiss.

Prop 65 Targets Cooked Food, Coffee and Vitamin Supplements

This blog entry was originally written by Lee Smith from the California Environmental Law Blog.

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.

FDA Seeks Public Comment Regarding FOP Labeling

This post also appears on the Essential Nutrition Law Blog.

In an April 28 release, the Food and Drug Administration (the “FDA”) asked for comments and information from the public and other interested parties about front-of-pack (“FOP”) nutrition labeling and shelf tags in retail stores. The FOP is the part of the package label that is most likely to be examined under customary conditions of display for retail sale.

According to the FDA release, the FOP nutrition labeling effort aims to “maximize the number of consumers who readily notice, understand, and use point-of-purchase information to make nutritious choices for themselves and their families.” Specifically, the agency is seeking to learn more about:

•    the extent to which consumers notice, use, and understand nutrition symbols on FOP labeling of food packages or on shelf tags in retail stores

•    research that assesses and compares the effectiveness of particular approaches to FOP labeling

•    graphic design, marketing, and advertising data and information that can help develop better point-of-purchase nutrition information

•    how point-of-purchase information may affect decisions by food manufacturers to reformulate products

The FDA is accepting comments on this issue until July 28, 2010. Further information is available in a notice from the FDA and the Department of Health and Human Services announcing the establishment of a docket to obtain the data and other information that will be utilized in the FDA’s deliberations.

These recent developments did not appear out of thin air. As noted by our colleagues at the FDA Law Blog, in a March 3 letter to industry, the FDA said it is working to devise a front-of-pack labeling system that consumers can understand and use. In the meantime, the FDA announced plans to issue new draft guidance relating to front-of-pack calorie and nutrient labeling. The agency is also planning to issue draft guidance that would recommend nutritional criteria for foods that make “dietary guidance” statements (such as “Eat 2 cups of fruit a day for good health”) in their labeling. Dating back even further, in an October 2009 letter to the industry, the FDA said it was working on developing a regulation that would define the nutritional criteria that would have to be met by manufacturers making broad FOP or shelf label claims concerning the nutritional quality of a food.

Dr. Hamburg also noted that the FDA is in the process of notifying numerous manufacturers that their current labels are in violation of the law and subject to proceedings that will remove their misbranded products from the marketplace. Thus it appears the FDA is willing to back up this position with action. Given the increasing number of headlines such as this one regarding the ability of the armed forces to find able-bodied servicemen and women, the issue of how manufacturers communicate to consumers with respect to nutritional content is likely to be a subject of FDA scrutiny for the foreseeable future.

Consumer Fraud Claims: Examples of Good and Bad Motion Practices

The Good: Tropicana recently brought a motion to dismiss the Zupnik putative consumer fraud class claims pending against it. Zupnik alleges that Tropicana misled consumers in the promotion of its “Pure 100% Juice Pomegranate Blueberry Flavored Blend of 5 Juices from Concentrate with other Natural Flavors” because its front label did not include pictures of fruits other than pomegranates and blueberries.

Tropicana’s motion, brought under both FRCP 9(b) and 12(b)(6), appears as a good example of how putative consumer class claims can be challenged at the outset of the case. Though we don’t yet know whether Tropicana will be successful, its pleading is a sharp attack on the plaintiff’s complaint and takes advantage of the heightened pleading requirements announced recently by the Supreme Court.

Tropicana moved on the basis that the complaint lacks particularity required under Rule 9(b) (the rule requires pleading of the “particularity of the fraud”). It also challenged whether the plaintiff had any injury in fact or alleged any reliance on particular advertising. Finally, Tropicana argued that Zupnik’s claims were expressly preempted by federal law.

Tropicana cites to Twombly to urge the court to disregard “plaintiffs legal conclusions . . . even when made, as here, in the guise of factual allegations.”

Tropicana also attacks Zupnik’s complaint on the basis that “she got what she paid for.” Tropicana points out that its product sold for far less than juice with a higher level of pomegranate or blueberry juices. Because she got what she paid for (presumably regardless of whether she understood it at the time of purchase), she lacks standing to bring a claim for consumer fraud.

The Bad: Coincidently, in another case involving a putative consumer fraud class claim over depictions of fruits on a label, Judge Gorton of the United States District Court for the District of Massachusetts in Wiley v. Gerber Products Company granted Gerber’s motion to transfer to the Southern District of California for consolidation with the Williams case pending in California. (The Williams case was previously discussed in this blog.)

The lesson from Wiley v Gerber: if your strategy is to avoid transfer of venue, think about this when pleading. For example, do not include allegations in the complaint about a nationwide class and the application of different states’ consumer protection laws.

Wiley argued against transfer, contending that the “Court’s familiarity with Massachusetts law, under which several claims are brought weights against transfer.” The problem is that “in her amended complaint, Wiley added several claims under New Jersey state law which only undermines her contention that this Court is especially competent to adjudicate the state laws at issue in this dispute.” Wiley also alleged a nationwide class. The court found that the plaintiff’s choice of forum mattered little when she alleged a nationwide class.

Hurdles Faced By Plaintiffs In Class Action Lawsuit for Sale and Marketing of Cold and Flu Medications Containing Vitamin C

By Guest Blogger Tyler Anderson

On November 2, we blogged about the FDA warning letter issued to Procter and Gamble for its unlawful marketing of Vicks cold and flu medications containing Vitamin C. On November 4, 2009, a putative class action lawsuit was filed against Procter and Gamble in the U.S. District Court for the Southern District of Ohio (Sixth Circuit) alleging Procter and Gamble violated federal and state consumer protection laws through false and misleading advertising practices regarding the two Vicks products mentioned in the FDA warning letter.

Regardless of the merits of their case, the plaintiffs in this action may have a hard time obtaining their desired relief. In Count 1 of the complaint, the plaintiffs allege Proctor and Gamble violated the consumer protection laws of 43 separate states. The Seventh Circuit’s holding in its Bridgestone/Firestone decision (J. Easterbrook) and its progeny, suggests that under FRCP 23(b)(3), such a class action is unmanageable. Courts point to the impracticability of one court applying the divergent laws of differing jurisdictions in circumstances such as those at bar.

“Plausibility” pleading standards (see recent discussion of Wright v. General Mills) present additional hurdles. Applying Twombly as the court did in the Wright case, to survive a motion to dismiss the plaintiffs would need to make plausible, non-conclusory allegations that the plaintiffs purchased the Vicks products because they contained Vitamin C and the cost of the product with the Vitamin C was greater than it would have been without. No such allegations exist here, so applying the holdings of Twombly and Wright to this claim indicates that it may be subject to dismissal.

“Reliance” may be yet another avenue to dismiss the action (at least in part). Many state consumer fraud statutes require reliance. This means that the plaintiffs would be required to show that each plaintiff in the action bought the product in reliance on the purported fraudulent statement. Because purchasing decisions are individual decisions, proving reliance on a class-wide basis would be an individual inquiry that would predominate over issues of fact common to the class, which would negate class treatment.

The Table Is Set For Class Action Litigation Over the Use of Smart Choices Labeling

By Guest Blogger Troy Hutchinson

In response to recent consumer complaints and state attorney general investigations that the use of the Smart Choices label is misleading and deceptive, food companies now face the threat of consumer class action litigation under state fraud and deceptive practices statutes.

Adding to the uproar, the Food and Drug Administration (FDA) announced that it will consider using its regulatory tools if front of pack nutrition labeling is not used in a common, credible way, it said in a letter to industry on October 20, 2009.

In a conference call with journalists, Margaret Hamburg of the FDA said that the FDA wants to work with industry, but that over time it “will take enforcement action for egregious examples.” Hamburg did not pinpoint specific products, but mentioned claims of “zero trans fats” on the front of packaging for products that have high levels of saturated fat, and said: “There are products that have got the Smart Choices check mark that are almost 50 percent sugar.”

At least one member of Congress has also weighed in on the issue. U.S. Rep. Rosa DeLauro announced that she is “very encouraged by FDA’s commitment to proceed with enforcement actions” against unauthorized claims. She went on to state that “[c]learly something is wrong when foods such as Froot Loops cereal, Cookie Crisp cereal, and Uncle Ben’s Instant Rice are designated as ‘healthy’ by these labeling systems.”

Responding to the FDA’s letter, president of the Grocery Manufacturers Association Pamela Bailey said in a statement that the organization is looking forward to working with the FDA “to determine what nutrition information is most useful in providing consumers with the tools they need to help them build a healthful diet.”

While companies who are using the Smart Choices program to promote legitimately healthy options should encourage FDA enforcement, that enforcement brings with it the risk of class action litigation. Whenever there are attorney general investigations or other regulatory enforcement action taken, class action litigation often follows. Food companies using the Smart Choices labeling should be strategizing on how best to defend these actions. Some private litigation may be preempted if the FDA has used its rule making authority. Where companies are legitimately using the Smart Choices label to promote healthier food options, those companies should encourage the FDA to use its rule making function to give clear rules on how companies can use the Smart Choices label.

Preemption v. Plausibility: Will There Be More or Fewer Successful Consumer Fraud Suits?

Products Liability Law360 ran a piece this week entitled “Suits Over Deceptive Food Marketing Likely To Increase” (unfortunately, this is a subscription-only site) authored by Liz McKenzie. The article discusses rightly how increased FDA enforcement action may lead plaintiffs attorneys to file “piggy-back” putative class actions. For example, it took just 13 days following the FDA’s warning letter to General Mills concerning Cheerios for the first putative class suit to be filed.

Compounding increased FDA enforcement,  recent rulings from the Supreme Court and the Third Circuit, like the Snapple Decision, have made it more difficult to assert a preemption defense in food cases in the absence of formal FDA rulemaking. 

But, what one hand giveth the other taketh away. The hope for food companies is that that the Supreme Court’s recent decisions in Twombly and Iqbal will negate the preemption decisions and effectively heighten the bar for consumer fraud claims related to product marketing. Dismissal for failure to meet the new “plausibility” pleading standard and not preemption is exactly how the District Court ruled in Wright v. General Mills. Wright involved a putative class complaint involving Nature’s Valley products sold as “100% Natural” “even though the products contained one or more non-natural or artificial ingredients such as high-fructose corn syrup (’HFCS’).”

In Wright, the court found defective, under the Iqbal/Twombly “plausibility” standard, the plaintiffs’ injury-in-fact allegation. The Wright court ruled that the injury-in-fact allegation “conclusory,” “sparse” and “defective.” The plaintiff alleged only that “Defendant caused Plaintiff and other members of the Class to purchase, purchase more of, or pay more for, these Nature Valley products.”

Following the Supreme Court's new standard of notice pleading and its application in the Wright case, query how any putative consumer fraud class complaint can survive a Rule 12 motion without having first completed market surveys or gathering of other evidence of consumer injury.

Lecture at the University of Minnesota

Off to Minneapolis this week for a lecture at the University of Minnesota’s Department of Food Science. I’ll be talking to professor Francisco Diez’s Food: Safety, Risks and Technology class. My lecture is titled “Consumers vs. Food Companies: Intersection of the Court System and Food Science.”

I plan a wide-ranging talk that touches on:

  1. The relationship and interaction between the tort system and food regulation;
  2. Basic principles of products liability law as it affects food;
  3. Three different types of food products claimants and how we respond to each;
  4. Why consumer claims matter to food companies;
  5. The importance of investigating agencies in determining the outcome of claims;
  6. The relationship between food-borne illness, home food preparation, organic food and locavores; and
  7. How lawyers use expert witnesses.

I’ll post the slides after the lecture.

Sodium Putative Class Action Suits to Become Epidemic?

Following the putative class suit filed last month in New Jersey by the Center for Science in the Public Interest (CSPI) against Denny’s, a similar suit was filed in Illinois (apparently CSPI is not directly involved in this action). The Illinois complaint can be found here.

Like the New Jersey complaint, the Illinois action alleges claims of consumer fraud and breach of implied warranty of merchantability. Previous posts on this site have explained why both consumer fraud and implied warranty of merchantability claims should fail on their face.

The Illinois action adds claims for unjust enrichment, accounting and ”breach of contract implied in fact.” Claims for unjust enrichment and accounting seem intertwined and not all that different from consumer fraud and breach of implied warranty claims.

Breach of contract implied in fact is more creative. Instead of directly attacking Denny's representations (which as discussed in previous posts are not really alleged to be inaccurate), this claim asserts something that looks more like a products liability claim. The claim turns not so much on “fraud” but on whether the meals sold “contained excessive amounts of sodium, such that it was not fit for human consumption.” This cause of action alleges that the “bargained for” contract between class members and Denny’s required Denny’s to provide “a meal fit for human consumption.”

While creative, the breach of contract implied in fact claim may be more problematic than the fraud and implied warranty of merchantability claims. First, as discussed previously, Denny’s discloses on its website (and according to CSPI, at its restaurants) sodium content of menu items. Like the fraud claims, proof that plaintiffs could have reasonably bargained for something different seems problematic.

Second, plaintiffs are asking the court to use its equitable powers and step into the shoes of local, state and federal health departments and regulatory agencies to pass on appropriate sodium levels in restaurant food. As a rule, courts use their equitable powers only in extraordinary circumstances (e.g., a building falls down, assets leave the country, an individual’s life or liberties at stake, etc.). If regulators and legislators have not reached consensus on regulating sodium, odds are that most judges will avoid weighing in on the issue.

Despite their problems (and probable lack of merit), best guess is that the plaintiffs' class action bar will continue copy-catting these suits across the country.  Doubtful that Denny's will be the only victim.

Facts Alleged in CSPI Sodium Suit Incongruent with Claims Asserted

Thought to be the first putative class action against a restaurant chain related to disclosure of sodium content on menus, Center for Science in the Public Interest (CSPI) has filed what appears to be a test case against Denny’s. Best guess is the case will fail on its merits (though for CSPI, success in litigation may not be the point).

The case, DeBenedetto v. Denny’s Corporation, asserts claims under New Jersey law for consumer fraud, N.J.S.A. 56:8-1, et seq., and breach of the implied warranty of merchantability under the New Jersey U.C.C., N.J.S.A. 12A:2-314(1)-(2). The theory advanced in CSPI’s complaint is that consumers have been “duped” about sodium content and that the “ordinary consumer, unschooled in nutrition and perhaps preoccupied with other matters, would not reasonably expect to encounter these high levels of sodium in one meal.”

Big incongruency in the complaint is that Denny’s does disclose sodium content in its meals. CSPI admits that Denny’s provides this information both online and in store pamphlets, but it complains that the information is “incomprehensible.” A review of Denny’s online disclosures shows a detailed nutritional chart, including sodium levels for every item on its menu. Here's an excerpt of Denny's online disclosures:

But, CSPI's complaint does not really seem to be that disclosures are not clear enough. Indeed,  CSPI argues that regardless of such disclosures by restaurants, studies show that “almost no one reads the nutrition information . . . .”

What CSPI is really saying is that sellers of salty foods (not unlike foods contaminated with E. coli) are strictly liable no matter the disclosures.  If this were the law (which as of now, it is not), few restaurants (or food manufacturers) would be exempt from paying the medical bills of their customers who develop heart disease. No doubt CSPI's real goal is "regulation through litigation" and the jury is still out whether CSPI's penchant for the court system will affect change.

Snapple Decision - FDA's Policy Concerning Use of "Natural" Not Entitled to Preemptive Effect

High Fructose Corn Syrup Labeling: Opening the Floodgates For Consumer HFCS Claims?

The Third Circuit ruled this week in Holk v. Snapple Beverage Corp., reversing the district court and reinstating the state law putative class claims for consumer fraud and breach of warranty for use of the term “all natural” despite the inclusion of high fructose corn syrup (HFCS) (though the court noted that the manufacturer no longer uses HFCS in its products).

The case is significant and is getting attention because the Third Circuit concluded that “FDA’s policy statement regarding the term ‘natural’ is not entitled to preemptive effect.” The court was persuaded because “the FDA declined to adopt a formal definition of the term ‘natural’ choosing instead to simply enforce its long standing ‘informal policy’”:

[T]he agency has considered “natural” to mean that nothing artificial or synthetic (including colors regardless of source) is included in, or has been added to, the product that would not normally be expected to be there. For example, the addition of beet juice to lemonade to make it pink would preclude the product being called “natural.”

As expected, the court followed its previous ruling in Fellner v. Tri-Union Seafood, LLC (our blog entry about it is here), ruling that neither the FDA’s “informal policy” nor their enforcement letters were entitled to any preemptive weight.

Practice Tip: For the next HFCS case, preemption may not be a dead issue. The Third Circuit did not rule (though it expressed its skepticism) on the “express preemption” argument based on 21 U.S.C. § 343-1(a)(3). The court ducked the issue by concluding that Snapple waived the argument by not “advancing it” in the district court.

Tort Damages Not the Only Exposure from Food-Borne Illness Outbreaks

For lawyers and insurance adjustors, compartmentalizing food-borne illness claims is easy. They often see their jobs solely as minimizing the tort liability and legal fees. In my experience, attorneys and adjustors often fail to appreciate how outbreaks can affect a client’s (or even a whole industry’s) business going forward. Often, the long-term business losses of a food-borne illness outbreak, recall, or government alert are not insured.

There is no better example of how a nationally reported food-borne illness outbreak can affect an entire industry (or even an entire category of food products) than the 2006 E. coli spinach outbreak. Two new studies published by the Agriculture & Applied Economics Association (AAEA) in its Choices magazine analyze consumer information and studies in the wake of the spinach outbreak. 

Among the highlights from the first study, “Public Response to Large-Scale Produce Contamination” by Carra Cuite and William K. Hallman, were findings that Americans were more aware of advisories beginning than ending. For example, 87% of spinach consumers knew about the outbreak, but more than six weeks after the FDA had lifted its spinach warnings “almost half (45%) of people who were aware of the spinach recall were not confident that the recall had ended.”

A second study entitled “E. coli Outbreaks Affect Demand for Salad Vegetables” was authored by Faysal Fahs, Ron C. Mittelhammer, and Jill J. McCluskey. It examines the cumulative effects that sequential outbreaks can have on consumer demand and concludes that “the empirical results suggest that the subsequent outbreaks had a greater impact on the consumption of salad vegetables than the first.”

For food companies the lesson is this:

A lawyer’s role in responding to a food product crisis is important. But the roles of others, such as public relations experts, may be as important or more important in preserving the business. Make sure your lawyer (and your insurer) understands that the world may not revolve around simply resolving the tort claims as economically as possible.

HFCS Labeling Case: Opening The Floodgates For New Consumer Claims?

The Third Circuit may be close to opening the floodgates of claims against food and beverage manufacturers who use high-fructose corn syrup (“HFCS”) in products labeled “all natural.” Shannon Duffy at the Legal Intelligencer reported recently on a “lively hour-long” oral argument in the Third Circuit about reversing a District Court’s dismissal of state consumer claims against Snapple for use of HFSC.

The District Court dismissed the consumer claims in 2007 on the basis of field preemption. The dismissal predated the Third Circuit’s decision in Fellner v. Tri-Union Seafood, LLC. See our previous blog on the Fellner case. Despite the FDA’s position in Fellner that a state law failure-to-warn claim is preempted by federal law, the Third Circuit ruled to the contrary.

In Fellner, a claim by a person who suffered from mercury poisoning after eating canned tuna literally for breakfast, lunch and dinner for five years may have been an outlier. But reversal of the District Court’s decision in the Snapple case will open the floodgates to consumer class action claims against a whole slew of food sellers and manufacturers.

Captain Crunch Suit Dismissed: Court Finds No "Actual Fruit Referred to as Crunchberry"

Yes, someone has actually filed a putative class action on the basis that she was “mislead by the packaging and marketing, which she argues convey the message that the Product contains real, nutritious fruit.” U.S. District Judge England in the Eastern District of California dismissed the complaint captioned as Sugawara v. Pepsico, Inc.

Though Sugawara seems purely frivolous, the claim follows predictably from the Ninth Circuit’s decision in Williams v. Gerber discussed previously on this blog. In Williams, the Ninth Circuit reinstated a putative class action that alleged labeling on “fruit juice snacks” (1) constituted misrepresentation and breach of warranty under California common law and (2) violated California’s statutes on unfair competition and consumer law. The district court had granted a motion to dismiss under Rule 12(b)(6), finding that statements on the label “were not likely to deceive a reasonable consumer, particularly given that the ingredient list was printed on the side of the box.”

Judge England distinguished Sugawara from Williams, writing that

while the challenged packaging contains the word “berries” it does so only in
conjunction with the descriptive term “crunch.” This Court is not aware of, nor has Plaintiff alleged the existence of, any actual fruit referred to as a “crunchberry.” Furthermore, the “Crunchberries” depicted on the PDP are round, crunchy, brightly- colored cereal balls, and the PDP clearly states both that the Product contains “sweetened corn & oat cereal” and that the cereal is “enlarged to show texture.” Thus, a reasonable consumer would not be deceived into believing that the Product in the instant case contained a fruit that does not exist.

Even lawsuits as unmerited as alleging that consumers believe Crunchberries grow on trees are expensive to deal with. As we said following the Williams decision, the sad state of affairs is that the only way manufacturers can mitigate against these types of putative class actions is to directly involve lawyers in the marketing and labeling process.

Sustainability and Consumer Confidence in Food Safety

For food sellers interested in promoting a “sustainable” brand and inspiring food safety confidence in their consumers, meet Food Alliance. Food Alliance “is a nonprofit organization that certifies farms, ranches and food handlers for sustainable agricultural and facility management practices.” It bills itself as “the most comprehensive certification program for sustainably produced food in North America.”

I’ve recently joined the Food Alliance Board of Directors (in fact, I’m headed to Portland today for a board meeting). My hope is to assist Food Alliance in becoming more widely accepted and mainstream. Credible third-party certification, such as Food Alliance provides, offers a transparent pathway to sustainability of our food supply and consumer confidence in food safety.

Food Alliance takes a holistic approach that is broader and more dynamic than organic certification, which does nothing to address food contamination from pathogens such as Salmonella, E. coli, and Listeria (in fact, many experts believe that organically grown food may be more likely to be contaminated by these pathogens). By way of example, Food Alliance certification standards, among other things, address “soil and water quality,” “ensure the health and humane treatment of animals,” “conserve energy and water,” and “ensure quality control and food handling safety.”

For more on why a holistic, independent third-party certification correlates with food safety (and accompanying consumer confidence), I’d suggest reading this op-ed piece co-authored by Food Alliance Executive Director Scott Exo, which was written earlier this year in the wake of the PCA peanut recall.

More on Reducing the Risk of Failure - Focus on Shifting Liability For Consumer Claims

Food Safety Magazine ran an interesting piece by Aaron Krauss titled “Reducing the Risk of Failure.”  The article was part of the magazine’s focus on limiting liability for food companies.  Mr. Krauss includes a good discussion of the pros and cons of indemnities and disclaimers of warranty and liability as ways to shift or reduce liability for claims within the supply chain.  Yet, the article does not discuss how to shift liability for claims from outside the supply chain, i.e., consumer claims.

For example, Mr. Krauss advocates that if members of the supply chain limited liability between themselves to the purchase price of the product, this might reduce or eliminate litigation.  Mr. Krauss points out that “if everyone in the ‘peanut butter food chain’ had limited their liability, a store might not bother suing, since it could only recover its purchase price.”

Limitation of liability clauses, while effective to reduce exposure between members of the supply chain, will have no limiting effect on consumer claims.  Unless a food seller can invoke a “passive retailer” defense,  each member of the supply chain will be strictly liable for injuries to consumers caused by the food product.

The only ways for a food seller to shift consumer liability is through either supplier indemnity or insurance.  Mr. Krauss is correct that indemnities by suppliers may be hard to secure and harder to enforce. And, claims defended by the seller’s own carrier will invariably result in higher premiums.

Because insureds will generally be penalized through premiums for invoking their own insurance, the best insurance is somebody else’s insurance.  Even a food seller that might not have the leverage with its supplier to receive indemnification may be able to secure “additional insurance.”  Naming a vendor as an additional insured frequently costs the supplier nothing in added premiums.  If seller specifies that this insurance is to be “primary and noncontributory,” the supplier’s insurance may be the first line of defense for claims involving the supplier’s products. 

If a supplier will provide additional insurance, follow-through is essential. The seller needs to (1) verify that the supplier has, in fact, named the seller as an additional insured and (2) review the operative language of the additional insured endorsement and/or policy language to ensure that it does not include unacceptable conditions or exclusions.

 

Court Rules That Retailers Have No Duty to Investigate Suppliers Compliance with Organic Regulations

An important ruling was issued last week dismissing claims that milk produced by an organically certified dairy and labeled as organic was not really organic. Plaintiffs in the action asserted violations of various states’ laws because they claimed that they paid more for the milk because it was labeled as "organic.”

A federal judge in the Eastern District of Missouri granted a Rule 12(b)(6) motion to dismiss on a multitude of cases pending against the dairy, various retailers selling the dairy products and others (originally these suits were filed in various federal courts around the country but were consolidated for pretrial purposes by the United States Judicial Panel on Multi-District Litigation or MDL).

The judge ruled that claims against the dairy were preempted because a “conflict exists between federal and state law” (otherwise known as “conflict preemption”). As explained in the opinion, conflict preemption exists where “a party’s compliance with both federal and state law would be impossible or where state law would pose an obstacle to the accomplishment of congressional objectives.” Here, the court found that for “plaintiff’s claims to succeed, the Court would have to invalidate the regulatory scheme established under the OFPA [Organic Foods Production Act] and NOP [National Organic Program].” The court concluded that if plaintiffs were to prevail “producers would be liable even where fully certified and authorized to use these terms and seals.”

For the retailer defendants, the judge ruled that because plaintiffs’ claims against the dairy are preempted, “the retailer Defendants cannot be liable.” But the court went further and dealt explicitly with the plaintiffs’ claims that the retailers “should have investigated” the dairy’s activities to ensure compliance with the OFPA and NOP. The court rejected these arguments:

The Retailer Defendants did not have any duty to inspect [the dairy’s] facilities, or the facilities of any of their other organic producers. Imposing such a requirement “would place an undue burden on the distributor who is least likely to have access to such information.”

This should be good news for organic retailers. Hopefully, this decision will reduce their legal exposure to consumer labeling claims going forward.

Food Safety Legislation Proposed by House - User Fees and Traceability Are Among Highlights

Last week, members of the U.S. House of Representatives Committee on Energy and Commerce released a discussion draft of the “Food Safety Enhancement Act of 2009.”
 

The draft proposes beefing up the FDA registry of “all food facilities serving American consumers” and charging every facility $1,000 per year to fund FDA food safety activities. The new legislation would expand the types of facilities that need to register by eliminating certain exemptions from the 2002 Bioterrorism Act, though for now it appears to maintain exemptions for retailers, restaurants, farmers and nonprofits.
 

The proposal’s most ambitious and controversial proposal may be traceability.

The draft legislation proposes to require FDA to “by regulation establish a tracing system for food that is located in the United States or is for import into the United States.” The legislation gives the FDA few specifics other than to “maintain the full pedigree of the origin and previous distribution history of food,” “link that history with subsequent history,” “establish and maintain a system for tracing food that is interoperable with the systems established and maintained by other such persons” and “use a unique identifier for each facility.” No doubt the devil will be in the details.

Verbatim, here is the Summary of Discussion Draft of The Food Safety Enhancement Act of 2009:

1. Creates an up-to-date registry of all food facilities serving American consumers: Requires all facilities operating within the U.S. or importing food to the U.S. to register with the FDA annually.

2. Generates resources to support FDA oversight of food safety: Requires registered facilities to pay an annual registration fee of $1,000 in order to generate revenue for food safety activities at the FDA; requires registered facilities to pay for FDA’s costs associated with reinspections and food recalls; allows FDA to charge a fee to domestic firms requesting export certificates for exported food.

3. Prevents food safety problems before they occur: Requires all facilities operating within the U.S. or importing food to the U.S. to implement safety plans that identify and protect against food hazards. FDA would have the authority to specify minimum food safety plan requirements and to audit food safety plans.

4. Requires safety plans for fresh produce: Directs FDA to issue regulations for ensuring the safe production and harvesting of fruits and vegetables.

5. Increases inspections of food facilities: Sets a minimum inspection frequency for all registered facilities. High-risk facilities would be inspected at least once every six to 18 months; low risk facilities would be inspected at least once every 18 months to three years; and warehouses that store food would be inspected at least once every three to four years. Refusing, impeding, or delaying an inspection is prohibited.

6. Improves traceability of food: Enhances FDA’s ability to trace the origin of tainted food in the event of an outbreak of foodborne illness. FDA would be required to issue regulations that require food producers, manufacturers, processors, transporters, or holders to maintain the full pedigree of the origin and previous distribution history of the food and to link that history with the subsequent distribution history of the food; and to establish an interoperable record to ensure fast and efficient traceback (current law permits facilities to hold a record in any format — paper or electronic — making efficient tracing of foods difficult for FDA). Prior to issuing such regulations, FDA would be required to conduct a feasibility study, public meetings, and a pilot project.

7. Enhances the safety of imported food: As an additional layer of protection, FDA can require food to be certified as meeting all U.S. food safety requirements by the government of the country from which the article originated or by certain qualified third parties. Third party certifying entities must meet strict requirements to protect against conflicts of interest with the firm seeking certification.

8. Expands laboratory testing capacity: Requires FDA to establish a program to recognize laboratory accreditation bodies and to accept test results only from duly accredited laboratories. Gives FDA the ability to require laboratories to send test results to FDA.

9. Provides strong, flexible enforcement tools: Provides FDA new authority to issue mandatory recalls of tainted foods. Strengthens criminal penalties and establishes civil monetary penalties that FDA may impose on food facilities that fail to comply with safety requirements.

10. Creates fast-track import process for food meeting security standards: Permits FDA to develop voluntary security guidelines for imported foods. Importers meeting the guidelines would receive expedited processing.

11. Enhances the safety of infant formula: Enhances FDA’s ability to assure the safety of new infant formulas before they go on the market.

12. Advances the science of food safety: Directs the Secretary to include food in an active surveillance system to assess more accurately the frequency and sources of human illness. The Secretary is also directed to identify industry and regulatory approaches to minimize hazards in the food supply.

13. Enhances FDA’s ability to block unsafe food from entering the food supply: Strengthens FDA’s authority to administratively detain unsafe food products. Grants FDA “quarantine” authority under which the agency may restrict or prohibit the movement of unsafe food products from a particular geographic area.

14. Directs FDA to assess the use of carbon monoxide in certain foods: Requires FDA to conduct a safety review of the use of carbon monoxide in meat, poultry, and seafood products.

15. Enhances transparency of GRAS program: Requires posting on FDA’s website of documentation submitted to FDA in support of a “generally recognized as safe” (GRAS) notification.

16. Requires country-of-origin labeling and disclosure: Requires all processed food labels to indicate the country in which final processing occurred. Requires food manufacturers to identify the country of origin for all ingredients on their websites. Requires country-of-origin labeling for all produce.

General Provisions

1. Creates an up-to-date registry of importers: Requires all importers of drugs, devices, and foods to register with the FDA annually and to pay a registration fee.

2. Requires unique identification numbers for facilities and importers: To enhance information about FDA-regulated entities, creates unique identification numbers for all drug, device, and food facilities and importers.

3. Creates a dedicated foreign inspectorate: Requires FDA to establish and maintain a corps of inspectors to monitor foreign facilities producing food, drugs, devices, and cosmetics for American consumers.

4. Grants FDA new authority to subpoena records related to possible violations.

5. Provides protection for whistleblowers that bring attention to important safety information: Prohibits entities regulated by the FDA from discriminating against an employee in retaliation for assisting in any investigation regarding any conduct which the employee reasonably believes constitutes a violation of federal law.

Tracking the Food Safety Working Group - More or Less Legal Exposure For Food Sellers?

This week the Obama administration announced the launch of a new website for the recently formed food safety working group. Obama announced the formation of this group in March in the wake of the high-profile food safety issues surrounding PCA peanut products

This website will assist in tracking the efforts of the working group. As discussed previously on this blog, this group is expected to make recommendations aimed at detection, awareness and government reorganization. Possible examples include increasing funding to states to monitor food-borne illness, combining FDA and USDA food safety efforts, reexamining mandatory recall authority, increasing retail enforcement and implementing more aggressive consumer warnings.

What is not clear is whether the working group will look beyond just detection, awareness and reorganization to bolder initiatives that may result in less consumer illness and less legal exposure for food sellers. Bolder initiatives could include funding for irradiation, consumer food safety education, and fast-track development and implementation of technology that can sample food products for whole colonies of microorganisms

 

Defending Liability in Foodborne Illness Outbreaks

I’m asked frequently about the “anatomy of litigation.” I plan to write more in this space on the topic. For now, some may find useful the slides from a presentation I gave recently on “Defending Liability in Foodborne Illness Outbreaks.” I discussed what I see as three prototypes of consumer claims and possible strategies to respond to each.

Are Organic Foods Safer? Will Consumers Continue to Favor Organics?

Nobody disputes that consumers have a favorable view of organic certification in foods. Consumers generally believe that organic foods are healthier, and many believe they taste better. Yet, among food scientists, uncertainty prevails as to whether organics are safer, especially raw fruits and vegetables.

Absence of synthetic fertilizers is a primary distinction between organic and non-organic foods. And, from a safety standpoint, the absence of pesticides is the only provable claim that organic foods are healthier. But does the absence of one hazard imply the existence of another?

The prevailing pesticide substitute for organic foods is manure or composted manure. Dangerous pathogens such as E. coli O157 reside in manure. Some guidelines exist for composting manure. Unfortunately, as I learned recently in a presentation by Dr. Francisco Diez-Gonzalez at the University of Minnesota Food Science Department, these guidelines were written a decade ago, before science began to understand the prevalence of E. coli in the environment.

Science now understands that E. coli O157, for example, can persist for years in soil, let alone a more rich environment like manure. In some cases, it may be virtually impossible to rid of an environment of E. coli O157, short of treatment with non-organic substances such as tear gas or asphalt.

Outside of the 2006 spinach outbreak, there have been few food-borne illness outbreaks associated with organic fruits or vegetables. As organic farming continues to grow and detection of food-borne illness increases, the only question is how long it will be until another well-publicized outbreak. When it happens, will consumers continue to believe organic foods are safer? Will the industry be ready with evidence that proves the benefits of organic farming outweigh its risks?

Alaska Unfair Trade Practices and Consumer Protection Statute

As discussed previously on this blog, the ABA Section of Litigation, Products Liability Committee will soon publish its 50-state survey on consumer protection statutes. In addition to the chapter on Washington, Bryan Anderson and I also coauthored the Alaska chapter.  

As with Washington, the Alaska statute is quite broad. See AS § 45.50.471-.561. A recent development in Alaska law extends the act to permit claims between commercial entities. See W. Star Trucks v. Big Iron Equip. Serv., Inc., 101 P.3d 1047 (Alaska 2004).  

A unique aspect of Alaska law is that it follows the English Rule awarding attorneys’ fees to the prevailing party. An interesting issue arises in the class context when a defendant “prevails” in a class suit. Who is responsible for paying prevailing party fees under Alaska Civil Rule 82 or AS § 45.50.537? The Alaska Supreme Court has resolved this issue by deciding that “named” class members may be liable for a prevailing defendant’s attorneys’ fees but that “absent” class members who are passive and have “relatively small claims” may not. See Turner v. Alaska Commc’ns Sys. Long Distance, Inc., 78 P.3d 264, 266-70 (Alaska 2003).

Washington Consumer Protection Law

The ABA Section of Litigation, Products Liability Committee will soon publish its 50-state survey on consumer protection statutes. Bryan Anderson and I coauthored the chapter for the state of Washington. As described in our article, Washington’s Consumer Protection Act, RCW 19.86.010, et seq., is quite broad:  

The Act is modeled after federal statutes, primarily the Federal Trade Commission Act, the Sherman Act, and sections of the Clayton Act. The purpose of the CPA is “to protect the public and foster fair and honest competition.” RCW 19.86.910. The CPA is “a carefully drafted attempt to bring within its reaches every person who conducts unfair or deceptive acts or practices in any trade or commerce.” Short v. Demopolis, 691 P.2d 163 (Wash. 1984) (emphasis in original). It is to be “liberally construed that its beneficial purposes may be served.” RCW 19.86.920.

Standing is also quite broad, allowing a party without monetary damages to bring suit:   

The Washington Supreme Court has recognized that the use of the term “injured” in this statutory provision “makes clear that no monetary damages need be proven” to have a cognizable claim under the CPA, and that “nonquantifiable injuries, such as loss of goodwill[,] would suffice. . . .” Nordstrom, Inc. v. Tampourlos, 733 P.2d 208, 211 (Wash. 1987).  

In fact, the Washington Supreme Court held that “a physician whose reputation is injured has standing to sue a drug company which engaged in an unfair or deceptive trade practice by failing to warn the physician of the dangers of its drug about which it had knowledge.” Wash. State Physicians Ins. Exch. & Ass’n v. Fisons Corp., 858 P.2d 1054, 1060 (Wash. 1993).

Another interesting development discussed in the article is that the “Supreme Court of Washington recently invalidated a class-action waiver in an arbitration clause of a contract for cellular telephone service, explaining that ‘without class actions, consumers would have far less ability to vindicate the CPA.’” Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007)

Supreme Court Denies Certiorari on Salmon Labeling Case

UPDATE to previous blog entries about the California salmon labeling case (Albertsons v. Kanter) -

Just yesterday, the U.S. Supreme Court denied certiorari.  The Supreme Court's ruling followed briefing submitted by the Solicitor General (aka Bush Administration). The Bush Administration  argued in support of the California Supreme Court's  opinion that claims under state law for alleged mislabeling of salmon are not preempted by federal law. The ruling of the California Supreme Court denying federal preemption will stand. The case will be sent back to the trial court to proceed as a putative class action.

When Is Labeling Misleading and Actionable Under State Law? Is There Any Clearly Understood Standard?

A recent Ninth Circuit case again raises serious questions as to whether there are any clearly defined legal standards as to when a food label is misleading and when it’s not. Manufacturers who are in compliance with federal standards for labeling may still be liable under state law.

In Williams v. Gerber, the Ninth Circuit, reversing the district court, reinstated a putative class action that alleged labeling on “fruit juice snacks” (1) constituted misrepresentation and breach of warranty under California common law and (2) violated California’s statutes on unfair competition and consumer law. The district court had granted a motion to dismiss under Rule 12(b)(6), finding that statements on the label “were not likely to deceive a reasonable consumer, particularly given that the ingredient list was printed on the side of the box.”

Here’s the label in question:

In particular, the appellate court did not approve that the product, made of white grape juice, featured photographs of a variety of fruit on the label. The court also found misleading the statement that the product was made with “fruit juice and other all natural ingredients.” The product contained in addition to all-natural ingredients some ingredients the Ninth Circuit believed may not be “all natural.” The court believed that the statement, though not untruthful, should have disclosed more information.

Troubling in the court’s decision is that full nutritional and ingredient information was printed in similar size print on the same label. Even the court acknowledged that “reasonable consumers expect that the ingredient list contains more detailed information about the product . . . .” As a practical matter, the only way manufacturers can mitigate against these types of putative class actions is to involve lawyers directly in the marketing and labeling process. Under the world imagined in the Williams case, legal training seems to be a prerequisite to understanding which labels may give rise to litigation and which may not.

Practical Advice for Litigating the Food Case

Click here for the slides from a presentation I gave recently with Shawn Stevens entitled "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).

Court to Rule on Consumers' Expectations For Organic Cosmetics

Dr. Bronner’s Magic Soaps (“Dr. Bronner’s”) received a favorable ruling recently in its suit against competitors that it believes are misleading consumers by labeling cosmetic products as “Organic”. Part of Dr. Bronner’s claim appears to be that “Organic” standards established by the U.S. Department of Agriculture (“USDA”) set the bar for consumer expectations of "Organic" cosmetic products. The USDA’s National Organic Program (“NOP”) standards, according to the USDA, do not apply to “cosmetics, body care, or personal care products”.  Dr. Bronner’s argues in its complaint that “[p]ersonal care products labeled as in compliance with ‘Organic’ or ‘Made with Organic [up to three specified ingredients]’ under the NOP criteria reflect basic organic consumer expectations . . . .” (Brackets in original.)

Last week, a California Superior Court in San Francisco overruled the demurrer of Ecocert France (SAS) and Ecocert, Inc. A demurrer is essentially a request made to a court, asking it to dismiss a lawsuit on the grounds that no legal claim is asserted.

According to Dr. Bronner’s, the “Court turned aside the defendants’ arguments that Dr. Bronner’s, in its complaint filed with the Court, had not sufficiently spelled out how actual consumers, the company and competition in the organic personal care industry have been hurt by the defendants’ deceptive practices.” The court’s ruling does not necessarily mean that Dr. Bronner’s is likely to succeed, only that it has articulated colorable claims. The court did not rule on the merits of these claims.

This case should be watched closely by those in cosmetics and food industries. Dr. Bronner’s claims turn, at least in part, on its view of “consumer expectations.” Do consumers have expectations as to what “Organic” means? Does it mean something different for cosmetic products? These are just a few of the significant questions that may be addressed in the litigation.

Salmon Labeling Probably Headed to Supreme Court

The U.S. Supreme Court  signaled last week that 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.” Following a petition for certiorari filed in April, the Supreme Court issued an order last week inviting the Solicitor General “to file a brief in this case expressing the views of the United States.”

The Bush administration generally favors federal preemption of state consumer protection laws. Most Supreme Court watchers believe that the Court will grant certiorari if the Solicitor General advocates doing so.  This case, if considered by the Supremes, is sure be significant with wide ranging implications for consumer protection claims concerning food product labeling.
 

Lessons from Toxic Rice and Chinese Dairies - Threats From Bioterrorism and Supplier Fraud

Manufacturer fraud and bioterrorism should be on the radar screen for any food producer. Apart from the meltdown in the U.S. financial markets and presidential politics, the big news this week is toxic rice from Southeast Asia and melamine-tainted dairy products from China. Both crises were caused by intentional contamination of food products by raw-materials suppliers with the apparent motivation to defraud food manufacturers and sellers.

Both (especially melamine-tainted dairy products) are causing a worldwide health scare and crisis in consumer confidence. Consumers outside of China may not be at serious risk, because the melamine-tainted dairy products are not sold as pure dairy products. Outside of China, Chinese dairy products are used only in small quantities as ingredients in products such as candy and coffee. U.S. and European Union consumers are at risk only when consuming unusually large quantities of these “nondairy” products.

Yet the consumer crisis inside and outside of China could have ameliorated dramatically but for failures in crisis management. Even the presumably government-controlled Chinese press understands this: “Crisis management is closely related to the brand and credibility of an enterprise, but many Chinese enterprises have not developed the capability to react properly when a crisis emerges . . . .”

Consistent with Western principles of crisis management, Chinese experts, according to the Chinese press, opine that “one principle of crisis management is to take a responsible attitude immediately and in a sincere manner, which is of great help for enterprises to rebuild their credibility.”

The press in China points to a company named Sanlu and concludes that “Sanlu, the center of the scandal, provided a bad example of crisis management. When it was first exposed, Sanlu refused to take the blame and passed the buck to innocent dairy farmers, which ignited great anger nationwide. . . . Sanlu didn’t openly admit its products were toxic until Sept. 11. It eventually recalled baby formula manufactured on and before Aug. 6. The scandal led to the fall of chairwoman Tian and the disappearance of all dairy products bearing the brand of Sanlu.” 

Dos and Don'ts for Executives Managing a Crisis

As discussed frequently in this blog, management of an outbreak at its inception determines the course of the crisis (and, in some cases, the fate of the company).

The Globe and Mail, in its ongoing coverage of the Maple Leaf Foods Listeria outbreak, today published a helpful punch list of 15 dos and don’ts for corporate executives managing a food-borne outbreak.

The last two items on the list may be the least obvious but are among the most important:

“14. Do make a list of the five questions you would least like to be asked and be prepared to answer them, since somebody will undoubtedly ask them.
“15. Do set up a rumour control hotline or website if rampant speculation could fuel the crisis.”

A hotline for collecting consumer information and complaints can be valuable. It allows the company not only to get control over and manage misinformation (the point being made in the Globe and Mail), but also to gather information about how many people the outbreak affects and who has fallen ill. Even more important, a hotline may enable the company to direct ill people to appropriate medical treatment, minimizing or even eliminating litigation.
 

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):

  • 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.
Again, most crisis management experts recommend frequent dress rehearsal. Simulating a crisis is the best way to train your team and the only way to determine its strengths and weaknesses. Effective crisis management can mean the difference of millions of dollars (lost sales, destroyed product and personal injuries) and consumer confidence (i.e. the future of your company).

More on The Raw Milk Debate - Consumer Choice vs. Consumer Protection

Recently discussed on this site was how the raw milk debate is in many ways ground zero for the debate between consumer protection and consumer choice. The Seattle Post Intelligencer ran an interesting piece today focusing on just that debate.

I found comments attributed in the article to Kansas State professor Doug Powell most salient:
Doug Powell says he's not surprised that government health officials denounce the dangers of raw milk then turn around and license the sale of the same milk.
"In part, it's because of the almost evangelical way people talk about raw milk and that America is founded on consumer choice," said the associate professor of food safety at Kansas State University.
"The numbers of illnesses from outbreaks caused by unpasteurized milk are not that high. You could very easily make the cases that 'Wow, maybe tomatoes should be regulated a whole lot more than we do now because the numbers of cases of salmonella saintpaul are up to 550 now,' " said Powell, who is also scientific director for the International Food Safety Network.
While I'm not sure I agree that "America is founded on consumer choice," professor Powell is surely right that the conflict between consumer choice and consumer protection is bringing raw milk to boil. Professor Powell is also correct that from a public health standpoint, fresh produce presents a greater and more certain danger.

Implicit in the Post-Intelligencer article is that the debate suffers from a lack of consumer information. For example, do we really understand the alleged benefits of raw milk? There is some information on the web but is this peer-reviewed information that consumers can trust? On the flip side, consumers should be given better information than the kind of "scared straight" quality of information currently available. Both those who advocate against raw milk and those who support it can surely agree that both would be served by better research and consumer information.