Food Safety Claims: Products Liability Issues Mastering the Standards - - PowerPoint PPT Presentation

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Food Safety Claims: Products Liability Issues

Mastering the Standards for Fault, Causation, and Damages in Foodborne Illness Litigation

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific THURS DAY, DECEMBER 8, 2011

Today s faculty features:

Lee N. S mith, Partner, Stoel Rives, S acramento, Calif. Joseph J. Bottiglieri, Partner, Bonner Kiernan Trebach & Crociata, Washington, D.C. Jonathan M. Cohen, Partner, Gilbert, Washington, D.C.

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From Field to Fork The Food Safety Modernization Act

P t d b Presented by: Lee N. Smith Stoel Rives LLP 500 Capitol Mall Ste 1600 Sacramento, CA 95814 , 5

December 8, 2011 ,

Abstract Abstract

In January 2011 President Obama signed the Food Safety M d i ti A t t d i t it f t d Modernization Act to drive greater security, safety and accountability of food products in our supply chain. This new law will require many new requirements for industries q y q that handle, process and package and distribute food

• products. While not all provisions of this new law go into

effect immediately there are certain provisions that effect immediately, there are certain provisions that require your immediate attention. This session will help you understand what you should be doing to prepare your f ilit f li d th i t d d d it

6

facility for compliance and reap the intended rewards it

• ffers.

Agenda Agenda

• Food Safety Modernization Act (“FSMA”) changes

the status quo with respect to – Recalls – Keeping records, and – Detentions

• How to respond to FDA investigations
• How to respond to recall or threatened recall

7

p

• Other steps you take to prevent or mitigate liability

Food Safety Modernization Act (H R 2751) (H.R. 2751)

• Most expansive changes in food safety

Most expansive changes in food safety since the 1938 Act

• Sweeping new enforcement authorities
• Sweeping new enforcement authorities
• Exacting new food import requirements
• Major new program activities for FDA

8

FSMA Scheduling Issues FSMA Scheduling Issues

• Statutory provisions

Statutory provisions are already in place although many of although many of the guidelines and regulations remain regulations remain to be drafted

9

What Was the Status Quo B f th N A t? Before the New Act?

• Recalls

– Class I Recalls:

• A situation in which there is a reasonable probability

th t th f t i l til d t ill that the use of or exposure to a violatile product will cause serious adverse health consequences or death. – Class II Recalls:

• A situation in which use of or exposure to a violatile

product may cause temporary or medically reversible adverse health consequences or where the probably

10

adverse health consequences or where the probably

• f serious adverse health consequences is remote.

What Was the Status Quo B f th N A t? Before the New Act? (cont.)

• Recalls (cont.)

( ) – Class III Recalls:

• A situation in which use of or exposure to a violatile

d i lik l d h l h product is not likely to cause adverse health consequences.

11

Mandatory Recall Authority (FSMA § 206) (FSMA § 206)

• Mandatory recall ordered if “reasonable probability

that an article of food is: – Food is adulterated under section 402 or misbranded under section 403(w) and; under section 403(w) and; – The use of or exposure to such article will cause serious adverse health consequences or death to humans or animals.

• Opportunity for voluntary recall within FDA

appropriate timing

12

appropriate timing

• Hearing within two days of the order’s issuance

FSMA Provisions Effective Now FSMA Provisions Effective Now

• Stronger Records Access Authority (FSMA § 101)

Stronger Records Access Authority (FSMA § 101)

• Mandatory Recall Authority (FSMA § 206)
• Increased Frequency of Inspections (FSMA § 201)

q y p ( § )

• Whistleblower Protection (FSMA § 402)
• Foreign Facilities and Refusal of Inspection

g p (FSMA § 306)

• Changes to Administrative Detention Standard

13

(FSMA § 207)

Stronger Records Access Authority (FSMA § 101) (FSMA § 101)

• When “reasonable

When reasonable probability” of “serious adverse health consequences”

• Includes records of
• ther food affected in

similar manner – NEW

14

• Proper credentials and

written notice

Increased Frequency of Inspections (FSMA § 201) (FSMA § 201)

• Immediate increased

Immediate increased frequency of inspections – Once every 7, 5, 3 y , , years

• Risk-based

– The higher the risk, the more inspections

15

1 5

Whistleblower Protection (FSMA § 402) (FSMA § 402)

• Protects employees from discharge, discrimination

Protects employees from discharge, discrimination in compensation or conditions of employment with respect to:

– Providing information re: violation of FDC Act – Testifying, assisting or participating in a proceeding re: a violation re: a violation – Objecting to an “activity, policy, practice or assigned task” they “reasonably believe to be a violation”

16

y y

• Remember to update Employee Handbooks to

reflect this policy

Foreign Facilities and Refusal of I ti (FSMA § 306) Inspection (FSMA § 306)

• If the FDA requests that it

q be allowed to inspect a foreign facility, it must allow entry to U.S. inspector within 24 hours f ti t

• f requesting entry
• Or, imported food from

th t f ilit ill b f d

17

that facility will be refused admission

Broader Authority to Detain Foods (FSMA § 207) (FSMA § 207)

• Administratively detain foods

Administratively detain foods

– Effective as of July 3, 2011

Regulations being promulgated

• Regulations being promulgated
• Lowers standard for FDA to detain foods

– FDA only needs “A reason to believe” food is “adulterated or misbranded.”

18

– Class I recall situation not required

Selected FSMA Provisions Effective Soon

• Amendments to the Reportable Food Registry

Amendments to the Reportable Food Registry (requiring more information and additional disclosure) (FSMA § 211)

• Suspension of Registration (FSMA § 102)
• Preventative Controls (FSMA § 103)
• FDA Lab Accreditation (FSMA § 202)
• Traceability (FSMA § 204)

19

• Major Changes to Regulation of Imports

(FSMA §§ 301,302)

Reportable Food Registry (RFR) Reportable Food Registry (RFR)

• “Reportable Food”

Reportable Food

– “Reasonable probability” of “serious adverse health consequences to humans or animals” health consequences to humans or animals

• “Responsible Party”

FDA registered facility where product is – FDA-registered facility where product is “manufactured, processed, packed, or held”

“Requirement”

20

• Requirement

– Report to FDA portal within 24 hours

Amendments to RFR (FSMA § 211) Amendments to RFR (FSMA § 211)

• New “critical information” required
• Within 18 months, FDA will require

“consumer-oriented information” including – Description – Product ID codes Contact information – Contact information – Anything else FDA deems necessary to enable a consumer to

21

accurately identify whether such consumer is in possession of the reportable food

Suspension of Registration Suspension of Registration

• If FDA determines “reasonable probability” of

If FDA determines reasonable probability of food causing “serious adverse health consequences,” it may suspend registration

• Facilities that are “responsible” and those that

knew or had reason to know are in jeopardy

• Informal hearing within two days
• FDA to consider corrective plans within 14 days

22

• Effective now

Preventative Controls (FSMA § 103) (FSMA § 103)

• Regulations require
• Allergen controls

Regulations require that

– Hazards be identified

g

• A recall contingency

plan

• GMPs

Hazards be identified – Preventative controls be enacted for

• GMPs
• Supplier verification

activities

• Sanitation
• Training

E i t l t l

– Monitor controls – Correction actions

23

• Environmental controls

Routine Environmental/Product Test R lt S b itt d T FDA (FSMA § 202) Results Submitted To FDA (FSMA § 202)

• FDA accredited labs

FDA accredited labs W/30 months

• Testing by FDA

accredited labs mandated R lt t di tl t

• Results sent directly to

FDA – makes developing a strategy or

24

developing a strategy or re-testing more difficult

Traceability (FSMA § 204) Traceability (FSMA § 204)

• 270 days to establish traceability pilot program(s)

270 days to establish traceability pilot program(s)

• Statute states that the FDA cannot require:

– A full pedigree, or a record of the complete previous A full pedigree, or a record of the complete previous distribution history of the food from the point of origin of such food R d f i i t f f d b d th i di t – Records of recipients of a food beyond the immediate subsequent recipient of such food – Product tracking to the case level by persons subject

25

Product tracking to the case level by persons subject to such requirements

Foreign Supplier Verification P (FSMA § 301) Program (FSMA § 301)

• Regulations are pending

– Importers required to perform “risk-based foreign supplier verification activities” verification activities – FDA required to determine content of program within 1 year I t U S – Importer: U.S. owner or consignee of food at the time of entry into U.S. or U.S. agent or t ti f f i

26

representative of foreign owner or consignee

Voluntary Qualified Importer Program (FSMA § 302) (FSMA § 302)

• Within 18 months, FDA shall “provide for the

Within 18 months, FDA shall provide for the expedited review and importation of food” for importers who participate voluntarily

• Will require third-party certification
• Importer: “the person that brings food, or causes

p p g , food to be brought, from a foreign country into the customs territory of the United States”

27

Import Certifications Import Certifications (FSMA FSMA § 302) 302) (FSMA FSMA § 302) 302)

• FDA may require third-

FDA may require third party certification as a condition of import

• FDA can create system of

accreditation for auditors

• Program may be funded

through fees imposed on dit

28

auditors

The Road Ahead for FDA The Road Ahead for FDA

• 10 rulemakings

10 rulemakings

• No fewer than 10

guidance documents g

• 13 reports (some on a

recurring basis) g )

• Numerous other

resource-intensive

29

implementation activities

Appropriate Strategy & R l ti hi ith FDA Relationship with FDA

• Cooperative but firm

Cooperative but firm

• Understand

communication is

• ne-way
• Understand and assert

rights

• Role-play during recall

30

rehearsal

When to Involve Legal Counsel? When to Involve Legal Counsel?

• Before inspection/investigation

Before inspection/investigation

• Earliest possible juncture
• Good lawyer will not escalate situation

Good lawyer will not escalate situation

• Attorney-client communication may be protected

31

FDA Inspection Plan FDA Inspection Plan

• Who will be involved?

– Involve your attorney

• Documents to be released and signed

– If documents are going to be released, have a standard “FOIA Letter.” (No right to disclose trade documents)

• Test results

Test results

• Photographs
• Interviews (who and review of legal counsel)

32

Interviews (who and review of legal counsel)

• Plan protected by privilege?

Recalls Happen Recalls Happen

O f i i i l d f ll i d Our manufacturing process is cautiously and carefully monitored at all times to ensure a safe, clean, bacteria-controlled environment - from the selection of the finest source products, throughout production to testing of the finished product. We take quality and safety very seriously. Topps has steadily and attentively developed standards and procedures to make certain we manufacture a safe product. We are fully compliant with all USDA Good Manufacturing Practices, and we have fully adopted and closely follow a HACCP (Hazard Analysis and Critical Control Point) program. y ) p g Topps Meat Company consistently employs technologically advanced equipment and our own safety innovations to create great tasting, quality products.

33

Recall Alone Can Be a D th S t Death Sentence

After Extensive Beef Recall, Topps Goes Out of Business In a statement, Anthony D’Urso, the chief operating

• fficer at Topps, in Elizabeth, N.J., said that the

company “cannot overcome the reality of a recall this large.” He added “This has been a shocking and sobering

Workers leaving the Topps Meat plant in Elizabeth, N.J., on Friday. The company which opened in 1940 went out of business shortly

He added, This has been a shocking and sobering experience for everyone.” Executives at Topps, which made frozen hamburgers and other meat products for supermarkets and mass merchandisers, declined to discuss how and why the company collapsed so quickly or whether they could

34

The company, which opened in 1940, went out of business shortly after it issued a recall that expanded to 21.7 million pounds of ground beef. Source: http://www.nytimes.com/2007/10/06/us/06topps.html?_r=2

company collapsed so quickly, or whether they could have taken steps earlier to protect consumers or to head off the plant’s closure.

Potential Recall Event: Wh t t D What to Do

• Follow recall plan that is in place

p p

• Log events, actions, and communications
• Record all reported injuries

p j

• Document investigation
• Institute litigation “hold” / retain

g all documents including electronic emails

35

• Cooperate and communicate with

government officials

More on How to Reduce Risk More on How to Reduce Risk

• Separate ownership of farm / retail / wholesale

Separate ownership of farm / retail / wholesale

• Supplier agreements

To warrant FSMA compliance be specific – To warrant, FSMA compliance - be specific – Make sure you have access to their records and audits audits – Indemnification – unambiguous – Insurance – product, CGL, recall, AI, audit, cyber-

36

p , , , , , y insurance, class action, chain insurance

Careful Review of Supplier/Vendor A t Agreement

[Make sure they reflect your insurance coverage]

Seller agrees to defend, indemnify and hold harmless Buyer … for the recovery of damages…

[Indemnity only as strong as indemnitor]

… for the recovery of damages… arising out of or alleged to have arisen out of (a) the delivery, sale, resale, labeling, use or consumption

• f any Product…

37

Careful Review of Supplier/Vendor A t ( t )

Seller’s insurance described herein shall be primary and not contributory with

Agreement (cont.)

Buyer’s insurance. Buyer shall be named as an additional 38 insured… waivers of subrogation

Insurance Insurance

• Sufficient coverage

Sufficient coverage

– Products Recall – Recall

• Sufficient limits
• Involve legal counsel and

trusted broker who

39

understands the industry and your business

Action Steps Action Steps

• Review and amend

– Supplier agreements (indemnification, insurance, compliance with FSMA) – Insurance coverage (re-examine recall coverage) Insurance coverage (re examine recall coverage)

• Prepare for import compliance
• Work with state/local officials on “friendly” food safety

y y compliance

• Recall plan and rehearsal

40

• FDA inspection plan
• Comment on rulemaking

Food Safety Claims: Food Safety Claims: Products Liability Issues Products Liability Issues Products Liability Issues Products Liability Issues

Mastering the Standards for Fault, Causation, and Damages in Foodborne Illness Litigation

By JOE BOTTIGLIERI By JOE BOTTIGLIERI y jbottiglieri@bonnerkiernan.com jbottiglieri@bonnerkiernan.com

1233 20th Street, N.W., 8th Floor Washington, DC 20036 (202) 712-7000 phone (202) 712-7100 fax

41

The Food Safety Products Liability Claim The Food Safety Products Liability Claim

 Each year, roughly 1 in 6 people in the United States becomes ill from eating contaminated food

MOST COMMON PATHOGENS

• E. Coli O157:H7

Campylobacter Salmonella

42

Number of E. Coli O157:H7 Illnesses by Vehicle

(2005-2009)

TOTAL ILL: 3,319

Unkown

Chicken Tenders Cookie Dough

Chicken Tenders 2% Unkown 32% Ground Beef 19%

Fruit/Vegitable Other Beef Products

Cookie Dough 3% Fruit/Vegitable 1% Other Beef Products Milk Other Foods

Guacamole Lettuce/Salad/Spinach

Products 8% Guacamole Lettuce/Salad/Spinach Milk Products 6% Other Foods 3%

Milk Products Other Foods

4% Lettuce/Salad/Spinach 22%

Unkown Ground Beef

*Foodborne Outbreak Online Database (FOOD); Center for Disease Control and Prevention http://wwwn.cdc.gov/foodborneoutbreaks/

43

Number of E.Coli Illnesses by Vehicle Excluding O157:H7 (2005-2009)

Unkown

TOTAL ILL: 897

Unkown Salad

Milk Sprouts 2% Guacamole 6%

Fruit

Unkown 65% Cheese (pasturized) 15% (unpasturized) 2%

Cheese (pasturized)

15%

Milk (unpasturized) Sprouts

Salad 9% Fruit 1%

p Guacamole

9%

*Foodborne Outbreak Online Database (FOOD); Center for Disease Control and Prevention http://wwwn.cdc.gov/foodborneoutbreaks/

44

TOTAL ILL: 3,809

Number of Campylobacter Illnesses by Vehicle (2005-2009)

Unpasturized Cheese 6%

Fruit/Vegitables

Shellfish Unkown 12%

Other Foods Meat

Shellfish 7% Unpasturized Milk

Shellfish

Oth F d Meat 8% Milk 60%

Unkown Unpasturized

Fruit/Vegitables Other Foods 2%

p Cheese Unpasturized Milk

*Foodborne Outbreak Online Database (FOOD); Center for Disease Control and Prevention http://wwwn.cdc.gov/foodborneoutbreaks/

4%

45

TOTAL ILL ANNUALLY: 1,000,000

Number of Salmonella Illnesses by Vehicle

Vine Vegitables Fruits and Nuts 13%

2004-2008

Poultry

Beef 8% Other 20%

Eggs Pork Beef

Poultry 29% Pork 12%

Beef Vegitables, Fruits, and Nuts

29% E

and Nuts Other

*Foodborne Outbreak Online Database (FOOD); Center for Disease Control and Prevention http://wwwn.cdc.gov/foodborneoutbreaks/

Eggs 18%

46

U k

Number of Listeria Illnesses by Vehicle

(2005-2009)

TOTAL ILL: 98

Cheese Unkown 14%

Cheese

Cheese 34% Taco/ Nacho Salad 2% Tuna Salad 5%

Chicken/Ham/Turkey Milk

2%

Sprouts

Sprouts

Taco/Nacho Salad Tuna Salad

Chicken/Ham/Turkey 19% 21%

Unkown

19% Milk 5%

*Foodborne Outbreak Online Database (FOOD); Center for Disease Control and Prevention http://wwwn.cdc.gov/foodborneoutbreaks/

47

Recent Significant Outbreaks Recent Significant Outbreaks

E COLI O104 H4 (2011)

• E. COLI O104:H4 (2011)

Sprouts (German farm – Lower Saxony; French farm – Bordeaux)  International Outbreak resulting in 852 people with HUS  International Outbreak resulting in 852 people with HUS

 32 deaths associated with HUS, 6 U.S. cases with one related death  Seeds originating from Egypt likely cause of contamination

SALMONELLA (2011)

Kosher Chicken Livers (Schreiber Processing Corporation) Kosher Chicken Livers (Schreiber Processing Corporation)  Outbreak in 6 states affecting 179 people

LISTERIA (2011) LISTERIA (2011)

Cantaloupe (Jensen Farms of Colorado) 

Outbreak in 28 States affecting 139 people



Outbreak in 28 States affecting 139 people  29 reported deaths

48

Enterohemorrhagic E. coli Enterohemorrhagic E. coli

• E. coli 0157: H7

Definition

One of over 180 types of E. coli. Causes Diarrhea, and Hemolytic Uremic Syndrome Hemolytic Uremic Syndrome

Common Route of Transmission

Foodborne/waterborne Person to person

Symptoms

Mild Diarrhea to severe stomach cramping, watery stool

y p

p g y followed by bloody diarrhea

Incubation Period

1-9 days

Communicability Period

While culture positive

Transmission

Cattle, undercooked contaminated ground beef, apple cider, recreational water supply, raw milk, mayonnaise, person-to- person transmission (i.e. day care centers or nursing homes), soil, chickens, lamb, pork, lettuce, salami, beef ) p jerky, radish sprouts, alfalfa sprouts, cantaloupe, and fresh potatoes

Diagnosis in People

Stool culture

49

Campylobacter Campylobacter

Campylobacteriosis

Definition

A bacteria best known for causing diarrhea

Definition

A bacteria best known for causing diarrhea

Common Route of Transmission

Foodborne/waterborne person to person

Symptoms

Most common symptoms: nausea and vomiting Only 1/3 with diarrhea Of those with Diarrhea only, 1/3 experience iti d bd i l vomiting and abdominal cramps

Incubation Period

1-10 days

Communicability Period

While culture positive

y

p

Transmission

Food (chicken, beef), milk, water, person-to- person, contact with dogs

Diagnosis in People

Stool culture

Diagnosis in People

Stool culture

50

Salmonella Salmonella

Salmonellosis (Bacteria)

Definition

Common bacterial cause of diarrhea. May lead to sepsis,

e

• y

p , and arthritis

Common Route of Transmission

Foodborne/waterborne Person to person

Symptoms

Nausea, vomiting, fatigue, cramps, loss of appetite, diarrhea (may be bloody), chills, fever

Incubation Period

6 72 hours

Incubation Period

6-72 hours

Communicability Period

Days to months while stool positive

Transmission

Beef pork poultry eggs dairy products fish potato

Transmission

Beef, pork, poultry, eggs, dairy products, fish, potato salad, water, tomatoes, sprouts, cantaloupe, dogs, cats, pet turtles, lizards, and orange juice

Diagnosis in People

Stool culture

Diagnosis in People

Stool culture

51

Listeria Listeria

Listeriosis

Definition

An invasive bacterial infection spreading beyond t i t ti l t t ith i d t gastrointestinal tract with varied symptoms

Common Route of Transmission

Foodborne, waterborne; Person to person Multiplies in refrigerated contaminated foods

S

F l h di h iti

Symptoms

Fever, muscle aches, diarrhea, nausea, vomiting, meningeal irritation, lesions at infection site Host dependent manifestations affected by age, immune system, pregnancy, etc.

Incubation Period

Extremely variable period ranging from 3-70 days, but averages 21 days

Communicability Period

Several months in positive stool; 7-10 days in post-

y

delivery mother’s urine and discharge

Transmission

Raw or unpasteurized milk products, cantaloupe, raw vegetables, raw deli meats, hot dogs, bologna, fish, etc.

Diagnosis in People

Stool culture

52

FoodNet FoodNet

 Foodborne Disease Active Surveillance Network (Foodnet)  Multi-state/agency collaborative project involving the CDC, 10 g y p j g states, the USDA, and the FDA  Conducts surveillance on Campylobacter, E. Coli O157:H7, Listeria, Salmonella, Shigella, and Yersinia Pestis  Performs studies for infection risk reduction, disease prevention, disease response  Enhance scope of knowledge available to officials and the l bli f db ill general public on foodborne illness  Publishes data on laboratory confirmed infections, illness tb k ti t d i ill t hi l f

• utbreaks, comparative trends in illness rates, vehicle of

contraction, and other pertinent information

53

PulseNet PulseNet

 Detects foodborne illness by using pulsed-field gel electrophoresis (PFGE)  Developed in the wake of the 1993 E coli O157:H7 outbreak originating from  Developed in the wake of the 1993 E. coli O157:H7 outbreak originating from the Jack in the Box restaurant chain  Compares PFGE patterns of bacteria isolated from afflicted persons to  Compares PFGE patterns of bacteria isolated from afflicted persons to determine similarities and to rapidly identify outbreaks  Stores collected local data in a shared national database to determine  Stores collected local data in a shared national database to determine geographical patterns of illness and identify cause and source of illness much faster than previous methods of detection  Reduces misclassification and error at each level of reporting (local, regional, national)  Provides surveillance of foodborne illness data

54

USDA’s “Big Six” Regulation USDA’s “Big Six” Regulation

 Establishes illegality of selling raw beef products contaminated with E.Coli strains 026, O45; O103; O111; O121; and O145 (O104:H4, responsible for the German outbreak not included) the German outbreak not included)  Rule applies to ground beef, beef trims and scraps, machine and needle tenderized steaks and others  USDA food inspection to launch program that tests for and detects the 6 strains in products entering commerce; designed as a preventive, not reactive, machine and needle tenderized steaks, and others p g ; g p , , program.  Industry groups anticipate new regulations will cost tens of millions in federal and industry dollars that will likely be passed onto the consumer and industry dollars that will likely be passed onto the consumer  In 2010, the Big Six were responsible for more infections in the U.S. than O157:H7 O157:H7  Effective March 5, 2012

55

Identifying Outbreaks Identifying Outbreaks

 Consumption of contaminated food  Doctor’s visit or hospital visit  Stool culture  Stool culture  Testing for appropriate pathogens g pp p p g  Positive finding reported to the health department  Health department investigation

56

Delineating Fault Delineating Fault

PRODUCTS LIABILITY 1 Only issues to be decided are causation and damages

• 1. Only issues to be decided are causation and damages

 Are you the manufacturer or retailer?  Was the product contaminated or unsafe?  Did the product cause injury?

• 2. Was this an outbreak or a single isolated occurrence?

Outbreak:

 Defined as 2 or more people getting sick from the same source around the same time

57

Delineating Fault Delineating Fault

Single Isolated Occurrence:

 Individual claims they ate your product or ate at your restaurant and y y p y became ill  Even though it is a product liability theory you can bring in everything that you did to prevent illness when arguing causation y p g g

58

Delineating Fault Delineating Fault

WHY THE ILLNESS WAS NOT CAUSED BY YOUR FOOD PRODUCT

 Go up the chain of distribution to the point

WHY THE ILLNESS WAS NOT CAUSED BY YOUR FOOD PRODUCT

p p

• f sale to prove wholesomeness (from

farm to fork).  It is important that you not only show why the illness was not caused by your product but also what the most likely  The most likely source can be, but does not have to be, a food source: product but also what the most likely source was

• Person-to-person transfer
• Recreational water
• Petting zoos
• Other meals, etc.

59

Outbreaks Outbreaks

SEVERAL DIFFERENT WAYS TO APPROACH THE DEFENSE

 Questioning the source of the outbreak  DNA fingerprinting through:  DNA fingerprinting through: 1. PFGE (Pulsed Field Gel Electrophoresis) 2. MLVA (Multiple-Locus Variable Number Tandem Repeat Analysis)

CULTURE POSITIVE?

Claimants that were treated and have a positive stool culture Claimants that were treated but have no stool culture Claimants that were not treated and have no stool culture

60

Delineating Fault Delineating Fault

OTHER POTENTIAL SOURCES

NEW JERSEY TACO BELL E COLI LITIGATION NEW JERSEY TACO BELL E. COLI LITIGATION Great Lakes Cheese and Ready Pac lettuce y Cheese was pasteurized  Cheese came from two different distribution chains with different sources for the product

61

How To Best Position the Litigation How To Best Position the Litigation

 CLASS ACTION  CLASS ACTION

• CAFA
• FRCP 23

 STATE CONSOLIDATION  MDL

– 28 USC Sec. 1407 – Judicial Panel on Multi-District Litigation

I R C A P t B tt P d t Li bilit Liti ti MDL – In Re ConAgra Peanut Butter Products Liability Litigation, MDL

• No. 1845

– In Re Pet Food Products Liability Litigation, MDL No. 1950 I R M D ld' F h F i Liti ti MDL 1784 – In Re McDonald's French Fries Litigation, MDL 1784

– Consolidation in one Federal District Court

– For purposes of discovery – Tagalongs

62

How To Best Position the Litigation How To Best Position the Litigation

SETTLEMENT SETTLEMENT

 Contacting claimants first  Matrix settlement  Resolve entire case load wholesale  Only culture positives  Settle as a class  Settle as a class – Prevents other claims unless opted out

63

How To Best Position the Litigation How To Best Position the Litigation

STRATEGIES TO AVOID PUBLICITY

 At outset in an outbreak – can’t be avoided – There is a public interest in learning about the outbreak  In single isolated occurrence – negative publicity can be minimized – Get your message out Be positive and confident – Be positive and confident – Reassure your customers – Investigate early and determine if your product made the claimant sick A. If the answer is “yes” – get the case settled B. If the answer is “no” – you still have to do what is best to protect your brand your brand

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Controlling the Aftermath Controlling the Aftermath

 Working out strategies with Plaintiff’s counsel

• Example: press conference on courthouse steps

 Private Trial  Incentives for Plaintiffs

– High/Low Agreement – Finality – No Appeals – Early Resolution

 Agreements to remove information about the outbreak from Plaintiff’s counsel’s website  Confidential settlement agreements and sealing the file

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Controlling the Aftermath Controlling the Aftermath

RECALLS

 Must plan for ahead of time

– During an outbreak is NOT the time to develop a recall plan – Have a crisis team in place Have a crisis team in place – Have a call center plan – Have sample responses prepared for people i t l i t answering customer complaints – Can be outsourced or use your third-party administrator

 Have sample recall notices and websites set up  Work with a company that specializes in recalls to help you through the process

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Food Safety Claims: Food Safety Claims: Products Liability Issues Products Liability Issues Products Liability Issues Products Liability Issues

Mastering the Standards for Fault, Causation, and Damages in Foodborne Illness Litigation

By JOE BOTTIGLIERI By JOE BOTTIGLIERI y jbottiglieri@bonnerkiernan.com jbottiglieri@bonnerkiernan.com

1233 20th Street, N.W., 8th Floor Washington, DC 20036 (202) 712-7000 phone (202) 712-7100 fax

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HOW TO PAY FOR THE LOSSES RESULTING FROM A OO S O FOOD SAFETY PROBLEM

By Jonathan M. Cohen Gilbert LLP Washington, DC cohenj@gotofirm.com (202) 772-2259

GOALS GOALS

• Identify common ways that companies lose

money due to food-related recalls and l i claims

• Match losses with sources of recovery
• Match losses with sources of recovery
• Suggest steps you can take now – before

Suggest steps you can take now before a crisis hits

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COMMON LOSSES COMMON LOSSES

• Losses to your company

y p y Examples:

– Recall costs – Product loss – Product loss – Sanitation costs – Business interruption Business interruption – Product rehabilitation

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COMMON LOSSES COMMON LOSSES

• Losses due to thirty-party claims

Examples:

– Bodily injury or property damage claims – Defense costs – Downstream claims

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COMMON LOSSES COMMON LOSSES

G t l t d i ti ti d l

• Government-related investigations and losses

Examples: Examples:

– Securities – Criminal investigations

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WHAT CAN YOU DO TODAY? WHAT CAN YOU DO TODAY?

P d t l t d i k t

• Product-related risk management
• Review of suppliers
• Review of suppliers
• Contract review

Contract review

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INDEMNIFICATION BY SUPPLIERS INDEMNIFICATION BY SUPPLIERS

D fti I

• Drafting Issues
• Indemnification from insolvent companies

usually won’t help

• Verify insurance back-up

y p

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INSURANCE AUDIT INSURANCE AUDIT

What to look for in o r policies

• What to look for in your policies
• The legal perspective into insurance review
• Insurance procedures, including procedures

for notice

• Cost tracking

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POLICIES ISSUED TO OTHERS IN THE POLICIES ISSUED TO OTHERS IN THE SUPPLY CHAIN

• Significance of upstream and downstream

Significance of upstream and downstream insurance

• Additional insured provisions
• Additional insured provisions
• International issues
• Best practices

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MATCHING LOSSES TO INSURANCE MATCHING LOSSES TO INSURANCE

• Types of coverages available
• Interaction of policies
• Evaluation of individual policies

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LOOMING COVERAGE DISPUTES LOOMING COVERAGE DISPUTES

• Pollution, contamination and microbe

provisions

• What if the product actually always was

safe?

• Mandatory versus voluntary recalls
• Application of sistership/recall exclusions

pp p

• Class III recalls

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RETENTIONS DEDUCTIBLES AND RETENTIONS, DEDUCTIBLES, AND LIMITS

Sufficient coverage Aggregate limits

• Sufficient coverage – Aggregate limits
• Structure of coverage – Retentions,

deductibles, coverage layers, and historic policies

• Occurrence limits and the number of
• ccurrences

– Definition of “Occurrence” – Batch provisions

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WORKING WITH INSURERS WORKING WITH INSURERS

• Is your insurer on your side, and when that

matters

• Defense obligations and defense counsel
• Cooperation and information requests

p q

• When to fight

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NOW WHAT?!? NOW WHAT?!?

• Conduct insurance/risk management audit
• Put adequate insurance procedures into

q p place

• Ensure cost-tracking process is effective

Ensure cost tracking process is effective

• Confirm information retention policies

N ti ti ti

• Notice, notice, notice

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THANK YOU

Jonathan M. Cohen Gilbert LLP W hi t DC Washington, DC cohenj@gotofirm.com (202) 772-2259

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