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FOOD SAFETY MANAGING RISKS TO

REDUCE LEGAL LIABLITY

ELIZABETH HAWS CONNALLY,ESQ.Alston Hunt Floyd & Ing

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FOODBORNE ILLNESS IS HEADLINE NEWS

MILLIONS OF CASES A YEAR DEEMED TIP OF THE ICEBERG - STAR BULLETIN 2/20/09

IDENTIFIED AS PRIORITY ISSUE FOR OBAMA ADMINISTRATION – BEFORE

RECENT PEANUT CASES LIKELY TO SEE MORE REGULATIONS

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CDC ESTIMATES OF FOODBORNE ILLNESS

CASES

EACH YEAR 87 MILLION CASES 371,000 HOSPITALIZATIONS 5,700 DEATHS

PEANUT CASES – Allegations so far - 640 ILL 9 DEATHS – 44 STATES

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CONSUMERS DEMANDING SAFE FOOD SUPPLY

CONSUMERS WANT TO HOLD ALL FOOD SUPPLIERS

ACCOUNTABLE

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FOOD SUPPLIERS NEED TO BE PROACTIVE

REDUCE CHANCE OF FOODCONTAMINATION

COMMON PATHOGENS E. coli 0157:H7 Hepatitis A Salmonella

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LAWSUITS – ON THE RISE E. coli 0157:H7 – contaminated

prepackaged fresh-cut spinach 26 states, 204 ill, 3 deaths

Entire supply chain in lawsuits for over 2yrs Hepatitis A – green onions

650 ill, 4 deaths Chi-Chi’s paid > $50M

Salmonella – peanuts More costly – Possible Criminal Charges

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Foodborne Illness Litigation

Prove by preponderance of the evidence that the food supplier committed wrongful acts that caused harm

3 Potential Causes of Action Product Liability Breach of Express or Implied

Warranty Negligence

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Product Liability Plaintiff must prove the product was

defective and unreasonably dangerous when it left food supplier’s control and the defect was the “proximate cause” of injury

Entire food chain exposed (i.e. production, transfer and handling) Includes value added products and production

process

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Breach of Warranty

Claim food product does not conform to the warranty and non-conformance caused injury

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Negligence Negligence per se – violated law or deviated

from food safety and health standards

Plaintiff must prove 3 elements Legal duty to exercise reasonable care Failed to perform duty Failure to perform duty caused injury

Food Suppliers must exercise DUE DILIGENCE REASONABLE CARE

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Negligence Food Supplier has duty to use

reasonable care such as inspecting food to prevent contamination or harm to consumer

Note – Inspecting is only one means of exercising reasonable care – not the only factor.

Food Supplier – may be liable if product contains unexpected items – peanuts

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Manage Food Safety Risks Good Food Safety Practices

Developed by USDA and FDA 4 Tools

The Guide Good Agricultural Practices Good Manufacturing Practices Hazard Analysis Critical Control Points

(HACCP) UH CTAHR workshops assist compliance

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Good Food Safety Practices Legal Defense

Use of Good Food Safety Practices by ENTIRE Food Supply Chain Minimize chances of foodborne illness Provides legal defense

Even if found liable – punitive damages can be reduced or avoided

Show took “reasonable care” Used best technology Complied with laws, regulations, guidelines

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Other Ways to Manage Risks

Use of contracts

Insurance

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Use Of Contracts

Can require food supplier adopt and implement safe food handling practices

Can require food supplier purchase sufficient insurance coverage to cover buyer’s risks

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Insurance Different types of insurance Determine if insurance covers

foodborne illness Determine if coverage levels

sufficient Buy enough – Inexpensive policy may

prove costly in the future Carefully review policy

Does it cover your risks?

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Types of Insurance Commercial general liability Business interruption Product Recall

Coverage for losses because of recall, cost of removing product and rebuilding reputation

Product Liability Coverage for claims relating to injury from

food product

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Food Safety Practices

Use it as a marketing tool Less costly to be proactive

than embroiled in lawsuits Protect your business Use Good Food Safety

Practices

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Questions?

Thank You

Elizabeth Haws ConnallyAlston Hunt Floyd & Ing

808-524-1800Ehaws@AHFI.com