My Company is Involved in a Foodborne Illness Outbreak… What do I do?

My phone rings the other day and I look at the number… I did not recognize it.  Of course, I answer the phone with a friendly, “Good morning, this is Jason.”  Just that quickly I am connected to a conference room filled with concerned produce company executives with little  time for pleasantries.  I quickly discover that the company is involved in a foodborne illness outbreak and has several concurrent fires to put out.  Against this back drop, the questions start flying:

  • Do I have to give the government copies of my customer list?
  • Do I have to allow the government to take pictures of my product, operation, etc.?
  • Do I have any rights when it comes to a government inspection?
  • What do I need to say or not say to my customers?
  • Is there something we should be doing that we are not?
  • Does my insurance policy cover this?
  • Do I have enough insurance?
  • Does it matter that the contaminated product was not ours?
  • Do we have any exposure here?
  • What should we be doing right now to mitigate our exposure to any type of litigation?
  • What should we be doing to protect our brand identify and the company name?

Grappling with any one of these questions while you are watching a foodborne illness outbreak unfold in real-time is both difficult and time sensitive.  In an ideal world, you would have a crisis management plan ready to be pulled off the shelf and executed upon.  Moreover, the company’s employees would be similarly prepared as they would have received re-occurring training on the company’s crisis management policies and procedures.

The reality for most produce companies is much different…  Under a sales driven business model, it is far to common for produce companies to rely on the food safety promises of third parties (many of which are not readily capable of verification) and for product testing to be too heavily focused on good arrival standards, which are governed by the relevant sales contracts.  Against this back drop, even successful produce companies find themselves in uncharted waters when they are thrust into the middle of a foodborne illness outbreak and forced to handle all the related media exposure, demands from government investigators and other unanticipated events.

So What Should You Do? (Top 10)

  1. Seek the advice of an experienced food law attorney of your chosing! 
  2. Through either your attorney or your company, have strategic partners identified and available for you to call upon for assistance.  This will help ensure that the crisis management activities of your company does not preclude the company from continuing its “normal” business operations.
  3. Don’t write anything or say anything that you do not want to see in the media.
  4. Know your rights and proactively manage any and all government inspections or requests for information.
  5. Prepare and implement a public relations plan designed to address at least two main target audiences: (i) your customers and (ii) the public.
  6. Initiate the audits necessary to both identify the source of the problem (contaminated product) and to trace all of the contaminated product that flowed through your company or which may still be in your company.
  7. Be aware of cross contamination issues…
  8. Know how to properly document all of the processes mentioned above.
  9. Know how to properly destroy contaminated food.
  10. Conduct a review of all relevant insurance policies, supply contracts and other documents that may contain contractual obligations the company must comply with during the crisis.  (i.e. are you obligated to notify your insurance carrier of the problem within a certain period of time?)

As you can see from the foregoing list, there are many things a produce company needs to know and do in order to protect itself (as best it can) from the fall out associated with a foodborne illness outbreak.  Many of these things can and should be prepared in anticipation of a foodborne illness incident that we all hope never occurs, but there are also many things that can be done and should be done as the event unfolds.

Again, if you find yourself in the middle of a foodborne illness outbreak or related recall you would be well advised to seek the advice of an experienced food law attorney of your choosing.  As we know from witnessing the Jensen Farms outbreak, few companies are adequately prepared to deal with these types of situations and that could lead to the demise of your company.  Of course, time is always of the essence in these types of cases.

Wrongful death cases related to foodborne illnesses cost the food industry billions of dollars each year and very few, if any, companies responsible for the problem live to tell the story.  Why?  Frankly this is the way juries like it when it comes to food safety and public health.  Accordingly, these types of cases are often won or lost before a civil action is ever filed.

Indiana Cantaloupes Linked to Multistate Salmonella Outbreak

As reported by Food Safety News and other sources:

“A multistate outbreak of Salmonella Typhimurium linked to cantaloupes grown in southwestern Indiana has killed two people in Kentucky and sickened 141 people nationwide, the Kentucky Department for Public Health and the Indiana State Department of Health have confirmed….”

See Salmonella Outbreak Linked to Indiana Cantaloupes

31 people have been hospitalized, according to the U.S. Food and Drug Administration.

A total of 20 states have been affected by the outbreak, FDA reports. Illnesses by state are as follows: Alabama (7), Arkansas (3), California, (2), Georgia (1), Illinois (17), Indiana (13), Iowa (7), Kentucky (50), Michigan (6), Minnesota (3), Missouri (9), Mississippi (2), New Jersey (1), North Carolina (3), Ohio (3), Pennsylvania (2), South Carolina (3), Tennessee (6), Texas (1) and Wisconsin (2).

Other reports indicate that there are currently 141 illnesses linked to the Indiana Cantaloupe Outbreak.  See Cantaloupe, a Deadly Fruit – Again.

As of the date/time of this posting, the identify of the farm or source of the outbreak has not been disclosed, but we do know the farm is located in Southwest Indiana.  Similarly, we do not know the name(s) of the grocery store(s) that sold the Cantaloupe to the public.  The investigation continues…

Burch Farms – Melons Recalled After FDA Discovers Listeria

In a recent online article The Packer reported that:

“Listeria contamination is confirmed at the Burch Farms melon packing facility in Faison, N.C., according to the Food and Drug Administration.”

FDA officials also said the Listeria finding spurred Burch to expand its recall to include all cantaloupe and honeydew melons shipped this season. No illnesses have been reported in relation to the recalled melons.

“This recall expansion is based on the FDA’s finding of Listeria monocytogenes (L. mono) on a honeydew melon grown and packed by Burch Farms. The recall expansion is also a result of the agency’s finding of L. mono in the environment of the firm’s packing facility,” according to the notice.

FDA finds Listeria at Burch Farms

Food Safety News also picked up on this breaking news and reported as follows:

According to FDA, the recalled whole cantaloupes are identified by a red label reading Burch Farms referencing PLU # 4319. All cantaloupes involved in the recall were grown by Burch Farms, however some of the cantaloupes may have been identified with a “Cottle Strawberry, Inc.” sticker referencing the same PLU, but Cottle Strawberry, Inc. did not grow or process the recalled cantaloupe.

FDA said that honeydew melons involved in the recall expansion “do not bear any identifying stickers and were packed in cartons labeled melons.”

The melons were shipped to distributors in 18 states — Florida, Georgia, Illinois, Kentucky, Massachusetts, Maryland, Maine, Michigan, North Carolina, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, South Carolina, Virginia, Vermont and West Virginia — but distributors in those states may have further distributed them to other states.

FDA Issues Update on Burch Farms Melons Recall

Jason Klinowski Presents at the 3rd Advanced Summit on Food Safety Regulatory Compliance

Recently, I had the privilege of speaking at the American Conference Institute’s 3rd Advanced Summit on Food Safety Regulatory Compliance, which was held in Chicago, Illinois on June 26-27 2012.  My presentation discussed: “How to Prepare and Implement Effective Remediation and Corrective Action Plans Post-Inspection.”  Notable conference attendees included counsel and/or representatives from ConAgra Foods, H.J. Heinz Company, J.M. Smucker Company,  Whole Foods Market and others.  Freeborn & Peters LLP was a proud sponsor of this event.

My presentation provided a practitioner’s point of view (as outside general counsel to numerous food companies) on how to prepare a proper response to a FDA 483 Report of Investigation, which including drafting tips, best practices and response strategies.  Following this same format, I also discussed how to prepare effective corrective action plans  and reconditioning plans.

For those of you who may be interested, here is a link to my presentation:

Jason Klinowski’s – ACI Presentation

Food Borne Illness Liability Forces Jensen Farms to File for Ch. 11 Bankruptcy Protection

On May 25, 2012, Jensen Farms, which is a general partnership, filed for Ch. 11 bankruptcy protection in Colorado.  With a list of the 20 largest creditors dominated by contingent, unliquidated and disputed estate claims, it is clear that wrongful death claims and other food safety related liabilities played a major role in the demise  of Jensen Farms.

The Produce News reported that Jensen Farms filed bankruptcy with $4.8 million in revenues in 2011, $2.1 million in current assets, $2.5 million in liabilities and an outstanding A/R from Frontera Produce in excess of $1.6 million.  The article went on to report that the bankruptcy should free up millions of dollars in insurance money to help fund settlements in numerous Listeria related wrongful death actions.  The Produce News – Jensen Farms Files for Bankruptcy Protection

This case will be closely watched as it is a glaring example of how important food safety issues are to the very sustainability and viability of a food company’s operations! 

Should a Company’s Failure to Comply with Food Safety Programs or Laws be Deemed an Unfair Trade Practice?

The Packer recently reported that the “CaliforniaCantaloupe Advisory Board is establishing the state’s first mandatory food safety program implemented by a commodity board.”  Although the actual details are still in the works, Steve Patricio, chairman of the California Cantaloupe Advisory Board, stated that “we have existing assessments and revenue we can convert to food safety” and “there will be an additional assessment, probably as high as two cents a carton.”   California Cantaloupe Food Safety Program Article – The Packer 

According to the article, the proposed Cantaloupe safety program utilizes USDA inspectors under the supervision of the California Department of Food and Agriculture (“CDFA”).  This is important because the CDFA stated that:

“noncompliance with the coming food safety metrics would amount to an unfair trade practice.”    

Under California law, 

“a marketing order may contain provisions which relate to the prohibition of unfair trade practices. In addition to the unfair trade practices now prohibited by law, applicable to the processing, distribution, or handling of any commodity within this state, the director may include in any marketing order which is issued provisions that are designed to correct any trade practice which affects the processing, distributing, or handling of any commodity within this state which the director finds, after a hearing upon the marketing order in which all interested persons are given an opportunity to be heard, is unfair and detrimental to the effectuation of the declared purposes of this chapter.” 

California Food and Agricultural Code Section 58890.  The foregoing means that the parties to a marketing agreement or other similar arrangement can agree that certain conduct shall be deemed a violation of California law.

Taken as a whole, the members of the California Cantaloupe industry, who make up approximately 70% of the domestic Cantaloupe supply, are working together to accomplish two significant goals.  See Leafy Green Marketing Agreement Article  The first is to promote and ensure food safety, which is great!  The second is to ensure that no one Cantaloupe grower is able to obtain a competitive price advantage over the other by electing not to incur the costs associated with a mandatory food safety program, which was reported to be approximately two cents per carton.  This is a good idea!

The PACA prohibits certain types of conduct by fruit and vegetable buyers and sellers as unfair trade practices.  Some examples of unfair trade practices include failing to make full payment promptly for produce purchases, misbranding or mislabeling of produce, making false and/or misleading statements in connection with produce transactions, and employing individuals under employment restrictions that were responsibly connected with a PACA violator firm.  What you don’t see addressed here is the subject of food safety and the unfair advantages associated with non-compliance with food safety laws.   Maybe it should… 70% of the Cantaloupe industry seems to think so! 

But, what the PACA does give the suppliers of perishable agricultural commodities (“Produce”) is the right to obtain trust protection on the sums “owing in connection” with their transactions in produce.   7 U.S.C. 499e(c)(2).  The cost of food safety (i.e. the two-cent per carton assessment discussed above) is a sum owning in connection with a company’s transactions in produce.  The cost of compliance with food safety programs and laws help ensure the safety of the produce itself and that serves the public interest. 

As such, the cost of food safety compliance should be considered an inseparable part of a company’s transactions in produce and it should be invoiced as such.  Any company that has ever been on the wrong side of a foodborne illness issue or incurred the costs associated with a major recall can attest to the fact that the cost of prevention is far less than the alternative, which often includes brand identity damage, loss of goodwill in the marketplace and litigation costs.   Moreover, as we see from the premiums placed on most organic products, consumers will seek out and pay for safer products.