December 12, 2016

WG 91st Annual Meeting: Foodborne Illness — Criminal & Civil Liability Workshop

It was an odd juxtaposition at the 91st Western Growers Annual Meeting.  Outside, paradise.  Lush ferns and palm trees lined the grounds of the Grand Hyatt Kauai Resort.  Waves from Keoniloa Bay gently crashed along the shores of Shipwrecks Beach.  Inside, a much more sobering reality, where the topic of conversation at the Monday afternoon workshop was civil and criminal liability related to foodborne illnesses.

The moderator of the panel, Stuart Woolf, president/CEO of Woolf Farming & Processing, began the workshop by explaining that the law treats foodborne illness or injury in several different ways. With civil liability, one party is legally accountable to pay damages to another party it has caused to become ill or injured.  With criminal liability, the government punishes an individual or a company for a wrong done to society.

Increasingly, executives of food companies are facing criminal exposure for food safety violations, a view articulated by U.S. Department of Justice Deputy Attorney General Sally Yates in September of 2015.  In her bombshell memo, officially titled, “Individual Accountability for Corporate Wrongdoing,” Yates stated that, “Fighting corporate fraud and other misconduct is a top priority of the Department of Justice.”

In this document, now known as the Yates Memo, she went on to say, “One of the most effective ways to combat corporate misconduct is by seeking accountability from the individuals who perpetrated the wrongdoing.”

Clearly, these declarations from the U.S. Department of Justice’s second-in-command have serious implications for the fresh produce industry.  In particular, in light of the fact that since 2013, the Justice Department has won four criminal cases against food companies or their executives in food safety-related incidents, including the Jensen brothers in the 2011 cantaloupe listeria outbreak.  By comparison, this is the same number of convictions or guilty pleas earned by the agency in the previous 24 years combined.

This uptick in Justice Department activity against violators of the 1938 Federal Food, Drug, and Cosmetic Act (FDCA) has been spurred by renewed emphasis on the Park Doctrine, named after a 1975 Supreme Court case in which the concept of “responsible corporate officer” was first established.  Under this legal principle, a corporate official who was in position to prevent or correct a food safety violation but failed to do so, can be convicted of a misdemeanor (and possible subsequent felony) by virtue of their authority.

And, the corporate official can be convicted without proof that he or she acted with intent or negligence, and even if the executive did not have any actual knowledge of, or participation in, the specific offense.  This type of liability is called strict liability, and has typically been applied in the context of civil liability, but is now increasingly commonly used in criminal prosecutions.

The topic of civil liability was covered by the first panelist, Bill Marler, managing partner in the law firm Marler Clark.  Marler elevated to national prominence in the wake of the 1993 Jack in the Box E. coli outbreak caused by undercooked hamburgers.  Since then, he has represented thousands of individuals in civil claims against food companies whose contaminated products have caused serious injury and death.

According to Marler, the law is constructed such that if he can prove your product caused foodborne illness or injury, the question isn’t if you’re going to pay or not, but how much.  However, he claimed the legal system has actually been positive for both public health and the industry, as it has forced food companies to adopt more progressive food safety practices.  For example, in the decade following the Jack in the Box incident, cases involving E. coli in hamburger meat represented 95 percent of his law firm’s revenue.  Today, it is nearly zero.  Marler indicated that he has seen similar trends in the fresh produce industry since the 2006 E. coli outbreak in bagged spinach.

Following Marler was Dan Jarcho, partner in the law firm Alston & Bird.  His practice focuses on litigation involving the Food and Drug Administration (FDA) and the industries regulated by the agency.  Jarcho pivoted away from civil liability, reinforcing the fact that the Park Doctrine creates strict liability in criminal cases, too.  With criminal liability, the question shifts from “How much will you pay?” to “Will you spend time in jail and how long?”

Jarcho explained that in the eyes of the law, food companies are in a position to protect the public in a way the public cannot.  As a consequence, what used to be good practices have now become legal requirements, which has lowered the threshold for corporate (and corporate officer) responsibility.

Sarah Brew, partner in the law firm of Faegre Baker Daniels, closed out the panel with an inside look at how FDA investigates foodborne illness cases.  She represents food processors, distributors and retailers in foodborne illness and contamination cases nationwide.

In the event of an outbreak, Brew noted that the federal government will subpoena not only your company’s records, but also the records of all of your business relationships in an effort to gather as much information about your firm as possible.  She also noted that the FDA is now taking DNA samples of raw food products and outbreak strains and storing the information in a database.  This genetic testing can definitively connect an illness with the source, and can be traced back at least five years.

Collectively, the panelists provided the following advice for reducing both civil and criminal exposure in cases of foodborne illness or injury:

•   Have a food safety plan in place and qualified people to execute the plan (and proper documentation!)

•   Comply with the rules outlined in the Food Safety Modernization Act

•   Have recall and crisis management plans in place

•   Be conservative in the scope of your recalls and consider the public health (versus the bottom line)

•   Treat any potential victim(s) fairly

•   Create a culture of food safety and place the customer first (“Have a good food safety story to tell.”)

•   Have a robust recall insurance policy

•   Western Growers provides a full suite of products and services to help its members limit their food safety-related liability

The WG Science & Technology Department has developed commodity-specific guidance documents, which contain strong preventative controls to reduce the risks associated with foodborne illnesses, as well as several manuals to assist in food inspection and recall situations. These resources can be accessed on the members-only section of the Science & Technology webpage (, or by contacting Hank Giclas ([email protected], (949) 885-2205).

Additionally, Western Growers Insurance Services has been working to develop a food safety recall program, which will include resources to help association members measure and manage the risks of an outbreak.  The tools offered will range from pre-event planning to post-event crisis and litigation management.  Layered on top of this program will be the Western Growers Shield®, a group of proprietary custom insurance products designed to provide financial protection should a food safety event occur.  The complete program will be available in early 2017.  Contact Jeff Gullickson for more information ([email protected], (949) 885-2351).