According to a recent article in Denver Post: The recent cantaloupe Listeria outbreak has few prime targets and these target companies have just $17 million in liability coverage for more than 130 illness cases. Experts in liability law believe that it could cost more than $100 million. The wide gap could make new legal targets out of grocery stores, distributors and auditors, and auditor labs, as victims seek large sums for compensation.
A lawyer and food-safety advocate, who is representing many cantaloupe-poisoning victims so far, said his early case research on the Colorado outbreak shows XYZ Farms has $2 million in liability coverage. Attorneys have sued XYZ Farm’s distributor, ABCD Produce of Texas also. But they only have $10 million in liability insurance. A 3rd party auditor that certified the cantaloupe farm’s safety practices before the outbreak has been threatened with lawsuits. This auditor company from California has $5 million in insurance.
The auditing company stands behind their audit as in line with cantaloupe-industry practices. They have never been sued, nor aware of any third-party auditing firms being sued under similar circumstances, according to an email from the President.
The 29 adult deaths and one miscarriage linked to the contaminated cantaloupe make the Colorado outbreak by some measures the deadliest since the Centers for Disease Control and Prevention (CDC) began tracking food illnesses in the 60s.
- The 2008-09 salmonella outbreak traced to peanut butter was blamed for 714 illnesses and nine deaths. Of those, just more than 100 sued.
- A spinach outbreak in 2006, about $100 million was spent to settle 110 lawsuits.
A Food and Drug Administration (FDA) probe at the farm found faulty machine, and improper washing and cooling methods. Colorado law makes it harder to sue stores in addition to the producer where the defect started, attorneys said. In the Listeria cases, attorneys may try to show retailers contributed by not demanding tougher farm audits, by failing to test for pathogens themselves, or by failing to wash the fruit one more time before sale. If the cantaloupe farm files for bankruptcy, claims would be put on hold until the assets and liability insurance are sorted out.
It’s unreasonable to hold grocery stores responsible for the safety of every item on their shelves, retailers say. “They have to rely on manufacturers to take care of that end of business and to make sure food items are ready for customer sale when they get them,” said president of the Rocky Mountain Food Industry Association, which represents more than 300 grocery stores in Colorado and Wyoming.
Many food-safety advocates say it’s time for everyone to take more responsibility, especially with foods that cause repeated damage. Hamburger, unpasteurized dairy, spinach, cantaloupes and other products have often been at the heart of dangerous outbreaks in recent years.
Compromising food safety:
Is it worth it?
Is it worth for a farm/processor/manufacturer to solely depend on the third-party audits to save a few bucks? Should they have higher food safety standards? Should they have a Quality Assurance specialist on staff to ensure that food safety precautions are in place in every step? Should they monitor whether their food safety and quality management systems are working – a bit more?
I share this information because these legal claim numbers are very alarming and they can hurt any company or a store/restaurant immensely.
Become PROACTIVE and hire a professional – It can save you millions (as in 7 zeros).