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Pundit’s Mailbag — No Matter What Growers, Shippers Or Retailers Do About Food Safety, ‘You Will Be Sued’

Jim Prevor’s Perishable Pundit, June 11, 2010

Our piece, Freshway’s Traceability System Worked Like A Charm: FDA And Buyers Don’t Care, brought a note from a grower:

This all goes back to the lawyers. I heard a lawyer speaking at a traceability conference and he said he doesn’t care what systems we have in place… they are suing us all.

I asked what about if the product is from Mexico and he said, and I quote: “We wouldn’t waste our time suing Mexico but if any of that product touched an American company you will be sued.”

My question to him was how do we do a better job to protect ourselves and his answer was buy more liability insurance.

So no matter what the grower, shipper or retailer does and how innocent you are, you will be sued. Lawyers are one of the top 3 problems in America today.

— Tom O’Brien
President
C&D Fruit and Vegetable
Bradenton, Florida

Wonder what Tom thinks the other top two problems are.

Shakespeare did write, “The first thing we do, let’s kill all the lawyers,” though as Mrs. Pundit is a member of the Bar in good standing in three states, we better point out that the problem is not, in fact, the lawyers; the problem is the legal system.

We have written some about the state of our legal system in our piece titled, How To Think About Supreme Court Nominees.

When it comes to issues of liability, though, the problem is that the legal system has come to be the method our society uses to compensate people who become the “collateral damage” of societal trade-offs.

If you remember the litigation Ford underwent years ago related to the fact that the Pinto’s gas tank sometimes exploded upon impact, you see the point.

In making cars, as in making food, there are trade-offs between different desirable traits. So in designing an economy car such as the Pinto, Ford’s engineers were electing to value economy — of weight, of fuel usage, etc. — over safety. Society sets some minimal standards, but beyond that, Ford could certainly decide that it was willing to accept a more dangerous car — i.e., one whose gas tank was more likely to explode — rather than make the car heavier or more expensive.

When Ford was sued — and lost — its executives basically asked its outside legal advisors for what standard Ford ought to follow to avoid such lawsuits. The answer was that Ford had two options: It could buy more insurance or it could view losing occasional lawsuits as a cost of doing business.

Tom’s point that it doesn’t matter whether someone in the food chain does a good or bad job is certainly true. They will still be held liable.

It is called a strict liability standard and, in food, it means that if food gets someone sick, the liability is automatic.

In contrast, slips and falls in a parking lot are typically negligence-based. So if there was a snowstorm and someone slips and breaks his leg, the parking lot owner can defend himself by proving that he had the lot quickly and properly plowed, that it was well lit, that salt or sand was quickly and properly applied, etc.

In food the function this strict liability serves is this: Our knowledge of food safety is that it is a continuum. At each step on the continuum — more straps, bigger buffers, more frequent water testing, etc. — the risk is reduced. Cost, however, is increased. There is no such thing as a “correct” point on the continuum.

Society comes to accept some trade-off between enhanced food safety and reasonably priced food. The problem, however, is that this trade off, though good for society as a whole, leaves some people to get sick.

The legal system built around strict liability is a way of ensuring that those who are the “collateral damage” of society’s need for reasonably priced food can get compensated.

Of course, it is a highly inefficient way. Lawyers on both sides must be paid, the judicial system utilized, enormous amounts spent on insurance, etc., etc. It also creates some perverse incentives as the incentive to invest in better food safety is reduced when doing so will not provide any defense in court.

We dealt with many of these issues in our piece written for The New Atlantis proposing a new food safety plan: How To Improve Food Safety — Aggrandizing the FDA Only Distracts From Real Solutions.

We don’t think it helps food safety and don’t think it morally acceptable to hold producers equally liable if they are diligent at food safety or laugh it off, so our proposal included a shift in the liability standard. This shift in the liability standard would mean that producers would “get credit” for their efforts and so that trade buyers would think twice before going for price over an enhanced safety regimen.

We thank Tom O’Brien and C&D Fruit and Vegetable for helping us think through this important subject.

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