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Legislators Question Epi-Pen Price Spikes


Image Credits: Mylan (R), New York Times

Following up on my posting about why Epi-Pen prices have increased 5-6X in 12 years, the New York Times reports that a bipartisan group of legislators is questioning the basis for these price spikes.

As the medicine and injection technology have not changed in years, consumers have also started an on-line petition to Stop the Epi Pen Price Gouging.

Mylan’s virtual monopoly limits access to life-or-death medication and disproportionately redistributes public dollars for private gain.

Food Fraud – More Emerging Risks

August 3, 2016 1 comment

fake rice image

Image Credit: Mauro Alvarees and Q Costa Rica

Just when I thought I understood the vast extent of food fraud, FoodLawLatest reported about another one: rice made from plastic. Rice is one of the cheapest foods available, so I had not considered that it presented a risk of economic fraud.

If someone is making a profit from selling a food, then there is a motive and opportunity for someone else to sell a counterfeit version of it. This problem is worldwide — from fake bottled water in China, to counterfeit Smirnoff vodka in Europe, to mislabeled seafood in the U.S. And this problem is not limited to high-value products.

Although some fraudsters are criminally prosecuted, some consumers who discover food fraud seek justice with class action lawsuits.

 

“Natural” Food and Artificial Injustice – Toward a Fair Liability Standard

Please see my recently-published article in Plaintiff Magazine regarding the liability standards that apply in California for food-related personal injuries.

The Mexicali Rose decision allows plaintiffs to state some previously non-cognizable negligence claims against restaurants that serve injury-causing food.  Mexicali Rose v. Sup. Ct. (Clark), 1 Cal.4th 617, 621 (1992) (“Mexicali Rose”).  However, if the injury resulted from a substance that was “natural to the preparation of the food,” then strict liability and breach of warranty claims remain barred.  Id. at 630.

In light of food processing and safety changes that have occurred since this 1992 decision, the artificial, vague, and unworkable distinction between foreign and purportedly natural substances should be overruled.  A fair measure of justice should be available for all consumers, based on their reasonable expectations for the food served.

“Good Things Come From Sysco” (Allegedly Via Unrefrigerated Storage Lockers)

NBC Bay Area has reported that foodservice giant Sysco allegedly kept perishable foods in unrefrigerated storage lockers for several hours before delivering them to customers.

If these allegations are true, they raise multiple issues regarding food safety and quality.  Most laypersons know that perishable food like milk and meat must be stored at proper cold temperatures to maximize food safety and minimize the growth of many dangerous pathogens.  The USDA recommends discarding many perishable foods that have been held above 40 degrees F for more than two hours.  Sysco clearly understands these concerns, as it (1) presents ServSafe “state-of-the-art food safety training” and (2) tells investors all about the high technology used in its climate-controlled warehouses.

Refrigeration is also critical to maintain food freshness throughout its recommended shelf life.  Perishable foods that have been subjected to temperature abuse rapidly degrade in quality, so buyers may not be getting all of the freshness they paid for.

This also raises an issue of unnecessary food waste.  Even utilizing modern temperature controls, each year, Americans throw away almost half of their food, worth an estimated $165 billion.  This means more than just people going hungry; it wastes massive amounts of water, land productivity, and energy.  Sysco represents that it takes its sustainability responsibility “seriously.”

So how can buyers protect themselves from temperature-abused food that might look just fine when it is delivered?  Technologies like RFID provide data to verify proper holding temperatures throughout the supply chain, but they are not used as widely as they could be.

If the allegations are proven, “Sysco faces misdemeanor criminal charges and a one thousand dollar fine for each violation,” not including possible customer lawsuits.

Food Fraud: More Than Just Economic Injury

Do you really know what kind of fish you’re eating?” And why that’s such an important question?

As recently reported in Food Safety News, food fraud (by way of species substitution) presents more than a risk of ripping off consumers.  Pregnant women may be unwittingly exposed to toxins, gastric distress, and allergens from consuming seafood that is not what it purports to be.  Honest employees of fishing companies, distributors, and retailers that sell genuine products can lose sales and their jobs.

U.S. Senator Barbara Boxer (D-CA) recently asked the FDA to increase its efforts to reduce seafood mislabeling.  For bad actors, increased “traceability and enforcement . . . from bait to plate” presents risks of criminal prosecution and civil damages from class action litigation.  However, for seafood companies that adopt best practices, it also provides promotional and marketing opportunities.

Food Fraud Presents Risks of Criminal Prosecution

The latest reminder of the risks of perpetrating food fraud: on May 22, 2012, the U.S. government filed felony charges against a seafood importer for allegedly falsifying Country of Origin Labeling (COOL).  According to the filing, Worldwide Shrimp Company and others conspired to violate the Lacey Act by labeling Mexican shrimp as a product of the U.S.

The defendants, of course, are innocent until proven guilty beyond a reasonable doubt.  The purpose of this posting is not to suggest otherwise.  Rather, it is to identify three (of many) underlying reasons why COOL laws are important to businesses and consumers.

First, some consumers choose not to buy imported foods like shrimp and honey, because they may be contaminated with banned chemicals that might cause personal injury.

Second, even if no one suffers personal injury from an imported food, in some states, economic injury is enough to provide standing for plaintiffs to sue, because labels matter.  Consumers often are willing to pay more for foods from certain countries (or to avoid buying foods from others) for many reasons not directly related to safety, such as supporting local jobs or reducing energy use.

Finally, companies that are accused of violating COOL laws should keep in mind they risk conviction in the court of public opinion.  Many consumers understand that companies willing to violate COOL laws may also be more likely to break other laws that affect food safety.

Food Fraud – An Emerging Litigation Risk

April 24, 2012 2 comments

Food Fraud presents an emerging litigation risk in California and nationwide.

What is Food Fraud?

Food fraud occurs when someone sells a product that is not what it purports to be.  A few examples include short weighting (e.g., including the weight of excessive ice glazing) of frozen seafood, species substitution, dilution of premium olive oil with inferior oil, and misrepresenting a product’s country of origin.

How do Fraudsters Get Away with It?

Many times, only minor distinctions differentiate competing products, so it can be difficult even for trained professionals to detect fraud.  Almost two hundred years ago, British writer Cyrus Redding stated that consumers could avoid food fraud by becoming “perfect[ly] acquaint[ed] with that which is good.”  But how can one become “perfectly acquainted” with the differences between conventionally-produced and “free range” eggs, other than by the price paid?

Why is this an Emerging Litigation Risk?

Food fraud is economic fraud, because labels matter, and customers want to get what they pay for.  Some states have already seen food fraud class actions filed that allege honey laundering.  Food fraud also presents a risk of food allergy personal injury litigation for companies that substitute cheaper finfish products like surimi for shellfish like crab.   Food fraud also may result in criminal indictment and imprisonment.  There  are also the indirect costs of negative publicity arising from conviction in the court of public opinion.

What can be Done to Manage Food Fraud Risks?

Companies that implement food fraud risk management plans that include traceability systems like RFID and third-party verifiers may be able to reduce their food fraud risks and increase sales.