COMMENT:
Get Ready for Lots More Regulation
Libertarian
types and others who are philosophically opposed to government regulation
should skip the rest of this article because we are going to make
what we think are some less than startling predictions concerning
the immediate future of the regulation of the food and dietary
supplement industries in the United States. In two words: “Lots
more.”
The
areas of increased regulation that are either here or may undergo
significant development during 2004 are:
Food
Security
Note
that our predictions are not dependant on which political party controls
either the White House or the Congress. The recent growth of federal
regulations and regulatory activities affecting the food and dietary
supplement industries has occurred during a “conservative”
Republican administration with the Republicans controlling both houses
of Congress. A Democratic administration will undoubtedly be much
of the same, just maybe more of it. Moreover, even if the regulators
are sympathetic to industry issues (FDA has tried to put a “happy
face” on the Bioterrorism Rules and USDA has been very cool
to COOL), inevitably political pressures molded by a frequently not
very well informed public opinion that assumes perfect food safety
is both achievable and affordable and, sometimes, court decisions,
may force the regulators to take off the velvet glove and use the
iron fist.
Therefore, the issue facing you isn’t whether regulation is
going to increase and get much more complex, it will. The issue is
how will you deal with it? Will you either individually or through
your trade associations lobby for legislation and rules that are
not unduly burdensome and are cost effective? Will you develop and
implement on a timely basis compliance programs for your company
that meet regulatory requirements? Will you outsource some regulatory
compliance activities and to whom? Will you be proactive or wait
until what will probably be the every less forgiving FDA, USDA or
state inspector orders you to get into compliance? Will a federal
or state official escort you off your business premises while wearing
metal bracelets?
Availability
of Irradiated Food Products Growing
Liability
If You Don’t Zap?
Recent
articles in the San Francisco Chronicle and The Wall Street Journal
have focused on the significant growth in the sale of irradiated
fresh beef products (in part due to last year’s mega recalls of ground
beef) and the fact FDA appears to be poised to approve radiation for
many more classes of products including deli meats. Although irradiation
was first approved in 1963, critics of the approval contend there
is not sufficient data to establish whether there could be adverse
long term health effects of consuming irradiated food products. While
the FDA’s approvals don’t put the food safety issue completely
to rest, courts normally defer to a regulatory agency’s scientific
expertise.
This
creates an important issue for producers and retailers of food products
who don’t use approved radiation methods. Does irradiation
create a new industry standard and if you sell a contaminated product
could you be liable for punitive damages? A little legal explanation
is necessary.
Under
modern products liability laws, manufacturers of consumer products
are “strictly liable” (liable without fault) for consumer
injuries caused by consumption of their products. For example, if
a consumer gets sick from eating a packer's ground beef, then the
packer is liable and pays for the consumer’s out-of-pocket losses,
their prospective losses such as future wages and pain and suffering.
It doesn't matter whether or not the product was irradiated. However,
if a packer "recklessly” or “willfully” exposed
an injured consumer to an unwholesome product, then a jury could hold
the packer liable for punitive damages. A number of recent notorious
product’s liability cases have involved punitive damage awards
far in excess of the consumer’s actual damages. (By the way,
under California law you can’t insure for reckless or willful
misconduct.) We don’t think that it takes a good deal of imagination
for a sick plaintiff to find their way to an attorney who will claim
that a defendant food processor engaged in reckless or willful misconduct
by failing to irradiate a product that is known to possibly carry
food borne illness. Maybe advertising that product is not irradiated
could be an (unintentional) warning label.
By
the way, restaurants, whether they sell fast food or slow food, are
not subject to strict liability. They are liable for injuries caused
by negligence, recklessness or willful misconduct. Of course, any
plaintiff’s attorney could just claim that a restaurant was
negligent if it didn’t use irradiated ingredients.