Real Events Happening Daily to Real People 1 Mead PS, et al., Food-related illness and death in the United States, Emerg Infect Dis. 5: Buzby, et al. Product Liability and Microbial Foodborne Illness (2001)ERS Agricultural Economic Report No  76 million cases of foodborne illness annually 1  325,000 hospitalizations  5,000 deaths  Medical costs, productivity losses, costs of premature death costs 6.9 billion dollars a year 2

Civil Litigation – A Tort – How it Really Works  Strict liability  It is their fault – Period!  Negligence  Did they act reasonably?  Punitive damages  Did they act with conscious disregard of a known safety risk?

Strict Liability for Food – a Bit(e) of History “… “… a manufacturer of a food product under modern conditions impliedly warrants his goods… and that warranty is available to all who may be damaged by reason of its use in the legitimate channels of trade…” Mazetti v. Armour & Co., 75 Wash. 622 (1913)

Who is a Manufacturer? A “manufacturer” is defined as a “product seller who designs, produces, makes, fabricates, constructs, or remanufactures the relevant product or component part of a product before its sale to a user or consumer….” RCW (2); see also Washburn v. Beatt Equipment Co., 120 Wn.2d 246 (1992)

The Legal Standard: Strict Liability STRICT LIABILITY IS LIABILITY WITHOUT REGARD TO FAULT.  The focus is on the product; not the conduct  They are liable if:  The product was unsafe  The product caused the injury

It’s called STRICT Liability for a Reason  The only defense is prevention  Wishful thinking does not help  If they manufacture a product that causes someone to be sick they are going to pay IF they get caught

Why Strict Liability?  Puts pressure on those (manufacturers) that most likely could correct the problem in the first place  Puts the cost of settlements and verdicts directly onto those (manufacturers) that profit from the product  Creates incentive not to let it happen again

The reason for excluding non- manufacturing retailers from strict liability is to distinguish between those who have actual control over the product and those who act as mere conduits in the chain of distribution. Negligence Is The Legal Standard Applied To Non-Manufacturers See Butello v. S.A. Woods-Yates Am. Mach. Co., 72 Wn. App. 397, 404 (1993).

Punitive (or Exemplary) Damages:  Punish the defendant for its conduct;  Deter others from similar conduct. Historically, such damages were awarded to discourage intentional wrongdoing, wanton and reckless misconduct, and outrageous behavior.

The Legal Arsenal  Interrogatories  Requests for production  Requests for inspection  Request for admission  Third-party subpoenas  Depositions  Motions to compel

But, Litigation Can Work – A History Lesson Jack in the Box Odwalla

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What Will a Jury Think? A Jury = 12 Consumers

Can A Chinese Manufacturer be Sued?  Can the manufacturer be subject directly to the jurisdiction of a U.S. Court?  Does the manufacturer have assets in the U.S. that can be attached after a U.S. Court judgment? Answer is likely not – However

What Is Likely To Happen  Contracts with Chinese exporters will be amended to include specific indemnities in favor of the importer on product safety and quality issues.  Contracts with Chinese exporters will be amended to include a specific provision requiring the Chinese seller to obtain and maintain sufficient product and general liability insurance, with a reputable U.S. or international insurance carrier, or to have sufficient, attachable, assets in the U.S.

Litigation Lessons Learned  If you manufacturer a contaminated product and ship it to the U.S. and consumers are sickened, and if those illness are linked: 1.You may be sued by the consumer 2.You will be sued by the importer 3.You will lose both consumers and customers 4.You will be subject to intense media coverage 5.You may be subject to regulatory action 6.You may be subject to criminal sanctions

William D. Marler Marler Clark LLP PS 6600 Columbia Tower 701 Fifth Avenue Seattle, Washington Questions?