FDA ups criminal
food safety violations
Criminal charges against a Colorado cantaloupe grower
implicated in a 2011 listeria outbreak should cause all
fresh produce shippers to take note.
The Food and Drug Administration told Congress in
2010 that it might increase misdemeanor prosecutions
of food industry executives for violations of the federal
Food Drug & Cosmetic Act. In September, Eric and
Ryan Jensen, owners of the Holly, Colo., farm, were
charged with violating the FDCA by introducing adulterated cantaloupe into interstate commerce, implicated
in the outbreak leading to 33 deaths.
The misdemeanor charges do not allege any criminal
“intent,” but FDCA violations alone are sufficient for
misdemeanor charges. The Jensen Farms case has
caused many growers to raise their eyebrows to try to
understand what the potential criminal exposure could
be for a food handler who unintentionally sells adulterated food.
The FDA’s basis of charges lies upon the history and
evolution of the Park Doctrine — which allows misdemeanor charges even though criminal intent is not
evident — and its use in the Jensen Farms case.
The main development, and something that all growers, packers and food manufacturers should be aware
of, is that Jensen Farms was charged criminally without
having any intent to do anything wrong or any knowledge of any problems. That means potential lawsuits,
especially if injuries or death of consumers, occur.
FDA is being more aggressive about pursing criminal
charges and that trend could increase.
FSMA rules are changing to change the game. And
new rules require investment by industry to meet the
demands. The fact that you can be found strictly criminally liable is yet another reason to take the new regulations seriously, to start preparing now for what it looks
FDA is going to require down the road and for investing
in getting it right from the start.
• Implement compliance programs at all levels
• Ensure current food safety standards are up-to-date
• Keep good records
• Train employees.
Fuel price spike
effect on produce
Fuel prices surges have the potential to hurt fresh produce demand, according to a new U.S. Department of
Agriculture study. The study, titled “How Transport Costs
Affect Fresh Fruit and Vegetable Prices” was published
by the USDA’s Economic Research Service. It examines
the influence of fuel and transportation costs on wholesale produce price volatility.
The report predicts the effect of changing fuel prices on
wholesale prices of fruits and vegetables, said Richard
Volpe, an author of the report and research economist in
the Food Markets Branch of the Food Economics Division.
Among other things, the study looked at the effects to
the industry if gas prices would double. While that’s a
dramatic increase, he said it helps to put into perspective what effects high fuel prices would have on fresh
produce. Some fresh produce items would see prices rise
by 40% to 50% with a doubling of fuel costs, he said.
The study showed that a 100% increase in diesel prices
would lead to a short-term average wholesale produce
price increase of 20% to 28%. That type of spike is
meaningful, he said, because the effect of fuel price increases on fresh produce is higher than it is for packaged
or shelf stable foods.
“It underscores the idea that more perishable foods — the
foods more in line with dietary guidelines — that are
more likely to face volatility as a result of input prices
such as fuel,” he said. The study demonstrates that fuel
prices are a significant factor in determining the difference between domestic wholesale and farm-level produce
prices. For produce shipped by truck, the price margins
are increasingly sensitive to fuel prices with greater distance from the growing region.
Volpe said he was somewhat surprised by transportation technology’s effect on fuel price increases. “Almost
across the board, the commodities that were most sensitive to fuel price swings were those that were produced
in the U.S. and shipped within the U.S. and shipped from
state to state,” he said. Those U.S.-produced commodities rely on truck transportation, which is more energy
intensive by far than ocean carrier transportation which
bring in produce from other countries.
“A lot of people have this perception that the closer to
home you are for the source of your food the better in
terms of being sustainable and fuel efficient and all that,
but that is not obviously always the case,” he said.
The study found that commodities with larger import
shares generally exhibit less fuel price sensitivity, with
the authors concluding that is because ship transport is
considerably less energy-intensive per mile than trucks.
Studies have shown that trucking uses more than 13
times more energy per-mile per-pound shipped than does
Rail fuel efficiency is almost as good as ocean shipping,
and Volpe said the study makes it clear that the incentives
of produce price stability and price predictability favor
more rail transport of fresh produce.
“To the extent that the fuel price share of produce prices
can be reduced, that’s one major step to reducing price
volatility, which should improve welfare,” he said.
“There are incentives to move in that direction, but that’s
not to say it is going to be easy.”
Volpe said more research is needed, particularly on the
link between increases in fuel prices and changing retail
Finding precise data from the retail sector will be more
challenging, but Volpe said he believes more research is
Jensen case sending
the produce industry
On Nov. 20, Eric and
Ryan Jensen, owners
and operators of Jensen
assigned their lawsuit
against PrimusLabs to
Marler, a nationally
advocate and managing
partner of the Seattle-based law firm Marler
Clark. The firm specializes in foodborne illness cases,
and Marler represents 46 of the 64 victims of the 2011
Listeria outbreak traced back to tainted cantaloupes
grown at Jensen Farms.
During the outbreak, 33 people died and another 147
people were sickened in the United States.
The assignment, made during an off-the-record meeting held at the federal courthouse in Denver, followed
several months of discussion. “Jensen has given my
clients that lawsuit,” Marler stated, adding that the assignment was taken in behalf of all 64 victims.
A lawsuit filed by Attorney Forrest W. Lewis sought
five claims of relief for Jensen Farms. The claims
against Primus include negligence; breach of contract;
negligent hire; negligent misrepresentation; and unfair
and deceptive trade practices.
Marler said a number of lawsuits have been filed in
behalf of victims in 16 states. A total of 20 lawsuits
have been filed in Colorado. “We’re in the long phase
of litigation,” he noted. The relationship between
manufacturers and consumers, and the degree to which
victims have recourse to file claims varies from state to
state. According to Marler, Primus has filed motions to
dismiss in jurisdictions based upon not having a duty
to consumers. “Even if Primus wins some motions to
dismiss, they won’t get away. If nothing else, they will
have to deal with the Jensen suit.”
Marler said the third-party auditing industry has
evolved largely unregulated. Historically, the meat
industry had inspectors in every plant. “On the FDA
side, that’s not the culture they grew up in,” he said of
the fresh produce industry. “Sure, there are great third-party auditors,” he said. But he added that inspection
reports generated at the time of a severe outbreak can
show a mismatch between inspection scoring and
actual conditions at a facility, often leaving people to
wonder “if the facility is the same.” Marler, whose
professional experience spans more than 20 years, said
the Jensen case is the only one where a specific auditor
has been named in a lawsuit. “There has to be a causation between the alleged failure of the inspection and
the outbreak,” he stated. “[Primus] was there when the
outbreak was happening.”
in ObamaCare rollout
The White House delayed the launch of its online small-business exchange by one year. The delay is another
setback for the troubled enrollment process of President
Obama’s signature healthcare law. Companies with
fewer than 50 employees were slated to begin buying
coverage through the Small Business Health Options
Program (SHOP), an online ObamaCare exchange. The
exchange’s delay means small businesses will instead
have to seek out coverage through an agent or broker.
U.S. Department of Health Services spokeswoman Julie
Bataille said the delay was the result of the administration concentrating its focus and energy on getting the
online exchange for individuals up and running by Nov.
30. Bataille argued that since many small businesses
already go through agents and brokers, the disruption
would be small because employers are already familiar
with the process. She also said employers would be able
to determine their eligibility for tax credits, a key feature
of the federal exchange, through the workaround.
Republicans seized on the announcement as yet another
example that the healthcare law is doomed to fail. “Once
again, President Obama has unilaterally delayed another
major portion of ObamaCare, and once again, he has tried
to bury bad news around a holiday hoping nobody will
notice,” House Majority Leader Eric Cantor (VA) said in a
statement. “The president’s latest one-year delay is another
sign that ObamaCare’s issues run much deeper than a
failing website,” he added. “The delay is also a reminder
of the terrible harm ObamaCare will inflict on small businesses, costing jobs and economic growth. The president
has fought bipartisan efforts to give middle class families
and individuals a similar one-year delay from the debacle
It’s not the first delay for the SHOP exchange, which
hasn’t received the attention of some other aspects of the
law because of the problem-plagued individual exchanges.
The healthcare law establishes new insurance marketplaces, referred to as SHOP exchanges, where small businesses
can compare and purchase insurance plans. The healthcare
law allows small businesses to either offer a single plan to
all of their workers or pick a certain benefit level and let
workers choose among plans at that level.
The HHS delayed the latter option earlier this year,
saying it’s too complicated for insurers to implement
right away. Workers will still not be able to choose from
an employer-approved benefit level of plans during the
one-year delay. The White House has instituted a handful of unilateral delays. The Spanish-language version
of the website will not be ready on time either, despite
assurances to the contrary. And the White House has on
a number of occasions moved back deadlines associated
with individual enrollment.