Why did Whole Foods stop selling raw milk in California, Washington, Pennsylvania, and Connecticut?
In January, I wrote “Risky Business – Why would a retailer like Whole Foods sell Raw Milk?” – perhaps Whole Foods actually paid attention? In the last two years I have spoken at various conferences of the financial risks–specifically to retailers and insurers–of selling raw milk. Over the weekend Whole Foods stopped raw milk sales in California, Washington, Pennsylvania, and Connecticut. Insurers are leaving the market. Why did they do it?
Here are the reasons: over the past several years, I have represented several families of children whose parents purchased raw milk directly from the farmer. The children came away with E. coli O157:H7 bacteria-mediated Hemolytic Uremic Syndrome, months of hospitalization, hundreds of thousands of dollars in medical expenses, and millions of dollars in risk of future complications, including end stage renal disease and the need for multiple kidney transplants.
I also presently represent two people (one child and one adult) from Connecticut who consumed raw milk purchased at a Whole Foods. The milk was contaminated with E. coli O157:H7. Both developed Hemolytic Uremic Syndrome. Once again, hundreds of thousands of dollars in medical expenses have been incurred. One victim, a twenty-eight year old mother, will likely require a kidney transplant–again, at a multiple million-dollar cost.
Now for the risky part to retailers and insurers: most, if not all, raw milk farmers have limited insurance and very few assets that are not owned solely by the bank. If they face litigation for poisoning a customer, bankruptcy is always an option and what insurance is available is paid.
But, what about the risk to the retailer? True, in selling raw milk they are “only” selling a product that has a history of sickening consumers – they did not manufacture it.
So, is a retailer, like Whole Foods, liable for paying millions of dollars to its customers if they are sickened by raw milk? The short answer is–Hell yes! The reality in most states is that the entire “chain of distribution,” whether you are a manufacturer (a farm is) or retailer, you are responsible if a product (raw milk is a product) causes harm. That means the farmer, the shipper, and the retailer will be responsible (morally and legally) to the consumer for all damages caused by the product. It is true that, depending on the state; a court may apportion damages between various members of the “chain.”
However, and this is key, if the original manufacturer (the farmer in this instance) is bankrupt or has limited assets (including insurance), the retailer may be left “holding the bag”–partially empty–that the retailer will need to fill. By way of example, assume that raw milk sold at a Whole Foods sickens five people. Two develop Hemolytic Uremic Syndrome. Assume further that the farm has only one million dollars in insurance and limited assets. Also assume that the total value of all cases (settlement or verdict) is ten million dollars. Guess who pays the nine?
So, why did they do it? They sold it because of money and they stopped selling it because of money.
Or, perhaps Whole Foods was paying attention to my speech at the AVMA: