A lawsuit was filed on December 4, 2009, against Cargill seeking at least $100 million to compensate Stephanie Smith for the tragic, life-changing injuries that she suffered as a result of eating a hamburger patty contaminated with deadly E. coli O157:H7 bacteria.  The hamburger patty–part of a box of premade, frozen patties sold by Walmart under the American Chef’s Selection Brand–was manufactured by Cargill, the largest privately-held corporation in America, with reported earnings last year of $3.3 billion on $116 billion in sales. I wrote previously about the meat industry’s response to Ms. Smith’s case in an article titled, Lies, Damn Lies, and Statistics: More Meat Industry Dissembling on E. coli.  According to an article about the lawsuit published in the Pioneer Press newspaper[1]:

Smith’s case has drawn widespread media attention, and she has become the most vivid and horrifying face of the rising number of food-borne illness outbreaks. Her story has helped bring reforms to the food-safety system inside the U.S. Department of Agriculture, and nudged along a food-safety bill in Congress.

At a family barbeque in 2007, Smith ate a hamburger sold at Sam’s Club, and processed by Cargill, which was tainted with a deadly strain of E. coli. Her health quickly deteriorated, and she suffered so many seizures that doctors put her into a drug-induced coma to save her life, and transported her to St. Mary’s Hospital in Rochester. She was in a coma for three months.

Two months ago, the New York Times cited confidential trace back information that showed the beef originated from four different Cargill suppliers — three plants scattered around the United States, and one in Uruguay.

And according to another article, this one published in the Star Tribune, efforts to settle Stephanie’s case without the need for litigation “collapsed” because Cargill took the position that it was not its fault–or not entirely–because it was actually one of its suppliers, Greater Omaha Packing Company, that had sold Cargill the raw materials that ended up contaminating the ground beef patties that were sold to Sam’s Club, and then to dozens of subsequently poisoned consumers.  As explained by my law partner, Bill Marler, who attended the two-day mediation at which settlement negotiations occurred:  “What it comes down to is Cargill really believes it’s not their fault….They believe that it’s one of their suppliers’ faults, but there’s no evidence to suggest which one of their suppliers is at fault.”[2]

The previously-cited Pioneer Press article expands upon this point, explaining why we sued only Cargill, and not the raw material supplier that Cargill had fingered:

Marler was asked why he only named Cargill Meat Solutions in the lawsuit, not any of the four outside suppliers or Wal-Mart.

“The grinding records of Cargill make it impossible to say where Cargill sourced its meat from,” Marler said. “Cargill is the manufacturer, and they’re ultimately responsible for the meat that was sold to Sam’s Club.”

Marler later added, “Ultimately what I think Cargill’s problem is, they want to point the finger at one of their suppliers…But I have looked at all the documents, and have seen all the grinding records, and there’s just no adequate evidence in my opinion to link this E. coli outbreak with any supplier.”

(To have a look at the grinding record that purports to be the “smoking gun,” look here: http://documents.nytimes.com/food-safety-documents#p=1)

The practice of pointing the finger at an upstream supplier is hardly a new maneuver.  But decades ago–prior to the nationwide “tort reform” push that occurred in the 80’s–a plaintiff was mostly entitled to sue the defendant of its choosing, and to collect the entire judgment from that one defendant.  This was called joint liability, whereby a single entity could be held 100% liable for the damages that the plaintiff suffered, even if multiple other entities contributed to causing the injury.  This is where we got the term “deep-pocket” defendant–that is, the defendant that was deemed most able to pay the entirety of a damage award, the one with the deepest pockets.  But because retailers–the entity that did nothing more fault-worthy than sell the defective product–were most often sued, the cry for tort reform arose as a response to surging (supposedly) insurance premiums.  And the most common reform enacted was to replace joint liability, with several liability–that is, a defendant need only pay for the portion of the fault allocated to it by the jury.  This meant, among other things, that a plaintiff needed, in most cases, to sue everyone potentially at fault so as to not risk being only partly compensated.  (In most states, including Minnesota, the jury gets to allocate fault to entities not made a party to the lawsuit too.)

The basic rationale behind joint liability was that the plaintiff was entitled to full compensation in the most expeditious manner possible.  Moreover, any injustice that arose from a company having to pay more than its “fair-share” could be alleviated by the filing of a contribution action–a lawsuit that sought to force other at-fault entities to contribute to the judgment paid by the entity that the plaintiff sued.  The fact that this sorting-out of fault occurred later–that is, after the plaintiff has been compensated, was not seen as too much of a burden for the at-fault entities to bear, since, of course, they were at-fault, and so it was their presumed negligence that had created the situation in the first place.  Of course, this assumes that the plaintiff was not herself at fault for the fact of injury, an assumption that was necessarily true when the rule of contributory negligence applied, a rule that prevented a plaintiff from recovering at all if she was even 1% at fault for her injuries. [3]

Because the plant where Cargill manufactured contaminated hamburger patties is a grinding operation that does not slaughter cattle or process carcasses, contaminated raw materials are almost certainly the source of the E. coli O157:H7 that caused such severe and widespread suffering–not just with Stephanie, but the dozens of others injured as part of the 2007 Cargill outbreak.  So it is not surprising that Cargill would, on some level, blame its suppliers.  Neither is it surprising that the USDA would attempt to identify (or “traceback”) the source of the raw materials to determine if the huge recall related to Cargill meat products might need to be expanded even further to include products manufactured by others.  What is surprising, however, at least at first glance, is that the USDA could not conclusively identify the source of the contaminated raw materials, despite having complete access to Cargill’s records.  

Of course, the failure of the USDA to determine the source of the contaminated raw materials will not stop Cargill from claiming to have made such identification itself, but such a claim needs to be understood as argument, not fact.  Plainly, Cargill is not an uninterested or unbiased party in this blame-game.  And just as plainly, if the USDA-folks–who are not only unbiased, but also highly motivated to determine the source of contaminated raw materials as a means of preventing future outbreaks–could not, based on all of the records available to them, identify the contamination-source, then why should Cargill’s self-serving analysis be accepted as credible?  It should not.  That does not mean, however, that anyone should be surprised by the attempt.

Given this after-the-fact attempt at blame, Cargill merely joins a long line of manufacturers who try to shift the blame for the fact th
at they made and sold an uns
afe product as a result of their use of unsafe raw materials.  In legal terms, this stratagem is call “allocation of fault,” and it is task that ultimately falls upon a jury to perform.  In fact, lawsuits arising from a well-investigated outbreak of foodborne illnesses, the issue of fault-allocation is the most likely to be vigorously contested, and, as evidenced by the failed attempt to settle the Stephanie Smith case without the need for litigation, also the most likely to scuttle settlement efforts.  Although all involved agree that Ms. Smith is entitled to full compensation for her grievous injuries, there is no similar agreement as to who should do the compensating, and in what percentages of relative responsibility.  

Commenting on this issue of relative responsibility, and the New York Times article on Stephanie Smith, an article in the Lincoln Star Journal observed:

Smith was victimized by ground meat that was tainted – nobody knows where or when in the processing chain – sold at a Sam’s Club and packed at a Cargill meat plant in Wisconsin, supplied in part with meat trimmings from Greater Omaha Packing Co.

At a plant the size of four football fields at 30th and L in Omaha, the company slaughters and processes 2,600 cattle daily, the Times reported.

Others in the Cargill supply chain were slaughterhouses in Texas and Uruguay, and Beef Products Inc., a South Dakota company with a plant in South Sioux City, Neb.

Using a combination of sources of meat and trimmings allowed Cargill to spend about 25 percent less than it would have otherwise, according to the Times.

In a response to questions from the Journal Star, Angelo Fili, executive vice president of Greater Omaha Packing, expressed sympathy for victims of tainted food. But he also said the Times story was biased and unfair because it neglected to report that Greater Omaha’s product has never been recalled, and its contribution to the Cargill product that crippled Smith had been cleared by a lab.

“Copies of the Certificate of Analysis test results of Greater Omaha’s product used by Cargill are available at our Website: www.greateromaha.com,” Fili said in an e-mail. “All product tests were performed by IEH Laboratories, the same lab that the New York Times used for their E. coli tests as referenced in the article. [4]

And so here you have a situation where Cargill selected its suppliers, and (one presumes) did its due diligence with regard to knowing that the suppliers were to be trusted.  Furthermore, as point out by the executive vice-president of Greater Omaha, Cargill also required that its suppliers test raw materials prior to their being shipped to its processing plant, and copies of the test results were made available to Cargill.  This means, presumably, raw materials that were not tested could be rejected by Cargill, and thus not used to make its ground beef patties.  Finally, there was also the option of Cargill testing the raw materials itself, as a sort of double-check on quality control.  But despite these facts, it remains Cargill’s stated position that it is not at fault, at least not entirely so, for the injuries that Stephanie suffered as a result of her E. coli O157:H7 infection.  Litigation thus commenced, and the resolution of Stephanie’s claims must await another day, a day that just may be one in which a jury decides whether to follow the path of Cargill’s finger, and make another entity pay for all or part of the millions of dollars of damages to be awarded.

[1] Tom Webb, “Minnesota woman sues Cargill for $100 million in E. coli case,” Pioneer Press, December 4, 2009, at http://www.twincities.com/ci_13926396

[2] See Matt McKinney, “Family of E. coli victim sues Cargill for $100 million, at http://www.startribune.com/local/78529222.html  

[3] This rule is still followed in four states (Alabama, Maryland, North Carolina, and Virginia), and the District of Columbia.  Twelve states bar the plaintiff from recovering anything if she is 50% at fault, whereas twenty-one states require the plaintiff to be 51% at fault before recovery is barred.  Thirteen states follow the pure-comparative fault rule, which allows the plaintiff to recover even if found to be 99% at fault, but the recovery is reduced by the percentage of the plaintiff’s fault–e.g., if she is awarded $100, she would only recover $1.  In Stephanie Smith’s case it remains to be seen whether Cargill will decide allocate fault to her or her mother based on the accusation that the ground beef was negligently “undercooked.”  This is certainly a position that Cargill has taken before.

[4] See Richard Piersol, “Beef Industry under fire after N.Y. Times article, Lincoln Journal Star, October 17, 2009, at http://www.journalstar.com/news/local/article_8b7de410-bb7f-11de-8369-001cc4c03286.html