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Marler Blog Providing Commentary on Food Poisoning Outbreaks & Litigation

Secrecy in Food Poisoning Settlements – Is it Time for Transparency?

I took the time today to read the Seattle Times article by Maureen O’Hagan, “Seattle lawyer turns into healthy food crusader,” and I was struck by a discussion I had with the reporter:

Marler, … says he and his firm, Marler Clark, have pried $500 million in settlements out of companies that have sickened customers. The vast majority of the firm’s cases settle. "We have a lot of big cases, $7 (million) to $10 million cases," Marler said. "People don’t just give you that kind of money unless you have your foot on their throat."

I won’t say that she did not believe that we had reached $500,000,000 in settlements in the last ten years, but she was skeptical. And, who could blame her. I mean, no matter how hard you look, you will find only one verdict (Finley E. coli O157:H7 Outbreak) and only a few settlements – Jack in the Box’s $15,600,000 settlement with Brianne Kiner, Odwalla’s $12,000,000 – $15,000,000 E. coli O157:H7 settlement, and a $11,000,000 E. coli O157:H7 settlement with BJ’s. Those settlement amounts only became public in part because of mistakes – the defense lawyer failed to seal the BJ’s court file and it appears that Odwalla leaked the settlement despite the parents of the children wanting the settlements to be confidential. The Kiner settlement was different – both sides, the Kiners and Jack in the Box, wanted the settlement to be public.

So, no wonder that Ms. O’Hagan questioned the settlement total. All three settlements that you can find, Kiner, Odwalla and BJ’s, were the exception to the general rule of confidentiality.

The “bottom line” is that defendants (a.k.a., companies that poison customers) and their insurers want confidentiality. Why? What food company really wants to admit that it paid money for poisoning someone? And, what insurance company wants to admit it paid any money at all to anyone at anytime?

As for victims, many agree to the defendant’s desire for confidentiality to get the money that is rightfully theirs for compensation for injuries, while others simply feel that the public does not need to know the amount of the settlement – in essence, a right to privacy.

The reality is that nearly all of the settlement agreements today contain a provision like:

Confidentiality. In further consideration of the payment to be made by Releasee, Releasors and their attorneys, including all individuals employed by or with the Releasors and/or their attorneys agree and represent that the existence of this Agreement, the Agreement itself, the terms of the Agreement, and the allegations of the complaint, are and shall remain confidential. Except as permitted below, Releasors and their attorneys agree that they will not disclose and have not in the past disclosed this Agreement or the contents thereof to any person, organization and/or entity, and will use their best efforts to insure that any such person who is permitted knowledge of the terms of this Agreement, will not violate the letter or spirit of this Agreement and the confidentiality provisions contained herein.

As I said, injured plaintiffs may desire privacy and therefore find confidentiality of settlements – especially for their children – beneficial. Defendants and insurers clearly benefit from secret settlements by both keeping, if they paid, and how much they paid, confidential.

However, does the public as a whole suffer from these confidential settlements?

What if a food company repeatedly causes harm and then covers up, not only the amount of the settlement, but also the cause of the outbreak, through a confidential settlement? And, how does the public benefit from allowing settlements by insurance companies to be secret – especially given that taxpayers have bailed several of these companies out?

However, what if each settlement amount was transparent? What if the media reported on the settlement? What if the public knew about the number of settlements and the amounts? Would it change legislator behavior? Would it change regulatory behavior? Would it change consumer-purchasing behavior? Would it change a companies investment it food safety?

I fear that as long as settlements are confidential we really will never know. Perhaps it is time for transparency?  From here on out, I will only agree to confidential settlements if the clients demand it.

  • Larry Andrew

    I think the consumer would benefit and the food industry would improve safety as a result. Clearly the public would avoid food produced by companies that had a record of poisoning consumers
    It is as though there is a natural law. C=T
    C is the benefit to insurance and food companies derive from confidentiality..
    T is the benefit the public derives from settlement transparency.
    The greater the value of C, the greater the value of T.

  • c p

    You would think that health departments would want to disclose the food borne illness incidents. Most health departments avoid any public announcements and try to downplay and limit investigation of food borne illness outbreaks. I speak from experience as a former sanitarian who was not encouraged to pursue food borne illness cases. There are many more cases than are disclosed.

  • Marymary

    It was the policy of my state health dept. to downplay foodborne illness outbreaks. They did not limit investigation, but they often did not go public when they were investigating. In an outbreak I was involved with at the local level, the state health dept. advised us (the local health dept.) not to disclose anything to the local media. It the media somehow found out, we were to stick to prescribed talking points.
    I’m very much in favor of transparency regarding legal settlements, but wouldn’t that have to apply to all product liability and all other tort liability and not only foodborne illness cases? And what about contractual disputes? Seems to me that we’d have to change the whole way that civil liability is handled. Are attorneys, judges, plaintiffs and defendants ready for that?