Ensuring the safety and quality of products manufactured in Australia

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In a presentation made to Australian beef producers visiting Seattle, attorney Bill Marler discussed meat safety and the U.S. legal system a it applies in civil litigation brought by victims of foodborne illness.

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Ensuring the safety and quality of products manufactured in Australia

  1. 1. ENSURING THE SAFETY AND QUALITY OF PRODUCTS
  2. 2. The Question is Why Do You Even Care?
  3. 3. U.S. Civil Litigation – How it Really Works• Strict liability – It is your fault – Period!• Negligence – Did you act reasonably?• Punitive damages – Did you act with conscious disregard of a known safety risk?
  4. 4. Strict Liability for Food – a Bit(e) of History“… a manufacturer of afood product under modernconditions impliedly warrantshis goods… and thatwarranty is available to allwho may be damagedby reason of its use in thelegitimate channels of trade…”Mazetti v. Armour & Co., 75 Wash. 622 (1913)
  5. 5. The Legal Standard: Strict Liability • The focus is on the product; not the conduct • You are liable if: − The product was unsafe − The product caused the injury STRICT LIABILITY IS LIABILITY WITHOUT REGARD TO FAULT.
  6. 6. Manufacturer vs. Retailer – Lines BlurManufacturer – A “manufacturer” is definedas a “product seller who designs, produces,makes, fabricates, constructs, orremanufactures the relevant product orcomponent part of a product before its saleto a user or consumer….” Retailer – “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.”
  7. 7. Manufacturer vs. Retailer – Strict Liability• In states that have adopted the Restatement of Torts 2d, any seller in the chain of distribution of a defective product may be held strictly liable for harm caused by the product.• Even in states that have not adopted the Restatement approach, further manufacturers/retailers may still be held strictly liable if the original manufacturer is bankrupt or can not be served.
  8. 8. Manufacturer – Common Law - Restatement • Also, in many states, a retailer of a product manufactured by another, which holds itself out to the public as the products manufacturer, has the status of a manufacturer and is subject to the same liability damage caused by a defective product. • Justification: Where a defendant puts out a product as its own, the purchaser has no means of ascertaining the identity of the true manufacturer, and it is thus fair to impose liability on the party whose actions effectively conceal the true manufacturers identity.
  9. 9. When Products AreManufactured in Australia
  10. 10. The Scope of the Issue• Australia shipped $16 billion worth of goods to the U.S. in 2011.*• The U.S. Refused 106 shipments in 2011**• Ag imports from Australia to the U.S. are big business and getting bigger. In 2011, the U.S. imported $2.4 billion worth of Agricultural products--$1.2 billion worth of beef and sheep.* *Office of the U.S. Trade Representative: http://www.ustr.gov/countries-regions/southeast-asia-pacific/australia **FDA Import Refusal Reports: http://www.accessdata.fda.gov/scripts/importrefusals/ir_months.cfm?LType=C
  11. 11. Can an Australian Manufacturer be Sued? • From Injured Person’s and Importer’s perspective: 1. Can the manufacturer be subject to personal jurisdiction of the U.S. courts? 2. Does the manufacturer have fixed assets in the U.S. that can be attached to satisfy a U.S. court judgment? 3. Can the manufacturer be sued in Australian Courts?
  12. 12. Where Is This Headed?Unlikely that Injured persons will have rights in the shortrun directly against a Australian manufacturer, However:• Contracts with Australian manufacturers will include specific indemnities in favor of the importer on product safety and quality issues.• Contracts with Australian manufacturers will be amended to include a specific provision requiring the Australian 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.
  13. 13. What We Want to Avoid
  14. 14. What is the “Bottom Line?” The entire chain of distribution is impacted

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