PREVENTION

1. PREVENTION “Best Laid Plans of Mice & Men”* *John Steinbeck Presented by: Martin L. Ellis mellis@bvblaw.com Darren V. Berg dberg@bvblaw.com 2701 Kingston Pike Knoxville, TN 37919

2. The Big Swim IIIEscape from Alcatraz

4. CURRENT FOOD SAFETY PLANS IN PLACE • HACCP is a systematic approach to the identification, evaluation, and control of food safety hazards based on the following 7 principles: • Conduct a hazard analysis • Determine the critical control points • Establish critical limits • Establish monitoring procedures • Establish corrective actions • Establish verification procedures • Establish record-keeping and documentation procedures

5. RECENTLY REPORTED OUTBREAKS 2010 ■ Half a billion eggs recalled as a result of Salmonella outbreak tied to two Iowa egg farms. ■ E. Coli O26 linked to 3 illnesses and recall of four tons of ground beef produced by Cargill Meat Solutions. June 2010 ■ $12,000,000 Settlement for victims of 2008 peanut butter Salmonella outbreak approved by the U.S. District Court for the Western District of Virginia. September 2010 ■ Salmonella outbreak linked to Taco Bell. Suit filed against Taco Bell and parent company Yum! Brands. August 2010 ■ Food poisoning lawsuit against Di Nolfo’s Banquet Inn and Catering Service. July 2010 ■ Salmonella outbreak linked to Marie Callender’s brand frozen Cheesy Chicken and Rice dinners. June 2010 ■ Salmonella infection after eating at Athens, Ohio Casa Lopez restaurant. June 2010 ■ California-based Caldwell Fresh Foods recall of raw alfalfa sprouts distributed in 19 states due to contamination by Salmonella. May 2010 ■ E. Coli O145 in three states linked to tainted lettuce from Freshway Foods. May 2010 ■ Salmonella death allegedly contracted from pepper produced by Union International Foods. March 2010 ■ Salmonella linked to Pepper Salami allegedly produced by Wholesome Spice and Mincing Oversees Trading Company. May 2009

6. LEGISLATION SUMMARY OF H.R. 2749THE FOOD SAFETY ENHANCEMENT ACT OF 2009 [Passed by the House 7/09 (Vote: 283-142)] ■ Registry ■ FDA Oversight ■ Prevention ■ Increased Inspections ■ Certification of Food Imports ■ Fast-Track Import Process ■ Safety Plans-FDA & USDA ■ Improve Traceability ■ Required Country-of-Origin Labeling ■ Expand Lab Testing Capacity ■ Strong, Flexible Enforcement Tools ■ Advance Science of Food Safety ■ Enhanced Transparency of GRAS ■ Fee for Post-Violation Inspection ■ Infant Formula ■ Ability to Detain Tainted Foods ■ Prohibit/Restrict Movement of Harmful Food Products ■ Up-To-Date Registry of Importers ■ ID Numbers for Facilities/ Importers ■ Protection for Whistleblowers ■ Subpoena Records Related to Possible Violations

7. LEGISLATION SUMMARY OF S. 510THE FDA FOOD SAFETY MODERNIZATION ACT (Pending in Senate) Directs the Secretary to assess and collect fees related to: ■ food facility reinspection; ■ food recalls; and ■ the voluntary qualified importer program Requires the Secretary to: ■ promote the safety and security of food; ■ promulgate regulations on sanitary food transportation practices; ■ develop policy re: risk of food allergy/anaphylaxis in schools and preschools; ■ allocate inspection resources based on the risk profile of food facilities or food;■ recognize bodies that accredit food testing laboratories;■ improve capacity to track and trace raw agricultural commodities. ■ to enhance foodborne illness surveillance systems; Authorizes the Secretary to order an immediate cessation of distribution or recall of food; Requires EPA to assist in an agriculture or food emergency; Provides for: ► foreign supplier verification activities; ► a voluntary qualified importer program; ► the inspection of foreign facilities registered to import food.

8. S.3669(Submitted by Senator Leahy and Senator Franken) July 29, 2010A bill to increase criminal penalties for certain knowing violations relating to food that is misbranded or adulterated.Any person who knowingly violates with respect to any food that is misbranded or adulterated shall be fined and imprisoned for not more than 10 years.

9. What sodium reduction recommendations mean for your restaurant June 17, 2010 | By Anita Jones-Mueller .... On April 20, the Institute of Medicine, or IOM, released its report, “Strategies to Reduce Sodium Intake in the United States," which outlines a long-term, collaborative solution to reducing America’s high intake of sodium. The IOM report emphasizes the need for “an overall reduction of the level of sodium in the food supply — that is, the level of sodium to which consumers are exposed on a daily basis from processed and restaurant foods.”

10. CASE STUDY DENNY’S SODIUM LITIGATION July 2009 BACKGROUND • Class action (lead member Nick DeBenedetto) filed against Denny’s in New Jersey state court in July 2009 • Lead Plaintiff alleged he was a long-time customer who frequently purchased Denny’s meals • Class action alleges Denny’s single meals contain more sodium, “in some cases two or three times more”, than the maximum recommended daily allowance ALLEGED DAMAGES • Sought damages for refund of each meal purchased by each class member; treble damages and attorneys’ fees under the state’s consumer protection statute • Denny’s moved for dismissal based on the fact that the case was really a products liability claim and that the Plaintiffs had failed to alleged sufficient facts in their Complaint to avoid summary dismissal. The Court accepted this argument and dismissed the lawsuit in its entirety APPEAL • Plaintiffs have appealed to the first level intermediate appellate court, arguing that dismissal was improper because face of Complaint stated a cause of action for consumer protection violation and breach of UCC warranty (Merchantability)

11. CASE STUDY CAMPBELL SOUP SODIUM LAWSUIT March 15, 2010 • Class action filed over marketing and sale of Campbell Less Sodium Tomato Soup which, while being labeled as containing “25% less Sodium” contains same amount of sodium as regular Campbell condensed product • Also, the Healthy Request Tomato Soup, even when labeled as being “low in fact and cholesterol”, the product contains more fat than the Campbell Regular Tomato Soup • Alleged violation of New Jersey Consumer Fraud Act, Breach of Express Warranty, Unjust Enrichment and Injunctive Relief

12. NEW FEDERAL MENU-LABELING LAW • National nutrition disclosure from restaurant chains included in the Healthcare Reform Bill that President Obama signed into law March 23, 2010. • Restaurants, food establishments and vending machines must disclose the number of calories of each standard menu item. • Take-out menus and online menus should include calorie information. • Chains with 19 or fewer units are not required to comply but may do so voluntarily by registering with the FDA. • Calorie data postings include: • Beverages, including alcoholic beverages • Self-service items-salad bars, buffet cafeteria lines • Total number of calories from any source, total number of calories from fat, total fat, total saturated fat, cholesterol, sodium, total carbohydrate, sugar, dietary fiber and total protein. Query: Will this menu-labeling law revive the Sodium Class Action Case?

13. The Most Controversial Man in Foodservice Michael Jacobson, the executive director of the Center for Science in the Public Interest, discusses what he has in his crosshairs for 2010. He looks more like a tenured professor than a zealous consumer advocate. He is soft spoken with round wire glasses and a navy sports coat, a warm smile and gray curly hair. He is Michael Jacobson, executive director and co-founder of the Center for Science in the Public Interest (CSPI), and at first glance it looks like he’s more likely to serve up a warm cup of tea than a lawsuit. At times his crusade has even led him to the courtroom, bringing lawsuits against and threatening to sue chains including Denny’s, Burger King, Starbucks, and KFC, and brands like Red Bull, Vitaminwater, and Sara Lee. While critics have called the CSPI the “joyless eating club” and insist Jacobson’s work is based on “junk science,” major chains realize that, for better or worse, Jacobson is an industry agenda-setter. Why target salt? Most people are blissfully unaware that high sodium levels in their foods are a major problem in regards to their health. High sodium diets promote high blood pressure, heart disease, and strokes. And there’s been so little publicity in the U.S. about this problem, it’s no surprise that the public isn’t aware of it. But big companies are well aware that high-sodium diets are a major problem because the British government has been beating them up on them for five years. They’re lowering sodium levels in Britain and they need to do the same in the U.S.

14. RISK MANAGEMENT  Personnel/Training  Policies & Procedures  Recall Team/PR Team/CM Team  Contractual Agreements  Insurance  Warnings  Communication  Onsite Inspections

15. CRISIS MANAGEMENT “ALL THE KING’S HORSES AND ALL THE KING’S MEN...”* *Humpty Dumpty

16. CRISIS MANAGEMENT ► REACT QUICKLY and APPROPRIATELY ► INITIAL INVESTIGATION ● Document with incident report “in anticipation of litigation” ► CONTACT: ● legal counsel ● local health department ● crisis management team ● insurer ► BP Youtube video/advertorial ► FOLLOW UP INVESTIGATION: Monitor press, interact with governmental agencies, respond on behalf of company, oversee site visits, etc. (Maple Leaf Recall)

17. FDA U.S. FOOD & DRUG ADMINISTRATION • New final rule to ensure egg safety, reduce Salmonella illnesses goes into effect July 9, 2010. Rule affects egg producers having 50,000 or more laying hens (80% of production). • New Rule requires: • ■ Buy chicks and young hens only from suppliers who monitor for Salmonella bacteria. • ■ Establish rodent, pest control, and bio security measures to prevent spread of bacteria. • ■ Conduct testing in the poultry house for Salmonella Interreges. • ■ If tests are positive, a representative sample of eggs must be tested over 8-week period. If any of the egg tests are positive, the producer must further process the eggs to destroy the bacteria, or divert the eggs to non-food use. • ■ Clean and disinfect poultry houses that have been tested positive for SE. • ■ Refrigerate eggs at 45 degrees Fahrenheit during storage and transportation no later than 36 hours after the eggs are laid. • ■ Egg producers must maintain a written SE prevention plan and records documenting their compliance. • FDA says as many as 79,000 illnesses and 30 deaths due to consumption of egg contaminated with SE will be avoided each year under these new safety requirements.

18. CASE STUDY NO. 1 • 483 is issued where investigators observe any significant objectionable conditions. • Objectionable observations shared with company management. Companies have informed FDA that they will not ship shell eggs to consumers until FDA is confident that the eggs are safe for consumption. • Quality Egg, Wright County Egg and Decoster Farms (“Decoster”) 8/13/10: • ■ Failure to prevent stray poultry, wild birds, cats and other animals from entering poultry houses. • ■ Outside access doors to manure pits were pushed open by weight of manure. • ■ Animals, including rodents, were able to enter poultry house due to structural damage. • ■ Failure to estimate birds from laying houses and to control rodents or flies. • ■ Live flies were observed on and around egg belts. • ■ Live flies were crushed under foot when employees walked in the aisles at work. • ■ Dead maggots observed in the manure pit of one plant. • ■ Failure to implement practices to protect against the introduction or transfer of SE. • ■ Employees failed to change protective clothing when moving from one house to another, also failed to clean and sanitize equipment. • Helendale Farms: • ■ Failure to fully implement and follow procedures in its SE prevention plan. • ■ Failure to eliminate entry ways for rodents and other pests. • ■ Failure to bait and seal rodent borough holes. • ■ Failure to eliminate standing water adjacent to manure pits. • ■ Company failed to maintain documentation that 19 weak pullets were monitored for SE. • ■ Failure to take steps to make sure that SE is not transferred into or among poultry houses.

19. CASE STUDY NO. 2 July 20, 2010 ■ Group of environmental organizations and citizens sued Farmer and Chicken Owner/Supplier for violations of the Clean Water Act. ■ Allegations of poultry manure from Farmer was being released into a branch of the Pocomoke River. ■ Samples of the water coming from Farm and allegedly found evidence of fecal coliform, E. coli, nitrogen, phosphorus, and ammonia. ■ Defendants filed a motion dismiss the lawsuit on several technical, procedural grounds. ■ Owner of the chickens on the farm, or, as it is known in the industry, the “poultry integrator.”

20. CASE STUDY NO. 2 (cont’d.) ■ As the Owner/Supplier owned the chickens; provided all of the feed, fuel, litter, medication, vaccinations, and other supplies needed to grow the chickens; and dictated what types of buildings and equipment were to be used by the Farmer there was enough evidence to allow the plaintiffs’ suit to continue. ■ The court generally denied the defendants’ motion to dismiss regarding the other procedural issues as well. ■ Owner/Supplier argued that the Farmer, as owner of the land, was the responsible for any violations of the Clean Water Act. Court disagreed and said that Owner/Supplier’s liability under the Clean Water Act would depend on its level of control over its “contractors’ chicken operations.”

21. CASE STUDY NO. 3 FACTS: Bar with long record of alcohol violations and citations served an under-aged patron who subsequently died in a one-car accident caused by his intoxication. • DEFENDANT POLICIES: Defendant’s server rules and regulations included: • “Deadbeat” customers will tie up one of your tables all night if you do not “kill them with kindness” and hawk them to buy that next round. • Although it is more fulfilling to serve cocktails to big tippers, it is also the server’s job to make “free loaders” as uncomfortable as possible. • All servers must remain aggressive and focused to sell food and drink until 3:00 a.m. nightly. • There is no limit to the number of drinks a bartender can serve. • The sale of alcohol is the main goal. • What are your policies and procedures? – review them – early and often – anything negative will be used against you. • Plaintiff’s father attempted to prove his son to be non-drinker. • Defense counsel found long history of alcohol abuse. • Father obtains assistance from friend to empty deceased son’s home of alcoholic beverages, bongs, etc. • Excellent settlement

22. CASE STUDY NO. 4 • Severely mentally ill customer comes into restaurant and begins behaving oddly. • Patron speaking to his backpack. • Inappropriate comments made to waitresses. • Patron left establishment $12 short on his bar tab. • Manager chases patron outside and confronts him about his tab. • Patron irrational returns to restaurant yelling. • Goes outside, retrieves his gun and kills patron. • Violation of defendant’s own policies. • Never chase a patron out of the restaurant for dining and dashing. • Rely on common sense. • Never chase anyone who refused to pay or shoplifting. [Call the police.] • Train employees what to do if they ever feel threatened. Call the police. • No prior instances of violence at this restaurant. • Defense took the position that irrational act of patron was not foreseeable. • Clearly foreseeable here where patron becomes enraged and tells manager he has a gun. • Train your employees to talk to management if they notice something out of the ordinary. • Manager here ignored repeated concerns by employees “because it was not right to judge a person by their appearance.”

23. As indicated, the “best laid plans of mice and men” aren’t always sufficient!!

24. Thank you for your time and interest. QUESTIONS & ANSWERS