RECALL READINESS Presentation Prepared for the Colorado Fruit and Vegetable Growers Association Recall Readiness and Crisis Management Workshop November 14, 2017 J. Lee Gray Partner
IS A RECALL PLAN REQUIRED? • Register as Food Facility? No Yes “Farm” “Mixed-Type Facility” • One physical location • Any other processing not entirely consumed on farm “slicing” or irradiating product • • Growing crops • Raising animals/seafood Pack/hold raw commodities • • Drying/dehydrating raw commodities • Ripening • Packaging/labeling raw items 2
DISCLAIMER • This presentation is intended to provide general information on pertinent legal topics, and the statements are made for educational purposes only. They do not constitute legal advice, and do not necessarily represent the views of Holland & Hart LLP or any of its attorneys other than myself. This presentation is not intended to create an attorney-client relationship between you and Holland & Hart LLP. If you have specific questions as to the application of the law to your activities, you should seek the advice of legal counsel.
SECONDARY ACTIVITIES FARMS ARE NOT REQUIRED TO REGISTER • Not located on Primary Production Farm • Harvesting, packing, and/or holding • Owns, jointly owns majority interest 4
RECALL PLAN • Mandated for FDA Registered Food Facilities • But everyone should have a recall plan During an outbreak is too late Mock recalls, audits “traceability exercise” 5
RECALL PLAN • Recall Team Role Monitor reports of issues Investigate Assess the hazard Make the recall determination and Oversee the entire recall process, through closure. 6
RECALL PLAN • Recall Team (con’t.) • All stakeholders; representatives from the following business functions: o Regulatory/Legal o Operations Manager o Scientific Advisor o Quality Assurance/Control o Marketing/PR o Customer Service o Logistics/receiving o Recall Coordinator 7
RECALL PLAN • Monitor Consumer complaints Test results/QC News reports Agency reports
RECALL PLAN • Investigate/Evaluate Identify and document: Source of report Root cause/source (if possible) Severity of potential risk Likelihood of injury Scope of affected product Recall decision
RECALL PLAN • Recall Actions Assign team member responsibilities Document/log all: o Events o Reported Injuries/issues o Actions o Communications FDA report
RECALL PLAN • Recall Actions (con’t.) Issue notices/press releases • Include social media Monitor recall Dispose of products ( Apply and Document!) Apply for termination of Recall Debrief team/lessons learned Prepare for legal issues
REPORTABLE FOOD REGISTRY • “Reportable food” Class I recall situation Reasonable probability Serious adverse health consequences or death To humans or animals • Contamination (e.g., Salmonella, Listeria) • Undisclosed allergen • Other danger (e.g., choking hazard) 12
REPORTABLE FOOD REGISTRY • When to report? 24 Hours after determining food is reportable • When not to report? If adulteration originates within facility, is not transferred to anyone else (including distributor), and Is corrected/destroyed. 13
REPORTABLE FOOD REGISTRY • How to report? Online portal (http://www.safetyreporting.hhs.gov) 14
REPORTABLE FOOD REGISTRY 15
REPORTABLE FOOD REGISTRY • Attachments: .pdf – Portable document format. .jpg, .jpeg – Image file format. .tiff - Tagged image file format. .rtf – Rich text format. .txt – Text format. .xls – Spreadsheet file format. .doc, docx – Word processing document formats. .wpd – Word processing document format. 16
REPORTABLE FOOD REGISTRY • What information to report? 1) The responsible party’s registration numbers 2) The date food was determined to be a reportable food; 3) Description of food (including the quantity or amount); 4) Extent and nature of the adulteration; 5) Results of any investigation of the cause of the adulteration, when known; • And if originated with the responsible party 6) Disposition of the food, when known; and 7) Product information typically found on packaging • product codes, use-by dates, and the names of manufacturers, packers, or distributors sufficient to identify the article of food 17
REPORTABLE FOOD REGISTRY • Online form Contact information Summary of the problem Affected products Distribution information Supplier information Attachments 18
WHEN TO RECALL • When you determine that a food item presents a reasonable probability of serious adverse health consequences or death. Develop process for making recall decision o Determine root cause of the issue o Determine and identify risks o Assess severity of risks o Determine actions to avoid recurrence Checklist for documenting recall decision
WHEN TO RECALL • Health Hazard Evaluation (HHE) • Team sport: Legal Customer Service Marketing Recall Operations Decision Regulatory Scientific Advisor Quality
WHEN TO RECALL • Examples of Class I recalls: Lettuce contaminated with Salmonella . Cantaloupes contaminated with Listeria and Salmonella. Sprouts contaminated with E. coli . Under-processed canned chili that contained Clostridium botulinum toxin. Smoked salmon contaminated with Listeria. Ice cream containing peanut butter, but that did not declare peanut-derived ingredients as an ingredient. Baby food that posed a choking hazard. Horse feed contaminated with elevated levels of monensin. Pet food contaminated with elevated levels of melamine and cyanuric acid. 21
WHEN TO RECALL • Look for: Sources of contamination Contamination (biological, chemical, o Formulation physical) o Facility/equipment o Tests o Transportation o Illness data o Processing procedures o Scientific reports o Packing/labeling o Consumer reports o Storage/distribution o News of outbreak o Sanitation/employee o Supplier reports hygiene Misbranding o Allergens o Claims 22
WHEN TO RECALL • Evaluate the hazard Severity of illness Probability of injury/hazard without corrective action Affected population Scope of hazard 23
HANDLING CONSUMER COMPLAINTS • Customer service script Document all calls • Collect all relevant information possible Product ID/lot numbers Demographics Description of incident/injury Date, time and location • Use data Evaluate potential hazard Evaluate/validate preventative controls 24
PENALTIES AND THE PARK DOCTRINE • Park Doctrine: A responsible corporate official can be held criminally liable for violation of the FDCA • without proof that the corporate official acted with intent or even negligence, and • even if such corporate official did not have any actual knowledge of, or participation in, the specific offense. First-time misdemeanor Subsequent felony 25
PENALTIES AND THE PARK DOCTRINE • Over 700 confirmed illnesses • 46 states • 9 consumer deaths • Knowingly shipped contaminated product • 76 Count criminal indictment 26
PENALTIES AND THE PARK DOCTRINE • Uses by FDA – Deterrent effect – To obtain documents by subpoena • Office of Criminal investigations (OCl) – Reviews all recommended investigations – Determines whether to proceed 27
PENALTIES AND THE PARK DOCTRINE • Factors considered by OCI: Whether the violation involves actual or potential harm to the public; Whether the violation is obvious; Whether the violation reflects a pattern of illegal behavior and/or failure to heed prior warnings; Whether the violation is widespread; Whether the violation is serious; The quality of the legal and factual support for the proposed prosecution; and Whether the proposed prosecution is a prudent use of agency resources. 28
INSURANCE ISSUES • Common losses (risks) – Cost of risk prevention – Cost of investigation – Recall costs • Crises management/PR • Legal • Logistics (reverse distribution/product destruction) • Brand rehabilitation – Third-party liability (personal injury/property damage) – Business interruption – Supply chain claims 29
INSURANCE ISSUES • Types of insurance General liability First party property Business interruption Contamination/recall o Voluntary recall o Exclusions D&O 30
INSURANCE ISSUES • Contamination/recall policies Accidental contamination o What is contamination? o Link to bodily injury/property damage o Triggering event? • Governmental action? • Adverse publicity • Impaired ingredients Malicious contamination 31
INSURANCE ISSUES • Contamination/recall policies (con’t.) Exclusions/limitations o GMO or specialized causes of loss o Criminal misconduct exclusions o Unidentified vs. identified products Terminology o Third-party loss o Sublimits o Calculating and tracking loss 32
INSURANCE ISSUES • In case of crisis: Know importance of early decisions o Notice o Choice of counsel o Cooperation Resolving disputes o Coverage o Supply chain 33
CONTACT J. LEE GRAY 303.290.1602 lgray@hollandhart.com 34
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