Listeria Lawsuits Settled for $27 MillFeb 6, 2009 | Parker Waichman LLP Maple Leaf Foods, Inc., the Canadian company responsible for the 2008 listeria outbreak that killed approximately 20 people, is preparing for large payouts. PG Citizen reported that Maple Leaf’s proposal to pay up to $27 million to settle a number of class-action lawsuits has been tentatively accepted and is pending approval from courts in Saskatchewan, Ontario, and Quebec; hearings are scheduled next month.
According to PG Citizen, Maple Leaf announced it will pay up to $125,000 to victims who suffered serious and long-lasting physical injuries; $120,000 to the estates of those who died and “additional substantial amounts” to surviving, immediate family members; no less than $750 for victims who suffered from physical symptoms consistent with listeriosis lasting no less than 24 and no more than 48 hours; and some legal costs.
"The amount each claimant will receive depends upon the severity of their illness," Maple Leaf Foods said in a release, adding, "Claimants may also claim for lost income and certain out-of-pocket expenses." The settlement allows for those who consumed tainted meat products bought from January 1 through August 31, 2008 to enter claims for compensation from a $25-million fund; the fund carries an option for up to an additional $2 million dollars if the initial amount is deemed insufficient, reported PG Citizen. Settlement costs will likely be paid by insurance, Reuters Canada said.
Last year’s outbreak prompted that largest meat recall in Canada’s history and stemmed from deli meats produced at Maple Leaf’s Toronto plant, said Reuters Canada. Robert Gibson, an analyst at Octagon Capital, told Reuters that "This is putting it behind them and they are moving forward and getting back to the normal business at hand," regarding steps Maple Leaf has taken since news of the outbreak made headlines last summer. Maple Leaf was shut down for one month, after which, Canadian Food Inspection Agency officials permitted the company to operate while it continued testing. An investigation revealed that two meat slicers at the Toronto facility were likely the cause of the contamination, said Reuters.
Maple Leaf Chief Executive Michael McCain reported last year that the recalls and extra sanitation cost the firm approximately $33 million in the third quarter of 2008, noted Reuters Canada, which added that the firm’s shares were down earlier this week on the Toronto Stock Exchange. Late last summer, McCain announced that Maple Leaf Foods was taking full responsibility for the massive listeria outbreak.
Most listeriosis reports originated from nursing homes, hospitals, and other similar type institutions, as well as restaurants and stores and prompted a recall of all of the over 200 products its Toronto plant produced. Samples of two deli meats produced at the Toronto plant tested positive for the same strain of listeria bacteria that sickened dozens and killed 20; inspections revealed that the source of the contamination was deep within the mechanical slicers. Maple Leaf runs 23 plants and is Canada’s largest meat processor.
Listeriosis, the food poisoning generated by Listeria monocytogenes, is particularly dangerous to the elderly, pregnant women, newborns, those with chronic medical conditions, people with HIV, or those undergoing chemotherapy. In serious cases, the disease spreads to the nervous system, causing headaches, stiff neck, and convulsions. In pregnant women, listeriosis can result in miscarriage, stillbirth, or birth of a baby suffering from the infection.