Peanut Corp. Faces Salmonella Lawsuits, Other Legal WoesFeb 17, 2009 | Parker Waichman LLP
PCA Behind A Nationwide Salmonella Outbreak
Peanut Corp. of America (PCA), the company behind a massive, nationwide salmonella outbreak, faces more than a dozen lawsuits over the debacle. The lawsuits are just the latest legal woes facing PCA as a result of the outbreak. On Friday, PCA filed for Chapter 7 bankruptcy protection after salmonella tainted products from two of its factories were implicated in hundreds of illnesses around the country.
According to Roanoke, Virginia TV station WSLS, Lynchburg-based PCA faces 13 lawsuits involving victims who were sickened by the company's salmonella products, or their families. Eight of those lawsuits were filed only last week. Lawyers interviewed by the TV station said that it is likely that more salmonella lawsuits will be filed against PCA in the coming weeks.
According to the Centers for Disease Control (CDC), the PCA salmonella has sickened 637 people in 44 states. At least nine deaths have been linked to the outbreak. However, the vast majority of salmonella cases are never reported to health authorities, so it is likely that PCA products have sickened even more than the 637 known victims.
PCA Provides Peanut Ingredients To 85 Firms
PCA provides peanut butter, peanut paste and other ingredients to 85 other food firms. More than 2000 products made by other companies, including the Kellogg Company and General Mills, have also been recalled. The recalls are so widespread that the Food & Drug Administration (FDA) has even set up an online database to help consumers track them.
Two PCA facilities, one in Blakely, Georgia and the other in Plainview, Texas, have been implicated in the salmonella outbreak. Last month, inspections of the Georgia plant found that PCA shipped peanuts that tested positive for salmonella contamination at least a dozen times in 2007 and 2008. At the time of that discovery, PCA officials told the FDA that those peanuts tested negative for the bacteria in a second round of testing. But the FDA eventually discovered that PCA actually shipped some of the peanuts before the second tests were completed. Other lots were shipped without testing and, in some cases, no second test was performed even after the first one came back positive. Those same inspections of the Blakely plant also turned up mold, roaches and a leaking roof. The Georgia facility shut its doors in January.
Conditions at the Texas PCA plant were just as awful. Early last week, that plant was shuttered after salmonella contamination was discovered there. Days later, the Texas Department of Health recalled everything made in Plainview after it found dead rodents, rodent excrement and bird feathers in a crawl space above a production area. According to the Associated Press, the plant’s air handling system was pulling debris from the infested crawl space into production areas. Despite having been in operation since 2005, the Plainview facility was unlicensed, and had never been inspected before the salmonella outbreak.
In a statement released Friday, PCA's lawyers blamed its bankruptcy filing on the fallout from the salmonella outbreak. “Given the events of the past month, including the broad-based recalls of the products sold by the company and its subsidiary in Plainview, Texas, the company has no alternative but to cease operations,” the statement said. “This bankruptcy filing, while regrettable, will allow for an orderly liquidation of the company.”
In addition to the lawsuits and bankruptcy, PCA is at the center of a criminal probe because of the salmonella outbreak. Last week, the FBI executed search warrants at the PCA Georgia plant and at its headquarters in Virginia.
At least one member of the U.S. Congress has called for criminal charges to be filed against PCA owner Stewart Parnell. "Based on my review of the evidence, there should be a criminal prosecution here," Sen. Amy Klobuchar, D-Minn., told the Minneapolis Star Tribune. Klobuchar said she was outraged after learning that under Parnell's direction, PCA had shipped batches of peanut products after they tested positive for salmonella. She told the Star Tribune that if Parnell is charged and found guilty, he should get jail time.
Parnell had been subpoenaed to testify at a Congressional hearing last week, and although he appeared, he invoked his constitutional right not to incriminate himself.
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