European, U.S. Courts Split on Compensation for False Outbreak Identifications
A German court has reportedly ordered the city of Hamburg to compensate a Spanish vegetable grower falsely linked to a 2011 E. coli outbreak that sickened more than 4,000 people in 16 countries. Vegetable cooperative Frunet asserted that it suffered €2.3 million in damages as a result of its incorrect identification as the source of the outbreak, which was later traced to fenugreek sprouts. The amount of the award has not been confirmed. See Think Spain, October 25, 2015.
Meanwhile, the U.S. Court of Appeals for the Federal Circuit has affirmed a lower court’s decision that the government does not owe tomato growers compensation after the U.S. Food and Drug Administration (FDA) publicly attributed a 2008 Salmonella outbreak to red tomatoes, then later traced it to jalapeno and serrano peppers. DiMare Fresh, Inc. v. U.S., No. 15-5006 (Fed. Cir., order entered October 28, 2015).
“The problem with the Tomato Producers’ contention is that it seeks to weave a regulatory takings claim, without more, simply out of the fact that the FDA’s press releases and media briefing impacted market demand for their produce,” the court held. “However, any government action such as a warning or report which provides information about a good or service is bound to impact consumer demand in the relevant market. Dissemination of information is critical to the adequate functioning of efficient markets. The fact that the market chooses to incorporate all available information, without more, cannot form the basis of a regulatory takings claim.”