By Shook Associate Matt Williams California often serves as an incubator for litigation that thereafter sweeps across the country. This phenomenon may hold true for newly minted COVID-19-based price-gouging lawsuits. Indeed, California has quickly become the epicenter of price-gouging enforcement and class action litigation. Food producers, distributors, retailers and online marketplaces such as Amazon have become the targets of price-gouging actions. Importantly, there is currently no federal price-gouging law, meaning that companies must navigate 50 different state laws. California’s price-gouging statute provides that “consumer food items or goods” cannot be sold for 10% more than the price advertised immediately before a declared state of emergency. The statute provides an exception for price increases if the seller can prove it was “directly attributable” to costs imposed by up-chain suppliers or increases in labor and material costs during the emergency. Violations are prosecuted by the California Attorney General and local district attorneys,…
Tag Archives COVID-19
The European Commission has announced the adoption of strategies to support biodiversity and “transition to a sustainable EU food system that safeguards food security and ensures access to healthy diets sourced from a healthy planet.” “The coronavirus crisis has underlined the importance of a robust and resilient food system that functions in all circumstances, and is capable of ensuring access to a sufficient supply of affordable food for citizens,” a question-and-answer resource on the program stated. “It has also made us acutely aware of the interrelations between our health, ecosystems, supply chains, consumption patterns and planetary boundaries.” The program’s goals include reduction of chemical pesticides, preservation of soil nutrients, reduction in sales of antimicrobials for farmed animals and aquaculture, and an increase in organic farming by 2030. The program will also include the proposal of mandatory front-of-packaging nutrition labeling and efforts to reduce food waste.
U.S. Rep. Earl Blumenauer (D-Ore.) has introduced The Real Economic Support That Acknowledges Unique Restaurant Assistance Needed to Survive Act of 2020 (RESTAURANTS Act). The proposed bill would create a $120 billion “restaurant stabilization grant program designed to help independent restaurants deal with the long-term structural challenges facing the industry due to COVID-19 and ensure they can reemploy 11 million workers,” according to Blumenauer’s May 20, 2020, press release. The program, which would be administered by the Department of the Treasury, would provide grants sufficient "to cover the difference between revenues from 2019 and projected revenues through 2020, with a maximum grant of $10 million.”
The U.S. Department of Agriculture (USDA) has issued a rule implementing the Coronavirus Food Assistance Program (CFAP), which was allocated $9.5 billion in the Coronavirus Aid, Relief, and Economic Stability Act. CFAP provides financial support for agricultural producers affected by COVID-19 to help offset sales losses. The Farm Service Agency and Agricultural Marketing Service will implement the program, which is generally available to producers that “suffered a 5-percent-or-greater price loss over a specified time resulting from the COVID-19 outbreak” or “face additional significant marketing costs for inventories.”
The U.S. Food and Drug Administration (FDA) has published a food-safety checklist for retail food establishments that have been closed or operating in a limited capacity during shelter-in-place orders. The list covers issues that may arise if a facility has been closed, such as ensuring water and sewage lines or coolers and freezers are working, and approaches to slowing the spread of COVID-19, such as social distancing measures and increased outdoor air circulation. Checklist sections include facility operations; water, plumbing and ice; cleaning, disinfecting and sanitizing for food contact and non-food contact surfaces; food temperature control; product inspection and rotation; warewashing equipment; handwashing stations; employee health; and social distancing.
Following an executive order directing the U.S. Department of Agriculture to ensure the continued supply of meat and poultry, twenty state attorneys general have submitted a letter urging President Trump to strengthen guidance for meatpacking facilities by requiring increased access to testing and personal protective equipment, implementation of physical distancing where possible, suspension of line speed waivers, and paid leave for workers in isolation or quarantine following exposure to COVID-19. “The industry’s failure to act earlier to protect its labor force, and the Administration’s lack of leadership and support for testing, procurement of personal protective equipment (PPE), and enforcement of federal worker safety standards, will be among the many regrettable lapses contributing to the tragic story of America’s experience with this pandemic,” the letter asserts. The letter calls for voluntary guidance provided to meatpacking facilities to become mandatory. “Even if these recommendations were sufficient to maintain worker safety, however, they…
The estate of a meatpacking plant employee who died from a COVID-19 infection has sued JBS S.A. for negligence, wrongful death, misrepresentation and survival, alleging that the man’s death "was the predictable and preventable result of the JBS Defendants’ decisions to ignore worker safety.” Benjamin v. JBS S.A., No. 200500370 (Pa. C.P., Phila. Cty., filed May 7, 2020). According to the complaint, JBS increased production in March 2020 to meet increased demand for meat as shelter-in-place orders began to take effect across the United States. The estate argues that JBS “failed to provide sufficient personal protective equipment,” “forced workers to work in close proximity,” “forced workers to use cramped and crowded work areas, break areas, restrooms, and hallways,” “discouraged workers from taking sick leave in a manner that had sick workers in fear of losing their jobs,” and “failed to properly provide testing and monitoring for individuals who may have…
Shook Partner Katie Gates Calderon and Associate Elizabeth Fessler have authored “Best Practices for Food and Beverage Pricing Right Now” for Law360, which discusses how food and beverage companies may face regulatory actions and reputational damage if they are perceived to have raised their prices too much during the COVID-19 pandemic. “With increased demand and potentially increasing production costs due to supply chain disruptions, many in the food and beverage industry may be wondering how to deal with the economic pressures without running afoul of price-gouging statutes,” Fessler and Gates Calderon write. Many states have different laws governing price-gouging, and those laws often differ on what an acceptable price differential may be. Understanding which state laws apply and documenting all aspects of the reasoning for any price increase are key, they explain, concluding, “If you are contacted about pricing issues, it may be best to contact outside counsel before providing…
President Trump has issued an executive order directing Secretary of Agriculture Sonny Perdue to “ensure the continued supply of meat and poultry” consistent with guidance issued by the Centers for Disease Control and Prevention (CDC) and the Occupational Safety and Health Administration. CDC also issued a report on COVID-19 at meat and poultry processing facilities for the month of April 2020 that found 4,913 cases and 20 deaths among 130,000 workers and cited, among other risks, “crowded, multigenerational” residences and carpooling as relevant factors increasing the likelihood of transmission among employees. The government actions coincide with lawsuits seeking to hold meat and poultry processing plants liable for injury or death caused by COVID-19, including a wrongful death lawsuit brought against Quality Sausage Co. following the death of a forklift driver who allegedly contracted the coronavirus from coworkers. Parra v. Quality Sausage Co., No. DC-20-06406 (Tex. Dist. Ct., filed April 30,…
A Texas state court has reportedly ordered Hillstone Restaurant Group to allow an employee returning to work to wear a face mask to avoid the transmission of COVID-19. The complaint initially sought to lift the restaurant group’s mask ban for all employees, but the plaintiff amended the complaint to only apply to her after the company attempted to remove the case to federal court, according to the Dallas Morning News. The employee asserted that she was denied four shifts, or 40 hours, because she refused to work without a mask, and the court’s temporary order will allow her to wear a mask for two weeks.
