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Peanut Corporation of America Files for Bankruptcy

The Washington Post (2/14, A4, Miroff, Layton) reported, “Peanut Corporation of America, the company at the center of the nationwide salmonella scare, has filed for Chapter 7 bankruptcy protection and will begin liquidating its assets as legal claims pile up against it.” Bill Marler, “a Seattle-based lawyer representing 47 clients who are suing the company, including family members of two victims who died after reportedly consuming peanut products tainted with salmonella” said, “Given that PCA is under criminal investigation, I’m not surprised they’ve gone bankrupt.” He said that the filing “puts everything on hold” and that “he would move to lift the stay of litigation on Monday so that new claims against PCA could be made.” He added, “PCA carried $24 million worth of personal liability insurance for the period of the alleged contamination.”

The Atlanta Journal-Constitution (2/14, Scott) reported, “Legal experts said the bankruptcy may alter the landscape of lawsuits and liability involving the company, already the subject of damage claims in federal and state courts, but it will not protect them against salmonella litigation.”

Broad support seen for improving US food safety system. After another weekend filled with new revelations about the Peanut Corporation of America’s operations in Texas, Monday saw a range of articles and editorials focusing on reform, both at the state and federal levels. In a lengthy editorial, the New York Times (2/17, A28) argues that “it would be a mistake to view this as ‘an unconscionable act by one manufacturer,’ as an official from the American Peanut Council, the industry’s trade association, said.” In the last few years, “American consumers have faced far too many food-supply emergencies in the last few years. Congress and the Obama administration must finally make food safety a serious priority.” Any attempt to reform the food safety system should give the FDA “the authority to recall tainted food quickly, establish strict federal standards on cleanliness and create an advanced system for tracking foods so that any tainted products can be culled from the food supply more quickly.”

The Washington Post (2/17, A12) also weighs in with an editorial, noting that PCA “was not required to report its numerous positive salmonella results to state or federal authorities. Companies need to be required to test for the hazards that are most likely to occur in their products, and standards for what constitutes a hazard must be devised.” Legislation currently being considered in the House “would mandate the use of a certified lab and require that the results be sent directly to the FDA.”

Lapse should be treated “as seriously as multiple homicide.” A particularly strongly-worded editorial in the Sunday Los Angeles Times (2/16) asked, “Who’s Watching What We Eat?” The FDA “had contracted out the inspection work to Georgia’s food-safety agency” who “failed at their job repeatedly.” But “that doesn’t remotely exonerate the FDA, which learned in April, when Canada returned a shipment of foul goods, that there were signs of filth and disregard for public health.” In addition, the editorial argues the USDA and the CDC “moved too slowly in analyzing the problem.” The recent “mass poisonings” represent “a new level of food outrage, more serious than even the salmonella salsa and downer-cow beef recalls of 2008. … This should be treated as seriously as a multiple homicide. What, you might wonder, were these people thinking?”

From the American Association for Justice news release.

Bob Kraft

I am a Dallas, Texas lawyer who has had the privilege of helping thousands of clients since 1971 in the areas of Personal Injury law and Social Security Disability.

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The title of this blog reflects my attitude toward those government agencies and insurance companies that routinely mistreat injured or disabled people. As a Dallas, Texas lawyer, I've spent more than 45 years trying to help those poor folk, and I have been frustrated daily by the actions of the people on the other side of their claims. (Sorry if I offended you...)

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