The Horses Are Off (The Shelves)! Odds Are That The Ensuing Litigation Will Be An Endurance Race

Originally published on CyberInquirer.

Regulators, food distributors, and, of course, lawyers are scrambling to determine the legal and reputational consequences of the still-growing horse meat scandal that recently hit Europe. Amid the recalls, finger-pointing, and consumer outrage at the thought of eating horse meatballs labeled as beef, one thing remains certain: you will have time to bet on many Derby winners before this scandal is fully resolved.

The distribution networks are complex and a multitude of factual determinations will inform fault and what insurance coverage may mitigate the massive losses that are sure to pile up over the course of the next decade or so. By comparison, in the US, it took twelve years of litigation to finally resolve one of the most infamous E. coli outbreaks in American history.

Last June, the Wisconsin Supreme Court held that a slaughterhouse which processed and sold contaminated meat to Sizzler Steak House franchises ("Sizzler") must indemnify the restaurant chain and its management company for damages stemming from the highly-publicized incident in 2000, where hundreds of people became ill and a three-year-old girl died. Estate of Kriefall v. Sizzler USA, et. al., Nos. 2009-AP-1212 and 2010-AP-491, 2012 WI 70.

Lessons learned in Sizzler provide an American perspective to Europe's horse meat scandal. Both incidents received major media coverage and may drag on for a decade or more. Sizzler served the contaminated food but the slaughterhouse was responsible. Likewise, the unknowing sellers of the mislabeled horsemeat may be able to seek indemnification from distributors that handled the meat earlier in the distribution chain, although ultimate responsibility remains unknown.

E. Coli Contamination at Sizzler in 2000

In late July and early August of 2000, more than 150 people became ill from ingesting food contaminated with E. coli 0157:H7 at two Sizzler restaurants in Milwaukee. Their illnesses ranged from diarrhea to vomiting to fever to stomach cramps, and sadly, in the case of three-year-old Brianna Kriefall, death. The contamination was traced to tri-tip beef processed and distributed by Excel Corporation ("Excel"), a slaughterhouse owned by Cargill, Inc. Although Excel admitted to selling contaminated meat, the food handling procedures of E&B Management Company, Waukesha ("E&B"), Sizzler's parent and management company, allegedly failed to comply with established safety standards. For example, the...