Legal precedent in many cases puts primary responsibility on manufacturers -- rather than distributors, retailers or others in the sales chain -- for injuries, illness and other incidents resulting from defective products. However, any of these parties can be found liable to some degree depending on circumstances. Experts say changes to federal oversight of food processing facilities have heightened the scrutiny placed on some types of distributors, potentially impacting their liability in certain situations.
Types of Liability
Experts note that product liability occurs when a defective product causes injury or damage, and it is established that the product was defective before the consumer took control of it. The three main categories of product defect stem from issues related to manufacturing, design and inadequate warning to the consumer. According to the consulting firm Milliman, legal observers have classified contaminated food as a manufacturing defect. However, liability in the case of food products is sometimes not clear-cut.
The federal Food Safety Modernization Act, passed in 2011, boosted the authority of the US Food and Drug Administration to regulate recalls and respond to instances of food contamination. Among other provisions, the FDA can suspend the operations of food distributors and processors if contamination is suspected. The measure also calls for facilities to have written action plans in place to prevent and handle food safety incidents, and bolsters prior laws regarding registration of food processing and distribution centers.
A distributor's potential liability can be impacted by several factors, depending on the distributor's role in preparing the product and getting it into consumers' hands. Insurance firm The Hartford notes that some wholesaler-distributors may increase their exposure in cases where they repackage or re-label a manufacturer's products under their own name. Damage to a food product that occurs during distribution might also cause injury to consumers. Other issues could arise when a distributor works with a foreign manufacturer that does not carry US product liability coverage or follow US rules.
In many cases, responsibilities for addressing defects will be spelled out in contracts made between food manufacturers and their distributors. Some states, including Texas, specifically indemnify distributors, retailers and other third parties from certain civil liabilities regarding defects in non-food products, but defer to federal law when it comes to liability regarding food and other regulated items, such as drugs and medical device. Experts advise company operators to check with their attorney, and also with oversight agencies in the states where they do business as to how liability is determined.