Running head: PRODUCT LIABILITIY OF KUDLER FINE FOODS

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Product Liability of Kudler Fine Foods Lee Fleming BSA/502 07/18/2011 Matthew Berg

PRODUCT LIABILITIY OF KUDLER FINE FOODS Product Liability of Kudler Fine Foods

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This business was established in 1978 by Kathy Kudler. Kudler Fine Foods follows a mission set by Kathy to provide their customers with the freshest, finest foods available across the world, wines, and related needs will also supplied in an unparalleled consumer environment. Their selections, coupled with the experience of the helpful trained staff, will aid in making each customers experience pleasant and informative. They will be able to provide these services by shopping the world for customers requests and the stocking products, purchase only the freshest of products, be diligent in training standards and will go to extensive lengths to assure that Kudlers is the supplier of choice for first time as well as repeat customers who are aspiring to find the finest in epicurean delights. The company is presently in three locations (La Jolla, Del Mar and Encinitas). Kudler Fine Foods deals daily in fine gourmet food ingredients and products often from foreign countries, smaller suppliers, and unique market places to help supply fresh unique ingredients. Acquiring fine foreign foods, exotic wines, cheeses, and food stuffs usually have high prices and a short shelf life and can cause reason for increased product liability awareness. (Kudler, 2011) Kudler Fine Foods at this time is represented by Anne Shousha as its only legal advising counsel. Anne is Kathy Kudlers sister-in-law and has proven herself as a successful tax attorney working with a major accounting firm in San Diego, CA. (Phoenix.edu.2011) To date, Kudlers has had only a few customer accidents that have ended in litigation. In each case, Anne suggested that Kathy agree to a settlement, telling her that, "going to court is like throwing dice." (Kudler, 2011) Kudler has constant awareness of its legal liabilities in supplying exotic food stuffs and foreign delights to maintain freshness to the customer no matter the

PRODUCT LIABILITIY OF KUDLER FINE FOODS

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origination of the product or shipping delays. This consideration of liability in a fragile market is forcing Kathy and Anne to take on a liability insurance policy to protect the business and its customers. Product Liabilities has much legality to be considered and regulations that must be adhered to by suppliers and checked by Kudler Foods. Product liability in the United States varies from other countries in some aspects of food handling and processing and is much stricter for packaging, processing and humane treatment for the final moments of animals. USDA regulations mandated an FDA Food and Safety Modernization Act ("FSMA" or "the Act") (USDA, December, 2010) A provision of this act allows for mandatory recall of food stuffs proved to be tainted and not voluntarily recalled by the provider. Legal Liability has many aspects for the supplier, distributor, and handlers. Liability Insurance is necessary for Manufacturer, Distributors and Suppliers of products especially those who export goods to customers in highly legally regulated environments e.g. North America, Canada, Australia etc. Kudler can avoid some liability by shifting the burden to the supplier in asking for evidence of the liability insurance for makers of easily harmful products, i.e. dairy, meat products, cultured products. (ehow.com) Consumer protection definitions to the current laws have been expanded to included imported food. In an effort to hold foreign suppliers accountable under the same standards applicable to United States facilities, food importers will be required to verify the safety of foreign suppliers and imported food. (Sykesinjurylaw) Kudler Foods deals with many organic foods and has acknowledged the regulations of The Organic Foods Production Act of 1990 which requires certification by the U.S. Department

PRODUCT LIABILITIY OF KUDLER FINE FOODS of Agriculture (USDA, December, 2010) before farms or processors can label their agricultural

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products as organic. (USDA) These regulations also apply to the raising, packaging and handling of meat products. As of 2003, 12,200 farmers, or about one-half of one percent of all farmers in the United States, were certified organic It is projected that there will be 100,000 certified organic farmers by 2013. Product Liability is separated into three major types of product liability claims: Manufacturing defects are those that occur in the manufacturing process and usually involve poor-quality materials or known harmful ingredients. Design defects occur where the product design is inherently dangerous this may be demonstrated either by showing that the product fails to satisfy ordinary consumer expectations as to what constitutes a safe product, or that the risks of using the product outweigh its benefits. Failure-to-warn defects arise in products that carry inherent non-obvious dangers which could be mitigated through adequate label warnings to the user, and these dangers are present regardless of how well the product is manufactured and designed for its intended purpose. i.e. Cigarettes, Alcohol, or Allergenic foods. (LexisNexis, 2011) Warranties are statements or implications by a manufacturer or seller concerning a product during a commercial transaction. Breach of warranty-based product liability claims usually focus on one of three types: (1) Express warranty. (2) Implied warranty of merchantability or usability for the intended purpose.

PRODUCT LIABILITIY OF KUDLER FINE FOODS (3) Warranty of fitness for a particular purpose. (LexisNexis, 2011) Negligence claims must provide proof of at least one of the following. 1) A duty owed. 2) A breach of that duty. 3) The breach was the cause in fact of the plaintiff's injury (actual cause). 4) The breach of warranty proximately caused the plaintiff's injury. 5) The plaintiff suffered actual quantifiable injury (damages). (LexisNexis,2011) Liability can be reduced and limited by providing due diligence in the practices of expiration date checks on products, checking quality by customer feedback, standing behind the products sold and holding suppliers responsible for highest quality produce and service. Kudler will maintain to be a leader in the field of providing quality exotic foods by limiting chances for

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liability claims and maintaining proof of liability insurance for their business and their suppliers.

References

PRODUCT LIABILITIY OF KUDLER FINE FOODS Virtual Organizations: Apollo Group, Kudlers Fine Foods, 2011, retrieved from:

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https://ecampus.phoenix.edu/secure/aapd/cist/vop/Business/Kudler/Admin/KudlerAdmin002.htm http://www.foodmarketexchange.com/service/servicedetail/insurance/sv_ss_in_liability.htm http://www.ota.com/organic/nosr.html http://www.sykesinjurylaw.com/newsletters/ProductsLiability/launch_pg=NewsletterDetailLayout&launch_sel=1000378&title=National+Stan dards+for+Organic+Foods http://www.thompsonhine.com/publications/publication2204.html LexisNexis, Retrieved from: http://www.lexisnexis.com/2011 LexisNexis, a division of Reed Elsevier Inc. Occupational Safety in the Food Industry, Retrieved from: http://www.ehow.com/about_5608303_occupational-safety-foodindustry.html#ixzz15J6HnUhQ