The recent supreme court decision on the deadliest foodborne disease outbreak in Canadian history

Gladys Osien and Ron Doering from Gowling WLG write in the latest Food in Canada that the listeriosis outbreak linked to cold cuts from a Maple Leaf Foods plant in Toronto in 2008 resulted in 57 confirmed cases and 22 deaths. It was the deadliest foodborne disease outbreak in Canadian history. The recall reportedly cost the company $20 million.

A class action lawsuit from affected consumers and their families was settled quickly by Maple Leaf and its insurance company. But that was not the end of the matter. To carry out extensive sanitation, the plant was closed for several weeks with the result that retail customers and distributors did not obtain their usual supply. 424 Mr. Sub franchise operators sued Maple Leaf for lost sales and damage to reputation. In November 2020, the Supreme Court of Canada in a 5-4 majority decision dismissed the case against Maple Leaf with important implications for Canadian food companies.

The question before the Court boiled down to whether Maple Leaf owed the requisite duty of care to the franchisees, a necessary step in establishing whether the franchisees have the right to recover damages in the tort of negligence. The Court held that Maple Leaf did not owe such a duty, especially for the protection of purely economic interest.

A duty of care must establish above all else what the law calls proximity. The Court held that the Mr. Sub franchisees failed to establish the requisite qualities of closeness and directness between the parties. (You can see there is a lot of discretion here.) The Court instead determined that the proximity, established by the responsibility and undertaking to supply meat fit for human consumption, and the rights to receive a supply of safe goods was between Maple Leaf and consumers, not the franchisees. The court reinforced the need for proximity to establish duty of care.

A key factor in the Court’s ruling was the fact that the franchisees could have protected themselves in contract law. There were multipartite arrangements but these did not specifically address the liability for economic loss in the event of a failure to supply product. The Court was reluctant to impose a duty of care in circumstances where the parties could have protected themselves through contracts.

The decision in 8871682 Ontario Inc v. Maple Leaf Foods Inc 2020 SCC 35 has some important lessons for Canadian food companies.

Review supplier warranty agreements: The older of the authors remembers being quite surprised 20 years ago to learn that many large Canadian food companies didn’t even have such agreements. They had longstanding handshake or simple purchase arrangements but did not have legally-drafted contracts to clarify rights and responsibilities in the case of a recall, for example.

One company did not even realize that its main product had 22 ingredients and any one of them could cause a huge recall with serious economic cost. And suppliers too have to be careful; a manufacturer may insist that a supplier undertake to compensate for any and all losses from a voluntary recall, a liability that might far exceed the value of the sale.

Review insurance coverage: Over the years several of our clients have been surprised by wording in their policies. In one case, a claim for losses from a large recall was denied because the client had failed to fully meet Good Manufacturing Practices (GMPs) as the policy required even though another negligent party was the principal cause of the product contamination.

Review sourcing practices: Many supplier warranty agreements rely on audits to ensure compliance with the agreement. However, audits are notoriously unreliable, particularly if the product or ingredient is sourced outside Canada. A supplier may be meeting all GMPs on the Tuesday when the auditor is there but not on the Wednesday after he’s gone. After learning this the hard way, some companies source from domestic suppliers even if it would be cheaper to get the ingredient from abroad.

Food companies should not expect to recover certain economic losses from manufacturer recalls, unless they are protected by contract: A negligence action against a manufacturer for economic losses that are unconnected to a physical or mental injury, or to physical damage to property (ie. purely economic) are rarely rewarded in court. Courts do not accept that manufacturers owe a broad duty of care to distributors.

Every Canadian food company should review this case with its lawyer.

Ron Doering BA, LLB, MA, LLD is counsel and Gladys Osien BSc, MSc, JD is an associate in the Ottawa offices of Gowling WLG.

38 sick, many pregnant in 2008 listeria in pasteurized cheese outbreak in Quebec; cross-contamination affected hundreds of retailers

Fall 2008 was a crappy time in Canada. While the Maple Leaf listeria-in-deli-meats outbreak would kill 23 and sicken 56, a listeria-in-cheese outbreak plagued Quebec (that’s in Canada, according to some), sickening lots, especially expectant mothers.

Amy was pregnant, heightening sensitivities.

At the time, public attention and concern in Quebec was far more focused on the plight of cheesemongers than the sick and several dead. Regulators took some tough steps to limit the outbreak but in a culture that values tradition, the Quebec Minister of Agriculture was forced to capitulate and change his tune from, "The province is not there to compensate. We aren’t an insurance company," to offering a three-year, $8.4-million aid package, along with $11.3-million in interest-free loans to Quebec’s small cheese producers and retailers less than three weeks later.

Government health-types in Quebec have now offered their version of events in the current issue of the Journal of Food Protection.

Although numbers of sick people were all over the place at the time, the researchers conclude there were 38 confirmed sick with the same strain of Listeria monocytogenes (LM P93) across Quebec from June through Dec. 2008, including 14 pregnant women and two babies born to asymptomatic mothers. There were two elderly deaths and three neonatal deaths.

The traceback of many brands of cheese that tested positive for LM P93 collected from retailers identified two cheese plants contaminated by L. monocytogenes strains on 3 and 4 September. PFGE profiles became available for both plants on 8 September, and confirmed that a single plant was associated with the outbreak. Products from these two plants were distributed to more than 300 retailers in the province, leading to extensive cross-contamination of retail stock.

So where is that local cheesemonger you know, trust and can look in the eye, getting their cheese from?

The abstract is below:

Widespread Listeriosis outbreak attributable to pasteurized cheese, which led to extensive cross-contamination affecting cheese retailers, Quebec, Canada, 2008
Journal of Food Protection®, Volume 75, Number 1, January 2012 , pp. 71-78(8)
Gaulin, Colette; Ramsay, Danielle; Bekal, Sadjia
A major Listeria monocytogenes outbreak occurred in the province of Quebec, Canada, in 2008, involving a strain of L. monocytogenes (LM P93) characterized by pulsed-field gel electrophoresis (PFGE) and associated with the consumption of pasteurized milk cheese. This report describes the results of the ensuing investigation. All individuals affected with LM P93 across the province were interviewed with a standardized questionnaire. Microbiological and environmental investigations were conducted by the Quebec’s Food Inspection Branch of Ministère de l’Agriculture, des Pêcheries et de l’Alimentation du Québec among retailers and cheese plants involved in the outbreak. Between 8 June and 31 December 2008, 38 confirmed cases of LM P93 were reported to public health authorities, including 16 maternal-neonatal cases (14 pregnant women, and two babies born to asymptomatic mothers). The traceback of many brands of cheese that tested positive for LM P93 collected from retailers identified two cheese plants contaminated by L. monocytogenes strains on 3 and 4 September. PFGE profiles became available for both plants on 8 September, and confirmed that a single plant was associated with the outbreak. Products from these two plants were distributed to more than 300 retailers in the province, leading to extensive cross-contamination of retail stock. L. monocytogenes is ubiquitous, and contamination can occur subsequent to heat treatment, which usually precedes cheese production. Contaminated soft-textured cheese is particularly prone to bacterial growth. Ongoing regulatory and industry efforts are needed to decrease the presence of Listeria in foods, including pasteurized products. Retailers should be instructed about the risk of cross-contamination, even with soft pasteurized cheese and apply methods to avoid it.

Norovirus, salmonella cause bulk of known US foodborne illness; meat, produce primary vehicles

The US. Centers for Disease Control reported today that in 2008, 1,034 foodborne disease outbreaks were reported, which resulted in 23,152 cases of illness, 1,276 hospitalizations, and 22 deaths. Among the 479 outbreaks with a laboratory-confirmed single etiologic agent reported, norovirus was the most common, accounting for 49% of outbreaks and 46% of illnesses. Salmonella was the second most common, accounting for 23% of outbreaks and 31% of illnesses. Among the 218 outbreaks attributed to a food vehicle with ingredients from only one of 17 defined food commodities, the top commodities to which outbreaks were attributed were poultry (15%), beef (14%), and finfish (14%), whereas the top commodities to which outbreak-related illnesses were attributed were fruits and nuts (24%), vine-stalk vegetables (23%), and beef (13%).

Since 1992, CDC has defined a foodborne disease outbreak as the occurrence of two or more similar illnesses resulting from ingestion of a common food. State, local, and territorial health department officials use a standard, Internet-based form to voluntarily submit reports of foodborne outbreaks to CDC. An online toolkit of clinical and laboratory information is available to support investigation and reporting of outbreaks.

The number (1,034) of outbreaks was 10% lower than the annual average reported (1,151) for 2003–2007, and the number of outbreak-related illnesses was 5% lower (23,152 versus 24,400).

Of the total number of outbreak-related foodborne illnesses, 1,276 (6%) resulted in hospitalization. Salmonella was the most common cause of outbreak-related hospitalizations, causing 62% of hospitalizations reported, followed by Shiga toxin–producing Escherichia coli (STEC) (17%) and norovirus (7%). Outbreaks caused by Clostridium botulinum resulted in the highest proportion of persons hospitalized (90%), followed by Listeria outbreaks (76%). Among the 22 deaths associated with foodborne disease outbreaks in 2008, 20 were attributed to bacterial etiologies (13 Salmonella, three Listeria monocytogenes, three STEC [two O157, one O111], one Staphylococcus), one to norovirus, and one to a mycotoxin.

Among the 868 outbreaks with a known single setting where food was consumed, 52% resulted from food consumed in a restaurant or deli, 15% in a private home, and the remainder in other locations.

Ref: Surveillance for foodborne disease outbreaks — United States, 2008. Morbidity and Mortality Weekly Report, September 9, 2011 / 60(35); 1197-1202.