Agriculture

Tomato Growers Lose Millions Thanks to False FDA Warning, Courts' Failure to Act

What happens when a food's link to salmonella is proven false? Nothing.

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tomatoes
vitamindave / CC BY-SA

Last week the Fourth Circuit Court of Appeals ruled that the federal government could not be held financially responsible for issuing erroneous warnings about the source of an outbreak of foodborne illness that caused the loss of millions of dollars of tomatoes.

The warnings, issued by the FDA in 2008, turned out to be wildly inaccurate and deeply damaging.

The first, issued on June 3, warned consumers in New Mexico and Texas not to consume several types of raw tomatoes because they may be tainted with salmonella, a bacteria that can sicken and kill those who consume it. A few days later, on June 8, the FDA expanded the warning to include similar types of tomatoes across the country.

Soon after, on June 13, the FDA held a press conference that strongly inferred Florida tomatoes might be to blame. ("I'm not wanting to put the focus on Florida specifically, but…") But on July 17, the agency reversed course.

"After a lengthy investigation, the FDA has determined that fresh tomatoes now available in the domestic market are not associated with the current outbreak," reads an agency press release, which concluded instead that consumers "should avoid eating raw jalapeño and raw serrano peppers."

At the time of the first warning, on June 3, the FDA documented several dozen cases of foodborne illness it wrongly claimed were caused from eating tomatoes. By the time the agency admitted its error on July 17, the FDA acknowledged more than 1,200 such cases had occurred. By that time, the salmonella cases had mushroomed into "the largest foodborne outbreak in the United States in more than a decade."

Clearly, the FDA warning hadn't helped consumers, who continued to buy and be sickened by contaminated hot peppers. And it didn't help consumers who stopped buying perfectly good tomatoes at the agency's urging, or who threw away tomatoes they'd already purchased.

But if the FDA's misplaced warning was unhelpful at best and harmful at worst to consumers, it was downright devastating to tomato growers and handlers. The agency's warnings had spread like wildfire. For example, the New Mexico Restaurant warned its members against using tomatoes. Newspapers around the country warned consumers to avoid eating tomatoes. Demand for tomatoes plummeted by up to 40 percent in the wake of the warning, and prices fell by half. The industry lost hundreds of millions of dollars.

Congress held hearings in the wake of the FDA's retraction of its tomato warning.

"Shipments ground to a halt," Anthony DiMare, whose family's company suffered enormous losses, told Congress. "Tomatoes were left in the fields, in the packinghouses and on trucks that were turned away by our customers."

DiMare criticized the FDA and CDC for acting without "knowledge they clearly lacked" and urged the agencies to work with industry so that they wouldn't repeat their mistakes.

A group of tomato growers and handlers, including DiMare, sued the FDA in federal claims court in 2013, arguing that the incorrect warnings had served effectively as a regulatory taking under the Fifth Amendment. They argued, as a judge wrote in a 2014 order in the case, "all or almost all of the value of plaintiffs' perishable tomatoes was destroyed by the collapse in the market for tomatoes triggered by the FDA's warnings."

Nevertheless, the judge rejected the claims of the tomato growers and handlers.

"A regulatory takings claim is not plausible and cannot proceed when the government action at issue has no legal effect on the plaintiff's property interest," the judge ruled. "Advisory pronouncements, even those with significant financial impact on the marketplace, are not enough to effect a taking of property under the Fifth Amendment."

I wrote an amicus brief in support of the plaintiffs in the case.

"The FDA's improper warning cost the tomato producers millions of dollars and turned tons of good tomatoes into tons of food waste," I told Law360 in the wake of the ruling. "For the court to say that producers of food—here, tomatoes—have no recourse is to set a dangerous precedent."

That brings us to last week's ruling by the Fourth Circuit Court—in a $15 million case brought by a separate group of tomato growers and handlers—which upheld a lower court decision denying the growers' claims.

Is there some other recourse for losses suffered directly due to false warnings like these? Not really. Insurance—which all commercial food producers and sellers carry—generally won't cover losses such as those suffered by the Florida tomato growers. Some commentators have suggested that complying with regulations is the best strategy to minimize the risk that your food might be subject to adverse and erroneous actions taken by the FDA. But the tomato producers here were all in compliance, and that didn't save them from millions of dollars in losses.

What can be done? The FDA—working with the Centers for Disease Control & Prevention (CDC)—should investigate and work to combat foodborne illness, while also mitigating the presence of harmful bacteria in the food supply.

But when an agency like the FDA gets it wrong—as it clearly did here—and that action is directly responsible for the loss of hundreds of millions of dollars, then food producers must have recourse against the agency. If that's something courts refuse to recognize, then Congress should step in and draft new laws that rightly hold the agency accountable for the losses it's caused.

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  1. Maybe they can prosecute the FDA under the new fake news laws that will soon be passed.

    1. Progs will make the gubmit exempt

      1. No they won’t. Every component of their agenda is expected to be implemented by government agencies. You really can’t expect the snowflakes to handle the dirty work.!!!

    2. I see I wasn’t the only person thinking “fake news”.

      1. Great in theory, but I am positive this would be officially approved correct news. Both versions.

    3. Criminal law can’t be retroactive, at least not in civilized countries.

      They’ll certainly commit a fresh offense though.

    4. This fake news bullshit is Clinton shooting herself in the dick, yet again. ‘Fake News’ has become a joke used against the unrivaled king of fake news; the left.

      This gives me great joy.

      1. Main Stream Media produces the most fake news.

  2. If that’s something courts refuse to recognize, then Congress should step in and draft new laws that rightly hold the agency accountable for the losses it’s caused.

    In other words, the growers’ lobby needs to step up its game?

    1. Yes, apparently they have not engaged in the regulatory capture techniques that some say rule all agencies. According to academic capitalist theory, this should never happen. Therefore some other sinister issue is at hand.

      1. Economists generally associate the theory of regulatory capture with George Stigler, who came out of the Chicago school of economics, about as capitalist and free-market as they come. What “academic capitalist theory” are you referring to?

  3. . . . the New Mexico Restaurant warned its members . . . .

    New Mexico only has one restaurant?

  4. So the FDA employees who screwed up and caused unjustified losses to Florida tomato growers got fired right?

    Their pay docked?

    Demoted?

    Wrist slapped?

    Promoted and given seniority? WINNER

    1. Fuck the FDA with a salmonellae laced cucumber.

  5. If that’s something courts refuse to recognize, then Congress should step in and draft new laws that rightly hold the agency accountable for the losses it’s caused.

    How about something novel. Repeal the problem set of laws instead of making more. i know, crazy talk in these parts.

    1. This is yet another example of government harming us for the benefit of people in government, rather than protecting us from people who harm us. Thus, turning government on its head.

      The right solution, would be to abolish the FDA. Nothing regulates the market, like the freedom of consumers to refuse to purchase stuff from businesses that have harmed people. That would be free market “regulation”, which IMHO is the only moral regulation. When politicians get involved and start using government force, it’s not moral.

      Now, if someone gets harmed, there is the common law that allows them to get compensation from those who caused that harm. This beats regulations via administrative law, which politicians change and also make bets in the stock market based on it. I wouldn’t be surprised that bureaucrats/politicians with inside knowledge of the FDA’s actions, shorted stocks in commercial tomato growers before it happened. Then when they knew it was jalapenos, did the same thing.

      1. You would think in an age where news is all around us we wouldn’t need an FDA to tell us when food was not to be consumed because of contamination. Don’t you think the MSM would be all over such a good scare as soon as possible so they can drive their daily scare ratings?

        At least if the MSM got it wrong there is a potential for reparation to the growers. Unlikely, but possible. Therein lays the static of a market. The MSM had to weigh being early with the story, or at least moderating its tone, while the FDA has no such static. They can prophesies all to their wishes without fear of wrongdoing. That lack of static leads to poor outcomes regardless of intent, because “what if they had been right! Think of the lives saved!”

  6. DONALD TRUMP IS THE MANCHURIAN CANDIDATE

    The CIA has concluded in a secret assessment that Russia intervened in the 2016 election to help Donald Trump win the presidency, rather than just to undermine confidence in the U.S. electoral system, according to officials briefed on the matter.

    Intelligence agencies have identified individuals with connections to the Russian government who provided WikiLeaks with thousands of hacked emails from the Democratic National Committee and others, including Hillary Clinton’s campaign chairman, according to U.S. officials. Those officials described the individuals as actors known to the intelligence community and part of a wider Russian operation to boost Trump and hurt Clinton’s chances.

    “It is the assessment of the intelligence community that Russia’s goal here was to favor one candidate over the other, to help Trump get elected,” said a senior U.S. official briefed on an intelligence presentation made to U.S. senators. “That’s the consensus view.”

    This isn’t going to help Team Blue move past the denial stage.

    1. “It is the assessment of the intelligence community that Russia’s goal here was to favor one candidate over the other, to help Trump get elected,”

      “When asked about their own blatant bias and water carrying for Clinton, the enterity of the EU’s media and government officials declined to comment.”

    2. Well that was heavy on innuendo and vague speculation, but remarkably light on substance. Silly me, but couldn’t just one of the journalism pieces on this list the “17 intelligence agencies”? I feel like I just got done reading John’s stunning legal analysis on the damning circumstantial evidence around Podesta’s pool party.

      1. No country needs 17 intelligence agencies.

    3. “That’s the consensus view.”

      Worked so well with global warming, er, climate change, er, whatever.

    4. Something something goose…gander…

    5. Clinton announced her plans to go to war with Russia.

      Trump said he would only use the military to protect essential American interests (Syria isnt).

      Also, didn’t Putin give 10M or so to the Clinton campaign to hedge his bet? If I were Russia I know who I would have supported. It’s a no brainer.

      1. Someone with no chance of winning, for the sheer trolling value.

        RT was indeed somewhat sympathetic to Sanders.

      2. “If I were Russia I know who I would have supported. It’s a no brainer.”

        And that’s what kills me about this theory. Putin undoubtedly had access to Clinton’s/SoS emails for her entire tenure at the post. God knows what information he’s accured that we’re as of yet not privy to.

        Call me crazy, but if I was Putin I’d want an American president I could blackmail at my leisure for whatever reason currently suits me.

    6. If the hackers were Russian they did help Trump, it is true.

      They also help the American people by exposing the truth of Clinton and the DNC.

      Just this week when she emerged from the woods Hillary blamed her loss on the head of the FBI.

      I wish she would make up her mind.

    7. Can someone explain why I should care? I should hate Russia for giving proof of hillarys corruption? If the emails were faked, modified, or untrue then the Dems should have an easy time providing evidence of that fact. Until they provide such evidence I shall treat Russia, not so ironically, the same way I treat Snowden. Appreciated at arms length for services rendered while not showing definite gratitude.

      1. And before you say the emails for destroyed, accepting one illegal act to legitimize another won’t work.

        That was for the prog trolls.

  7. MONSANTO CAN AFFORD IT!
    /Prog answer

    1. Lol. If progs were project managers they would be excoriated for ever persistent scope creep. You can always afford to do more… Until you can’t.

    2. It’s really funny to me how “progressives” exalt the virtues of buying food from small, local producers, then they turn around and cheer for regulatory burdens that create an environment where only corporate giants like Monsanto can hack it.

  8. Look, if they all their tomatoes were ‘organic’ and grown in manure and used ‘natural’ weed and pest control the problem would be solved. Right? Right?

  9. “…consumers “should avoid eating raw jalape?o and raw serrano peppers.”…”

    ‘Until we find we made a mistake about those, too’, he added

  10. If that’s something courts refuse to recognize, then Congress should step in and draft new laws that rightly hold the agency accountable for the losses it’s caused.

    Shoveling taxpayer money to the tomato growers in the name of the FDA won’t help.

    The only way to get them to clean up their act is for heads to roll. It was probably an honest mistake or mere negligence, but in the private sector, those things can cost you your job. Should be so in the public sector too.

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