A federal court has given preliminary approval to a settlement agreement covering lawsuits in U.S. and Canadian courts. Menu Foods was hit by more than 100 class action lawsuits last year after pet foods it distributed were found to contain toxic ingredients imported from China. In March 2007, the company, whose products were sold under such labels as Iams, Eukanuba, and President’s Choice, recalled tens of millions of containers of wet dog and cat food. The agreement, which was announced in principle in April, will resolve class action lawsuits filed in U.S. and Canadian courts. The agreement calls for Menu Foods and its insurer to create a fund of $24 million to pay for up to 100% of damages incurred by pet owners, subject to certain limitations.

The lawsuits were filed in the wake of the largest pet-food recall in history after owners watched helplessly as dogs and cats inexplicably got sick and, in many cases, died starting in early 2007. The deaths were traced to tainted wheat gluten grown in China. It was the first of a number of problems involving products from China, including the anticoagulant drug heparin, toothpaste, fish and toys. At least 81 deaths have been linked to tainted heparin from China.

The culprit in the pet food was a chemical used to make plastics that was added to the wheat gluten before it was imported to the United States. Two Chinese businesses and two executives, along with the owners of a Nevada company, were charged this year in connection with the importation of the pet food. The federal civil case has been closely watched by pet owners and the animal-rights community, which hoped it might increase the ability of pet owners to be compensated for emotional distress. Animals have long been viewed as property in the eyes of the law. To date, few courts have allowed owners to recover for the emotional value of their pets.

In my opinion, pets should be recognized as more than just personal property. The main defendant in the litigation was Menu Foods Inc., the Canadian manufacturer of about 100 of the tainted product lines, but other companies that made or distributed the food also were named. In a news release in April, Menu Foods said that its estimate for recall costs remained $56 million, and that the settlement would be funded by various defendants, including Menu Foods and its product-liability insurer. The idea that pets are treated like property and no more is pretty hard to take for pet owners, and I happen to be one of those folks.

The fund will be operated by a neutral claims administrator and will be available to U.S. and Canadian consumers who purchased or obtained recalled pet food. The settlement will provide restitution to the pet owners affected by the 2007 pet food recalls. Menu Foods and other pet food producers say they themselves were victims of “a terrible fraud committed by a company in China.” The recall, which involved more than 150 brands of dog and cat food, was tied to contaminated wheat gluten and rice protein concentrate imported from China. That may be true to some extent, but the companies had a definite duty to protect pet owners and they failed to do that. I believe those companies should be punished in the criminal courts for their conduct.

Source: Insurance Journal

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