It Must Be Something I Ate–Causation in Food Liability Cases

This article was originally published in South Carolina Lawyer, March 2013, at 16 - 19.  Click here for a link to the online version of the magazine, which is produced by the South Carolina Bar.  

 

Charles Appleby

Have you ever received the unpleasant surprise of a foreign substance in your food?  Or woken up the morning after a meal feeling sick and thought, “It must be something I ate?” Many food liability cases undoubtedly begin with this very thought.  A common theme among food liability cases is the importance of having sufficient proof that the adulterated food proximately caused the alleged illness or damages.  In fact, the outcome in a food liability case often depends on having sufficient proof of causation.

South Carolina Food and Cosmetic Act & Negligence

The South Carolina Food and Cosmetic Act is intended to protect the consumer from adulterated or misbranded food and cosmetics.[1] Under the Act, a food is deemed to be adulterated under a variety of circumstances, including if it contains any poisonous or harmful substance that makes it injurious to health or if it contains any diseased, contaminated,[2] Any entity, such as a restaurant or retailer, violates the Act if it, inter alia, manufactures, sells, delivers, holds, or offers for sale any adulterated food; adulterates any food; or receives in commerce any adulterated food.[3]

Amy Neuschafer

filthy, putrid or decomposed substance.

Proof of a violation of South Carolina Food and Cosmetic Act constitutes negligence per se and supports recovery of damages if the violation proximately caused or contributed to the plaintiff's injury.[4] A plaintiff is required to show negligence with reasonable certainty, not through mere conjecture.  Negligence cannot be proven through the doctrine of res ipsa loquitur.[5] Accordingly, whether alleging negligence based on violation of the Act or another theory, to prevail on a negligence claim arising out of unwholesome food, the plaintiff must prove the food in question was unfit and that it caused his/her illness.[6] 

The central question in food liability cases therefore becomes: “Is it really something you ate?”

Proving Causation

Causation is proved by establishing the plaintiff’s injury would not have occurred “but for” the defendant’s negligence.[7] “It is not sufficient that the malady in question ‘possibly’ or ‘could have’ or ‘might have’ resulted in the injury.”[8] Professor David G. Owen aptly notes the importance of establishing causation in his treatise on product liability law:

In addition to showing that a particular food item was defective, the plaintiff must also link the defective food product to the harm.  In many cases, the causal link between the defective foodstuff and a plaintiff’s harm is undisputed, as when the plaintiff immediately is injured or sickened from consuming food that clearly is defective, as a sirloin steak containing the tip end of hypodermic needle, or a chili dog containing a cockroach.  But if the connection between defective food or drink and a person’s illness is not self-evident, as often is the case, reliable expert testimony may be required to establish the causal link between the defect and the harm.[9]  

Expert testimony is not always necessary to prove causation in an unfit food case.[10]  In Miller v. Atlantic Bottling Corp., the plaintiff allegedly became ill after drinking a bottle of soda containing a harmful foreign substance.  The plaintiff testified she bought the soda, drank a few swallows, and immediately noticed the soda had a “vile smell and taste.”[11]  She then noticed an unidentified foreign substance in the bottom of the bottle.  She immediately began to feel nauseated, her throat and chest hurt, and her mouth began to water.  The defendant contended expert testimony was necessary to establish the substance caused the plaintiff’s illness.  In rejecting this argument, the court recognized that “in many instances expert medical evidence would be required to determine whether an illness resulted from a particular act.”[12] However, the court reasoned expert testimony was not required to establish the foreign substance most probably caused the plaintiff’s illness where she became violently ill immediately after consuming the bottled drink containing the “vile smelling and tasting, and revolting foreign substance.”[13]  In declining to require expert testimony regarding causation, the Miller court clearly took into account the obvious adulterated quality of the soda, as well as the plaintiff’s immediate onset of symptoms.

That being said, the mere showing that a person became sick subsequent to eating food typically is insufficient to establish causation.[14] “Courts generally have been skeptical of claims based largely on the theory, ‘I ate it, and then I got sick.’”[15]  For instance, in Fowler v. Coastal Coca-Cola Bottling Co., the court held the plaintiff failed to offer sufficient evidence of causation despite testimony that he became ill an hour and half after drinking a soda containing a slimy substance later identified as yeast.[16] In reaching its conclusion, the court pointed out the plaintiff’s treating physician testified a virus that was prevalent in the community at the time was the likely cause of the plaintiff’s symptoms, and the physician found no evidence the plaintiff’s illness was attributable to the ingestion of yeast.  Although the court did not address whether expert testimony was necessary to establish causation, the treating physician’s alternative explanation for the plaintiff’s symptoms and inability to link the foreign substance to these symptoms were key to the court’s decision.

South Carolina courts have specifically required expert medical testimony to establish causation where there is not a reasonable basis upon which to conclude that the illness was the natural and probable consequence of consuming the contaminated food or beverage.[17]  In Burr v. Coca-Cola Bottling Co. of Columbia, Inc., the plaintiff began experiencing nausea and diarrhea two hours after consuming a bottled beverage containing a foreign substance. The court noted there was no medical testimony as to the cause of plaintiff’s illness, and common experience showed the plaintiff’s symptoms often occurred from other causes. The court held that “[i]n view of the nature of the illness, the lapse of two hours before the first symptoms appeared renders the sequence of events too remote, absent other testimony, upon which to base a finding of causal connection.”[18]

An unreported decision from the District of South Carolina similarly reinforces the need for expert testimony where an average juror could not conclude a causal link existed between the allegedly unfit food and the plaintiff’s subsequent illness.  In Griffin v. Wilcohess, LLC, the court granted summary judgment for the defendant because the plaintiff failed to establish his salmonella poisoning was caused by consuming defendant’s cheeseburger.[19] To establish causation, the plaintiff pointed to medical records indicating he was diagnosed with salmonella and the allegation he was the only member of his family to eat the burger and the only member to become ill.  The defendant offered the affidavit of a medical expert opining the passage of time between the plaintiff’s consumption of the cheeseburger and the onset of his symptoms was not sufficiently long enough for the salmonella bacteria to incubate.  Rather, the defendant’s expert opined the plaintiff’s illness more likely resulted from the eggs or oysters he consumed the previous day. 

In granting the defendant’s motion for summary judgment, the court reasoned there was no evidence the cheeseburger was unfit or that is caused the plaintiff’s illness. To the contrary, the evidence showed defendant maintained a 100 percent food inspection rating and of the 3,452 food items sold at defendant’s restaurant on the day the plaintiff purchased his cheeseburger, the only report of illness came from the plaintiff.  The court further found expert testimony was required to establish the cheeseburger caused the plaintiff’s salmonella.  Because the plaintiff offered evidence only that he had salmonella, but no expert opinion linking the infection to the defendant’s cheeseburger, the court granted summary judgment. Accordingly, depending on the facts of a particular case, expert testimony may be necessary to establish causation.

Court Rules Plaintiff Bit off More than He Could Chew

A recent decision from the Eastern District of North Carolina is another example of the key role proof of causation plays in food liability cases.  In Manley v. Doe, the plaintiff filed suit against a Wendy’s franchisee after a two-inch plastic fragment bearing the Wendy’s logo was removed from his lung.[20]

In 2007, the plaintiff began to suffer from episodes of fatigue, coughing, choking, and gastrointestinal problems. Almost two years later, it was determined an approximately two-inch long fragment from a plastic eating utensil was lodged in the plaintiff’s lung. When the fragment was removed, it was found to be embossed with part of the Wendy’s logo. The plaintiff brought suit against a Wendy’s franchisee, claiming he unknowingly consumed the fragment while eating a hamburger during one of his four-to-five visits to the restaurant in the months prior to the onset of his symptoms.

At first glance, this case might sound like a slam dunk. After all, the fragment did bear the Wendy’s logo and the plaintiff had eaten at Wendy’s in the months before he fell ill. Nonetheless, the district court found the plaintiff’s theory of the case tough to swallow and granted summary judgment in favor of the restaurant. The plaintiff relied on circumstantial evidence to prove a defect in a hamburger (i.e., the plastic fragment) the restaurant sold to him caused his injuries. Although there appears to have been no dispute that his condition was caused by the fragment, the key issue was whether the fragment became lodged in his lung while eating a Wendy’s hamburger.

The court noted there was no evidence the fragment came from the particular Wendy’s franchisee named as a defendant in the case. Furthermore, although the plaintiff’s doctors testified the fragment caused his symptoms, their testimony did not to prove how the fragment entered his lung. The restaurant’s experts, on the other hand, testified a person could unknowingly inhale such an object only if he suffered from “severe mental status depression,” which would suppress the coughing reflex. One cause of this condition is intoxication, and despite the plaintiff’s denials, there was evidence he abused drugs and alcohol in the year he became ill. Although the plaintiff testified he was never intoxicated during his visits to Wendy’s, the defense experts concluded the fragment entered the plaintiff’s lung due to suppressed gag and cough reflexes while he was under the influence.

The defense’s position was supported by the absence of food particles in the plaintiff’s lung. Because the lungs do not contain enzymes to break down food like those found in the stomach, if food had entered the lungs with the fragment as plaintiff alleged, then food particles would still have been present when the fragment was removed.

Finally, the court relied on the absence of other similar incidents at the franchisee’s restaurants to reject the plaintiff’s theory of causation. During a two-year period, the franchisee served approximately 36 million customers, but received only 21 customer complaints involving foreign objects in food. However, none of these complaints involved pieces of plastic eating utensils. After considering the evidence, the court concluded no reasonable jury could find a defect in the hamburger the restaurant sold to the plaintiff caused his injuries.

Conclusion – Follow the Facts

The facts giving rise to food adulteration cases are often so disgusting and disturbing that proximate causation might seem like a foregone conclusion.  Although it may seem like a no-brainer that the foreign substance in the plaintiff’s sandwich is responsible for his ensuing illness or that the plaintiff’s last meal is to blame for his symptoms, causation should never be taken for granted.  The facts of each case should be closely examined to determine if expert testimony is necessary to establish the adulterated food or beverage proximately caused plaintiff’s illness.

Amy Neuschafer focuses on retail, hospitality and entertainment law in Collins & Lacy, P.C.’s Myrtle Beach office.

Charles Appleby is an attorney focusing on retail, hospitality and entertainment law in Collins & Lacy, P.C.’s Columbia office.

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[1] See generally S.C. Code Ann. §§ 39-25-10 et seq.

[2] S.C. Code Ann. § 39-25-100.

[3] S.C. Code Ann. § 39-25-30.

[4] Coward v. Borden Foods, Inc., 267 S.C. 423, 229 S.E.2d 262 (1976), Fowler v. Coastal Coca-Cola Bottling Company, Inc., 252 S.C. 579, 167 S.E.2d 572 (1969).

[5]Crider v. Infinger Transp. Co., 248 S.C. 10, 148 S.E.2d 732 (1966); Eickhoff v. Beard-Laney, 199 S.C. 500, 20 S.E.2d 153 (1942);. 

[6] Miller v. Atlantic Bottling Corp., 259 S.C. 278, 281, 191 S.E.2d 518, 519 (1972); Burr v. Coca-Cola Bottling Co. of Columbia, Inc., 256 S.C. 162, 166, 181 S.E.2d 478, 480 (1971).

[7] Hurd v. Williamsburg County, 353 S.C. 596, 579 S.E.2d 136 (Ct. App. 2003).

[8] 32 S.C. Jur. Witnesses § 79 (2006) (citing Scoggin v. McClellion, 321 S.C. 264, 468 S.E.2d 12 (Ct. App. 1996); Gambrell v. Burleson, 252 S.C. 98, 165 S.E.2d 622 (1969)).

[9] David G. Owen, Products Liability Law 478 (West 2005) (internal citations omitted).

[10]Miller, 259 S.C. 278, 191 S.E.2d 518 (holding the plaintiff’s description of “repulsive” soda that immediately made him nauseated was enough to create an inference of food poisoning, and expert testimony was not required); Turner v. Wilson, 227 S.C. 95, 102, 86 S.E.2d 867, 870 (1955) (upholding judgment for the plaintiff in a food poisoning case which was based wholly on circumstantial evidence); Kyle v. Swift & Co., 229 F.2d 887, 888-89 (4th Cir. 1956) (stating circumstantial evidence may consist of proof that other people who ate the same food also became sick).

[11] Miller, 259 S.C. at 280 191 S.E.2d at 519.

[12] Id. at 282, 191 S.E.2d at 520.

[13] Id.

[14] Coward, 267 S.C. 423, 229 S.E.2d 262 (plaintiff’s testimony her tooth struck a hard object while eating “Cracker Jack” popcorn was insufficient to establish her broken tooth was caused by any adulteration in the popcorn); Meyer v. Super Discount Mkts., 501 S.E.2d 2, 4 (Ga. Ct. App. 1998); Castleberry’s Food Co. v. Smith, 424 S.E.2d 33, 36 (Ga. Ct. App. 1992). 

[15] 47 Am. Jur. Proof of Facts 3d § 47 (2012).

[16] 252 S.C. 579, 167 S.E.2d 572.

[17] Burr, 256 S.C. at 165-66, 181 S.E.2d at 480.

[18] Id.

[19] Griffin v. Wilcohess, LLC, No. 0:10-cv-00489-JFA, 2010 WL 3803695 (D.S.C. 2010).

[20] 849 F. Supp. 2d 594 (E.D.N.C. 2012).

Collins & Lacy Hosts Statewide CLE Presentation for Association of Corporate Counsel (ACC)

Post by Christian Stegmaier

This year, I will reprise my role as presenter at our annual ACC CLE on Friday, June 14, 2013 along with my other Collins & Lacy colleagues to address issues that in-house counsel face on a daily basis, including ethics in mediation, case management strategies, S.C. legislative updates, contract disputes and workers' compensation claims.

In-house counsel can access this CLE even more easily this year, as we are offering our first statewide program, with a live presentation in our Columbia office that will stream to our Greenville and Charleston locations where attorneys will be available to answer questions and offer additional insights. See below to register - space is limited, so don't wait!

 

       

        

Collins & Lacy will provide a statewide Continuing Legal Education (CLE) presentation to the Association of Corporate Counsel (ACC), covering a variety of topics relevant to the daily challenges faced by in-house counsel. The presentation, which offers three hours of CLE credit, will be held Friday, June 14, 2013 from 9 a.m. to 12 p.m., followed by a catered lunch.

Unique this year, Collins & Lacy is offering the CLE opportunity to in-house counsel across South Carolina by providing an in-person presentation from its Columbia office while simultaneously broadcasting the event live in its Greenville and Charleston offices. This will allow ACC members to attend the event with little travel time, and it will enable them to ask questions of Collins & Lacy attorneys in each location in addition to networking with their fellow ACC members. The locations for the statewide CLE will be:

• Columbia Collins & Lacy Office – 1330 Lady Street, Sixth Floor
• Greenville Collins & Lacy Office – 37 Villa Road, Suite 500
• Charleston Collins & Lacy Office – 200 Meeting Street, Suite 403

Collins & Lacy attorneys will present the following CLE topics:

• “Ethics and Professionalism in Mediating Your Case,” presented by Christian Stegmaier and Rebecca Halberg
• “How Did You Arrive at that Number?  Objective and Quantitative Methods for Case Management and Evaluation,” presented by Brian Comer
• “What’s Going on at the State House?  A Legislative Update from the 2013 Legislative Session,” presented by South Carolina Chamber of Commerce CEO Otis Rawl 
• “I Liked It When I Signed It, But I Don’t Like It Now – It Must Be Unconscionable,” presented by Joey McCue
• “The Proactive Approach to Workers' Compensation Claims,” presented by Kristian Cross

This presentation is free to in-house counsel, but they must register to attend. For more information and to RSVP, please contact Keely Yates at the ACC-SC Chapter office, 803-252-1087.

Do I really have to pay for that? Department of Labor Continues to Crack Down on Hospitality Industry

Post by Charles Appleby

The Department of Labor is cracking down on employers allegedly failing to pay employee wages.  Since 2009, the Department of Labor’s Columbia, South Carolina District Office has concluded more than 300 restaurant investigations, resulting in restaurants paying more than $2.5 million in back wages for more than 2,500 workers. 

Michelle Garvey, director of the division’s Columbia office, said in a recent press release, “The Wage and Hour Division is resolute in its commitment to increasing compliance in [the hospitality] industry. Our investigators continue to make unannounced visits to restaurants throughout South Carolina to remedy widespread labor violations and ensure a level playing field for law-abiding employers.”

The Fair Labor Standards Act (FLSA) covers minimum wage and overtime pay.  The FLSA requires employees, except those exempt under the Act, to be paid at least the federal minimum wage, which is currently $7.25/hour, for all hours worked.  It also requires overtime pay at time and a half the regular rate for all hours worked over 40 in a workweek.

One of the most common mistakes is failing to pay employees for all hours worked.  Below are a few tips to ensure your business will not have to pay back wages in the future.

• “Choosing” to Continue Working is Still Working
  • Employees must be paid for all work “suffered” or permitted to be performed.  If an employee voluntarily continues to work at the end of the shift to finish an assigned task or to correct errors, the hours are still work time, and you have to pay them for it.
• Don’t Deduct Too Much
  • Deductions made from wages for items such as cash shortages, required uniforms, or customer walk-outs are illegal if the deduction reduces the employee’s wages below the minimum wage or cuts into overtime pay.  Therefore, deductions made for items other than board, lodging, or other recognized facilities normally cannot be made in an overtime workweek.
• Track Hours Worked by Employee, Not by Position
  • You are required to pay overtime for all hours an employee works over 40 in a given week.  Some employees may work two positions.  If they work 13 hours as a dishwasher and 29 as a server, you do not initially think overtime is due.  But if they worked these amounts in one week, they are owed overtime because the total hours worked was 42. 

Charles Appleby practices in retail/hospitality law as well as employment law, representing hospitality businesses and other entities. This blog can also be seen on the South Carolina Employment Law Alerts Blog.

Christian to Stegmaier to Speak About Product Recalls at DRI Retail and Hospitality Seminar

Retail/Hospitality Practice Group Chair Christian Stegmaier will speak at the DRI Retail and Hospitality Litigation and Claims Management Seminar May 16-17, 2013. Christian will join a panel discussion on effectively handling a product recall in cooperation with the U.S. Consumer Product Safety Commission. To find out more or to register, click here.

Free Evidence On Protecting Guests – Want It To Work For You or Against You?

Post by Attorney Charles Appleby

As discussed in previous articles, (see “When Hard Hits of Football Season End Up Between Fans at Your Business” and “South Carolina Hospitality-Related Businesses Have Obligations to Protect Guests”), a retailer or hospitality establishment in South Carolina is not the insurer of the safety of its guests.  However, it has also been well settled that such operators may be negligent if they realized “or should have realized” their conduct involved unreasonable risks of harm through the conduct of others, even when such conduct by others was criminal.  Bass v. Gopal, Inc., 384 S.C. 238, 244, 680 S.E.2d 917, 920 (Ct. App. 2009).  Specifically, the courts have held a business owner “owes to his guests the duty of exercising reasonable care to maintain in a reasonably safe condition those parts of his premises which a guest may be expected to use.”  Id.

*The following information applies specifically to Columbia businesses, but we have retail/hospitality attorneys in Greenville, Charleston and Myrtle Beach who can advise on ways to better protect businesses and their guests in those areas.*

For Columbia operators, new tools offered free of charge by the City of Columbia Police Department (CPD) could serve as evidence in helping determine whether you - as a business owner - took reasonable action to make your premises safe.  The question is: will you make it work for you or against you?

·    The first tool is RAIDS online, a website that allows you to search your commercial address online and find out about crimes occurring in your area/district.  There are also meaningful analytics on the website, including a time-of-day and day-of-week graph to help you interpret crime activity so you can take action and stay safe.  Lastly, automated watch emails keep you up-to-date on recent crime activity near your address.

·    The second tool is a free assessment of your business.  Upon your request, CPD will send one of their experienced Crime Prevention Officers to conduct the premises survey.  They look for target hardening, natural surveillance, territorial enforcement and access control measures.  At the end of the process, they provide you a copy of their survey form with their recommendations and also file a copy at their office.

The South Carolina Supreme Court[1] has held the presence or absence of prior criminal incidents is a significant factor in determining the amount of security required of a business owner.  The absence of such incidents does not excuse the property owner from the duty to provide some level of security if other factors support a heightened risk.  Such factors may include: the type of operation run by the owner; the location of the business; use of the business by guests and patrons at night, etc. 

Based on the case law, this is what’s most important:

·    knowing about the crimes in your area

·    following recommendations from police and qualified security experts, regardless of whether there is

    substantial or minimal crime in your area

·    properly documenting these actions

If you choose not to use tools that supply this information, we anticipate others may argue your failure to utilize these resources - such as the free ones from CPD - is evidence you failed to take reasonable measures to protect your customers.  If you call for an assessment of your business and fail to take the recommended actions from CPD, this evidence, which an opposing party could obtain from sending a subpoena to CPD, will be used to argue you are on the hook for not only actual damages, but also punitive damages (see Court of Appeals Holds Prior Long Term Notice of Premises Defect Creates Punitive Damages Exposure).  While evidence of utilizing the resources available and following the recommendations provided will not be conclusive by itself, taking steps to ensure you have evidence that works for you, not against you, is always best.

Special thanks to the Congaree Vista Guild for alerting our firm and other Vista Guild members to these new services from CPD.

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[1] See Bass v. Gopal

Latest News from Congaree Vista Guild

With our founding location right in the Vista and as a Vista Guild member, we are pleased to bring you the latest news in our "neighborhood" from the Vista Guild. Lots of exciting developments from 2012, including the Vista Greenway to promote green travel (walking and cycling) in our city, and plenty ahead for the new year. Thanks to the Vista Guild on all they do to improve the retail/hospitality industry in Columbia, SC!

Attorneys Kristian Cross and Brian Comer Share Litigation Risk Managment Strategies with In-House Counsel

Attorneys Kristian Cross of our retail/hospitality law team and Brian Comer, chair of Products Liability at Collins & Lacy, recently shared in the ACC-SC newsletter some strategies for managing risk throughout the litigation process.

Though the article is geared toward in-house counsel, any business owner or risk manager may find this information helpful should the need for litigation arise. As always, if you have questions, feel free to give us a ring at 888.648.0526.

To All a Good Night: Minimizing Risk at Office Holiday Parties

Post by Kristian Cross

With the holiday season approaching, many companies may be planning holiday parties to show appreciation to their employees and staff. Because alcohol may be served, exposure to lawsuits arising out of workers’ compensation law, employment law, and negligence is heightened.

Injuries arising out of and in the course and scope of employment are covered by the South Carolina Workers' Compensation Act, but what about injuries occurring at an office party? In Leopard v. Blackman-Uhler, 318 S.C. 369, 458 S.E.2d 41 (1995), the South Carolina Supreme Court adopted a three part system to determine when a recreational or social activity is within the course of employment. Such an activity will fall within the course and scope of employment when:

(1) They occur on premises during a lunch or recreation period as a regular incident of the employment; or

(2) The employer, by expressly or impliedly requiring participation, or by making the activity part of the services of an employee, brings the activity within the orbit of the employment; or,

(3) The employer derives substantial direct benefit from the activity beyond the intangible value of improvement in employee health and morale that is common to all kinds of recreation and social life.

 To avoid liability, you don’t have to eliminate the office holiday party altogether. Instead, here are ten tips to help limit your exposure during your company party:

(1) Make the holiday party voluntary and avoid discussing work matters. If formal invitations are sent to employees, specify that attendance is not required.

(2) If you have an office policy on employee standards of conduct and rules, remind employees the policy applies during the holiday party.

(3) If the event is on-site and during business hours, do not serve alcohol.

(4) Try moving the party off-site to a restaurant or other location and use professional bartenders to serve drinks.

(5) Make sure the bartenders have been trained to request proof of age from anyone who looks too young to drink; to not over-pour drinks; and to not serve alcohol to anyone who is visibly intoxicated.

(6) Do not encourage over-drinking, such as taking shots or playing beer pong.

(7) Have a variety of non-alcoholic beverages available as an alternative to alcoholic beverages.

(8) Limit the length of the party and discourage "after parties."

(9) Stop serving alcohol at least one hour before the party is scheduled to end.

(10) Do not hang mistletoe.

  If you have any questions on how to limit your company’s exposure to liability for employees or third-parties while planning your office holiday party, give us a call.

Happy Holidays!

Kristian

This post can also be found on the South Carolina Workers' Compensation Law Blog

Hospitality Advocacy in South Carolina Takes on New Identity & Leader

Post by Practice Group Chair
Christian Stegmaier

Hospitality advocacy in South Carolina has taken on a new face with former Director of S.C. Parks, Recreation and Tourism John Durst now at the helm. The organization has also re-branded itself as the South Carolina Restaurant and Lodging Association, harkening back to the great foundations laid by the late Tom Sponseller in helping merge the S.C. Hotel & Motel Association with the S.C. Restaurant Association. Tom was not only a tireless advocate, but a true friend to many, and we honor his memory even in the midst of this new chapter for the South Carolina hospitality industry.

In the wake of convicted staff accountant Rachel Duncan's embezzlement plot and Sponseller's tragic suicide, the reformed S.C. Restaurant and Lodging Association has taken several precautions to prevent any fiscal discrepancies within the organization:

• tasking an outside accounting firm with compiling quarterly reports for the board
• developing a finance committee within the board to review these reports as well as an audit committee to conduct annual reviews
• ramping up security and documentation for all accounting and banking processes handled internally

We look forward to the next phase of this organization, and its benefit to the hopsitality industries we work to protect.

You can read more about the new South Carolina Restaurant and Lodging Association in the State Newspaper.

When Hard Hits of Football Season End Up Between Fans at Your Business

Post by Charles Appleby

Football season is one of the greatest times of the year for fans and businesses as swarms of people descend on towns across the country to see their favorite teams battle it out on the gridiron. Fans love the camaraderie and cheering their team on to victory, while the hospitality industry loves the increased revenues from packed hotels, restaurants and bars. However, with the increased revenues comes increased liability.  From serving the underage to overserving those of age, to onsite fights and falling down stairs, football season is rife with potential liability for those in the hospitality industry. 

A case pending in San Francisco Superior Court is an example of how a fight can affect several hospitality businesses.  On August 20, 2011 two San Francisco 49er fans were severely injured after one was beaten unconscious in the parking lot, and the other was shot four times while trying to help his friend.  The two fans sued the parking lot security, San Francisco 49er organization and the National Football League for failure to create a safe environment.  The fans cited the March 2011 beating of a San Francisco Giants fan at Dodger stadium in Los Angeles as well as the two shootings, two beatings and numerous fights after last year’s 49ers v. Raiders game to support their allegations that the defendants knew there were security problems at sports stadiums and needed to take additional precautions. 

Since the filing of the lawsuit, the 49ers team has taken additional preventive measures by banning post game drinking and tailgating in parking lots.  While these measures may help prevent future incidents and show the team took action to prevent these types of incidents, it will not be admissible to help in the current case.  When analyzing the existence of operator liability for injuries to guests and patrons as a result of third party assault in South Carolina, courts turn to Bass v. Gopal.

In Bass v. Gopal, a guest of an Orangeburg motel answered the door to his room after a stranger knocked on it three separate times over the course of 15 minutes.  When the guest opened the door, the stranger asked for money, the guest refused, and the stranger shot the guest before running from the property.  The guest filed suit against both the franchisee and the franchisor, alleging negligence.  Specifically, the guest maintained the defendants owed him a duty to protect him from the criminal act of a third party, which the guest asserted had been breached.

In South Carolina, while a hospitality-related entity is not the insurer of the safety of its guests, it has been well settled that such an entity is under a legal duty to its guests to take reasonable action to protect them against unreasonable risk of physical harm.  The extent of this duty may be determined with an analysis of whether the property owner knew or had reason to know of a probability of harm to its guests following an incident.  Specifically, the courts have held a business owner has a duty to take reasonable action to protect its invitees against the foreseeable risk of physical harm. 

The “Balancing Test,” which the South Carolina Supreme Court adopted in Bass, is an approach  which acknowledges that duty is a flexible concept and seeks to balance the degree of foreseeability of harm against the burden of the duty imposed. Under this test, the presence or absence of prior criminal incidents is a significant factor in determining the amount of security required of a business owner; however, the absence of such incidents does not excuse the property owner from the duty to provide some level of security if other factors support a heightened risk.  Such factors may include: the type of operation run by the owner; the location of the business; use of the business by guests and patrons at night, etc.  In adopting a balancing approach, the court states it “hope[s] to encourage a reasonable response to the crime phenomenon without making unreasonable demands.” 

A key element of the defense’s success in the Bass case was the testimony of the security expert, who was coincidentally hired by the guest, not the defendants.  The expert admitted that if no significant criminal activity had occurred at the motel for a period of time prior to the guest’s shooting, then the motel's management would have no reason to expect the shooting to occur or to spend money to enhance security.  The security expert also conceded that: the motel's perimeter lighting was appropriate; the motel's room doors were appropriate and met statutory requirements; the guest would have stayed safe in his motel room had he not opened the door; the guest should have stayed in his motel room; and the guest should have telephoned for assistance.

The important take-aways for restaurant, bar and hotel managers are:

(1)                          Don’t ignore situations, and don’t be afraid to call the police.  Customers and guests during football season are typically more boisterous and their conduct more unruly than typical guests.  Consider conducting additional training for staff working on football game days to make certain they know how to identify potential situations and the actions needed to address them before they get out of control.

(2)                          Be sure to review past problems at your establishment during football season, and consider talking with owners and managers at similar establishments in the area.  Then, take adequate measures to try and prevent those issues and potential liabilities.

(3)                          If your business does not have a lot of experience evaluating potential security issues or instituting preventive and responsive measures, consider consulting with a security expert, legal counsel and other professionals specializing in premises liability and patron safety. 

A long night of football is always fun and exciting, but the hangover of a lawsuit is exponentially more expensive than the typical bottle of Gatorade and Tylenol.  So be proactive and don’t let the additional revenue your business earns during football season go to waste.  If you have any questions, let us know, and we’ll be there for you every step of the way.

Attorney Christian Stegmaier to Speak at RIMS Southeastern Educational Conference About Liqour Liability

Post by Christian Stegmaier

Practicing law in a state with a booming tourism/hospitality industry has afforded me plenty of experience in defining the do's and don'ts for business owners regarding alcohol liability. If you are in the area, I invite you to check out the info below about the upcoming Risk Management Society (RIMS) conference - should be a good one (and I'm not just saying that because I'm a speaker):

Collins & Lacy attorney and Retail/Hospitality Practice Chair Christian Stegmaier will speak at the Risk Management Society (RIMS) 43^rd annual Southeastern Educational Conference. The conference will be held October 3-5, 2012 at the Grove Park Inn in Asheville, North Carolina. To register for the RIMS conference, click here.
In keeping with the conference theme, "Blazing New Trails," Christian's presentation is entitled "Moonshinin': North Carolina and South Carolina Liquor Liability." Christian will cover pitfalls and risk management strategies for hospitality businesses who sell alcohol.
For more information on alcohol liability and other issues concerning hospitality business owners, visit the South Carolina Retail/Hospitality Law Blog. Below are some more resources related to alcohol liability:

• Beer & Wine Permit Holders Take Note! South Carolina Supreme Court Issues Important Alcohol Liability Decision Concerning Service of Intoxicated Persons (video included)
• Staying One Step Ahead of the Sheriff: Carolina Student Creates @DrinkingTicket to Warn Partygoers of Police Presence in Five Points