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Unsettled Blame

Posted on: Wednesday, 7 September 2005, 00:00 CDT

Sep. 5--FORT WORTH -- Four years ago the nation's worst outbreak of botulism since 1994 sickened 15 people and left 10 hospitalized. It was traced to frozen tubs of chili con carne made and sold in Fort Worth.

The outbreak continues to reverberate in a bare-knuckle, high-stakes legal battle in state civil court, replete with allegations of deception, slander and failure to produce key evidence.

At the center of allegations is Ben E. Keith Foods, among the region's biggest restaurant suppliers, which stands accused of withholding "smoking gun" memos.

The notes suggest that Keith managers misled state and federal investigators trying to track the source of the disease.

One company buyer was quoted as saying he "played dumb" when approached.

Opposing lawyers say the memos buttress allegations that Keith received thawed and refrozen chili that had been rejected by a Dallas restaurant, got a full refund plus a disposal fee from the chili maker and then resold the product to Town Talk Foods after changing an "unacceptable" coding.

After five days of sanction hearings that concluded last Monday, Judge Bob McGrath is considering whether Keith should pay heavy costs that the plaintiffs and the other defendants -- the chili maker and the supermarket -- say would not have been incurred if the memos had been released two years earlier. A decision is expected before the case's Jan. 17 trial date.

Keith denies the allegations, calling the memos privileged communications that didn't need to be handed over to the other lawyers. Moreover, their belated release -- shortly before a May trial date -- caused these parties no harm because the trial was put off until January.

More than $4.5 million has been paid in negotiated settlements with some of those stricken. One attorney, Lori Watson, said her client, John Johnson of Sanger, settled with Keith for $315,000 but is now seeking an additional $315,000 in light of the memos.

Victims include 3-year-old Essence Hemingway of Denton, who, like the 7-year-old Johnson, lay in a coma attached to a ventilator for more than a month.

Sanger truck driver Sam Jones Jr. was flown to a Dallas hospital unconscious. Jones was among six who had breathing tubes inserted in their throats.

After he emerged from a six-week coma, Jones and four siblings were cared for by their elderly parents. Three years later, his feeding tube was finally removed.

Like other victims, Jones has recovered from the August 2001 outbreak.

Telling memos

The case's unexpected twists have brought an artful shifting of alliances among three defendants, not unlike the machinations of contestants on TV's Survivor show.

The family-owned chili maker, for example, once aligned itself with Keith in hiring investigators to pursue claims against the discount supermarket, Town Talk Foods, that sold the frozen tubs. Now, the First Original Texas Chili Co. is demanding $1.1 million in costs and lawyers' fees from Keith. Other lawyers are seeking amounts ranging from $27,500 to $219,000.

Lawyers for some of the sickest victims, who ate the chili at a gospel music event at Sanger's Holy Temple Church of God, initially regarded the chili manufacturer and the supermarket as the lead targets of their litigation.

They have since dropped claims against Texas Chili and expressed regret for having so aggressively pursued Town Talk and its owners, Tom and Anne Potthoff, in light of what they've learned. Plaintiff lawyer Carl Mallory of the Arlington firm Mallory & Sturns issued a public apology from the witness stand during the sanctions hearing.

The Potthoffs' business bore the brunt of the damaging news coverage after the outbreak. Authorities found 11 refrigerated items above the required temperature but no problems with frozen items including chili. After voluntarily closing for about 10 days, Town Talk resumed business and received annual license renewals. It has a permit to salvage products damaged in shipment, but the Potthoffs say most merchandise is production overruns, discontinued goods or items purchased from bankrupt businesses.

Once considered a relatively minor player, the nearly century-old Ben E. Keith Co. has become the center of the multimillion-dollar case.

On April 29, the lawsuit brought by the victims took a dramatic turn when Keith's former attorney, Bob Mabel, released 1,000 pages of documents, including a series of diarylike memos written by Carla Sue Oliver, the company's Fort Worth inventory-control manager.

The notes show that Keith officials misled state and federal investigators trying to find the botulism's and track the contaminated chili's movements, according to attorneys who testified against Keith in the hearings.

Oliver wrote that a U.S. Department of Agriculture inspector asked about her colleague, Robby Austin. She explained that Austin was Keith's buyer for Texas Chili.

"I did not know that Robby had spoke to the inspector. ... Robby told me he 'played dumb' and said he didn't think we sold to Town Talk," she wrote.

When the USDA inspector asked how damaged products were recorded. Oliver told him only what the night shift did, a memo said. She did not explain a process for returned and warehouse-damaged items, so the information "he got was not a true picture ... I did not go into the whole process."

Perhaps most significant to the case, an Oliver memo quotes the manager of Norma's, a Dallas cafe, as saying she returned a case of Texas Chili because one of the four 5-pound tubs "smelled really bad" after being thawed.

Up until the notes were produced, the restaurant manager and Keith employees maintained in lengthy depositions that the chili was returned simply because of a strong spicy smell.

Keith attorney Mike Berry, of the Dallas firm of Thompson & Knight, argued that that memo was irrelevant because expert witnesses called by both sides testified that botulism is odorless. But opposing attorneys maintain that a putrid smell is an indication of storing food at the wrong temperature, which creates a favorable environment for botulism.

Keith disputes that the chili behind the botulism outbreak can be positively identified as Texas Chili tubs that it sold. It noted that not all of the original containers with production lot numbers were found. And Keith maintained that maintaining an improper temperature occurred either at Texas Chili or at Town Talk.

But the opposing side argued that where the chili spoiled is less important than the fact that tubs rejected by a Keith customer were resold to a supermarket for human consumption after Keith's own records had coded it "quality unacceptable." In addition, Keith never informed Town Talk that the chili had been out of Keith's control or had been thawed, they say.

Questionable practices

Ben E. Keith charged Norma's a restocking fee for taking back the rejected chili. Then it took a 100 percent return credit from Texas Chili and tacked on a 10 percent disposal fee, according to testimony.

Afterward, a "quality unacceptable" coding was changed to "damaged in warehouse." This permitted Keith to "double dip," said Texas Chili attorney John Barr, by reselling it to Town Talk after collecting more than the original cost.

Last year, Keith's attorneys argued that Town Talk was obligated to destroy any product found unfit for consumption. Moreover, the food-service distributor remains unconvinced that chili it sold was responsible for the botulism.

"The truth is there are claims and allegations about several batches of chili at issue," attorney Jeff Ballew told the Star-Telegram in August 2004. "And the only place where all the chili came from is Town Talk Foods. And the truth remains that Town Talk is the source of the problem and the place the Texas Department of Health brought actions against because of health-code violations."

R. Wayne Gordon, the supermarket's Dallas attorney, said Town Talk had been led to believe that the chili tubs had never been out of Keith's control.

In a curious exchange during a May 17 deposition, Ben E. Keith Foods division President Mike Roach insisted that his company didn't actually "sell" the chili when Town Talk picked it up.

Even though money changed hands, the chili was "salvaged," not "sold" by Keith, said Roach, a 25-year veteran of Ben E. Keith Foods, which along with its Anheuser-Busch beer-distribution division reportedly did $1.3 billion in sales in 2004.

Asked whether he saw no difference between Keith throwing refrozen chili into a trash bin and "salvaging" it for money to Town Talk, Roach replied: "No, there's not."

If he ran the supermarket, Roach conceded that he would want to know whether the goods being bought were fit for human consumption. Nonetheless, he said it was Town Talk's responsibility to determine whether the food was acceptable.

Gordon asked whether Roach knew why Ben E. Keith would not inform Town Talk that the chili had been thawed, refrozen and returned from a customer who found that it "smelled really bad."

"I can't think of any reason," Roach answered.

"Is there any excuse for Ben E. Keith not telling Town Talk that?" Gordon asked.

"No," Roach replied.

Continued acrimony

More than a month after the botulism outbreak, Ben E. Keith quietly changed its policy.

It no longer accepts the return of frozen food out of its control, citing the country's heightened concern with food security.

Although Keith had filed a $2 million claim for damages against Texas Chili, it continued to buy about 900 cases of the frozen chili a month until Judge McGrath dropped the claim when the Oliver notes were released.

Then the Texas Chili got calls from customers quoting Keith salespeople as saying it was out of business or could no longer afford liability insurance, said owners Danny and Deborah Owens.

Orders through Keith dropped to zero, an overnight loss of 10 percent to 15 percent of sales, said Danny Owens, who produced e-mails between a customer and Keith.

Texas Chili had settled with botulism victims not knowing that Keith had failed to destroy the thawed chili, said Barr, the chili company's lawyer.

Now, Barr alleged, Keith was trying to hurt the family-run business by spreading misinformation.

Keith has declined to comment on this or other allegations because the case is still before the court.

After Texas Chili complained, a customer shared with it a follow-up Keith e-mail that corrected an earlier one and said the company did indeed have insurance. But there were no new orders.

"It's been like a horror show," said Owens, referring to the grilling by federal inspectors, then losing a major account.

"The little guy is really at their mercy," he said of dealings with Keith. "It's kind of like fighting for your life. What do they gain, other than vengeance?"

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Copyright (c) 2005, Fort Worth Star-Telegram, Texas

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Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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