L+G Newsletter - November 2017

Recall Insurance—The Plain Truth About It For Produce Companies

By Kendra Clark

The practical reality for most growers and manufacturers, even those with the highest food safety standards, is that at some point they may have to manage a food safety event and ultimately issue a product recall. Therefore, many growers and produce manufacturers breathed a sigh of relief with the availability of recall insurance, with high hopes that this insurance product would be a mitigating factor when a food safety event arose.

Like many insurance products, recall insurance is not always what it seems. A careful read of policy terms when you are shopping and comparing products is critical along with an awareness of the requirements of a policy throughout any food safety event.

In the past, produce companies have only held Commercial General Liability (CGL) policies. CGL policies are typically designed to provide coverage for third-party claims for personal injury or property damage and, unless there is a specific endorsement for extra coverage, provide little if any coverage for recall expenses. A consumer who gets ill as a result of eating contaminated product would seek coverage for damages under a company’s CGL policy. Recall costs borne by the company itself, however, would typically not be covered and are generally excluded.

All recall policies are different and will provide different levels of coverage, but traditionally coverage will extend to five basic categories: (1) Business interruption, (2) Lost profits, (3) Recall expenses, (4) Rehabilitation expense to rebuild the company brand’s image, and a (5) Crisis fund to respond to adverse publicity. Within these categories there is typically broad coverage for items such as transportation and disposal of the products, additional personnel and overtime, cleaning equipment and extra sanitation expenses, lab analysis, brand rehabilitation costs, and consultant expenses, including crisis management professionals, scientists, public relations specialists and legal experts.

Since the coverage varies, a produce company will first need to consider the priorities for coverage in a food safety event. A company with a large brand presence will want to focus on brand rehabilitation coverage as opposed to a company that only provides product under private labels, who may be focused on availability of coverage for cost reimbursement to downstream parties that may be excluded absent a specific endorsement...

To read Kendra's full article click here . Or find it in the latest issue of Coastal Grower .

Family Home in Dissolution

By Nevin Miller

If you are getting divorced or dissolving your civil partnership, one of the biggest financial decisions you could face is what happens to the family home.

Hi, this is Nevin Miller of L&G Attorneys in Salinas/Monterey.

If you are getting divorced or dissolving your civil partnership, one of the biggest financial decisions you could face is what happens to the family home.

California law entitles you to a divorce or dissolution of marriage, based on irreconcilable differences. Any fault in causing the breakdown of the marriage is no longer relevant in California. Understand that a dissolution may divide your property and debts, which can include everything from the family home, cars and furniture to bank accounts, stocks and life insurance. For the sake of this discussion, I'll focus on the family home.

In a dissolution, the court makes decisions about how to divide the property that you bought together during the marriage. Even if you don't want to deal with these issues, the court still needs to make a formal order. But this doesn't mean that you have to appear before a judge to settle them.

Often couples can divide their property by mutual agreement, but the judge still has to sign off on the agreement. Until that happens, the property you got during the marriage or domestic partnership belongs to both of you, no matter who is using it or who has control of it. For more information on the family home in dissolutions, contact me at L+G Attorneys at 831-754- 2444 .

Listen to Nevin on KRML here .

Waters of the State Update

By Jonny Parker

In July of this year, the California State Water Resources Control Board (“State Water Control Board”) published the final draft of a proposed rule entitled “State Wetland Definition and Procedures for Discharges of Dredged or Fill Materials to Waters of the State” (“Proposed Rule”). The Proposed Rule significantly broadens the definition of “wetlands” and creates a new state permitting process regulating the discharge of dredged or fill materials into California waters. The public comment period for this Proposed Rule ran through the first week of September. Responses to those comments by the State Water Control Board are expected to be published sometime this fall, and the final draft of the Proposed Rule is expected before the New Year.

At the federal level, President Trump has taken steps to curtail Obama-Era Clean Water Act (CWA) regulations and enforcement actions, by revising and limiting the definition of “Waters of the United States.” Many California farmers, land developers, and business organizations praise such efforts as necessary and practical steps which will alleviate overbroad regulatory burdens and spur economic growth. In its current form, the State Water Control Board Proposed Rule will likely neutralize any efforts at the federal level to constrict the definition of “wetland.”

During the public comment period, numerous organizations – including, but not limited to, the Monterey County Farm Bureau, the San Joaquin Farm Bureau Federation, the Association of California Cities, the Association of California Water Agencies, the California Alliance for Jobs, the California Building Industry Association, the California Chamber of Commerce, the California Farm Bureau Federation, the California Water Association, the California Forestry Association, and the U.S. Army Corp of Engineers – advocated against the Proposed Rule. Though these and other groups have raised a wide variety of concerns, the most common concerns are that the Proposed Rule is overbroad; that it will significantly increase the administrative burden placed on development, business, and farming project proponents; and that it will confuse permitting processes due to the potential for conflicting determinations from federal and state regulating agencies.

L+G, LLP will continue to provide updates on the status of this Proposed Rule, as the situation develops. Our Land Use and Environmental attorneys stand ready to assist you with all of your land use, environmental, and regulatory needs.

Jonny Parker joined L+G LLP in 2017, specializing in Litigation. He served in the JAG Corps as a Prosecutor and Special Assistant United States Attorney and continues to serve as a Naval Officer and Judge Advocate, within the Selective Reserves. He lives in Monterey with his wife Tammy and their two children.

We Are Thankful For You!

During this season of thanks , we would like to thank each and every one of our customers for your support over the years. We look forward to many wonderful years to come! Just a friendly reminder, we are closed Thanksgiving, Christmas Eve, Christmas Day and New Year’s Day to be with our families. We appreciate you and look forward to seeing you on November 30 ᵗʰ , invitations to come.