Bioterrorism: A Major Threat to Private Companies

Company "A", a private seafood importer/processor, imports a container of shrimp from country "X". There are 1800 cartons of shrimp, all contaminated on the exterior with anthrax placed there by a foreign extremist from the Middle East. The container is picked up at the pier and transported by public trucker "T" to public warehouse "W". In the process of unloading the container, the truck driver and the warehouse employees handle a number of cartons of shrimp. Within several days, they are all infected with inhalation or cutaneous anthrax.

Meanwhile, many pallets of the shrimp are moved from the public warehouse to the company-owned process plant. The truck driver, the warehouse employees and many process line employees handle the contaminated cartons. The shrimp is processed and returned to the warehouse and mingled with the pallets of shrimp already contaminated, wherein warehouse employees contaminate the processed shrimp cartons through handling. The contaminated processed shrimp are removed from the warehouse and transported to the warehouse of a large retail restaurant chain, where more seafood products, other than the shrimp, are contaminated through handling.

$850,000 A company recruited a top sales executive who had an employment contract with a competitor company. The competitor sued the company for damages suffered as a result of losing its top sales producer on the grounds that the company interfered with the competitor’s contractual relationship with its employee. Defense expenses were in excess of $250,000 and the competitor was awarded damages of $600,000.

$1,800,000 An employee of a small business convinced the board of directors that he was qualified to step into the role of president of the company, and he was appointed. Under his leadership, the company’s financial position substantially weakened. On behalf of the company, a shareholder sued the BOARD OF DIRECTORS alleging that they used poor judgment and did not act in the best interests of the company when they appointed the new president. The case eventually settled for $1,500,000 and legal fees totaled $300,000.

$500,000 A retailer advised one of its suppliers that is ought to increase inventory because business was expected to increase significantly. Business did increase for the retailer but it decided to use a different supplier for the increased inventory. The original supplier sued the retailer alleging that he relied on the retailer’s promise of more business and suffered damages as a result of having relied on that promise. The matter was eventually settled for $500,000.

$1,250,000 A shareholder derivative action against a wholesaler and its directors alleges breach of duty. The plaintiff alleged the directors breached their fiduciary duties and wasted corporate assets in connection with certain business transactions with affiliated companies. The case settled for $1,100,000 and defense costs amounted to $150,000.

$2,150,000 The jury awards a competitor $2 million in damages after the president of a privately-owned service company is found negligent for interfering with business relations. The president disclosed that his company’s success is due largely in part to that competitor’s lack of customer service and inferior product in a conference call with members of the press. The attorney’s fees for this case amounted to $150,000.

$2,300,000 A federal judge approved a $2 million settlement of a lawsuit filed by employees and former employees who claim they were discriminated against because of their race. Plaintiffs’ attorney’s fees amounted to an additional $300,000.