NEW YORK CITY -- The National Coffee Association of U.S.A. is facilitating a unified response by the coffee roasting industry to a threat of litigation under California's Proposition 65.
"Notice of a potential lawsuit has been served on 40 roasters, and even those not named are receiving 'demand for indemnity' letters from retailers who carry their products," according to a bulletin circulated by NCA president and chief executive Robert F. Nelson. "The consequences could be staggering -- consumer warnings that coffee may cause cancer, and fines of up to $2,500 a day per violation for failing to post warnings to date."
Proposition 65, known by its sponsors as the Safe Drinking Water and Toxic Enforcement Act, was passed by voter initiative in 1986. Among its provisions is the requirement that "no person in the course of doing business shall knowingly and intentionally expose any individual to a chemical known to the state to cause cancer or reproductive toxicity without first giving clear and reasonable warning to such individual ..." And a protein breakdown compound, acrylamide is "known to the state to cause cancer," on the basis of tests conducted on laboratory animals.
NCA notes that, in 2002, Swedish scientists found that acrylamide is formed during the "Maillard reaction," which occurs when many proteins are heated. The Maillard reaction causes food to brown, and produces many of the flavors formed in a wide variety of foods by cooking.
It also is produced in coffee by roasting, which has provoked the current alarm on the part of roasters who have received these "demand for indemnity" letters. "Undoubtedly, the letters will instill fear with their abundant legalese," NCA observed.
It is important for suppliers who receive such letters to put them into perspective, NCA emphasized. "Chances are you will receive these letters because of standard clauses in your supplier agreements with the retailers you service. If retailers are named as potential defendants, they may issue such letters routinely to secure their rights to be indemnified against any legal damages or penalties, perhaps including attorneys' fees, should they be found liable stemming from the products you sell in their stores."
While the association cannot offer legal counsel, it can apprise recipients of these letters of the steps they should take. NCA's recommendations are:
"First, please be aware of the routine nature of demand for indemnity letters -- a standard procedure in situations of this nature.
"Second, make sure to submit the letters to your own counsel so that he or she may respond in a timely and appropriate manner to preserve the business relationship with your retail outlets, as well as protect your own rights as spelled out in your individual supplier agreements.
"Third, be assured that the impetus for these routine letters, namely the threatened lawsuit, is being addressed effectively by the industry group waging a joint defense following NCA's initiative."
The association emphasizes that it has spearheaded a united industry front against the threat, by engaging the named respondents and paving the way for a joint defense agreement. Under this arrangement, the parties agree to pool efforts, share costs and present a coordinated defense, bolstered by their individual reputations and joint industry clout, NCA explained.
The association also has engaged industry members who were directly challenged by a similar proposed lawsuit, which was to be brought against retailers who sell coffee as a ready-to-drink beverage. They include large and small retail chains, local coffeehouses, convenience stores and even restaurants.
"Discussions are ensuing as the parties continue to assert a strong, united defense as the case works its way through California legal channels," NCA stated.