The pet food recall is still at the top of the consumer radar these days, and we've been waiting for the lawsuits to begin. One of the first efforts is now underway, as a man whose dog passed away from kidney failure has filed suit against Wal-Mart Stores (NYSE: WMT), Menu Foods (an ingredient supplier blamed for the recall) and Del Monte.This was to be expected, but I am surprised that Wal-Mart was included in the suit. Being a distributor of products, in most cases, should absolve one of liability unless the product is not removed from shelves after notification from vendors and suppliers. Perhaps this was the case with Wal-Mart. If so, the retailer deserves to be included here.
The same argument could be made for Google Inc. (NASDAQ: GOOG), which is sued routinely for making certain information available through its search engine. Apparently, being a "distributor" of information means legal liability, which is nonsense. This kind of thinking moves the responsibility from the creator of a service or product into the realm of the middleman. Is this right? Well, it can be -- it's all in the details of each case. In the Wal-Mart case, the charges include language like "failed to prevent the distribution of tainted pet foods after the discovery of contaminated wheat gluten in their ingredients." If true, then Wal-Mart's inclusion makes sense.
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