Lawsuit for Exposure to E. Coli Bacteria

Vons Companies, Inc. v. Seabest Foods, Inc arose out of the injuries suffered by Jack-in-the-Box customers from exposure to the E. coli bacteria. Jack-in-the-Box franchisees sued Vons, a meat supplier, and Vons sought to cross-complain against the franchisees, alleging that the customer injuries would have been avoided if the meat had been properly cooked. The issue before the Supreme Court was whether the franchisees, Washington corporations, had sufficient contact with California for the assertion of jurisdiction here. Notably, Foodmaker, Inc., a Delaware corporation which is the parent company of Jack-in-the-Box, had its principal place of business in California. The court closely examined the franchisees' relationships with Foodmaker and this state, and found extensive contact. Among the contacts the court discussed were the fact that the franchise agreements between the franchisees and Foodmaker were signed in California, and the franchisees' agreements with their own restaurants provided that disputes would be litigated in California under California law. Each franchisee did extensive business with Foodmaker in California, and had agreed to follow Foodmaker directions in food preparation and to buy supplies from Foodmaker or from suppliers approved by Foodmaker. ( Vons Companies, Inc. v. Seabest Foods, Inc., supra, 14 Cal. 4th at pp. 442-443, 456.) The court concluded that California could exercise specific jurisdiction over the franchisees, since each had purposefully availed itself of the benefits in this state by reaching out to State residents to create an ongoing franchise relationship. ( Id. at p. 449.)