LETTERS FROM TWO ATTORNEYS
WARN SEATTLE SCHOOL BOARD
ABOUT LEGAL LIABILITY FOR "COKE FOR KICKBACKS" CONTRACT
Email Sent by Public Interest Law Professor John F. Banzhaf III to Members
of the Seattle School Board
Warning Them of Potential Liability If the Board Renews a Contract With
Coke
to Sell Sugrary Soft Drinks in Schools for Comissions - Which Could be Termed
Bribes of Kickbacks
DATE: June 25, 2003
TO: Chairperson Nancy Waldman, Members of the School Board, and Mr. George
Sneller
FROM: Prof. John Banzhaf, George Washington University Law School
RE: Exclusive Right of Sale Contracts With Soft Drink Providers
I have just been advised that the City of Seattle School Board is about
to hold a hearing on this topic. I would therefore like to respectfully
bring to your attention some information which might be relevant. I
trust you will be kind enough to share it with the other School Board members
if they do not receive this email.
Over the weekend more than 100 lawyers, doctors, public health professionals,
and food activists held a conference to discuss and encourage a growing and
so-far very successful movement to use legal action as a weapon against the
growing epidemic of obesity. Indeed, although barely a year old, the
movement has already won more than $15 million dollars in three cases. The
conference was widely reported. Indeed, links to several of the articles
appears near the top of my website on the issue: http://banzhaf.net/obesitylinks
As some of these articles suggest, it was the consensus of the conference
that one of the next major law suits to go forward will be a tort action
seeking damages against a school board - and perhaps even individual school
board members - for entering into exclusive contracts with soft drink providers.
Let me very briefly explain why we plan to bring such actions:
1. As everyone now seemingly agrees - although your Board may not have
had this information when it first entered into its current contract - we
are now in the midst of a major epidemic in pediatric obesity. What
used to be called "adult onset diabetes" because it was seen only in adults
is now being seen regularly in children. Last weekend the Centers
for Disease Controls reported that fully one-third of all children (and
a higher percentage of minority children) will contract diabetes - a disease
caused by obesity which often leads to renal failure, the need for dialyses,
blindness, amputations, and very expensive medical care during their entire
lifetime. These are only a few examples of the childhood epidemic of obesity.
I'm sure that George C. Sneller, Director ,Child Nutrition Services, Office
of Superintendent of Public Instruction, 360/725-6200 (voice) , 360/664-9397
(fax) would be happy to provide you with more information on this topic.
2. There also seems to be a consensus that soft drinks are a (one of many)
factors leading to this epidemic. It is not difficult to see why consuming
each day one of more beverages which may contain more than 100 calories
and have no nutritional value may be a significant factor in contributing
to pediatric obesity. Also, since many of these drinks contain amounts
of caffeine which are very significant to a young child [e.g., a 200 lb adult
drinking a typical cup of coffee containing 135 milligrams of caffeine ingests
135/200 = 0.67 mg/lb of caffeine whereas a young child weighing 50 lbs who
drinks a can of Pepsi One with 85 milligrams of caffeine may ingest 85/50=
1.7 mg/lb of caffeine, or a dose more than twice that for an adult], it
is not hard to see how this could not only be harmful to health but
also very disruptive and counterproductive for a child who is trying to
sit still and learn in a classroom.
3. Schools and school board members have a much higher and more encompassing
legal duty to their students than fast food restaurants and other merchants
do. Merchants owe everyone a duty of "reasonable care" - which is why
caveat emptor applies. But, the law suggests, school boards owe a
higher and more exacting legal duty to children - in the nature of a fiduciary
duty - for the same reasons that many other entities do.
4. When laymen deal with doctors, lawyers, banks, hospitals, and other
institutions, the law imposes this higher fiduciary duty for two reasons.
The first is that - unlike the situation with ordinary vendors like fast
food outlets - the individuals have far less knowledge than the person or
institution they are dealing with. Indeed, it is just this inequality
of knowledge which compels persons to seek out these specialized services,
and one of the reasons why the law imposes this higher fiduciary duty.
5. Second, patients of doctors, clients of lawyers, customers of bankers,
etc. repose a special trust and confidence in the person or institution they
are dealing with, fully expecting that they will (as the law requires) do
more to protect their interests than a typical merchant. This relationship
of special trust is the other reason for imposing this fiduciary duty.
6. Our research indicates that the same kind of duty - a fiduciary or at
least quasi-fiduciary duty - applies between students and a school board.
Certainly students have less knowledge, maturity, judgment, etc. than the
school board. For this reason students (as well as their parents) repose
a special trust in the school to watch out for them and to protect them
from harmful activities. Students (as well as their parents) trust
that when a school suggests or even facilitates a student engaging in an
activity - e.g., doing an exercise in gym, filling out a controversial questionnaire,
going on a field trip, engaging in an athletic event or activity, or even
eating a food - that the school has determined that it is reasonably
safe and in the best interest of the student to do so.
7. In the instant situation it is very hard to argue that eating sugary
soft drinks, especially during school hours, is healthful or in the student's
best interests. Therefore than alone could create potential liability
under the tort theory of breach of a fiduciary or quasi-fiduciary relationship,
or ordinary negligence.
8. Moreover, two additional factors add to the strength of the legal argument.
The first is that the school often receives money from the contract in the
form of a commission, bonus, or incentive. Thus, it could be argued,
the school and even individual school board members have a conflict of interest
between the desire to earn/receive money and the interest in being sure that
activities are safe and healthful for the student. Indeed, under the
circumstances, a jury might even see these payments as in the nature of
a bribe or payoff.
9. Second, students are often a captive audience. Unlike, for example,
college students where such contracts are also often in effect on campus,
students in lower schools are often not free to leave the school grounds
during the school day to purchase other beverages if they so choose.
Thus, although it might be possible (although maybe not reasonable) for students
to bring beverages from home in some instances, students who do not or are
unable to do so, students who need more beverages than can easily be brought
from home, and students who desire a cool beverage (not an uncommon desire
on a hot day) may have no practical choice but to purchase the beverage offered
by the company which is giving the school money for every sugary soft drink
which is sold.
These in brief are the reasons why I and many of the attorneys with whom
I am working believe that entering into and/or renewing such contracts,
especially after the school board members are aware of the serious health
consequences, may create the risk of legal liability. It is for these
reasons - as well as in the interest of the health of your students - that
I respectfully suggest that you carefully investigate before routinely renewing
this contract. As you may know, the New York City Schools banned soft
drinks today, and the Los Angeles Schools did so several months ago.
Perhaps the actions of these larger school systems might provide some incentive
for your school board to do likewise.
PROFESSOR JOHN F. BANZHAF III
Professor of Public Interest Law
George Washington University Law School
2000 H Street, NW, Washington, DC 200006, USA
(202) 994-7229 // (703) 527-8418
http://banzhaf.net
http://banzhaf.net/obesitylinks
http://banzhaf.net/obesitymediareleases
Email Sent by Seattle
Attorney to Members of the Seattle School Board
Warning Them of Potential Liability If the Board Renews a Contract With
Coke
to Sell Sugrary Soft Drinks in Schools for Comissions - Which Could be
Termed Bribes of Kickbacks
LETTER FROM LAW OFFICE OF DWIGHT VAN WINKLE
119 First Avenue South, Suite 200, Seattle, WA 98104; (206) 442-1408
Nancy Waldman
President and District III Representative
Seattle School Board
School Board Office
2445 Third Avenue South
Mail Stop: 11-010
PO BOX 34165
Seattle, WA 98124-1165
Via personal delivery to School Board Office and via electronic mail to:
nwaldman@seattleschools.org
June 30, 2003
RE: Potential Board and Individual Liability for Renewing "Pouring
Rights" Contract
Dear Ms. Waldman:
As you know, I am a resident of District III and parent of children in
District III schools, and a fellow member of the Washington State Bar
Association, and have been strongly opposed to the initial contract
between Seattle Public Schools and Coca-Cola. I am writing to you to
urge you to delay your vote on renewing the Coca-Cola contract so that
you may carefully consider very important new information that has come
to our attention.
I write to advise you that I am aware that you and the other Board
members have been advised that the Board, as well as the individual
Board members, might be subject to legal action and potential legal
liability for renewing a contract under which your students will be
encouraged to consume sugary soft drinks with virtually no nutritional
value, especially now that you have been placed on legal notice of the
health and legal consequences of such action. I am attaching a copy of a
letter that was sent to me by Professor John Banzhaf of George
Washington University, which I understand was sent to you the week of
June 23, 2003.
Please be advised that the communication you received does raise serious
legal issues, including some novel points of law for which there are no
definitive answers. I believe that it would be in the best interests of
the Board as an entity, and of individual Board members, to obtain
written advice from the Board counsel and/or other qualified attorneys
representing the Board or individual directors, before proceeding further.
The issues upon which you should request written opinions for your own
protection include:
1. The nature and extent of the Board's legal obligations and duties
regarding the health of its students; whether there is a heightened
standard in the nature of a fiduciary and/or quasi-fiduciary duty; and
how this relates to actions which the Board may take which might be
characterized not only as "negligent" but also "intentional" since the
Board is acting with "substantially certain knowledge" that there will
be harmful consequences to at least some of the students, who might not
be the same students who predominately benefit from the funds received
from Coca-Cola.
2. The extent to which, in addition to naming the Board as a defendant,
an attorney representing one or more parents or students could include
individual Board members as defendants and, if so, their potential
liability. I phrase the issue this way because being named as a
defendant in a civil action can by itself have serious consequences in
terms of public documents, credit ratings, etc., and attorneys are
permitted to bring actions under legal theories which have not yet be
recognized provided that they can make a good faith argument for an
extension and/or modification of existing law. I am aware that the
school district has likely purchased insurance to hold individual school
board directors personally harmless; however, my understanding is that
such insurance would not itself insulate individual directors from
lawsuits but would merely pay any judgments obtained against them.
3. The extent to which the law of Washington provides qualified immunity
for the Board and/or its individual members; the limits or exceptions to
such immunity; and whether the immunity applies once a Board member is
on notice of the legal and health-related effects of an action, and then
acts intentionally in the face of that knowledge.
4. The extent to which a court might consider that the school board has
exceeded its statutory authority, express or implied, by contracting to
receive money from Coca-Cola in exchange for allowing Coca-Cola to
market its products to the students which the school board is charged
with protecting; and whether such an ultra vires act might weigh into a
courts decision to allow suits to go forward against the school board
and/or individual directors under the fiduciary duty or other legal theory.
As you may remember, I told you and the School Board five years ago that
I believe that school board has no legal authority to raise money by
selling its students as a market for a private business. At that time,
the health issues related to caffeine and empty calories were also
obvious. You apparently chose to view these issues as a philosophical
concern of a vocal minority, as a necessary political trade-off, and/or
as the responsibility of parents. Since then, very disturbing research
has shown an alarming increase in adult-onset diabetes among juveniles,
which you cannot brush aside as the views of a vocal minority or as a
problem for parents alone. The school board is now on legal notice that
it may be causing serious harm to some of its vulnerable students by
encouraging them to consume unhealthy beverages, and the board must ask
itself whether its legal exposure will be limited merely by restricting
its next business deal to students in high school.
As an attorney with a strong interest in this issue, I will be closely
watching your deliberations and votes on the pouring rights contract,
and may decide, should the facts warrant, to take further action as may
appear to be appropriate. I believe you owe it both to your students and
to the taxpayers of Seattle to carefully consider these legal issues
before proceeding further with the Coca-Cola contract.
Sincerely,
Dwight Van Winkle