Why “Least Cost” Is the “Best Value”

Take note, the task of identifying satisfied customers should take place before a claim is brought against your company. Having already made a public commitment to support your company’s system, such customers are more likely to follow through with a willingness to repeat that opinion in the context of litigation.

Stay flexible

Your company’s formulation system should allow your employees to override the system’s recommendations, whether for reasons of customer preference, palatability or pelletability. This is not only a good business approach, but also a good legal approach. Such flexibility will help demonstrate that your company looks out for its customers and empowers its employees to make individual decisions instead of relying purely on a computer.

Communication

If your customers understand, even in very general terms, the formulation system your company is employing, they will be less likely to sue and claim surprise that least-cost formulation was used. Open communication tends to make customers feel like trusted partners. While not removing the economic pressures today’s livestock producers are under, customers who feel a sense of partnership with your company are less likely to sue.

Similar to the point about sound science, here too, documentation is important. Of course, the “gold standard” would be a written acknowledgement of least-cost formulation signed by the producer. For many reasons, a signed acknowledgement may not be realistic, but there are still steps your company can take to improve its position in any subsequent litigation. Such steps can include promotional materials in writing and/or on the company website, and training manuals. If these materials suggest a dialogue with customers about ingredient choices being made for economic reasons, your company will appear more credible when asking a jury to conclude that the producer already knew about the system and is now just pointing fingers and seeking a windfall.

Todd Langel is an attorney with Faegre Baker Daniels, focusing on agricultural law and litigation, representing agribusinesses, in contract, product liability and environmental litigation, as well as various commercial transactions. Langel can be reached at Todd.Langel@FaegreBD.com. Mark Carpenter, partner at Faegre & Benson, has focused his practice primarily on defending clients in product liability litigation, including class actions, with a particular emphasis on litigation involving agribusiness. Carpenter can be reached at Mark.Carpenter@FaegreBD.com.