The Peanut Corporation of America was a supplier of processed peanuts to some of the largest food-production companies in the United States, including ConAgra, a major producer of peanut butter. The company was founded by Hugh Parnell Sr. when he was selling ice cream vending machines in the 1960s. When he was restocking a machine, he noticed that the peanuts on the Nutty Buddy ice cream cones came from a plant in the North. He decided to begin a company that processed peanuts in the South, where they were grown. The company grew with plants in Lynchburg, Virginia, Blakely, Georgia, and Plainview, Texas. \({ }^{10}\) The company produced peanut paste, which is the base used in the production of peanut butter, cookie filling, and other types of peanut-flavored foods.

Stewart Parnell entered the business in the 1970s, when he complained to his father that those in his major, oceanography, often ended up working on oil rigs. His father offered him a job, and Stewart left college to begin work in the Virginia facilities. The company's sales grew, and in 1995 the Parnells sold the company to Morvan Partners LLP. Stewart worked as a consultant for the new buyer but bought back the company in 2000 . By 2008, gross sales were \(\$ 30,000,000\) per year. Michael Parnell, Stewart Parnell's brother, was the vice president of P.P. Sales, a Lynchburg, Virginia food broker for producers, manufacturers, and producers of food. Michael oversaw the negotiation and execution of contracts for Peanut Corporation's products, including supervision of the biological testing of those products.

Peanut Corporation's base was sold to its customers for use in peanut butter, ice cream, cookies, and crackers. Peanut Corporation was known for its cost cutting. When a prospective customer came back with a bid from another peanut product company that was lower, Stewart Parnell, the CEO of Peanut Corporation, would always cut the price by a few cents in order to win over the potential customer.

The price cuts were possible because of cost cutting at the plant. Peanut Corporation paid low wages to temporary workers and offered few benefits programs. E-mails reflect Parnell's concerns about costs. When a salmonella test was positive, Peanut Corporation was required to hold off shipment for a retest. However, in response, Parnell wrote in an e-mail, "We need to discuss this. Beside the cost, this time lapse is costing us \(\$ \$ \$\) and causing us obviously a huge lapse from the time when we pick up the peanuts until the time we can invoice."11 When he was informed that the test results for salmonella were not complete, he also wrote, "Turn them loose."12 When Mr. Parnell was notified by a customer that the products the customer had received tested positive for salmonella, Mr. Parnell responded in e-mail, "I am dumbfounded by what you have found. It is the first time in my over 26 years in the peanut business that I have ever seen an instance of this. We run Certificates of Analysis EVERY DAY with tests for Salmonella and have not found any instances of any, even traces, of a Salmonella problem." (Emphasis in original) \({ }^{13}\)

When the FDA made the connection between Peanut Corporation and the salmonella poisonings, Mr. Parnell wrote, "Obviously we are not shipping any peanut butter products affected by the recall but desperately at least need to turn the raw peanuts on the floor into money....................

 Discussion Questions
1. Discuss the theories for imposing liability on Peanut Corp.
2. Are the e-mails admissible as evidence?
3. Mr. Parnell's father, Hugh Parnell Sr. said, "He's being railroaded. Why would anybody send something out that would ruin his own company? It's like an auto dealer sending a car out with no brakes." \({ }^{19}\) What defense is he raising for his son?