Papa John’s coms outage could cost more than $2 billion in fines, but it’s more complicated than that
In late June, Papa Johns announced a power outage in its US restaurants and cafeterias that cost more money to fix than it was worth.
In the weeks since, the chain has had to pay fines from regulators and other parties in a wide range of different ways, most of which are designed to deter and punish companies that don’t comply with the Clean Air Act and other environmental regulations.
The Papa John chain has already paid $1.3 billion in penalties since its 2009 fire that killed more than 1,400 people, including more than 400 employees.
The company also paid $100 million to settle claims by the US Environmental Protection Agency and California regulators over pollution at its facilities in the Bay Area.
In April, the New York Attorney General’s office said it would pursue more than a dozen cases against Papa John.
The pizza chain is also working on a settlement with the US Department of Justice, which accused it of failing to properly test and treat its pizza, and paying bribes to state and local governments.
But the most serious penalties, according to the Justice Department, come from a bill the chain was fined $3.6 billion last year.
A lawsuit filed by New York’s attorney general alleges that the company misled consumers about the safety of its pizza and made false claims about the health benefits of the pizza, according the New Yorker.
“Papa Johns has failed to provide accurate information about its pizza ingredients and has repeatedly failed to inform consumers about its health- and safety-related claims,” the suit reads.
“Instead, it has sought to hide behind its reputation for health and safety to mislead consumers about health risks posed by its products.”
The Papa Joes company was already facing a series of lawsuits from regulators after it was found to have overstated its exposure to air pollution from its manufacturing plants in the United States and elsewhere.
Papa John has said that it has no plans to change its practices or reduce its reliance on energy-efficient manufacturing methods.
It has also said that if a settlement is reached, it will work to reduce its use of fossil fuels and invest in renewable energy.
Papa Johns was fined a record $4.6bn last year for violating Clean Air Acts, including those relating to power plants and other pollutants.
But that amount is likely to be dwarfed by the billions of dollars in fines and settlements Papa John is already under for its failure to comply with Clean Air acts and other regulations, including for not testing its pizzas properly.
The Justice Department complaint alleges that Papa John “has been the poster child for the fraud perpetrated by companies that claim to be responsible for protecting the public from harmful toxins,” but it also accuses the chain of “attempting to manipulate the market to drive down the price of its products, and has been complicit in a fraudulent scheme to increase the profits of its executives and stockholders.”
In a statement, Papa Johns CEO Kevin Kelly said the company was “fully cooperating” with the Justice’s investigation and that the charges were “not substantiated.”