The U.S. Court of Appeals for the First Circuit has affirmed a decision by the U.S. District Court for the District of Maine rejecting an insurer's subrogation action against a chicken supplier for providing salmonella-contaminated chicken, finding that the chicken was not “defective” because the salmonella could have been eliminated by proper cooking.
The Case
Mountaire Farms, Inc., contracted to deliver raw chicken parts to an AdvancePierre Food, Inc., facility in Portland, Maine. Thereafter, it shipped 120,000 pounds of fresh boneless chicken breasts to the Portland facility in connection with three separate purchase orders that AdvancePierre made under the contract. AdvancePierre logged each purchase order, which was assigned a unique lot number, into its computer system, along with the supplier information and the time and date that the products that had been ordered were received.
After AdvancePierre used the fresh chicken to produce value-added raw chicken products, clusters of individuals (initially a total of six) in Minnesota and Wisconsin became infected with salmonella enteritidis. The federal Food Safety Inspection Service (“FSIS”) identified “PFG pattern combinations” of the salmonella pathogen in all six of these patients and then linked the unique PFG pattern combinations to chicken products made by AdvancePierre at the Portland facility.
Based on this testing, the FSIS issued a public health alert and AdvancePierre initiated a recall with respect to 58,320 pounds of chicken products made on specific dates at the Portland facility – which soon expanded to encompass a total of 1,707,494 pounds of raw chicken products produced by AdvancePierre at the facility.
AdvancePierre determined that the chicken products associated with the outbreak and the subsequent recall were made with chicken from the raw chicken parts that Mountaire had supplied.
As a result of the recall, AdvancePierre incurred losses in excess of $10 million. AdvancePierre's insurer, Starr Surplus Lines, paid AdvancePierre $10 million.
Starr then filed a lawsuit in subrogation against Mountaire. Starr brought claims under Maine law for breach of the implied warranty of merchantability, breach of the implied warranty of fitness for a particular purpose, and strict product liability based on the allegation that the chicken that Mountaire had supplied to AdvancePierre was contaminated with salmonella enteritidis.
The district court dismissed the action, concluding that, under Maine law, salmonella was an “inherent, unavoidable, and recognized component of raw chicken” that was eliminated by proper cooking methods and that the complaint failed plausibly to allege that the chicken from Mountaire was contaminated with any pathogen other than salmonella. Therefore, the district court concluded, Starr's complaint did not sufficiently allege a “defect” in the chicken from Mountaire, as it was required to do in order to state a claim for breach of warranty and strict product liability.
Starr appealed to the First Circuit.
The First Circuit's Decision
The circuit court affirmed.
In its decision, the circuit court explained that Starr's breach of warranty claims could succeed only if it plausibly alleged that the raw chicken that Mountaire sold to AdvancePierre was contaminated with a type of salmonella that would persist despite proper cooking, which it had not done. According to the First Circuit, Starr's complaint made no direct allegation that the type of salmonella found in the chicken linked to the infected persons could not have been eliminated by proper cooking.
Moreover, the circuit court continued, the mere fact of the FSIS-orchestrated recall did not give rise to the plausible inference that the type of salmonella found in the AdvancePierre chicken products could not have been eliminated by proper cooking. According to the First Circuit, the fact of the recall might have simply reflected “that the FSIS linked particular chicken products to an outbreak of salmonella.”
The First Circuit then affirmed the district court's dismissal of Starr's breach of warranty claims.
The circuit court reached the same conclusion with respect to Starr's strict liability claim, concluding that Starr had not sufficiently pleaded facts to demonstrate that the raw chicken Mountaire sold to AdvancePierre was defective under Maine law.
The case is Starr Surplus Lines Ins. Co. v. Mountaire Farms, Inc., No. 18-1818 (1st Cir. April 3, 2019). Attorneys involved include: Eileen K. Bower, with whom James J. Sanders, Emily A. Golding, Clyde & Co U.S. LLP, Paul C. Catsos, Elizabeth K. Peck, and Thompson Bowie & Hatch LLC were on brief, for plaintiff-appellant. Kevin King, with whom John J. Deboy, Neil K. Roman, Covington & Burling LLP, David B. McConnell, Joseph G. Talbot, and Perkins Thompson PA were on brief, for defendant-appellee.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].