American Home Assurance Company; Cargill Meat Solutions Corporation, Plaintiffs - Appellees
Greater Omaha Packing Co., Inc., Defendant - Appellant
October 20, 2015.
from United States District Court for the District of
Nebraska - Omaha.
American Home Assurance Company, Plaintiff - Appellee: Thomas
A. Grennan, Adam J. Wachal, GROSS & WELCH, Omaha, NE.
Cargill Meat Solutions Corporation, Plaintiff - Appellee:
Jacob Bylund, Kimberly J. Walker, FAEGRE & BAKER, Des Moines,
IA; Bruce Gregory Jones, FAEGRE & BAKER, Minneapolis, MN.
Greater Omaha Packing Co., Inc., Defendant - Appellant:
Jordan W. Adam, Patrick S. Cooper, Michael Francis Coyle,
David J. Stubstad, FRASER & STRYKER, Omaha, NE.
WOLLMAN, BEAM, and GRUENDER, Circuit Judges.
Meat Solutions Corporation (Cargill) and American Home
Assurance Company filed suit against Greater Omaha Packing
Company, Inc. (Greater Omaha), alleging breach of contract
and warranties. Cargill claimed that Greater Omaha
sold raw beef trim tainted with E. coli O157:H7,
which Cargill then used in its ground beef products, causing
several people to become ill. Greater Omaha counterclaimed
for tortious interference with business relationships and
expectancies. The district court granted summary judgment
in favor of Cargill on Greater Omaha's counterclaim.
Following a three-week trial, the jury returned a general
verdict for Cargill and awarded $9 million in damages. On
appeal, Greater Omaha argues that the district court erred in
admitting certain evidence, that the jury instructions were
improper, that the jury reached an impermissible compromise
verdict, and that Greater Omaha's counterclaim should
have survived summary judgment. We affirm.
coli O157:H7 bacteria live in the digestive tracts of
cows and can be transferred to meat during slaughter. Humans
become infected by consuming contaminated beef, and the
O157:H7 strain is so virulent that even a small dose can make
a person ill. Unlike the harmless E. coli bacteria
commonly found in human intestines, E. coli O157:H7
produces Shiga toxins, which cause inflammation of the colon
and large intestine, resulting in stomach cramps and bloody
diarrhea. Hemolytic uremic syndrome is a severe complication
of E. coli O157:H7 infection that can cause anemia
and kidney damage.
infected patients seek treatment, health care providers
report the cases of E. coli O157:H7 to state health
departments, and clinical laboratories send bacterial
isolates to state public health laboratories for pulsed-field
gel electrophoresis (PFGE), which is a method of DNA
fingerprinting. State health departments then submit the PFGE
results to the Centers for Disease Control and
Prevention's (CDC) national molecular subtyping database,
PulseNet, which helps detect outbreaks of foodborne disease.
September and October 2007, the Minnesota Department of
Health (MDH) received several reports of cases of E.
coli O157:H7. Clinical laboratories sent bacterial
isolates to the MDH for two-enzyme PFGE testing. The results
revealed that the Minnesota cases had indistinguishable PFGE
patterns. MDH submitted the results to PulseNet, and the
Minnesota cases were considered to be part of an existing
national outbreak of E. coli O157:H7, consisting of
cases having the same PFGE pattern. Although the
outbreak's PFGE pattern was rare, it had been reported to
the CDC in 2005 and 2006.
to the supervisor of the foodborne diseases unit in the MDH,
" when isolates of bacteria from different people have
the same DNA fingerprint, that suggests that they -- the
people may have acquired their illness from a common
source." Several Minnesota patients reported having
consumed the same brand of frozen hamburger patties from
Sam's Club--American Chef's Selection Angus Beef
Patties--which was produced by Cargill. State officials
collected leftover patties and packaging materials from those
patients and tested the patties for the presence of
E. coli O157:H7. That testing revealed that
the human and ground beef bacterial isolates had the same
two-enzyme PFGE pattern, and packaging materials indicated
that the patties were produced within minutes of each other
on two production lines in the same facility. Accordingly, on
October 5, 2007, the MDH issued a news release, instructing
the public to discard or return to Sam's Club any
American Chef's Selection Angus Beef Patties.
the U.S. Department of Agriculture's Food Safety and
Inspection Service (FSIS) notified Cargill of the E.
coli O157:H7 outbreak. Cargill determined that the
contaminated patties were produced at its Butler, Wisconsin,
beef grinding facility on August 16, 2007. Angie Siemens,
Ph.D., then Vice President of Technical Services, served as
Cargill's recall coordinator. She traveled to the Butler
facility to work with the on-site technical services team and
FSIS officials to determine the scope of the recall. On
October 6, 2007, Cargill recalled 845,000 pounds of frozen
had used raw materials from the following four suppliers in
its August 16 production: Greater Omaha; Beef Products, Inc.
(BPI); Lone Star Beef Processors (Lone Star); and Frigorifico
PUL (Frigorifico), a foreign company. Greater Omaha produced
the raw beef trim included in this production on August 9 and
10, 2007. Cargill contacted the four suppliers the same day
it announced the recall.
the four suppliers had submitted to Cargill certificates of
analysis showing that samples of their beef had tested
negative for E. coli O157:H7, it is undisputed that
raw materials caused the contamination. To determine the
source of the contamination, Cargill reviewed microbiological
data from the suppliers and sent personnel to visit the
domestic suppliers. Cargill learned from its audit of Greater
Omaha's E. coli sampling procedures that Greater
Omaha had been testing a new sampling procedure that,
according to Cargill, did not comply with the procedure
Cargill required. Cargill claimed that when Greater Omaha
resumed using the appropriate method in October 2007, Greater
Omaha experienced a spike in E. coli
O157:H7-positive samples. On December 5, 2007, Cargill
threatened to delist the Greater Omaha plant if it did not
improve its process control or institute corrective actions.
Greater Omaha's December 18, 2007, response outlined the
improvements that it had made, including that it had modified
its sampling procedures.
early October 2007, FSIS also notified Greater Omaha that its
beef had been used in the Cargill patties that had tested
positive for E. coli O157:H7. Thereafter, in
December 2007, FSIS completed a comprehensive review of
Greater Omaha's food-safety systems, documenting several
instances of non-compliance with federal regulations. Because
it had failed to maintain adequate sanitary conditions in its
facility, FSIS issued a Notice of Intended Enforcement (NOIE)
to Greater Omaha on December 20, 2007. The NOIE stated that
from June 1, 2007, to November 29, 2007, Greater Omaha had
" failed to meet regulatory requirements for
pre-operational sanitation, on average, 48% of the
time." FSIS thus concluded that the recurring
noncompliance " indicate[d] failure to properly
implement [Greater Omaha's] sanitation program." The
NOIE also addressed a spike in E. coli
O157:H7-positive results from Greater Omaha samples from
mid-October to early November 2007. In its response to FSIS,
Greater Omaha attributed the spike to a fan that had been
placed on the kill floor and was subsequently removed.
created a line list for the E. coli O157:H7
outbreak, using data provided by state health departments.
The line list included information about fifty-four case
patients, all of whom had the same strain of E. coli
O157:H7. The spreadsheet had fields for the patient's
age, sex, onset date, symptoms, and food history. Because the
most common vehicle for E. coli O157:H7 is beef, the
spreadsheet also included fields for brands, types, and
purchase dates of any beef consumed by the case patient.
fifty-four cases on the line list, twenty-seven case patients
reported exposure to American Chef's Selection Angus Beef
Patties. Of the twenty-seven case patients who had not been
exposed to the Cargill patties, the line list included no
food-history information for fourteen cases and varying
degrees of food-history information for the remaining
thirteen cases. Among the thirteen case patients who reported
some food history, two young boys from Ohio had fallen ill
before August 9, 2007, and three individuals--from Hawaii,
Missouri, and New York--reported exposure to beef that could
be traced back to Greater Omaha. When Dr. Siemens reviewed
the CDC's line list and discovered a case patient who had
not been exposed to the Cargill patties but who had consumed
other Greater Omaha beef, she concluded that Greater
Omaha's raw beef trim was the source of the
Hawaii case patient was a seven-year-old girl who had
consumed a raw beef dish at a restaurant on August 30, 2007.
She became ill four days later and was diagnosed with E.
coli O157:H7. PFGE testing revealed that the Hawaii case
patient had the same PFGE pattern as the Minnesota case
patients, and further genetic subtyping, known as multiple
locus variable-number tandem repeat analysis (MLVA), revealed
that she also had the same MLVA results as the Minnesota case
patients. The restaurant identified the cuts of beef that may
have been used in the girl's meal and reported that it
had received those cuts from a distributor in California.
That distributor identified Greater Omaha as the source of
the beef that it had shipped to the restaurant on August 16
and 18, 2007. The distributor had not shipped any beef from
BPI, Lonestar, or Frigorifico to the restaurant. According to
Greater Omaha's records, it had produced the beef on
August 9, 2007.
twenty-four-year-old man in Missouri became ill on September
14, 2007, with the same strain of E. coli O157:H7 as
the Minnesota case patients. He reported that he regularly
purchased ground beef from Schnucks, a grocery store that
grinds its beef in-house. Schnucks had not purchased or
received raw beef from BPI, Lonestar, or Frigorifico during
the time period relevant to the outbreak, but it had
purchased raw beef from Greater Omaha, including a shipment
sent by Greater Omaha on August 10, 2007.
September 16, 2007, a sixteen-year-old girl attending
boarding school in upstate New York ate a hamburger at a
school picnic. She became ill days later, and tests confirmed
that she had the same strain of E. coli O157:H7 as
the Minnesota case patients. The school had purchased the
hamburger patties from a distributor of Farmland Food
patties. The distributor had purchased the patties from
Rochester Meat Company, which produced the patties on August
16, 2007, using raw beef from Greater Omaha. Rochester Meat
Company had not used raw beef from BPI, Lonestar, or
Frigorifico to make ...