General Mills Operations, LLC v. Five Star Custom Foods, Ltd.

789 F. Supp. 2d 1148, 2011 U.S. Dist. LEXIS 54505, 2011 WL 1988314
District Court, D. Minnesota·Decided May 20, 2011·No. Civ. 10-15 (RHK/JJG)·Published·Cited by 11 cases

Opinion

MEMORANDUM OPINION AND ORDER

RICHARD H. KYLE, District Judge.

INTRODUCTION

Plaintiff General Mills Operations, LLC, f/k/a General Mills Operations, Inc. (“General Mills”) purchased meatballs from Defendant Five Star Custom Foods, Ltd. (“Five Star”) for use in its Progresso line *1151 of soups. Some of the meat used in these meatballs was later recalled, and General Mills had to recover and destroy soup containing the product. It now asserts that Five Star breached its contract, breached several express and implied warranties, and was negligent by supplying the recalled meatballs. Both General Mills and Five Star have moved for summary judgment. 1 For the reasons set forth below, the Court will grant each Motion in part and deny each in part.

BACKGROUND

Except where otherwise indicated, the material facts are undisputed. Both General Mills and Five Star are companies in the food-products industry. They have had a business relationship since 2001, and General Mills continues to be a customer of Five Star. (Paar Aff. Ex. 1 (Phillips Dep.) at 10.)

Five Star is a custom food products manufacturer. As such, it is subject to federal regulation — specifically, its meat-based products are regulated by the United States Department of Agriculture (“USDA”), while non-meat products are regulated by the Food and Drug Administration (“FDA”). (Id. at 11-12.) Five Star supplies General Mills with various custom manufactured meat-based products, including the “Big Meatballs Cooked Italian” used in General Mills’ Progresso Italian-Style Wedding Soup.

In the fall of 2007, General Mills ordered two shipments of meatballs from Five Star, to be delivered by September 28 and October 5. As was its usual practice, General Mills sent purchase orders to Five Star via an automated fax system. The face of its purchase order form states: “This purchase order contract, along with General Mills’ standard Purchase Order Terms and Conditions dated [1/29/04] 2 shall govern all terms and conditions of sale.... Shipment of the goods against this order constitutes acceptance of terms and conditions dated [1/29/04] — otherwise do not ship.” (Paar Aff. Ex. 6; Bryan Aff. Exs. C, D.) According to General Mills, the Purchase Order Terms and Conditions (“Terms and Conditions”) were set forth on the back of every purchase order, including the meatball orders faxed to Five Star. (Tran Aff. ¶¶ 4 — 5; Paar Aff. Ex. 7 (Tran Dep.) at 18-28.) General Mills also claims that it mailed a copy of the 2004 version of its Terms and Conditions to Five Star’s Customer Service Manager on February 4, 2004. (Tran Aff. ¶ 10.) For *1152 its part, however, Five Star denies receiving the Terms and Conditions.

General Mills asserts that Five Star breached its contract and breached express warranties based on the following relevant provisions in the Terms and Conditions:

5. GOODS: The Goods shall conform in all respects to the description on the face of this Order, and/or [General Mills’] then current specifications furnished to [Five Star], The Goods ... shall be new, of first class commercial type ... unless otherwise specified on the face of this Order. Workmanship and materials shall be of the best quality and free from defects that might render the Goods unsuitable or inefficient for the purpose for which it is to be used. [Five Star] warrants and guarantees its Goods for the period of time normally specified for the type of Goods involved .... This warranty is in addition to and not in lieu of, any other warranties or guarantees made by [Five Star] or created or implied as a matter of law. The above warranties, as well as all other warranties contained herein, including, without limitation, the warranties in paragraphs 6, 8, 9, 10, 12, 18, 20, 21, 25, and 26 shall collectively be defined herein as “Warranties.”
25. COMPLIANCE WITH LAW: [Five Star]’s performance under this Order shall be in compliance with all applicable federal, state, and local laws, ordinances, regulations, rules and statutes (“Laws”).
* * *
27. RECALL: [General Mills] shall have the sole right, exercisable in its discretion, to initiate and direct the content and scope of a recall, market withdrawal, stock recovery, product correction and/or advisory safety communication (any one or more referred to as “Recall Action”) regarding the Goods.... Any and all action to be taken in connection with a Recall Action shall be in accordance with FDA policies and other Laws. [Five Star] shall bear the costs associated with any Recall Action which results from [Five Star]’s negligence or willful misconduct or that the Goods do not comply with [Five Star]’s Warmnties under this Order.

(Paar Aff. Ex. 8; Bryan Aff. Ex. E (emphases added).)

Additionally, the purchase order states on its face that “[t]he goods must conform to all current General Mills’ specifications as furnished to Seller.” (Paar Aff. Ex. 6; Bryan Aff. Exs. C, D.) General Mills mailed a copy of the ingredient specifications (“Specifications”) for its “Meatballs Italian Cooked” to Five Star on January 18, 2006. (Paar Aff. Ex. 9; id. Ex. 1 (Phillips Dep.) at 109-12.) Five Star does not dispute receiving these Specifications, and it acknowledges that they applied to the meatballs at issue here. (Phillips Dep. at 109-12.) The Specifications provide:

This ingredient shall be of food grade in all respects, including labeling, in compliance with the Meat Inspection Act of 1906 as amended.
The Beef or Beef By-Product in this ingredient must be sourced from countries or regions where USDA recognized BSE 3 controls are in place in accordance with the recommendations of the World Animal Health Organization.
Stunning, slaughter, and processing practices must meet or exceed the re *1153 quirements established by the USDA and the World Animal Health Organization for safe trade in animal products.

(Paar Aff. Ex. 9, at 3 (emphases added).)

Five Star obtains the ingredients for its products from a variety of suppliers. One of Five Star’s beef suppliers was Westland Meat Packing Company (“Westland”). Westland’s beef was used in two orders of meatballs supplied to General Mills. In February 2008, the Food Safety Inspection Service (“FSIS”) 4 issued a Class II recall of all products containing beef produced by Westland between February 1, 2006, and February 15, 2008. (See Paar Aff. Ex. 3.) The recall was due to Westland’s supposed failure to contact FSIS when it identified non-ambulatory disabled, or “downer,” cows that became non-ambulatory after passing ante-mortem inspections but before slaughter.

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General Mills Operations, LLC v. Five Star Custom Foods, Ltd., 789 F. Supp. 2d 1148, 2011 U.S. Dist. LEXIS 54505, 2011 WL 1988314 (mnd 2011).

789 F. Supp. 2d 1148 (General Mills Operations, LLC v. Five Star Custom Foods, Ltd.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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