The Pillsbury Company v. West Carrollton Parchment

210 F. App'x 915
CourtCourt of Appeals for the Eleventh Circuit
DecidedDecember 14, 2006
Docket06-10717
StatusUnpublished
Cited by3 cases

This text of 210 F. App'x 915 (The Pillsbury Company v. West Carrollton Parchment) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eleventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
The Pillsbury Company v. West Carrollton Parchment, 210 F. App'x 915 (11th Cir. 2006).

Opinion

PER CURIAM:

In this action, appellant, The Pillsbury Co. (“Pillsbury”), appeals the district court’s grant of the summary judgment motion of the appellee, West Carrollton Parchment Co., Inc. (“West Carrollton”), on Pillsbury’s claims of negligent manufacture, negligent failure to warn, and punitive damages. Pillsbury also appeals the district court’s denial of its motion for a new trial and its motion for judgment as a matter of law on its breach of contract claim. After oral argument and a thorough review of the record, we reverse the judgments of the district court regarding the claims of negligent manufacture and negligent failure to warn, and affirm the judgments in all other respects.

I. Background

Pillsbury began producing Pet-Ritz frozen pie crusts (or pie shells) in 1995, packaging them in stacks of two. To ease separation and prevent discoloration, a waxed paper divider (“divider”) was inserted between the top face of one pie shell and the bottom of the baking tin containing the upper-most pie shell. The dividers were manufactured and supplied by outside suppliers who were required to represent that the products they supplied would conform to Pillsbury’s specifications.

In 1998, Pillsbury launched a marketing campaign for its pie crusts by adding printed recipes to the dividers. Pillsbury’s specifications for the printed dividers provided, inter alia, that (1) the wax be applied on top of the printing to serve as a functional barrier between the ink and the pie crusts; (2) there be no visible transfer of ink to the pie crusts; (3) the supplier perform tests to ensure that no ink be visibly transferred to the pie crusts; (4) the ink(s) be approved for direct food contact; and (4) the specifications could not be verbally modified or superseded. To secure the dividers, Pillsbury enlisted the services of broker-distributor Federated Products (“Federated”), and Federated chose West Carrollton as a potential supplier.

At Federated’s direction, West Carroll-ton forwarded Pillsbury several samples of its printing and waxing capabilities, and Pillsbury provided West Carrollton with its specifications for both plain and printed dividers. After receiving West Carroll-ton’s samples, Pillsbury instructed Feder *917 ated to secure printed dividers from West Carrollton.

Pillsbury issued a purchase order to Federated for 8.5 million printed dividers, and Federated issued its own purchase order to West Carrollton. Upon receiving a new product, West Carrollton’s standard business practice was to transfer details from the product’s specifications to its internal files and to its laboratory. West Carrollton also employed a Quality Assurance Manager to test products after production to determine if they complied with the specifications on file. West Carrollton alleges that after receiving the specifications for Pillsbury’s printed dividers, it determined that the only way to keep its print register aligned during the cutting process was to coat the dividers with wax before applying the ink printing. According to West Carrollton, before it began producing the dividers, it informed Pillsbury, through Federated, that because of printing and die-cutting limitations, the ink printing would be applied on top of the wax. Pillsbury, however, denies receiving this information.

Pillsbury accepted delivery of the printed dividers and began placing them between its pie crusts at the Lithonia, Georgia plant. Assembly workers would insert the dividers by hand, sometimes with the ink-side facing upwards and touching the bottom of the tin above (as West Carroll-ton claims it believed that they would be inserted), but sometimes with the ink-side facing downwards touching the pie crust below (which, as Pillsbury claims, its specifications clearly allowed). Notably, Pillsbury never performed more than a visual inspection of the dividers before accepting delivery or inserting them into its pie crusts.

In September 1998, workers at the Lithonia plant noticed that the ink from one of West Carrollton’s printed dividers had transferred onto a pie crust. Further inspection revealed that the problem was widespread, and Pillsbury soon began receiving complaints from its customers. Pillsbury claims it was only at this point that it noticed that the ink printing had been applied over the wax and that West Carrollton had not used inks approved by the Food and Drug Administration (“FDA”) for direct food contact.

At the FDA’s direction, Pillsbury immediately b,egan a complete recall of the entire production run of the Pet-Ritz pie crusts, totaling over 600,000 cases. The FDA deemed the pie crusts “adulterated” by a “food additive” (i.e., the ink), and therefore, “unsafe” under the applicable provisions of the Food, Drug, and Cosmetic Act (“FDCA”). The FDA classified the recall as a “Class III” recall, which, according to the FDA, is “for products that are unlikely to cause any adverse health reaction, but that violate FDA labeling or manufacturing regulations.” 1 According to Pillsbury, it sustained damages exceeding $7.8 million as a result of this recall.

Pillsbury filed a complaint against West Carrollton in the Superior Court of DeKalb County, Georgia for negligent manufacture, negligent failure to warn, punitive damages, and breach of contract. West Carrollton removed the case to the United States District Court for the Northern District of Georgia on the basis of federal diversity jurisdiction. Pillsbury later filed an amended complaint expounding upon its breach of contract claims, asserting that West Carrollton breached its contract with Pillsbury and its contract with Federated (to which Pillsbury was a third party bene *918 ficiary). The parties filed cross-motions for summary judgment. The district court denied Pillsbury’s motion and granted West Carrollton’s motion as to Pillsbury’s claims of negligence, punitive damages, and direct breach of contract. The remaining breach of contract claim (under the third-party-beneficiary theory) was tried by jury, and, after approximately sixty minutes of deliberation, the jury found in favor of West Carrollton. Pillsbury then filed motions for judgment as a matter of law and a new trial, which the district court denied. Pillsbury timely filed this appeal.

II. Standard of Review

We review a district court’s grant of summary judgment de novo, viewing the evidence in the light most favorable to the party opposing the motion. Cotton v. Cracker Barrel Old Country Store, Inc., 434 F.3d 1227, 1230 (11th Cir.2006). Summary judgment is appropriate if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show there are no genuine issues as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c).

We review the district court’s denial of a motion for a new trial for abuse of discretion. Bianchi v. Roadway Express, Inc.,

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