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In re Shigellosis Litigation6/18/2002
More than 200 people became ill after eating bacteria-contaminated parsley at a restaurant operated by Horse & Hunt Club. This appeal arises from Horse & Hunt's contribution and indemnity claims against the seller and the importer to allocate the $1,000,000 arbitration liability for the consumers' damages. We affirm the denial of Horse & Hunt's challenges to the jury verdict relating to the importer. But because the produce seller was dismissed before trial without a complaint being filed against the certified manufacturer, we reverse and remand for further proceedings against the seller.
FACTS
Horse & Hunt Club operates an eating facility that served bacteria-contaminated parsley on parsley-buttered potatoes in August 1998. After complaints about a food-borne illness, the Minnesota Department of Health investigated and concluded that the illness resulted from ingestion of parsley contaminated with the shigella bacteria.
Through discovery, Horse & Hunt determined the parsley had been grown in Mexico by Agricola Herendira/Grupo Pas L.L.C. (Grupo Pas); purchased and imported by Sunridge Farms of California; sold first to Bix Fruit Company, a seller and distributor; and then to Horse & Hunt. The Minnesota Department of Health's trace-back investigation disclosed that the water used by Grupo Pas to rinse and ice the parsley in Mexico was untreated and contaminated with shigella bacteria.
The consumers affected by the bacteria sued Horse & Hunt for negligence, per se negligence for violation of food statutes, breach of implied warranties of merchantability and fitness, and strict liability. Horse & Hunt brought a third-party contribution-and-indemnity claim against Bix, the distributor, and against Sunridge, the importer. The district court ordered that the parties address issues of relative fault among the entities in the distribution chain before resolving the consumers' causation and damage claims.
Horse & Hunt initially identified Bix as the parsley manufacturer. But after the close of discovery, Horse & Hunt alleged instead that Sunridge was the manufacturer and moved for summary judgment. Horse & Hunt claimed that Sunridge, as the importer, should be deemed the "manufacturer" of the contaminated parsley because it marketed and sold the parsley under its own trademarked name, "Coastline," and because no party had produced evidence that Horse & Hunt was negligent in handling the parsley.
At the same time, Bix moved for dismissal of strict-liability claims under Minn. Stat. ยง 544.41 (2000), the "seller's exception" statute, and summary judgment on the remaining claims. Bix identified the Mexican grower, Grupo Pas, as the manufacturer of the contaminated parsley. Horse & Hunt opposed Bix's motion, arguing that the identity of the manufacturer was in dispute, that Grupo Pas was not a party to the litigation, and that Grupo Pas was not subject to jurisdiction in Minnesota courts.
The district court denied Horse & Hunt's motion because of the substantial factual dispute over the identity of the "true manufacturer" of the contaminated parsley. But the court granted Bix's motion for summary judgment based on Horse & Hunt's argument that Sunridge was a manufacturer. The court granted leave to Sunridge to interplead Grupo Pas, but Sunridge instead brought a fifth-party complaint against International Farm Services, who was later dismissed on jurisdictional grounds.
After Bix was dismissed, Horse & Hunt and Sunridge agreed to resolve the consumers' claims through binding arbitration. While the arbitration was proceeding, the affected consumers moved
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