Products Liability Law Daily Cake mix distributor may be indemnified by provider of injury-causing packaging
Wednesday, October 2, 2019

Cake mix distributor may be indemnified by provider of injury-causing packaging

By David Yucht, J.D.

The fact that the distributor had been involved in assembling icing packages provided by the packaging company did not negate its right to seek indemnification under Pennsylvania’s common-law indemnification doctrine.

A federal district court in Pennsylvania found that a cake mix distributor that was involved in assembling icing packets sold with its product could seek indemnification from the packaging company in a wrongful-death case filed by the parents of a child who had choked on the cap of the icing packaging. Consequently, the court refused to dismiss a third-party complaint seeking indemnification against the packaging company for strict liability claims. However, the court threw out claims for indemnification related to negligence and express warranty (Bachtell v. General Mills, Inc., October 1, 2019, Rambo, S.).

A complaint was filed against General Mills, Inc. and Signature Brands, LLC (Signature) stemming from an accident in which a child died after having choked on the cap of a Betty Crocker icing dispenser. The decedent’s parents alleged that the icing package and its cap were improperly designed and that there were insufficient warnings of the dangers of choking on the cap. The parents asserted negligence, breach of warranty, and strict liability claims.

Thereafter, Signature filed a third-party complaint against Flair Flexible Packaging Corp. and Manto International Ltd., alleging that Flair designed, manufactured, and supplied the subject icing pouch. On that basis, Signature brought common-law indemnification and contribution claims against Flair. Flair moved to dismiss those claims, arguing that the indemnification claim failed because: (1) Pennsylvania’s common-law indemnification doctrine only permits recovery by one who was "secondarily" liable, by operation of law, for a third party whose actual conduct rendered them "primarily" liable; (2) the negligence claims against Signature were not subject to indemnification because proof of the underlying negligence claim against the company would require a finding that it had engaged in conduct rendering it liable; (3) the strict liability claims against Signature were not subject to indemnification because the company had actively participated in the tortious conduct at issue by assembling the icing product that was ultimately sold; and (4) the breach of warranty claims were not susceptible to indemnification.

Indemnification—strict liability. The court denied the motion to dismiss regarding indemnification for the strict liability claims. The court agreed that Pennsylvania’s common-law indemnification doctrine only permits recovery by an entity who was "secondarily" liable, by operation of law, for a third party whose actual conduct rendered them "primarily" liable. But the court noted that as a mere seller of a defective product, Signature might be entitled to seek indemnification from Flair as the manufacturer under appropriate circumstances. A wrinkle in the case was that Signature was not just a mere seller, because it actually had assembled the product. The court noted that while an assembler and manufacturer both may be legally liable to the consumer, contribution and indemnification exist specifically to determine whose conduct truly caused the underlying injury. Consequently, the mere fact that Signature had assembled the product at issue was insufficient to negate its right to seek indemnification. The court concluded that consideration of whether Flair must indemnify Signature required resolution of whether the latter knew that the icing packaging was defective; whether the way Signature had assembled the product caused the injuries; whether trade customs generally required the seller or manufacturer of such a product to ensure the cap was safely added; and whether the cap selected had been tailored to the packaging, or whether Signature autonomously had selected the cap at issue. Consequently, the court said that it could not decide, at this stage in the litigation, whether Signature’s conduct negated its entitlement to indemnification. It could reasonably be inferred that Flair was the primarily liable party, with Signature being only secondarily liable by operation of law, enabling Signature to seek indemnification.

Other issues. Because Signature admitted that the negligence claims were not subject to indemnification—as they would require a jury to find that Signature was an active tortfeasor— the court dismissed Signature’s indemnification claims related to negligence. However, at trial, Signature could argue that it reasonably relied upon Flair’s work and, thus, was not negligent in its decision to market, assemble, and sell the Betty Crocker icing packaging at issue. Additionally, the court granted the motion to dismiss indemnification regarding the express warranty claim. However, noting that at least two lower state court decisions had held that breach of implied warranty actions were tort actions subject to contribution claims, the court denied the motion regarding the implied warranty claims. The court also struck a paragraph of Signature’s third-party complaint which improperly pleaded joint-and-several liability as being connected to its indemnification claim.

The case is No. 1:18-cv-02292.

Attorneys: Derek R. Layser (Friedman Schuman, PC) for Keith C. Bachtell. Edward A. Greenberg (Ward Greenberg Heller & Reidy, LLP) for General Mills, Inc. and General Mills, Inc.

Companies: General Mills, Inc.; General Mills, Inc.

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