American Home Assurance Co. v. Greater Omaha Packing Co., Inc ( 2016 )

United States Court of Appeals
For the Eighth Circuit
___________________________
No. 15-1313
___________________________
American Home Assurance Company; Cargill Meat Solutions Corporation
lllllllllllllllllllll Plaintiffs - Appellees
v.
Greater Omaha Packing Co., Inc.
lllllllllllllllllllll Defendant - Appellant
____________
Appeal from United States District Court
for the District of Nebraska - Omaha
____________
Submitted: October 20, 2015
Filed: April 5, 2016
____________
Before WOLLMAN, BEAM, and GRUENDER, Circuit Judges.
____________
WOLLMAN, Circuit Judge.
Cargill 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.1 Cargill claimed that Greater Omaha sold
1
American Home Assurance Company is Cargill’s insurer. It did not participate
at trial and merely has joined Cargill’s opposition to this appeal.
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 court2
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.
I. Background
E. 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.
When 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
2
The Honorable Lyle E. Strom, United States District Judge for the District of
Nebraska.
-2-
molecular subtyping database, PulseNet, which helps detect outbreaks of foodborne
disease.
In 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.
According 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.
Meanwhile, 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
-3-
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
ground beef.
Cargill 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.
Although 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.
In 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
-4-
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 non-
compliance “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.
The CDC created a line list3 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.
Of the 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
3
A line list is a spreadsheet that includes information about case patients
associated with a foodborne-disease outbreak.
-5-
but who had consumed other Greater Omaha beef, she concluded that Greater
Omaha’s raw beef trim was the source of the contamination.
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.
A 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.
On 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
-6-
Greater Omaha. Rochester Meat Company had not used raw beef from BPI, Lonestar,
or Frigorifico to make the patties. Using invoices and shipment records, the
hamburger patty was traced from the school picnic to Greater Omaha’s August 9,
2007, beef production.
Cargill entered into nine settlement agreements related to personal injuries
caused by the contaminated American Chef’s Selection Angus Beef Patties, paying
out $25,270,768.50. Cargill also incurred $548,604.51 in business costs related to the
recall. Cargill filed the present suit against Greater Omaha in August 2011, alleging
five counts: breach of express warranty, breach of implied warranty of
merchantability, breach of implied warranty of fitness for a particular purpose, breach
of contract, and indemnity.4 The complaint identified a guarantee dated June 2, 2006,
wherein Greater Omaha guaranteed, in relevant part, that “all articles comprising each
shipment or other delivery to [Cargill] as of the date of shipment or delivery, will . . .
[n]ot be adulterated or misbranded within the definitions provided in the Meat
Inspection Act, Federal Food, Drug and Cosmetic Act, or any amendment thereof.”
In the breach-of-contract count, Cargill alleged that Greater Omaha breached the terms
of the June 2 guarantee when it shipped raw beef trim that was tainted with E. coli
O157:H7. As discussed more fully below, Greater Omaha filed a counterclaim for
tortious interference with business relationships and expectancies, which, as earlier
indicated, was dismissed at summary judgment.
Before trial, Cargill identified as experts Dr. Siemens and two professors of
epidemiology, Lee Harrison, M.D., and Randall Singer, Ph.D. Drs. Harrison and
Singer concluded that Greater Omaha beef was the source of the E. coli O157:H7
outbreak, based on their analysis of molecular data connecting the case patients to the
outbreak, state health department records, and supply-chain traceback data.
4
The district court granted Cargill’s pretrial motion to dismiss its indemnity
claim.
-7-
According to the pretrial written reports of Drs. Harrison and Singer, molecular
data indicated that the E. coli O157:H7 likely originated from the same source. Dr.
Harrison’s report stated that “[b]acterial isolates that have the same DNA fingerprint
are presumed to be genetically highly related and therefore from the same source.”
Similarly, Dr. Singer’s report stated that if two isolates have the same PFGE pattern,
“[t]he isolates are very similar (and possibly identical) and might be derived from the
same [s]ource.” Dr. Harrison found the molecular data from the Hawaii case
particularly compelling, noting that the matching two-enzyme PFGE pattern, along
with identical MLVA, constitute “exceedingly strong evidence that [the case patients]
got their infection from the same source.” He explained that MLVA “is able to further
discriminate among E. coli O157:H7 isolates that appear to be the same by two-
enzyme PFGE.”
A traceback investigation begins with the case patient’s food history. Because
symptoms of E. coli O157:H7 infection typically begin several days after exposure to
the bacteria, the case patient’s food history also must go back several days. After
identifying the vehicle that likely caused the person to become ill, the investigation
works its way back through the supply chain to try to determine the source of the
contamination. As Dr. Harrison explained,
[P]urchase and shipment documents are reviewed to trace back from
where the case patients purchased or consumed the product, then to the
suppliers/distributors of the product, and then to the processor and
producers. . . . In the case of a meat-related outbreak, the traceback often
leads to the slaughterhouse from where the contaminated meat
originated.
Dr. Singer noted that traceback investigations can be difficult because people often
cannot remember what they ate before they became ill.
-8-
Drs. Harrison and Singer cited the Hawaii, Missouri, and New York cases as
evidence that Greater Omaha was the source of the E. coli O157:H7 outbreak.
Traceback investigations for each of those cases led to beef produced by Greater
Omaha and ruled out beef produced by BPI, Lonestar, or Frigorifico. Greater
Omaha’s experts asserted that Drs. Harrison and Singer had cherry-picked those three
cases and ignored the Ohio cases. Dr. Singer responded that he investigated all fifty-
four cases and looked for epidemiological data that might link the cases together. Dr.
Harrison explained that cases with incomplete information do not always allow a
traceback investigation from vehicle to source. The more complete data from the
Hawaii, Missouri, and New York cases allowed for the investigation to begin with the
likely vehicles and to trace back to a common source, Greater Omaha. Dr. Harrison
further explained that there was no apparent epidemiological link between the Ohio
cases and the known outbreak cases, nor had the Ohio cases undergone MLVA, the
more discerning of the genetic subtyping methods.
Greater Omaha moved in limine to exclude the expert testimony of Drs.
Siemens, Harrison, and Singer. The district court denied the motion, rejecting Greater
Omaha’s argument that the experts had ignored all but the Hawaii, Missouri, and New
York cases in formulating their opinions. The district court concluded that although
Cargill’s experts could not account for every patient’s source of illness, “[i]t does not
follow that the Expert Witnesses ignored facts because they failed to account for each
patient’s illness through analysis.” D. Ct. Order of April 16, 2014, at 8.
Trial commenced on September 8, 2014. Several witnesses testified regarding
the 2007 E. coli O157:H7 outbreak, the identification of the Cargill patties as the
vehicle for many case patients, and the recall. Dr. Siemens testified regarding
Cargill’s investigation into the contamination and her conclusion that Greater
Omaha’s raw materials contaminated the Cargill patties. Drs. Harrison and Singer also
opined that Greater Omaha was the source of the E. coli O157:H7 bacteria found in
the Cargill patties. Greater Omaha’s expert testified that the Ohio cases indicated that
-9-
Greater Omaha was not the source of the outbreak. Over Greater Omaha’s objection,
the district court admitted the NOIE that FSIS had issued to Greater Omaha in
December 2007.
To establish its damages, Cargill submitted evidence of the sums that it paid to
settle outbreak-related claims and of the business costs related to the recall. The
attorney who mediated the settlement agreements testified that the sums Cargill paid
were reasonable. On cross-examination, Greater Omaha suggested that Cargill sought
to settle the cases for business and reputation reasons, advancing the theory it had
introduced during opening statements to the effect that the settlement amounts were
unreasonable and “driven by factors not related to the nature and extent of the [E. coli
O157:H7] illness.” At the close of Cargill’s case-in-chief, the district court denied
Greater Omaha’s motion for judgment as a matter of law.
Cargill suggested in its proposed jury instructions that the June 2
guarantee—along with several other documents—constituted the contract. Greater
Omaha objected, arguing that the guarantee alone constituted the contract and that
Cargill’s proposed instruction had the effect of amending the complaint. The district
court overruled Greater Omaha’s objection and submitted an instruction that explained
that the parties disputed which documents made up the contract. The instruction set
forth both parties’ positions and charged the jury with deciding “what constitutes the
parties’ contract, and which of the parties’ interpretations of that contract is correct.”
The instruction that set forth Cargill’s breach-of-contract claim, however, referred
only to the June 2, 2006, guarantee.
The district court also denied Greater Omaha’s request for an instruction on the
exclusion or modification of implied warranties, rejecting Greater Omaha’s argument
that its invoices excluded any warranties and limited any damages to the purchase price
or the cost of replacing the goods.
-10-
The jury received the case shortly after noon on Friday, September 26, 2014. It
deliberated until 4:30 p.m. that afternoon and reconvened at approximately 9:00 a.m. on
Monday, September 29. The jury reached its verdict at 9:30 a.m., returning a general
verdict in favor of Cargill for $9 million. The district court denied Greater Omaha’s
renewed motion for judgment as a matter of law and its alternative motion for a new
trial.
II. Discussion
A. Expert Evidence
Greater Omaha first argues that the district court erred in admitting the testimony
of Drs. Harrison and Singer. We review the decision to admit expert evidence for abuse
of discretion. Gen. Elec. Co. v. Joiner, 522 U.S. 136, 143 (1997). The opinion of a
qualified expert witness is admissible if (1) it is based on sufficient facts or data, (2) it
is the product of reliable principles and methods, and (3) the expert has reliably applied
the principles and methods to the facts of the case. Fed. R. Evid. 702. The expert’s
scientific, technical, or specialized knowledge must also “assist the trier of fact to
understand the evidence or determine a fact in issue.” Id. The district court is thus
vested with a gatekeeping function, ensuring that “any and all scientific testimony or
evidence admitted is not only relevant, but reliable.” Daubert v. Merrell Dow Pharms.,
Inc., 509 U.S. 579, 589 (1993).
Greater Omaha contends that the methodology of Drs. Harrison and Singer was
flawed because they ignored the two case patients from Ohio who fell ill on July 31 and
August 1—several days before Greater Omaha produced the meat that allegedly
contaminated the Cargill patties. Because the Ohio case patients’ illness could not be
attributed to the Greater Omaha product that was used in the Cargill patties, the
argument goes, the Ohio cases proved that the source of E. coli O157:H7 outbreak was
not Greater Omaha.
-11-
Greater Omaha’s argument begins with the premise that the fifty-four cases of E.
coli O157:H7 listed on the CDC’s line list share the same source because they have
indistinguishable PFGE patterns. According to Drs. Harrison’s and Singer’s reports and
testimony, a common PFGE pattern constitutes evidence that the bacteria causing the
illnesses may have derived from the same source, but E. coli O157:H7 cases that derive
from different sources can have indistinguishable PFGE patterns. According to Cargill’s
experts, the PFGE pattern must be considered along with the epidemiological
information. As Dr. Singer testified, “We need to know about the timing of the
infections. We need to know where they got infected. We need to know their exposure,
so what foods did they consume? We collect all of this additional information to
establish what we would call the epidemiological relatedness.”
Drs. Harrison and Singer testified that they could not find an epidemiological link
between the Ohio cases and the rest of the cases associated with the outbreak. They
explained that they did not ignore the Ohio cases, but rather were unable to trace those
cases back to their source. Reviewing the information from the twenty-seven case
patients who had not been exposed to Cargill patties, Dr. Harrison testified that he tried
to find a common denominator, i.e., had any of those case patients consumed beef that
could be traced back to one of Cargill’s four suppliers? The answer, he found, was yes,
three cases—from Hawaii, Missouri, and New York—traced back to Greater Omaha.
Similarly, Dr. Singer explained that his traceback investigation involved all fifty-four
cases from the line list:
[A]s an epidemiologist, I start with the illnesses and then I work
backwards to try to understand the exposures that they had, the vehicles
that may have caused their illness. . . . I need to look at all 54 illnesses
in order to work backwards and see what was their likely exposure, what
was the likely vehicle that caused the infection, and can I relate them
epidemiologically. The only way to do that is to review all of the
illnesses that are on the line list.
-12-
Dr. Singer testified that he had “traced back all 27 [cases not linked to Cargill] and ha[d]
sufficient information for three of them.” He traced the cases from Hawaii, Missouri,
and New York back to Greater Omaha.
That Greater Omaha’s August 9 or 10, 2007, beef production could not have
caused the two Ohio case patients’ E. coli O157:H7 infections does not invalidate the
experts’ conclusion that the Greater Omaha production was the source of the E. coli
O157:H7 bacteria found in the Cargill patties. As mentioned above, the PFGE pattern
identified in the outbreak was rare, but it had previously been reported to the CDC.
Moreover, Greater Omaha cites no scientific literature or expert testimony to support its
argument that Cargill’s experts’ methodology was flawed. The district court did not
abuse its discretion in determining that the expert evidence met the standard for
admissibility and that the evidence of the Ohio cases was best used for impeachment and
cross-examination. Accordingly, we find no error in the admission of the Dr. Harrison’s
and Dr. Singer’s testimony.
Greater Omaha also argues that the expert testimony of Dr. Siemens should have
been excluded because she is not an epidemiologist and she merely restated the opinions
of the other experts. Dr. Siemens, however, had investigated the source of the E. coli
O157:H7 immediately after the outbreak and reached the conclusion that Greater
Omaha’s product caused the contamination, and so the district court did not err in
admitting her testimony.
B. Admission of December 2007 NOIE
Greater Omaha argues that the district court erred in admitting the original and
revised December 2007 NOIE and Greater Omaha’s response thereto. Greater Omaha
contends that the documents were not relevant and, even if they were, any probative
value was substantially outweighed by the danger of unfair prejudice and confusion of
the issues. We review a district court’s decision to admit evidence for clear and
-13-
prejudicial abuse of discretion. Smith v. Tenet Healthsystem SL, Inc., 436 F.3d 879, 885
(8th Cir. 2006). We find none here.
The NOIE broadly addressed Greater Omaha’s sanitation program from June to
November 2007, finding that Greater Omaha had failed to meet certain sanitation
requirements almost as often as it had met them. That information tended to prove that
Greater Omaha failed to maintain sanitary conditions at its plant in August 2007, when
it produced the raw beef trim that was used in the Cargill patties. The district court thus
did not abuse its discretion in determining that the December 2007 NOIE and related
documents were relevant. See Fed. R. Evid. 401. The NOIE also addressed a spike in
E. coli O157:H7-positive samples that occurred in October and November 2007.
Although Greater Omaha attributed the spike to a fan placed on the kill floor, the
removal of which allowed the E. coli O157:H7 results to return to normal, Cargill
attributed the spike to Greater Omaha’s non-compliant sampling procedure that, once
corrected, resulted in more accurate E. coli O157:H7 test results. We cannot say that the
district court committed clear and prejudicial abuse of discretion when it determined that
the probative value of the documents was not substantially outweighed by a danger of
unfair prejudice or confusion of the issues. See Fed. R. Evid. 403.
C. Jury Instructions
Greater Omaha argues that it is entitled to a new trial because the district court
erroneously charged the jury with deciding which documents constituted the parties’
contract and failed to give an instruction on the exclusion or modification of implied
warranties. We review the district court’s rulings on jury instructions for abuse of
discretion. M.M. Silta, Inc. v. Cleveland Cliffs, Inc., 572 F.3d 532, 536 (8th Cir. 2009).
We consider “whether the instructions, taken as a whole and viewed in light of the
evidence and applicable law, fairly and adequately submitted the issues in the case to the
jury.” Id. (quoting Bass v. Flying J, Inc., 500 F.3d 736, 739 (8th Cir. 2007)). “[A] new
trial is necessary only when the errors misled the jury or had a probable effect on a jury’s
-14-
verdict.” Slidell, Inc. v. Millennium Inorganic Chems., Inc., 460 F.3d 1047, 1054 (8th
Cir. 2006).
Read as a whole, the district court’s instructions fairly and adequately submitted
the issues to the jury. The evidence allowed Cargill to take the position that its contract
with Greater Omaha comprised the June 2, 2006, guarantee and other documents. The
district court thus did not abuse its discretion in allowing the jury to decide whether
those documents or the guarantee alone made up the contract. In any event, Greater
Omaha has not shown that it suffered any prejudice from the instructions as given. The
central issue in this litigation has always been whether Greater Omaha sold and shipped
contaminated raw material to Cargill, not whether its doing so constituted a breach.
Moreover, the instruction that charged the breach-of-contract count identified only the
June 2, 2006, guarantee as the contract and explained that Cargill was required to prove
that Greater Omaha breached the contract by supplying raw beef trim adulterated with
E. coli O157:H7. Greater Omaha has not articulated how it would have proceeded
differently at trial or how the instruction might have misled the jury or affected the
verdict.
We also find no abuse of discretion in the district court’s decision to forego
instructing the jury on exclusion or modification of implied warranties. The Nebraska
Supreme Court has followed the rule that “disclaimers or warranty made on or after
delivery of the goods by means of an invoice, receipt, or similar note are ineffectual
unless the buyer assents or is charged with knowledge as to the transaction.” Pfizer
Genetics, Inc. v. Williams Mgmt. Co., 281 N.W.2d 536, 539 (Neb. 1979). The invoices
Greater Omaha sent to its customers the day after it shipped goods included a disclaimer
of warranties. Cargill had no record of receiving the relevant invoices, for it did not
remit payment pursuant to invoices. It instead used a payment method that involved
weighing shipments and electronically transferring funds from its bank account to its
suppliers’ bank account. Given the state of the record, the district court could determine
that because the evidence did not permit a finding that Greater Omaha had effectively
-15-
disclaimed warranties in its invoices to Cargill, it was not entitled to an instruction to
that effect.
D. Verdict
Greater Omaha argues that the district court should have granted a new trial
because the jury reached an impermissible compromise verdict. As set forth above,
Cargill requested damages in the amount of $25,270,768.50 in settlement costs and
$548,604.51 in business costs. Greater Omaha contends that the only logical explanation
for the jury’s $9 million award is that the jury disregarded the district court’s
instructions, decided that Greater Omaha was only partly liable, and awarded damages
commensurate with Greater Omaha’s liability.
Greater Omaha has not shown that the jury reached a compromise verdict. “A
compromise verdict results when the jury, unable to agree on the issue of liability,
compromises that disagreement by awarding a party inadequate damages.” Boesing v.
Spiess, 540 F.3d 886, 889 (8th Cir. 2008). The district court properly instructed the jury
that it was required to return a verdict for Greater Omaha if it found that Cargill had in
part caused the damages or if it found that Cargill had misused Greater Omaha’s product.
The jury asked no substantive questions after the case was submitted to it and returned
its verdict after deliberating only for a few hours. Moreover, Greater Omaha had
disputed the amount of damages, arguing that they were unreasonable and motivated by
a desire to protect Cargill’s corporate image. The jury may have agreed with Greater
Omaha and reduced the award accordingly. The record simply does not indicate that the
jury reached a compromise verdict because it was unable to agree on Greater Omaha’s
liability, and thus the district court did not abuse its discretion in denying Greater
Omaha’s motion for a new trial on that ground. See id. (standard of review).
-16-
E. Counterclaim
In 2009, the New York Times published the article, “The Burger That Shattered
Her Life,” about a Minnesota woman who became sick after eating an undercooked
Cargill patty tainted with E. coli O157:H7. The article traced the history of her burger.
It explained that the Cargill patties were made with raw materials from four suppliers,
including Greater Omaha. The following passage appeared near the end of the article:
Shawn K. Stevens, a lawyer in Milwaukee working for Cargill, began
investigating. Sifting through state health department records from
around the nation, Mr. Stevens found the case of a young girl in Hawaii
stricken with the same E. coli found in the Cargill patties. But instead
of a Cargill burger, she had eaten raw minced beef at a Japanese
restaurant that Mr. Stevens said he traced through a distributor to Greater
Omaha.
“Potentially, it could let Cargill shift all the responsibility,” Mr. Stevens
said. In March, he sent his findings to William Marler, a lawyer in
Seattle who specializes in food-borne disease cases and is handling the
claims against Cargill.
“Most of the time, in these outbreaks, it’s not unusual when I point the
finger at somebody, they try to point the finger at somebody else,” Mr.
Marler said. But he said Mr. Stevens’s finding “doesn’t rise to the level
of proof that I need” to sue Greater Omaha.
Michael Moss, The Burger That Shattered Her Life, N.Y. Times, Oct. 4, 2009, at A25.
Greater Omaha’s counterclaim for tortious interference was based on information
Stevens gave to the reporter. Greater Omaha alleged that “Cargill’s implication of
[Greater Omaha] in the alleged E. coli O:157:H7 outbreak that occurred as a result of
Cargill’s production of hamburger in August 2007 was intentional, wrongful, false and
misleading.” The district court determined that Greater Omaha had shown no
-17-
interference by Cargill, however, and granted Cargill’s motion for summary judgment.
See Recio v. Evers, 771 N.W.2d 121, 131 (Neb. 2009) (setting forth the elements of a
tortious interference claim).
We review de novo the district court’s grant of summary judgment, viewing the
evidence in the light most favorable to the nonmoving party. Crews v. Monarch Fire
Prot. Dist., 771 F.3d 1085, 1089 (8th Cir. 2014). We will affirm if there is “no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a).
We have said that to survive a motion for summary judgment, “the requisite
‘genuine dispute,’ Fed. R. Civ. P. 56(a), must appear in admissible evidence.” Id. at
1092 (emphasis in original). “[N]ewspaper articles are ‘rank hearsay’ that do not fit a
hearsay exception.” Id. (quoting Nooner v. Norris, 594 F.3d 592, 603 (8th Cir. 2010)).
Although alleged tortious statements “may not themselves be hearsay, see Fed. R. Evid.
801(c)(2), (d)(2)(A), the second level—[the] newspaper’s out-of-court assertion that [the
declarant] in fact made these statements—is hearsay.” Id. The district court concluded
that statements attributed to Stevens in the New York Times article and in emails from
the reporter to Cargill were inadmissible hearsay that could not be used to support
Greater Omaha’s counterclaim.
Greater Omaha argues that it should not have been required to produce admissible
evidence to oppose Cargill’s motion for summary judgment. According to Greater
Omaha, it is not whether the nonmoving party supports its claim with evidence that is
admissible, but whether it supports its claim with evidence that could be admissible. See
Fed. R. Civ. P. 56(c)(2) advisory committee’s note to 2010 amendment (explaining that
after a party objects that material cannot be presented in an admissible form, “[t]he
burden is on the proponent to show that the material is admissible as presented or to
explain the admissible form that is anticipated”). The district court determined that
Greater Omaha had failed to show how the article and emails might be reduced to an
-18-
admissible form at trial. Although Greater Omaha had mentioned that it might call the
reporter as a witness, the New York Times had not responded to a subpoena and Greater
Omaha had neither deposed the reporter nor obtained an affidavit as to what the reporter
might testify to at trial, leading the district court to rule that “[t]here was no evidence in
the summary judgment phase as to what [the reporter] might offer, if anything, in court.”
D. Ct. Order of Apr. 14, 2014, at 9. We conclude that the district court did not apply the
wrong standard of proof or otherwise err in granting Cargill’s motion for summary
judgment.
III. Conclusion
The judgment is affirmed.
______________________________
-19-