A $9 million verdict was returned by a Nebraska federal jury in favor of Cargill Inc. in its dispute with a beef-packing company that it accused of selling it beef products tainted with E. Coli that put Cargill on the hook for $26 million in costs, including victim settlements. After a jury trial that began in early September, Cargill received the verdict on its breach of contract claims against Omaha, Nebraska-based Greater Omaha Packing Co., whose raw beef trim was alleged to have contributed to an outbreak that sickened at least 54 people. Cargill mixed the allegedly tainted Greater Omaha beef with meat from three other suppliers and used it for so-called American Chef Burgers sold nationwide.
During the outbreak, some unfinished burgers also tested positive, forcing Cargill into a massive recall of 845,000 pounds of meat. In the aftermath, Cargill and its insurance carrier American Home Assurance Co. filed suit against Greater Omaha, alleging contract and warranty breaches. The complaint demanded the supplier to indemnify them for recall-related costs. Cargill and American Home claimed they were owed indemnification because Greater Omaha promised in a June 2006 guarantee that its meat would not be adulterated or misbranded within the definition of the Federal Meat Inspection Act or the Federal Food, Drug and Cosmetic Act.
Greater Omaha had claimed one of Cargill’s lawyers damaged Greater Omaha’s reputation by mentioning its potential liability — before the lawsuit was filed — in an interview with a reporter from The New York Times about the outbreak. But U.S. District Judge Lyle E. Strom rejected those counterclaims in April, finding that Greater Omaha failed to prove its claim of tortious interference with a business relationship because it couldn’t show an intentional interference that would have caused a breach of its relationship with Cargill. The case is in the U.S. District Court for the District of Nebraska.
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