United States District Court, C.D. California
FINDINGS OF FACT AND CONCLUSIONS OF LAW
O. CARTER UNITED STATES DISTRICT JUDGE.
trial in this matter took place from April 4 to 14, 2017, on
claims asserted by Plaintiffs Townsend Farms, Inc.
(“Townsend Farms”), Purely Pomegranate, Inc.
(“PPI”), and Valley Forge Insurance Company
(“Valley Forge”) (collectively
the jury were claims for equitable indemnity and negligence
by Townsend Farms, PPI, and Valley Forge; claims for
negligent and intentional misrepresentation by Townsend Farms
and PPI; and Townsend Farms' assigned claim for breach of
contract. The jury found Defendants Göknur Gida
Maddeleri Enerji Imalat Ithalat Ihracat Ticaret ve Sanayi
A.Ş. (“Göknur”) and United Juice Corp.
(“United Juice”) liable on all of these claims.
Redacted Verdict Form (“Verdict Form”) (Dkt.
parties have reserved Plaintiffs' claim for declaratory
relief. Plaintiffs contend that their Unfair Competition Law
(“UCL”) claim, under California Business and
Professions Code § 17200, et seq., was also
reserved, while Defendants contend that Plaintiffs dropped
their UCL claim during the jury trial.
parties have also submitted to the Court the issues of United
Juice's alter ego liability and the insurers' ability
to bring their claims in subrogation of Townsend Farms and
have also requested that the Court enforce the parties'
damages stipulation (the “Damages Stipulation”)
(Dkt. 214) and that the Judgment be altered to reflect the
Damages Stipulation. This would result in a significant
increase over the damages awarded by the jury. See
Court issues the following findings of fact and conclusions
of law pursuant to Federal Rule of Civil Procedure 52. To the
extent that any findings of fact are included in the
Conclusions of Law section, they shall be deemed findings of
fact, and to the extent that any conclusions of law are
included in the Findings of Fact section, they shall be
deemed conclusions of law.
FINDINGS OF FACT
The Hepatitis A Outbreak
2013, there was a hepatitis A outbreak (the
“Outbreak”) in the western United States linked
to consumption of a the Townsend Farms Organic Antioxidant
Blend (“Antioxidant Blend”), a blend of frozen
berries sold at Costco. Joint Statement of the Case
(“Joint Statement”) (Dkt. 201) at 2.
Antioxidant Blend was a frozen berry blend that contained
five fruits- strawberries, cherries, raspberries, blueberries
and pomegranate arils. Id.
Townsend Farms packaged and sold the Antioxidant Blend.
Göknur produced some of the pomegranate arils used in
the Antioxidant Blend. Id.
sold pomegranate arils supplied by Göknur and used by
Townsend Farms in the Antioxidant Blend. Id.
Valley Forge is PPI's insurer. Id.
United Juice imported the Göknur arils that were used in
the Antioxidant Blend. Id.
This Lawsuit and Damages Stipulation
Plaintiffs brought this action contending that some of the
Göknur pomegranate arils that were used in the
Antioxidant Blend were contaminated with hepatitis A, and
that Göknur and United Juice are therefore responsible
for the Outbreak. Joint Statement at 2.
Plaintiffs asserted various claims for relief, and sought
payment from Göknur and United Juice for amounts they
and certain other insurance companies have paid to settle
underlying consumer claims and for associated litigation
costs and other out-of-pocket expenses and lost profits.
Id. at 2-3.
parties stipulated that Plaintiffs and their insurers had
paid certain amounts to defend consumer actions arising out
of the Outbreak, and to settle those clams: (1) Plaintiff
Valley Forge paid $11, 625, 000 in settlements and $3, 996,
144.56 in attorney's fees and costs related to defending
PPI and Townsend Farms in the underlying consumer claims; (2)
Townsend Farm's insurer Massachusetts Bay Insurance
Company paid $2, 769, 986.61 in settlement costs and $1, 241,
764.49 in attorney fees and costs for the defense of the
underlying consumer claims; (3) as of March 28, 2017,
Townsend Farms' insurer, Great American Insurance
Company, paid $874, 382 in settlement payments and $3, 447,
624.26 in attorney fees and costs for the defense of the
underlying consumer claims; (4) Fallon Trading's insurer,
Maryland Casualty Company, paid $349, 267.07 in attorney fees
and defense costs on the underlying consumer claims, as well
as $2, 250, 000.00 to settle a lawsuit between Fallon Trading
and Townsend Farms. Damages Stipulation ¶¶ 2-9.
the stipulation, the Plaintiffs were relieved of proving that
the amounts provided in the Damages Stipulation were
“reasonable, and that each settlement was based on a
reasonable estimate of liability at the time of the
settlement.” Id.¶ 10.
Finally, the parties agreed as part of the damages
stipulation the Townsend Farms paid $2, 772, 808 for various
out-of-pocket expenses ...