588 F.Supp.3d 753
W.D. Ky.2022Background:
- Cousins Smokehouse contracted with Louisville Processing & Cold Storage (LPCS) to produce pork jerky and with Interstate Packaging to supply packaging bags; USDA disposed of 27,072 bags after mold was found, resulting in about $120,000 loss.
- Cousins sued Interstate for breach of the implied warranty of merchantability and fitness for a particular purpose, alleging Interstate's bags contributed to mold contamination.
- Interstate’s sales order forms included a Tennessee choice-of-law clause and a broad disclaimer of all warranties; multiple purchase orders and confirmations were exchanged over the year-long relationship.
- Testing by LPCS and Cousins measured bag failures at various vacuum pressures (15, 18, 22 inHg); results were inconclusive and no expert was offered to establish industry pressure standards or causation.
- Cousins’ CEO acknowledged test results showing no failures at 18 inHg and only a minority of failures at 22 inHg, and conceded Interstate had "no reason to accept blame."
- The district court granted Interstate summary judgment, dismissing Cousins’ claims with prejudice; LPCS’s motion to set aside deemed admissions was denied as moot and Cousins’ request to file a sur-reply was denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Inclusion of choice-of-law clause from Interstate's sales order | Clause was part of the parties' contract | Sales order terms were additional and not agreed to; Tennessee law should govern | Court: choice-of-law clause not material to outcome; applied Kentucky law because both states adopt similar UCC rules |
| Incorporation of Interstate's warranty disclaimer | Cousins did not accept disclaimer; warranty protections apply | Interstate asserts disclaimer was part of the sales order and waived implied warranties | Court: warranty disclaimer materially altered the offer under UCC §2-207 and was not incorporated |
| Breach of implied warranties and causation | Bags caused mold; testing supports defect | No industry-standard proof or expert; testing inconclusive; causation not established | Court: Cousins failed to produce expert or adequate evidence of causation; summary judgment for Interstate |
| LPCS deemed admissions & Cousins' sur-reply | LPCS sought to set aside deemed admissions as inadvertent; Cousins sought leave to file sur-reply | Interstate opposed late responses and sur-reply | Court: LPCS motion denied as moot due to summary judgment; Cousins' sur-reply denied (no new arguments in reply) |
Key Cases Cited
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (movant may show absence of genuine issue by pointing to opponent's lack of evidence)
- Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (U.S. 1986) (summary judgment requires viewing evidence in light most favorable to nonmoving party)
- Wallace Hardware Co. Inc. v. Abrams, 223 F.3d 382 (6th Cir. 2000) (choice-of-law principles in diversity cases and forum preference considerations)
- Hollister v. Dayton Hudson Corp., 201 F.3d 731 (6th Cir. 2000) (plaintiff must show product defect and that defect caused injury in implied-warranty claim)
- Schultz & Burch Biscuit Co. v. Treetop, Inc., 831 F.2d 709 (7th Cir. 1987) (course-of-dealing may support incorporation of added terms in some contexts)
- Thompson I.G., LLC v. Edgetech I.G. Inc., [citation="590 F. App'x 532"] (6th Cir. 2014) (complex causation issues in warranty cases often require expert testimony)