General Mills Operations, LLC v. Five Star Custom Foods, Ltd., 789 F. Supp. 2d 1148

General Mills purchased Five Star meatballs for its Progresso soups; a recall of Westland beef prompted destruction of some soup and recall costs exceeded $1 million.
Five Star is a USDA-regulated meat-products manufacturer; General Mills asserts breach of contract, warranties, and negligence arising from recalled meat.
Purchase orders incorporated General Mills' Terms and Conditions (2004 version) via front-face language and back-page boilerplate; dispute over receipt of terms.
Specifications mailed by General Mills required meatballs to meet Meat Inspection Act and USDA standards; Five Star acknowledged these applied.
Westland beef used in some meatballs later recalled due to noncompliance with slaughter/inspection rules; Five Star traced and notified customers, including General Mills.
General Mills seeks damages and attorney fees; Five Star seeks summary judgment on several counts.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether warranty claims survive recall without manifest defect	General Mills argues recall shows breach of free-from-defect and regulatory warranties.	Five Star contends recall alone does not prove defect; no manifest defect shown.	Warranties require manifest defect; summary judgment for Five Star on warranty claims.
Breach of contract viability given recall and compliance terms	Recall demonstrates Five Star breached contract by failing to supply conforming meatballs.	Recall does not automatically equal breach absent definition of noncompliance with contract terms.	Five Star breached by not meeting USDA specifications; contract claims survive against Five Star.
Enforceability of Terms and Conditions incorporated by purchase order	Terms were incorporated by front-face language and posted boilerplate; Five Star had notice.	Terms were inconspicuous and unenforceable due to location and boilerplate.	Terms and Conditions enforceable; incorporation valid given sophisticated parties and no material alteration.
Allocation of recall costs and attorney fees under contract	Contract terms require Five Star to reimburse recall-related costs and attorney fees.	Fees only recoverable if there is a breach; otherwise not.	Five Star breached; General Mills entitled to reasonable attorney's fees.

Briehl v. Gen. Motors Corp., 172 F.3d 623 (8th Cir. 1999) (defect must manifest in product for warranty claims)
O'Neil v. Simplicity, Inc., 574 F.3d 501 (8th Cir. 2009) (recall does not imply defect absent manifestation)
Coghlan v. Wellcraft Marine Corp., 240 F.3d 449 (5th Cir. 2001) (contract-based damages differ from product-liability no-injury claims)
Coop. Power Ass'n v. Westinghouse Elec. Corp., 60 F.3d 1336 (8th Cir. 1995) (manifest defect indispensable element of warranty claims)
Video Update, Inc. v. Videoland, Inc., 182 F.3d 659 (8th Cir. 1999) (attorney fees awarded where contract allows fee-shifting upon breach)
Marvin Lumber & Cedar Co. v. PPG Indus., Inc., 401 F.3d 901 (8th Cir. 2005) (reasonableness of contract terms in context of evidence)
TRWL Fin. Establishment v. Select Int'l, Inc., 527 N.W.2d 573 (Minn. Ct. App. 1995) (non-negotiated terms may become part of contract if not materially altered)