New Jersey Federal Court Endorses Food Processor’s Claims Against Manufacturer That Supplied Contaminated Packaging Which Ruined Its Line Of Protein Powders
February 27, 2023
By: Carl L. Engel
On February 23, 2023, the U.S. District Court for the District of New Jersey, in the case The Carrington Tea Company v. Pretium Packaging LLC, preserved a food processor’s claims against a supplier that it had accused of providing packaging that had been contaminated with chemicals which ruined its protein powder. The court declined the supplier’s motion to dismiss the claims based on breaches of the parties’ contract and the implied warranty of merchantability. The court did, however, dismiss the food processor’s claim for breach of the implied warranty of fitness for a particular purpose. As a result, this case provides a clear illustration of the difference between the two implied-warranty claims most frequently brought against suppliers of defective products.
The Carrington Tea Company (also known as “Carrington Farms”) makes a line of whey protein powder marketed under the brand-name “Simple Tera’s Whey Protein.” The products were sold in packaging that Carrington had purchased from Pretium Packaging LLC. Almost immediately after it began using the packaging, Carrington started to receive complaints from its customers that the whey protein “smelled like detergent or fragrances,” “tasted like plastic,” that the smell “penetrates into the whey powder,” and many other similar grievances. Customers concluded that it was “toxic” and they “can’t eat it anymore.”
When Carrington raised the problem with Pretium, Pretium acknowledged that there had been an issue at its manufacturing facility in California, but said that it could produce replacement packaging at its plant in Salt Lake City. Upon hearing of an issue at the California plant, Carrington sent the packaging from California to a laboratory for testing, which revealed that it had been contaminated with limonene, an industrial chemical derived from citrus peels. Although Carrington does not speculate as to how the contamination occurred, limonene is commonly used as a cleaning solvent to remove oil from machinery, and could have contaminated the packaging on an assembly line.
Carrington alleges that, not only did the limonene ruin the taste and smell of the product, it is also a known allergen that could affect the health of its customers. Accordingly, Carrington recalled all of the whey protein packaged in Pretium’s product, and filed a lawsuit against Pretium for breach of contract, breach of the implied warranty of fitness for a particular purpose, and breach of the implied warranty of merchantability. Pretium moved to dismiss each of the claims against it.
The court preserved Carrington’s claims for breaches of the parties’ contract and the implied warranty of merchantability, but dismissed the claim for breach of the implied warranty of fitness for a particular purpose. The court reasoned that the contract claim was supported by a provision in the contract whereby Pretium agreed to indemnify Carrington for losses caused by defects in its packaging. The claim for breach of implied warranty of merchantability was preserved because the packaging had failed to achieve its “ordinary purpose,” which was to properly contain the protein powder to keep it free from contaminants.
The court dismissed the claim for breach of implied warranty of fitness for a particular purpose, however, because there were no allegations that Carrington had instructed Pretium that the packaging would be used for any distinct purpose other than the “ordinary purpose.” For a purpose of a product to be “particular,” the buyer’s use of it must be “peculiar.” Carrington had used the packaging to contain protein powder, which is how packaging ordinarily is used, and is not a “peculiar” use. Therefore, Carrington could bring an implied warranty claim only based on the “ordinary purpose,” and not a “particular purpose.”
This case highlights the difference between the two most common implied-warranty claims: “merchantability” refers to the purpose for which the product is ordinarily used, and a “particular purpose” refers to a custom specification that is “peculiar” or unusual. Management should be familiar with the distinction, so they bring the proper claim when there is a problem with a supplier.