Estate of Kriefall v. Sizzler USA Franchise, Inc.

• Decision Date: 13 May 2003
• Docket Number: No. 02-1939.,02-1939.
• Citation: 2003 WI App 119,665 N.W.2d 417,265 Wis.2d 476
• Parties: ESTATE OF Brianna L. KRIEFALL, deceased, by her Special Administrator, Douglas A. Kriefall, Douglas A. Kriefall, Connie J. Kriefall, and Chad Kriefall, a minor, by his Guardian ad Litem, William M. Cannon, Plaintiffs-Appellants, HUMANA EMPLOYERS HEALTH INSURANCE CO., a Wisconsin insurance corporation, Involuntary-Plaintiff, v. SIZZLER USA FRANCHISE, INC., a foreign corporation, Defendant-Third-Party Plaintiff-Co-Appellant, FEDERAL INSURANCE Co., a foreign insurance corporation, E&B Management Co. Waukesha, Inc., a Wisconsin corporation, Secura Insurance, a Wisconsin insurance corporation, Sysco Services of Eastern Wisconsin, a wholly owned subsidiary of Sysco Corporation, a foreign corporation, Fidelity and Guaranty Insurance Co., a foreign insurance corporation, Lee M. Eschenbach, Steven C. Boysa, AAA Insurance Co., and BBB Insurance Co., Defendants, EXCEL CORPORATION, a foreign corporation, and American Home Assurance Co., a foreign insurance corporation, Defendants-Respondents, v. Lee M. ESCHENBACH, Steven C. Boysa, AAA Insurance Co., BBB Insurance Co., Cargill, Inc., a foreign corporation, and Excel Food Distribution, Inc., a foreign corporation, Third-Party Defendants. Ervin J. LESAK and Florence Lesak, Plaintiffs-Co-Appellants, v. E&B MANAGEMENT CO. WAUKESHA, INC., Defendant, EXCEL CORPORATION, Defendant-Respondent. Jeffrey FORTIER, Judith Fortier, Tristan Fortier, and Carly Fortier, Plaintiffs-Co-Appellants, GREAT WEST LIFE & ANNUITY INSURANCE, Involuntary-Plaintiff, v. EXCEL CORPORATION, Defendant-Respondent. Kevin McCORMICK, Sandy McCormick, and Kelsea McCormick, Plaintiffs-Co-Appellants, BLUE CROSS BLUE SHIELD UNITED, Involuntary-Plaintiff, v. EXCEL CORPORATION, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

265 Wis.2d 476

2003 WI App 119

665 N.W.2d 417

ESTATE OF Brianna L. KRIEFALL, deceased, by her Special Administrator, Douglas A. Kriefall, Douglas A. Kriefall, Connie J. Kriefall, and Chad Kriefall, a minor, by his Guardian ad Litem, William M. Cannon, Plaintiffs-Appellants,

HUMANA EMPLOYERS HEALTH INSURANCE CO., a Wisconsin insurance corporation, Involuntary-Plaintiff, v. SIZZLER USA FRANCHISE, INC., a foreign corporation, Defendant-Third-Party Plaintiff-Co-Appellant, FEDERAL INSURANCE Co., a foreign insurance corporation, E&B Management Co. Waukesha, Inc., a Wisconsin corporation, Secura Insurance, a Wisconsin insurance corporation, Sysco Services of Eastern Wisconsin, a wholly owned subsidiary of Sysco Corporation, a foreign corporation, Fidelity and Guaranty Insurance Co., a foreign insurance corporation, Lee M. Eschenbach, Steven C. Boysa, AAA Insurance Co., and BBB Insurance Co., Defendants, EXCEL CORPORATION, a foreign corporation, and American Home Assurance Co., a foreign insurance corporation, Defendants-Respondents, v. Lee M. ESCHENBACH, Steven C. Boysa, AAA Insurance Co., BBB Insurance Co., Cargill, Inc., a foreign corporation, and Excel Food Distribution, Inc., a foreign corporation, Third-Party Defendants.

Ervin J. LESAK and Florence Lesak, Plaintiffs-Co-Appellants, v. E&B MANAGEMENT CO. WAUKESHA, INC., Defendant, EXCEL CORPORATION, Defendant-Respondent.¹

Jeffrey FORTIER, Judith Fortier, Tristan Fortier, and Carly Fortier, Plaintiffs-Co-Appellants, GREAT WEST LIFE & ANNUITY INSURANCE, Involuntary-Plaintiff, v. EXCEL CORPORATION, Defendant-Respondent.¹

Kevin McCORMICK, Sandy McCormick, and Kelsea McCormick, Plaintiffs-Co-Appellants, BLUE CROSS BLUE SHIELD UNITED, Involuntary-Plaintiff, v. EXCEL CORPORATION, Defendant-Respondent.¹

No. 02-1939.

Court of Appeals of Wisconsin.

Oral argument May 6, 2003.

Decided May 13, 2003.

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of William M. Cannon and Edward E. Robinson of Cannon & Dunphy, S.C., Milwaukee. There was oral argument by Edward E. Robinson.

On behalf of the plaintiffs-co-appellants, Ervin J. Lesak and Florence Lesak, the cause was submitted on the briefs of Denis W. Stearns of Marler Clark, LLP, PS, Seattle, Washington and Michael J. Hanrahan of Fox, O'Neill & Shannon, S.C., Milwaukee. There was oral argument by Denis W. Stearns.

On behalf of the defendant-third-party plaintiff-co-appellant, the cause was submitted on the briefs of Russell A. Klingaman of Hinshaw & Culbertson, Milwaukee; J. Ric Gass, Mark M. Leitner, and Thomas Gonzalez of Kravit, Gass, Hovel & Leitner, S.C., Milwaukee; and Frederic L. Holmes of Gordon & Holmes, San Diego, California. There was oral argument by James R. Gass. On behalf of the defendant-respondent, Excel Corporation, the cause was submitted on the brief of Ralph A. Weber, Amelia L. McCarthy, and Shawn K. Stevens of Reinhart Boerner Van Deuren, S.C., Milwaukee. There was oral argument by Ralph A. Weber.

An amicus curiae brief was filed by Timothy A. Bascom of Bascom, Budish & Ceman, S.C., Wauwatosa; Gary Jay Kushner of Hogan & Hartson, L.L.P., Washington, D.C.; Mark D. Dopp of American Meat Institute, Arlington, Virginia; Brett T. Schwemer, Dennis R. Johnson, and Philip C. Olsson of Olsson, Frank and Weeda, P.C., Washington, D.C.

Before Fine, Schudson and Hoover, JJ.

¶ 1. FINE, J.

This is a consolidated appeal from the trial court's grant of summary judgment to Excel Corporation, a meat processor, dismissing claims against Excel for damages allegedly caused by Excel's sale to a Milwaukee area Sizzler restaurant of beef contaminated with the bacterium E. coli O157:H7. The plaintiffs involved in this appeal contend that E. coli bacteria from the meat sold by Excel to the Sizzler restaurant contaminated other food that was eaten by either them or those through whom they derive their claims.² Sizzler USA Franchise, Inc., the franchisor of the Milwaukee Sizzler restaurant, is a defendant in some of the actions and also appeals from the trial court's grant of summary judgment dismissing Sizzler USA's claims against Excel. The trial court ruled that the claims against Excel were barred by the federal-preemption doctrine. We disagree and reverse.

I.

¶ 2. In July of 2000, a number of persons were injured and three-year-old Brianna Kriefall died from eating food that everyone party to this appeal, the plaintiffs, Sizzler USA, and Excel, recognize was cross-contaminated by E. coli O157:H7 bacteria from meat sold by Excel. Although some of the parties' arguments on appeal focus on both to what extent the E. coli contamination of the Excel beef was a cause of Brianna's death and the other injuries, and whether Excel was either negligent or sold a dangerously defective product, the only issue we need decide on this appeal is whether the claims against Excel are preempted by federal law. We conclude that federal preemption does not close the doors of Wisconsin's courts to the claims against Excel; the merits of those claims still have to be determined.

[1]

¶ 3. Federal preemption is based on Article VI of the United States Constitution, which makes federal law "the supreme Law of the Land." Cipollone v. Liggett Group, Inc., 505 U.S. 504, 516 (1992). As material here, there are two steps to an analysis of whether federal regulation preempts state common-law claims: (1) whether the controlling federal statute "expressly preempts common-law claims," and, if not, (2) whether "the potential conflict between diverse state rules and the federal interest in a uniform system of regulation impliedly pre-empts such claims." Sprietsma v. Mercury Marine, 123 S. Ct. 518, 522-523 (2002); see also Geier v. American Honda Motor Co., 529 U.S. 861, 869 (2000) ("ordinary" preemption principles may bar state claims even though those claims are not expressly preempted by the applicable federal statute).³

¶ 4. The interstate sale of beef and other meat products intended for human consumption is regulated by the Federal Meat Inspection Act, 21 U.S.C. §§ 601-695. The Act has a preemption clause, which provides, as applicable here:

Requirements within the scope of this chapter with respect to premises, facilities and operations of any establishment at which inspection is provided under subchapter I of this chapter [§§ 601-624], which are in addition to, or different than those made under this chapter may not be imposed by any State . . . This chapter shall not preclude any State . . . from making requirement [sic] or taking other action, consistent with this chapter, with respect to any other matters regulated under this chapter.

21 U.S.C. § 678.⁴ This section thus: (1) prevents states from imposing "[r]equirements ... with respect to premises, facilities and operations of any establishment at which inspection is provided under" 21 U.S.C. §§ 601-624 that "are in addition to, or different than those made under" the Act, and (2) permits states to impose "requirement[s]" and to take "other action" that is "consistent" with the Act "with respect to any other matters regulated under" the Act.

[2]

¶ 5. For the purpose of this appeal, we assume that all the facts asserted by Excel are true. See City of Milwaukee v. Burnette, 2001 WI App 258, ¶ 8, 248 Wis. 2d 820, 834, 637 N.W.2d 447, 454 (court reviewing grant or denial of summary judgment ignores disputed facts unless those facts are material to the legal issue to be decided). We analyze whether either 21 U.S.C. § 678 expressly preempts the tort claims asserted here or whether those claims are impliedly preempted by federal law because they present "an actual conflict with a federal objective." Geier, 529 U.S. at 871. Whether state tort claims are preempted by federal law is a legal issue that we review de novo. International Ass'n of Machinists & Aerospace Workers v. United States Can Co., 150 Wis. 2d 479, 487, 441 N.W.2d 710, 713 (1989),cert. denied, 493 U.S. 1019.

II.

¶ 6. Congressional intent concerning the interstate sale of meat is set out in 21 U.S.C. § 602, which we reprint in full:

Meat and meat food products are an important source of the Nation's total supply of food. They are consumed throughout the Nation and the major portion thereof moves in interstate or foreign commerce. It is essential in the public interest that the health and welfare of consumers be protected by assuring that meat and meat food products distributed to them are wholesome, not adulterated, and properly marked, labeled, and packaged. Unwholesome, adulterated, or misbranded meat or meat food products impair the effective regulation of meat and meat food products in interstate or foreign commerce, are injurious to the public welfare, destroy markets for wholesome, not adulterated, and properly labeled and packaged meat and meat food products, and result in sundry losses to livestock producers and processors of meat and meat food products, as well as injury to consumers. The unwholesome, adulterated, mislabeled, or deceptively packaged articles can be sold at lower prices and compete unfairly with the wholesome, not adulterated, and properly labeled and packaged articles, to the detriment of consumers and the public generally. It is hereby found that all articles and animals which are regulated under this chapter are either in interstate or foreign commerce or substantially affect such commerce, and that regulation by the Secretary and cooperation by the States and other jurisdictions as contemplated by this chapter are appropriate to prevent and eliminate burdens upon such commerce, to effectively regulate such commerce, and to protect the health and welfare of consumers.⁵

(Footnote added.) Thus, as expressed in § 602, Congress wanted to: (1) protect consumers "by assuring that meat and meat food products distributed to them are wholesome, not adulterated, and properly marked, labeled, and packaged"; (2) protect those in the meat-production chain from unscrupulous...