Holt v. Egg

• Decision Date: 25 March 2011
• Docket Number: C 10–3059–MWB,C 10–3048–MWB,C 10–3050–MWB,Nos. C 10–3046–MWB,C 10–3055–MWB,C 10–3060–MWB.,s. C 10–3046–MWB
• Parties: Jennifer Leigh HOLT, Individually and as Parent of J.S.H., a minor, Plaintiff,v.QUALITY EGG, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Daniel and Libby Sands, Individually and as Parents of A.S., a minor, Plaintiffs,v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Sarah Lewis, Plaintiff,v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Tanya Dzinovic, Plaintiff,v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Jim Bussey, Plaintiff,v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Jason and Jennifer Tucker, Individually and as Parents of J.T., a minor, Plaintiffs,v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.
• Court: U.S. District Court — Northern District of Iowa

777 F.Supp.2d 1160

Jennifer Leigh HOLT, Individually and as Parent of J.S.H., a minor, Plaintiff,

v.QUALITY EGG, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Daniel and Libby Sands, Individually and as Parents of A.S., a minor, Plaintiffs,

v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Sarah Lewis, Plaintiff,

v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Tanya Dzinovic, Plaintiff,

v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Jim Bussey, Plaintiff,

v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.Jason and Jennifer Tucker, Individually and as Parents of J.T., a minor, Plaintiffs,

v.Quality Egg, L.L.C., d/b/a “Wright County Egg,” an Iowa limited liability company, Defendant.

Nos. C 10–3046–MWB

C 10–3048–MWB

C 10–3050–MWB

C 10–3055–MWB

C 10–3059–MWB

C 10–3060–MWB.

United States District Court,N.D. Iowa,Central Division.

March 25, 2011.

Steven P. Wandro, Kara Marie Simons, Wandro, Baer & McCarthy, PC, Des Moines, IA, David W. Babcock, William D. Marler, Marler Clark, LLP, PS, Seattle, WA, for Plaintiff.Sean M. O'Brien, Bradshaw, Fowler, Proctor & Fairgrave, P.C., Des Moines, IA, for Defendant.

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANT'S MOTION TO DISMISS AND STRIKE

MARK W. BENNETT, District Judge.

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                ¦TABLE OF CONTENTS¦
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                I. INTRODUCTION                                                       1163
                

 A. Procedural Background                                          1163
                    B. Factual Background                                             1164
                

                II. LEGAL ANALYSIS                                                    1166
                

 A. Applicable Standards                                           1166
                

 1. Standards for dismissal pursuant to Rule 12(b)(6)           1167
                        2. Standards for striking allegations pursuant to Rule 12(f)   1168
                

 B. Arguments Of The Parties                                       1169
                

 1. Quality Egg's arguments                                   1169
                         2. The plaintiffs' responses                                 1170
                

 C. Analysis                                                       1171
                

 1. Standards for punitive damages under Iowa law                                             1171
                         2. Whether underlying claims must have a “willfulness” element                           1172
                              Whether the regulations and acts underlying the negligence   per se
                         3. claim permit punitive damages                                                             1173
                         4. Whether the punitive damages allegations are related to the underlying causes of action   1173
                

                III. CONCLUSION                                                        1175
                

I. INTRODUCTION

A. Procedural Background

These six cases arise out of an outbreak of Salmonella enteritidis in the summer of 2010 that was allegedly tied to defendant Quality Egg's products. As of November 18, 2010, the plaintiffs in all six cases asserted claims of strict products liability, negligence, and negligence per se; the plaintiffs in five of the cases (excluding Lewis, No. C 10–3050–MWB) asserted claims of breach of warranty; and the plaintiffs in four of the cases (excluding Holt, No. C 10–3046–MWB, and Sands, No. C 10–3048–MWB) sought punitive damages.¹

In Rule 12 Motions filed in these cases between November 1, 2010, and November 18, 2010,² Quality Egg asked the court to dismiss all breach-of-warranty claims and claims for punitive damages pursuant to Rule 12(b)(6); to strike allegations in support of claims for punitive damages pursuant to Rule 12(f); and to order a more definite statement of all negligence per se claims pursuant to Rule 12(e). By Order dated November 18, 2010, on the parties' joint motions, the court consolidated these cases for purposes of discovery. In that Order, the court also noted that counsel for the parties had represented that they had communicated about the issues raised in the pending Rule 12 motions and anticipated that most of the issues could be resolved without court intervention. Therefore, the court granted the parties' request for a schedule for disposition of the pending motions that would allow the parties to work out some issues, clarify others, and get all six cases “up to speed,” with the goal that remaining issues could be addressed on one occasion.

The parties' predictions that court intervention ultimately would not be necessary to resolve some of the issues raised in Quality Egg's Rule 12 motions has proved to be correct. Specifically, on December 7, 2010, the plaintiffs filed in each case an Amended (or Second Amended) Complaint (the December 7, 2010, Amended Complaints), and on December 9, 2010, they filed in each case a consolidated Opposition To Defendant's Motion To Dismiss Pursuant To Rule 12(b)(6) And Motion To Strike Pursuant To Rule 12(f). That consolidated Opposition focused on issues relating to punitive damages. In a consolidated Reply To Plaintiffs' Resistance To The Motion To Dismiss Pursuant To Rule 12(b)(6) And Motion To Strike Pursuant To Rule 12(f), filed in each case on December 20, 2010, Quality Egg acknowledges that the December 7, 2010, Amended Complaints no longer assert any breach-of-warranty claims, so that Quality Egg's Rule 12(b)(6) motion to dismiss the warranty claims in the Holt, Sands, Bussey, Dzinovic, and Tucker cases are now moot, and are withdrawn, and that all of the December 7, 2010, Amended Complaints contain a more specific statement of the plaintiffs' negligence per se claims, so that Quality Egg's Rule 12(e) motions for a more definite statement in all cases are withdrawn. Thus, Quality Egg reasserts only its Rule 12(b)(6) motions to dismiss the punitive damages claims and its Rule 12(f) motions to strike specific factual allegations pertaining to punitive damages as to the December 7, 2010, Amended Complaints. Quality Egg's Reply does not assert any additional arguments in support of its position on these remaining issues, however.

The parties did not request oral arguments on the pending Rule 12 Motions in the manner required by applicable local rules. The court also has not found such oral arguments to be necessary, in light of the quality of the parties' briefing and the parties' narrowing of the issues to be resolved by the court. Therefore, the court has considered the Rule 12 Motions on the parties' written submissions.

B. Factual Background

With this procedural background in mind, the following discussion of the factual background focuses on issues relating to the plaintiffs' claims for punitive damages. “When ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint.” Erickson v. Pardus, 551 U.S. 89, 94, 127 S.Ct. 2197, 167 L.Ed.2d 1081 (2007) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555–56, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). Thus, the factual background presented here is based on the plaintiffs' allegations related to punitive damages in their December 7, 2010, Amended Complaints.

As noted above, these cases arise from an outbreak of Salmonella enteritidis in the summer of 2010 that was allegedly tied to defendant Quality Egg's products. In the course of the outbreak, Quality Egg, doing business as Wright County Egg, recalled hundreds of millions of shell eggs that it had manufactured and distributed in recent months. Also, numerous state health departments announced that illnesses among state residents were linked to eggs and egg products sold by Wright County Egg. The plaintiffs allege that, as of October 21, 2010, the Centers for Disease Control (CDC) had linked approximately 1,813 illnesses to egg products contaminated with Salmonella enteritidis.

The United States Food and Drug Administration (FDA) Department of Health and Human Services began an investigation into Wright County Egg's egg manufacturing facilities in Galt, Iowa, which included on-site inspections at various egg laying farms/plants between August 12 and August 30, 2010. The FDA's observations from its on-site inspections are contained in FDA Form 483, issued to Wright County Egg's Chief Operating Officer, Peter A. DeCoster, on August 30, 2010. The plaintiffs allege that the FDA Form 483 included the following findings:

10.1. Chicken manure located in the manure pits below the egg laying operations was observed to be approximately 4 feet high to 8 feet high at the following locations: Layer 1—House 1; Layer 3—Houses 2, 7, 17, and 18. The outside access doors to the manure pits at these locations had been pushed out by the weight of the manure, leaving open access to wildlife or domesticated animals.

10.2. Un-baited, unsealed holes appearing to be rodent burrows located along the second floor baseboards were observed inside Layer 1—Houses 1–9 and 11–13; Layer 2—Houses 7 and 11; Layer 3—Houses 1, 3, 4, 5, and 6; Layer 4—House 3.

10.3. Dark liquid which appeared to be manure was observed seeping through the concrete foundation to the outside of the laying houses at the following locations: Layer 1—Houses 1, 2, 3, 4, 5, 8, 11, 12, and 14; and Layer 3—Houses 1, 8, 13, and 17.

10.4. Standing water approximately 3 inches deep was observed at the southeast corner of the manure pit located inside Layer 1—House 13.

10.5. Un-caged birds (chickens having escaped) were observed in the egg laying operations in contact with the egg laying birds at Layer 3—Houses 9 and 16. The un-caged birds were using the manure, which was approximately 8 feet high, to access the egg laying area.

10.6. Layer 3—House 11, the house entrance door to access both House 11 and 12 was blocked with excessive amounts of manure in the manure pits.

10.7. There were between 2 to 5 live mice observed inside the egg laying Houses 1, 2, 3, 5, 7,...