Underwood v. Farms

• Decision Date: 31 December 2013
• Docket Number: Case No.: 6:11-CV-348-JHP
• Parties: 1. DOYLE UNDERWOOD, Plaintiff, v. 1. JENSEN FARMS, a trade name; 2. FRONTERA PRODUCE LTD, a foreign corporation; 3. PRIMUS GROUP, INC., d/b/a PRIMUS LABS, a foreign corporation; 4. PRUETT' S FOOD, INC., a domestic corporation; 5. ASSOCIATED WHOLESALE GROCERS, INC., a foreign corporation; and 6. JOHN DOES 1-10, Defendants.
• Court: U.S. District Court — Eastern District of Oklahoma

1. DOYLE UNDERWOOD, Plaintiff, v. 1. JENSEN FARMS, a trade name;

2. FRONTERA PRODUCE LTD, a foreign corporation;

3. PRIMUS GROUP, INC., d/b/a PRIMUS LABS, a foreign corporation;

4. PRUETT' S FOOD, INC., a domestic corporation;

5. ASSOCIATED WHOLESALE GROCERS, INC., a foreign corporation; and

6. JOHN DOES 1-10, Defendants.

Case No.: 6:11-CV-348-JHP

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF OKLAHOMA

Dated: December 31, 2013

OPINION AND ORDER

Before the Court are Defendant Primus Group, Inc.'s ("Primus") Motion to Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6) (Doc. No. 89); Plaintiff's Response in Opposition to Primus' Motion to Dismiss (Doc. No. 93); Defendant Frontera Produce LTD's ("Frontera") Partial Joinder in Plaintiff's Response in Opposition to Primus' Motion to Dismiss, [Doc. No. 94]; and Primus' Reply to Plaintiff's Response (Doc. No. 94). For the reasons set forth below, Defendants' Motion to Dismiss is GRANTED.

BACKGROUND

This case stems from a multi-state Listeria outbreak allegedly linked to contaminated cantaloupe manufactured, distributed, and sold collectively by Jenson Farms, Frontera, Associated Wholesale Grocers, Inc. ("AWG"), and Pruett's Food, Inc. ("Pruett's") during thesummer of 2011. One of the many consumers affected by this outbreak was Plaintiff Doyle Underwood, who contracted listeriosis after consuming a contaminated cantaloupe he purchased from Pruett's in Broken Bow, Oklahoma. Plaintiff became ill on September 2, 2011, and was subsequently hospitalized for approximately one month. While in the hospital, Plaintiff tested positive for a strain of Listeria, which Oklahoma health officials later linked to the multi-state outbreak involving cantaloupe manufactured by Jenson Farms.

Prior to the Listeria outbreak, Jenson Farms entered into a contract with Primus (the "Audit Contract"), whereby Primus agreed to provide auditing services to Jenson Farms related to manufacture and sale of food products. On July 25, 2011, through its agents Bio Food Safety and auditor James Dilorio, Primus performed an audit at a cantaloupe packinghouse owned by Jenson Farms in Colorado (the "July 25, 2011 Audit"). With regard to the July 25, 2011 Audit, Plaintiff alleges that

Mr. Dilorio failed to observe, or properly downscore or consider, multiple conditions or practices that were in violation of Primus'[]audit standards applicable to cantaloupe packing houses, industry standards, and applicable FDA industry guidance.

(Doc. No. 77, 10.) In support of this contention, Plaintiff alleges that the results of an environmental assessment performed by the FDA on September 22-23, 2011, subsequently set out in a report dated October 19, 2011, identified unsatisfactory facility designs, equipment designs, and postharvest practices. Plaintiff posits that "these conditions and practices [were] inconsistent and irreconcilable with the 'superior' rating, and 96% score" Mr. Dilorio ultimately gave to Jensen Farms and should have caused the packinghouse to fail the audit. (Id. at 11.) Plaintiff concludes, "Had the Jensen Farms' packing house failed the July 25, 2011 audit, the cantaloupe that caused the Plaintiff['s] [l]isteriosis illness would not have been distributed by Jensen Farms and Frontera." (Id.)

On October 5, 2011, Plaintiff commenced the instant action seeking damages resulting from his listeriosis infection. In his Second Amended Complaint ("SAC"), Plaintiff asserts strict liability, breach of warranty, negligence, and negligence per se claims against Frontera, AWG, and Pruett's. Further, Plaintiff also asserts negligence claims against Primus based on (1) Primus' selection and retention of Bio Food Safety and (2) Mr. Dilorio's July 25, 2011 audit conduct. On October 11, 2013, Primus filed a Motion to Dismiss the claims against it pursuant to Fed. R. Civ. P. 12(b)(6) (Doc. No. 89). This motion is fully briefed and now before the Court.

DISCUSSION

Fed. R. Civ. P. 12(b)(6) states that a court may dismiss a complaint for "failure to state a claim upon which relief can be granted." See Fed. R. Civ. P. 12(b)(6). In reviewing a motion to dismiss pursuant to Rule 12(b)(6), the Court must accept all well-plead allegations in the Complaint as true and view those allegations in the light most favorable to the nonmoving party. Stidham v. Peace Officer Standards and Training, 265 F.3d 1144, 1149 (10th Cir. 2001) (quoting Sutton v. Utah State Sch. For the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)). With regard to what must be pled to avoid dismissal, the Supreme Court in Ashcroft v. Iqbal, 556 U.S. 662, 677 (2009), described the standard that must be met as "facial plausibility." In this context, "plausibility" refers to the scope and degree of specificity of the allegations in the complaint. Khalik v. United Air Lines, 671 F.3d 1188 (10th Cir. 2012).

Although Fed. R. Civ. P. 8(a)(2) still requires the pleader to supply only "a short and plain statement of the claim," that statement must provide more than "labels and conclusions," "a formulaic recitation of the elements of a cause of action," or generalized allegations of conduct that "encompass a wide swath of conduct, much of it innocent." Id. In this regard, the plaintiff must do more than articulate a set of facts that could "conceivabl[y]" or "possibly" give rise to aclaim; he must "nudge[ ]his claims across the line from conceivable to plausible." Id. Of course, the degree of specificity that will be required will necessarily vary based on the context of the case. Id. Determining whether a complaint states a plausible claim for relief is a "context-specific task that requires the reviewing court to draw on its judicial experience and common sense." See Iqbal, 556 U.S. at 679. Ultimately, the question to be decided is "whether the complaint sufficiently alleges facts supporting all the elements necessary to establish an entitlement to relief under the legal theory proposed." Lane v. Simon, 495 F.3d 1182, 1186 (10th Cir. 2007) (internal quotation omitted).

A. Negligence in Conducting the July 25, 2011 Audit

To establish a prima facie case of negligence under Oklahoma law, Plaintiff must prove that (1) a duty was owed to him, (2) the duty was breached because it was not properly exercised or performed, and (3) the breach of duty proximately caused Plaintiff to suffer harm. Thompson v. Presbyterian Hospital, Inc., 652 P.2d 260, 263 (Okla. 1982). At its most basic level, "[a]ny claim of negligence depends on the existence of a duty and the breach of that duty." Brewer v. Murray, 292 P.3d 41, 46 (Okla. Civ. App. 2012) (citing Wofford v. Eastern State Hosp., 795 P.2d 516, 518 (Okla. 1990)). As explained below, the Court finds that Plaintiff has failed to allege facts sufficient to establish both the duty and causation elements of a negligence claim.

1. Duty

"A duty is a threshold question in any negligence case. Whether a duty exists presents a question of law which depends on the relationship between the parties and the general risks involved in the common undertaking." McClure v. Sunshine Furniture, 283 P.3d 323, 328 (Okla. Civ. App. 2012), as corrected (June 13, 2012) (citing Wofford, 795 P.2d at 518). "If a defendant does not owe a duty of care to the plaintiff, there can be no liability for negligence as amatter of law." Lowery v. Echostar Satellite Corp., 160 P.3d 959, 964 (Okla. 2007). A duty can be grounded in "contract or some special relationship," or it can be grounded in "general principles of the law of negligence." Id.

The issue of whether a third-party auditor of a produce packinghouse owes a duty to ultimate consumers of the food processed therein is an issue of first impression in Oklahoma. In the absence of an authoritative pronouncement from a state's highest court, a federal court's task under the Erie doctrine is to predict how the state's highest court would rule if presented with the same case. See Wade v. EMCASCO Ins. Co., 483 F.3d 657, 666 (10th Cir. 2007). The federal court "must follow the decisions of intermediate state courts in the absence of convincing evidence that the highest court of the state would decide differently." Stoner v. New York Life Ins. Co., 311 U.S. 464, 467 (1940). To predict how the state's highest court would rule, the federal court "may seek guidance from decisions rendered by lower courts in the relevant state, appellate decisions in other states with similar legal principles, district court decisions interpreting the law of the state in question, and 'the general weight and trend of authority' in the relevant area of law." Wade, 483 F.3d at 666 (citations and internal quotation marks omitted). The Court's analysis is guided by these principles.

a. Duty Based on General Principles of Negligence Law

The existence of a duty based on general principles of negligence law were explained by the Oklahoma Supreme Court in Lowery v. Echostar Satellite Corporation:

We have long recognized that without regard to the relationship of the parties, a person owes a duty of care to another person whenever the circumstances place the one person in a position towards the other person such that an ordinary prudent person would recognize that if he or she did not act with ordinary care and skill in regard to the circumstances, he or she may cause danger of injury to the other person. We have explained that a duty of care may arise from a set of circumstances which would require the defendant to foresee the particular harm to the plaintiff.

160 P.3d at 964 (citation and emphasis added). This duty is not grounded in any contractual or special relationship of the parties, but in the relationship created by the specific circumstances that are presented and known to the alleged tortfeasor.

In determining whether this common law duty applies, courts must weigh the following policy considerations: "1) foreseeability of harm to the plaintiff, 2) degree of certainty of harm to the plaintiff, 3) moral blame attached to defen...