United States District Court, D. Minnesota
Brandon M. Schwartz, Esq., Michael D. Schwartz, Esq. and
Schwartz Law Firm, counsel for plaintiff.
C. Kim, Esq., Dean M. Zimmerli, Esq. and Gislason &
Hunter LLP, counsel for intervenor plaintiff.
A. Jenson Prouty, Esq. and Arthur Chapman, counsel for
S. Doty, Judge United States District Court
matter is before the court upon the motion for judgment on
the pleadings by defendants Employer Mutual Casualty Company
d/b/a EMC Insurance Companies and Hamilton Mutual Insurance
Company. Based on a review of the file, record, and
proceedings herein, and for the following reasons, the court
grants defendants' motion.
insurance coverage dispute arises out of an underlying claim
by intervenor plaintiff New Fashion Pork (NFP) against plaintiff
Restaurant Recycling, LLC and Superior Feed,
NFP is a pork producer that owns and operates feed mills
where it blends grain, fat, and other ingredients to create
feed for its swine. ECF No. 9-1 ¶ 6. Restaurant
Recycling is a manufacturer and supplier of fat products for
animal feed. Id. ¶ 7. NFP alleges that, between
July 1, 2014, and September 24, 2015, Restaurant Recycling
delivered four shipments of fat products to NFP that were
contaminated with lasalocid and lascadoil. Id.
¶¶ 9-10. Lasalocid is a medication regulated by the
Food and Drug Administration that is generally used in
chicken and turkey feed, but it is not approved for use in
swine. Id. ¶ 11. Lascadoil is a byproduct
created in the production of lasalocid and is only approved
for use as biofuel. Id. ¶ 10.
claims that it used Restaurant Recycling's fat products
to produce feed for its swine and the contaminated feed
caused serious health problems in its swine. Id.
¶¶ 14-15. On November 23, 2016, NFP filed an
amended complaint in Ramsey County alleging breach of
contract, breach of implied warranty of merchantability,
breach of implied warranty of fitness for a particular
purpose, negligence, strict liability, and
insured Restaurant Recycling under Policy No. 4D5-66-11-15
from July 2, 2014 to July 2, 2015, which provided general
commercial liability coverage. See ECF No. 9-2. The
policy contains an absolute pollution exclusion.
Specifically, the policy does not cover: “‘Body
injury' or ‘property damage' which would not
have occurred in whole or part but for the actual, alleged or
threatened discharge, dispersal, seepage, migration, release
or escape of ‘pollutants' at any time.”
Id. at 44. The policy defines
“pollutants” as “any solid, liquid, gaseous
or thermal irritant or contaminant, including smoke, vapor,
soot, fumes, acids, alkalis, chemicals and waste. Waste
includes material to be recycled, reconditioned or
reclaimed.” Id. at 38.
January 3, 2017, Restaurant Recycling filed this action
seeking a declaration that EMC is obligated, pursuant to the
policy, to provide defense and coverage for all claims
asserted by NFP and for any damages awarded. Defendants now
move for judgment on the pleadings.
Subject Matter Jurisdiction
the underlying litigation was settled for an amount less than
$75, 000, the court requested that the parties submit letters
on whether the court retained jurisdiction. Both parties
concluded that the settlement agreement did not divest the
court of jurisdiction. The court agrees. “It is well
established that the requirements for diversity jurisdiction
must be satisfied only with respect to the [amount alleged in
the complaint at] the time of filing.” Scottsdale
Ins. Co. v. Universal Crop Protection All., LLC, 620
F.3d 926, 931 (8th Cir. 2010). Furthermore, “subsequent
events reducing the amount in controversy do not destroy
diversity jurisdiction.” Id. As a result, the
court retains subject matter jurisdiction.