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F.E.I. Co. v. United States

United States District Court, M.D. Pennsylvania

August 12, 2019

F.E.I. COMPANY, Plaintiff
v.
UNITED STATES OF AMERICA, Defendant

          MEMORANDUM

          KANE JUDGE

         On November 4, 2016, Plaintiff F.E.I. Company (“Plaintiff”) commenced this Federal Tort Claims Act (“FTCA”) action alleging that the United States of America negligently initiated the detention of approximately one million pounds of food products in Plaintiff's cold-storage facility and continued that detention for many months after the permitted 20-day detention period had ended, causing Plaintiff to suffer over $2 million in damages. (Doc. No. 1.) Following nearly two and a half years of litigation, the Court conducted a bench trial on Plaintiff's negligence claim in late April of 2019. This memorandum constitutes the Court's findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a).

         I. FINDINGS OF FACT AND PROCEDURAL BACKGROUND

         A. Plaintiff's Cold-Storage Facility at 1125 Berryhill Street in Harrisburg, Pennsylvania

         Plaintiff owned and operated a cold-storage facility at 1125 Berryhill Street in Harrisburg, Pennsylvania from the early 2000s through 2018. Plaintiff completed extensive renovations on the approximately-25, 000-square-foot facility in the mid-2000s. Plaintiff's facility served as a cold-storage facility for its customers' food products, functioning as a stopover point between the products' place of production or slaughter and the homes or businesses of the product owners' customers. Plaintiff strived to maximize profits through the efficient use of its storage space and the rapid movement of food products in and out of the facility. Plaintiff's customers included, inter alia, American Gold Label Foods (“AGL”), Empire Kosher Poultry (“Empire”), JDT Slaughterhouse (“JDT”), Kuyahoora Valley Acres (“Kuyahoora”), LA Foods, Propak Frozen Foods (“Propak”), and Sygma Network (“Sygma”). (Gov. Ex. 22.) In late October of 2013, about half of the pallets at Plaintiff's facility contained USDA-regulated food products, and about half of the pallets contained non-USDA-regulated food products. (Id.)

         B. Events Preceding USDA Involvement

         Timothy Baumert (“Mr. Baumert”), the owner of JDT, testified that in July or August of 2013, his company transported a load of its food products from Plaintiff's cold-storage facility to a customer in New York City. The customer refused the entire load upon encountering a strong ammonia smell when the doors to the truck were opened, and Mr. Baumert had the food products shipped back to Plaintiff's facility in Harrisburg so that they would remain frozen until he could determine how to deal with them. Mr. Baumert testified that Plaintiff did not inform him of an ammonia leak at Plaintiff's cold-storage facility prior to Mr. Baumert's customer rejecting the load of JDT food products due to the ammonia smell. A letter from Plaintiff's owner, Paul Winer (“Mr. Winer”), to Mr. Baumert indicates that Plaintiff disputed whether there was an ammonia leak at its facility and noted that no other customers had complained of an ammonia smell on their products. (Gov. Ex. 87.)

         On October 10, 2013, Plaintiff's contract refrigeration servicer, Refrigerated Services Engineering (“RSE”), removed ice from a frozen drain pan in the facility's freezer. On Friday, October 18, 2013, Plaintiff's warehouse manager asked RSE to return to the facility because a leak indicated that the drain pan was frozen again. RSE arrived at the facility and performed maintenance to address the leak and frozen drain pan. RSE then informed Plaintiff's warehouse manager that the problem was resolved and left the facility. When Plaintiff's warehouse manager entered the freezer later that afternoon, he smelled ammonia. When RSE was notified of the ammonia smell, it indicated to the warehouse manager that it would address the problem over the weekend. RSE's owner and Mr. Winer communicated over the weekend regarding the situation, and Mr. Winer believed the situation had been resolved.

         Upon entering the facility on the morning of Monday, October 21, 2013, Plaintiff's warehouse manager noticed a strong ammonia smell. The warehouse manager informed Mr. Winer of the smell, and Mr. Winer instructed him to close the facility for the day and arrange for RSE to return to the warehouse as soon as possible to address the apparent leak. Mr. Winer subsequently flew from California to Harrisburg, arriving on the morning of October 23, 2013. That afternoon, Empire's president sent Mr. Winer an email, in which he voiced Empire's concern over the impact of the ammonia leak on its products in Plaintiff's facility, as well as Empire's concern regarding Plaintiff's failure to contact Empire regarding the ammonia leak. (Gov. Ex. 83.)

         C. USDA Involvement

         On Thursday, October 24, 2013, Dr. Kristen Gentzel (“Dr. Gentzel”), a USDA employee, emailed several USDA Food Safety and Inspection Service (“FSIS”) employees-including James Borda (“Mr. Borda”), the northeast regional director for the Compliance and Investigations Division of the USDA Food Safety Inspection Service, and Joseph Priore (“Mr. Priore”), the then-supervisory investigator of the Compliance and Investigations Division- relaying information she had received indicating that an ammonia leak had occurred at Plaintiff's cold-storage facility. (Gov. Ex. 19.) She reported that members of management at Empire-one of Plaintiff's customers-had indicated to her that Empire's employees had received a shipment of pallets of food products from Plaintiff's facility on the morning of Wednesday, October 23, 2013 and detected a strong odor of ammonia coming from the food products upon arrival at Empire's facility. (Id.) Dr. Gentzel also reported that Empire management informed her that testing indicated that the food products that came from Plaintiff's facility contained ammonia at a level of 100 parts per million, and that when Empire employees visited Plaintiff's facility, testing indicated the presence of ammonia in the main warehouse area and on the loading dock. (Id.)

         Mr. Priore then reported the information from Dr. Gentzel's email to three USDA investigators-Michael Ronczka (“Mr. Ronczka”), Robert Simms (“Mr. Simms”), and Christopher Molloy (“Mr. Molloy”)-and directed them to travel to Plaintiff's facility. When the investigators reached the facility, they received instructions from Mr. Borda and Mr. Priore to enter the facility and investigate. Upon entering Plaintiff's facility, the investigators smelled ammonia and observed two large circular fans positioned to blow air out of the facility through open doorways.[1] The investigators then walked to the facility's office, where they identified themselves to the warehouse manager and Mr. Winer. After the warehouse manager explained the events leading up to the ammonia leak, the investigators inspected the freezer area, where the ammonia leak was located. Mr. Ronczka observed that the ammonia smell was stronger in that area than in the rest of the facility. After inspecting the facility, the USDA investigators went to the parking lot and had a conference call with Mr. Borda and Mr. Priore. During that call, the investigators described their observations of the ammonia smell throughout the facility. Collectively, Mr. Borda, Mr. Priore, and the investigators then decided to detain the USDA-regulated products at the facility. The investigators subsequently applied a red detention tag to the outside of the facility's freezer, took photographs of the facility, gathered a list of the owners of the detained products, and interviewed Mr. Winer and Plaintiff's warehouse manager. The resulting detention applied to 776 pallets, totaling approximately 985, 000 pounds of USDA-regulated food products.[2] (Pltf. Ex. 3.)

         Following the commencement of the detention of the USDA-regulated food products at Plaintiff's facility, the USDA began to communicate with the owners of the detained food products about developing disposition plans in regard to their products.[3] (Pltf. Ex. 3.) Throughout early November of 2013, USDA officials researched the history and existing literature regarding food product exposure to ammonia (Pltf. Exs. 12, 14, 26) and contemplated recommending the seizure of the food products detained at Plaintiff's facility (Pltf. Ex. 13). During this period, USDA officials also received proposed disposition plans from several owners, discussed those proposals amongst themselves, and provided feedback regarding the sufficiency of the proposals. (Pltf. Exs. 16, 18, 23, 27.) Through November 19, however, no approved written disposition plans were in place. (Pltf. Ex. 3.) On November 17, 2013, Mr. Borda emailed other USDA officials indicating that he intended to begin the process to seize the detained food products. (Pltf. Ex. 32.) On November 19, 2013, Mr. Borda sent a recommendation for seizure pertaining to the detained food products at Plaintiff's facility to the USDA's Enforcement and Litigation Division. (Pltf. Exs. 33, 34.) Mr. Borda emailed Mr. Winer on November 20, 2013, indicating that the USDA was moving forward with the seizure of the food products detained in Plaintiff's facility. (Pltf. Ex. 35.)

         On November 20, 2013, the USDA approved Empire's disposition plan. (Gov. Ex. 43.) The detained Empire food products were removed from Plaintiff's facility and destroyed between November 21 and 22 of 2013. (Pltf. Ex. 3.) Kuyahoora and LA Foods removed their food products from Plaintiff's facility on November 22, 2013 and November 27, 2013, respectively. (Id.) By early January of 2014, Sygma's products were no longer at Plaintiff's facility. (Id.) In late May of 2014, Propak indicated that it intended to voluntarily dispose of its detained products, but Plaintiff stated that it would not pay for the destruction or permit the release of Propak's detained products until Propak paid Plaintiff for outstanding storage fees. (Pltf. Ex. 70.) In late July of 2014, AGL's vice president indicated in an email to Mr. Priore that AGL intended to destroy its detained food products voluntarily. (Pltf. Ex. 76.) On September 30, 2014, Mr. Winer wrote to Mr. Borda to request a letter from the USDA because Plaintiff planned to have a landfill company dispose of the remaining food products the following week. (Pltf. Ex. 88.) At that time, AGL's, Propak's, and JDT's products remained at Plaintiff's facility. In mid-October of 2014, Mr. Winer exchanged emails with USDA officials regarding whether he needed any specific paperwork either to destroy the remaining detained products or to return them to their owners. (Pltf. Ex. 90.) AGL's, Propak's, and JDT's detained products remained at Plaintiff's facility until April of 2015.[4] At no point during the detention period were any food products at Plaintiff's facility seized by the USDA.

         Plaintiff filed the above-captioned action on November 4, 2016, alleging one count of negligence against the Government and seeking over $2 million in damages. (Doc. No. 1.) On March 25, 2019, the Government filed a motion in limine to exclude or limit the expert testimony of Dr. Catherine Adams Hutt (“Dr. Hutt”). (Doc. No. 49.) After both parties filed proposed findings of fact and conclusions of law (Doc. Nos. 48, 51), the Government filed objections to Plaintiff's proposed findings of fact and conclusions of law (Doc. No. 53), and Plaintiff filed objections to and a motion to strike in part the Government's proposed findings of fact and conclusions of law (Doc. No. 56). On April 23, 2019, the Court conducted a bench trial, which concluded on April 30, 2019. On May 16, 2019, the Court ordered additional briefing on the topic of the duty element of Plaintiff's negligence claim (Doc. No. 63), which the parties submitted in June and July of 2019 (Doc. Nos. 66-68).

         II. DISCUSSION

         A. The Government's Motion in Limine

         On March 25, 2019, the Government filed a motion in limine to exclude or limit the expert testimony of Dr. Hutt (Doc. No. 49), and a brief in support thereof (Doc. No. 50). Plaintiff filed a brief in opposition to the Government's motion on April 8, 2019 (Doc. No. 52), which included a response from Dr. Hutt (Doc. No. 52-1). The Government also raised and renewed its objection to Dr. Hutt's testimony at trial.

         The Government contends that Dr. Hutt is not qualified to offer an expert opinion regarding ammonia adulteration and that her opinion lacks a reliable foundation. (Doc. No. 50 at 2015, ” he “made the assumption that the AGL, Propak, and JDT pallets were [] detained through April of 5-14.) It first argues that although Dr. Hutt is qualified to offer expert opinions in food science, food safety, and nutrition generally, she is not qualified to offer expert testimony on ammonia adulteration because she lacks academic or professional experience dealing with ammonia adulteration or the use of ammonia in food. (Id. at 6-9.) The Government next argues that based on Dr. Hutt's expert report, her opinion regarding ammonia adulteration lacks a reliable foundation. (Id. at 9-14.) To that end, the Government attacks the sources relied upon in Dr. Hutt's expert report, including a non-peer-reviewed article from the industry-funded International Food Information Council (“IFIC”) and a webpage from the website of Beef Products, Inc., a meat processing company. (Id. at 11-12.) The Government asserts that these sources are not reliable bases for an opinion on ammonia adulteration. (Id. at 13-14.)

         In response, Plaintiff argues that Dr. Hutt's experience regarding ammonia adulteration in both the private and public sectors renders her qualified to offer expert testimony regarding ammonia adulteration. (Doc. No. 52 at 6-7.) Plaintiff further argues that Dr. Hutt's expert opinion rests on a reliable foundation. It defends Dr. Hutt's reliance on an article published by industry-funded IFIC and notes that the citation to the Beef Products, Inc. website actually referred to the findings contained in a World Health Organization document. (Id. at 8-11.)

         Federal Rule of Evidence 702 governs the admissibility of expert testimony. See Fed.R.Evid. 702. Rule 702 states, in relevant part:

         A witness who is qualified as an expert by knowledge, skill, experience, training, or education may testify in the form of an opinion or otherwise if:

(a) The expert's scientific, technical, or other specialized knowledge will help the trier of fact to understand the evidence ...

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