United States District Court, D. Rhode Island
MEMORANDUM AND ORDER
WILLIAM E. SMITH CHIEF JUDGE.
Daniele International, Inc. (“Plaintiff” or
“Daniele”) contracted with Defendant Sabra
Dipping Company, LLC (“Defendant” or
“Sabra”) for Sabra to provide hummus to be
included in Daniele's Sabra Party Platter Select
(“party platter”). The deal went bad because the
hummus went bad (it was allegedly infested with Listeria,
which tainted the entire platter). As a result, Daniele
brings a multi-count state-law Complaint (ECF No. 1); Sabra
moves to dismiss (ECF No. 10) Daniele's claims for strict
products liability (Count III), common law indemnification
(Count VII), tortious interference with contractual relations
(Count VIII), tortious interference with business expectancy
(Count IX), and negligent misrepresentation (Count X).
hearing on April 4, 2018, the Court denied Sabra's Motion
with respect to Count VII, dismissed Counts VIII and IX, and
took under advisement Counts III and X. This Memorandum and
Order addresses Counts III and X.
1945, Daniele has produced and distributed premium gourmet
specialty foods, “buil[ding] a reputation for
quality.” (Pl.'s Compl. (“Compl.”)
¶¶ 6, 9, ECF No. 1.) This quality was called into
doubt when Sabra allegedly provided Listeria-infested hummus
to be included in Daniele's party platter. (Id.
2016, Daniele and Sabra agreed that Sabra would provide
Daniele packages of hummus to be incorporated into its party
platter, which Daniele packaged and distributed.
(Id. ¶ 11.) In connection with the parties'
agreement, Sabra effectuated a Product Guaranty and
Indemnification Agreement, through which it promised to
provide untainted products fit for their forecasted purpose.
(Id. ¶¶ 12-13.) Moreover, with respect to
any potential product recalls, Sabra promised to accept back
any faulty products for a full refund. (Id. ¶
October 2016, the United States Food and Drug Administration
(“FDA”) inspected Sabra's manufacturing
facility in Colonial Heights, Virginia. (Id. ¶
23.) This inspection revealed that the facility was
contaminated by the presence of Listeria monocytogenes, a
substance harmful to humans if ingested. (Id. ¶
24.) On November 19, 2016, the FDA directed that Sabra recall
various hummus products manufactured before November 8, 2016,
in light of the presence of Listeria; on November 23, 2016,
the FDA's directive (“2016 Recall”) was
updated to include the party platter. (Id.
¶¶ 29-30.) The November 23 update recalled the
entire party platter due to the risk that the
Listeria-infested hummus may have cross-contaminated the
other party-platter products. (Id. ¶ 30.) The
2016 Recall was extensively publicized by national media
outlets - outlets that also assigned Daniele a role in the
Listeria outbreak. (Id. ¶¶ 30-32.)
contends that it has lost a considerable investment (more
than $750, 000) in preparing for the party platter
“production line” - money that it would not have
spent, and equipment that it would not have purchased, but
for the party platter's production. (Id.
¶¶ 16-20.) For instance, Daniele purchased two
meat-slicing machines, which were only useful in producing
the party platter. (Id. ¶ 17.) In addition,
because of the 2016 Recall, Daniele was faced with
substantial expenses including back charges from retailers
who had received party platters and returned them.
(Id. ¶ 33.) Sabra's recalled hummus also
forced Daniele to discontinue making its party platters
altogether, which, in turn, left Daniele with substantial
inventory that it had no use for, as well as twenty employees
that it had to let go. (Id. ¶¶ 34-36.)
assessing a motion to dismiss under Rule 12(b)(6) of the
Federal Rules of Civil Procedure, “the district court
must ‘accept as true the well-pleaded factual
allegations of the complaint, draw all reasonable inferences
therefrom in the plaintiff's favor, and determine whether
the complaint, so read, limns facts sufficient to justify
recovery on any cognizable theory.'” Rivera v.
Centro Medico de Turabo, Inc., 575 F.3d 10, 15 (1st Cir.
2009) (quoting LaChapelle v. Berkshire Life Ins.
Co., 142 F.3d 507, 508 (1st Cir. 1998)). To overcome a
motion to dismiss, a complaint must possess “sufficient
factual matter, accepted as true, to ‘state a claim to
relief that is plausible on its face.'”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
moves to dismiss Daniele's strict-products liability
(Count III) and negligent-misrepresentation (Count X) claims.
While Sabra's argument may have merit, it is too early to
principal attack on both of Daniele's claims is grounded
in the “economic-loss doctrine.” Under Rhode
Island law, this doctrine provides that, “a plaintiff
is precluded from recovering purely economic losses in a
negligence cause of action.” BostonInv.
Property #1 State v. E.W. Burman, Inc., 658 A.2d 515,
517 (R.I. 1995). Notably, the Rhode Island Supreme Court has
not answered whether it would apply that doctrine to claims
sounding in either strict-products liability or negligent
misrepresentation. But as this Court has said before,
“it is simply too early in the litigation cycle to
determine whether the economic loss doctrine precludes
Plaintiff's claim[s, ]” and the Court need not
venture a guess on how the Rhode Island Supreme Court would
opine. See Lang Pharma Nutrition, Inc. v. Aenova Holding
Gmbh, No. 16-371 S, 2017 WL 3327572, at *4 (D.R.I. Aug.
3, 2017); see also Sheet Metal Workers Local No. 20
Welfare & Benefit Fund v. CVS Health Corp., 221
F.Supp.3d 227, 237-38 (D.R.I. 2016). “The bottom line
is that . ...