Wednesday, February 03, 2016

Insurer of Blue Buffalo Supplier Says "Tough Luck"

From Law 360 comes this story of dog food fraudsters finding out that their legal insurance policy is as weak as their food purity claims:

The insurer of a pet food ingredient broker accused of colluding to fraudulently provide less-than-pure chicken and turkey meal for Blue Buffalo’s kibble products says those claims don’t constitute personal injuries, therefore its coverage doesn’t apply, according to a complaint filed in Texas federal court on Thursday.

Colony Insurance Co. says it has no duty to defend or repay the litigation costs of its policyholder, Custom AG Commodities, an intermediary between pet food ingredient suppliers and distributors that was targeted in a third-party complaint accusing it of conspiring with those distributors to pass off inferior pet food ingredients as premium while charging more money to suppliers — claims that don’t constitute bodily injury or property damage under its policy, Colony said....

...,The dispute stems from a pair of lawsuits filed against Blue Buffalo by Nestle Purina PetCare Co. and a class of consumers, alleging that the company falsely advertised its pet foods as free of poultry byproduct meal when independent testing showed that it wasn’t. The consolidated consumer multidistrict litigation was settled in December for $32 million, but Purina’s claim that Blue Buffalo unfairly profited and violated the federal Lanham Act still remains.

After being sued by Purina in May 2014, Blue Buffalo then went after its ingredient suppliers and distributors, Diversified and Wilbur-Ellis, alleging it was duped into buying the adulterated chicken and turkey byproduct filler. Diversified, in turn, brought Custom AG into the fold, alleging that it and Wilbur-Ellis “conspired over a number of years” to defraud it.

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