April 21, 2021

Kraft must fork over turkey meat

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Screen Shot 2015-10-15 at 5.37.50 PMBy Max Mitchell, From The Legal Intelligencer

Despite cutting turkey production because of an avian flu outbreak, a Philadelphia judge has ordered Kraft Heinz Co. to provide a family-owned meat processor with thousands of pounds of turkey twice a week for the rest of the year.

Philadelphia Court of Common Pleas Judge Patricia A. McInerney granted a restraining order and preliminary injunction ordering Kraft to provide Mrs. Ressler’s Food Products with 36,000 pounds of fresh turkey breast meat twice a week for the duration of the parties’ 2015 contract. The one-page order in Mrs. Ressler’s Food Products v. H&H Trading, which was issued last week, was conditioned on the plaintiff company posting a $30,000 bond.

Although Kraft had noted that an avian flu outbreak required it to reduce its sales of turkey breast to the company by 10 percent and argued there was no immediate threat to the company, Mrs. Ressler’s argued that Kraft was using the outbreak as an excuse to break its contract.

“The result is a brazen attempt by Kraft to force Mrs. Ressler’s out of the market for finished turkey products—and out of business entirely—by completely withholding the raw turkey breast meat it had committed to sell Mrs. Ressler’s for no more than $2.70 per pound over the course of 2015, and, instead, using that raw turkey meat for both its own competing products and selling it to others on the open market where the price has soared to approximately $5.70 per pound,” according to the complaint, filed by Jonathan Scott Goldman of Blank Rome.

Although Kraft had made an oral motion to stay the court’s order granting Mrs. Ressler’s petition for temporary restraining order and preliminary injunction, McInerney also denied that request.

According to court documents, Mrs. Ressler’s contracted with Kraft in late 2014 to provide it with more than 4 million pounds of turkey breast meat throughout 2015, which was expected to be about 40 percent of the company’s supply of turkey.

In May, Kraft asked Mrs. Ressler’s if it would consider selling back some of the raw turkey breast it bought, but company officials refused. Later that month, Kraft notified H&H Trading, the company that had brokered the deal, that it was reducing its delivery of turkey breast by 10 percent, explaining that its supply was being impacted by an outbreak of avian flu in Mississippi, court papers said.

The complaint said Kraft promised to make up the shorted deliveries at a later date. However, in September, Kraft then told H&H that it would be suspending all sales of breast meat indefinitely, court papers said.

Mrs. Ressler’s contended the rest of the shipments were not new sales, but constituted existing contractual obligations that could not be canceled. Company officials said Mrs. Ressler’s had relied on the contracts, and the loss of the meat could result in at least a 25 percent loss of business.

According to court documents, Mrs. Ressler’s contended it had to advise its customers that it was unable to supply them with finished turkey products. The company also had to discontinue at least six lines of turkey products, court documents said.

Along with noting its alleged lost business, Mrs. Ressler’s also argued its loss of reputation is not capable of being fully remedied by monetary damages.

“The longer Mrs. Ressler’s is forced to go without sufficient raw turkey breast to support customers’ orders, the more likely it is that Mrs. Ressler’s customers become entrenched with a competitor such that they may never return to Mrs. Ressler’s at all,” the complaint said.

The company sued for breach of contract and unfair competition, and also sought a temporary restraining order and injunction to force Kraft to fulfill the remainder of the contract.

Kraft, however, said Mrs. Ressler’s failed to show concrete evidence of irreparable harm, and instead relied on speculation. Most of the testimony from Mrs. Ressler’s officials about how its clients were claiming they would possibly move to another supplier was hearsay, Kraft argued.

Kraft further contended the only possible remedy for the claims was monetary, and therefore the plaintiff should seek a legal remedy as opposed to an injunction or restraining order.

Kraft also argued there is no imminent threat to Mrs. Ressler’s, since it could buy additional turkey breast meat from other suppliers. Kraft noted that Mrs. Ressler’s had declined to do so because of the allegedly higher cost from other sources. Kraft also noted Mrs. Ressler’s does not only sell turkey products.

“Mrs. Ressler’s claim that it will suffer long-term damage to its relationships with its customers defies logic,” said Kraft’s opposition to the petition, which was filed by John S. Stapleton of Hangley Aronchick Segal Pudlin & Schiller.

In a statement, Goldman, who handled the case with Stephanie Chomentowski, said he was happy to quickly and efficiently get the injunction.

“As a third-generation Philadelphia company, Mrs. Ressler’s Food Products Co. is extremely pleased with the Commerce Court’s decision,” he said.

Stapleton did not return a call for comment.

For more on this story go to: http://www.thelegalintelligencer.com/id=1202739708495/Kraft-Must-Fork-Over-Turkey-Meat#ixzz3oYCNvGoi

 

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