Insurer not liable in legal action over fat fed to pigs


By Aerin Einstein-Curtis, Feed Navigator



A pollution exclusion in an insurance policy for Minnesota based fat recycling firm, Restaurant Recycling, protects the insurer from having to defend the feed ingredient producer in a lawsuit brought by a local pork producer over tainted feed, rules a US appeals court.


Restaurant Recycling purchases various fats, including soyoil and uses fryer grease from restaurants, which it then process, filter, and blends; it resells the recycled fats to feed mills where they are ultimately mixed with other feed ingredients and then fed to livestock.


New Fashion Pork, located in Jackson, Minnesota, sued Restaurant Recycling for providing a "defective"​ fat product, which it used in its swine feed. These fats, delivered to the pork company between August and October 2014, were allegedly contaminated with two substances, Lasalocid and the industrial waste product Lascadoil.


Lascadoil is a byproduct produced in the manufacture of the medication Lasalocid, and it is not approved for consumption in humans or in animals and is not generally recognized as safe, as stated in the court documents. Lascadoil’s only approved use is as a biofuel. Lasalocid is an ionophore agent typically used as medication in chicken and turkey feeds, a Type A medication regulated by the FDA, and it is not approved for use in swine under federal regulations, as documented in the court filings.


In a lawsuit against Restaurant Recyling, the pork producer sought refund of the payment for fat product and damages for the health issues the tainted feed reportedly caused to its pigs, according to the court documents. 


Restaurant Recycling, in turn, sued its insurer, Employer Mutual Casualty Company (EMC) in the US District Court of Minnesota, seeking a judgment that the insurer had a duty to defend and indemnify it. EMC moved for judgment on the pleadings, citing a total pollution exclusion in its policy that limited coverage in the case.


The district court found for the insurer:


“Because the underlying litigation arises out of an alleged dispersal of a pollutant, the pollution exclusion provision applies. As a result, EMC has no duty to defend or indemnify ​Restaurant Recycling under the insurance policy.”​


The fats recycling company then appealed that ruling in the Eight US Circuit Court of Appeals. 


On April 29 this year, the federal court concluded that the total pollution exclusion applied and it affirmed the judgment of the lower court.


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Background: Underlying case involving contaminated feed​ ...