Products Liability Law Reporter

The Fifth Circuit Court of Appeals held that a district court should have remanded a suit alleging liability for damages resulting from allegedly tainted baby food.

Grant and Sarah Palmquist fed their son Hain’s Earth’s Best Organic Products, which were purchased at Whole Foods and fed to the child almost exclusively during the first two years of his life. At approximately 30 months, the child rapidly regressed, and he was diagnosed as having autism spectrum disorder and heavy metal poisoning. A congressional report subsequently demonstrated that certain baby foods, including Hain’s, contained elevated levels of toxic heavy metals, including lead, arsenic, and mercury.

The Palmquists sued Hain Celestial Group, Inc., and Whole Foods Market, Inc., in Texas state court. The plaintiffs alleged claims for strict liability and negligence against Hain’s and breach of warranty and negligence against Whole Foods. Hain removed the case to federal court, arguing that Whole Foods was improperly joined to defeat diversity jurisdiction. The plaintiffs then moved to remand. The district court held that the plaintiffs had improperly joined Whole Foods and dismissed their claims against it. At the subsequent trial against Hain’s in federal court, the court granted the defendant’s motion for judgment as a matter of law.

Reversing, the Fifth Circuit found that when considering whether a plaintiff has stated a claim against a nondiverse party in state court, a court should determine whether the defendant has demonstrated there was no possibility of recovery by the plaintiff against the in-state defendant. Citing case law, the court added that any contested issues of fact and any ambiguities of state law must be resolved in favor of remand. Here, the the plaintiffs alleged that Whole Foods had represented that it carefully vetted its products to ensure they met high standards. Whole Foods purported to have special knowledge about the ingredients in Hain’s baby food that is not available to customers, the court said, adding that the retailer’s business model depends on its reputation and customers’ willingness to pay a premium for products advertised as healthy and high quality.

Consequently, the court found that the plaintiffs had stated a claim under the Texas Products Liability Act, and the trial court had erred in concluding Whole Foods was improperly joined and in denying the plaintiffs’ motion to remand. The court therefore vacated the district court’s final judgment.

Citation: Palmquist v. Hain Celestial Grp., Inc., 2024 WL 2720460 (5th Cir. May 28, 2024).

Plaintiff counsel: Russell S. Post, Owen J. McGovern, Bennett J. Ostdiek, AAJ member Kurt B. Arnold, AAJ member Caj Boatright, Austin Brumbaugh, Jason R. LaFond, and Constance Hankins Pfeiffer, all of Houston.