Court Overrides Jury Verdict in Heinz Lead-Tainted Baby Food Insurance Dispute

Contradicting an advisory jury verdict, a Pennsylvania federal court has
allowed Starr Surplus Lines Insurance Co. to void its policy with H.J.
Heinz Co. covering damages related to the manufacture and sale of lead-tainted
baby cereal. H.J. Heinz Co. v. Starr Surplus Ins. Co., No. 15-0631
(W.D. Penn., order entered February 1, 2016). Surplus sought to rescind
the policy, and the jury agreed with its argument that Heinz had made
material misrepresentations on its application for product contamination
coverage. The jury concluded that the insurance company knew
about the misrepresentations and sold the policy anyway, thus losing its
grounds for rescinding the policy; the court disagreed, finding “Heinz
did not prove by a preponderance of the evidence that Starr had sufficient
knowledge of the misrepresented facts prior to issuing the policy.”
Accordingly, the court voided the policy. Additional information about
the jury decision appears in Issue 588 of this Update.

Issue 593