Cereal Maker Sues Canadian Packaging Company for Defective Liners

Kellogg Co. has filed a lawsuit in a Michigan federal court against the Canadian packaging company that supplied allegedly defective liners with “offensive characteristics” (taste and odor) that purportedly caused nausea and diarrhea in some Kellogg cereal consumers and forced a “costly nationwide recall” of four company products. Kellogg Co. v. FPC Flexible Packaging Corp., No. 11-272 (W.D. Mich., S. Div., filed March 18, 2011). The cereal maker alleges violations of Michigan’s Uniform Commercial Code, breach of contract and express and implied indemnification. Alleging damages in excess of $75,000, Kellogg also seeks a declaratory judgment that it is not liable for payment of $3.3 million in materials still in the packaging company’s possession or for the $1.04 million in defective liners provided to Kellogg. According to the complaint, the packaging company has demanded payment for the liners and the materials used in their production.