Plaintiffs Seek U.S. Supreme Court Review of Diacetyl Ruling

In a petition for a writ of certiorari, plaintiffs alleging harm by exposure to the flavoring agent diacetyl have argued that the Third Circuit erred in ruling that Aaroma Holdings cannot be held liable for the actions of diacetyl producer Emoral Inc., which Aaroma purchased following the alleged exposures. Diacetyl Plaintiffs v. Aaroma Holdings, No. 14-71 (U.S., petition for writ of certiorari filed July 18, 2014). The terms of the 2010 purchase agreement confirming Aaroma’s acquisition of Emoral apparently noted that Emoral may be subject to diacetyl litigation and stated that Aaroma did not assume liability for any future claims. Emoral filed for bankruptcy protection in 2011, and the bankruptcy trustee reportedly released Aaroma from future diacetyl causes of action against Emoral in exchange for $500,000. In addition to accusing the Third Circuit of diverging from binding precedent on injured creditors’ claims, the plaintiffs’ petition argues that the decision is contrary to public policy and creates paths for defendants to circumvent tort liability.

Issue 532