WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on Nov. 14 refused to hear a pull-tab lid supplier's appeal of the Ninth Circuit U.S. Court of Appeals' ruling that there is no umbrella insurance coverage for its alleged $4.9 million in losses stemming from defective pull-tab lids on fruit cup containers (Silgan Containers Corp. v. National Union Fire Insurance Company of Pittsburgh, Pennsylvania, No. 11-384, U.S. Sup.).
In 2004, Del Monte Corp. began receiving a large number of complaints that the pull tabs on its "fruit cup" products were defective because the tabs were breaking off and exposing sharp, jagged edges that could hurt consumers.
Del Monte pulled the products from the market and claimed damages totaling $6,500,956.27 from Silgan Containers Corp., which supplied Del Monte with the fruit cup containers.
Primary insurer Zurich American Insurance Co. accepted Del Monte's claim and paid the $1.5 million limit. National Union Fire Insurance Company of Pittsburgh, Pa., which issued a commercial umbrella liability policy to Silgan, denied coverage.
Silgan sued National Union in the U.S. District Court for the Northern District of California, seeking $4,917,963.70 in damages plus prejudgment interest. Judge Phyllis J. Hamilton ruled in favor of National Union and entered final judgment on April 12, 2010.
Silgan appealed to the Ninth Circuit, which affirmed the District Court's ruling on May 27, 2011. The panel found that there was no "physical injury to tangible property, including all resulting loss of use of that property" as defined by the policy. The panel further determined that there was no "loss of use of tangible property that is not physically injured" as defined by the policy.
After a rehearing was denied, Silgan filed a petition for a writ of certiorari in the U.S. Supreme Court on Sept. 23.
[Editor's Note: Full coverage will be in the Nov. 17 issue of Mealey's Emerging Insurance Disputes. For all of your legal news needs, please visit www.lexisnexis.com/mealeys.]
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