Products Liability Law Reporter

A federal district court granted the defendants’ motion to transfer a New Jersey couple’s products liability suit against Daily Harvest, Inc., and its manufacturer and supplier.

Kathryn D’Ambola purchased a Daily Harvest subscription meal plan online. The next month, she received her weekly meal plan, which included Daily Harvest’s French Lentil + Leek Crumbles product. Within a few hours of eating the lentil product, she experienced vomiting plus extreme abdominal, back, and shoulder pain, necessitating two trips to the ER. She later underwent surgery to remove her gallbladder. Approximately one week later, D’Ambola and her husband ate the lentil product again, and they both experienced extreme back pain and cramps. Testing revealed that Kathryn suffered from elevated liver enzymes. She continues to suffer pain, discomfort, and severe distress from her experience.

D’Ambola and her husband sued Daily Harvest, Inc., in New Jersey state court. Daily Harvest removed the action to federal court and later moved to compel arbitration or, in the alternative, transfer the action to the Southern District of New York (SDNY). The plaintiffs then added Stone Gate Foods, which manufactured the lentil product, and Smirk’s, Ltd., which supplied Tara flour for the lentil product. The plaintiffs also filed an opposition to the motion to transfer and for arbitration.

Granting the transfer, the district court first considered whether the SDNY was an appropriate venue. The court found that the plaintiffs’ claims might have been brought in the SDNY, which would have had subject matter jurisdiction because the plaintiffs are citizens of a different state than each of the defendants, and the amount in controversy exceeds $75,000. Additionally, the court found that the SDNY may exercise personal jurisdiction over all the defendants, noting that Daily Harvest has its headquarters and principal place of business in New York, whose long-arm statute provides a basis for personal jurisdiction over the manufacturer and supplier, which presumably contracted to supply services to Daily Harvest in New York. Venue is also proper in the SDNY, the court found, because a substantial part of the alleged wrongdoing giving rise to the plaintiffs’ claims occurred in New York, where Daily Harvest marketed, sold, and distributed its lentil product. Thus, the court determined that the plaintiffs might have brought their cause of action in the SDNY.

Turning to whether there is a valid forum selection clause, the court noted that the plaintiffs were required to agree to Daily Harvest’s online terms and conditions in order to place their order on the company’s website. The company’s terms of use include a forum selection clause explicitly stating that New York law applies. Citing case law, the court therefore found that Daily Harvest’s terms of use are presumptively valid and enforceable unless the plaintiffs establish fraud, public policy disfavoring enforcement, or a serious inconvenience to the plaintiffs resulting from the enforcement. The court found that the forum selection clause was not unreasonable in that it would require the plaintiffs to travel less than 15 extra miles, and they would not be deprived of their day in court if the action were transferred to the SDNY. Moreover, the court rejected the plaintiffs’ argument that the terms of use were unenforceable because they had allegedly failed to read them. Daily Harvest made the terms accessible via hyperlink, and this is not a reason to find a forum selection clause unenforceable, the court said. Consequently, the court held that the plaintiffs had not overcome their forum selection clause’s presumption of validity.

Last, the court considered the interests of justice and convenience regarding the proposed transfer to the SDNY. Finding that public interest favors the transfer, the court reasoned that the SDNY may be able to enforce a judgment with greater ease in that Daily Harvest is headquartered and has its principal place of business in New York. Practical considerations also weigh in favor of a transfer, the court said, given that at least 52 analogous pending actions are before the SDNY. Local interest also supports the transfer because New York is where the lentil product was developed and that is where important decisions regarding the product’s marketing, sale, and distribution were made, the court noted. That the plaintiffs experienced the effects of the defendants’ alleged wrongdoing in New Jersey, the court said, does not make their case a local dispute.

As such, the court ordered that the case be transferred to the SDNY, holding that it had not decided the issue of compelled arbitration, which was for the transferee forum to decide.

Citation: D’Ambola v. Daily Harvest, Inc., 2023 WL 3720888 (D.N.J. May 30, 2023).

Comment: In Fay v. OTB Acquisition, LLC, No. MER-L-002650-18 (N.J. Super. Ct. Mercer Cnty. Mar. 17, 2023), Shawn Fay was dining at On the Border Mexican Grill & Cantina in Princeton, N.J. He felt a sharp pain in his mouth when he began to consume his chili rellenos entrée. After spitting out the food, he found a hidden toothpick in it. The next day, he consulted a dentist and was diagnosed as having a perforated gum and tooth damage, which necessitated placement of a crown and implant. He sued the restaurant’s operator, OTB Acquisition, LLC, alleging it had served defective food and exposed him to a foreign object in the food. The jury awarded approximately $24,800 for the plaintiff’s past dental bills. AAJ member Evan J. Lide and Douglas H. Hurd, both of Princeton, represented the plaintiff.