Fresh Express Inc. v. Beazley Syndicate 2623/623 at Lloyd's

In September 2006, the United States Food and Drug Administration (the FDA) issued an “alert” advising that “consumers not eat bagged fresh spinach” due to “an outbreak of E. coli 0157:H7” that was possibly linked to consumption of bagged fresh spinach. The FDA advisory disclosed that there had already been reports of 50 “cases of illness” and “one death.” The FDA withdrew its advisory two weeks later after the source of the outbreak had been identified.

Plaintiff Fresh Express Incorporated (Fresh Express), which markets bagged fresh spinach and other leafy greens, was not the source of the E. coli outbreak, but it suffered a significant loss of business in the wake of the FDA advisory. Fresh Express sought to recover these losses under its “TotalRecall+” insurance policy issued by defendants Beazley Syndicate 2623/623 at Lloyd’s and QBE Insurance (Europe) Limited (collectively Beazley). Beazley denied Fresh Express’s claim, and Fresh Express filed a breach of contract action against Beazley. Fresh Express prevailed at trial and recovered the $12 million policy limit.

Beazley appeals and claims that, because the trial court erroneously defined the “Insured Event” under…