Insurers look to cut ties with company accused of tainting whey with animal urine

By Hal Conick contact

- Last updated on GMT

A Wisconsin company allegedly tainted its whey product with animal urine to improve the protein content.
A Wisconsin company allegedly tainted its whey product with animal urine to improve the protein content.
Four insurance companies are seeking to cut ties with Wisconsin-based Packerland Whey Products Inc, after the company and its executives were accused of tainting its products with animal urine.

The original lawsuit, filed by Minnesota-based Land O’Lakes in November 2014, alleged that Packerland spiked its whey products with animal urine to help boost the protein content of the product.

Land O’Lakes alleged in court filings that this was done at the behest of Packerland’s executives and owners, including Daniel Ratajczak Jr, Angela Ratajczak and Scott Ratajczak, who no longer work or have ownership stakes in the company.

What the insurance companies filed

Each insurance company, which included First Mercury Insurance Co, Indian Harbor Insurance Co, Regent Insurance Co and Rural Mutual Insurance Co, filed motions in Wisconsin court that they should not have to cover, defend or indemnify owners and executives of Packerland.

The motions by each company said the conspiracy and deceit involved in these claims should not qualify the company for property damage protection.

In similar motions field by the insurance companies, it is claimed that the actions of this case would not be covered since Land O’Lakes did not make a claim for property damage or a covered “occurrence”​ in the court filings.

The insurance companies also noted in the court filings that there is a “pollution exclusion”​ under their coverage plans.

This means that if there is property damage or injury, it would not be covered if the incidence would not have happened without a pollutant.

An allegedly tainted product

Since the lawsuit was filed by Land O’Lakes in 2014, there have been motions and responses back and forth between the sides.

The company claims Packerland executives tried to cover up the use of the tainted product.

"From 2006 through 2012, Land O'Lakes paid over $15 million for the product without knowing that the product was non-conforming and adulterated with urea,"​ the initial lawsuit from Land O’Lakes said. “Because the product was adulterated with urea, it was not merchantable or fit for use by Land O'Lakes and had no value.”

Since the original filing, the former owners and executives of Packerland, have filed motions back, including a motion for summary judgement in September 2015 claiming Land O’Lakes suffered no economic setback from this issue.

This motion stated that the whey was still used by Land O’Lakes to make animal feed even when it believed there was a problem. The defendants went as far to say that they believe Land O’Lakes is simply looking for a multi-million dollar windfall from this case.

The Ratajczaks and Packerland have severed ties, as their interests in Packerland Whey were sold to Packerland Whey Intermediary Holding Group in late 2013, according to court documents.

Members of the family were let go from the company a short time later, accused of “wrongdoing in connection with the business activates of Packerland Whey,”​ court documents say.

Attorneys for both the Ratajczak family and Land O’Lakes did not respond to a request for comment from DairyReporter.

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