Pallets at the Center of $5.3 Million Lawsuit

Millions worth of coffee lost due to mold problem leads to lawsuit from Starbucks

Pallets Unlimited LLC, the company that supplied the wood pallets involved in a $5.3 million lawsuit, has asked a California federal court to be excused in the case.  The pallet company was a subcontractor to Amcor Packaging Distribution in the supply of pallets to Starbucks in 2011. Several million dollars of coffee beans were destroyed at a Nevada plant, and moldy wood pallets were implicated in the loss. And while the coffee giant had contracted with Amcor for kiln-dried wood pallets, Pallets Unlimited stated that it had never agreed to supply such a product.

In its lawsuit, Starbucks claimed that it had specified wood pallets with a moisture content of less than 19 percent. According to the suit, an Amcor representative had told a Pallets Unlimited employee that it would email the Starbucks specification sheet. It was claimed that the pallet company understood the specifications but failed to meet them.

For its part, the pallet company said that the specification sheet came in a separate email that might not have been seen.  It said it quoted for green pallets, and that the purchase order did not specify kiln-dried timber.  Furthermore, a previous order in 2009 did not ask for kiln-dried lumber, and as such, it had no reason to suspect that the requirements had changed. Pallets Unlimited argued that it had met its contractual obligations.

Back in June, a California federal judge ruled that Starbucks Corp. never forfeited its rights to sue in spite of a short disclaimer on the 26 Amcor invoices sent to Starbucks.  The disclaimer dismissed any liability for defective pallets beyond replacement. The  California court determined that payment of the invoices did not constitute an agreement to those terms because it had agreed to a specification sheet to supply pallets with a moisture content of less than 19 percent.

Source: Law360