The Sixth Circuit Sides with Smucker on The Number of “Occurrences”
The Sixth Circuit affirmed summary judgment for the J.M. Smucker Company in its insurance dispute with Ace American Insurance Company relating to how many retained limits applied to thousands of claims arising from a 2022 peanut-butter salmonella recall. The J.M. Smucker Co. v. ACE American Ins. Co., No. 25-3799 (6th Cir. Jul. 1, 2026). Smucker’s commercial general liability policies required it to pay a $250,000 retained limit per “occurrence” before ACE’s obligations began. ACE argued that each claimant’s exposure to the contaminated peanut-butter was a separate occurrence and that a Lot Endorsement grouped those claims into 225 lot-based occurrences, potentially requiring Smucker to satisfy up to $112.5 million in retained limits across two policy years before coverage attached.
The Sixth Circuit rejected ACE’s interpretation because the policies defined an occurrence as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions,” and Ohio law applies the “cause” test to calculate the number of occurrences. From Smucker’s standpoint, the relevant accident was caused by its alleged unintentional production of potentially contaminated peanut butter, not each consumer’s later decision to eat it. The Sixth Circuit held that the alleged salmonella contamination was a single continuous cause of the claims and refused to treat each claimant’s exposure as a separate occurrence.
The Sixth Circuit also held that the Lot Endorsement did not clearly transform one occurrence into multiple lot-based occurrences. The endorsement was found to be ambiguous because it did not expressly replace the policy definition of “occurrence” and could reasonably be read either as aggregating multiple claims within a lot or as creating separate lot-based retained limits. Applying Ohio rules that construe ambiguous insurance provisions against the insurer, the Sixth Circuit concluded that only one occurrence applied and affirmed judgment for Smucker. The decision underscores the importance of the application of state law as state law varies on the critical rules of policy construction including the calculation of the number of occurrences.
