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One Salmonella Outbreak, One ‘Occurrence’: The Sixth Circuit Hands Smucker a Big Win

The Sixth Circuit occurrence ruling in J.M. Smucker Co. v. ACE American Insurance Co. answers a deceptively simple question with an outsized price tag: when does a single manufacturing problem count as one insurance claim rather than hundreds? On July 1, 2026, the court sided with Smucker — and the difference was worth more than $112 million.

Sixth Circuit occurrence ruling

The Facts

Smucker bought commercial general liability policies from ACE for 2021 and 2022. Each policy required Smucker to pay a “retained limit” of $250,000 per “occurrence” before ACE’s coverage obligations kicked in. In 2022, Smucker recalled peanut butter made at its Lexington, Kentucky facility over potential salmonella contamination, and thousands of consumers filed claims alleging bodily injury and property damage.

The Dispute

The question was deceptively simple: how many “occurrences” were there? Smucker said one — the salmonella contamination. ACE said each consumer’s exposure was a separate occurrence, which its policy’s “Lot Endorsement” then bundled into 225 production “lots”. Under ACE’s reading, Smucker would owe a $250,000 retained limit for each lot — up to roughly $112.5 million across both policies before ACE paid a dime.

The Holding

The district court sided with Smucker on summary judgment, and the Sixth Circuit affirmed.

Here are the key takeaways from the court’s reasoning:

  • Look at the insured’s conduct, not the claimants’. The policies defined “occurrence” as an “accident,” and under Ohio law an accident is viewed from the insured’s perspective. The only “accident” was Smucker’s unintentional production of contaminated peanut butter — not each consumer’s decision to eat it.
  • Ohio’s “cause” test controls. The number of occurrences turns on the cause of the injuries, not the number of individual claims. A single, continuous, uninterrupted cause produces a single occurrence. ACE’s theory improperly equated the number of occurrences with the number of claims.
  • The Lot Endorsement was ambiguous — and ambiguity favors the insured. The court found the endorsement susceptible to more than one reasonable reading and unclear on whether it even redefined “occurrence”. Because insurers draft these contracts, ambiguity is construed against them. A “remarkably similar” salmonella-peanut-butter case from the Delaware Supreme Court, ConAgra Foods v. Lexington Insurance, reached the same conclusion.
  • ACE’s asbestos cases didn’t fit. The court distinguished ACE’s authorities as “coverage” disputes tied to deliberate business decisions, not “retained limits” cases involving an accidental event.

Why it Matters

For companies managing product-recall and contamination exposure, this decision is a meaningful reminder that how “occurrence” is defined — and interpreted — can swing self-insured retentions by tens of millions of dollars. The opinion reinforces two enduring principles of insurance law: the cause of a loss, not the count of claimants, generally defines an occurrence, and ambiguous policy language drafted by the insurer will be read in the policyholder’s favor.

For policyholders and insurers alike, the lesson is the same: precision in policy drafting is not a formality — it is the whole ballgame.

Get More Information

To discuss your specific insurance coverage issue, please contact Jacob M. Mihm. You can also learn more about him by visiting his LinkedIn profile.

 Disclaimer: This article is provided for informational purposes only and does not constitute legal advice. Polales Horton & Leonardi LLP is experienced in handling complex insurance coverage matters on behalf of policyholders across the United States. 

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