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ConAgra Off Hook for $100M in Explosion Case

CHICAGO (CN) - ConAgra Foods does not have to pay nearly $100 million in punitive damages stemming from the explosion at an Illinois grain bin that severely burned three workers, the 7th Circuit said.

The explosion of the grain bin, part of a flour mill in Chester, Ill., occurred on April 27, 2010. One of the injured workers, John Jentz, was burned on over 75 percent of his body, and can only leave his home on mild days because his body can no longer effectively regulate its temperature, the Huffington Post reported.

"Explosions are a constant risk in grain storage, which produces not only a lot of combustible dust and carbon monoxide (which can oxidize explosively to carbon dioxide) but also, through the decay of a bin's contents, heat that can set off a blast," the judgment says.

ConAgra discovered a burning smell in the bin a month before the accident, and hired West Side Salvage, an expert in "hot bins," to save as much of the wheat as possible.

But removing grain from the top of the bin allowed more oxygen to reach wheat composting at the bottom.

Seven days after West Side began work, it detected smoke coming from the bin, and called the fire department. While waiting for the firefighters to arrive, West Side foreman Mel Flitsch sent three workers in to remove tools that might get in the firefighters' way. Then the bin exploded.

A jury awarded the employees almost $180 million after a 17-day trial against ConAgra and West Side - $80 million in compensatory damages and $100 million in punitive damages, $99 million of which were assigned to ConAgra.

However, the 7th Circuit ruled Tuesday that ConAgra cannot be held liable for failing to provide West Side with a safe place to work. Further, he found that West Side also cannot be held liable for the explosion, setting aside the $1 million in punitive damages is was ordered to pay.

"ConAgra responds that of course bin C15 was unsafe - that's why West Side had been hired!" Judge Frank Easterbrook said, writing for the three-judge panel. (Emphasis in original.)

"Although plaintiffs and West Side weakly contend that it did not know that C15 was a hot bin, the evidence overwhelmingly establishes that it did - indeed, it knew that this is why it had been hired - and no reasonable jury could have concluded otherwise. (The jury was not asked to return a special verdict on that question, which it did not need to resolve under the instructions it received)," the judge continued. (Parentheses in original.)

West Side did not deny its liability, but claimed that the jury's punitive damages award is excessive.

The court agreed: "No one contends that Flitsch sent the workers into the tunnel wanting harm to come their way; they were his coworkers if not his friends," the 10-page opinion said. (Emphasis in original.)

Easterbrook also noted none of the parties presented any evidence that Flitsch should have known an explosion was imminent or even likely.

"True, Flitsch asked ConAgra to call the fire department, which evinced consciousness of risk, but his order to retrieve the tools evinced a belief that the short-run risk was small (and Flitsch so testified). For all this record shows, Flitsch may have been right. The probability of an explosion before the workers could reach safety may have been only 1 in 10,000. It could have been more, or it could have been less. We just don't know," Easterbrook said. (Parentheses in original.)

"The verdict appears to be a consequence of hindsight bias - the human tendency to believe that whatever happened was bound to happen, and that everyone must have known it. If Flitsch believed that an explosion was imminent, then he is a monster; but of that there is no evidence. Hindsight bias is not enough to support a verdict."

The court remanded the remaining compensatory damages award to the lower court to re-determine how the award will be paid.

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