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Storage-Facility Fire Case Headed to Supremes

WASHINGTON (CN) - The Supreme Court agreed Thursday to review an insurance dispute between Americold Logistics and several food distributors including ConAgra Foods Inc.

At issue is a matter of diversity jurisdiction in a case filed by ConAgra, Swift-Eckrich Inc., Kraft Foodservice Inc., Safeway Inc. and Phillips Connections Inc. to recover damages from a 1991 fire in an Americold underground storage facility. The lawsuit resulted in a $58.7 million settlement, which included an assignment to the plaintiffs of Americold's right to seek recovery from excess insurance providers, including Northwestern Pacific Indemnity Co.

The plaintiffs initiated garnishment proceedings against Northwestern that lasted 18 years. In June 2012, a federal court vacated judgments against Northwestern, causing the plaintiffs to sue Americold's successors in interest - Americold Realty Trust and Americold Logistics LLC.

But the plaintiffs named the trust rather than the trustees as defendants and Americold Logistics removed the case to Kansas federal court without objection on the basis of diversity jurisdiction.

The federal court granted Americold's motion for summary judgment in 2013.

The plaintiffs appealed and the Tenth Circuit found that diversity jurisdiction wasn't established. The appeals court sent the lawsuit back to Kansas federal court with instructions to remand it to Kansas state court.

In appealing to the Supreme Court, Americold Logistics argued that the Tenth Circuit went against its own precedent by ruling that a trust's citizenship can also be based on the citizenship of its beneficiaries. Americold argued that trusts play a major role in American commerce and that the public and lower courts would benefit from the Supreme Court settling the issue, which regularly occurs in litigation.

Per its custom, the Supreme Court did not issue any comment in taking up Americold's case.

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