Let's say you bought a new Ford automobile. After filling the tank the engine was damaged from a very bad batch of gasoline.
Would you expect Ford to replace the engine and then pursue the gas station, or distributor or supplier of the gasoline, to pay for the repairs?
I just don't think that's Smith & Wesson's responsibility. And I have to agree with others that S&W has a sterling reputation when it comes to customer service.
One thought, though. Can you ask Smith & Wesson for a copy of their analysis of your firearm? That may provide you with some "ammunition" is dealing with Federal. And it will help you understand how they reached their conclusions.
But if this is truly 15 year old ammo I suspect Federal's responsibility has long since passed. I'm not sure what the warranty is on ammo, or even if there is one, but ammo this old would reasonably seem to be long out of warranty. Rock meet hard place.
FYI this experience really bites. I know how much I enjoy my firearms and to have that happen is really a rotten thing. Sorry it happened.