Federal Court Dismisses Excess-Giblet Litigation
A federal court in Illinois has dismissed with prejudice the second amended complaint filed in putative class litigation alleging that a chicken processing company violated state consumer fraud and protection laws by selling its whole chickens with the extra giblets that it cannot sell with its cut-up chicken portions or as pet food. Nieto v. Perdue Farms, Inc., No. 08-07399 (N.D. Ill., filed March 17, 2010).
According to the complaint, the defendant placed more than one heart, liver, gizzard, or neck in the whole chickens the company sold, thereby increasing the total weight of a whole chicken and “effectively forcing consumers to subsidize [defendant’s] costs of disposing of the extra giblets.” The named plaintiff also alleged that the company concealed its policy of including the extra offal when communicating with customers “through advertising generally and at the point of sale.”
Finding that it had jurisdiction over the claims under the Class Action Fairness Act, the court analyzed the sufficiency of plaintiff’s complaint under the heightened pleading standard of Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), and Federal Rule of Civil Procedure 9, which requires that averments of fraud be stated with particularity. According to the court, the plaintiff alleged that the company “knew and fraudulently concealed and/or intentionally failed to disclose . . . that Perdue was passing off its excess giblet waste.” Yet, the plaintiff “alleges no facts supporting this claim, rather only stating that her experience—finding extra giblets in one chicken—and her attorney’s investigation . . . reveal the passing off of extra giblets on consumers is not an isolated event but a policy and/or procedure which is an accepted means of giblet disposal by Perdue.’” Because the plaintiff “failed to plead with specificity the who, what, where, when, and how of the alleged fraud,” the court found she failed to state a claim for fraud under state law. With her unjust enrichment claim and request for declaratory relief dependent on her insufficient claims of fraud, the court dismissed these claims as well.
The court dismissed the litigation with prejudice because the plaintiff had been given repeated opportunities to amend and had “failed to remedy the same deficiency.” The court stated, “to permit further amendments would be futile.”