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The Colorado Supreme Court has upheld a municipal ordinance charging a $0.20 "waste reduction fee" for paper grocery bags and prohibiting disposable plastic bags, ruling the charge is part of a regulatory program of waste management and not a tax. Colo. Union of Taxpayers Found. v. City of Aspen, No. 16SC377 (Colo., entered May 21, 2018). After two members of the plaintiff advocacy group paid the bag charge in Aspen, the group sued the city and members of the city council alleging the charge was a tax subject to voter approval under the state's Taxpayer Bill of Rights. The trial court and the Colorado Court of Appeals ruled in the city’s favor. The court noted that grocers are permitted to retain a portion of the $0.20 charge to provide information to customers, train staff and improve collection and administration, while the remainder is submitted to the city on a form separate…

A consumer has filed a putative class action alleging Trader Joe's Co. falsely advertises its Sour Gummies by failing to disclose that the product contains d-l-malic acid. Wong v. Trader Joe's Co., No. 18-0869 (S.D. Cal., removed to federal court May 4, 2018). The plaintiff asserts that under California law, "any artificial flavor must be identified on both the front-of-package label and the product ingredient list. Defendants fail to do either." According to the complaint, "Trader Joe's maintains a pervasive national marketing campaign guaranteeing that all its house-brand products are only naturally flavored," including the statement "when you see our name on a label, you can be assured that the product contains: YES quality ingredients NO artificial flavors." Alleging unfair competition, false advertising and negligent misrepresentation, the plaintiff seeks class certification, damages, corrective advertising and attorney's fees. In addition, Trader Joe's has filed a notice of opposition to an application for the…

A consumer has filed a putative class action alleging Trader Joe’s Co.'s two-ingredient fruit bars are deceptively labeled with collective terms such as “apples” on the ingredient list instead of the specific name for an apple-based ingredient. Jamison v. Trader Joe’s Co., No. 18-2216 (E.D.N.Y., filed April 14, 2018). The plaintiff asserts that the use of a collective term misleads consumers into believing that the products are made from whole, unprocessed fruit, which would require “an additional binding ingredient such as a gel, pectin, juice concentrate or syrup.” A solid bar made without a binding agent, the complaint asserts, would require fruit powder and water, which are not listed on the product labels. Alleging negligent misrepresentation, breach of warranties, fraud and unjust enrichment, the plaintiff seeks class certification, injunctive relief, damages and attorney’s fees.

Litigation, increasing online grocery shopping and consumer concerns regarding product ingredients were hot topics at the 2018 Grocery Manufacturers Association (GMA) conference. Founded in 1908, GMA comprises more than 250 food, beverage and consumer product companies—collectively, consumer packaged goods (CPG) companies—and works as an advocate for its members and the industry. Many of the event’s panels focused on recent developments affecting the industry and expected trends going forward, including panels on Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop. 65) issues, the litigation landscape for CPG companies and pet food litigation issues. Shook Partners Jim Muehlberger and Naoki Kaneko presented with Courtney Ozer, Assistant General Counsel – Litigation for Unilever United States, on trends in class action litigation, noting a continued focus on natural claims—including more claims filed regarding consumer products like lotions, soaps and home care products—and trends stemming from an increased consumer focus on sustainability and…

Two consumers have filed a lawsuit alleging that they contracted Salmonella from deli chicken salad they purchased at Fareway Stores Inc. Porter v. Fareway Stores Inc., No. 18-0050 (S.D. Iowa, filed February 20, 2018). The plaintiffs, a married couple, allege that the contaminated chicken salad sent them to an emergency room—with the wife requiring further hospitalization—and that they both tested positive for Salmonella. The complaint also states that Fareway chicken salad has been linked to “at least 28 confirmed and 66 probable cases of Salmonella” in Iowa by the state’s Department of Health, with reports of possible related illnesses in Nebraska and Minnesota. The U.S. Department of Agriculture’s Food Safety and Inspection Service issued a public health alert about the Iowa outbreak in February 2018. Alleging strict product liability, negligence and breach of warranty, the plaintiffs seek damages and attorney’s fees.

The Trademark Trial and Appeal Board has denied Hy-Vee Inc.'s application to register the “Peaceful Piranha” mark for a line of snack foods, deeming the mark to be too similar to the mark for an existing line of “Piraña” snack foods. In re Hy-Vee, Inc., No., 87120774 (T.T.A.B., entered February 6, 2018). Finding “piranha” to be the dominant portion of the mark, the board found the term likely to confuse consumers unfamiliar with Spanish because they may read the pronunciation of the terms as identical. Further, consumers who understand Spanish may be confused because they would understand the cognate terms as a reference to the fish. Although Hy-Vee argued that “peaceful” and “piranha” are counterintuitive, creating an entirely different connotation with no association to “vicious” piranha fish, the board found the term “peaceful” was not likely to distinguish the marks because “it would merely indicate an atypical piranha, possibly for use…

The U.S. Court of Appeals for the Ninth Circuit has vacated and remanded a lower court’s grant of summary judgment in favor of Whole Foods Market Inc. in a trademark infringement case related to the company’s “Eat Right America” promotion. Eat Right Foods Ltd. v. Whole Foods Mkt., Inc., No. 15-35524 (9th Cir., entered January 29, 2018). Plaintiff Eat Right Foods (ERF), a New Zealand-based maker of organic foods, registered U.S. marks for “EatRight” and “Eat Right” in 2001 and 2003; ERF has also sold a line of gluten-free cookies to Whole Foods. In 2009, Whole Foods contracted with Nutritional Excellence, LLC, which previously did business as “Eat Right America,” to use a food-scoring system to advertise the nutritional value of products to shoppers. In early 2010, an ERF executive discovered Whole Foods using an “Eat Right America” promotion and contacted Whole Foods to suggest the grocery buy its brand…

Amazon has opened Amazon Go, a grocery store using artificial intelligence (AI), prompting speculation about its potential effects on the labor market, worries about consumer privacy and skepticism about how well it will work. Shoppers scan a smartphone app at a turnstile as they enter, then items are added to a virtual shopping cart as shoppers pull them off the shelf. If the shopper puts the item back on a shelf, the item is deleted from the cart. When shoppers leave the store, their credit cards are charged for the total. The store reportedly uses machine learning algorithms and computer-vision image processing along with weight sensors, camera-friendly bar codes and infrared sensors to track products as they leave shelves and the store. The store's technology hit speed bumps before its unveiling. Amazon Go’s opening was delayed by a year as the company fine-tuned and tested the technology; among early bugs was…

A consumer has filed a putative class action alleging Whole Foods Market Group Inc. charged him $1.29 for snack bars despite advertising them as $1.00 each. Alston v. Whole Foods Mkt. Grp. Inc., No. 17-2580 (D.D.C., removed to federal court December 4, 2017). The plaintiff alleges that he purchased snack bars over several visits to a Whole Foods store in Washington, D.C., but did not notice until later that he had been overcharged. The complaint asserts that Whole Foods “calculated that most consumers would not notice the 29 cents overcharge, would not bother to say anything after they noticed the overcharge or that they would simply refund the overcharge if a customer requested a refund.” Claiming violations of the District of Columbia Consumer Protection Procedures Act and fraud, the plaintiff seeks class certification, damages, a $25,000 incentive award and attorney’s fees.

Two grocery chains face similar lawsuits filed by a New York plaintiff who argues the stores’ websites are inaccessible to the blind or visually impaired, allegedly violating the Americans with Disabilities Act (ADA). Jorge v. Key Food Mkt., Inc., No. 17-9306 (S.D.N.Y., filed November 28, 2017); Jorge v. Fairway Grp. Holdings Corp., No. 17-9309 (S.D.N.Y., filed November 28, 2017). The complaints assert that Key Food and Fairway Market stores have failed to make their websites accessible to screen-reading software, denying the plaintiff equal access to their facilities, goods and services. Alleging violations of the ADA as well as New York state and municipal human rights laws, the plaintiff seeks class certification, injunctive relief, damages and attorney’s fees.

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