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The Second Circuit has upheld the $50­ million settlement of an alleged milk price-­fixing conspiracy, holding that “[b]y their nature, settlements are compromises that do not provide either side with all that they might have hoped to obtain in litigation.” Haar v. Allen, No. 16­1944 (2d Cir., order entered April 18, 2017). The class action asserted that Dairy Farmers of America, Inc., Dairy Marketing Services and Dean Foods Co. conspired to suppress competition and fix prices of raw milk in the Northeast. The appellants argued that the settlement was the result of collusion between class counsel and opposing counsel and that members of the class were coerced into participation. The Second Circuit disagreed, finding the appellants confused “counsel’s willingness to negotiate in good faith toward a settlement with collusion,” noting that the district court found no evidence of impropriety after a lengthy hearing into claims of misconduct. The court also…

President Donald Trump has indicated that he will attempt to renegotiate the North American Free Trade Agreement after making several negative comments about Canada's dairy pricing. The dispute centers on ultra-filtered milk, a product used in the production of cheese that U.S. dairy farmers previously sold to Canadian companies. After Canadian dairy farmers in Ontario dropped their prices low enough to compete with U.S. farmers, many Canadian cheesemakers canceled contracts with their U.S. suppliers to pursue the Ontario farmers' supply. Trump tweeted, “We will not stand for this,” and later announced that he will attempt to renegotiate the trade agreement with Canada. See USA Today, April 25, 2017; Washington Post, April 27, 2017.   Issue 632

The U.S. Department of Justice (DOJ) has obtained a consent decree against Valley Milk Products LLC prohibiting the sale of more than four million pounds of milk powder products and preventing the company from manufacturing the products in the future. U.S. v. All 50 pound high heat nonfat dry milk powder (Grade A), No. 16-­0076, (W.D. Va., order entered March 17, 2017). DOJ seized dry milk and dry buttermilk products at the company’s Strasburg, Virginia, facility in November 2016 after FDA inspections found unsanitary conditions and confirmed samples of Salmonella and Listeria. According to the U.S. Food and Drug Administration, the Salmonella strains were “nearly identical” to strains found at Strasburg in 2010, 2011 and 2013, indicating “the existence of persistent/resident strain and harborage” of the bacteria at the facility. DOJ also alleged the products were “contaminated with filth” after inspectors found dark brown droplets forming on metal surfaces of…

The U.S. Court of Appeals for the Eleventh Circuit has overturned a Florida court's summary judgment against Ocheesee Creamery, finding that the company can sell its milk product as skim milk despite its refusal to follow a Florida law requiring skim milk to be fortified with vitamin A. Ocheesee Creamery LLC v. Putnam, No. 16-­12049 (11th Cir., order entered March 20, 2017). Additional details on the lower court's rulings appear in Issues 555 and 599 of this Update. Florida initially told Ocheesee that it could sell its skim milk as "imitation skim milk," but Ocheesee objected to the description of its natural, unfortified milk as "imitation." Ocheesee rejected other suggested labels as well, including "Non­-Grade 'A' Milk Product, Natural Milk Vitamins Removed," then filed a lawsuit asserting a First Amendment right to describe its product as "skim milk." The lower court granted summary judgment in favor of Florida, finding that…

The widow of a Vermont man who died after eating raw­milk cheese allegedly contaminated with Listeria monocytogenes has filed suit against the manufacturer of the cheese, Vulto Creamery. Friedman v. Vulto Creamery LLC, No. 17­-0283 (N.D.N.Y., filed March 10, 2017). Vulto issued a recall of its Ouleout, Miranda, Heinennellie and Willowemoc raw-­milk cheeses in March 2017 after the U.S. Food and Drug Administration identified Ouleout as the source of a Listeria outbreak that began in September 2016. The complaint asserts that multiple people became ill or died after eating Vulto’s Ouleout. For alleged strict liability, breach of warranty, negligence and negligence per se, the plaintiff is seeking damages and attorney’s fees.   Issue 627

Shook Partner Frank Cruz-Alvarez and Associate Ravika Rameshwar have authored an article for the Washington Legal Foundation’s Legal Pulse discussing a New York federal court’s dismissal of a class action centered on infant formula marketed as organic. The complaint alleged that Abbott Laboratories, Inc. represented its Similac® Advance® as organic despite containing ingredients prohibited in organic products by the U.S. Department of Agriculture (USDA). Cruz-Alvarez and Rameshwar provide an overview of the case and detail the relevant provisions of the Organic Foods Production Act of 1990, which establishes that a product can be labeled “organic” if a USDA-accredited agency certifies it as such. The court compared the infant formula allegations to a U.S. Court of Appeals for the Eighth Circuit case challenging the organic label of milk and reached an analogous conclusion: the state laws supporting the complaint challenged the federal law’s certification determination and were thus preempted. Accordingly, the…

The Good Food Institute (GFI) has filed a lawsuit seeking to compel the U.S. Food and Drug Administration (FDA) to disclose records “related to FDA’s regulatory treatment of the common and usual name ‘soy milk’ or ‘soymilk’ to refer to a liquid food derived from the cooking and processing of whole soybeans with water.” Good Food Inst. v. FDA, No. 16-1052 (D.D.C., filed June 6, 2016). The organization asserts that FDA has been inconsistent in its opinion of “soy milk,” citing two warning letters to soy-milk producers requesting them to use “soy beverage” or “soy drink” instead. “Notwithstanding FDA’s varying positions on the matter, many major brands of soy milk continue to label their products as ‘soy milk’ or ‘soymilk.’ This has resulted in consumer confusion and an uneven competitive landscape,” the complaint argues. GFI submitted Freedom of Information Act requests to FDA in April 2016 and asserts that it…

The National Milk Producers Federation, International Dairy Foods Association and U.S. Dairy Export Council have authored a May 9, 2016, letter to President Barack Obama (D), asking the White House to reject proposed World Health Organization (WHO) guidance that “would discourage consumption of nutritious dairy products by young children.” Slated for presentation at the 69th World Health Assembly on May 23-28, 2016, the draft guidelines seek to end the promotion of breast-milk substitutes, including all milk and fortified soy milk, intended for consumption by children younger than age 3. Among other things, the proposal not only places restrictions on the marketing of foods for infants and young children, but also stipulates that “the messages used to promote foods for infants and young children should support optimal feeding and inappropriate messages should not be included.” The guidelines specifically preclude the indirect crosspromotion of breast-milk substitutes with other food products, as well…

A Florida federal court has rejected a Florida dairy farmer’s challenge to the state’s standard of identity for skim milk, which dictates that its nutrient content must be the same as that of unfortified whole milk, requiring the addition of vitamin A after processing. Ocheesee Creamery v. Putnam, No. 14-0621 (N.D. Fla., Tallahassee Div., order entered March 30, 2016). The farmer’s company, Ocheesee Creamery, skimmed the cream from milk and sold the leftover product as “skim milk” without fortifying it with vitamin A. Florida inspectors told the dairy farmer she must adjust the nutrient level or label the milk “imitation,” and she filed a lawsuit challenging the rule. Additional details on the case appear in Issue 555 of this Update. The court found that the state standard of identity and its federal counterpart in the federal Food, Drug, and Cosmetic Act “easily pass muster” under the First Amendment test for…

The U.S. Court of Appeals for the Second Circuit has affirmed a lower court’s dismissal of a lawsuit against Kellogg Co. alleging the company owed a man compensation after it implemented an idea for a portable breakfast the man had submitted through the company’s online portal for innovative ideas. Wilson v. Kellogg Co., No. 15-2237 (2nd Cir., order entered January 13, 2016). The man submitted an idea for a beverage flavored like cereal milk, but Kellogg apparently told him it was not interested in pursuing the idea. The company later obtained a trademark for “Kellogg’s Breakfast to Go” and began selling a similar product under the name in 2013. The man sought compensation for the idea, but Kellogg argued that the terms and conditions the man had agreed to upon submission limited his ability to recover any money for a successful submission. The Second Circuit agreed, finding that the terms…

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