A New York federal court has dismissed a putative class action alleging Whole Foods Market Group overcharged its customers for some prepackaged foods, finding that the plaintiffs failed to specify any particular transactions in which the grocer overcharged them. In re Whole Foods Mkt. Grp., Inc. Overcharging Litig., No. 15-5838 (S.D.N.Y., order entered March 1, 2016). The complaint was filed after the New York City Department of Consumer Affairs (DCA) announced the results of its investigation into “systemic overcharging” at Whole Foods stores across the city. The plaintiffs alleged that they “regularly purchased”—“one or two times per month”—pre-packaged products from Whole Foods that the DCA identified in its press release, including cheese, cupcakes and chicken fingers. The court took issue with the plaintiffs’ reliance on the DCA press release, finding that its “statements fall very far short of reporting an investigative finding of ubiquitous, systematic over-weighting at Whole Foods’ New…
Category Archives 2nd Circuit
Cumberland Packing Corp. and a group of consumers have reached a settlement agreement in a lawsuit alleging that Cumberland Packing Corp. misrepresents its Stevia in the Raw® sweetener products as all natural despite containing genetically modified organisms. Frohberg v. Cumberland Packing Corp., No. 14-0748 (E.D.N.Y., motion filed February 22, 2016). Under the agreement, Cumberland will pay up to $1,547,000 to reimburse class members with $2.00—or 40 percent of the average purchase price—per purchase of Stevia in the Raw®, to a maximum of $16 per person. In addition, Cumberland will remove “100% Natural” or “All Natural” label claims. Issue 595
A New York consumer has filed a putative class action against Victoria Fine Foods alleging the company falsely advertises its vodka sauce as “all natural” and free of preservatives despite containing citric acid. Shmidt v. Victoria Fine Foods, No. 16-0230 (E.D.N.Y., filed January 15, 2016). The complaint asserts that Victoria “sought to capitalize on consumers’ preference for natural products and the association between such products and a wholesome way of life.” The plaintiff argues that the primary jurisdiction doctrine does not apply because the U.S. Food and Drug Administration (FDA) “has repeatedly declined to adopt formal rule-making that would define the word ‘natural,” although she asserts that FDA “has loosely defined the term ‘natural’ as a product that ‘does not contain added color, artificial flavors, or synthetic substances.’” The complaint also cites the U.S. Department of Agriculture’s Food Standards and Labeling Policy Book, “which states that the term ‘natural’ may…
Chobani has filed a lawsuit seeking a declaratory judgment that its advertisements claiming competitor Dannon’s yogurt contains chlorine are not false or misleading, prompting Dannon to file a counterclaim seeking a preliminary injunction. Chobani v. The Dannon Co., Inc., No. 16-0030 (N.D.N.Y., complaint filed January 8, 2016, counterclaim filed January 11, 2016). Chobani’s complaint details its campaign, launched January 6, 2016, that asserts “Dannon’s Light & Fit Greek Yogurt contains sucralose, an artificial sweetener processed with added chlorine.” The company seeks a declaration that its claims are not false, misleading, disparaging or deceptive under the Lanham Act or New York state law. Dannon’s response argues that the ad campaign “has been misinforming consumers about the health and safety of Dannon’s products while exaggerating the relative health benefits of its own product.” The counterclaim defends sucralose and its use, arguing that it “is not ‘bad’ or harmful.” Further, “Chobani’s campaign falsely…
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…
A New York federal court has denied Fifth Generation, Inc.’s motion to dismiss a lawsuit arguing that its Tito’s Handmade Vodka® is falsely advertised as handmade because machines are used in the process of manufacturing the product. Singleton v. Fifth Generation, Inc., No. 15-0474 (N.D.N.Y., order entered January 12, 2016). The court rejected the company’s claim that its adherence to U.S. Alcohol and Tobacco Tax and Trade Bureau standards does not relieve it from liability for false advertising claims. Further, the court found that “Tito’s labels could plausibly mislead a reasonable consumer to believe that its vodka is made in a hands-on, small-batch process, when it is allegedly mass-produced in a highly-automated one.” Accordingly, the court allowed several claims to continue, but dismissed allegations of breach of express warranties and negligent misrepresentation. The decision echoes a November 2015 ruling from a California federal court, which also refused to find that the safe harbor provision excused Fifth Generation from liability. Hofmann v. Fifth…
A consumer has filed a proposed class action against Trader Joe’s Co. alleging the company sells 5-ounce cans of store-brand tuna filled with only 3 ounces of product. Magier v. Trader Joe’s Co., No. 16-0043 (S.D.N.Y., filed January 5, 2016). According to the complaint, “Independent testing by the U.S. National Oceanic and Atmospheric Administration (NOAA) determined that, over a sample of 24 cans, 5-ounce cans of Trader Joe’s Albacore Tuna in Water Salt Added contain an average of only 2.61 ounces of pressed cake tuna when measured precisely according to the methods specified by [the federal statute].” The complaint further alleges similar NOAA test results for six other Trader Joe’s tuna products, amounting to breach of warranties, unjust enrichment, negligent misrepresentation, fraud and violations of New York’s consumer-protection statute. The plaintiff seeks class certification, declaratory judgment, compensatory and punitive damages, an injunction, attorney’s fees and a jury trial. Issue…
The U.S. Court of Appeals for the Second Circuit has ruled that a Russian state-owned company can sue U.S. distributors of Stolichnaya vodka in a dispute over which entity inherited the brand after the Soviet Union collapsed—the Russian Federation or private companies successive to the company that sold the product before the dissolution. Fed. Treasury Enter. Sojuzplodoimport v. Spirits Intl. BV, No. 14-4721 (2nd Cir., order entered January 5, 2016). A lower court previously held that the Russian Federation’s Federal Treasury Enterprise Sojuzplodoimport (FTE) did not have standing to sue, but the appeals court disagreed. “The declaration of a United States court that the executive branch of the Russian government violated its own law by transferring its own rights to its own quasi-governmental entity (FTE) would be an affront to the government of a foreign sovereign,” the appeals court held. “Even an inquiry into whether Russian law permitted the Assignment…
The U.S. Court of Appeals for the Second Circuit had upheld the conviction of a man who sold $20 million worth of counterfeit wine by mixing lower-priced wines and pouring them into the bottles of more expensive wines. USA v. Kurniawan, No. 14-2928 (2nd Cir., order entered December 22, 2015). The man challenged the search of his home on Fourth Amendment grounds, arguing that the evidence police found should have been inadmissible. The appeals court disagreed, finding that although the warrantless protective sweep had been illegal, the police affidavit provided enough additional evidence beyond what was found during the protective sweep to support issuing the warrant. Accordingly, the court affirmed a lower court’s judgment that the man must serve 10 years in prison and pay $28 million in restitution along with $20 million in forfeiture. Issue 589
Pepperidge Farm, maker of Milano® cookies, has filed a trademark infringement lawsuit against Trader Joe’s Co. alleging the retailer’s Crispy Cookies emulate the shape and configuration of Milano® cookies. Pepperidge Farm, Inc. v. Trader Joe’s Co., No. 15-1774 (D. Conn., filed December 2, 2015). In addition to the similarity between the cookie products, Pepperidge Farm alleges that the packaging of Crispy Cookies is similar as well. Although Crispy Cookies packaging depicts the cookies in a fluted paper tray—as Milano® cookies are sold—Trader Joe’s actually packages the cookies in a plastic tray inside the external packaging. Pepperidge Farm cites Google search results for “‘Trader Joe’s,’ ‘cookie’ and ‘Milano’” as evidence that consumers have also noted the similarities between the two products. Pepperidge Farm seeks declarations of infringement, permanent injunctions, damages and attorney’s fees. Issue 586
