After granting a motion for summary judgment in favor of Kangadis Food Inc.’s (KFI’s) owners, a New York federal court has issued an order further explaining its decision to dismiss the owners from a false-labeling class action. Ebin v. Kangadis Family Mgmt. LLC, No. 14-1324 (S.D.N.Y., order entered December 1, 2014). Additional information about the initial dismissal appears in Issue 543 of this Update. The court held that the plaintiffs “totally failed” to properly argue that the court should pierce the corporate veil and hold the owners liable for KFI’s actions. To satisfy the second prong of the piercing-the-veil test, the plaintiffs had to show that the owners, “through their domination, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice” against the plaintiffs. The court found that rather than providing an argument satisfying the second prong, the plaintiffs merely provided a “wholly conclusory statement”…
Category Archives 2nd Circuit
A New York federal court has rejected Wolfgang’s Steakhouse and ZMF Restaurants LLC’s motion to dismiss a case alleging that the restaurant violated the Fair and Accurate Credit Transactions Act of 2003 (FACTA) by printing credit card expiration dates on receipts. Fullwood v. Wolfgang’s Steakhouse, Inc., No. 13-7174 (S.D.N.Y., order entered November 14, 2014). The court found that the plaintiff’s amended complaint insufficiently supported its allegation that Wolfgang’s knew of the ramifications of violating FACTA yet wilfully disregarded the law, but granted her leave to amend. The plaintiff brought her putative class action after receiving a receipt from Wolfgang’s that displayed her credit card’s expiration date. She did not, however, allege any actual damages from the disclosure. Under FACTA, actual damages can be awarded for both negligent and willful violations; only willful violations, however, can result in the statutory and punitive damages that the plaintiff seeks. Accordingly, the court devoted much of…
A federal court in New York has granted the motion for summary judgment filed by the owners of Kangadis Food Inc., a company that declared bankruptcy when faced with class claims that it falsely labeled its products as pure olive oil when they actually contain an industrially processed substance. Ebin v. Kangadis Family Mgmt. LLC, No. 14-1324 (U.S. Dist. Ct., S.D.N.Y., order entered October 24, 2014). Additional information about the litigation appears in Issue 539 of this Update. According to the court, the “plaintiffs have failed to adduce competent labeling evidence from which any reasonable juror could conclude that defendants used their alleged domination of Kangadis Food Inc. as a means to accomplish the fraud here alleged.” Counsel for the defendants reportedly surmised that the court agreed that the plaintiffs’ “derivative claims are nothing more than a desperate attempt to extract some value from the defendants, individuals and a separate entity with…
A New York federal court has approved a $910,000 settlement in a class action contending that Pret A Manger failed to pay employees for the time it took them to put on uniforms or time spent waiting for the changing room. Trinidad v. Pret A Manger (USA) Ltd., No. 12-6094 (S.D.N.Y., order entered September 19, 2014). Under the settlement agreement, Pret will pay $910,000 to the class to be distributed on a sliding scale, with $5 to class members employed for less than a week, and about $4.50 per week to class members who worked there longer. Class counsel sought 33 percent of the settlement fund for attorney’s fees, but the court found fault with some of counsel’s billing practices. It noted that approximately 70 percent of the billed hours were worked by a partner at the rate of $550 per hour, but “a close review of the tasks that [the…
A New York bankruptcy court and federal court have issued orders certifying classes in litigation against Kangadis Food, Inc. d/b/a The Gourmet Factory and related entities, alleging that the company falsely labeled its products as “100% Pure Olive Oil” when they actually contain the industrially processed substance “olive-pomace oil,” “olive-residue oil” or “Pomace.” In re Kangadis Food Inc., No. 14-72649 (U.S. Bankr. Ct., E.D.N.Y., order entered September 19, 2014); Ebin v. Kangadis Family Mgmt. LLC, No. 14-1324 (S.D.N.Y., order entered September 18, 2014). Additional information about the federal court proceeding appears in Issue 507 of this Update. While the federal court dismissed the direct claims against the company’s owners, it found that the claims could proceed against them “under the veil piercing and alter ego theories.” The court further rejected the defendants’ “ascertainability” challenge to class certification, noting that “whether or not an individual purchased during the class period a tin…
The Natural Resources Defense Council (NRDC) and other groups have requested that the Second Circuit Court of Appeals reconsider its decision that the U.S. Food and Drug Administration (FDA) is not required to begin proceedings to withdraw approval of certain antibiotics in livestock feed. NRDC Inc. v. FDA, No. 12-2106 (2d Cir., petition filed September 8, 2014). Additional details about the Second Circuit’s split ruling appear in Issue 531 of this Update. According to a news source, the petitioners contend that the panel majority overlooked FDA’s initial findings that the use of antibiotics in animal feed is unsafe and “writes the withdrawal provision out of the Food and Drug Act.” FDA considered the safety of penicillin and tetracyclines in animal feed in 1977, but never conducted adversarial hearings with industry as purportedly required under the law, opting instead to seek the voluntary withdrawal of animal feed with antibiotics from the market. See Law360,…
According to a news source, a 600-pound man, who worked as a Hometown Buffet restaurant manager, has filed a lawsuit under the Americans with Disabilities Act against OCB Restaurant Co. in a Connecticut federal court, alleging that he was fired and replaced with a worker who “is not morbidly obese and does not suffer from chronic knee pain.” Flanders v. OCB Restaurant Co., LLC, No. 14-1239 (D. Conn., filed August 27, 2014). See Courthouse News Service, August 28, 2014. Issue 536
A New York federal court has allowed Lanham Act claims for the Stolichnaya trademark to proceed in a long-running case between a Russian state-chartered company and several international beverage companies. Fed. Treasury Enter. Sojuzplodoimport v. SPI Spirits Ltd., No. 14-712 (U.S. Dist. Ct., S.D.N.Y., order entered August 25, 2014). Federal Treasury Enterprise Sojuzplodoimport (FTE), owned by the Russian Federation, alleges that it owns the Stolichnaya trademarks, but SPI Spirits purports to be the private successor to the state-owned company that owned the trademarks before the Soviet Union dissolved and several public entities became private companies. The Second Circuit previously held that FTE lacked standing because it was neither an assign nor legal representative under the Lanham Act. Since that ruling, the Russian Federation assigned its rights to the Stolichnaya trademark to FTE, and the New York federal court has found that the assignment cures FTE’s previous lack of standing issue.…
According to New York Southern District U.S. Attorney Preet Bharara, a man who allegedly operated a wine counterfeiting laboratory from his California residence between 2004 and 2012 has been sentenced to 10 years in prison. Rudy Kurniawan apparently became a prominent and prolific U.S. dealer of rare and expensive wine that was actually lower-priced wine blended to mimic the taste and character of far better wines. He allegedly purchased empty bottles of rare and expensive wines—some of them from New York City restaurants—poured his mixtures into them, sealed the bottles, and then attached counterfeit labels that he created. The fakes were then sold to wealthy wine collectors through auctions and by direct sales. According to a news source, Kurniawan was eventually caught through misspellings and other packaging errors, including early 20th century dates on some bottles that pre-dated their actual production. Kurniawan also allegedly fraudulently obtained a $3-million loan from a…
The Second Circuit has reversed a district court’s decision that ordered the U.S. Food and Drug Administration (FDA) to initiate hearings responding to a livestock antibiotics challenge from the Natural Resources Defense Council (NRDC) based on a 1977 agency finding that the use of growth antibiotics for healthy animals was unsafe. NRDC v. FDA, No. 12-2106 (2d Cir., order entered July 24, 2014). Two judges were “firmly persuaded that Congress has not required the FDA to hold hearings whenever FDA officials have scientific concerns about the safety of animal drug usage,” that FDA has discretion on proceedings to withdraw approval of animal drugs, and that the law requires “withdrawal of approval of animal drugs or particular uses of such drugs only when the FDA has made a final determination, after notice and hearing, that the drug could pose a threat to human health and safety.” In 1977, FDA planned to…
