According to a putative class action removed to Arkansas federal court, Whole Foods mislabels several of its 365 Everyday Value brand products as “organic” or “all natural” despite containing synthetic ingredients. Stafford v. Whole Foods Market Cal., No. 14-420 (E.D. Ark., removed July 22, 2014). Originally filed in Arkansas state court in June, the complaint accuses several products of mislabeling—for example, the plaintiff says, the 365 Everyday Value soft drink contains carbon dioxide, citric acid, tartaric acid, and caramel coloring despite its “all natural” label. Whole Foods argued to the state court that the potential class contains more than 100 people who seek over $5 million in damages, so the case was removed to federal court. Alleging that Whole Foods violated Arkansas labeling laws and breached warranties, the plaintiff seeks class certification, damages and interest. A similar case filed in New Jersey state court alleges that Breyers, a subsidiary of Unilever…
Category Archives 8th Circuit
As anticipated, Quality Egg LLC and its former owners, Austin “Jack” DeCoster and his son Peter, have entered guilty pleas to charges of introducing adulterated food into interstate commerce. Additional information about the plea agreement appears in Issue 524 of this Update. They admitted that the company’s shell eggs, shipped to buyers in states throughout the country, contained Salmonella in 2010. As part of the plea agreement, the company reportedly agreed to pay a $6.8 million fine. The DeCosters, who will remain free on bail pending sentencing, face a maximum sentence of up to one year in prison or five years’ probation. Sentencing has not yet been scheduled. See USA Today, June 3, 2014. Issue 525
Federal prosecutors have reportedly filed criminal charges against Iowa-based Quality Egg LLC and two former company executives—Austin “Jack” DeCoster and his son Peter—over a 2010 Salmonella outbreak that sickened thousands across the country and resulted in the recall of some 550 million eggs. United States v. Quality Egg, LLC, No. 14-cr-3024 (N.D. Iowa, filed May 21, 2014). The charging document, which brings two felony counts of introducing adulterated food into interstate commerce against the company and related misdemeanor charges against the DeCosters, alleges that the company sold tainted eggs from early 2010 until the August recall. According to news sources, the DeCosters are expected to enter guilty pleas on June 3, 2014, as part of a plea agreement that ends the four-year investigation. The charging document alleges that the company sold products with labels making “the eggs appear to be not as old as they actually were” from 2006 to 2010,…
A federal court in Missouri has determined that a man who alleges employment discrimination and retaliation in violation of the Americans with Disabilities Act (ADA) on the basis of his severe obesity has sufficiently stated his claims and may proceed with his action. Whittaker v. America’s Car-Mart, Inc., No. 13-0108 (D. Mo., order entered April 24, 2014). The plaintiff allegedly began working for the defendant in August 2005 and was discharged from his general manager position in November 2012, purportedly because of his disability. He claims that the defendant regarded him as having a physical impairment under the ADA and “as being substantially limited in a major life activity, walking, as a result of his obesity.” To support its argument that the alleged disability “is not an actual disability under the ADA unless it is related to an underlying physiological disorder or condition and that plaintiff fails to allege that his…
While continuing to deny that its labeling and marketing for Truvia® sweetener products misled consumers, Cargill has apparently agreed to settle a putative nationwide class action alleging consumer fraud and breach of warranty. Martin v. Cargill, Inc., No. 13-2563 (D. Minn., preliminary agreement filed September 19, 2013). The plaintiffs claimed that the products are not “natural” because they contain “highly processed” ingredients or those derived from genetically modified organisms. Under the agreement, the company would create a $5 million fund for cash refunds and vouchers on selected Truvia® products. The company has also agreed to modify product labels that will refer consumers to its website where it will explain in some detail how the erythritol in Truvia® is produced. Cargill has agreed not to oppose attorney’s fees and expenses of $1.59 million. Any residual funds remaining in the settlement fund would be distributed to the National Consumer Law Center and…
The Eighth Circuit Court of Appeals has found constitutional Missouri’s four-tier alcohol distribution system which includes a residency requirement for wholesalers, which comprise the third tier. S. Wine & Spirits of Am., Inc. v. Div. of Alcohol & Tobacco Control, No. 12-2502 (8th Cir., decided September 25, 2013). According to the court, the decision required it to examine the “current state of the relationship between the dormant Commerce Clause and the Twenty-First Amendment.” The former forbids discrimination against out-ofstate residents, while the latter gives states “certain prerogatives particular to the regulation of alcohol.” Missouri law requires those seeking a wholesaler license to be incorporated under the state’s laws, with all officers and directors “qualified legal voters and taxpaying citizens of the county . . . in which they reside” and “bona fide residents” of Missouri for at least three years. Resident shareholders must own at least 60 percent of all the…
A federal court in Arkansas has ruled that it has jurisdiction, pursuant to the U.S. Supreme Court’s seminal standing decision under the Class Action Fairness Act (CAFA), Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013), to adjudicate the putative class claims filed by a woman who alleges that Frito-Lay deceives consumers by labeling its Tostitos® and SunChips® products as “All Natural” because they contain genetically modified corn and hexane-extracted soybean oil. Deaton v. Frito-Lay N. Am., Inc., No. 12-1029 (W.D. Ark., order entered June 5, 2013). At issue was whether the defendants had submitted sufficient evidence to show that the amount in controversy exceeded CAFA’s $5 million jurisdictional minimum. The plaintiff had stipulated that she would not seek more than $5 million to keep the lawsuit in state court, but conceded that her stipulation could not prevent removal under the Knowles decision. The court ruled that the…
A federal court in Minnesota has dismissed a putative class action alleging that General Mills misleads consumers by labeling its Nature Valley products as “Natural” or “100% Natural” when they actually contain highly processed ingredients such as high-fructose corn syrup, high-maltose dextrin syrup and maltodextrin. Chin v. General Mills, Inc., No. 12-2150 (D. Minn., decided June 3, 2013). Additional details about the original complaint appear in Issue 453 of this Update. The court dismissed all counts relating to Nature Valley products that the plaintiffs did not purchase, according to their first amended complaint, ruling that they lacked standing to bring such claims. The court dismissed a breach of written warranty claim brought under the Magnuson-Moss Warranty Act because labeling a product as “100% Natural” is not a written warranty under the law; rather, it is a “product description.” Implied warranty claims under the Act and state law were also dismissed…
The Eighth Circuit Court of Appeals has reversed the grant of class certification for some 1,600 Domino’s Pizza delivery drivers in Minnesota, finding that their claims lacked commonality. Luiken v. Domino’s Pizza, LLC, No. 12-1216 (8th Cir., decided February 4, 2013). The drivers claimed that Domino’s improperly withheld from them a fixed delivery charge imposed on customer orders. They contended that the charge was in the nature of a surcharge or gratuity under Minnesota law and, as such, must be paid to them. According to the court, liability was based on the objective, reasonable person standard, and what is objectively reasonable from the perspective of the customer “depends on the nature and context of the parties’ bargain.” Because some customers were told by drivers that Domino’s retained the charge and was not part of their tip and because the fixed charge was sometimes within the normal range for a tip,…
A federal court in Minnesota has granted the motion for summary judgment filed by a company whose insurance carrier claimed it was not required to cover the company’s settlement of claims arising from a recall of instant oatmeal purportedly contaminated with instant milk produced at a facility where the Food and Drug Administration “detected insanitary conditions and salmonella.” The Netherlands Ins. Co. v. Main St. Ingredients, LLC, No. 11-533 (D. Minn., decided January 8, 2013). The company had supplied the instant milk to Malt-o-Meal which used it to make instant oatmeal. After the instant milk and downstream products such as the oatmeal were recalled, Malt-o-Meal sued both the supplier and the company that had produced the instant milk. While none of the supplier’s instant milk was found to contain Salmonella, the case ultimately settled for $1.4 million. The insurance company sued the supplier, Main Street Ingredients, for a declaration that…
