Walter Scott Cameron, a former senior vice president of sales at Bumble Bee Foods, LLC has pleaded guilty to combination and conspiracy to fix, raise and maintain the prices of packaged seafood, including canned tuna. U. S. v. Cameron, No. 16-CR-0501 (N.D. Cal., information filed December 7, 2016). The criminal information accuses Cameron of conspiring with other seafood companies to fix prices of seafood sold in the United States. "Today’s charge is the first to be filed in the Antitrust Division’s ongoing investigation into price fixing among some of the largest suppliers of canned tuna and other packaged seafood,” said an attorney with the U.S. Department of Justice’s Antitrust Division in a December 7, 2016, press release. “All consumers deserve competitive prices for these important kitchen staples, and companies and executives who cheat those consumers will be held criminally accountable.” Issue 625
Category Archives 9th Circuit
A California federal court has denied Kraft Food Group Inc.’s request to stay class action litigation alleging the company’s fat-free cheese product is misleadingly labeled “natural” because it contains artificial coloring, finding that the U.S. Food and Drug Administration’s (FDA’s) expected guidance on the term “natural” does not affect the issues of the case. Morales v. Kraft Foods Grp. Inc., No. 14-4387 (C.D. Cal., order entered December 6, 2016). A week earlier, the same court denied Kraft’s motion for summary judgment on the grounds that triable issues existed in the case, including (i) “whether consumers are likely to believe that ‘artificial color’ is not an artificial ingredient if it is produced by a natural product”; (ii) “whether such belief is material to customers’ purchasing decisions”; and (iii) “whether all artificial colors, regardless of source, are artificial ingredients.” Details about the certification of the class appear in Issue 570 of this…
Two people have been convicted of conspiracy in charges related to a scheme to distribute counterfeit 5-Hour Energy drinks. United States v. Shayota, No. 15-0264 (N.D. Cal., verdict entered November 28, 2016). The couple, Joseph and Adriana Shayota, produced several million bottles of a drink manufactured under unsanitary conditions and labeled the drink with 5-Hour Energy's packaging. Before beginning that scheme, the couple reportedly bought 5-Hour Energy drinks intended for the Mexican market, repackaged them and sold them in the United States for a price well below the retail price. Six other defendants pleaded guilty to similar charges, and 5-Hour Energy maker Living Essentials won a $20-million civil judgment in March 2016. See Los Angeles Times, November 30, 2016. Issue 624
Two consumers have filed a projected class action against Arizona Canning Co. alleging that the image of a bowl full of beans on its Sun Vista products misleads consumers into believing the can is filled completely with beans rather than filled with some beans and a large amount of water. Beckman v. Ariz. Canning Co., No. 16-2792 (S.D. Cal., removed November 14, 2016). The complaint asserts that the “picturesque” label image depicts “a bowl full of plump and hearty beans with glimmer of shine, and little to no water,” but when the can is opened, it reveals “the repulsive sight of bean water” and “an inappropriately large amount of water and a small amount of beans.” The complaint admits that a reasonable consumer “would expect to find some water within the container,” but one plaintiff’s “home investigation” apparently found that a 29-ounce can of pinto beans contained 13 ounces of…
The Ninth Circuit Court of Appeals has ruled that the attorneys general of six states—Missouri, Nebraska, Oklahoma, Alabama, Kentucky and Iowa—do not have standing to sue California AG Kamala Harris in an attempt to block enforcement of a law requiring egg-production facilities to provide hens enough space to fully extend their limbs and turn around freely in the confinement in which they spend the majority of the day. Missouri v. Harris, No. 14-17111 (9th Cir., order entered November 17, 2016). The court found that the plaintiff states did not have parens patriae standing, the standing provided to a governmental entity as the legal protector of its citizens. The states could not “articulate an interest apart from the interests of private egg producers, who could have filed an action on their own behalf,” the court held. Further, the states’ allegations about potential economic damages were speculative, and “the allegations of discrimination were…
A consumer has filed a projected class action against Krispy Kreme Doughnuts, Inc., alleging the company’s blueberry, maple and raspberry products are not made with the ingredients in their fruit-based names. Saidian v. Krispy Kreme Doughnuts, Inc., No. 16-8338 (C.D. Cal., filed November 9, 2016). The complaint highlights health benefits apparently linked to raspberries, blueberries, maple syrup and maple sugar, asserting that Krispy Kreme charged a premium for its products to capitalize on those perceived health benefits while using imitation versions of the ingredients. The plaintiff also distinguishes the blueberry, raspberry and maple products from Krispy Kreme’s lemon, strawberry and cinnamon apple products, because the latter group does contain its advertised ingredients, leading to further consumer confusion. For allegations of fraud, misrepresentation and violations of California statutes, the plaintiff seeks class certification, an injunction, damages and attorney’s fees. Issue 622
A federal grand jury has indicted Jeffry Hill of Hill Wine Co. on charges that he sold wine falsely labeled as originating from Napa Valley in California. United States v. Hill, No. 16-CR-0454 (N.D. Cal., indictment entered November 1, 2016). The indictment accuses Hill of growing grapes outside the designated Napa Valley borders and selling the grape juice, bulk wine or bottled wine as made only from Napa Valley grapes, which apparently earned him more than $1.5 million. Hill also allegedly misrepresented the varietals of grapes he sold and created fraudulent bills of lading and inventory records. The indictment asserts that Hill also concealed the true origins of the grapes from his employees by moving grapes between Hill Wine Co.’s three facilities and intercepting trucks shipping grapes to alter the paperwork indicating their origin or varietal. Hill faces eight charges of mail fraud and wire fraud. Issue 622
A California federal court has dismissed a consumer’s putative class action against AdvancePierre Foods, Inc. alleging the company both physically and financially harmed her by selling her a microwavable sandwich made with partially hydrogenated oil (PHO). Hawkins v. AdvancePierre Foods, Inc., No. 15-2309 (S.D. Cal., order entered November 8, 2016). The court agreed with AdvancePierre’s argument that the U.S. Food and Drug Administration’s June 2015 final determination removing PHO’s status as a material generally recognized as safe for use in food implemented a June 2018 deadline for compliance to avoid allowing consumers to obtain damages for the use of PHO in the meantime. Under the Consolidated Appropriations Act of 2016 (CAA), “No partially hydrogenated oils as defined in the [Final Determination] shall be deemed unsafe . . . and no food that is introduced into interstate commerce that bears or contains a partially hydrogenated oil shall be deemed adulterated . .…
A California federal court has denied Vigo Importing Co.’s motion to dismiss a lawsuit alleging the company mislabels its products as containing octopus when they are actually composed of jumbo squid. Fonseca v. Vigo Importing Co., No. 16-2055 (N.D. Cal., order entered October 26, 2016). Vigo Importing sought to dismiss the claim on jurisdictional grounds, arguing that based on its sales figures, the amount in controversy could not possibly meet the $5 million threshold required by the Class Action Fairness Act to allow a federal court to consider the case. The court disagreed, noting that the sales price was only part of the calculation; the potential damages determination requires information on the cost of the products as well as the value of the product if composed of jumbo squid. Details on the complaint appear in Issue 602 of this Update. Issue 621
A consumer has filed a putative class action against Dole Packaged Foods, LLC alleging the company’s products contain too much added sugar to be labeled as “rich in nutrients” or “healthy.” Amaya v. Dole Packaged Foods, LLC, No. 15-7734 (C.D. Cal., filed October 18, 2016). The complaint first details research connecting added sugar intake to detrimental health effects, including type 2 diabetes, cardiovascular disease and metabolic syndrome, then asserts that Dole’s products containing added sugar are misleadingly labeled. “Dole’s representations that Dole Fruit & Oatmeal contains ‘real fruit!’ and ‘No Trans Fat or Cholesterol,’ and is ‘a healthy . . . Breakfast’ are false, or even if literally true at least highly misleading, in light of the substantial added sugar in the Dole Fruit & Oatmeal products,” the plaintiff argues. The complaint also alleges the labeling claims are unlawful because (i) a statement indicating that the product is free of…
