A California federal court has determined that Safeway is liable for $30 million in damages for claims alleging that the company charged different prices for products sold online despite a contractual agreement that in-store and online prices would be the same. Rodman v. Safeway Inc., No. 11-3003 (N.D. Cal., order entered August 31, 2015). The court granted partial summary judgment to the plaintiffs in December 2014, finding that Safeway breached the contract. Details about the decision appear in Issue 549 of this Update. The court arrived at the damages amount by calculating the sum that Safeway earned from the concealed markup between April 2010 and December 2012. The court also rejected the plaintiffs’ attempt to expand the class to include purchases before 2006, when Safeway switched from paying a third party to manage online sales to running the website in-house. Issue 578
Category Archives 9th Circuit
A California federal court has dismissed a putative class action alleging that Jim Beam Brands and Beam Suntory Import mislabel Jim Beam® bourbon bottles because the label calls the product “handcrafted” despite its machine-based manufacturing process. Welk v. Beam Suntory Imp. Co., No. 15-0328 (S.D. Cal., order entered August 21, 2015). The plaintiff had alleged that a reasonable consumer would be fooled by the bourbon label because the production process for the “handmade” product requires “little to no human supervision, assistance or involvement.” Details about the complaint appear in Issue 556 of this Update. The court first denied the distillery’s motion to dismiss under California’s safe harbor doctrine, finding that although Jim Beam could prove the Alcohol and Tobacco Tax and Trade Bureau had approved the label, the evidence did not indicate whether the agency investigated and approved including decisions finding for Jim Beam and its sibling brand Maker’s Mark®,…
A consumer has filed a putative class action against Costco Wholesale Corp. alleging that the company sells shrimp obtained with slave labor in Thailand. Sud v. Costco Wholesale Corp., No. 15-3783 (N.D. Cal., filed August 19, 2015). Citing documentaries and media reports, the complaint asserts that through its store brand, Kirkland, Costco has been selling seafood from Thailand “derived from a supply chain that depends upon documented slavery, human trafficking and other illegal labor abuses.” Further, Costco “does not advise U.S. consumers, in its packaging or otherwise, that the supply line for farmed prawns has been tainted by the use of slave labor in Thailand, and other nearby locations in international waters, including Indonesia, on Thai-flagged ships, and that there has been no eradication of this plague.” Knowingly selling such products and failing to warn the public of the farming conditions allegedly amount to unlawful business practices, misleading and deceptive…
A California federal court has granted a stay awaiting guidance from the U.S. Food and Drug Administration (FDA) in a putative class action alleging that General Mills uses partially hydrogenated vegetable oils, which contain trans fat, in its baking mixes. Backus v. Gen. Mills, Inc., No. 15-1964 (N.D. Cal., order entered August 18, 2015). After finding that the plaintiff had standing because he alleged economic and immediate physical injury, the court turned to his claims of unlawful and unfair business practices under California law and held that they were plausibly alleged. The public nuisance and implied warranty of merchantability claims were insufficient, the court found, because the plaintiff failed to show a public harm distinct from his own injury and he failed to allege “that the baking mixes were unfit for even the most basic degree of ordinary use.” The court then granted General Mills’ motion to stay the continuing…
After dismissing a portion of the claims in July 2015, a California federal court has dismissed the remaining claims in a lawsuit against Nissin Foods Co. Inc. alleging that the use of partially hydrogenated oil (PHO) violates California law. Guttmann v. Nissin Foods (U.S.A.) Co., Inc., No. 15-0567 (N.D. Cal., order entered August 14, 2015). The plaintiff alleged that Nissin sold unsafe food to the public because of the trans fat content of its Cup Noodles®. Details of the previous ruling appear in Issue 573 of this Update. The plaintiff’s claims of unfair business practices and breach of the implied warranty of merchantability rested on his lack of knowledge about the harms of PHO and trans fat when he purchased Cup Noodles®. He claimed to believe that the products he purchased were safe to consume when they allegedly were not; however, according to three previous lawsuits against other companies on the…
A California federal court has denied a plaintiff’s attempt to obtain Bigelow’s financial records in a putative class action alleging that the company mislabeled its tea. Khasin v. R.C. Bigelow Inc., No. 12-2204 (N.D. Cal., order entered August 12, 2015). The plaintiff argued that the records would help him calculate what portion of the profits he would seek. The court sided with Bigelow, which argued that “its profits and costs are irrelevant because the proper measure of restitution in a food labeling case is the price premium attributable to the challenged label (the difference between the product as labeled and the product as received), not its profits.” The court then cited a similar decision in another food labeling lawsuit with the same plaintiff. Issue 575
Bumble Bee Foods, Starkist Co. and Thai Union Frozen Products have been fixing tuna prices since 2011, according to a putative class action brought by Olean Wholesale Grocery Cooperative, Inc. Olean Wholesale Grocery Coop. v. Bumble Bee Foods LLC, No. 15-1714 (S.D. Cal., filed August 3, 2015). The complaint notes that while tuna consumption has fallen in the United States, prices have risen, which cannot be explained by raw material costs, the cooperative says. The complaint also details opportunities for the companies to meet and collude, such as industry conferences and various mergers and acquisitions within the “oligopolistic structure” of the industry. For claims of Sherman Act violations, the cooperative seeks to represent a nationwide class of those affected by the alleged price-fixing, court declarations of conspiracy, treble damages and an injunction from continuing any sort of agreement or understanding about maintaining prices. Issue 574
Two consumers have filed a lawsuit against Diageo PLC alleging that Red Stripe® is falsely marketed as Jamaican because it has been brewed and bottled in Latrobe, Pennsylvania, since 2012. Dumas v. Diageo PLC, No. 15-1681 (S.D. Cal., filed July 29, 2015). Red Stripe® packaging “boldly states that it is a ‘Jamaican Style Lager’ that contains ‘The Taste of Jamaica,’” and displays the logo of the Jamaican brewery that previously made it, the complaint asserts. “The only clue that Red Stripe is no longer a Jamaican beer is that on the border of the new labels, in obscure white text, the bottle says: ‘Brewed & Bottled by Red Stripe Beer Company Latrobe, PA.’” The plaintiffs argue that the text cannot be seen on packages of 12 bottles of Red Stripe® and is only visible on packages of six if a single bottle is removed and examined. Consumers pay higher prices…
An Idaho federal court has invalidated a state law that criminalized undercover investigations at agricultural manufacturing plants, finding that the law criminalized speech in violation of the First Amendment. Animal Legal Def. Fund v. Otter, No. 14-0104 (D. Idaho, order entered August 3, 2015). The 2014 Idaho statute passed after an animal-rights organization publicized a video recorded during an undercover investigation at a dairy. The statute criminalized “interference with agricultural production,” specifically interference by non-employees who obtain access to a facility by trespass or misrepresentation—or employees who obtain employment by misrepresentation—who then create audio or video recordings without the facility owner’s consent or intentionally cause physical damage to facility operations. The Animal Legal Defense Fund challenged the law on First Amendment and Equal Protection grounds soon after it took effect. The court first detailed the legislative history of the bill, noting the intentions of the bill’s drafters—including the “desire to…
The Ninth Circuit Court of Appeals has affirmed a lower court’s ruling dismissing a challenge to California’s law criminalizing the sale or distribution of shark fin. Chinatown Neighborhood Ass’n v. Harris, No. 14-15781 (9th Cir., order entered July 27, 2015). The plaintiffs, two groups representing Asian-Americans who seek to serve shark-fin soup, a traditional Chinese dish, argued that the law violates the Commerce Clause of the U.S. Constitution and is preempted by the Magnuson-Stevens Act. The Ninth Circuit rejected the claims, finding that the lower court did not err in refusing to grant leave to the organizations so that they could fully brief the preemption issue. Further, the shark-fin ban does not violate the Commerce Clause, the court found, because the effects on interstate commerce result from regulation of in-state conduct. Additional details about the groups’ complaint appear in Issue 447 of this Update. Issue 574
