A California federal court has allowed most of the claims to proceed in a lawsuit alleging that Marie Callender’s baking mixes are labeled “all natural” despite containing the synthetic ingredient sodium acid pyrophosphate. Musgrave v. ICC/Marie Callender’s Gourmet Prods. Div., No. 14-2006 (U.S. Dist. Ct., N.D. Cal., order entered February 5, 2015). The court dismissed the plaintiff’s request for an injunction and unjust enrichment claim but denied the food company’s motion to dismiss all other claims. The court assessed each argument in the motion to dismiss in turn, finding first that the plaintiff’s claims were not preempted by the Federal Food, Drug, and Cosmetic Act or subject to the primary jurisdiction of the U.S. Food and Drug Administration. It then discussed whether a reasonable consumer would be deceived by the term “natural” on the baking mixes. The court dismissed the food company’s argument that the plaintiff offered inconsistent meanings of “natural”…
Category Archives 9th Circuit
Steven Neil, the former CFO of Diamond Foods Inc., has agreed to pay $125,000 to settle a U.S. Securities and Exchange Commission (SEC) lawsuit alleging that he directed his employees to underreport the amount of money paid to walnut growers to ensure that the company hit quarterly targets for earnings per share. SEC v. Diamond Foods, Inc., No. 14-122 (N.D. Cal., order entered February 2, 2015). According to SEC, Diamond falsely reported some of its payments to walnut growers as advances for crops not yet delivered to exclude the amounts from year-end financial statements, and after an investigation into the company’s accounting practices began, Neil allegedly gave independent auditors false and incomplete information about the payment scheme. Diamond and its former CEO, Michael Mendes, reached a deal with SEC in January 2014 to pay a $125,000 penalty along with returning more than $4 million that Mendes had received in bonuses…
A California federal court has dismissed two claims and allowed four to continue in a putative class action alleging that (i) Salov North America Corp. mislabeled its Filippo Berio olive oils as “Imported from Italy” despite using olives grown and pressed in other countries and (ii) its extra virgin olive oils do not meet the high standards required to qualify as “extra virgin,” partly due to inefficient bottling and transportation. Kumar v. Salov North Am. Corp., No. 14-2411 (N.D. Cal., order entered February 3, 2015). The court first assessed Salov’s challenge to the plaintiff’s standing and found that it could not, as a matter of law, determine that a reasonable consumer would not interpret “Imported from Italy” to mean that the product was made exclusively of Italian olives. Salov also asserted that the plaintiff must have seen the statement on the label that informed consumers that the product was “Packed…
A California federal court has granted plaintiffs’ motion to vacate the judgment and reopened a proposed class action against Attune Foods Inc., finding that the delay in guidance from the U.S. Food and Drug Administration (FDA) on whether “sugar” is the “common or usual name” for “evaporated cane juice” (ECJ), an ingredient that appears on Attune’s labels, could unfairly disadvantage the plaintiffs’ case. Swearingen v. Attune Foods Inc., No. 13-4541 (U.S. Dist. Ct., N.D. Cal., Oakland Div., order entered January 28, 2015). Citing the primary jurisdiction doctrine, the court had dismissed the case without prejudice in May 2014 to await FDA guidance after the agency reopened the comment period in March of that year to determine whether sugar and ECJ are materially different substances. After the plaintiffs sought relief from the judgment, the court has now determined that FDA’s delay could unfairly disadvantage the plaintiffs if the statute of limitations prohibits…
The office of California Attorney General Kamala Harris will appeal the January 2015 decision overturning the state’s ban on foie gras, according to a notice of appeal filed in California federal court. Association des Éleveurs de Canards et d’Oies du Québec v. Harris, No. 12 5735 (U.S. Dist. Ct., C.D. Cal., notice of appeal filed February 4, 2015). The prohibition was found to impose “[m]arking, labeling, packaging, or ingredient requirements” that interfered with the free flow of poultry products in violation of the federal Poultry Products Inspection Act. The AG’s 1-page notice of appeal cited no arguments supporting its challenge. Additional details about the district court decision appear in Issue 550 of this Update. Issue 554
Noodles Raw Catering, owner of Chubby Noodle restaurants, has filed a lawsuit alleging that Saison Group’s Fat Noodle restaurant infringes on Noodles Raw’s trademark. Noodles Raw Catering LLC v. Saison Group LLC, No. 15-316 (N.D. Cal., filed January 22, 2015). The complaint asserts that although Chubby Noodle, which sells “high-quality, well-priced Asian-inspired” food, does not yet own a federally registered trademark in its name (because its application is pending), it has received national and international attention since its opening in 2011. Saison has been developing a Fat Noodle restaurant since 2012—as indicated by intent-to-use applications with the U.S. Patent and Trademark Office—but has not yet opened the restaurant, and its website appears to be a placeholder. Noodles Raw alleges that the logo appearing on the website is too similar to its Chubby Noodle logo because both feature “a simple, black, Asian-style bowl with noodles.” Claiming common law trademark infringement, false…
A group of consumers has filed a putative class action against Cytosport Inc., maker of Muscle Milk, alleging that its powdered and ready-to-drink protein supplements do not contain the ingredients and characteristics advertised on its packaging. Clay v. Cytosport Inc., 15-165 (S.D. Cal., filed January 23, 2015). The plaintiffs argue that independent scientific testing shows that Muscle Milk products contain substantially less protein than the amount represented in the Nutrition Facts panel. They also allege that Muscle Milk labels list L-glutamine amino acids separately from the protein content to falsely imply that the products have additional L-glutamine beyond the content inherent in the protein mix. The complaint further argues that Muscle Milk labels cannot feature the word “lean” because the product does not contain less fat than its competitors. Alleging deceptive advertising, misrepresentation and breach of warranties, the putative class seeks certification, damages, an injunction, and attorney’s fees. Issue…
A California federal court has dismissed without leave to amend claims that the makers of 5-Hour Energy—Innovation Ventures LLC, Living Essentials LLC, Manoj Bhargava, and Bio Clinical Development Inc.—falsely advertised their product as boosting its users’ energy levels with B-vitamins and amino acids rather than caffeine. In re: 5-Hour Energy Mktg. & Sales Practices Litig., No. 13-2438 (C.D. Cal., order entered January 22, 2015). The plaintiffs argued that the 5-Hour Energy makers downplayed the caffeine content in favor of attributing the product’s energy source to vitamins and other ingredients, and they included descriptions of five commercials containing the allegedly misleading statements. The court found that they failed to show what statements actually misled them, and it was also unpersuaded by the argument that the plaintiffs were exposed to a common message and thus did not need to specify which statements they relied upon to their detriment, so it dismissed without…
Two days after filing a lawsuit alleging that Sierra Nevada Brewing Co. infringed its stylized label trademark featuring the letters “IPA,” Lagunitas Brewing Co. filed a notice of voluntary dismissal without prejudice in the case and its owner, Tony Magee, publicly commented that he had been “seriously schooled” by the “Court of Public Opinion” following a wave of social media backlash. The Lagunitas Brewing Co. v. Sierra Nevada Brewing Co., No 15-153 (N.D. Cal., notice of voluntary dismissal filed January 14, 2015). The complaint alleged that Sierra Nevada’s label for its new Hop Hunter IPA, in a “radical departure” from its typical label designs, infringed the Lagunitas trademark on “large, all-capital, bold, black and centralized ‘IPA’ lettering.” The complaint further argued that “[w]hen Lagunitas began selling its now iconic IPA beer in 1995, there existed only a handful of other brewers who produced an India Pale Ale, and, on information and…
The Federal Circuit Court of Appeals has affirmed a lower court’s ruling that unauthorized public use of the Scarlet Royal and Autumn King varieties of table grapes does not invalidate the U.S. Department of Agriculture’s (USDA’s) patents on them. Delano Farms Co. v. Cal. Table Grape Comm’n., No. 2014-1030 (Fed. Cir., order entered January 9, 2015). The appellants, three farming companies, had challenged the patents on the grounds that they were in public use for more than a year before the date of the patent applications. According to the facts determined by a lower court’s bench trial, the mature fruit of grape varieties were exhibited at an experimental variety open house in 2001 at California State University, Fresno. Without authorization, a USDA employee gave a grape grower the plant materials for the unreleased varieties, and that grower in turn gave the materials to his brother and cousin in addition to…
