A federal court in California has denied the motion to dismiss filed by guacamole maker Yucatan Foods, L.P. in a putative class action alleging violations of labeling laws based on the company’s use of “evaporated cane juice” instead of “sugar” on product labels. Swearingen v. Yucatan Foods, L.P., No. 13-3544 (N.D. Cal., order entered February 7, 2014). So ruling, the court rejected Yucatan’s arguments that (i) the “home state” exception of the Class Action Fairness Act should apply and divest the federal court of jurisdiction because a nationwide class of consumers cannot be certified given that California law cannot regulate conduct unconnected to the state—the court found that resolution of this issue was not appropriate at the pleadings stage; (ii) federal law preempts the plaintiffs’ state law-based claims—the court determined that the claims rise and fall on the defendant’s compliance with federal law, thus the requirements the plaintiffs seek to…
Category Archives 9th Circuit
Missouri Attorney General (AG) Chris Koster has sued California AG Kamala Harris, seeking to enjoin the enforcement of a voter-approved ballot initiative (Prop. 2) and law (A.B. 1437) that will increase the size of egg-laying hen enclosures and decrease flock densities both for California producers and those in other states wishing to sell eggs in California. Missouri ex rel. Koster v. Harris, No. 14-0067 (E.D. Cal., filed February 3, 2014). According to the complaint, Missouri egg farmers will be forced under the law to “incur massive capital improvement costs to build larger habitats for some or all of Missouri’s seven million egg-laying hens, or they can walk away from the state whose consumers bought one third of all eggs produced in Missouri last year. The first option will raise the cost of eggs in Missouri and make them too expensive to export to any state other than California. The second…
A California resident has filed a putative statewide class action against Ralphs Grocery Co., alleging that it misleads consumers by labeling its decaffeinated coffee products as “without caffeine” when they are actually, according to labeling fine print, “99.7% caffeine free.” Kopalian v. Ralphs Grocery Co., No. BC533846 (Cal. Super. Ct., Los Angeles Cty., filed January 22, 2014). The plaintiff invokes no state or federal law labeling violations, but instead claims that the labeling and packaging are “likely to confuse and mislead consumers.” He contends that he relied on the “without caffeine” labeling to make his purchase, believing that the product was 100 percent caffeine free, and chose it over other brands for this reason. Alleging breach of express warranty and violations of the state’s Unfair Competition Law, False Advertising Law and Consumers Legal Remedies Act, the plaintiff seeks injunctive relief, including a corrective advertising campaign, actual and punitive damages, restitution,…
Finding significant differences among the state laws applicable to a putative nationwide class action alleging injury to pets and economic damages from the purchase of dog treats containing chicken jerky from China, a federal court in California has denied the plaintiff’s request for class certification. Holt v. Globalinx Pet LLC, No. 13-0041 (C.D. Cal., S. Div., order entered January 30, 2014). According to the court, “[w]hile the Plaintiff maintains that the laws of California should apply to the proposed nationwide classes, the Defendants have catalogued a series of material differences between the consumer protection laws of several states and those of California, and crucially, this Court has already performed a case-specific conflict of law analysis and determined that Texas law would govern four of the named Plaintiff’s causes of action.” Agreeing that these differences were material, the court concluded that the proposed classes “do not meet the predominance and superiority…
A federal court in California has dismissed with prejudice a number of claims in a putative nationwide class action alleging that Gerber Products Co. misleads consumers and violates state and federal labeling laws by making certain nutrient-content and sugar-related claims on its baby food product labels. Bruton v. Gerber Prods. Co., No. 12-2412 (N.D. Cal., order entered January 15, 2014). Among the claims dismissed with prejudice were those relating to (i) products that the named plaintiff had not purchased and had failed, in her second amended complaint, to adequately allege how they are substantially similar to any of the purchased products; (ii) company website statements that the named plaintiff did not view, but that supported some of her claims; and (iii) the theory that Gerber breached a duty to disclose that its products were misbranded under federal and California law. Because the court found that Gerber’s remaining challenges in its motion…
A federal court in California has dismissed putative class claims relating to any product other than Mott’s 100% Apple Juice because the plaintiff failed to properly allege that the company’s numerous sauce products are mislabeled under state and federal law. Rahman v. Mott’s LLP, No. 13-3482 (N.D. Cal., order entered January 29, 2014). The court also dismissed claims under the state’s False Advertising Law, the fraud prong of the Unfair Competition Law (UCL) and the Consumers Legal Remedies Act because they were not sufficiently pleaded, and further dismissed the plaintiff’s claim for negligent misrepresentation for failure to plead justifiable reliance. The court disagreed that the action should be dismissed under the primary jurisdiction doctrine or that the UCL claim should be dismissed for failure to allege facts that would satisfy the reasonable consumer test. As to the latter, the court reiterated that this test “does not apply to claims brought…
A California resident has filed a putative statewide class action in a California federal court against Diamond Foods, Inc., alleging that the company misleads consumers by prominently labeling its line of TIAS Tortilla Chips® as “All Natural” when they contain artificial ingredients such as maltodextrin and/or dextrose. Surzyn v. Diamond Foods, Inc. No. 14-136 (N.D. Cal., filed January 9, 2014). The complaint has been crafted to avoid some of the pitfalls that other plaintiffs have encountered bringing similar claims, including express references to the defendant making “the exact same ‘All Natural’ claim in the exact same prominently displayed location on the front packaging,” to forestall a court finding that the plaintiff lacks standing to pursue claims for products she did not actually purchase. Alleging economic injury, that is, not receiving the benefit of the bargain, and expressly not seeking “to contest or enforce any state law that has requirements beyond those…
Oregon Attorney General (AG) Ellen Rosenblum has reportedly filed an action in state court against the companies that make and promote 5-hour ENERGY®, a drink purportedly linked to adverse incidents including fatalities, seeking to enforce her demand for information about the product. The lawsuit against Innovation Ventures, Living Essentials and Microdose Sales, filed in Multnomah County Court, apparently seeks enforcement of the AG’s Civil Investigative Demand for information under the state’s Unlawful Trade Practices Act (UTPA). According to a news source, the AG says she has “reason to believe that respondents have made misleading statements regarding 5-hour Energy in three issue areas: (1) whether users experience ‘no crash’ when using the product; (2) a ‘Doctors Recommend’ advertising campaign; and (3) the product’s suitability for children, all potentially in violation of . . . the UTPA.” She seeks an order requiring the respondents to respond to her demand with unredacted documents,…
The U.S. Securities and Exchange Commission (SEC) has filed a complaint against Diamond Foods, Inc. and two former executives alleging that the company “materially misstated its financial results in multiple SEC Forms 10-Q, 10-K, and 8-K from at least February 2010 and ending in September 2011. In this timeframe, Diamond reported artificially inflated earnings per share that beat Wall Street earnings estimates on a quarterly and yearly basis.” SEC v. Diamond Foods, Inc., No. 14-0123 (N.D. Cal., filed January 9, 2014). Information about shareholder litigation involving the alleged price manipulation and financial misstatements at the root of the SEC’s complaint appear in Issue 464 of this Update. According to the SEC, Diamond Foods has agreed to pay $5 million to settle the charges, and former CEO Michael Mendes has agreed to a settlement. The claims against former CFO Steven Neil continue. SEC claims that increasing walnut prices and pressure to meet…
A federal court in California has granted in part the motion for summary judgment filed by Twinings North America in a putative class action alleging that the company misbrands its tea products by stating that they are a “Natural Source of Antioxidants” and “a natural source of protective antioxidants." Lanovaz v. Twinings N. Am., Inc., No. 12-2646 (N.D. Cal., order entered January 6, 2014). Regarding the plaintiff’s claims that the company’s labels imply protection from disease, the court found the product representations “too general to relate to a ‘health-related condition’” and thus dismissed these claims. As to causation, the issue was whether the plaintiff admitted in her deposition that she did not rely on the green tea and Earl Grey tea labels or the company’s website when making her purchasing decisions. The court refused to read her deposition transcript as narrowly as the company urged and found that the label…
