A federal court in California has granted in part the motion to dismiss filed by Diamond Foods, Inc. in a putative class action alleging that the company misleads consumers by claiming that its Reduced Fat Sea Salt Chips are “40% reduced fat potato chips” and its Backyard Barbecue Chips are “All Natural,” as well as making false and deceptive statements in the company’s “promotional materials” and on its “website.” Hall v. Diamond Foods, Inc., No. 14-2148 (U.S. Dist. Ct., N.D. Cal., order entered July 31, 2014). An amended complaint, if any, must be filed by August 15, 2014, and the case management conference will be held on October 31. The court dismissed the reduced fat claims finding them insufficiently pleaded because it was unclear whether the plaintiff read only the statement on the front of the bag, in which case he “would lack standing to argue the statements on the…
Category Archives U.S. Circuit Courts
A federal court in Washington has determined that the U.S. Environmental Protection Agency (EPA) did not violate the Freedom of Information Act (FOIA) in responding to requests for information relating to its investigation of nitrate levels in groundwater and residential drinking water wells in the Lower Yakima Valley. Cmty. Ass’n for Restoration of the Env’t, Inc. v. EPA, No. 13-3067 (E.D. Wash., order entered August 6, 2014). Because the environmental organization (CARE), which is a plaintiff in Resource Conservation and Recovery Act (RCRA) citizen suits against the dairies whose documents are part of the FOIA requests, also alleged Administrative Procedure Act (APA) violations against EPA, the court granted its request to allow the parties to brief the merits of CARE’s APA claim. Meanwhile, the dairies subject to the RCRA actions have filed a lawsuit against EPA, seeking an order prohibiting EPA from disclosing to CARE or other members of the…
While a number of jurors were dismissed because a two-month trial would create hardships for them, a 12-member jury and six alternates were selected on July 31, 2014, and opening statements began the next day in the criminal prosecution of former Peanut Corp. of America (PCA) owner Stewart Parnell, his brother Michael Parnell and the company’s quality control manager Mary Wilkerson. United States v. Parnell, 13-cr-12 (M.D. Ga.). Earlier in the week, the court denied Wilkerson’s motion to dismiss or alternatively for a continuance and severance and to compel meaningful discovery. She claimed that the government’s discovery disclosures “were not accompanied by easily searchable databases” and that she was not timely provided a password to access one of two discovery disclosures. The court had apparently considered some of these issues previously and found that “Wilkerson has not demonstrated any changed circumstances that would require the Court to reconsider its referenced…
In a petition for a writ of certiorari, plaintiffs alleging harm by exposure to the flavoring agent diacetyl have argued that the Third Circuit erred in ruling that Aaroma Holdings cannot be held liable for the actions of diacetyl producer Emoral Inc., which Aaroma purchased following the alleged exposures. Diacetyl Plaintiffs v. Aaroma Holdings, No. 14-71 (U.S., petition for writ of certiorari filed July 18, 2014). The terms of the 2010 purchase agreement confirming Aaroma’s acquisition of Emoral apparently noted that Emoral may be subject to diacetyl litigation and stated that Aaroma did not assume liability for any future claims. Emoral filed for bankruptcy protection in 2011, and the bankruptcy trustee reportedly released Aaroma from future diacetyl causes of action against Emoral in exchange for $500,000. In addition to accusing the Third Circuit of diverging from binding precedent on injured creditors’ claims, the plaintiffs’ petition argues that the decision is contrary…
A California federal court has granted the plaintiffs’ request to dismiss their entire action with prejudice in a case accusing Gruma Corp. of labeling its Mission Restaurant Style tortilla chips as “all natural” despite containing genetically modified corn. Cox v. Gruma Corp., No. 12-6502 (N.D. Cal., order entered July 25, 2014). The plaintiffs’ stipulation to dismiss did not indicate whether the parties reached a settlement agreement. In the 2012 complaint, the plaintiffs alleged that Gruma violated state consumer protection laws like the Consumer Legal Remedies Act due to its alleged mislabeling; in July 2014, they debated Gruma’s motion to dismiss, in which the corporation argued that a reasonable customer would not have been misled by their labels, the complaint’s claims infringed the First Amendment, the plaintiffs failed to plead their fraud claims with the particularity required, and the court lacked jurisdiction to issue an injunction. Additional information on the case appears…
A federal court in California has dismissed for lack of standing a putative class action alleging that Pacific Foods of Oregon, Inc. misleads consumers by using the term “evaporated cane juice” (ECJ) on its food labels instead of sugar. Swearingen v. Pac. Foods of Ore., Inc., No. 13-4157 (N.D. Cal., order entered July 30, 2014). Plaintiffs Mary Swearingen and Robert Figy are named plaintiffs in a number of ECJ-related cases that have recently been stayed under the primary jurisdiction doctrine as the U.S. Food and Drug Administration considers its position on use of the term by food makers. Two such cases are summarized in Issue 529 of this Update. The court did not address this issue here, because it dismissed the case on pleading grounds. According to the court, the plaintiffs did not allege that they purchased the company’s products “in reliance on any alleged misrepresentations that evaporated cane juice is…
In consolidated actions pending since 2010, a federal court in California has entered a final order approving a class-action settlement that will require Quaker Oats Co. to remove partially hydrogenated oils (PHOs) from some of its oatmeal products and cease making the statement “contains a dietarily insignificant amount of trans fat” on any product label where the product still contains more than 0.2 grams of artificial trans fat per serving. In re Quaker Oats Labeling Litig., No. 10-0502 (U.S. Dist. Ct., N.D. Cal., San Jose Div., order entered July 29, 2014). Details about a court ruling trimming the plaintiffs’ claims that the company falsely advertised products with PHOs as healthy appear in Issue 433 of this Update. According to the court’s order awarding $760,000 to class counsel in attorney’s fees and costs, the suit and settlement conferred “a significant benefit . . . on the general public” given the product…
In a 9-2 en banc decision, the District of Columbia Circuit has affirmed an earlier panel decision that the U.S. Department of Agriculture (USDA) can require meat producers to include country-of-origin labeling (COOL) on their packaging. Am. Meat. Inst. v. USDA, No. 13-5281 (D.C. Cir., order entered July 29, 2014). The First Amendment allows for such required disclosures because the government’s interest is sufficient, the court found. Additional information on the American Meat Institute’s constitutional challenge and the D.C. panel’s decision appears in Issues 518 and 520 of this Update. In its discussion, the court interpreted the U.S. Supreme Court’s decision in Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626 (1985) to reach beyond mandated commercial labeling necessary to correct deception to include the “factual and uncontroversial disclosures required to serve other government interests” at issue in the COOL context. The language in Zauderer “sweeps far more broadly than…
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…
A California federal court has dismissed fraud claims against R.C. Bigelow in a putative class action accusing the company of advertising that its tea “delivers healthful antioxidants” when the levels of antioxidants are too low to benefit the consumer. Victor v. R.C. Bigelow, No. 13-2976 (N.D. Cal., order entered July 18, 2014). The court allowed to proceed the plaintiff’s claim that Bigelow’s antioxidants assertion on its packaging violated California’s Unfair Competition Law (UCL) based on the “unlawful” prong, but it dismissed with prejudice his claims that Bigelow had violated the “fraud” prong of the UCL. Despite arguing the importance of the word “deliver,” the plaintiff failed to prove that the phrase “delivers healthy antioxidants” represented that the product contained a high enough level of antioxidants to provide health benefits to the tea drinker; as the court had previously allowed the plaintiff to amend his complaint, the claims relating to fraudulent…
