Green Mountain Coffee Roasters Inc. investors have reportedly filed a consolidated securities action against the company, claiming that they were misled about demand for Keurig and K-Cup products. La. Mun. Police Emp. Ret. Sys. v. Green Mountain Coffee Roasters, Inc., No. 11-00289 (D. Vt., filed October 29, 2012). The Louisiana Municipal Police Employees’ Retirement System sued the company for U.S. securities law violations in November 2011 when Green Mountain’s shares fell 34 percent in a single day, losing $3.1 billion in market value, after quarterly sales fell short of analysts’ expectations. A group of pension funds, seeking to represent all company investors, allege that “[u]nbeknownst to investors, and contrary to defendants’ statements that they were barely able to ship orders as they came in, Green Mountain Coffee Roaster’s warehouses were overflowing with unused and expiring coffee products that were not being sold to consumers.” The company is facing increasing competition as…
Category Archives U.S. Circuit Courts
The Center for Science in the Public Interest (CSPI) has filed a putative nationwide class action in a federal court in California against Dr. Pepper Snapple Group, Inc., alleging that the company misleads consumers, through marketing and product labeling, to believe that the antioxidants contained in its beverages are derived from fruits and that the company’s use of antioxidants in soft drinks violates contrary Food and Drug Administration (FDA) regulations. Green v. Dr. Pepper Snapple Group, Inc., No. ___ (C.D. Cal., filed November 8, 2012). By using the term “antioxidant” in the names of some of its beverages, the company allegedly distinguishes its products “from similar soft drinks and, thereby, command[s] a premium price for the Products.” According to the complaint, “Contrary to Defendant’s claims and representations, the Products do not contain any real cherries, real berries, or even extracts from those fruits. Nor do the Products derive their antioxidant…
A California appeals court has determined that the Office of Environmental Health Hazard Assessment (OEHHA) may not add styrene or vinyl acetate to the Proposition 65 (Prop. 65) list of chemicals known to the state to cause cancer because they have been identified as “possible” but not known carcinogens. Styrene Info. & Research Ctr. v. OEHHA, No. C064301 (Cal. Ct. App., 3d Dist., decided October 31, 2012). Styrene is used in food packaging. The International Agency for Research on Cancer (IARC) had categorized the substances as Group 2b chemicals, which are “possibly” carcinogenic to humans, based on less than sufficient evidence of carcinogenicity in experimental animals. The court acknowledged that the California Health and Safety Code requires that the Prop. 65 list contain “at a minimum, the substances identified by reference in Labor Code section 6382, subdivision (d),” which addresses “hazardous substances” that extend “beyond those that cause cancer or…
After removing to federal court a defamation lawsuit brought by the company that makes lean finely textured beef (LFBT), ABC News has reportedly filed a motion to dismiss claiming that its news stories referring to the product as “pink slime” are protected speech under the First Amendment. Beef Products, Inc. v. Am. Broadcasting Cos., Inc., No. 12-04183 (D.S.D., filed October 24, 2012). Additional information about the lawsuit appears in Issue 453 of this Update. According to the news company’s motion, “Pink slime is exactly the sort of ‘loose, figurative, or hyperbolic language’ that courts recognize demands protection under the First Amendment.” ABC reportedly contends that the lawsuit challenges the rights of news organizations to “explore matters of obvious public interest—what is in the food we eat and how that food is labeled.” See Reuters, October 31, 2012.
A federal court in California has approved the settlement of class claims that will require Burger King Corp. to remove barriers to wheelchair and scooter access at more than 75 of the restaurants it leases to franchisees in the state and pay $19 million to the settlement class. Vallabhapuapu v. Burger King Corp., No. 11-00667 (N.D. Cal., decided October 29, 2012). This is the second settlement of Americans with Disabilities Act claims against the company; the first involved 10 certified classes and 10 alleged noncompliant restaurants in California. Each individual who files a claim by November 15, 2012, will take a pro rata share of the settlement for up to six visits to a Burger King restaurant “where he or she encountered a barrier to access.” As of mid-October, 620 claims had been filed with an average recovery expected to be nearly $5,000 per store visit, based on an adjusted…
A federal court in Illinois has dismissed a putative class action filed against a nutritional supplement company by a Muslim woman who alleged that the company misled consumers by failing to disclose that some of its products contain an animal-based product. Lateef v. Pharmavite LLC, No. 12-5611 (N.D. Ill., decided October 24, 2012). The court found the consumer-fraud claim preempted and determined that the named plaintiff lacked standing to rely on allegations relating to the company’s web-based advertising because she did not visit the Website before purchasing the product. The plaintiff also abandoned her federal law-based claim. According to the court, the plaintiff has dietary restrictions that prohibit her from eating certain animal-based food products such as pork. She allegedly purchased the defendant’s Nature Made® Vitamin D tablets after carefully reading the product label to ensure it did not contain animal byproducts. Her complaint alleges that the tablets were coated…
Golden Eagle Insurance Corp. has filed a complaint for declaratory relief against its insured Moon Marine (U.S.A.) Corp., requesting that the umbrella policy it issued to the insured be rescinded because Moon Marine allegedly concealed material facts when it obtained the policy. Golden Eagle Ins. Corp. v. Moon Marine (U.S.A.) Corp., No. 12-5438 (N.D. Cal., filed October 22, 2012). According to the complaint, Moon Marine knew that its imported yellowfin tuna (scrape) was linked to a nationwide Salmonella outbreak that sickened more than 400 individuals and had, in fact, recalled the product, when the $2-million excess insurance policy was obtained. The plaintiffs allege that Moon Marine failed to inform the insurance carrier’s underwriter that the fish importer faced “obvious liability exposure for bodily injury claims from the nationwide salmonella outbreak that had been linked to Moon Marines’ importation of Scrape.” The first lawsuit was actually filed two days before the plaintiffs quoted and bound…
The parents of a 14-year-old girl who allegedly died after consuming two 24-ounce Monster Energy® drinks in a 24-hour period have filed a wrongful death and strict product liability lawsuit against Monster Beverage Corp. in a California state court. Crossland v. Monster Beverage Corp., No. RIC 1215551 (Cal. Super. Ct., Riverside Cty., filed October 17, 2012). They claim that the teen went into cardiac arrest and was placed in an induced coma at Johns Hopkins Hospital to reduce brain swelling. After six days, life support was terminated, and the girl died. The plaintiffs allege that the autopsy report attributed her death to “cardiac arrhythmia due to caffeine toxicity complicating mitral valve regurgitation in the setting of Ehlers-Danlos syndrome.” The complaint contends that two of the company’s energy drinks contain 480 milligrams of caffeine, the equivalent of 14 12-ounce cans of caffeinated soda. Among other matters, the plaintiffs allege that the…
A federal jury in California has reportedly determined that Benihana properly classified three restaurant managers as exempt thus concluding wage-related litigation against the chain. Originally filed as a putative class action in state court, the case initially included claims about overtime wages, accrued vacation pay, rest and meal breaks, and itemized wage statements. By the time the case was tried after removal to federal court, it involved just three named plaintiffs and the overtime dispute. According to a news source, the company nearly derailed the case by alleging that one of the employees had copied and destroyed thousands of files from a computer at the company’s Cupertino, California, location. The court levied sanctions against the employee and dismissed him from the case, but then determined that the conduct, alleged to be “wrongful self-help discovery” and the deletion of stolen copies, may not have been “beyond the pale” because some evidence…
The Second Circuit Court of Appeals has certified to the New York Court of Appeals questions arising under state employment law in a dispute over the distribution of tips in Starbucks stores. Barenboim v. Starbucks Corp., No. 10-4912; Winans v. Starbucks Corp., No. 11-3199 (2d Cir., questions certified October 23, 2012). A federal district court determined that Starbucks properly distributed pooled tips to shift supervisors and that Starbucks was not required to include assistant store managers in its tip pools. The appellants in the consolidated appeals are a putative class of baristas who allege that shift supervisors are “agents” under New York Labor Law § 196-d and ineligible to share tips, and a putative class of assistant store managers who claim they are entitled to share in the tip pools because they perform the same tasks as baristas and have only limited management authority. The plaintiffs in both cases sought review…
