An Arizona federal court has granted the U.S. Federal Trade Commission's (FTC's) request to temporarily shut down "Success By Health," an alleged pyramid scheme premised on the sale of instant coffee. The coffee, "MycoCafe," is touted as containing health benefits from mushrooms. "However, the FTC alleges that selling the product to coffee drinkers took a back seat to recruiting more affiliates," according to an agency press release. "The complaint alleges that when affiliates did try to sell the product to other consumers, they found themselves in competition with the company itself. Success By Health sells its products directly to the public for the same 'wholesale' price paid by affiliates, severely limiting affiliates’ ability to follow the defendants’ instructions to apply a 50 percent 'markup' before selling to the public."
Category Archives U.S. Circuit Courts
Four consumers have filed a putative class action alleging that BA Sports Nutrition's BodyArmor SuperDrink sports drinks are "unlawfully fortified junk food." Silver v. BA Sports Nutrition LLC, No. 20-0633 (N.D. Cal., filed January 28, 2020). "BodyArmor does not provide 'superior' or 'better' hydration to Plaintiffs and other consumers than other beverages, nor are the Plaintiffs or the general public hydration deficient and/or in need of its characteristics to replenish them from dehydration," the complaint asserts. The plaintiffs argue that BodyArmor is a sugar-sweetened beverage "that scientifically links to serious medical conditions, including obesity, type 2 diabetes, and cardiovascular disease, when regularly consumed." They allege that they "would not have purchased BodyArmor, purchased as much of it, or paid as much for it, had they understood that consumption does not provide them with a drink comprised of natural ingredients and/or that was more, natural, better for them than other drinks."…
A California federal court has refused to approve a $6.5 million settlement between Tri-Union Seafoods and commercial food preparers. In re Packaged Seafood Prods. Antitrust Litig., No. 15-2670 (S.D. Cal., entered January 17, 2020). The court found that the proposed $6.5 million, half of which would go to attorney's fees and $2 million to costs and expenses, "would provide at most $1.5 million" to the class. The gross settlement amount "is approximately one-third of the damages," the court noted, and "a rough calculation suggests that [the class] will collectively receive approximately 6.85% of the damages they attribute to [the defendant]."
The Seventh Circuit has declined to revive a putative class action alleging that Fannie May Confections Brands Inc. misleads consumers as to the amount of chocolates contained in its boxes. Benson v. Fannie May Confections Brands Inc., No. 19-1032 (7th Cir., entered December 9, 2019). The court found that the plaintiffs suffered no "actual damage" as a result of Fannie May's allegedly misleading packaging. The plaintiffs "never said that the chocolates they received were worth less than the $9.99 they paid for them, or that they could have obtained a better price elsewhere," the court held. "That is fatal to their effort to show pecuniary loss. Moreover, their request for damages based on the percentage of nonfunctional slack-fill is quite vague. They do not explain how a percentage refund of the purchase price based on the percentage of nonfunctional slack-fill corresponds to their alleged harm. They thus failed to raise…
An Arkansas federal court has granted Turtle Island Foods SPC, which does business as Tofurky Co., a preliminary injunction preventing the enforcement against it of an Arkansas law prohibiting the use of meat-related terms to describe plant-based products on food packaging. Turtle Island Foods SPC v. Soman, No. 19-0514 (E.D. Ark., C. Div., entered December 11, 2019). The court found that Tofurky "likely faces ruinous civil liability, enormous operational costs, or a cessation of in-state operations" if the statute is enforced against it. The court granted the preliminary injunction despite Arkansas' indication that it "does not intend to begin enforcement" until the constitutional challenge is resolved because "there is nothing in the record binding the State to that position" and "the State has made no assurances that it will not levy retroactive penalties for Tofurky's alleged violations of Act 501 between the law's passage and this litigation's conclusion."
An Illinois federal court has dismissed a lawsuit alleging Wendy's International discriminates against disabled customers who cannot independently access 24-hour Wendy's locations during night hours when the stores only accept drive-through orders. Davis v. Wendy's Int'l LLC, No. 19-4003 (N.D. Ill., E. Div., entered December 12, 2019). The court held that the Wendy's policy applied to all pedestrians regardless of their disabled status. "[A]s with any other non-drivers, [the plaintiff] could access the drive-through if she were a passenger in a car sharing service, a taxi, or a friend's car," the court noted. "Therefore, the fact that [the plaintiff] cannot drive because of her visual impairment does not establish that Wendy's drive-through policies are the but-for cause for her inability to obtain food. [] Instead, it is her status as a pedestrian that is the but-for cause of her injury." The court dismissed the plaintiff's claim with prejudice.
The U.S. Court of Appeals for the Federal Circuit has dismissed a challenge to trade dress protection granted to Al Johnson's Swedish Restaurant & Butik Inc., a Wisconsin restaurant that features grazing goats on its rooftop, brought by an attorney who found the trade dress "demeaning to goats." Bank v. Al Johnson's Swedish Restaurant & Butik Inc., No. 19-1880 (Fed. Cir., entered December 9, 2019). The attorney argued that the trade dress of the restaurant, which includes a rooftop covered in grass and several goats grazing on it, is "offensive" and "denigrates the value he places on the respect, dignity, and worth of animals." The Trademark Trial and Appeal Board found this argument insufficient to establish standing; the Federal Circuit agreed and dismissed the appeal.
The National Pork Producers Council and American Farm Bureau Federation have filed a lawsuit against the secretary of the California Department of Food and Agriculture alleging that Proposition 12, which was passed in November 2018 and established minimum requirements for the confinement of farm animals, "has thrown a giant wrench into the workings of the interstate market in pork." Nat'l Pork Producers Council v. Ross, No. 19-2324 (S.D. Cal., filed December 5, 2019). The complaint alleges that "Proposition 12 institutes a wholesale change in how pork is raised and marketed in this country. Its requirements are inconsistent with industry practices and standards, generations of producer experience, scientific research, and the standards set by other states. They impose on producers costly mandates that substantially interfere with commerce among the states in hogs and whole pork meat. And they impose these enormous costs on pork producers, which will ultimately increase costs for…
A New York federal court has denied class certification to a group of consumers alleging that they were misled by Kellogg Co.'s Pringles Salt & Vinegar chips label into believing the product contained no artificial ingredients. Marotto v. Kellogg Co., No. 18-3545 (S.D.N.Y., entered December 5, 2019). The plaintiff identified himself as a chef who has a deep knowledge of molecular gastronomy and is married to an attorney who works at a law firm seeking to represent the putative class. "Unfortunately, for [the plaintiff], once he popped, the fun did, ultimately, stop," the court noted, explaining that the plaintiff stated he was misled by the sodium diacetate and malic acid on the ingredient list. The court found that the plaintiff "plainly failed to satisfy the predominance requirement" because only four of 20 Pringles labels contained the challenged "No Artificial Flavors" label. "How is the Court supposed to sift through tens…
A California federal court has denied Clif Bar & Co.'s motion to dismiss a lawsuit alleging that its products marketed as containing white chocolate lack the claimed ingredients. Joslin v. Clif Bar & Co., No. 18-4941 (N.D. Cal., entered December 2, 2019). A previous version of the complaint was dismissed for failure to show that members of the public were likely to be deceived. The court again found that the plaintiffs failed to allege standing for the injunctive relief they sought, but it held that the amended complaint properly alleged facts that satisfy the "reasonable consumer" standard. "This is a close case," the court stated. "Having considered Plaintiffs’ amendments, the Court concludes Plaintiffs have nudged their claims over the line from possible to plausible. The Court concludes Plaintiffs’ allegations are sufficient to allege the Products’ labels would be likely to deceive a reasonable consumer and sufficiently allege facts to state…
