A federal court in New Jersey has, for a second time, requested supplemental briefing before approving a stipulated final order for permanent injunction and other equitable relief in the Federal Trade Commission’s (FTC’s) action against a company that allegedly marketed açai-berry weight-loss products with “fake” news reports and deceptive claims. FTC v. Circa Direct LLC, No. 11-2172 (D.N.J., order filed June 13, 2012). Among other matters, the court seeks FTC’s views on whether the agency has shown it was likely to succeed on the merits “without an admission of liability by the Defendants and with no evidentiary submissions before the Court.” The court also requests additional briefing on whether it “may consider the lack of an admission by the defendants in its public interest analysis under the [FTC Act].” When the parties submitted their first supplemental briefs, FTC Commissioner J. Thomas Rosch submitted a letter indicating that, in his view,…
Category Archives U.S. Circuit Courts
A California resident has filed a putative class action against Ralphs Grocery Co. alleging that it breached its promise not to share the personal information that shoppers must provide to obtain a “Ralphs rewards Card”; only cardholders may purportedly take advantage of advertised store discounts. Heller v. Ralphs Grocery Co., No. BC486035 (Cal. Super. Ct., Los Angeles Cty., filed June 6, 2012). He contends that he would not have shopped at the grocery stores or applied for a rewards card “if not for Defendant’s misrepresentation and/or nondisclosure of the fact that it was selling and/or sharing its customers’ personal identification information.” According to the complaint, the defendant shares customer information with Kroger and with dunnhumby, a company that allegedly “performs data mining services for more than 350 million people in 25 countries on behalf of retailers” and “uses personal identification information and data from purchase transactions gleaned from the Ralph’s reward Card…
Seeking to represent a statewide class of product purchasers, a California resident has filed a putative class action against Costco, alleging that the company falsely sells its Kirkland Signature Kettle Brand Potato Chips®, which purportedly contain “more than 13 grams of fat per 50 grams,” with a “0 Trans Fat” label. Thomas v. Costco Wholesale Corp., No. 12-2908 (N.D. Cal., filed June 5, 2012). Citing 21 C.F.R. § 101.13(h), plaintiff Karen Thomas contends that the defendant is “prohibited from making the unqualified nutrient claims of ‘0 grams Trans Fat’ on its food products if they contain fat in excess of 13 grams, saturated fat in excess of 4 grams, cholesterol in excess of 60 milligrams, or sodium in excess of 480 mg per 50 grams, unless the product also displays a disclosure statement that informs consumers of the product’s fat, saturated fat and sodium levels.” She alleges that the product…
A Cuyahoga County, Ohio, court has reportedly determined that a state law prohibiting municipalities from regulating the ingredients used in prepared foods, such as restaurant meals and grocery or bakery takeout items, does not preempt Cleveland’s ordinance prohibiting retail food establishments from selling foods containing trans fats. Cleveland announced the ban in April 2011, and several months later, Ohio’s General Assembly amended the state’s budget with a provision prohibiting municipalities from restricting the food at food service establishments “based on the food nutrition information.” Cleveland sued the legislature in January 2012, contending that it had encroached on its home rule authority. City of Cleveland v. Ohio, No. cv-12- 772529 (Ohio Ct. Com. Pl., Cuyahoga Cty., decided June 11, 2012). Additional information about the lawsuit appears in Issue 422 of this Update. The court apparently agreed, noting in the case docket that the amendment was unconstitutional and that the city’s enactment…
A federal court in Florida has denied the Federal Trade Commission’s (FTC’s) request that it modify a stipulated final order resolving a 2006 dispute with Garden of Life, Inc. over purportedly unsubstantiated representations that its products could treat a range of serious diseases and their symptoms. FTC v. Garden of Life, Inc., No. 06-80226 (S.D. Fla., filed May 25, 2012). The parties had agreed that the company could make such claims if supported by “competent and reliable scientific evidence,” defined in the stipulated final order as “tests, analyses, research, studies, or other evidence based on the expertise of professionals in the relevant area, that has been conducted and evaluated in an objective manner by persons qualified to do so, using procedures generally accepted in the profession to yield accurate and reliable results.” Claiming that the company was continuing to deceive consumers and that “the Stipulated Final Order has failed to…
The Second Circuit Court of Appeals has upheld an award of $10,000 in sanctions under Federal Rule of Civil Procedure 11 for the filing of a frivolous action related to trademark infringement litigation between companies that make and sell hoisin sauce. Star Mark Mgmt., Inc. v. Koon Chun Hing Kee Soy & Sauce Factory, Ltd., Nos. 10-4931, 11-16 (2d Cir., decided June 13, 2012). Koon Chun prevailed, in part, on its claims of willful trademark infringement against Star Mark, based on Star Mark’s sale of counterfeit versions of Koon Chun’s hoisin sauce. A magistrate judge awarded damages and costs, and the Second Circuit affirmed. In the meantime, the parties were litigating Star Mark’s suit to cancel Koon Chun’s mark “on the theory that Koon Chun’s use of the word ‘hoisin’—which translates to ‘seafood’—was deceptive because the sauce did not contain seafood.” When considering this matter in a motion to amend…
On remand from the U.S. Supreme Court, the Ninth Circuit Court of Appeals has issued an order which reinstates a district court ruling that a California law regulating swine slaughterhouses and nonambulatory animals was preempted by federal law. Nat’l Meat Ass’n v. Harris, Nos. 09-15483 and -15486 (9th Cir., order entered June 8, 2012). Additional details about the case and the unanimous U.S. Supreme Court ruling appear in Issue 424 of this Update.
The Sixth Circuit Court of Appeals has determined that the Roskam Baking Co. did not infringe a trademark by using the term “Texas Toast” in selling its packaged croutons. T. Marzetti Co. v. Roskam Baking Co., No. 10-3784 (6th Cir., decided May 25, 2012). Marzetti apparently began using the Texas Toast mark for its frozen garlic bread in 1995 and then adopted the term for use with a crouton product sold in 2007. The company attempted to register the mark in 2009, but the applications were initially denied “because of the potential likelihood of confusion with the mark Texas toast for bakery goods.” Thereafter, they were approved for publication as, “at a minimum, suggestive.” The defendant filed an opposition to the trademarks in 2010, and Marzetti, learning about the company’s Texas Toast croutons, filed this trademark infringement action. The Sixth Circuit agreed with the district court that the mark is not…
A California resident has filed a putative class action against Starbucks Corp. alleging that the company deceived consumers by failing to disclose that some of its products were made with cochineal extract, a common food-coloring ingredient made from crushed insects. Anderson v. Starbucks Corp., No. BC485438 (Cal. Super. Ct., Los Angeles Cty., filed May 25, 2012). Seeking to represent a nationwide class and statewide subclass of consumers, the plaintiff claims that she and the class members, had they known about the company’s use of the ingredient, would not have purchased the products for a number of reasons, including objections to consuming animal products, allergic responses to the ingredient or “sheer disgust.” Alleging violations of the California Unfair Business Practices Act and False Advertising Act, unjust enrichment, fraud by omission/concealment, and violation of California’s Consumers Legal Remedies Act, the plaintiff seeks disgorgement, restitution, compensatory and punitive damages, payment to a cy pres fund,…
A Florida resident has filed a complaint on behalf of a nationwide class of consumers against Frito-Lay, alleging that it sells the company’s snack foods, such as Tostitos® chips, Sunchips® and bean dip, as “All Natural” without disclosing that they contain genetically modified organisms (GMOs). Foust v. Frito-Lay N. Am., Inc., No. 12-21975 (S.D. Fla., filed May 25, 2012). According to the complaint, “The Product poses a potential threat to consumers because medical research and scientific studies have yet to determine the long-term health effects of genetically engineered foods. Recent studies suggest that GMOs may in fact be harmful to a consumer’s health.” Still, the plaintiff does not allege personal injury, claiming instead that he would not have purchased the product “if he had known that the Defendant could not support their [sic] claim that the Product is all natural because it contains GMOs.” In this regard, the plaintiff notes that…
