A Venice, Italy-based wine producer has sued a German wine distributor for unfair competition and trademark and copyright infringement in a federal court in California, alleging that the defendant ships to the United States for sale by a U.S. distributor a “gray market” product purporting to be the plaintiff’s pinot grigio wine. Santa Margherita, S.p.A v. Unger Weine KG, 12-3499 (C.D. Cal., filed April 23, 2012). According to the complaint, the U.S. distributor entered a consent order with the plaintiff in 2011 prohibiting it from importing, selling, marketing, and distributing Santa Margherita Pinot Grigio in the United States. The plaintiff contends that it sells its wine in the United States exclusively through an Illinois distributor and closely monitors the distribution network to ensure product quality. The complaint alleges, “Gray Market Santa Margherita Wine is sold and distributed outside this authorized distribution channel and is not subject to the same quality…
Category Archives U.S. Circuit Courts
The claims process under two settlements reached with the company that makes the hazelnut spread Nutella® is underway, and consumers can recover up to $20, or $4 each for up to five jars purchased during the relevant periods. In re: Ferrero Litig., No. 11-205 (S.D. Cal.) (California class, Aug. 1, 2009 – Jan. 23, 2012); In re: Nutella Mktg. & Sales Practices Litig., No. 11-1086 (D.N.J.) (Nationwide class, except California, Jan. 1, 2008 – Feb. 3, 2012). The settlement funds available to both classes total $3.05 million, but if the claims exceed this amount, individual payments “will be reduced proportionately.” Under the settlement agreement, the company, which continues to deny any wrongdoing, will modify its product label and certain marketing statements, create new TV ads, and change the Nutella® website. The company also agreed not to object to a California fee award of $900,000 and New Jersey fee award of $3…
A federal grand jury in Illinois has brought criminal indictments against four individuals who allegedly distributed more than 110,000 pounds of Mexican cheese in the United States in 2007 despite Food and Drug Administration (FDA) “hold” orders and also allegedly “washed” cheese returned by dissatisfied customers by scraping off mold and fungus so it could be resold. United States v. Zurita, No. __ (N.D. Ill., indictment returned April 18, 2012). No illnesses or other public health issues were attributed to the adulterated cheese distribution in the six-count indictment. The charges involve three separate shipments of cheese from Mexico that FDA ordered to be held and then later ordered either “detained” or “refused” after testing revealed the presence of Salmonella, E. coli, alkaline phosphate (found in unpasteurized products), and Staphylococcus. The defendants allegedly conspired to distribute the shipments despite FDA orders not to do so. They also allegedly distributed cheese before inspection, failed…
The Ninth Circuit Court of Appeals has affirmed the dismissal of a putative class action filed against Dreyer’s Grand Ice Cream, Inc., alleging that the company misrepresented its products by labeling them as “0g Trans Fat” when they actually contain some trans fat per serving. Carrea v. Dreyer’s Grand Ice Cream, Inc., No. 11-15263 (9th Cir., decided April 5, 2012) (unpublished). According to the court, because the products contain less than 0.5 grams of trans fat per serving, “the Nutrition Facts panel must express this amount as zero” under federal law, and the “same rule applies to the statement” on the front-of-package label. “In essence,” said the court, “Carrea seeks to enjoin and declare unlawful the very statement that federal law permits and defines. Such relief would impose a burden through state law that is not identical to the requirements under section 343(r). These claims are therefore expressly preempted.” The court also found…
A California egg farmer has filed a lawsuit challenging the constitutionality of Proposition 2 (Prop. 2), a voter-approved ballot initiative that, beginning January 1, 2015, will subject egg producers to criminal sanctions for confining egg-laying hens to cages preventing them from “lying down, standing up, and fully extending . . . [their] limbs” and “turning around freely.” Cramer v. Brown, No. 12-03130 (C.D. Cal., filed April 10, 2012). Contending that Prop. 2 violates his due process rights because it is vague and will result in arbitrary enforcement, the plaintiff claims that he and others will likely shut down their farms before the effective date and that the price of eggs will skyrocket for state consumers and supply shortages will occur if it goes into effect. The plaintiff also alleges that Prop. 2 violates the Commerce Clause by failing to provide local benefits and greatly burdening interstate commerce. According to the…
California resident Tricia Ogden has filed a putative class action in federal court against Bumble Bee Foods, LLC, alleging that it misbrands its seafood products by claiming they “are an excellent and affordable source of protein, nutrients and Omega 3 fatty acids” and “Rich in Natural Omega-3.” Ogden v. Bumble Bee Foods, LLC, No. 12-01828 (N.D. Cal., filed April 12, 2012). The only injury apparently alleged is economic, i.e., “Plaintiff would have foregone purchasing Defendant’s products and bought other products readily available at a lower price,” and “Plaintiff would not have purchased Defendant’s Misbranded Food Products had he [sic] known they were not capable of being legally held or sold.” According to the complaint, such representations and labeling establish that the company’s products are drugs under federal law “because they are intended for use in the diagnosis, cure, mitigation, treatment or prevention of disease” and are sold without prior Food and…
According to the U.S. Equal Employment Opportunity Commission (EEOC), the owner and operator of a long-term residential treatment facility for chemically dependent women and their children has agreed to pay $125,000 to the estate of an employee allegedly terminated from her position because she was severely obese. EEOC v. Res. for Human Dev., Inc., No. 10-03322 (E.D. La., consent decree entered April 10, 2012). Additional information about the court decision denying the employer’s motions for summary judgment and recognizing obesity as a disability under the Americans with Disabilities Act (ADA) appears in Issue 421 of this Update. EEOC also indicated that under the consent decree, the employer will “provide annual training on federal disability law to all human resources personnel and corporate directors of RHD [Resources for Human Development] nationwide.” The agreement further requires the company to report to EEOC “for three years on all complaints of disability discrimination and…
A federal court in California has granted in part and denied in part the defendant’s motion to dismiss claims that its product labels, ads and Website representations for Muscle Milk® ready-to-drink beverages and snack bars violate state unfair competition and false advertising laws and the California Consumers Legal Remedies Act, and constitute fraud, negligent misrepresentation and unjust enrichment. Delacruz v. Cytosport, Inc., No. 11-3532 (N.D. Cal., decided April 11, 2012). While the court determined that the plaintiff has standing to pursue the putative class claims and that the claims are not preempted by federal law nor should be stayed under the primary jurisdiction doctrine, it found many of her claims insufficiently pleaded. According to the court, the only claim that survives the motion to dismiss alleges that the term “healthy fats” on the 14-ounce Muscle Milk® ready-to-drink label could constitute deceptive product labeling, because “[a] reasonable consumer would be likely…
Under a court order preliminarily approving a settlement of consumer fraud claims involving purported health benefit labeling used to sell Diamond Foods walnuts, the class notification program has apparently begun. Zeisel v. Diamond Foods, Inc., No. 10-01192 (N.D. Cal., preliminary approval order entered January 30, 2012). The court previously certified a nationwide class of consumers who have until July 30, 2012, to opt out of or object to the settlement. Additional details about the certification ruling appear in Issue 397 of this Update. The deadline for filing a claim is September 7. While the company admits no wrongdoing, it has ceased using the disputed product labels and has removed a “Live Well” section from its website. It also agreed to cease using unqualified health claims, but reserves “the right to use the FDA-approved qualified health claim for walnuts, any language or symbols developed by or in conjunction with the American…
The insurance carriers for Rubio’s Restaurant have filed a motion for summary judgment in a dispute with the company that insured the restaurant’s fish supplier, following the settlement of claims pursued by a restaurant patron who alleged that he has permanent and severe neurological injuries from exposure to a toxin from the mahi mahi in a Rubio’s fish burrito. Fireman’s Fund Ins. Co. v. Nationwide Mut. Fire Ins. Co., No. 11-0114 (S.D. Cal., motion filed April 9, 2012). While the patron and his wife reportedly sought $7 million in damages, the settlement amount remains undisclosed. According to the plaintiffs, the defendant must reimburse them for the costs of defending the restaurant and the amounts they contributed to the settlement on the restaurant’s behalf. The restaurant was evidently an additional insured under the defendant’s policy with the fish supplier, and the plaintiffs argue that a duty to defend exists when there…
