KFC franchisees have reportedly made their closing arguments before a Delaware Chancery Court in a dispute over the company’s advertising policies. They contend that 1997 amendments to the company’s corporate documents gave them the authority to propose and approve different advertising recommendations. The lawsuit was apparently filed after KFC Corp. launched an advertising campaign for grilled chicken menu offerings, which the franchisees opposed for their potential to dilute the company’s fried chicken brand. According to a news source, the franchisees argued that while they can veto funding for advertising by majority vote, this power is illusory because KFC could institute delays, thus causing a blackout that would inflict significant damage on franchisees. The company apparently countered that the franchisees do have the right to make recommendations or modifications to the company’s advertising policy and have exercised that right on several occasions. Still, the company reportedly indicated that the franchisees cannot have…
Category Archives U.S. Circuit Courts
A Florida man has sued a Houston’s restaurant and its manager for failing to train servers to explain to patrons how to eat grilled artichokes, contending that their negligence led to his hospitalization and exploratory bowel surgery. Carvajal v. Hillstone Restaurant Group, Inc., No. 10-57757 CA 03 (Fla. Cir. Ct., Miami Dade Cty., filed October 27, 2010). He alleges ordering a special item offered by a server, “which Plaintiff advised he had never seen or heard of previously.” According to the complaint, plaintiff Arturo Carvajal was not instructed that the outside portion of the leaf should not be eaten, although the restaurant “had a duty to use reasonable care with respect to the serving and explanation of items not described on the menu; which by their appearance as served appeared wholly consumable.” He is seeking damages in excess of $15,000.
Nestlé Prepared Foods Co. has filed a complaint against the suppliers of ingredients for its Lean Cuisine® frozen meals, which it was apparently forced to recall when it learned that some of the meals were contaminated with foreign, hard blue plastic pieces. Nestlé Prepared Foods Co. v. Nat’l Food Trading Corp., No. 10-1077 (D. Utah, filed October 29, 2010). According to the complaint, the plastic pieces were mixed into the sun-dried tomatoes that defendants sold to Nestlé. Customer complaints purportedly alerted Nestlé to the contamination, and “[a]t least one consumer reported an injury caused by the hard blue plastic materials.” Recalling some 880,000 pounds of frozen meals allegedly caused Nestlé to incur “substantial losses, including, but not limited to, refunds to customers, the value of the recalled meals, the value of the unusable sun dried tomatoes, cancelled orders, and the costs of shipping, storage, plant operations, and investigation, as well as…
The California Supreme Court has denied a petition for review filed by fast food restaurants seeking to overturn an intermediate appellate court ruling allowing further proceedings on claims that they violated Proposition 65 by selling grilled chicken products to consumers without appropriate warnings about carcinogens created by the cooking process. Physicians Comm. for Responsible Med. v. McDonald’s Corp., No. S186566 (Cal., decided October 27, 2010). The intermediate appellate court determined that federal law did not preempt the claims. Additional information about its ruling appears in Issue 360 of this Update.
A California court of appeals has denied the request of a former Chipotle employee to certify a class of current and former non-managerial employees alleging that the company violated labor laws by denying them meal and rest breaks. Hernandez v. Chipotle Mexican Grill, Inc., No. B216004 (Cal. Ct. App., 2d Dist., modified opinion filed October 28, 2010). The court agreed with the defendant that California law requires that employers provide, but not ensure, that employees take breaks. The court also found no error in the trial court’s denial of class certification because the court record showed that “Chipotle did not have a universal practice with regard to breaks.” Apparently, while the company paid for meal and rest breaks, some employees declared that they always missed meal breaks, some missed meal breaks but not rest breaks, some were not denied meal breaks, and others declared their breaks were delayed or interrupted…
The Second Circuit Court of Appeals has affirmed a district court’s dismissal of claims filed by a 76-year-old woman who alleged that she was seriously burned when trying to remove the lid from a cup of tea she purchased at Starbucks. Moltner v. Starbucks Coffee Co., No. 09-4943 (2d Cir., decided November 3, 2010). The court issued a non-precedential summary order to affirm the grant of defendant’s summary judgment motion. According to the court, the district court correctly excluded the testimony of plaintiff’s experts because they were unreliable under Federal Rule of Evidence 702 standards. In this regard, the court stated, “[w]ithout the testimony of her expert witnesses, Moltner’s claims fail because there is no way for a reasonable juror to determine, with respect to her defective design claim, whether the risks posed by the product’s design outweighed its utility, or, with respect to her negligence claim, whether Starbucks failed to…
Public Employees for Environmental Responsibility (PEER) has filed a complaint in federal court under the Freedom of Information Act (FOIA), seeking documents from the White House Office of Science and Technology Policy (OSTP) related to the development of policies to protect scientific integrity in federal agencies, such as the U.S. Department of Agriculture and the Food and Drug Administration. PEER v. OSTP, No. __ (D.D.C., filed October 19, 2010). According to the complaint, President Barack Obama (D) issued an executive order in March 2009, requiring the development of such rules by July. They have not yet been promulgated. OSTP Director John Holdren reportedly wrote online in June 2010 that the “process has been more laborious and time-consuming than expected,” and that an interagency panel has developed draft recommendations for OSTP and Office of Management and Budget review. Representatives from the latter two offices “have been honing a final set of recommendations”…
A California resident has filed a putative class action against the company that owns the Breyers ice cream brand, alleging violations of consumer protection laws because its 23 chocolate-flavored products are labeled “All Natural” but also contain cocoa processed with alkali. Denmon-Clark v. Conopco, Inc., No. 10-7898 (C.D. Cal., filed October 20, 2010). According to the complaint, “Breyers Ice Cream products containing alkalized cocoa are processed with potassium carbonate which is a recognized synthetic substance.” While acknowledging that the Food and Drug Administration (FDA) does not directly regulate the use of the term “natural,” the plaintiff alleges that the agency has a policy that defines “the outer boundaries of the use of that term” and clarifies that “a product is not natural if it contains color, artificial flavors, or synthetic substances.” The plaintiff alleges that FDA requires products made with an “alkalization” process to include the statement “Processed with alkali.” Breyers’ website…
According to a news source, an appellate lawyer in California has submitted an amicus brief to the Ninth Circuit Court of Appeals, claiming that the state’s ballot initiative process, adopted 99 years ago, was improperly voted into law. He has asked the court to certify the question to the California Supreme Court. This issue arose in a case involving the validity of Proposition 8, a voter-approved ballot measure that banned same-sex marriage. A federal district court ruled that Proposition 8 violates the U.S. Constitution. If the process that led to the adoption of Proposition 8 is ultimately overturned, it could call into question the validity of Proposition 65, which has required manufacturers and retailers to warn consumers if their products contain chemicals known to the state to cause cancer or reproductive harm. The state has been considering in recent months how to effectively apply the law to the food industry.…
A judge from the U.S. Court of International Trade, sitting by designation in a New York federal district court, has determined that the obesity-related claims filed in 2002 against McDonald’s Corp. cannot be pursued as a class action. Pelman v. McDonald’s Corp., No. 02-7821 (S.D.N.Y., decided October 27, 2010). Essentially, the court found that individual causation issues predominated over common ones and that, as to any common issues, the plaintiffs had failed to show that the putative class was sufficiently numerous for the court to certify an issues class. A spokesperson reportedly indicated that the company was pleased with the decision, stating, “As we have maintained throughout these proceedings, it is unfair to blame McDonald’s for this complex social problem.” Teenagers alleging obesity-related health problems claimed that they were misled by the fast food chain’s deceptive advertising into believing that the food could be consumed daily without any adverse health effects.…
