The multitdistrict litigation (MDL) court in Missouri before which nearly 20 putative class actions against Aurora Dairy Corp., an accredited organic certifying agent and several retailers had been consolidated for pre-trial proceedings, has dismissed the lawsuits with prejudice finding that federal organic food laws preempt the claims. In re Aurora Dairy Corp. Organic Milk Mktg. & Sales Practices Litig., MDL NO. 08-1907 (E.D. Mo., decided June 3, 2009). Relying on a U.S. Department of Agriculture (USDA) investigation that found the dairy in violation of national organic program requirements relating to pasturing and organic management, the plaintiffs alleged violations of various state consumer protection laws, breaches of express and implied warrantees, negligence per se, negligent misrepresentation, and unjust enrichment. The court discusses at length the program under which Aurora Dairy conducted its operations with the overall supervision and control of USDA. While the court found that the litigation claims were not expressly…
Category Archives U.S. Circuit Courts
A federal magistrate in Colorado has consolidated two lawsuits that address whether Aurora Dairy Corp.’s insurers are required to defend or indemnify the organic dairy in a host of consumer class actions alleging that the company falsely certified its milk as organic. ACE Am. Ins. Corp. v. Aurora Organic Dairy Corp., No. 08-1236 (D. Colo., order entered May 20, 2009). The putative class actions, consolidated before a multidistrict court in Missouri, claim that Aurora’s milk products do not conform to organic standards, citing a U.S. Department of Agriculture report that purportedly found shortcomings in Aurora’s organic operations. Among other matters, the claimants seek disgorgement for unjust enrichment. Aurora sued Nationwide Agribusiness Insurance Co. seeking a declaration that the insurer was required to defend it in at least one of the pending class actions. The dairy also sued for bad faith, breach of contract and related claims. A group of insurers…
As anticipated, federal prosecutors have reportedly filed a motion to dismiss a number of charges of aiding and abetting aggravated identity theft against a Postville, Iowa, slaughterhouse, its former executive and a former manager. The action was taken after the U.S. Supreme Court ruled that a conviction under the identity theft law requires a showing that those presenting false identification documents to employers knew they belonged to another real person. More information about the case and its effect on charges arising from the immigration raids that occurred in Iowa in 2008 appear in issue 303 of this Update. According to a news source, prosecutors knew they would be unable to prove that the undocumented immigrants who worked at an Agriprocessors, Inc. facility knowingly used identification papers belonging to others, and thus, they would be unable to prove that the managers and executives were guilty of aiding and abetting. After nearly…
The Vermont Supreme Court has refused to expand liability to allow the recovery of non-economic damages in litigation involving the death of pets. Goodby v. Vetpharm, Inc., No. 2009 VT 52 (Vt., decided May 8, 2009). While the issue arose in a case involving the alleged negligence of a veterinarian and pharmaceutical company, the question whether pain and suffering damages are available to pet owners also came to the fore when melamine-contaminated pet food injured or killed cats and dogs throughout the United States and Canada in 2007. Shook, Hardy & Bacon Public Policy Partner Victor Schwartz and Associate Phil Goldberg submitted an amicus curiae brief to the court on behalf of the Animal Health Institute, Federation of Dog Clubs, American Kennel Club, and Pet Industry Joint Advisory Council, analyzing the legal and public policy implications of allowing such damages. The brief explained to the court how this proposed liability would depart from hundreds…
The Tenth Circuit Court of Appeals has affirmed a lower court’s decision not to enjoin Tyson Foods, Inc. from using poultry litter as fertilizer. Oklahoma v. Tyson Foods, Inc., No. 08-5154 (10th Cir., decided May 13, 2009). Oklahoma’s attorney general sought a preliminary injunction to halt the practice, arguing that poultry litter contains E. coli, Salmonella and Campylobacter and that its use in the Illinois River Watershed in Arkansas and Oklahoma caused fecal bacterial contamination of the watershed’s waterways, which are popular for water recreation and supply drinking water for local residents. Tyson responded that the bacteria come from multiple sources including wildlife, various farm animals and humans. The company also noted that the way its farmers treat poultry litter kills any bacteria and that the watershed’s bacteria levels “do not correlate to poultry farming or litter application, but rather correspond to areas of cattle farming and human activity.” The…
The named plaintiff who brought a putative class action for false advertising of healthy menu items against a company that operates chain restaurants across the United States has reportedly agreed to dismiss with prejudice the claims she filed in a federal court in Texas. Paskett v. Brinker Int’l Inc., No. 08-942 (N.D. Tex., dismissed April 20, 2009). The plaintiff alleged that the healthy menu items at Chili’s Grill & Bar, Romano’s Macaroni Grill and On the Border Mexican Grill & Cantina restaurants actually contained higher levels of fat, calories and total carbohydrates than listed on the menus. The named plaintiff has filed similar claims in California against Applebee’s parent company, alleging that she dined at these restaurants because they offered a Weight Watchers menu, which was also purportedly advertised and marketed inaccurately. See LexisNexis® Mealey’s™ Litigation Report, Food Liability, May 2009.
A Texas resident has filed a putative class action in a New Jersey federal court against the manufacturer of a fruit blend, which he alleges is falsely advertised as a product that helps control blood pressure and flush sodium. Slaughter v. Unilever United States, Inc., No. 09-2072 (D.N.J., filed May 1, 2009). At issue is Unilever’s SuperShots®, a fruit blend in three flavors sold in small “shot”-sized bottles. Each contains 350 mg of potassium and is allegedly promoted as a functional food that “will enable consumers to help control blood pressure and flush sodium from their bodies.” According to the complaint, the product does not have this effect and has not been subjected to any clinical trials. The plaintiff seeks to certify a nationwide class of product purchasers and alleges violations of New Jersey’s Consumer Fraud Act, breach of implied and express warranties and unjust enrichment. He seeks restitution, disgorgement, monetary…
The U.S. Department of Justice (DOJ) has intervened in a qui tam, or whistleblower, lawsuit filed in California by the Humane Society of the United States against two former suppliers to the National School Lunch Program. The suit alleges that Hallmark Meat Packing Co. and Westland Meat Co., Inc. knowingly and falsely represented that cattle at their slaughtering facility were treated humanely and that beef supplied to the schools did not include meat from disabled, non-ambulatory animals. Videotape of employees abusing non-ambulatory animals at the slaughterhouse resulted in the recall of 143 million pounds of beef in February 2008. Under the False Claims Act, private parties, or “relators,” may file claims on behalf of the U.S. government and may recover a portion of any recovery. The government, which will file an amended complaint now that it is a party to the action, is entitled to treble damages and civil penalties of…
A federal court in New Jersey has reportedly refused to seal information about a proposed settlement involving putative class claims that the manufacturers of “Pirate’s Booty” and “Veggie Booty” food products misrepresented their nutritional labeling information. Schatz-Bernstein v. Keystone Food Prods., Inc., No. 08-3079 (D.N.J., order entered April 17, 2009). The snacks were allegedly marketed as containing only 2.5 grams of fat and 120 calories per serving, when they actually contained nearly four times the fat and were 25 percent higher in calories. The plaintiff alleges breach of express warranty, unjust enrichment and a violation of consumer protection laws. According to a news source, the defendants sought to seal settlement details that the plaintiff allegedly published improperly. The plaintiff has apparently maintained that the defendants reneged on the agreement. Denying the defendants’ motion to seal, the court reportedly ruled that the defendants wrongly classified their settlement discussions with the court…
A federal court in Illinois, presiding over consolidated multidistrict litigation claims against McDonald’s Corp. for allegedly advertising its French fries as gluten-, wheat- and dairy-free while actually using small amounts of hydrolyzed wheat bran and casein in them, has denied plaintiffs’ motion for class certification. In re McDonald’s French Fries Litig., MDL No. 1784 (N.D. Ill., decided May 6, 2009. The court determined that the class definition was indefinite and overbroad, the proposed class would be unmanageable, and individual issues would predominate over common ones. The plaintiffs, who alleged violations of all 50 states’ and the District of Columbia’s consumer fraud and/or deceptive trade practices acts, breach of express warranty and unjust enrichment, sought to certify a nationwide class of all persons “who purchased Potato Products from McDonald’s restaurants on or after February 27, 2002 through February 7, 2006 and who at the time of purchase had been medically diagnosed with…
