A consumer has filed a putative class action alleging the $1 surcharge that P.F. Chang’s imposes on its gluten-free menu items violates the Americans with Disabilities Act (ADA) by discriminating against those with celiac disease. Phillips v. P.F. Chang’s China Bistro, No. 15-344 (N.D. Cal., removed to federal court January 23, 2015). The complaint asserts that P.F. Chang’s maintains a separate gluten-free menu that charges $1 more than seemingly identical items on its regular menu and that it does not add a similar surcharge for other dietary accommodations. The plaintiff alleges that the surcharges lack justification because they “do not reflect additional costs of ingredients” and some of the items “are the same as the non-gluten free options or contain fewer ingredients” or are “naturally gluten free.” The plaintiff seeks certification of a California class and violations of the state’s Unruh Act, Disabled Persons Act and Unfair Competition Law. Issue…
Category Archives U.S. Circuit Courts
The Fourth Circuit Court of Appeals has affirmed a lower court’s dismissal of a case alleging that Kraft spammed an Internet service provider (ISP) with advertisements for its Gevalia® coffee products. Beyond Systems, Inc. v. Kraft Foods, Inc., No. 13-2137 (4th Cir., order entered February 4, 2015). Beyond Systems sued Kraft alleging violations of Maryland’s and California’s anti-spam statutes, but the circuit court agreed with the district court’s determination that Beyond Systems “invited its own purported injury and thus could not recover for it.” Beyond Systems is a Maryland ISP with servers housed at the residence of the owner’s parents, and the owner’s brother owns Hypertouch, Inc., a similar “nominal” ISP with servers in California. Both ISPs host websites with hidden email addresses that only “spam crawlers” can find, and Beyond Systems uses the email addresses as “spam traps”; the court notes that “spam-trap-based litigation has accounted for 90% of…
A Florida federal court has denied the state’s motion to dismiss a First Amendment lawsuit challenging regulations that require products labeled as “skim milk” to contain the same amount of vitamin A as whole milk. Ocheesee Creamery, LLC v. Putnam, No. 14-621 (N.D. Fla., order entered February 7, 2015). Because the process of skimming cream from milk removes much of the vitamin A content, the regulation requires skim milk to contain added vitamin A to bear the “skim milk” label; otherwise, it must be labeled as “imitation milk product.” Ocheesee Creamery’s November 2014 complaint claimed that by refusing to allow the company to sell its pasteurized skim milk with a “skim milk” label unless it added vitamin A—which the creamery views as tainting its “all-natural” products—Florida is censoring its use of the phrase “skim milk.” In its motion to dismiss, the state argued that the creamery had no standing and failed…
A California federal court has allowed most of the claims to proceed in a lawsuit alleging that Marie Callender’s baking mixes are labeled “all natural” despite containing the synthetic ingredient sodium acid pyrophosphate. Musgrave v. ICC/Marie Callender’s Gourmet Prods. Div., No. 14-2006 (U.S. Dist. Ct., N.D. Cal., order entered February 5, 2015). The court dismissed the plaintiff’s request for an injunction and unjust enrichment claim but denied the food company’s motion to dismiss all other claims. The court assessed each argument in the motion to dismiss in turn, finding first that the plaintiff’s claims were not preempted by the Federal Food, Drug, and Cosmetic Act or subject to the primary jurisdiction of the U.S. Food and Drug Administration. It then discussed whether a reasonable consumer would be deceived by the term “natural” on the baking mixes. The court dismissed the food company’s argument that the plaintiff offered inconsistent meanings of “natural”…
Finding a lack of standing, a D.C. federal court has dismissed Food & Water Watch’s lawsuit alleging that the U.S. Department of Agriculture’s (USDA’s) New Poultry Inspection System (NPIS) is inconsistent with the Poultry Products Inspection Act (PPIA), which requires USDA to ensure that poultry products are wholesome, unadulterated and properly marked, labeled and packaged. Food & Water Watch v. Vilsack, No. 14-1547 (D.D.C., order entered February 9, 2015). The NPIS reduces the number of USDA inspectors at the slaughter line of poultry production facilities, “freeing up [USDA Food Safety and Inspection Service] resources to conduct offline inspection activities that are more important for food safety, such as verifying compliance with sanitation and [other] requirements, or conducting Food Safety Assessments.” Food & Water Watch challenged the NPIS as consumers of poultry, arguing that the USDA inspection label indicated to them that a federal employee had inspected the poultry and that…
Challengers to the U.S. Department of Agriculture’s country-of-origin labeling (COOL) rules requiring meat products to indicate where the animals were born, raised and slaughtered reportedly will not continue to pursue their claims, according to a stipulation of dismissal. Am. Meat Inst. v. USDA, No. 13-1033 (D.C., stipulation filed February 9, 2015). The meat and poultry groups lost their First Amendment challenge to the mandatory labeling rules in the D.C. Circuit Court and were later denied a rehearing. The stipulation comes after a World Trade Organization (WTO) ruling against the United States in favor of Canada and Mexico, which argue that the rules discriminated against their livestock producers. “While we remain disappointed with the court’s ruling on country of origin labeling (COOL), we agree with the World Trade Organization’s assessment that the U.S. rule is out of compliance with its trade obligations to Canada and Mexico,” North American Meat Institute CEO…
Steven Neil, the former CFO of Diamond Foods Inc., has agreed to pay $125,000 to settle a U.S. Securities and Exchange Commission (SEC) lawsuit alleging that he directed his employees to underreport the amount of money paid to walnut growers to ensure that the company hit quarterly targets for earnings per share. SEC v. Diamond Foods, Inc., No. 14-122 (N.D. Cal., order entered February 2, 2015). According to SEC, Diamond falsely reported some of its payments to walnut growers as advances for crops not yet delivered to exclude the amounts from year-end financial statements, and after an investigation into the company’s accounting practices began, Neil allegedly gave independent auditors false and incomplete information about the payment scheme. Diamond and its former CEO, Michael Mendes, reached a deal with SEC in January 2014 to pay a $125,000 penalty along with returning more than $4 million that Mendes had received in bonuses…
A California federal court has dismissed two claims and allowed four to continue in a putative class action alleging that (i) Salov North America Corp. mislabeled its Filippo Berio olive oils as “Imported from Italy” despite using olives grown and pressed in other countries and (ii) its extra virgin olive oils do not meet the high standards required to qualify as “extra virgin,” partly due to inefficient bottling and transportation. Kumar v. Salov North Am. Corp., No. 14-2411 (N.D. Cal., order entered February 3, 2015). The court first assessed Salov’s challenge to the plaintiff’s standing and found that it could not, as a matter of law, determine that a reasonable consumer would not interpret “Imported from Italy” to mean that the product was made exclusively of Italian olives. Salov also asserted that the plaintiff must have seen the statement on the label that informed consumers that the product was “Packed…
A California federal court has granted plaintiffs’ motion to vacate the judgment and reopened a proposed class action against Attune Foods Inc., finding that the delay in guidance from the U.S. Food and Drug Administration (FDA) on whether “sugar” is the “common or usual name” for “evaporated cane juice” (ECJ), an ingredient that appears on Attune’s labels, could unfairly disadvantage the plaintiffs’ case. Swearingen v. Attune Foods Inc., No. 13-4541 (U.S. Dist. Ct., N.D. Cal., Oakland Div., order entered January 28, 2015). Citing the primary jurisdiction doctrine, the court had dismissed the case without prejudice in May 2014 to await FDA guidance after the agency reopened the comment period in March of that year to determine whether sugar and ECJ are materially different substances. After the plaintiffs sought relief from the judgment, the court has now determined that FDA’s delay could unfairly disadvantage the plaintiffs if the statute of limitations prohibits…
An Arkansas federal court has dismissed with prejudice a putative class action alleging that Twinings North America, Inc. mislabeled its tea by including the statement that the product is a “natural source of antioxidants” on its packaging. Craig v. Twinings North Am., Inc., No. 14-5214 (W.D. Ark., order entered February 5, 2015). The plaintiff had argued that under the Arkansas Food, Drug, and Cosmetic Act (AFDCA), an act identical to the food labeling regulations of the U.S. Food and Drug Administration (FDA), Twinings’ tea failed to meet the nutrient level threshold—10 percent or more of the recommended daily intake—required for a claim about the nutrient content of a product. Twinings argued that the Arkansas law claims were preempted by the Federal Food, Drug, and Cosmetic Act (FDCA) and could impose liability inconsistent with federal law. To assess the preemption argument, the court considered whether the statement “natural source of antioxidants” is…
