A federal court in New York has granted the motion for summary judgment filed by the owners of Kangadis Food Inc., a company that declared bankruptcy when faced with class claims that it falsely labeled its products as pure olive oil when they actually contain an industrially processed substance. Ebin v. Kangadis Family Mgmt. LLC, No. 14-1324 (U.S. Dist. Ct., S.D.N.Y., order entered October 24, 2014). Additional information about the litigation appears in Issue 539 of this Update. According to the court, the “plaintiffs have failed to adduce competent labeling evidence from which any reasonable juror could conclude that defendants used their alleged domination of Kangadis Food Inc. as a means to accomplish the fraud here alleged.” Counsel for the defendants reportedly surmised that the court agreed that the plaintiffs’ “derivative claims are nothing more than a desperate attempt to extract some value from the defendants, individuals and a separate entity with…
Category Archives U.S. Circuit Courts
A California federal court has rejected in part and granted in part Total Sweeteners Inc.’s motion for summary judgment in a case alleging that the molasses supplier sold American Licorice Co. shipments tainted with lead that American Licorice then used to create Red Vines black licorice candy, resulting in a costly recall. Am. Licorice Co. v. Total Sweeteners Inc., No. 13-1929 (N.D. Cal., order entered October 22, 2014). Additional details about the case appear in Issue 494 of this Update. American Licorice argued that, under the sales contract, Total Sweeteners was obliged to provide molasses that complied with state and federal regulations; Total Sweeteners asserted that American Licorice knew that molasses has some naturally occurring lead and should have tested for it upon receipt. The court focused on the contract, agreeing with Total Sweeteners that the sales contract between the parties, and not a subsequent purchase order with terms favorable…
A Texas federal court has rejected the argument that the founders of Gina’s Italian Kitchen infringed New York Pizzeria, Inc.’s (NYPI’s) trademark flavor in its Italian dishes. New York Pizzeria, Inc. v. Syal, No. 13-335 (U.S. Dist. Ct., S.D. Tex., order entered October 20, 2014). NYPI alleged that its former vice president and his business partner stole trade secrets, including recipes, and used them to infringe NYPI’s distinctive flavors and plating methods at their new restaurant, Gina’s Italian Kitchen. They allegedly obtained a franchisee’s username and password and used it to log onto NYPI’s franchisee website, which held, among other things, recipes for NYPI’s menu items. The court refused to dismiss the claims for violations of the Computer Fraud and Abuse Act and the Stored Communications Act stemming from alleged access to the franchisee website. The court then addressed NYPI’s Lanham Act claims. Asserting that “no special legal rule” prevents the…
Under a settlement agreement approved by a New Jersey federal court, Dakota Growers Pasta Co. will pay $7.9 million to resolve claims that it deceptively markets, advertises and sells Dreamfields Pasta as having a low glycemic index and only five grams of digestible carbohydrates per serving, making it a “healthy alternative to traditional pasta.” Mirakay v. Dakota Growers Pasta Co., Inc., No. 13-4429 (D.N.J., order entered October 20, 2014). The agreement stipulates that for one year, Dakota will remove from its packaging (i) the claims of a low glycemic index and low carbohydrates and (ii) the claim that the product can reduce spikes in blood glucose levels. Dakota will also pay $2.9 million in attorney’s fees and $5 million into a settlement fund for distribution to class members, who will receive $1.99 for every box of pasta ordered online without limit as well as for each box purchased in a store,…
An Arizona federal court has preliminarily approved a settlement in a lawsuit alleging that Bashas’ Inc. paid Hispanic workers less than comparable non-Hispanic workers from 1998 to 2007 in violation of Title VII of the Civil Rights Act of 1964. Parra v. Bashas’ Inc., No. 2-591 (D. Ariz., order entered October 21, 2014). The plaintiffs were employees at Bashas’ Inc.’s Food City stores, which cater mostly to Hispanic customers and whose staff was about 75 percent Hispanic. They alleged that they were paid on a lower pay scale than the mostly white employees at Bashas’ Inc.’s A.J. Fine Foods and Bashas’ stores. According to the plaintiffs, Bashas’ Inc.’s president personally set the pay scale each year, and an experienced Food City store clerk was allegedly paid $0.82 per hour less than a comparable Bashas’ store clerk in 1999—amounting to a loss of about $1,640 per year for a full-time employee. Under…
Adopting a magistrate judge’s recommendation, a Texas federal court has ruled that Texas can intervene in a lawsuit brought by brewer Alamo Beer Co. alleging that Old 300 Brewing infringed Alamo Beer’s trademark for using the silhouette of the Alamo building on its labels. Alamo Beer Co. LLC v. Old 300 Brewing LLC, No. 14-285 (W.D. Tex., order entered October 14, 2014). The state of Texas filed a motion to intervene in April 2014, asserting that its interests in the Alamo trademark were not adequately represented by either party. A magistrate judge issued a report on the matter in May recommending that Texas be allowed to join the lawsuit, and Alamo Beer argued to the court that the magistrate judge had failed to properly analyze two factors of mandatory intervention and that the state lacked the right to intervene under trademark law. Reviewing Alamo Beer’s concerns, the court rejected its arguments and…
A California federal court has granted in part and denied in part a motion for summary judgment in a lawsuit alleging that Mott’s violated the U.S. Food and Drug Administration’s (FDA’s) and California’s Sherman Law standards on the use of “no sugar added” on food packaging. Rahman v. Mott’s LLP, No. 13-3482 (N.D. Cal., order entered October 14, 2014). The plaintiff alleged that Mott’s 100% Apple Juice included a “no sugar added” label but failed to follow the additional FDA regulations requiring “a statement that the food is not ‘low calorie’ or ‘calorie reduced’ (unless the food meets the requirement for a ‘low’ or ‘reduced calorie’ food) and that directs consumers’ attention to the nutrition panel for further information on sugar and calorie content.” Mott’s moved for summary judgment on four grounds: the plaintiff (i) did not suffer damages as a result of purchasing the apple juice, (ii) lacked standing…
A New Jersey federal court has refused to dismiss a lawsuit alleging that Gerber falsely advertises some of its products as providing immune system boosts and as being nearly equal to breast milk. In re Gerber Probiotics Sales Practices Litig., No. 12-835 (D.N.J., order entered October 6, 2014). The plaintiffs alleged that Gerber misleadingly advertised three products—Good Start Protect Infant Formula, Good Start 2 Protect Formula for 9 through 24 months and DHA & Probiotic Cereal—as boosting immunity with an “Immuniprotect” formula that includes trademarked Bifidus BL probiotic bacteria. Gerber challenged the plaintiffs’ fourth amended complaint for lack of standing, arguing that the complaint did not allege that a named plaintiff purchased the infant formula product, but the court found that the basis for the claims was the same in that Gerber advertised each product as “scientifically advanced” and superior through the inclusion of Bifidus BL. The court agreed with Gerber’s…
A California federal court has preliminarily approved a settlement in a case alleging that Ghirardelli failed to include white chocolate, cocoa or cocoa butter in its white chocolate chips. Miller v. Ghirardelli Chocolate Co., No. 12-4936 (U.S. Dist. Ct., N.D. Cal., San Francisco Div., order entered October 2, 2014). Additional details about the settlement appear in Issue 535 of this Update, and further information about the litigation appears in Issues 465 and 479 of this Update. Under the agreement, Ghirardelli will pay $5.25 million to a common fund to distribute to class members. Notices to potential class members will appear in People magazine and the Oakland Tribune and on several popular websites, and any leftover balance in the settlement fund will be divided among several consumer and food organizations, including Consumers Union and Florida State University’s Food & Nutrition Science Department. A fairness hearing is scheduled for February 2015. …
Stewart Parnell, former CEO of Peanut Corp. of America (PCA), and his brother Michael Parnell, former vice president of sales, have filed a joint motion for a new trial following their recent convictions on charges stemming from a Salmonella outbreak traced to their peanut processing facilities. United States v. Parnell, 13-12 (M.D. Ga., motion filed October 7). In a separate motion, former quality control manager Mary Wilkerson asked the court to acquit her of obstruction-of-justice charges because, she argued, the government failed to provide “a recording, time log, video, affidavit, state or any time of record of the alleged interview” in which Wilkerson was apparently asked “if she was aware of any positives [for Salmonella] in any of the FDA Inspector’s notes.” In their motion, the Parnells claimed that jury members conducted their own research and discovered that the Salmonella outbreak had been linked to nine deaths, a fact that had been excluded…
