The U.S. Supreme Court (SCOTUS) has denied certiorari to petitioners alleging that Aaroma Holdings LLC is liable for personal injury claims stemming from the use of diacetyl by Emoral Inc., which declared bankruptcy in 2011 after Aaroma bought its assets in 2010. Diacetyl Plaintiffs v. Aaroma Holdings LLC, No. 14-71 (U.S., cert. denied November 3, 2014). The petitioners had argued that freeing Aaroma from liability would create a loophole for companies looking to avoid tort liability by encouraging them to sell assets before filing for bankruptcy. Additional information about the certiorari petition appears in Issue 532 of this Update. Issue 544
Category Archives Litigation
Food & Water Watch and the Center for Food Safety (CFS) have reported that AquaBounty Technologies has been fined $9,500 USD for violating environmental regulations in Panama and call for the U.S. Food and Drug Administration (FDA), which is assessing the safety of the company’s genetically engineered (GE) salmon, to terminate its review and deny AquaBounty’s pending application to sell GE fish in the United States. The Panamanian National Environmental Authority apparently ruled on October 23, 2014, that AquaBounty failed to secure the permits needed for water use and water discharge before commencing operations. The decision came in response to a complaint filed in 2013 by the environmental organization Centro de Incidencia Ambiental. CFS senior attorney George Kimbrell said, “AquaBounty has not been able to follow the law, because it lacks the capacity, sophistication, will, or all of the above. This decision is also even further proof that FDA is…
Lucasfilm Ltd. has filed a notice of opposition to Walton Street Brewing Corp.’s application to the U.S. Patent and Trademark Office (USPTO) to register “Empire Strikes Bock” as a mark. Lucasfilm argues that the name will cause confusion with and dilute goods related to its 1980 film"The Empire Strikes Back," which, as Bloomberg BNA notes, is not associated with any active trademarks but may be famous enough to be protected under common law. The production company also claims that granting the “Bock” trademark will cause confusion with its existing mark—Skywalker Vineyards—in the alcohol industry. In an irreverent video response, Walton Street’s owner explains that the brewery has sold “Bock” on tap at its pub for several years and now intends to bottle it, and it never intended to cause any confusion with its “parody” beer. In the background, a person in a Stormtrooper costume appears to stir beer with a lightsaber,…
The U.S. Federal Trade Commission (FTC) has filed a complaint in a New Jersey federal court against Gerber Products Co., alleging that since 2011 the company has falsely promoted its Good Start Gentle infant formula as a product that can prevent or reduce the risk of a child developing allergies. FTC v. Gerber Prods. Co., No. 14-6771 (U.S. Dist. Ct., D.N.J., filed October 29, 2014). The formula is apparently made with partially hydrolyzed whey proteins (PHWPs) that Gerber purportedly claims make the product easier to digest than formula made with intact cow’s milk protein. Product stickers and ads compare the product to breastfeeding as a way to naturally protect a baby from allergies and claim that the formula is the “1st and ONLY” “TO REDUCE THE RISK OF DEVELOPING ALLERGIES.” The company also allegedly claims that the formula “is the first and only infant formula that meets the criteria for…
Diamond Foods, Inc. has agreed to settle the consumer fraud class action suits filed by plaintiffs in California and Florida alleging that the company falsely labels its Kettle Brand® chip products as “All Natural,” when they contain artificial, synthetic or genetically modified ingredients, or as “Reduced Fat” while referencing non-comparable foods. Klacko v. Diamond Foods, Inc., No. 14-80005 (S.D. Fla., motion for preliminary approval filed October 22, 2014). Details about one of two similar California lawsuits appear in Issue 510 of this Update. Under the agreement, the company would establish a $2.75-million fund for class member claims, pay the costs of class notice and administration up to $300,000 and agree not to oppose attorney’s fees, expenses and costs of $775,000. Class members with proof of purchase would be able to recover up to $20, representing $1.00 for up to 20 purchases; those without proof of purchase would recover up to $10.…
A California state court has approved the settlement of a putative class action alleging that Barney’s Worldwide Inc., owner of the Barney’s Beanery restaurant chain, falsely advertised its beef as Kobe beef when a U.S. Department of Agriculture (USDA) ban on the import of beef from Kobe, Japan, was in effect. Nalbantian v. Barney’s Worldwide Inc., No. BC493145 (Cal. Super. Ct., Cty. of Los Angeles, approval entered October 23, 2014). The plaintiff had alleged that Barney’s advertised its menu as containing Kobe beef—which the plaintiff said indicates that the beef comes from Wagyu-breed cattle raised and slaughtered in Kobe, Japan—despite a USDA ban imposed due to fears of disease in May 2010. Under the settlement, the restaurant chain will use “Kobe beef” on its menu only if it is listed as “American Kobe beef” and will pay up to $220,000 in $10 gift certificates to any class member who submits a claim…
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…
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,…
