Following similar decisions from courts across the country, two California federal courts have delayed final rulings in cases accusing Kashi and Trader Joe’s of mislabeling their products by using the term “evaporated cane juice” (ECJ) in their ingredient lists rather than simply “sugar,” which the plaintiffs allege is the same substance. Gitson v. Trader Joe’s Co., No. 13-1333 (N.D. Cal., order entered August 7, 2014); Saubers v. Kashi Co., No. 13-899 (S.D. Cal., order entered August 11, 2014). In the proposed class action against Kashi, the plaintiffs accused the Kellogg-owned company of “misbranding” more than 75 different food products by listing ECJ instead of sugar on its labels to conceal its inclusion in the foods. The court found that the plaintiffs’ claims relied “heavily, if not entirely, on the premise that the [U.S. Food and Drug Administration (FDA)] has concluded that ‘evaporated cane juice’ is not the common or usual name…
Category Archives Litigation
The U.S. Environmental Protection Agency (EPA) and several conservation groups have agreed to a settlement that limits pesticide use near salmon habitats in three states in a lawsuit accusing the agency of failing to assess the effects of pesticides on salmon despite a 2004 court decision ordering it to consult with National Marine Fisheries Service (NMFS) on the issue. Nw. Ctr. for Alts. To Pesticides v. EPA, No. 10 1919 (W.D. Wash., stipulated settlement agreement filed August 13, 2014). The settlement bans aerial spraying of five pesticides—carbaryl, chlorpyrifos, diazinon, malathion, and methomyl—within 300 feet and ground applications within 60 feet of salmon habitats in California, Oregon and Washington. The restrictions will be in place while NMFS analyzes the impact of the pesticides on salmon, and according to the settlement, EPA will then be required to enact permanent protections based on the findings. The Fourth Circuit struck down similar provisions in 2013…
A Michigan federal court has denied a motion filed by FPC Flexible Packaging Corp. and The International Group, Inc. to dismiss evidence for spoliation in a case accusing the packaging company and the wax maker of providing Kellogg defective cereal liners, resulting in a $70 million recall. Kellogg Co. v. FPC Flexible Packaging Corp., No. 11-272 (U.S. Dist. Ct., W.D. Mich., S. Div., order entered August 12, 2014). Kellogg allegedly received several consumer complaints of unusual odors in its products, and the company said it obtained samples of products from two of the consumers. The cereal samples have since disappeared, but Kellogg preserved a piece of the plastic liner provided by one of the consumers. International and FPC argued that the loss of evidence could not have been accidental because Kellogg managed to keep the sample of the liner, but the court dismissed their arguments. “An appropriate jury instruction addressing the use…
A California federal court has dismissed several of the plaintiffs’ claims in a putative class action accusing Frito-Lay North America Inc. of mislabeling its Rold Gold pretzels as “low fat,” “fat free” or “all-natural” despite allegedly containing high sodium levels and unnatural ingredients. Figy v. Frito-Lay North America Inc., No. 13-3988 (N.D. Cal., order entered August 12, 2014). The court found that the plaintiffs had standing to sue on behalf of purchasers of several non-purchased products because Frito-Lay’s health claims were the same for each and the only difference was the shape of the pretzel products. The court then dismissed several of the plaintiffs’ claims. It found that it did not have subject matter jurisdiction to grant injunctive relief because Frito-Lay had triggered the plaintiffs’ obligation to prove jurisdiction by submitting declarations and extrinsic evidence of the plaintiffs’ lack of standing to seek an injunction, and the plaintiffs had then failed to…
The D.C. Circuit Court of Appeals has vacated a panel’s March 28, 2014, denial of the motion for preliminary judgment filed by meat producer interests in litigation challenging U.S. Department of Agriculture (USDA) regulations requiring retailers of “muscle cuts” of meat to list the countries of origin and production (country-of-origin labeling, or COOL) as to each step of production—born, raised or slaughtered. Am. Meat Inst. v. USDA, No. 13-5281 (D.C. Cir., order entered April 4, 2014). Additional information about the March 28 decision appears in Issue 518 of this Update. A court majority voted to rehear the case before the full court on May 19 and ordered the parties to brief a supplemental issue: “Whether, under the First Amendment, judicial review of mandatory disclosure of ‘purely factual and uncontroversial’ commercial information, compelled for reasons other than preventing deception, can properly proceed under Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651…
Chipotle Mexican Grill investors have filed a motion for final approval of a derivative-action settlement in a lawsuit accusing the restaurant chain’s executives of breaching fiduciary duties by failing to comply with employee work authorization requirements. Mohammed v. Ells, No. 12-1831 (D. Colo., motion filed July 31, 2014). The case stems from a U.S. Immigration and Customs Enforcement (ICE) investigation of the company that led to the firing of 450 Minnesota employees and 50 Washington, D.C., workers for lack of U.S. work authorization. In July 2012, Chipotle investors accused the company’s executives of breaching their fiduciary duties in several lawsuits that were later merged. After “intense, arm’s-length negotiations by experienced counsel,” the parties reached a settlement that earned preliminary court approval in April 2014. Under the settlement’s terms, Chipotle will provide twice-yearly reports to its audit committee, which oversees the company’s hiring requirement compliance. In arguing for settlement approval, the…
A plaintiff has alleged in Massachusetts federal court that Whole Foods Market mislabels its 365 Everyday Value Plain Greek Yogurt as containing 2 grams of sugar per serving despite Consumer Reports tests showing that a serving of the product contains an average of more than 11 grams of sugar. Knox v. Whole Foods Market, No. 14-13185 (U.S. Dist. Ct., D. Mass., filed Aug. 1, 2014). According to the complaint, the plaintiff learned about the alleged labeling discrepancy from Consumer Reports magazine, which tested six samples of 365 Everyday Value Plain Greek Yogurt and apparently found the average sugar content to be nearly six times the amount listed on the label. Whole Foods reportedly responded to the magazine’s findings by asserting that it relied on testing results from reputable third-party labs. The plaintiff alleges breach of warranty, unjust enrichment and negligence, and he seeks class certification, compensatory and punitive damages, attorney’s…
A plaintiff has accused cereal company Organic Milling of mislabeling its Nutritious Living Hi-Lo brand cereals as “100% natural” despite allegedly containing synthetic and heavily processed ingredients and being produced with genetically modified (GM) crops. Mirto v. Organic Milling, No. BC553780 (Super. Ct. Cal., Los Angeles Cty., filed Aug. 5, 2014). The complaint alleges first that the use of GM crops in the cereal’s production precludes the company from using the phrase “100% natural” on its marketing materials, citing definitions from the World Health Organization and Environmental Protection Agency to argue that “GM crops are not ‘natural,’ and products made from these crops, including [Organic Milling’s products], are not ‘100% natural.’” The complaint further argues that Organic Milling’s use of canola oil in Hi-Lo cereal is not “100% natural” either because of the heavy processing required to produce the oil. The plaintiff also objects to the use of emulsifier soy…
According to New York Southern District U.S. Attorney Preet Bharara, a man who allegedly operated a wine counterfeiting laboratory from his California residence between 2004 and 2012 has been sentenced to 10 years in prison. Rudy Kurniawan apparently became a prominent and prolific U.S. dealer of rare and expensive wine that was actually lower-priced wine blended to mimic the taste and character of far better wines. He allegedly purchased empty bottles of rare and expensive wines—some of them from New York City restaurants—poured his mixtures into them, sealed the bottles, and then attached counterfeit labels that he created. The fakes were then sold to wealthy wine collectors through auctions and by direct sales. According to a news source, Kurniawan was eventually caught through misspellings and other packaging errors, including early 20th century dates on some bottles that pre-dated their actual production. Kurniawan also allegedly fraudulently obtained a $3-million loan from a…
A federal court in California has granted in part the motion to dismiss filed by Diamond Foods, Inc. in a putative class action alleging that the company misleads consumers by claiming that its Reduced Fat Sea Salt Chips are “40% reduced fat potato chips” and its Backyard Barbecue Chips are “All Natural,” as well as making false and deceptive statements in the company’s “promotional materials” and on its “website.” Hall v. Diamond Foods, Inc., No. 14-2148 (U.S. Dist. Ct., N.D. Cal., order entered July 31, 2014). An amended complaint, if any, must be filed by August 15, 2014, and the case management conference will be held on October 31. The court dismissed the reduced fat claims finding them insufficiently pleaded because it was unclear whether the plaintiff read only the statement on the front of the bag, in which case he “would lack standing to argue the statements on the…
