The state attorneys general (AGs) of Oregon, Vermont and Washington have reportedly filed separate lawsuits against Living Essentials and its parent Innovation Ventures seeking a permanent injunction to stop allegedly misleading and deceptive advertising for 5-hour ENERGY®. According to news sources, other state AGs are expected to bring similar action; some 30 have been investigating the accuracy of company ads for the product. Washington AG Bob Ferguson has alleged that the defendants violated the state consumer protection statute by (i) airing TV commercials with “survey results” from doctors who “recommend” the product “while misrepresenting survey results and failing to disclose key facts”; (ii) using a misleading “no sugar crash” product tagline given studies demonstrating a caffeine crash; (iii) implying that the product can be consumed by teens with the label statement, “Do not take if you are pregnant or nursing, or under 12 years of age”; and (iv) claiming that the…
Category Archives Litigation
A federal court in Illinois has dismissed without prejudice a putative class action alleging consumer fraud against a company that makes snacks which list evaporated cane juice (ECJ) as an ingredient. Ibarrola v. Kind, LLC, No. 13-50377 (N.D. Ill., order entered July 14, 2014). The court declined to address whether the plaintiff had standing to assert claims as to products she had not purchased because class issues such as adequacy and typicality had not yet been briefed and further declined to consider dismissing the complaint under the primary jurisdiction doctrine, noting that the U.S. Supreme Court may have called this rationale into question in POM Wonderful LLC v. Coca-Cola Co., No. 12-761, 2014 WL 2608859 (June 12, 2014). The court dismissed the entire complaint, however, because it failed “to plausibly and adequately alleged that [the plaintiff] was deceived by Kind’s representations.” She did not apparently “explain how she was deceived, or…
A California federal court has dismissed on jurisdictional grounds Quest Nutrition LLC’s lawsuit against Louisiana State University Agricultural Center accusing the school of filing a patent for a sweetener using Quest’s confidential information. Quest Nutrition LLC v. Bd. of Supervisors of LSU Agric. & Mech. Coll., No. 14-2005 (C.D. Cal., order entered July 8, 2014). The court ruled that the majority of Quest’s claims—including those for unfair competition and breach of contract—arose under state law so the court lacked subject matter jurisdiction, and the court held that state courts and the U.S. Patent and Trademark Office have subject matter jurisdiction over Quest’s patent claims. Quest hired LSU Agricultural Center in 2013 to test a potentially new sweetener and bound the information by a confidentiality agreement. The company alleged that the university succeeded in identifying the formula for the sweetener and filed a patent application with the information that did not list Quest…
The Ninth Circuit Court of Appeals has upheld the settlement of class actions alleging consumer fraud in ads portraying Nutella as a healthy breakfast food. In re Ferrero Litigation, No. 12-56469 (9th Cir., decided July 16, 2014) (unpublished). Three members of the certified statewide class objected to the settlement, which provided $550,000 to reimburse class members, required ad-campaign and product-labeling revisions and awarded $985,920 in attorney’s fees. The objectors claimed inadequate notice of the attorney’s fee request, lack of justification or explanation for the fee award and the district court’s failure to consider whether class counsel adequately represented the class. The court found no basis for the objections, noting in part that the district court properly applied the lodestar method to the attorney’s fee calculation and that no indicia of collusion were present. Issue 530
Briefing has been completed before the U.S. Supreme Court (SCOTUS) on a petition seeking review of the Ninth Circuit Court of Appeals ruling upholding California’s prohibition on the sale of food produced by force feeding birds to enlarge the liver beyond normal size. Association des Éleveur de Canards des d’Oies du Québec v. Harris, No. 13-1313 (U.S., distributed for Sept. 29, 2014, conference on July 16). Additional details about the Ninth Circuit’s ruling appear in Issue 497 of this Update. Joining the Canadian and New York foie gras producers that filed the certiorari petition are the attorneys general (AGs) of 13 states. Their amici curiae brief claims that the petition presents an issue of “exceptional importance to the preservation of state sovereignty,” namely, that the lower court’s decision “allows the states to engage in economic isolationism, set themselves against one another, and balkanize the nation, thus giving rise to trade wars…
A Hawaii state court has reportedly ordered Hawaii County not to publicly disclose the identity and specific location of farms that grow genetically modified (GM) papayas. While the order apparently allows the county to maintain registration information under a December 2013 law that also prohibited open-air use and testing of GM crops, the court agreed with two GM papaya growers that the registration program lacked clear rules as to information that could be released to the public. According to a news source, the growers are concerned about vandalism or other economic harms. The court’s preliminary injunction states that releasing information about specific farm locations would not “protect farmers of nongenetically engineered crops” due to a “limited” cross-pollination risk and because GM papayas are not prohibited. A Kohala councilwoman reportedly expressed satisfaction with the ruling and contended that the general location of farms could still be made public under the injunction.…
A federal court in California has granted final approval to the nationwide class settlement of claims that the company which makes Muscle Milk® products deceived consumers by labeling them with the terms “Healthy, Sustained Energy” and “Healthy Fats.” Delacruz v. CytoSport, Inc., No. 11-3532 (N.D. Cal., order entered July 1, 2014). Additional information about the litigation and settlement appears in Issues 403, 436, 475, and 505 of this Update. Under the agreement, CytoSport will pay $1 million to eligible class members and cease using the allegedly deceptive terms on all newly printed packaging for certain products. The company may continue to use the designation “Healthy Fats” on the packaging for Muscle Milk® RTD and related products if they contain “fewer than 0.5 grams of saturated fat per serving, or CytoSport also includes the words ‘See nutrition information for saturated fat content’ in connection with the words ‘Healthy Fats.’” The court also awarded…
Poultry manufacturer Foster Farms has filed an amended complaint in its lawsuit against its Lloyd’s of London insurers, which had rejected its $14.2 million claim for economic losses resulting from a government-mandated shutdown of one of its facilities. Foster Poultry Farms Inc. v. Certain Underwriters at Lloyd’s, London, No. 14–953 (E.D. Cal., amended complaint filed July 3, 2014). Foster Farms had paid almost $600,000 for a yearlong product contamination policy to three insurers operating on the Lloyd’s of London insurance market, and the company later filed a claim to cover losses from the forced closure, including costs from the 1.3 million pounds of product it destroyed. The insurers rejected the claim because Foster Farms did not initiate the recall of its chicken, arguing instead that the policy covered economic losses associated with a voluntary recall from customers rather than losses from the destruction of products still in its warehouse. In a…
The Beech-Nut Nutrition Co. has filed a complaint against an organic baby-food maker seeking a declaration that Beech-Nut has not infringed any of Plum PBC’s trademarks and that the trademarks Plum has asserted to the word “JUST” and certain phrases are invalid. Beech-Nut Nutrition Co. v. Plum PBC, No. 14-0791 (N.D.N.Y., filed June 30, 2014). According to the complaint, Plum sent Beech-Nut a cease-and-desist letter in June 2014 shortly after Beech-Nut launched a new line of whole fruit and vegetable foods for babies including the word “just” on product labels and advertised them under a promotional campaign “This is not baby food” and “This is real food for babies.” The letter allegedly demanded that Beech-Nut stop infringing Plum’s “JUST” trademark and using the promotional phrases. Beech-Nut contends that (i) the word “just” is simply descriptive and generic; (ii) Plum does not use the trademark symbol beside the word on its product…
A federal court in Georgia has entered a number of orders in criminal proceedings, expected to go to trial July 14, 2014, against the former owner of the Peanut Corp. of America, implicated in a 2008-2009 nationwide Salmonella outbreak that sickened hundreds and led to at least nine deaths; among the orders was one denying the prosecution’s request for a psychiatric examination of Stewart Parnell. United States v. Parnell, No. 13-cr-12 (U.S. Dist. Ct., M.D. Ga., Albany Div., order entered July 10, 2014). Details about the criminal indictment appear in Issue 472 of this Update. While Parnell’s expert, whose testimony as to the defendant’s purported ADHD condition has been excluded, described Parnell as “fidgety, restless, excitable,” the court apparently found that this testimony did not otherwise indicate that Parnell would be unable to focus at trial. “Even if Stewart Parnell has an attention deficit disorder, Dr. Conley testified he is…
