Federal prosecutors have reportedly filed criminal charges against Iowa-based Quality Egg LLC and two former company executives—Austin “Jack” DeCoster and his son Peter—over a 2010 Salmonella outbreak that sickened thousands across the country and resulted in the recall of some 550 million eggs. United States v. Quality Egg, LLC, No. 14-cr-3024 (N.D. Iowa, filed May 21, 2014). The charging document, which brings two felony counts of introducing adulterated food into interstate commerce against the company and related misdemeanor charges against the DeCosters, alleges that the company sold tainted eggs from early 2010 until the August recall. According to news sources, the DeCosters are expected to enter guilty pleas on June 3, 2014, as part of a plea agreement that ends the four-year investigation. The charging document alleges that the company sold products with labels making “the eggs appear to be not as old as they actually were” from 2006 to 2010,…
Category Archives Litigation
After a three-week trial, a jury has reportedly cleared Anheuser-Busch of sex discrimination in a suit brought by former executive Francine Katz, who had alleged that she was paid less than her male counterparts because of her gender. Katz v. Anheuser-Busch Inc., No. 922-CC09513 (St. Louis Circ. Ct., verdict rendered May 16, 2014). Katz worked at Anheuser-Busch as vice president of communications and consumer affairs from 2002 to 2008, when she left following InBev NV’s November 2008 acquisition of the company. During the acquisition process, Katz learned that her compensation was lower than the pay received by her male colleagues on the strategy committee, and she filed a suit alleging violations of the Missouri Human Rights Act in 2009. Following the jury’s decision, Katz told the media that she hoped she had helped to draw attention to the issue of gender bias in compensation. See St. Louis Post-Dispatch, May 17,…
A New York state court has granted a motion for summary judgment and dismissed libel claims filed against Fox Television Stations Inc. by a D’Lites ice cream seller. Prince v. Fox Television Stations Inc., No. 107129/2011 (N.Y. S. Ct., order entered May 6, 2014). Matthew Prince filed a libel suit against Fox after a local channel in New York aired a report claiming that the low-calorie ice cream sold in the D’Lites stores Prince would soon be opening in the area contained more than three times as many calories, carbohydrates, total fat, and sugar than the amounts the chain advertised—for example, 148 calories rather than the advertised 50. The court rejected Fox’s argument that its report had not sufficiently identified Prince, despite that the reporters only visited stores that Prince did not own and the report briefly showed a screenshot of the D’Lites website listing what cities would soon have…
According to news sources, the South Dakota Supreme Court has denied the defendants’ petition seeking review and dismissal of a lawsuit filed by Beef Products, Inc. alleging that the ABC network and news anchor Diane Sawyer, among others, defamed the company by their coverage of the company’s lean, finely textured beef, which has been dubbed “pink slime” by critics. Beef Prods., Inc. v. Am. Broadcasting Cos., Inc., No. 12-292 (Union Cty. Cir. Ct., S.D., supreme court order entered May 22, 2014). Without discussing the case merits, the court also apparently lifted a stay that had stopped the discovery process in April 2014. Additional details about the lawsuit appear in Issues 519 and 453 of this Update. The plaintiff seeks $1.2 billion in damages. See AP, May 23, 2014. Issue 524
Ice cream truck franchiser Mister Softee Inc. has filed a motion for a preliminary injunction in a lawsuit alleging trademark infringement and violation of a non-compete covenant against former franchisee Dimitrios Tsirkos, who converted his 16 Mister Softee trucks to Master Softee trucks and began selling his own ice cream out of them at the beginning of the 2014 ice cream truck season. Mister Softee of Queens Inc. v. Tsirkos, No. 14-1975 (S.D.N.Y., motion filed April 25, 2014). Mister Softee ended Tsirkos’ franchise contract after he refused to pay $74,000 in franchise royalties for his trucks, but Tsirkos allegedly adjusted the logo on his trucks, started his own soft-serve depot and began selling ice cream in New York City anyway. Tsirkos has filed a motion opposing the injunction, and a hearing is set for May 15, 2014. See Law360, May 2, 2014. See New York Daily News, May 1, 2014. …
Two consumers have filed a putative class action against dairy cooperative Darigold Inc., a subsidiary of Northwest Dairy Association, for false advertising and fraud by concealment, alleging that the company misrepresented the conditions in which its milk is produced. Ruiz v. Darigold Inc., No. 14-2054 (N.D. Cal., May 5, 2014). Yesenia Ruiz and Fernando Dorantes argue that they would not have purchased Darigold’s products if they had known about the purportedly poor conditions in which its employees work and its cows are milked. According to the complaint, Darigold employees are denied drinkable water, break periods and lunch rooms, and some of its cows are sick and injured but are milked anyway. The plaintiffs also assert claims under California’s Unfair Competition Law; the unjust enrichment laws of California, Washington and Oregon; Washington’s Consumer Protection Act; and Oregon’s Unlawful Trade Practices Act. Issue 523
A California resident has filed a putative nationwide class action against Trader Joe’s alleging that the company fails to disclose “the dangerously high” sodium content contained in its sunflower kernels and sunflower shells and then markets the products as a “good” or healthy snack. DiSimone v. Trader Joe’s Co., No. BC544924 (Cal. Super. Ct., Los Angeles Cty., filed May 6, 2014). Claiming that the company deceives consumers by listing a single serving “with Shells” as containing 690 milligrams (mg) of sodium or “29%” of the total daily value established by the U.S. Food and Drug Administration (FDA), the plaintiff contends that the seeds and shells, which are also placed in the mouth, actually contain more than 2,350 mg of sodium, an amount that far exceeds a large order of McDonald’s French fries at 350 mg of sodium. The plaintiff further asserts that the average consumer will eat more than one…
Kashi Co. and its unit Bear Naked Inc. have both settled class actions stemming from their claims that their products are “All Natural” and include “Nothing Artificial.” Astiana v. Kashi Co., No. 11-1967 (S.D. Cal., settlement filed May 2, 2014). Thurston v. Bear Naked Inc., No. 11-2890 (S.D. Cal., settlement filed May 2, 2014). The plaintiffs alleged in California federal court that the companies, both part of Kellogg Co., advertised their products as all natural and charged higher prices based on that quality while inserting synthetic material into their foods. A judge certified both classes in July 2013 after ruling that the plaintiffs had proved the artificiality of some of the “natural” ingredients, including hexane-processed soy ingredients and pyridoxine hydrochloride. Kashi has agreed to pay $5 million to California consumers who purchased its products and to alter its labeling and advertising to remove the claims at issue; in a similar…
Samuel Lightsey, who formerly managed the Peanut Corp. of America, which was implicated in a 2008-2009 nationwide Salmonella outbreak, has entered a guilty plea to six of 76 criminal charges, including conspiracy, mail and wire fraud, obstruction of justice, and other counts related to the distribution of adulterated or misbranded food. U.S. v. Lightsey, No. 13-CR-12 (M.D. Ga., Albany Div., plea entered May 7, 2014). Facing a potential sentence of six years in prison, Lightsey has agreed to cooperate with the prosecution. The outbreak sickened more than 700 who consumed products containing tainted peanut paste, and at least nine died. According to the plea agreement, in September 2008, Lightsey and others shipped a lot of peanut paste from the company’s Blakely, Georgia, facility “without ever having submitted a sample from said lot to a laboratory for microbiological testing.” This food was misbranded because it was accompanied by a document containing…
Texas has filed a motion to intervene in Alamo Beer Co. LLC’s trademark infringement suit against Old 300 Brewing LLC, asserting that the state has the rights to the “Alamo” mark. Alamo Beer Co. LLC v. Old 300 Brewing LLC, No. 14-285 (W.D. Tex., motion filed April 28, 2014). Filed in March 2014, Alamo Beer’s original complaint alleged that Old 300 Brewing (doing business as Texian Brewing Co.) infringed on its mark by using the silhouette of the Alamo on Texian beer labels, which image Alamo Beer has used and federally registered as a trademark for beer labeling since 1997. Texas argues that it has registered and common law rights to the use of the Alamo Mission’s likeness in commerce. In 2013, the state began registering the Alamo silhouette in a variety of categories, including blankets, apparel, jewelry, leather goods, digital media, packaged foods, and museum services. In the category…
