According to New York Attorney General (AG) Eric Schneiderman, Phusion Projects, LLC, the company that makes Four Loko flavored malt beverages, has agreed to settle allegations by 20 attorneys general and the San Francisco city attorney that the company marketed and sold its products in violation of consumer protection and trade practice statutes. In re Investigation by Eric T. Schneiderman, N.Y. AG of Phusion Projects, LLC, No. AOD 14-075 (N.Y. AG, Bureau of Consumer Frauds & Protection, March 25, 2014). Without admitting any liability, the company has agreed not to (i) promote the misuse of alcohol or mixing flavored malt beverages with caffeinated products; (ii) manufacture, market, sell, or distribute any caffeinated alcohol beverages; (iii) provide materials to wholesalers, distributors or retailers promoting mixing flavored malt beverages with caffeinated products; (iv) sell, distribute or promote alcohol beverages to underage persons or hire underage persons to promote these products; (v) use college-related…
Category Archives Litigation
A California resident has filed a putative statewide class action against H.J. Heinz Co. alleging that its Distilled White Vinegar is falsely advertised as “all natural” because it is made with genetically modified (GM) crops. Banafsheha v. H.J. Heinz Co., No. 14-2023 (C.D. Cal., filed March 17, 2014). Alleging that she paid more for the product due to the “all natural” labeling and would not have purchased the product had she known that it contains GM ingredients, the plaintiff claims, “Over 70% of U.S. corn crops are GM. Defendant sources its ingredients from U.S. commodity suppliers who supply GM crops. Large volume food manufacturers who wish to use non-GM ingredients must specifically source their crops, typically from Europe, or undertake the additional step and expense of verifying the supply from non-GM growers through identity preservation programs. In most instances, manufacturers who purchase only non-GM crops for their products specifically label the…
The University of Denver law professors who filed a challenge to Utah’s law barring audio or video recordings of purported animal abuse in agricultural operations have filed a second challenge to a similar law that recently took effect in Idaho. Animal Legal Def. Fund v. Otter, No. 14-0104 (D. Idaho, filed March 17, 2014). Both lawsuits challenge the so-called “ag-gag” laws on constitutional grounds. Utah’s attorney general has requested that the lawsuit filed in that state in 2013 be dismissed on standing grounds; the issue will be argued on May 15. Filed against the governor on behalf of animal rights organizations, the American Civil Liberties Union, Center for Food Safety, journalists, historians, and an “agricultural investigations expert,” the Idaho lawsuit contends that the statute “defines ‘agricultural production facility’ so broadly” that it would apply to “public parks, restaurants, nursing homes, grocery stores, pet stores, and virtually every public accommodation and…
The defendant in litigation alleging that it conceals the sugar added to its tea-like yerba mate products by listing the ingredient as “organic evaporated cane juice” has removed the action to federal court. Cowan v. Guayaki Sustainable Rainforest Prods., Inc., No. 14-1248 (N.D. Cal., removed March 17, 2014). The plaintiff, a California resident with a family history of diabetes, alleges that she purchased the products relying on the ingredients listed on the product labels and paid more for them “because she believed the Class Products contained lesser amounts of sugar and was [sic] healthier for her” than comparable products. Seeking to represent a nationwide class of consumers, the plaintiff claims that Guayaki releases misbranded products into the stream of commerce and that the company violates the Unfair Business Practices Act, California False Advertising Act and Consumers Legal Remedies Act. She also brings causes of action for negligent misrepresentation and breach of…
A federal court in California has refused to certify four classes of Starbucks employees in litigation alleging that its rest break policy and scheduling practices, and meal period policy and practices violated the state’s Labor Code and Unfair Competition Law. Cummings v. Starbucks Corp., No. 12-6345 (C.D. Cal., decided March 24, 2014). As to the proposed meal break class, the court found that the plaintiff’s “second theory of liability—that Starbucks had a practice of failing to provide timely meal breaks—does not present a common question of law” because “there is no common answer as to why employees took a late meal break, and individualized inquiries into each late meal break would be required.” The court also found as to this proposed class that the plaintiff’s claims did not meet the typicality requirement because her alleged late meal break claims were due not to a defective policy, but “because of unique…
While a federal court in California has dismissed a request for injunctive relief in a consumer fraud action against Wallaby Yogurt Co. for lack of standing, it will allow the first amended complaint’s remaining claims to proceed. Morgan v. Wallaby Yogurt Co., Inc., No. 13-0296 (N.D. Cal., order entered March 13, 2014). Additional details about the court’s ruling on the plaintiff’s original complaint appear in Issue 500 of this Update. As to the request for prospective injunctive relief, the court agreed with the defendant that the plaintiffs will not be deceived as to future product purchases because they now know that “evaporated cane juice” is added sugar. So ruling, the court acknowledged a split among the district courts in the circuit on this issue. The court also expressly disagreed with Kane v. Chobani, Inc., No. 12-2425 (N.D. Cal. Sept. 19, 2013), to the extent that the court (i) found that…
A federal multidistrict litigation (MDL) court in California has granted POM Wonderful’s motion to decertify a class of claimants alleging that they were misled by health-benefit representations for the company’s pomegranate juice. In re POM Wonderful LLC Mktg. & Sales Practices Litig., MDL No. 2199 (C.D. Cal., order entered March 25, 2014). Details about the motion appear in Issue 516 of this Update. According to a news source, the court found that (i) the plaintiffs’ two damages models failed to support a class action, and (ii) claims that consumers allegedly paid an inflated price for the company’s juice failed to explain how the company’s health-benefit representations caused damage. As to the practical effects of proceeding as a class action, the court reportedly stated, “Here, Plaintiffs acknowledge that, based on the volume of product sold, every adult in the United States is a potential class member. These millions of consumers paid…
The D.C. Circuit Court of Appeals has affirmed a lower court ruling denying the motion for preliminary injunction 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., decided March 28, 2014). The regulations at issue were adopted in 2013 in response to a World Trade Organization (WTO) ruling finding their predecessor to violate the WTO Agreement on Technical Barriers to Trade. They “increased the required level of precision” to address each production step and also “eliminated the special allowance for commingled meat.” The plaintiffs argued that the amended rules ban commingling and thus alter “production practices over which the COOL statute gives the Secretary no authority,” and that the…
American Law Reports (A.L.R.) has published an annotation titled “Liability of Food Manufacturer Based on Statement in Product Labeling or Promotion Relating to, or Inconsistent with Presence of, Trans Fat in Product.” 92 A.L.R.6th 141 (2014). It “collects and analyzes all the federal and state cases discussing the liability, when not precluded by federal preemption, of a food manufacturer based on an allegedly untrue or misleading statement, in the labeling or promotion of a food product, relating to the presence or absence of trans fat in the product or a statement that, while not referring itself to trans fat, is allegedly inconsistent with the presence of trans fat in the product.” Most of the nearly 30 cases were filed in federal district courts in the Ninth Circuit. Issue 517
Wheat farmers who sued Monsanto Co. over losses they allegedly sustained after genetically modified (GM) wheat was discovered in an Oregon farmer’s field have reportedly decided to attempt to mediate the dispute. In re Monsanto Co. GE Wheat Litig., MDL No. 2473 (D. Kan.). Details about the consolidation of a number of related cases before a multidistrict litigation (MDL) court appear in Issue 500 of this Update. The GM wheat discovery prompted Japan and South Korea to suspend imports of soft white wheat from the United States, and the farmers contend that they lost money as a result. Monsanto denies any wrongdoing—it field tested GM wheat more than 10 years ago in Oregon—and calls the event an isolated incident. The MDL court had scheduled a March 10, 2014, status conference, but canceled the hearing and has stayed the litigation. See The National Law Journal, March 7, 2014. Issue 517
