A National Labor Relations Board (NLRB) judge has determined that Sprouts Farmers Market violated federal labor law by requiring employees to sign mutual binding arbitration agreements (MAAs) that preclude class or collective-action claims in arbitration or otherwise as a condition of hiring and continued employment. SF Mkts, LLC d/b/a Sprouts Farmers Mkt., Nos. 21-CA- 099065, -104677 (NLRB Div. of Judges, Atlanta Branch Ofc., decided February 18, 2014). The issue arose from two cases: in the first, Jana Mestanek filed wage-andhour claims against the employer in court, and it sought to compel arbitration under the MAA to which she had agreed; in the second, Laura Christensen was fired for refusing to sign an acknowledgement of an employee handbook supplement agreeing to the terms of a revised MAA. At issue was whether D.R. Horton, Inc. (Horton), 357 NLRB No. 184 (2012), enfd. in part, denied in part, 737 F.3d 344 (5th Cir.…
Category Archives Litigation
The U.S. Food and Drug Administration (FDA) has entered a consent decree with the Center for Food Safety, which sued the agency over its alleged failure to comply with implementation rulemaking deadlines in the Food Safety Modernization Act (FSMA). Ctr. for Food Safety v. Hamburg, No. 12-4529 (N.D. Cal., decree filed February 20, 2014). Under the agreement, FDA will withdraw its Ninth Circuit appeal and will comply with the following timeline for the adoption of final rules: (i) Preventive Controls for Human Food and Preventive Controls for Animal Food—August 30, 2015; (ii) Foreign Supplier Verification Program, Produce Safety Standards, and Accreditation of Third Party Auditors—October 31, 2015; (iii) Sanitary Transport of Food and Feed—March 31, 2016; and (iv) Intentional Contamination— May 31, 2016. The deadlines may be extended by written agreement of the parties and court approval if “FDA believes good cause exists to seek an extension.” If agreement is…
A federal court in California has dismissed with prejudice the third amended complaint filed by named plaintiffs on behalf of a putative class of purchasers of Chobani Greek Yogurt products, alleging violations of state consumer protection laws because the products were mislabeled under federal law by listing evaporated cane juice (ECJ), instead of sugar, as an ingredient and stating that the yogurts contain only natural ingredients, when they actually contain fruit and vegetable juice—purportedly “highly processed unnatural substances”—as well as turmeric for color. Kane v. Chobani, Inc., No. 12-2425 (N.D. Cal., decided February 20, 2014). The court agreed with Chobani that the plaintiffs failed to sufficiently allege reliance or to plead fraud with sufficient particularity and thus lacked standing to pursue their claims under California’s Unfair Competition Law (UCL), False Advertising Law and Consumers Legal Remedies Act. Apparently annoyed that the plaintiffs had been given numerous opportunities to cure pleading…
Represented by animal rights organization Compassion over Killing, a California resident has filed a putative statewide class action against the Kroger Co., alleging that it misleads consumers by labeling its store-brand chicken products as “sourced from chickens raised ‘cage free in a humane environment,’” when the company’s “Simple Truth” chickens “are treated no differently than other mass-produced chickens on the market.” Ortega v. The Kroger Co., No. BC536034 (Cal. Super. Ct., Los Angeles Cty., filed February 11, 2014). Plaintiff Anna Ortega claims that she purchased the company’s chicken products, sourced from Perdue, relying on the package representations and paid a premium for them, averaging 41 percent more than comparable products. The complaint outlines the industry standards that Perdue and other chicken processors follow, detailing how they fail to prevent pain, disease and injury from birth to slaughter for a significant number of birds. According to the complaint, Kroger and Perdue…
A federal court in California has preliminarily approved a $3.375 million settlement of class-action claims that Trader Joe’s misled consumers throughout the United States by selling a number of food products with “All Natural” labels despite the presence of synthetic or artificial ingredients. Larsen v. Trader Joe’s Co., No. 11-5188 (N.D. Cal., order entered February 6, 2014). Additional details about the complaint appear in Issue 415 of this Update. According to a news source, the agreement would provide class members with proof of purchase the average price of the purchased items. Those without proof of purchase would receive between $2.70 and $39.99. The grocery chain has also apparently agreed to stop advertising the products as “all natural.” The final approval hearing has been scheduled for July 9, 2014. See Law360, February 7, 2014. Issue 513
TreeHouse Foods, Inc. has filed an antitrust and unfair competition lawsuit against Green Mountain Coffee Roasters, Inc. and Keurig, Inc., alleging that they have undertaken a series of unlawful practices that have allowed them to dominate the single-serve coffee market, despite the expiration of their “K-Cup” patents in 2012. TreeHouse Foods, Inc. v. Green Mountain Coffee Roasters, Inc., No. 14-0905 (S.D.N.Y., filed February 11, 2014). Among other matters, the plaintiffs claim that Green Mountain (i) eliminated potential competitors by acquiring them; (ii) systematically tied up vertical distribution channels for competitive cups by entering restrictive exclusive dealing contracts with companies at all levels of the compatible cup distribution system, including machinery sellers, compatible cup component sellers, competitor coffee roasters and coffee brands, and retailers selling compatible cups to end user consumers, businesses and institutions; (iii) filed an unsuccessful patent infringement lawsuit against the plaintiff—the Federal Circuit concluded that “Keurig is attempting to…
A California resident has filed a putative nationwide class action against Suja Life, LLC, alleging that the company, which advertises and labels its juice products as “raw” and “cold-pressed,” misleads consumers because it uses a high pressure processing (HPP) treatment that alters the nutrients and live enzymes that raw-product purchasers wish to consume. Heikkila v. Suja Life, LLC, No. 14-0556 (N.D. Cal., filed February 5, 2014). Claiming that HPP’s effects on juice products are “identical to those of traditional pasteurization—inactivated enzymes, inactivated probiotics, altered physical properties of the product, and denatured proteins, among other undesirable qualities,” the plaintiff alleges that the products “are nothing more than run-of-the-mill, processed juices.” According to the complaint, the plaintiff reviewed the company’s Website, packaging and labeling before making her purchase and paid a premium price for the products. She contends that raw juices have a short shelf life and are thus more expensive than…
A federal court in California has denied the motion to dismiss filed by guacamole maker Yucatan Foods, L.P. in a putative class action alleging violations of labeling laws based on the company’s use of “evaporated cane juice” instead of “sugar” on product labels. Swearingen v. Yucatan Foods, L.P., No. 13-3544 (N.D. Cal., order entered February 7, 2014). So ruling, the court rejected Yucatan’s arguments that (i) the “home state” exception of the Class Action Fairness Act should apply and divest the federal court of jurisdiction because a nationwide class of consumers cannot be certified given that California law cannot regulate conduct unconnected to the state—the court found that resolution of this issue was not appropriate at the pleadings stage; (ii) federal law preempts the plaintiffs’ state law-based claims—the court determined that the claims rise and fall on the defendant’s compliance with federal law, thus the requirements the plaintiffs seek to…
A Texas Court of Appeals has affirmed a lower court’s grant of the defendants’ summary judgment motion in a legal malpractice action brought by a mushroom distributor, finding that he failed to prove lost profits as to his negligence claim and filed his breach of fiduciary duty claim too late under the applicable statute of limitations. Thomas v. Carnahan Thomas, LLP, No. 05-11-01615-CV (Tex. Ct. App., 5th Dist., decided February 5, 2014). The defendants represented mushroom distributor Stuart Thomas and provided legal advice as to one of the ongoing disputes he had with the company that produced the mushrooms he distributed. Among other matters, the attorneys told Thomas he could violate non-compete agreements in his distribution and employment contracts and also unsuccessfully represented him in handling his declaratory judgment action as to the non-compete agreements. The court agreed with the attorneys that Thomas had no evidence of lost profits because…
A putative statewide consumer-fraud class action has been filed in a Florida state court against Living Harvest Foods, Inc. over use of the term “evaporated cane juice” (ECJ) on food product labels rather than sugar. Miller v. Living Harvest Foods Inc., No. __ (Fla. Cir. Ct., Miami-Dade Cty., filed January 30, 2014). While the specific products at issue are not named, the plaintiff contends that the defendant “conceals the fact that its Products have added sugar by referring to the sugar as ECJ, a ‘healthy’ sounding name made up by the sugar industry years ago to sell sugar to ‘healthy’ food manufacturers to use in their consumer products. ECJ is not the common or usual name of any type of sweetener, or even any type of juice, and the use of such a name is false and misleading. Defendant uniformly lists ECJ as an ingredient on its Products, as well as…
