In False Claims Act (FCA) litigation arising from the sale to the U.S. Department of Agriculture of beef processed from the alleged abuse of downer cattle, WestlandMeat Co. has reportedly agreed to pay more than $3 million, or most of its owners and investors’ remaining assets. United States ex rel. The Humane Soc’y of the U.S. v. Westland/Hallmark Meat Co., No. 08-0221 (C.D. Cal., judgment filed November 27, 2013). The Humane Society had whistleblower videos showing slaughterhouse employees kicking, beating and dragging disabled cattle to slaughter, prompting the largest recall of beef in U.S. history over bovine spongiform encephalopathy concerns. Details about the video appear in Issue 247 of this Update. The agreement apparently reduces the bankrupt company’s liability to some $155 million, from a previous treble damages judgment of nearly $500 million. According to a news source, the case involved disputed topics under FCA case law: implied certification and damages calculations. See…
Category Archives Litigation
Texas and California residents have filed a putative class action against Whole Foods Market Services, Inc. in a Texas federal court, alleging that the company’s private label lines include falsely labeled additive-laden and genetically modified (GM) foods, despite promises that its products contain “nothing artificial” and that it enforces “strict quality standards.” Gedalia v. Whole Foods Mkt. Servs., Inc., No. 13-3517 (S.D. Tex., filed November 28, 2013). Among purported transgressions are (i) organic infant formula containing 25 ingredients “prohibited from being in organic foods” as well as 30 artificial ingredients, and (ii) organic soy and almond milk containing “ingredients not permitted in organic foods.” The complaint also alleges that the company reneges on its promise to avoid ingredients grown from genetically engineered seed and relies on a Cornucopia Institute study purportedly showing that Whole Foods’ 365 Everyday Value® products “were contaminated with high levels of genetically engineered ingredients,” citing, in particular,…
In a putative class action against Amy’s Kitchen, a federal court in California has dismissed with leave to amend claims that the company has mislabeled its products by listing “evaporated cane juice” (ECJ) or “organic evaporated cane juice” as an ingredient. Figy v. Amy’s Kitchen, Inc., No. 13-3816 (N.D. Cal., order entered November 25, 2013). The company argued that the plaintiff “failed to allege that he relied on the products’ ingredient labeling” and thus lacked standing under the state’s Unfair Competition Law (UCL). According to the plaintiff, “reliance on a label misrepresentation is not a necessary element of a claim under the unlawful prong of the UCL.” Interpreting and applying In re Tobacco II Cases, 46 Cal. 4th 298 (2009), and Kwikset Corp. v. Superior Court, 51 Cal. 4th 310 (2011), the court held, “because the statutes plaintiff relies on prohibit specific types of misrepresentation on food labels—the listing of…
Finding that individual issues predominate over common ones in a putative class action alleging that Chipotle Mexican Grill sold conventionally raised meats despite advertising its use of “naturally raised” meats, a federal court in California has denied the plaintiff’s motion for class certification. Hernandez v. Chipotle Mexican Grill, Inc., No. 12-5543 (C.D. Cal., order entered December 2, 2013). Additional details about the case appear in Issue 451 of this Update. According to the court, when and where a class member ate at Chipotle and which meat she ate can only be handled individually. The court deemed these issues significant because the allegations are based on the company’s in-store menu signboards and paper menus and because the dates on which “naturally raised” meats were unavailable to specific stores varied over the course of five years. The court also noted that when Chipotle experienced “naturally raised” meat shortages, it would instruct individual…
A District of Columbia court has determined that a plaintiff who purchased a bottle of Pompeian-brand extra-virgin olive oil (EVOO) after learning that testing done in 2010 and 2011 concluded that certain EVOO brands did not satisfy U.S. and international EVOO standards has standing to bring certain consumer-fraud claims despite purportedly believing that the product was defective when purchased. Mostofi v. Mohtaram, Inc., No. 2011 CA 163 B (D.C. Super. Ct., order entered November 12, 2013). Thus the court rejected the defendant’s “manufactured” or “self-inflicted” injury standing argument. According to the court, “The dispositive consideration is that Plaintiff is a consumer who engaged in a consumer transaction.” The court also disagreed with the defendant that the plaintiff lacked expert testimony or that his sampling testing was insufficiently reliable to support two claims of statutory consumer fraud, finding they were matters of fact to be determined by a jury. The court…
A federal court in California has given preliminary approval to the settlement of a nationwide class alleging that Cytosport, Inc. misleads consumers by representing that its Muscle Milk® Ready-to-Drink products are healthy and nutritious when they actually contain the same amount of calories and almost as much fat as a doughnut. Delacruz v. Cytosport, Inc., No. 11-3532 (N.D. Cal., order entered November 18, 2013). Additional information about the settlement and litigation appear in Issue 475 of this Update. The court has scheduled a May 15, 2014, final approval hearing.
A California resident has filed a putative nationwide class action against Pacific Foods of Oregon, Inc., alleging that the company falsely labels its Hemp NonDairy Beverage® products as “all natural” despite the presence of processed and artificial ingredients and misbrands them by listing as an ingredient “evaporated cane juice.” Perera v. Pac. Foods of Or., Inc., No. 13-1788 (C.D. Cal., filed November 13, 2013). Plaintiff Sadisha Perera claims that she purchased one specific beverage relying on the prominent “all natural” labeling, but seeks to represent class members who purchased a number of other hemp non-dairy products that are purportedly substantially similar. According to the plaintiff, she would not have purchased the products if she had known that ingredients, such as calcium phosphate, disodium phosphate, xanthan gum, and certain vitamins, listed on the product in smaller print, were non-natural. She claims that she did not get the benefit of the bargain…
A federal court in California has denied the motion to dismiss putative class claims that Jamba Juice falsely labels its frozen smoothie kits as “all natural,” finding that while the plaintiffs lack standing to assert claims related to products they did not buy, “they may seek to represent a class of people who have purchased those products, as long as all plaintiffs, named and absent, have standing in their own right, and as long as the prerequisites to class certification are satisfied.” Lilly v. Jamba Juice Co., No. 13-2998 (N.D. Cal., order entered November 18, 2013). The court will address whether the named plaintiffs may represent the proposed class at class certification and ordered them to file their certification motion by February 3, 2014.
A federal court in Illinois has denied a request that it reconsider an earlier order denying certification of a multi-state class of single-serve coffee purchasers allegedly deceived into believing that the product was ground coffee and not instant; the court has also granted the defendants’ motions for summary judgment. Suchanek v. Sturm Foods, Inc., No. 11-565 (S.D. Ill., decided November 20, 2013). Information about the court’s previous ruling appears in Issue 496 of this Update. According to the court, “[t]he problem with the proposed class here is that showing reliance or causation—as required to establish liability requires an investigation of each purchaser.” The court details the purchasing experiences of each named plaintiff in this consolidated action and finds that most did not read the packaging, understood what the word “soluble” means or purchased the product due to price, shelf placement, imagery, or because they liked to try new things. Finding that…
In a summary order, the Second Circuit Court of Appeals has affirmed a lower court’s dismissal of employee claims that Starbucks Corp. violated New York law by allowing shift supervisors to share store tip pools with baristas. Barenboim v. Starbucks Corp., No. 10-4912 (2d Cir., decided November 21, 2013). Details about the New York Court of Appeals ruling on which the Second Circuit relied appear in Issue 489 of this Update. The New York court rejected the baristas’ claims that state law barred “any employee with ‘even the slightest degree of supervisory responsibility’ from sharing tips.” Because it was “undisputed that Starbucks’s shift supervisors spend a majority of their time performing the same duties as baristas, and are primarily responsible for serving food and beverages to customers,” the Second Circuit found “no genuine dispute of material fact as to whether § 196-d permits shift supervisors to participate in Starbucks’s tip pools.”…
