A federal court in Washington has dismissed without prejudice a number of claims in a putative class action alleging that the producer and seller of a vitamin water product misled consumers by failing to disclose that the product contains caffeine or its relative amount and falsely represents that the product is a “natural tonic” and contains “natural caffeine.” Maple v. Costco Wholesale Corp., No. 12-5166 (E.D. Wash., order entered August 1, 2013). While the court determined that the plaintiff had standing by rejecting Costco’s contention that the labeling on one product unit was not visible through the packaging encasing the variety packs in which it is sold, it found that federal law preempts claims that the defendants were required to disclose the presence of caffeine or state its relative amount in the drink. Among the claims that the court dismissed for insufficient pleading were (i) violation of the state’s consumer…
Category Archives Litigation
A federal court in California has dismissed with prejudice the breach of warranty claims made by a putative class as to purportedly “misbranded food products” sold by 7-Eleven, but dismissed the remaining consumer fraud claims without prejudice to allow the plaintiff to amend the complaint to meet the stringent pleading requirements for fraud-based allegations. Bishop v. 7-Eleven, Inc., No. 12-2621 (N.D. Cal., order entered August 5, 2013). While the plaintiff defined “misbranded food products” as pertaining to potato chips, pretzels and other foods labeled “0 grams Trans Fat,” “No Cholesterol,” “All Natural,” “Fresh to Go,” “guaranteed fresh,” or “Fresh,” as well as products “sold in oversized slack filled container,” the court determined that he failed to “provide a clear and particular account of the allegedly fraudulent, deceptive, misrepresentative, or otherwise unlawful statements” and failed to “unambiguously specify the particular products that have violated particular labeling requirements, the allegedly unlawful representations that…
A Florida-based import-export company has filed for Chapter 7 protection in bankruptcy court, listing more than $204 million in liabilities from litigation over its role in the import from China of powdered milk contaminated with melamine. In re Exim Brickell, LLC, No. 13-28502 (U.S. Bankruptcy Ct., S.D. Fla., filed August 3, 2013). Exim Brickell, LLC declared $300 in office furniture as its only asset. According to a news source, the 2008 tainted Chinese milk scandal, which affected hundreds of thousands of children in that country and killed six, resulted n verdicts and legal fees against the company as a result of litigation involving a Venezuelan company that recently won an appeal in their breach of contract dispute. See Law360, August 7, 2013. In a related development, a new milk contamination scandal has developed in China over whey protein concentrate potentially contaminated with the C. botulinum bacterium. The dairy farm near…
The Judicial Panel on Multidistrict Litigation (JPML) has denied transfer to a multidistrict litigation (MDL) court of consumer-fraud lawsuits involving Capatriti brand “100% Pure Olive Oil” made by Kangadis Food Inc. d/b/a The Gourmet Factory and numerous snack, cereal, protein bar, and frozen entrée products made by the Kashi Co. In re Capatriti Brand Olive Oil Mktg. & Sales Practices Litig., MDL No. 2469; In re Kashi Co. Mktg. & Sales Practices Litig., MDL No. 2456 (J.P.M.L., decided August 6, 2013). According to the court, centralization is not appropriate in the olive oil suit because the Southern District of New York action has made “significant progress” and the number of actions pending in adjacent districts is small with a “correspondingly limited number of involved counsel and courts.” Because the plaintiff in a New Jersey action has considered voluntarily transferring his action to New York, the JPML found that alternatives to centralization…
A federal court in California has granted motions to certify California classes of consumers in two separate consumer-fraud lawsuits involving the “all natural” claims on products made by Bear Naked, Inc. and the Kashi Co. Thurston v. Bear Naked, Inc., No. 11-2890, Astiana v. Kashi Co., No. 11-1967 (S.D. Cal., orders entered July 30, 2013). Details about the latter suit, a consolidated matter, appear under the plaintiff’s name Bates in Issue 408 of this Update. The court agreed with Bear Naked that the named plaintiffs failed to sufficiently show that “natural” has a uniform definition among class members, that a sufficient number of class members would have relied to their detriment on the representation or that the company’s “representation of natural in light of the presence of the challenged ingredients would be considered to be a material falsehood by class members.” Still, the court determined that the plaintiff made a sufficient showing of…
Applying separation-of-power principles that defeated a state administrative body’s effort to regulate smoking in public places, Boreali v. Axelrod, 71 N.Y.2d 1 (N.Y. 1987), a New York appeals court has affirmed a lower court ruling invalidating the “Portion Cap Rule” promulgated by the New York City Department of Health and Mental Hygiene (Department). In re N.Y. Statewide Coal. of Hispanic Chambers of Commerce v. N.Y.C. Dept. of Health & Mental Hygiene, No. 2013 NY Slip Op. 05505 (N.Y. App. Div., decided July 30, 2013). The rule would have limited the sale of certain sugary soft drinks to 16 ounces in food service establishments over which the Department has authority under a memorandum of understanding with the state’s Department of Agriculture and Marketing. Thus the rule would have applied to restaurants, delis, fast-food franchises, movie theaters, stadiums, and street carts, but not to grocery stores, convenience stores, corner markets, gas stations, and…
A federal court in New York has determined that while plaintiffs alleging they were sold olive-residue oil, or Pomace, instead of the “100% Pure Olive Oil” appearing on the labels of The Gourmet Factory’s Capatriti-brand products could not maintain a cause of action under the Magnuson-Moss Warranty Act, their claims did exceed the $5 million threshold for maintenance of the action in federal court under the Class Action Fairness Act (CAFA). Ebin v. Kangadis Food Inc. d/b/a The Gourmet Factory, No. 13-2311 (S.D.N.Y., order entered July 26, 2013). The plaintiffs apparently based their amount-in-controversy allegation on documents that the defendant submitted in parallel litigation brought by an olive oil trade association. Details about that suit appear in Issues 470, 482 and 483 of this Update. Thus the court rebuffed the defendant’s attempt to fault the plaintiffs for failing to conduct an independent investigation into the amount-in-controversy before filing the complaint,…
According to a news source, upscale Rodeo Drive sushi restaurant Urasawa has been sued by former employees who claim they were forbidden from taking breaks and were not paid the overtime they worked. Apparently, a California Labor Department investigation has confirmed the complaints targeting chef and owner, Hiroyuki Urasawa, whose menu includes dishes served with caviar and 24-karat gold flakes and can cost a couple in excess of $1,000. Among those seeking back wages is Heriberto Zamora, who was reportedly forced to buy his own $700 set of knives when he was earning just $9 per hour. Zamora claims he was fired nine hours into his shift when he asked to go home with a fever and cough. See The New York Times, July 20, 2013.
A federal magistrate has recommended that General Mills’ motion to dismiss a putative consumer fraud class action be denied without prejudice and that, under the primary jurisdiction doctrine, the suit be stayed “pending action by the FDA [Food and Drug Administration] with respect to the referral made by Judge Rogers in Cox v. Gruma. Van Atta v. General Mills, Inc., No. 12-2815 (D. Colo., recommendation entered July 18, 2013). At issue is the company’s claim that its granola bars are “100% Natural” when they allegedly contain genetically modified organisms (GMOs). Finding that the food-labeling issue falls within FDA’s regulatory authority and that the agency “has not issued a rule which requires products containing GMOs to be labeled as such, nor has the FDA issued a rule regarding whether products labeled ‘natural’ may contain GMOs,” the magistrate found invocation of the primary jurisdiction doctrine appropriate. In this regard, the magistrate stated,…
To settle litigation filed in 2007 by environmental and union interests, California EPA’s Office of Environmental Health Hazard Assessment (OEHHA) has agreed to a number of actions that would remove certain steps from the Proposition 65 (Prop. 65) chemical-listing process that would accelerate the listings. Sierra Club v. Brown, No. RG07356881 (Cal. Super. Ct., settlement endorsed July 3, 2013). The agreement will affect OEHHA’s authoritative bodies listings as to specific chemicals and its Carcinogen Identification Committee listings. Not affected by the agreement, and yet to be determined by the court, is the plaintiffs’ motion for judgment on the pleadings requiring OEHHA to list all International Agency for Research on Cancer (IARC) Group 3 chemicals for which IARC finds sufficient evidence of carcinogenicity in animals. According to a news source, the court will hold a hearing to consider whether to approve the agreement on August 15, 2013. See InsideEPA.com, July 25,…
