A unanimous U.S. Supreme Court has determined that the Ninth Circuit erred by failing to consider the unconstitutional takings defense raised by raisin growers who were subject to penalties and assessments for failure to pay assessments and set aside reserve-tonnage raisins under a Depression-era program intended to stabilize prices for agricultural commodities by limiting their quantity in the domestic competitive market. Horne v. USDA, No. 12-123 (U.S., decided June 10, 2013). Pursuant to the Tucker Act, claims “for just compensation under the Takings Clause must be brought to the Court of Federal Claims in the first instance, unless Congress has withdrawn the Tucker Act grant of jurisdiction in the relevant statute.” The Court found that the Agricultural Marketing Agreement Act (AMAA) of 1937 displaces Tucker Act jurisdiction and, because the raisin growers had no alternative remedy, “their takings claim was not ‘premature’ when presented to the Ninth Circuit.” The Court…
Category Archives Litigation
Austin-based Amy’s Ice Creams has reportedly filed a trademark infringement lawsuit in a federal district court against Amy’s Kitchen, which makes frozen lunch and dinner entrées with organic and non-genetically modified ingredients. While the two companies have apparently co existed without difficulty for more than 20 years, Amy’s Ice Creams, now with 15 shops throughout Texas, claims that it recently learned about the frozen food company’s plan to launch a line of frozen treats. Amy’s Kitchen is based in California, and its products are sold nationally. Ice cream company founder Amy Simmons reportedly said, “We don’t want them to go into ice cream because there will be obvious confusion.” According to the complaint, the confusion would not be limited to Texas consumers, as the ice cream company “is well known beyond the state. The success of Amy’s [Ice Creams] has been featured in such publications as Inc., Southern Living, Wall…
Chef Kyle Connaughton, who has “been employed by some of the most prestigious restaurants in the world,” co-authored books and co presented on United Kingdom (U.K.) TV programs, has sued Chipotle Mexican Grill and its CEO, claiming that he was hired to developed a ramen-noodle fast-food restaurant concept that was doomed to fail because someone else had already created the concept in the context of a confidential business deal with Chipotle that did not come to fruition. Connaughton v. Chipotle Mexican Grill, Inc., No. 155106/2013 (N.Y. Sup. Ct., N.Y. Cty., filed June 3, 2013). Connaughton allegedly developed the business plan and concept from 2010-2012 in close collaboration with Chipotle employees. Connaughton later learned on meeting with Momofuku’s Noodle Bar chief marketing officer that Momofuku would sue Chipotle when its ramen restaurant opened because owner David Chang had developed the same concept for Chipotle in 2008. Because Chang could not come to terms…
A federal court in California has reportedly determined that a named plaintiff in a putative consumer-fraud class action may pursue claims pertaining to the defendant’s green tea products but not its black teas. Khasin v. R.C. Bigelow, Inc., No. 12-2204 (N.D. Cal., order entered May 31, 2013). The plaintiff apparently alleges that the defendant made misleading statements in press releases and on its website about the presence of antioxidants in its tea products, including both green and black teas. Because he did not purchase the black teas, the court ruled that he lacked standing to represent consumers who did purchase them. The court also reportedly dismissed the plaintiff’s unjust enrichment claim but refused to dismiss most of his other allegations finding them sufficiently pleaded. See Bloomberg BNA Product Safety & Liability Reporter, June 4, 2013.
A federal court in Arkansas has ruled that it has jurisdiction, pursuant to the U.S. Supreme Court’s seminal standing decision under the Class Action Fairness Act (CAFA), Standard Fire Insurance Co. v. Knowles, 133 S. Ct. 1345 (2013), to adjudicate the putative class claims filed by a woman who alleges that Frito-Lay deceives consumers by labeling its Tostitos® and SunChips® products as “All Natural” because they contain genetically modified corn and hexane-extracted soybean oil. Deaton v. Frito-Lay N. Am., Inc., No. 12-1029 (W.D. Ark., order entered June 5, 2013). At issue was whether the defendants had submitted sufficient evidence to show that the amount in controversy exceeded CAFA’s $5 million jurisdictional minimum. The plaintiff had stipulated that she would not seek more than $5 million to keep the lawsuit in state court, but conceded that her stipulation could not prevent removal under the Knowles decision. The court ruled that the…
A California resident has filed a strict liability lawsuit against a food retailer and the Oregon-based company that produced a frozen organic fruit mix allegedly implicated in a widespread Hepatitis A outbreak. Brackenridge v. Townsend Farms Corp., No. BC510633 (Cal. Super. Ct., Los Angeles Cty., filed June 3, 2013). According to the complaint, Lynda Brackenridge contracted the disease after purchasing the frozen fruit blend and remains hospitalized in isolation and in guarded condition. Seeking past and future economic and non-economic damages in excess of $25,000, court costs and interest, the plaintiff also alleges negligence and breach of implied warranties.
A federal court in Minnesota has dismissed a putative class action alleging that General Mills misleads consumers by labeling its Nature Valley products as “Natural” or “100% Natural” when they actually contain highly processed ingredients such as high-fructose corn syrup, high-maltose dextrin syrup and maltodextrin. Chin v. General Mills, Inc., No. 12-2150 (D. Minn., decided June 3, 2013). Additional details about the original complaint appear in Issue 453 of this Update. The court dismissed all counts relating to Nature Valley products that the plaintiffs did not purchase, according to their first amended complaint, ruling that they lacked standing to bring such claims. The court dismissed a breach of written warranty claim brought under the Magnuson-Moss Warranty Act because labeling a product as “100% Natural” is not a written warranty under the law; rather, it is a “product description.” Implied warranty claims under the Act and state law were also dismissed…
The Department of Justice (DOJ) has published the antitrust complaint filed with a proposed final judgment and competitive impact statement, resolving its concerns that the acquisition of Grupo Modelo S.A.B. de C.V. by Anheuser-Busch InBev SA/NV would violate section 7 of the Clayton Act. According to DOJ, the final judgment requires the companies “to divest Modelo’s entire U.S. business to Constellation Brands, Inc.,” or to an alternative purchaser if that transaction fails, to avoid a threat to the competitive U.S. beer market. Court approval of the agreement is required, and public comment is requested within 60 days of publication. See Federal Register, May 22, 2013.
Class representatives in litigation against Papa John’s International have filed an unopposed motion for preliminary approval of a class action settlement in a case involving claims that the company’s franchisees sent unlawful commercial text messages through OnTime4U to some 220,000 individuals without their express consent. Agne v. Papa John’s Int’l, Inc., No. 10-1139 (W.D. Wash., filed May 17, 2013). Details about the court’s grant of class certification appear in Issue 463 of this Update. Under the proposed agreement, class members who are provided notice will automatically receive a merchandise certificate for a free Papa John’s pizza—a $13 retail value with a collective value of $2.86 million. Class members who submit claims and whose phone numbers are verified will also receive $50 each at an aggregate value of $11 million. Attorney’s fees and costs will add $2.45 million to the settlement fund, and $25,000 in incentives for the named plaintiffs will…
A YUM! Brands shareholder has brought a derivative action on behalf of the company against its officers and directors in a federal court in Kentucky, alleging they inflated the company’s growth predictions and failed to promptly inform shareholders that the company purchased chicken with allegedly excessive levels of antibiotics and toxic chemicals for sale in KFC establishments in China; according to the complaint, once the information became public, business in China and the company’s share price plummeted, while the defendants “profited handsomely” from “dumping more than $64.6 million of personally held common stock during the Relevant Period.” Zona v. Novak, No. 13 506 (W.D. Ky., filed May 21, 2013). Alleging breach of fiduciary duty, insider selling and misappropriation of information, and unjust enrichment, the plaintiff seeks damages, injunctive relief, disgorgement, attorney’s fees, costs, and expenses. She claims that management knew as early as 2009 that the chicken purchased in China was tainted…
