A federal jury agreed with POM Wonderful LLC that Welch Foods, Inc. developed intentionally confusing and misleading marketing and labeling for its White Grape Pomegranate juice product to take advantage of the market POM created for pomegranate juice, but determined that POM did not lose sales because of Welch’s conduct. POM Wonderful LLC v. Welch Foods Inc., No. 09-00567 (C.D. Cal., verdict reached September 13, 2010). More details about the case appear in Issue 290 of this Update. POM has reportedly asked the Ninth Circuit Court of Appeals to review the verdict, claiming that the lower court’s decision to try the case in two phases led the company to refrain from introducing evidence about lost sales during the first phase, which focused on liability. According to a news source, the company requested before the verdict that the court not instruct the jury to decide whether POM had lost sales, but…
Category Archives Litigation
Taco Bell has requested that the Ninth Circuit Court of Appeals review a district court determination that three insurance companies are not required to provide coverage under commercial liability policies for economic loss allegedly arising from decreased patronage in the wake of a 2006 E. coli outbreak. Nat’l Union Fire Ins. Co. of Pittsburgh, PA v. Ready Pac Foods, Inc., No. 09-3220 (C.D. Cal., appeal filed May 11, 2011). The district court reportedly issued an order granting a request for certification of the economic loss claim and stayed its adjudication of other unresolved matters to allow Taco Bell to take an interlocutory appeal to the Ninth Circuit. According to the lower court, “The lost patronage claim presents a legal issue that is unique and distinct from the other types of loss for which Taco Bell seeks a declaration of coverage . . . such as claims for bodily injury, claims for…
The Department of Justice recently took action against seafood producers in Wisconsin and Alabama for products that were either processed in plants lacking Hazard Analysis and Critical Control Point (HACCP) plans or misbranded. In Wisconsin, a U.S. attorney filed a complaint to seize a variety of breaded seafood products in the possession of Soderholm Wholesale Foods, Inc. and Fellerson, Inc. and sold under the “Seaside” label. United States v. “Seaside” Breaded Cod Fillets, No. 11-277 (W.D. Wis., filed April 18, 2011). According to the complaint, these products are adulterated “in that they have been prepared, packed, or held under insanitary conditions whereby they may have been rendered injurious to health.” Investigations in 2010 allegedly revealed that the companies did not have a written HACCP plan and failed to adopt one after warning. Meanwhile, seafood wholesalers Karen Blyth and David Phelps have reportedly been sentenced in an Alabama federal court to 33…
A divided Delaware Supreme Court has determined that ConAgra’s insurance 0contract is ambiguous and therefore might provide broader coverage, with a lower “retained limit” or deductible, for claims arising out of an alleged Salmonella outbreak involving the company’s peanut butter. ConAgra Foods, Inc. v. Lexington Ins. Co., No. 227, 2010 (Del., decided April 28, 2011). The court reversed a lower court ruling that granted, in part, the insurer’s motion for summary judgment and remanded for consideration of extrinsic evidence about what the parties intended when they agreed to a “lot or batch” endorsement; if that intent cannot be ascertained, the lower court was instructed to interpret the contract in ConAgra’s favor. The court also determined that because ConAgra exceeded the retained limit, the insurer’s duty to defend was triggered on the date the food maker’s liabilities exceeded that limit. The policy at issue included two definitions for “occurrence,” one of which was in…
A federal multidistrict litigation (MDL) court in Georgia has denied ConAgra Foods’ motion for summary judgment in a case involving claims that tainted peanut butter caused a man’s salmonellosis. In re: ConAgra Peanut Butter Prods. Liab. Litig. (Kidd) v. ConAgra Foods, Inc., MDL No. 1845, No. 07-1415 (N.D. Ga., decided May 4, 2011). Bobby Joe Kidd claimed that after he ate Peter Pan® peanut butter he was hospitalized with abdominal pain and nausea. Blood and urine samples taken during his stay apparently tested negative for Salmonella and other infectious agents. ConAgra relied on the negative tests to argue that Kidd would be unable to show that it was more likely than not that contaminated peanut butter caused his illness. The court disagreed, finding sufficient evidence “to allow a reasonable jury to infer that contaminated peanut butter caused his symptoms.” Kidd’s records “indicate that he ate recalled peanut butter and experienced Salmonella-like…
A federal court in Iowa has determined that 31 disabled men who worked at a turkey-processing plant were owed $1.7 million in back wages and liquidated damages by employers who compensated them at a rate of about $.41 per hour for years. Solis v. Hill Country Farms, Inc., No. 09-00162 (S.D. Iowa, Davenport Div., decided April 21, 2011). The recovery will compensate the workers for a three-year period. The two-year statute of limitations was extended for the defendants’ knowing and reckless disregard of federal minimum wage and overtime requirements because the Wage and Hour Division had previously investigated them for the same violations. The employees lived in a bunkhouse provided by the defendants, and their room and board expenses were deducted from their Social Security (SS) or Supplemental Security Income (SSI) benefits. Those expenses, which were increased over time, were also deducted from their pay; their take home of $65…
A Minnesota appeals court has reportedly decided a dispute over workers’ compensation deductibles in favor of a pork processing company’s insurance carrier in litigation arising from injuries to employees exposed to the mist from pig brain tissue. Quality Pork Processors Inc. is apparently considering whether to appeal the ruling to the state supreme court. According to counsel for the company, the matter involves a contractual dispute and has no effect on benefit payments to those infected while working on or near the line called the “head table.” They apparently used compressed air to remove pigs’ brains and were diagnosed with an unusual neurological disease that causes symptoms including weakness, fatigue, confusion, and seizures. The pork processor contends that the contract language addressing how deductibles were calculated is ambiguous and disagreed that each accident should be decided separately. See The Austin Daily Herald, April 14, 2011.
A Georgia-based poultry farm has reportedly appealed a federal court ruling dismissing libel, slander and product disparagement claims against CBS, which apparently aired a segment on its 60 Minutes program in 2003 about alleged terrorist money laundering involving dead chickens. Mar-Jac Poultry, Inc. v. Katz, No. 03-2422 (D.D.C., dismissal entered March 30, 2011). The D.C. Circuit Court of Appeals has apparently not yet indicated whether it will hear the appeal. The segment focused on a purported “terrorist hunter” whose actions in ferreting out terrorist activity in the United States apparently led the U.S. government to raid a poultry farm after she claimed that Saudis had purchased it. According to Rita Katz, who appeared on the program in disguise, chicken was the best cover for money laundering because “chicken is one of the things that no one really can track it down. If you say in one year that you lost 10…
Contending that Diamond Foods, Inc. has defended its decision to place “heart-healthy” claims on its packaged walnuts on the advice of counsel, and removed them after a Food and Drug Administration (FDA) warning, also on the advice of counsel, the named plaintiff in a putative class action alleging consumer-fraud against the company is seeking the production of attorney-client communications. Zeisel v. Diamond Foods, Inc., No. 10-01192 (N.D. Cal., filed April 26, 2011). Details about a court order denying the defendant’s motion to dismiss appear in Issue 363 of this Update. The plaintiff points to instances in responses to interrogatories and deposition questions where the company defended its decision to link the omega-3 fatty acids in walnuts to heart health as a good faith bona fide error and indicated that decisions about the labeling were made with legal counsel’s approval. Yet, the company has refused to produce any attorney-client communications on…
A federal grand jury has indicted a husband and wife who own a grain storage company in northwestern Missouri, alleging that they conspired to victimize more than 100 farmers at an estimated loss exceeding $3.1 million by selling grain the farmers owned without paying them and by commingling and embezzling the farmers’ money. United States v. Froman, No. 11-06005 (W.D. Mo., filed April 21, 2011). The indictment alleges that “grain (primarily corn and soybeans), which was owned by various farmers who contracted with Gallatin Grain, was sold by the Fromans without the farmers’ permission and the proceeds of the sale were wrongfully withheld by the Fromans.” Counts of conspiracy, mail fraud and bank fraud have been brought against both Daniel and Pauline Froman. Daniel has also been charged with one count of wire fraud and one count of interstate transportation of stolen property. Prison terms of up to 30 years…
