The Federal Trade Commission (FTC) has filed a motion to dismiss a complaint charging the agency with exceeding its authority in requiring Food and Drug Administration (FDA) pre-approval for health-related claims on food products, violating advertisers’ constitutional rights by requiring compliance with these standards and failing to comply with notice-and-comment rulemaking procedures in establishing the standards. POM Wonderful LLC v. FTC, No. 10-1539 (D.D.C., motion filed November 16, 2010). Additional information about POM Wonderful’s complaint appears in Issue 364 of this Update. FTC contends that the court lacks jurisdiction to consider the matter because the complaint is moot, the company lacks standing, the company is attempting to preclude an enforcement action, and the complaint does not challenge final agency action. Specifically, FTC claims (i) the agency merely created a possible remedy of FDA pre-approval in consent agreements with food producers making health-related claims and not an enforceable rule; (ii) it…
Category Archives Litigation
A federal court in California, presiding over two putative class actions alleging that I Can’t Believe It’s Not Butter!®, Country Crock® and other cholesterol-free margarines were falsely advertised as nutritious, has denied a joint motion for preliminary approval of a class settlement. Red v. Unilever PLC, No. 10-00387 (N.D. Cal., order filed November 16, 2010). The court was concerned about “the waiver of certain damages claims and need for opt-out in a Federal Rule of Civil Procedure 23(b)(2) injunctive class where the proposed class received no monetary relief.” Scheduling a settlement hearing for the parties with a special master on or before December 13, 2010, the court allowed the parties to continue negotiating and expanded the special master’s authority “to negotiate a revised settlement to address the Court’s concerns.” The cases, filed in 2009, involve claims that butter-substitute makers have violated consumer protection laws by promoting their products as “healthy”…
A coalition of major farm, food and fuel industry trade groups has reportedly filed a lawsuit in the D.C. Circuit Court of Appeals to challenge the Environmental Protection Agency’s (EPA’s) decision to allow gasoline with up to 15 percent ethanol (E15) to be sold for vehicles made in the 2007 model year or later. The coalition, which includes the American Petroleum Institute, apparently contends that tests to determine whether the blend will damage these cars, light-duty trucks and SUVs have not been completed. Under the Clean Air Act, EPA may not approve a new fuel additive unless it “will not cause or contribute to a failure of any emission control device or system.” The industry interests also claim that EPA lacks the authority to grant a “partial waiver” to allow the fuel to be used in only some vehicles, saying the agency should not approve the fuel unless it is…
KFC franchisees have reportedly made their closing arguments before a Delaware Chancery Court in a dispute over the company’s advertising policies. They contend that 1997 amendments to the company’s corporate documents gave them the authority to propose and approve different advertising recommendations. The lawsuit was apparently filed after KFC Corp. launched an advertising campaign for grilled chicken menu offerings, which the franchisees opposed for their potential to dilute the company’s fried chicken brand. According to a news source, the franchisees argued that while they can veto funding for advertising by majority vote, this power is illusory because KFC could institute delays, thus causing a blackout that would inflict significant damage on franchisees. The company apparently countered that the franchisees do have the right to make recommendations or modifications to the company’s advertising policy and have exercised that right on several occasions. Still, the company reportedly indicated that the franchisees cannot have…
A Florida man has sued a Houston’s restaurant and its manager for failing to train servers to explain to patrons how to eat grilled artichokes, contending that their negligence led to his hospitalization and exploratory bowel surgery. Carvajal v. Hillstone Restaurant Group, Inc., No. 10-57757 CA 03 (Fla. Cir. Ct., Miami Dade Cty., filed October 27, 2010). He alleges ordering a special item offered by a server, “which Plaintiff advised he had never seen or heard of previously.” According to the complaint, plaintiff Arturo Carvajal was not instructed that the outside portion of the leaf should not be eaten, although the restaurant “had a duty to use reasonable care with respect to the serving and explanation of items not described on the menu; which by their appearance as served appeared wholly consumable.” He is seeking damages in excess of $15,000.
Nestlé Prepared Foods Co. has filed a complaint against the suppliers of ingredients for its Lean Cuisine® frozen meals, which it was apparently forced to recall when it learned that some of the meals were contaminated with foreign, hard blue plastic pieces. Nestlé Prepared Foods Co. v. Nat’l Food Trading Corp., No. 10-1077 (D. Utah, filed October 29, 2010). According to the complaint, the plastic pieces were mixed into the sun-dried tomatoes that defendants sold to Nestlé. Customer complaints purportedly alerted Nestlé to the contamination, and “[a]t least one consumer reported an injury caused by the hard blue plastic materials.” Recalling some 880,000 pounds of frozen meals allegedly caused Nestlé to incur “substantial losses, including, but not limited to, refunds to customers, the value of the recalled meals, the value of the unusable sun dried tomatoes, cancelled orders, and the costs of shipping, storage, plant operations, and investigation, as well as…
The California Supreme Court has denied a petition for review filed by fast food restaurants seeking to overturn an intermediate appellate court ruling allowing further proceedings on claims that they violated Proposition 65 by selling grilled chicken products to consumers without appropriate warnings about carcinogens created by the cooking process. Physicians Comm. for Responsible Med. v. McDonald’s Corp., No. S186566 (Cal., decided October 27, 2010). The intermediate appellate court determined that federal law did not preempt the claims. Additional information about its ruling appears in Issue 360 of this Update.
A California court of appeals has denied the request of a former Chipotle employee to certify a class of current and former non-managerial employees alleging that the company violated labor laws by denying them meal and rest breaks. Hernandez v. Chipotle Mexican Grill, Inc., No. B216004 (Cal. Ct. App., 2d Dist., modified opinion filed October 28, 2010). The court agreed with the defendant that California law requires that employers provide, but not ensure, that employees take breaks. The court also found no error in the trial court’s denial of class certification because the court record showed that “Chipotle did not have a universal practice with regard to breaks.” Apparently, while the company paid for meal and rest breaks, some employees declared that they always missed meal breaks, some missed meal breaks but not rest breaks, some were not denied meal breaks, and others declared their breaks were delayed or interrupted…
The Second Circuit Court of Appeals has affirmed a district court’s dismissal of claims filed by a 76-year-old woman who alleged that she was seriously burned when trying to remove the lid from a cup of tea she purchased at Starbucks. Moltner v. Starbucks Coffee Co., No. 09-4943 (2d Cir., decided November 3, 2010). The court issued a non-precedential summary order to affirm the grant of defendant’s summary judgment motion. According to the court, the district court correctly excluded the testimony of plaintiff’s experts because they were unreliable under Federal Rule of Evidence 702 standards. In this regard, the court stated, “[w]ithout the testimony of her expert witnesses, Moltner’s claims fail because there is no way for a reasonable juror to determine, with respect to her defective design claim, whether the risks posed by the product’s design outweighed its utility, or, with respect to her negligence claim, whether Starbucks failed to…
According to a news source, a Brazilian judge has ordered McDonald’s Corp. to pay one of its former franchise managers US$17,500 because he gained 65 pounds over the 12 years he worked for the company. He reportedly claimed that he was required to sample all of the restaurant’s foods everyday to ensure their quality, and he consumed the free lunches that were offered to company employees. The 32-year old man apparently convinced the court that he had to sample the food because McDonald’s hired people to make unannounced visits to its restaurants to guarantee that food, cleanliness and service standards were maintained. See Product Liability Law360, October 28, 2010.
