A federal court in California has denied in part and granted in part the motion to dismiss filed by Smart Balance, Inc., which is defending a putative class action alleging that the company misled consumers by marketing its Nucoa margarine as cholesterol-free and healthy despite the artificial trans fat in the product. Yumul v. Smart Balance, Inc., No. 10-00927 (C.D. Cal., order entered July 30, 2010). The plaintiff alleges violations of the state’s unfair competition and false advertising laws and violation of the Consumer Legal Remedies Act. She seeks an injunction requiring that the misleading advertising practices cease, a corrective advertising campaign, restitution, and an injunction requiring the destruction of all misleading and deceptive materials and products. The defendant asserted that the factual allegations lacked sufficient specificity and also contended that the complaint be dismissed because it was based on conduct outside the applicable limitations period. Declining to consider some materials submitted…
Category Archives Litigation
With one judge dissenting, the D.C. Circuit Court of Appeals has determined that federal law does not bar domestic almond producers from challenging a rule that requires them to pasteurize or chemically treat their product to prevent Salmonella outbreaks. Koretoff v. Vilsack, No. 09-5286 (D.C. Cir., decided August 3, 2010). While the court allowed those who grow almonds to continue pursuing their challenge to the 2007 rule, it dismissed the claims of companies that package and sell the almonds to consumers, finding that, as “handlers,” they must first exhaust their administrative remedies before turning to the courts to resolve their dispute. The U.S. Department of Agriculture secretary promulgated the challenged rule under the authority of the Agricultural Marketing Agreement Act of 1937 (AMAA). California almond producers and retailers claim that the rule is arbitrary and capricious because it devastated the domestic raw almond market while leaving foreign producers, who are…
The D.C. Circuit Court of Appeals has upheld, in part, the Environmental Protection Agency’s (EPA’s) denial of objections filed to its final rule revoking all residues of the pesticide carbofuran permitted on or in raw and processed foods. Nat’l Corn Growers Ass’n v. EPA, No. 09-1284 (D.C. Cir., decided July 23, 2010). EPA revoked the carbofuran “tolerances” after notice-and-comment rulemaking because it determined that aggregate dietary exposure to residues of carbofuran is “not safe” and because exposure to the chemical in drinking water exceeded “the level of concern with respect to both children and adults.” This action effectively banned its use on both domestic and imported food for human consumption. The U.S. company that makes the pesticide and several trade organizations filed objections to the revocation and a hearing request, which EPA denied. While the objectors had participated in the rulemaking proceeding, they attempted to either introduce new evidence during the…
According to a news source, a company that makes high-priced cookware and targets its sales to Spanish-speaking immigrants in the Los Angeles area has agreed to settle litigation accusing it of fraudulently claiming that its products could cure diseases ranging from cancer and Alzheimer’s to diabetes and heart disease. California v. Rena Ware Int’l, Inc., No. BC437981 (Cal. Super. Ct., Los Angeles Cty., settlement reached July 1, 2010). California Attorney General Jerry Brown brought the lawsuit, alleging unfair competition and false advertising. Sales representatives reportedly told consumers that the cookware reduced high blood pressure by removing hormones from meat while it cooked. Under the agreement, the manufacturer will pay a total of $625,000 to resolve the dispute and must ensure, by means of an independent monitor, that it will refrain from using either false information or high-pressure sales tactics. See Mealey’s Personal Injury Report, July 12, 2010.
A federal court in New Jersey has reportedly stayed for six months consumer fraud litigation against the company that makes Arizona Iced Tea® beverages and has asked the Food and Drug Administration (FDA) to determine whether high-fructose corn syrup (HFCS) qualifies as a “natural” ingredient. Coyle v. Hornell Brewing Co., No. 08-2797 (D.N.J., stay order entered June 15, 2010). Claiming that these beverages are deceptively marketed as “100% Natural” despite containing HFCS, the plaintiff alleges violation of the New Jersey Consumer Fraud Act, unjust enrichment and common-law restitution, and breach of express and implied warranties. The court issued the stay rather than dismiss the putative class action outright as requested by the defendants on the basis of the doctrine of primary jurisdiction. According to a news source, the court acknowledged that “categorizing HFCS as either natural or artificial for the purpose of food and beverage labeling does not fall within…
According to news sources, a St. Louis jury has awarded more than $500,000 to a Louisiana farmer who alleged that when the U.S. rice supply was contaminated in 2006 with a genetically modified (GM) crop that was somehow released from testing facilities, he lost $1.5 million due to lost sales abroad. In re: Genetically Modified Rice Litig., MDL No. 1811 (E.D. Mo.). The lawsuit is the third to reach trial of more than 500 consolidated before a multidistrict litigation court in eastern Missouri; it marks the third loss in federal court for the defendant, which is facing more than $52 million in jury awards. Two state trials also resulted in plaintiff verdicts. While the defendant has not apparently disputed the contamination, it has denied that it was negligent and contends that rice sales recovered shortly after the initial plunge. See Bloomberg Businessweek and Post Dispatch, July 14, 2010.
As part of its ongoing campaign to persuade government authorities to prohibit the use of bisphenol A (BPA), the Natural Resources Defense Council (NRDC) recently filed a lawsuit in the D.C. Circuit Court of Appeals seeking to force the Food and Drug Administration (FDA) to take action on a petition the organization filed in October 2008 requesting that the agency prohibit the chemical’s use in food packaging. In re: NRDC, Inc., No. 10-1142 (D.C. Cir., filed June 29, 2010). One year ago, NRDC also submitted a petition to California EPA’s Office of Environmental Health Hazard Assessment, requesting that BPA be added to list of chemicals “known to the state to cause reproductive toxicity” under the Safe Drinking Water and Toxic Enforcement Act of 1986 (also known as Prop. 65). In its lawsuit, NRDC notes that more than 600 days have passed since its FDA petition was filed, and the NRDC reiterates…
A federal court in California has dismissed a putative class action alleging that consumers were misled into believing that Cap’n Crunch’s Crunch Berries® cereal contained real berries or fruit. Werberl v. PepsiCo, Inc., No. 09-04456 (N.D. Cal., decided July 1, 2010). Noting that one law firm had filed unsuccessful suits in two other California federal district courts on behalf of two other class representatives, the court observed that the claims before it were “virtually identical.” Additional information about the dismissal of one of the other cases appears in issue 306 of this Update. According to the court, “no reasonable consumer would believe that Cap’n Crunch derives any nutritional value from berries” and any reliance on the use of the term “crunch berries” to imply “that real berries or fruit are contained in the cereal would neither be reasonable nor justifiable.” The court also found that leave to amend was unwarranted…
A federal court in Washington has dismissed the lawsuit filed by a man who alleged that inhaling the diacetyl in fumes from four to six bags of microwave popcorn daily caused his lung disease. Newkirk v. ConAgra Foods, Inc., No. 08-273 (E.D. Wash., decided July 2, 2010). Additional information about this litigation appears in issue 274 of this Update. Represented by the Independence, Missouri, attorney who has brought claims on behalf of popcorn factory workers and other consumers, Larry Newkirk sought to introduce the general causation opinion of physician David Egilman and the specific causation opinions of Dr. Charles Pue, Dr. Allan Parmet and William Ewing. The court analyzed Egilman’s proposed testimony and found it unreliable on a number of grounds, including that he sought to extrapolate residential diacetyl exposures from industrial exposures, which have been extensively studied and associated with bronchilitis obliterans, a debilitating lung disease also referred to…
The Ninth Circuit Court of Appeals has imposed a suspension, a formal reprimand and fines on several attorneys who attempted to enforce in U.S. courts a $489 million default judgment entered by a Nicaraguan court against a business entity that did not exist for allegedly exposing hundreds of banana plantation workers to pesticides. In re: Thomas V. Girardi, Esq., Nos. 08-80090, 03-57038 (9th Cir., decided July 13, 2010). The litigation in Nicaragua had been filed against “Dole Food Corporation” and “Shell Oil Company,” but should instead have named “Dole Food Company” and “Shell Chemical Company.” According to the court, “In a high-stakes gamble to enforce a foreign Judgment of nearly a half billion dollars, Respondents initiated and directed years of litigation against Defendants. Respondents efforts went beyond the use of ‘questionable tactics’—they crossed the line to include the persistent use of known falsehoods.” Those falsehoods included that (i) “Dole Food Company…
