A federal court in California has dismissed without prejudice some of the claims filed by a food supplier in a dispute over insurance coverage in food-contamination litigation. Nat’l Surety Corp. v. Pacific Int’l Vegetable Mktg., Inc., No. 09-4898 (N.D. Cal., decided March 5, 2010). A fast food restaurant was sued for injuries purportedly linked to foodborne contamination, and it filed a third party complaint against the company that supplied the lettuce which allegedly caused the outbreak. The supplier turned to the lettuce grower’s insurer to defend it under a policy that was supposed to include the supplier as an additional insured pursuant to an agreement between the supplier and grower. The insurer refused to defend the claims, and the supplier sued the agent purportedly responsible for adding the supplier to the insurance policy for breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary…
Category Archives Litigation
The Eighth Circuit Court of Appeals has determined that certain business expense claims and a personal property claim made by a poultry processor for damages sustained during a break in electrical service caused by an ice storm were not covered by the processor’s insurance policy. George’s Inc. v. Allianz Global Risks US Ins. Co., No. 09-2220 (8th Cir., decided March 9, 2010). The insurer paid the processor’s claims for lost business income and extra expenses totaling more than $300,000, but refused to pay $155,000 in fixed labor and overhead costs and $30,000 for chickens that died in the processor’s holding shed. The court agreed with the insurer that the refused claims were subject to exclusions under the insurance policy, rejecting the processor’s contentions that (i) its labor and overhead costs were extra expenses because the processor experienced an increase in cost-per-pound when the business disruption caused it to process less chicken…
A putative class action has been filed in a Washington state court by plaintiffs claiming that L’il Critters Omega-3 Gummy Fish® are deceptively marketed as products that will “Promote Healthy Brain Function” in children. Aust v. NW Natural Prods., Inc., No. 10-07949 (Wash. Super. Ct., King Cty., filed February 23, 2010). In fall 2009, the Federal Trade Commission (FTC) warned the defendant that its claims may violate federal false advertising laws, and the company modified its marketing materials. Additional information about the FTC’s actions on products with omega-3 related claims appears in issue 338 of this Update. Seeking to represent a class of all Washington residents who have purchased the company’s omega-3 gummy fish products, the plaintiffs allege violations of Washington’s consumer protection act, breach of warranties, conversion and unjust enrichment. They seek a class certification order, a declaration that the company’s conduct was unlawful, actual damages, statutory damages including treble…
Three advocacy organizations have sued Department of the Interior Secretary Ken Salazar and the U.S. Fish & Wildlife Service (FWS), charging them with violations of the National Environmental Policy Act (NEPA) for failing to prepare an environmental impact statement (EIS) before entering into contracts that allow farmers to cultivate genetically engineered (GE) crops at the Bombay Hook refuge in Delaware. Delaware Audubon Soc’y v. Salazar, No. 99-9999 (D. Del., filed March 1, 2010). The refuge reportedly spans 16,000 acres of mainly tidal marshes that provide habitat for many waterfowl species that attract birdwatchers. Claiming that GE crops harm the environment by increasing the use of herbicides with adverse effects on soil, water, amphibians, and birds, and with the development of “superweeds” resistant to certain herbicide ingredients, the plaintiffs allege that defendants have repeatedly ignored legal obligations under NEPA to provide an environmental assessment or an EIS. The refuge has leased some…
A federal court in Kentucky has determined as a matter of law that a company which tested, developed and approved paper packaging for customers buying KFC Popcorn chicken breached its contract because the containers caught fire while being microwaved. KFC U.S. Props., Inc. v. Paris Packaging, Inc., No. 09-00249 (W.D. Ky., decided February 25, 2010). So ruling, the court granted KFC’s motion for partial summary judgment. Additional details about the lawsuit appear in issue 299 of this Update. According to the court, the parties’ contract specified that the packaging company would be responsible for ensuring the product was safe regardless of any standards, specifications or other information KFC provided. Because it was reasonably foreseeable that customers would microwave their KFC chicken in the paper box in which they took it home, the court held that the defendant breached its contract by providing unsafe packaging that was unfit for its intended…
Cargill, Inc. has reportedly responded to a $100 million lawsuit by admitting that a beef patty it manufactured contained E. coli and caused plaintiff Stephanie Smith’s debilitating injuries. While not contesting strict liability, the company is denying that it was negligent. Its suppliers apparently certified that the product had been tested for E. coli and that all the tests were negative. The company also reportedly included in its response that its products are inspected by the U.S. Department of Agriculture and that federal law requires meat products to be labeled with warnings that meat may contain bacteria that will cause illness if not properly cooked. Smith, who is confined to a wheelchair and was profiled in a New York Times article, is represented by food lawyer William Marler. He was quoted as saying, “Never in my 23 years have I seen a food company admit liability out of the box…
According to a news source, a putative class action has been filed against E&J Gallo Winery alleging that it falsely labeled and sold its Red Bicyclette® wine as Pinot Noir when the wine was “illegally cut with cheaper Syrah and Merlot grapes.” The action, reportedly filed in Los Angeles Superior Court, follows news that wine makers in France were sentenced for selling the cheaper wine to the company as pinot noir. Additional details about the French scam appear in issue 338 of this Update. Meanwhile, the U.S. Alcohol and Tobacco Tax and Trade Bureau (TTB) has reportedly been investigating the matter with French authorities and may also take action against U.S. wine importers. The bureau was quoted as saying, “TTB is waiting for an official translation of the court documents and has begun investigations to determine the appropriate course of action to take regarding the American importers of these mislabeled…
A putative class action has been filed in a Madison County, Illinois, court alleging that a fast food chain has fraudulently advertised its Super Stacked™ sub sandwiches “as containing ‘double portions of meat’” compared with its standard sandwiches, when they do not have double the meat. Williams v. Kahala Corp., No. 10-L-166 (Ill. Cir. Ct., Madison Cty., filed February 12, 2010). According to the complaint, while defendant charges a premium for its Super Stacked™ sandwiches, they “do not have double the protein” because “they do not have double the meat.” The plaintiffs allege that a 12-inch BLIMPIE Best™ sandwich has 50 grams of protein, while its Super Stacked™ counterpart “contains only 73 grams of protein.” They also allege that some Super Stacked™ sandwiches have no “regular” counterpart with which consumers can compare. Seeking to certify a class of all persons who purchased a Super Stacked™ sandwich from Blimpie restaurants in…
After a federal court in Ohio preliminarily approved the settlement of claims that The Dannon Co. deceived consumers by advertising the purported digestive health benefits of its Activia® and DanActive® products, class notification was initiated. Gemelas v. The Dannon Co., Inc., No. 08-236 (N.D. Ohio, order filed January 27, 2010). Without admitting liability, Dannon has agreed to create a $35 million fund for the settlement, which was discussed in detail in issue 320 of this Update. Claims must be submitted by October 1, 2010, and objections to the proposed settlement must be filed by May 24. The court has scheduled a June 23 hearing to consider any objections; to decide whether the settlement is fair, reasonable and adequate; and to determine what the plaintiffs’ lawyers will be paid.
A court in Carcassonne, France, has reportedly found French winemakers and traders guilty of deliberately and repeatedly mislabeling wine as a more expensive grape variety to get a better price from E. & J. Gallo under its Red Bicyclette® brand. French customs officials apparently discovered the swindle when they found that the amount of “pinot noir” sold to Gallo far exceeded what the region produced. According to a news source, the scam more than doubled the miscreants’ profits, which totaled some €7 million for 18 million bottles. The fines imposed ranged from US$2,050 to US$247,050, and the suspended jail sentences ranged from one to six months. The judge was quoted as saying, “The scale of the fraud caused severe damage for the wines of the Languedoc for which the United States is an important outlet.” A defense attorney reportedly said that no American customers complained about the fraud. See BBC News,…
