The U.S. Attorney in Sacramento, California, has announced that a former purchasing manager for Safeway Inc. has agreed to plead guilty to two counts of wire fraud “in connection with an ongoing federal investigation into various illicit activities in the tomato processing industry.” According to the announcement, Michael Chavez has admitted that “while working at Safeway, he received personal bribery payments” from a sales broker and director of SK Foods L.P. to steer contracts for processed tomato products to that company rather than industry competitors. Purchasing managers at other major food companies have also pleaded guilty to receiving illicit payments from the SK Foods broker. U.S. Attorney Benjamin Wagner further noted that the Justice Department’s investigation into SK Foods “has uncovered wide-ranging fraud with respect to the quality of tomato product that was produced, purchased and sold by the company.” Apparently, “SK Foods regularly shipped products which, while not a health…
Category Archives Litigation
The National Cattlemen’s Beef Association has filed a challenge to the Environmental Protections Agency’s (EPA’s) finding that manmade greenhouse gas emissions (GHGs) endanger human health and the environment. Filed by a coalition of interested parties in the D.C. Circuit Court of Appeals on December 23, 2009, the petition calls for the court to determine that the agency lacked an adequate basis to make its finding. The finding apparently provides the foundation for EPA to regulate GHGs regardless of action that could be taken by Congress on pending climate change legislation. According to an association press statement, “EPA’s finding is not based on a rigorous scientific analysis; yet it would trigger a cascade of future greenhouse gas regulations with sweeping impacts across the entire U.S. economy,” said Tamara Thies, chief environmental counsel. “Why the Administration decided to move forward on this type of rule when there’s so much uncertainty surrounding humans’ contribution to climate…
According to a press report, three people from the Shaanxi Jinqiao Dairy Co. have been arrested and charged with producing and selling toxic food. They are apparently accused of selling more than five tons of milk powder laced with melamine to a food additive firm, which discovered the contamination. The tainted product was apparently recovered before reaching the marketplace. The detentions come a little more than a year after a nationwide scandal involving contaminated milk powder killed six children and sickened more than 300,000. The first civil trial to consider claims by parents of an injured child began in November 2009, but a second hearing in the matter has reportedly been delayed after the defendants demanded additional investigation into the cause of the child’s illness. See FoodNavigatorUSA.com, December 11, 2009.
According to a news source, a Denver man who alleged that his habit of consuming two bags of microwave popcorn every day caused his bronchiolitis obliterans, a debilitating lung condition purportedly associated with exposure to the butter flavoring diacetyl, has settled his claims against a flavoring manufacturer. Watson v. Dillon Cos., Inc., (D. Colo.) One of three diacetyl lawsuits brought by consumers in 2008, the claims of Wayne Watson were filed on his behalf by an Independence, Missouri, law firm that has obtained a number of settlements for workers with “popcorn lung” purportedly caused by occupational exposures to diacetyl. Details about Watson’s case appear in issue 244 of this Update. No additional information about the settlement has apparently been made available. See Findlaw.com, December 15, 2009.
A fractured Fifth Circuit Court of Appeals has determined that claims alleging violation of the Packers and Stockyards Act of 1921 must be supported by proof of injury, or likelihood of injury, to competition. Wheeler v. Pilgrim’s Pride Corp., No. 07-40651 (5th Cir., decided December 15, 2009). The issue arose from a complaint filed by certain poultry “growers,” alleging under the Act that another grower “was given a contract [with defendant] on preferable terms.” The district court and a Fifth Circuit panel concluded that the Act did not require a showing of adverse effect on competition and allowed the claims to proceed. The appeals court, in a 9-7 decision, reversed, finding the district court erred in denying defendant’s motion for summary judgment. Four judges joined the majority opinion but authored a concurrence to more clearly discuss the statutory interpretation principles at issue in the case. The dissenting judges, relying on…
EU ambassadors this week signed an agreement with Latin American and U.S. officials to end “a 15-year dispute over EU banana imports,” according to a December 15, 2009, press release, which described the impasse as “the longest trade dispute in history.” The European Union has apparently agreed to “gradually cut its import tariff on bananas from Latin America from €176 per tonne to €114,” in addition to providing €200 million to African and Caribbean banana-exporting countries “to help them adjust to stiffer competition from Latin America.” In return, Latin American countries will “not demand further cuts” and the United States has consented to drop its World Trade Organization (WTO) complaint against Europe’s banana importation practices. “This dispute on bananas has soured global trade relations for too long,” stated EU Agriculture and Rural Development Commissioner Mariann Fischer Boel, who noted that the accord was “well-balanced” and likely to further European objectives…
Francis Ford Coppola Presents, LLC has filed a complaint in a California court against a company that makes corks, screw caps, bottles, and other packaging, alleging that defects in the bottles and screw caps purchased for the winery’s Encyclopedia® collection of wines caused the degradation or destruction of 55,000 cases of wine. Francis Ford Coppola Presents, LLC v. Vinocor USA, Inc., No. 26-50585 (Cal. Super. Ct., Napa Cty., filed November 23, 2009). The winery alleges breach of contract, the implied covenant of good faith and fair dealing and the implied warranty of fitness; fraud in the inducement; negligent misrepresentation; negligence; and “for money had and received.” According to the complaint, the affected wine collection “was crafted and designed to be a collection of wines aimed at educating consumers on understanding how geography, history, food and religion, to name a few, all contribute to the making and enjoyment of wine. In…
Welch Foods Inc. has filed suit against its insurers claiming that they have a duty to defend and indemnify the beverage maker in litigation alleging that the company deceptively marketed its “100% Juice White Grape Pomegranate Flavored 3 Juice Blend”®. Welch Foods Inc. v. Zurich Am. Ins. Co., No. 09-12087 (D. Mass., filed December 8, 2009). According to Welch, the insurers were timely notified about two lawsuits, one by a competitor, POM Wonderful LLC v. Welch Foods Inc., and one by a consumer on behalf of a class, Burcham v. Welch Foods Inc., and denied they had a duty to defend or indemnify the beverage maker. Additional information about those lawsuits appears in issues 290, 313 and 316 of this Update. Alleging that its defense costs have exceeded $75,000 to date in both cases, Welch seeks a declaration that the insurers have a duty to defend and indemnify it under…
Plaintiffs’ lawyer William Marler has reportedly filed suit against Cargill on behalf of the guardian of a woman allegedly paralyzed by consuming hamburger contaminated with E. coli. Stephanie Smith was profiled in a recent New York Times article; she is a former dance instructor who reportedly became ill in 2007, began having seizures and was comatose for three months. According to Marler, she has spent two years in rehabilitation at a cost of some $2 million and remains in a wheelchair. He contends that his client has attempted mediation with the company but has been unable to reach a fair agreement. A Cargill spokesperson was quoted as saying, “Cargill deeply regrets Ms. Smith’s continuing suffering due to her illness. Each time Ms. Smith’s family has asked for financial assistance to cover out-of-pocket and rehabilitation costs, Cargill has advanced funds to help her and her family. We will continue to provide…
An administrative law judge recently issued an order suspending a Nebraska-based livestock operation’s organic certification for four years, agreeing with the U.S. Department of Agriculture’s (USDA) 2008 complaint that the company failed to keep and produce adequate records. In Re Promiseland Livestock, LLC, No, 08-0134 (USDA, Nov. 25, 2009). A supplier for Aurora Dairy and other organic farms, Promiseland Livestock, LLC, apparently operates five ranches in Missouri and Nebraska with more than 22,000 head of beef and dairy cattle. The judge concluded that Promiseland “willfully . . . failed to make requested records available” to USDA and denied agency representatives “access to review and copy organic operation records required to determine compliance” with the Organic Foods Production Act of 1990 and National Organic Program regulations. Promiseland first came under scrutiny when The Cornucopia Institute, an organic watchdog, targeted Aurora Dairy for allegedly “illegal” operations, according to a recent press release issued by…
