Ferrero SpA, maker of Nutella®, has reportedly won a dispute in the Brussels Court of Appeal over a rival’s advertising that claimed its similar product was healthier because it does not contain palm oil. Ferrero sued Belgium’s Delhaize Group after the “Choco” maker launched an ad campaign claiming its “certified without palm oil” spread was healthier and environmentally sustainable. The court held Delhaize made illegal and unproven comparisons in its environmental and health claims about palm oil and ordered the company to end the campaign. The court also barred Delhaize’s use of the word “chocolate” on Choco labels because the product does not contain chocolate. See 7 Sur 7, June 2, 2017. Issue 637
Category Archives Litigation
A Colorado federal court has dismissed a shareholder derivative action against Chipotle alleging the company’s officers and directors of food-safety oversight failed to take action to prevent outbreaks of foodborne illness. Gubricky v. Ells, No. 16-2011 (D. Colo., order entered June 7, 2017). The plaintiff claimed the defendants had failed to implement and enforce effective food-safety procedures, monitor compliance with food-safety laws or commit necessary resources to store audits and risk assessment after a series of foodborne illness outbreaks. The complaint further alleged that the board failed to take action or offer sick employees paid leave until 2015, seven years after the outbreaks began. In a shareholder derivative suit, plaintiffs must plead “with particularity” why demanding the corporate board to take corrective action would be futile, the court said, but the plaintiff failed to plead facts specific to each director establishing a “substantial likelihood of personal liability.” The plaintiff must…
The U.S. Supreme Court has denied certiorari in a six-state coalition's attempt to block enforcement of a California law requiring egg-production facilities to provide hens enough space to extend their limbs and turn around. Missouri v. Becerra, No. 16-1015 (U.S., denial of certiorari entered May 30, 2017). The rule affects private egg producers within each state, but the U.S. Court of Appeals for the Ninth Circuit found that this interest did not convey standing upon the states. Additional details on the circuit court's decision appear in Issue 623 of this Update. The high court also denied certiorari to Austin "Jack" DeCoster and his son Peter, who sought to appeal the prison sentences they received for their roles in a 2010 Salmonella outbreak that sickened thousands across the United States. DeCoster v. United States, No. 16-877 (U.S., denial of certiorari entered May 18, 2017). The men, former executives of Quality Egg…
The U.S. Court of Appeals for the Second Circuit has reversed a lower court’s dismissal of a proposed class action alleging Whole Foods Market Group, Inc. overcharges for prepackaged foods. John v. Whole Foods Mkt. Grp., Inc., No. 16-0986 (2nd Cir., order entered June 2, 2017). The plaintiff alleged that he routinely purchased prepackaged foods at two Whole Foods stores in Manhattan but learned that a New York City Department of Consumer Affairs (DCA) investigation had found systematic overcharging for some foods. Details on the lower court’s dismissal appear in Issue 596 of this Update. The Second Circuit held that the lower court dismissed the case prematurely because the plaintiff did not need to prove the accuracy of the DCA report or defend its methodology at the pleading stage; he was required only to plausibly allege that he overpaid for at least one product, which satisfies the “low threshold” required…
A California federal court has granted a motion to dismiss a consolidated proposed class action alleging Trader Joe’s underfilled its five-ounce cans of tuna, holding the plaintiffs’ claims are preempted by the Federal Food, Drug and Cosmetic Act (FDCA). In re Trader Joe’s Tuna Litig., No. 16-1371 (C.D. Cal., order entered June 2, 2017). The plaintiffs commissioned the National Oceanic and Atmospheric Administration to test several varieties of Trader Joe’s canned tuna, and the agency apparently determined that some cans were filled as much as 25 percent below the U.S. Food and Drug Administration (FDA) minimum. Additional information on one of the consolidated complaints appears in Issue 589 of this Update. Trader Joe’s argued that the weights listed on the labels were accurate and that the plaintiffs’ claim was preempted by federal law because it was based on an alleged violation of FDA standards. The court agreed, finding the FDCA…
A federal court has denied class certification to plaintiffs in multidistrict litigation involving false advertising claims for 5-Hour Energy® drinks, finding they failed to allege that common issues predominate over individual ones, including a common definition of “energy.” In re 5-Hour Energy Mktg. and Sales Practices Litig., No. 13-2438 (C.D. Cal., order entered June 7, 2017). The plaintiffs could not establish the definition of “energy,” the court found, because they defined it as “caloric energy” based on U.S. Food and Drug Administration dietary-supplement standards but did not show that consumers interpret “energy” the same way. In addition, plaintiffs in California, Missouri and New Mexico proposed a theory of liability based on underfilling, alleging that the product provided only 3.7 minutes of caloric energy instead of five hours, while plaintiffs in other states did not argue for the theory. Issue 637
The Center for Science in the Public Interest (CSPI) and National Consumers League have filed a lawsuit alleging the U.S. Food and Drug Administration’s (FDA’s) decision to delay implementation of rules requiring chain restaurants and food sellers to display nutritional information violated the Administrative Procedure Act. Ctr. for Sci. in the Pub. Interest v. Price, No. 17-1085 (D.D.C., filed June 7, 2017). The plaintiffs allege that the agency “repeatedly delayed” the compliance date for the nutritional labeling rules, which were originally scheduled to take effect in December 2015. One day before the revised enforcement date in May 2017, FDA announced that compliance would be delayed until May 2018. The plaintiffs request that the court vacate the delay. Additional details on the delay announcement appear in Issue 633 of this Update. “The Trump administration’s delay of menu labeling ill serves consumers, who need and want better information about their food choices,” CSPI Director of Nutrition Policy Margo G. Wootan said in a June…
The family of Bob Marley will receive more than $2.8 million in damages and unpaid royalties from Jammin Java Corp. in a trademark-infringement suit. FiftySix Hope Rd. Music Ltd. v. Jammin Java, No. 16-5810 (C.D. Cal., order entered May 30, 2017). The family’s companies, 56 Hope Road Music Ltd. and Hope Road Merchandising LLC, own the late musician’s intellectual property and publicity rights and sued Jammin Java after it failed to pay royalties on a license to produce Marley Coffee. Jammin Java was founded by Marley’s son Rohan, who left the company in 2008. Issue 636
A proposed slack-fill class action against Harry & David LLC was dismissed after the parties voluntarily dismissed the action. Brown v. Harry & David LLC, No. 17-0999 (S.D.N.Y., stipulation filed May 22, 2017). The stipulation did not explain the reason for dismissal but stipulated that it was dismissed “with prejudice against the Defendant.” The plaintiff had alleged that 10-ounce containers of Moose Munch Milk Chocolate, Dark Chocolate, Classic Caramel and Cinnamon Maple Pecan popcorn mix were underfilled by as much as 43 percent. Issue 636
A consumer has filed a proposed class action alleging Sargento Foods misleadingly advertises its cheese products as “natural” despite containing genetically modified organisms (GMOs) or animal growth hormones. Stanton v. Sargento Foods, Inc., No. 17-2881 (N.D. Cal., filed May 19, 2017). The plaintiff asserts that the cows providing milk for the production of Sargento cheeses are fed GMO corn and soybeans as well as a growth hormone. Alleging violations of state consumer protection acts and breach of warranty laws, the plaintiff seeks class certification, damages, an injunction and attorney’s fees. Issue 636
