Two people have been convicted of conspiracy in charges related to a scheme to distribute counterfeit 5-Hour Energy drinks. United States v. Shayota, No. 15-0264 (N.D. Cal., verdict entered November 28, 2016). The couple, Joseph and Adriana Shayota, produced several million bottles of a drink manufactured under unsanitary conditions and labeled the drink with 5-Hour Energy's packaging. Before beginning that scheme, the couple reportedly bought 5-Hour Energy drinks intended for the Mexican market, repackaged them and sold them in the United States for a price well below the retail price. Six other defendants pleaded guilty to similar charges, and 5-Hour Energy maker Living Essentials won a $20-million civil judgment in March 2016. See Los Angeles Times, November 30, 2016. Issue 624
Category Archives Litigation
A consumer has filed a putative class action against Buffalo Trace Distillery, Inc., Old Charter Distillery Co. and Sazerac Co. alleging the companies misrepresent Old Charter Bourbon as aged for eight years before entering the market. Parker v. Buffalo Trace Distillery, Inc., No. 16-8986 (S.D.N.Y., filed November 18, 2016). The complaint argues that Old Charter was aged for eight years before a switch in manufacturing practices in 2014, and the bottle's labels were adjusted to remove the eight-year claim. Where the label once said "Aged 8 years," the label was changed to merely display an 8; in another spot on the label, the text reads, "gently matured for eight seasons." The plaintiff alleges negligent misrepresentation, fraud, breach of warranty, unjust enrichment and violations of New York and federal law. Issue 624
Three consumers have filed a lawsuit against Chipotle Mexican Grill, Inc. alleging the company misrepresents the calorie counts of its food in store menus, boards and advertising. Desmond v. Chipotle Mexican Grill, Inc., No. BC640700 (Cal. Super. Ct., Los Angeles Cty., filed November 15, 2016). The complaint asserts that the defendants each relied upon a menu board displaying a photo of a burrito with chorizo and "300 calories" to order what they believed to be a low-calorie option, then realized after eating it that "the burrito couldn't have been just 300 calories." The plaintiffs seek damages and attorney's fees for alleged violations of California's consumer-protection statutes. Issue 624
The North American Olive Oil Association (NAOOA) has filed a lawsuit against Mehmet Oz of "The Dr. Oz Show" alleging he falsely told his audience in a May 2016 episode that 80 percent of olive oil sold in supermarkets is fraudulent. N. Am. Olive Oil Ass'n v. Oz, No. 283156 (Ga. Super. Ct., Fulton Cty., filed November 29, 2016). The complaint asserts that Oz told viewers: "So how does it become fake, if it's just fresh olive juice? . . . Adulterated oil . . . takes some of the real oil and mixes it with fake olive oil substitute. To make the fake olive oil, you take an oil with no flavor or color like sunflower oil, add some coloring in there like chlorophyll to give it that rich green hue, then you mix that in with some of the real stuff, into extra virgin olive oil, and then,…
Two consumers have filed a projected class action against Arizona Canning Co. alleging that the image of a bowl full of beans on its Sun Vista products misleads consumers into believing the can is filled completely with beans rather than filled with some beans and a large amount of water. Beckman v. Ariz. Canning Co., No. 16-2792 (S.D. Cal., removed November 14, 2016). The complaint asserts that the “picturesque” label image depicts “a bowl full of plump and hearty beans with glimmer of shine, and little to no water,” but when the can is opened, it reveals “the repulsive sight of bean water” and “an inappropriately large amount of water and a small amount of beans.” The complaint admits that a reasonable consumer “would expect to find some water within the container,” but one plaintiff’s “home investigation” apparently found that a 29-ounce can of pinto beans contained 13 ounces of…
The U.S. Department of Justice has filed a lawsuit against two Washington companies—Washington Potato and Pasco Processing—for allegedly discriminating against immigrants during the employment eligibility verification process. United States v. Wash. Potato Co., No. 16-1320 (D.O.J., filed November 14, 2016). The complaint alleges the companies required non-U.S. citizens to submit specific documentation to process the Form I-9 and E-Verify while allowing U.S. citizens more flexibility in their documentation. “Federal law protects individuals with legal work authorization from facing discriminatory obstacles during employment eligibility verification,” said Principal Deputy Assistant Attorney General Vanita Gupta in a November 14, 2016, press release. “All people with legal employment status in the United States must receive an equal opportunity to prove they can work, regardless of their citizenship or immigration status.” Issue 623
Christian Rivas, owner of Oasis Brands Inc., has been sentenced to 15 months in prison for two charges that he sold cheese contaminated with Listeria monocytogenes after the U.S. Food and Drug Administration (FDA) instructed the company to stop distribution until it remedied its practices. FDA inspected Oasis in August 2014, found several violations and required Oasis to halt distribution of any products until they were cleared by laboratory testing. Rivas continued distributing Oasis' cheese, which then failed a random Listeria test at a Virginia grocery store. In addition to his 15 months in prison, Rivas is subject to one year of supervised release. See South Florida Business Journal, November 16, 2016. Issue 623
The Ninth Circuit Court of Appeals has ruled that the attorneys general of six states—Missouri, Nebraska, Oklahoma, Alabama, Kentucky and Iowa—do not have standing to sue California AG Kamala Harris in an attempt to block enforcement of a law requiring egg-production facilities to provide hens enough space to fully extend their limbs and turn around freely in the confinement in which they spend the majority of the day. Missouri v. Harris, No. 14-17111 (9th Cir., order entered November 17, 2016). The court found that the plaintiff states did not have parens patriae standing, the standing provided to a governmental entity as the legal protector of its citizens. The states could not “articulate an interest apart from the interests of private egg producers, who could have filed an action on their own behalf,” the court held. Further, the states’ allegations about potential economic damages were speculative, and “the allegations of discrimination were…
A consumer has filed a projected class action against Krispy Kreme Doughnuts, Inc., alleging the company’s blueberry, maple and raspberry products are not made with the ingredients in their fruit-based names. Saidian v. Krispy Kreme Doughnuts, Inc., No. 16-8338 (C.D. Cal., filed November 9, 2016). The complaint highlights health benefits apparently linked to raspberries, blueberries, maple syrup and maple sugar, asserting that Krispy Kreme charged a premium for its products to capitalize on those perceived health benefits while using imitation versions of the ingredients. The plaintiff also distinguishes the blueberry, raspberry and maple products from Krispy Kreme’s lemon, strawberry and cinnamon apple products, because the latter group does contain its advertised ingredients, leading to further consumer confusion. For allegations of fraud, misrepresentation and violations of California statutes, the plaintiff seeks class certification, an injunction, damages and attorney’s fees. Issue 622
Heartland Consumer Products, producer of sucralose-based sweetener Splenda®, has filed a lawsuit against Dunkin’ Brands, Inc. and its franchisees alleging the restaurant chain misleads its customers into believing it carries Splenda® while providing a different sweetener made in China. Heartland Consumer Prods. v. Dunkin’ Brands, Inc., No. 16-3045 (S.D. Ind., Indianapolis Div., filed November 7, 2016). According to the complaint, Dunkin regularly purchased Splenda® from Heartland until April 2016, when it switched to a different sucralose sweetener. Heartland asserts that Dunkin employees continue to tell customers that the sweetener is Splenda even though the new sweetener is a “Chinese-made, off-brand sucralose.” Heartland further argues that Dunkin appropriated its “Sweet Swaps” program by creating a Dunkin-branded “Smart Swaps” program. The complaint asserts that Heartland received multiple reports of consumer confusion, including one customer who reported that a Dunkin employee said Dunkin had “bought out Splenda.” For allegations of trademark infringement, dilution, false…
