In a lawsuit brought by the Natural Resources Defense Council (NRDC) alleging failure to meet a deadline to set limits on perchlorate levels in drinking water, a New York federal court has issued an order adopting the U.S. Environmental Protection Agency’s (EPA’s) preferred language to admit the failure. Nat. Res. Def. Council v. EPA, No. 16-1251 (S.D.N.Y., order entered September 19, 2016). An EPA attorney reportedly admitted in court that the agency had missed the deadline of February 11, 2013, to set limits on perchlorate in drinking water after announcing its intention to propose regulations two years prior. NRDC and EPA then submitted proposed orders admitting the failure, and the court adopted EPA’s language without further discussion. See Law360, September 20, 2016. The court’s order finds that (i) EPA triggered a non-discretionary duty to propose a maximum contaminant level goal by February 11, 2013; (ii) EPA failed to propose that goal…
Category Archives Litigation
Shook Partner Frank Cruz-Alvarez and Associate Ravika Rameshwar have authored an article for the Washington Legal Foundation’s Legal Pulse discussing a New York federal court’s dismissal of a class action centered on infant formula marketed as organic. The complaint alleged that Abbott Laboratories, Inc. represented its Similac® Advance® as organic despite containing ingredients prohibited in organic products by the U.S. Department of Agriculture (USDA). Cruz-Alvarez and Rameshwar provide an overview of the case and detail the relevant provisions of the Organic Foods Production Act of 1990, which establishes that a product can be labeled “organic” if a USDA-accredited agency certifies it as such. The court compared the infant formula allegations to a U.S. Court of Appeals for the Eighth Circuit case challenging the organic label of milk and reached an analogous conclusion: the state laws supporting the complaint challenged the federal law’s certification determination and were thus preempted. Accordingly, the…
Chipotle Mexican Grill Inc. and its customers who consumed tainted food during outbreaks of E. Coli, Salmonella and norovirus have reportedly reached a settlement agreement. Terms of the agreement were not disclosed except for one class member’s request to receive vouchers for free burritos. One case in the litigation is still pending. See The Denver Post, September 9, 2016. Chipotle was also hit with an unrelated lawsuit in California alleging the company fired an employee for saying that her Latino coworkers received preferential treatment. The plaintiff argues that after a Latina woman was promoted to the district manager position, Latino employees began receiving more favorable day shifts while other employees received night shifts. When the plaintiff complained about the scheduling to a Latino manager, she was allegedly told that “black girls always have attitude.” See CBS Los Angeles, September 13, 2016. Issue 617
The American Beverage Association, other industry groups, retailers and distributors have filed a lawsuit against the city of Philadelphia challenging its tax on sugar-sweetened beverages (SSBs), arguing the statute unlawfully attempts to circumvent Pennsylvania’s taxation supremacy. Williams v. City of Philadelphia, No. 160901452 (Penn. Ct. C.P., Philadelphia Cty., filed September 14, 2016). The plaintiffs assert the statute creates “a roadmap for every local government in the Commonwealth [of Pennsylvania] to evade the Commonwealth’s supreme taxation structure on thousands of products— from over-the-counter pharmaceuticals to cars—merely by imposing a duplicative tax at a different level in the distribution chain than a tax already imposed by the Commonwealth.” Because the beverages subject to the Philadelphia tax are also subject to Pennsylvania tax, the city tax duplicates the state tax, the plaintiffs argue, which amounts to “seizing the taxing authority expressly reserved to the Commonwealth in contravention of the Sterling Act’s prohibition on…
A Texas judge has reportedly voided a 2013 law prohibiting Texas craft-beer brewers from selling territorial rights to distribute their beers, finding the state had no compelling state interest in restricting the breweries. The statute was part of a package of other laws benefitting small breweries, but the distribution limitation was apparently inserted at the behest of large Texas wholesalers. The rule prevented brewers from receiving monetary compensation for distribution rights. The brewer who challenged the law, a former plaintiffs’ attorney, told Texas Lawyer, “It restores millions of dollars of value to brewers who had their rights taken from them for no justifiable reason.” See Houston Chronicle, August 26, 2016; Texas Lawyer, August 29, 2016. Issue 617
A California federal court has denied the U.S. Department of Agriculture’s (USDA’s) motion to dismiss a lawsuit brought by several activist groups challenging aspects of the Organic Food Production Act’s sunset provision, which governs when substances are removed from the National List. Ctr. for Food Safety v. Vilsack, No. 15-1590 (N.D. Cal., order entered September 8, 2016). The plaintiffs objected to how USDA changed the process to remove a substance from the List, which documents permitted synthetic substances and prohibited non-synthetic substances in the production of organic food. Details about the complaint appear in Issue 561 of this Update. The court first determined that the plaintiff groups had standing to sue, then considered whether it had subject matter jurisdiction. USDA argued the sunset notice changes were not part of a final agency action, but the court determined the question of jurisdiction and the merits of the action were so intertwined…
Rangers Baseball LLC filed then suspended an opposition to Bacardi & Co.’s application to register a trademark for a logo featuring the letter “T,” stylized to feature points extruding from the middle of the character. Opposition No. 91229825 (USPTO, suspended September 2, 2016). The Texas Major League Baseball team filed its notice of opposition on August 31, 2016, arguing a likelihood of confusion, and then two days later filed a stipulation to suspend pending settlement negotiations. The Bacardi application seeks to trademark the stylized “T” as well as “Tang” for use on alcohol beverages for its spirit produced from tea leaves. The product is currently available only in China. Issue 616
Two consumers have filed a lawsuit against Subway Sandwich Shops Inc. and T-Mobile USA Inc. alleging the companies sent unsolicited text messages advertising an offer for a free sandwich without first obtaining written consent from the recipients. Rahmany v. T-Mobile USA Inc., No. 16-1416 (W.D. Wash., filed September 6, 2016). The complaint asserts that the plaintiffs each received an unsolicited text on September 1, 2016, advertising a free 6-inch chicken sandwich from Subway, with a link to download the T-Mobile app for additional details. T-Mobile sent the message with an automatic telephone dialing system “with the consent and encouragement of Subway for the purposes of financial gain in a mutually beneficial relationship between those two companies,” the plaintiffs allege. For alleged violations of the Telephone Consumer Protection Act (TCPA), the plaintiffs seek $500 per negligent violation and $1,500 per knowing or willful violation. Issue 616
A Massachusetts federal court has granted certification to a class of former and current delivery drivers for Domino’s Pizza Inc. who allege that they should have received the delivery charge paid by customers. Mooney v. Domino’s Pizza, Inc., No. 14-13723 (D. Mass., order entered September 1, 2016). The plaintiffs also asserted that they should have been paid minimum wage for “inside work” unrelated to deliveries, rather than the lower minimum wage for tipped workers. The court focused on whether the plaintiffs’ claims were common to all members of the class. Domino’s and its franchisee argued the classification of the delivery fee as a service charge—which is to compensate employees for service and to be remitted to the employees under Massachusetts law—or an administrative fee “depends on the circumstances of each customer’s encounter with the delivery fee,” thus precluding commonality. The court disagreed, finding that “the plain language of the statute suggests…
A California federal court has granted in part and denied in part a motion to dismiss a lawsuit alleging Chipotle Mexican Grill Inc. misleadingly advertises its food as free of genetically modified organisms (GMOs) despite allegedly selling flour and corn tortillas with GMOs, using GMO soy in its cooking oils and serving meat and dairy products derived from animals fed GMO feed. Pappas v. Chipotle Mexican Grill Inc., No. 16-0612 (S.D. Cal., order entered August 31, 2016). Chipotle argued that reasonable consumers would not “equate ‘nonGMO ingredients’ with ingredients not derived from animals that have eaten genetically modified feed.” The plaintiff argued that the reasonable consumer standard was not applicable at the motion-to-dismiss stage in a fraud or deception case, but the court found that the standard could be used to hold the plaintiff’s allegations to be implausible. The court compared the plaintiff’s meat and dairy allegations to a case…
