Contradicting an advisory jury verdict, a Pennsylvania federal court has allowed Starr Surplus Lines Insurance Co. to void its policy with H.J. Heinz Co. covering damages related to the manufacture and sale of lead-tainted baby cereal. H.J. Heinz Co. v. Starr Surplus Ins. Co., No. 15-0631 (W.D. Penn., order entered February 1, 2016). Surplus sought to rescind the policy, and the jury agreed with its argument that Heinz had made material misrepresentations on its application for product contamination coverage. The jury concluded that the insurance company knew about the misrepresentations and sold the policy anyway, thus losing its grounds for rescinding the policy; the court disagreed, finding “Heinz did not prove by a preponderance of the evidence that Starr had sufficient knowledge of the misrepresented facts prior to issuing the policy.” Accordingly, the court voided the policy. Additional information about the jury decision appears in Issue 588 of this Update.…
Category Archives Litigation
An Ohio appeals court has affirmed a lower court decision finding that two consumers’ mislabeling allegations against The Kroger Co. are preempted by the Poultry Products Inspection Act (PPIA). Arnold v. Kroger Co., No. C-150291 (Ohio Ct. App., 1st App. D., Hamilton Cty., order entered January 22, 2016). The consumers alleged Kroger’s chickens were not subjected to “a humane environment” as the company advertised and thus were not worth the premium the store charged. The trial court dismissed the claims as preempted by the PPIA, and the plaintiffs appealed. The appeals court was unpersuaded by the plaintiffs’ argument that the Food Safety and Inspection Service’s (FSIS’) inspection and approval of Kroger’s slaughtered chickens were insufficient to determine whether the chickens were in a humane environment while alive. “FSIS has determined that humane treatment of poultry directly implicates its fitness for human consumption because ‘under the PPIA, poultry products are more…
A consumer has filed a putative class action against Quorn Foods, Inc. alleging the term “mycoprotein,” which the company uses in its advertising, implies the product is “the same or substantially similar to a mushroom, truffle or morel” but Quorn products “are actually made of mold.” Birbrower v. Quorn Foods, Inc., No. 608107 (Cal. Super. Ct., Los Angeles Cty., C. Dist., complaint filed January 22, 2016). The complaint argues that Quorn labels misrepresent “mycoprotein,” specifically citing the packaging claim that “Quorn [products] are made with mycoprotein (‘myco’ is Greek for ‘fungi’) and are completely meatless and soy-free. There are believed to be over 600,000 varieties of fungi in the world, many of which are among the most sought after foods like varieties of mushroom, truffles, and morels.” The plaintiff alleges violations of California consumer-protection statutes and fraud, and she seeks an injunction, implementation of product labels that state that “this…
A consumer has filed a putative class action against Kellogg Co. alleging the company produces Mother’s Cookies® with partially hydrogenated oil (PHO), which contains trans fat, in violation of the U.S. Food and Drug Administration’s (FDA’s) ban on the ingredient. Hawkins v. Kellogg Co., No. 16-0147 (S.D. Cal., filed January 21, 2016). The plaintiff asserts FDA “determined that PHO is unsafe for use in food” in 2015 and alleges as a result that Kellogg is prohibited from using the food additive in its cookies. “Today there is no question about the scientific consensus on trans fat,” the complaint argues, describing several studies examining the effects of PHO on the human body. For alleged violations of California consumer-protection statutes, nuisance and breach of implied warranty, the plaintiff seeks class certification, restitution, an injunction, a corrective advertising campaign and attorney’s fees. Issue 592
A Delaware cheese company and two individual defendants have pled guilty to a misdemeanor violation of the federal Food, Drug, and Cosmetic Act for distributing adulterated ricotta, queso fresco and fresh cheese curds in several neighboring states. U.S. v. Roos Foods, Inc., No. 16-0013 (D. Del., information filed January 22, 2016). Roos’ cheese was connected to a 2014 outbreak of Listeria that caused five adults and three newborns to contract listeriosis. The criminal information alleged the company produced the cheese in unsanitary conditions, including the “[f]ailure to clean food-contact surfaces as frequently as necessary to protect against contamination of food” and “failure to store raw materials or ingredients in a manner that protects against contamination.” In their agreement with the U.S. Food and Drug Administration (FDA), the defendants agreed to an injunction preventing them from processing or distributing food products until they undergo an FDA inspection and facility testing by…
The Association of National Advertisers, Inc. (ANA) has filed an amicus brief in a case challenging San Francisco’s health code provisions requiring advertisements on sugar-sweetened beverages (SSBs) to notify the public of alleged health risks associated with SSB consumption. Am. Beverage Ass’n v. City of San Francisco, No. 15-3415 (N.D. Cal., San Francisco Div., amicus brief filed January 22, 2016). The brief focuses on First Amendment arguments against requiring private parties to include government speech on their product labels. “The City of San Francisco’s imposition of the Warning Mandate in reaction to potential over-consumption of sugar-sweetened beverages by its citizens, whatever the merits of that concern, takes regulatory Nannyism to new levels and is wholly incompatible with First Amendment protections afforded to commercial speech,” the brief argues. “If this Court were to uphold the Board of Supervisors’ conscription of sugar-sweetened beverage ads to convey government views on health issues there…
A jury in Alabama has found Golden Peanut Co. liable for an accident causing an employee welder to inhale peanut dust, resulting in a pneumonia infection and subsequent lung transplant. Smith v. Golden Peanut Co., No. 14-0999 (M.D. Ala., jury verdict filed January 15, 2015). The welder was apparently inside a grain elevator when a truck began dumping peanuts into the shaft, causing the peanut dust to become “so thick in the work area of the elevator pit shaft that [the welder] could not see his hand in front of his face.” He was then diagnosed with pneumonia, required the use of an oxygen tank and became unable to work. In its verdict, the jury concluded the welder could recover $718,113.25 for his negligence claim. See Law360, January 15, 2016. Issue 591
Whole Foods and a consumer have reached an agreement in a lawsuit alleging the company misrepresented the prices of its products before the point of purchase. Burgos v. Whole Foods Mkt. Grp., No. 15-7357 (D.N.J., stipulation filed January 20, 2016). The plaintiff alleged that some of Whole Foods’ price displays failed to meet the state’s requirements, which she argued amounted to violations of New Jersey’s consumer-protection statute. The stipulation specifies that the individual plaintiff’s claims are dismissed with prejudice, but the plaintiff’s proposed class is not bound to the terms of the agreement. Issue 591
A California federal court has dismissed a lawsuit against Costco Wholesale Corp. alleging the company’s shrimp was falsely advertised as adherent to a supplier code of conduct on human rights while the product was allegedly obtained through the use of slave labor. Sud v. Costco Wholesale Corp., No. 15-3783 (N.D. Cal., order entered January 15, 2016). The plaintiff argued that she was harmed because she purchased shrimp relying on Costco’s misrepresentation; the court disagreed after Costco provided records of the plaintiff’s and her mother’s purchases, which the company tracks through its membership program. Accordingly the court granted Costco’s motion to dismiss but allowed the plaintiff leave to amend. Details about the August 2015 complaint appear in Issue 576 of this Update. Issue 591
The U.S. Department of Justice (DOJ) has intervened in an ongoing series of lawsuits against Tri-Union Seafoods, StarKist and Bumble Bee Foods alleging the companies conspired to set prices for tuna in the United States. In re Packaged Seafood Prods. Antitrust Litig., 15-2670 (S.D. Cal., order entered January 20, 2015). A California federal court granted the government’s unopposed motion to intervene at a status conference with attorneys representing several consumer and competitor plaintiffs in the consolidated action. The court found “common questions of law and fact between this civil action and an ongoing criminal grand jury investigation” conducted by the DOJ and accordingly granted a stay in the case. Details about the consolidation appear in Issue 588 of this Update and additional information on lawsuits brought by grocers appears in Issues 574 and 590. Issue 591
