A federal court in New York has determined that while plaintiffs alleging they
were sold olive-residue oil, or Pomace, instead of the “100% Pure Olive Oil”
appearing on the labels of The Gourmet Factory’s Capatriti-brand products
could not maintain a cause of action under the Magnuson-Moss Warranty Act,
their claims did exceed the $5 million threshold for maintenance of the action
in federal court under the Class Action Fairness Act (CAFA). Ebin v. Kangadis
Food Inc. d/b/a The Gourmet Factory, No. 13-2311 (S.D.N.Y., order
entered July 26, 2013).

The plaintiffs apparently based their amount-in-controversy allegation on
documents that the defendant submitted in parallel litigation brought by an
olive oil trade association. Details about that suit appear in Issues 470, 482
and 483 of this Update. Thus the court rebuffed the defendant’s attempt to
fault the plaintiffs for failing to conduct an independent investigation into
the amount-in-controversy before filing the complaint, observing “Defendant
cites no authority for the remarkable notion that plaintiffs cannot in good
faith rely on defendant’s own representations to this Court.” Based on either
the full retail price paid for the products or on the benefit of the bargain,
calculated by taking the price the plaintiffs actually paid for what they
thought was pure olive oil and subtracting the general price of the Pomace
they actually received, the court found that the roughly $10.9 million amount
derived from sales in New York and New Jersey adequately met the CAFA
jurisdictional requirement.



About The Author

For decades, manufacturers, distributors and retailers at every link in the food chain have come to Shook, Hardy & Bacon to partner with a legal team that understands the issues they face in today's evolving food production industry. Shook attorneys work with some of the world's largest food, beverage and agribusiness companies to establish preventative measures, conduct internal audits, develop public relations strategies, and advance tort reform initiatives.