While continuing to deny that its labeling and marketing for Truvia® sweetener products misled consumers, Cargill has apparently agreed to settle a putative nationwide class action alleging consumer fraud and breach of warranty. Martin v. Cargill, Inc., No. 13-2563 (D. Minn., preliminary agreement filed September 19, 2013). The plaintiffs claimed that the products are not “natural” because they contain “highly processed” ingredients or those derived from genetically modified organisms. Under the agreement, the company would create a $5 million fund for cash refunds and vouchers on selected Truvia® products. The company has also agreed to modify product labels that will refer consumers to its website where it will explain in some detail how the erythritol in Truvia® is produced. Cargill has agreed not to oppose attorney’s fees and expenses of $1.59 million. Any residual funds remaining in the settlement fund would be distributed to the National Consumer Law Center and…
Brothers Eric and Ryan Jensen who own the Colorado cantaloupe farm linked to a deadly 2011 Listeria outbreak have reportedly been arrested on six misdemeanor charges of introducing adulterated food into interstate commerce and aiding and abetting. According to court records, they purportedly changed their cantaloupe cleaning process in May 2011 and never used the chlorine spray incorporated into the system. The Department of Justice (DOJ) alleges that they “were aware that their cantaloupes could be contaminated with harmful bacteria if not sufficiently washed.” The Centers for Disease Control and Prevention determined that people in 28 states consumed the contaminated cantaloupe, 33 died, 147 were hospitalized, and a pregnant women miscarried. The brothers reportedly pleaded not guilty and face a December 2, 2013, trial. If convicted, each could serve one year in prison and be fined up to $250,000 for each charge. See DOJ News Release, September 26, 2013; Fox…
A federal court in California has denied the motion to dismiss defendants’ counterclaims filed by plaintiff sugar producers in a dispute between them and companies that make high-fructose corn syrup (HFCS) and promoted it in a national campaign claiming that “HFCS is corn sugar,” “HFCS is natural,” and “sugar is sugar.” W. Sugar Coop. v. Archer-Daniels Midland Co., No. 11-3473 (C.D. Cal., order entered September 16, 2013). The court ruled that (i) because the counterclaims do not allege fraud, they satisfy the pleading requirements of Federal Rule of Civil Procedure 8; (ii) whether the plaintiffs’ statements, at issue in the counterclaims, are immune from liability under the Noerr-Pennington doctrine requires further factual development and is thus premature; (iii) the counterclaims’ allegations do not demonstrate that the plaintiffs are immune from liability under the Communications Decency Act of 1996 in that they “neither demonstrate that Plaintiffs ‘passively displayed’ the statements [authored by…
A federal court in California has granted in part and denied in part the motion to dismiss filed by Dole Food Co. in a putative nationwide class action alleging that the company misbrands a number of its fruit products by making certain “all natural,” “fresh,” nutrient content, antioxidant, sugar-free, and health claims, as well as failing to disclose that the products contain artificial additives, chemical preservatives and other artificial ingredients. Brazil v. Dole Food Co., No. 12-1831 (N.D. Cal., order entered September 23, 2013). According to the court, the plaintiff has standing at this stage of the proceedings to bring claims as to products he did not purchase, ruling that he may proceed with “substantially similar claims based on both products he purchased and substantially similar products he did not purchase” on behalf of unnamed class members. The court dismissed with prejudice claims based on the company’s website statements because the…
On reconsideration, a federal court in California has dismissed a lawsuit against Chobani, Inc., in a putative class action alleging that its yogurt products are mislabeled because they include “evaporated cane juice” (ECJ) as an ingredient and state that they have no added sugar and contain only “natural ingredients.” Kane v. Chobani, Inc., No. 12-2425 (N.D. Cal., San Jose Div., order entered September 19, 2013). Details about the order the court reconsidered appear in Issue 491 of this Update. The court dismissed the Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumers Legal Remedies Act (CLRA) claims without prejudice and gave the plaintiffs 21 days to file a third amended complaint. Claims for unjust enrichment and violation of the Song-Beverly and Magnuson-Moss Warranty Act were dismissed with prejudice. Essentially, the court found that the plaintiffs lacked standing to pursue their UCL, FAL and CLRA claims because they failed to…
The Eighth Circuit Court of Appeals has found constitutional Missouri’s four-tier alcohol distribution system which includes a residency requirement for wholesalers, which comprise the third tier. S. Wine & Spirits of Am., Inc. v. Div. of Alcohol & Tobacco Control, No. 12-2502 (8th Cir., decided September 25, 2013). According to the court, the decision required it to examine the “current state of the relationship between the dormant Commerce Clause and the Twenty-First Amendment.” The former forbids discrimination against out-ofstate residents, while the latter gives states “certain prerogatives particular to the regulation of alcohol.” Missouri law requires those seeking a wholesaler license to be incorporated under the state’s laws, with all officers and directors “qualified legal voters and taxpaying citizens of the county . . . in which they reside” and “bona fide residents” of Missouri for at least three years. Resident shareholders must own at least 60 percent of all the…
A divided Fourth Circuit Court of Appeals panel has determined that a Virginia Alcohol Beverage Control Board prohibition on alcohol advertisements in college newspapers, as applied, violates the First Amendment rights of two campus newspapers because the majority of the papers’ readers are age 21 or older, and thus the rule is “not appropriately tailored to Virginia’s stated aim.” Educ. Media Co. at Va. Tech, Inc. v. Insley, No. 12-2183 (4th Cir., decided September 25, 2013). So ruling, the court reversed a district court decision upholding the rule’s validity. The board argued that the purpose of the regulation “is to combat underage and abusive college drinking.” The court majority found that, under either a strict scrutiny or intermediate scrutiny analysis, the regulation was overbroad as applied to college newspapers that were read by college students of legal age. The regulation failed, said the court, “because it prohibits large numbers of…
San Francisco Supervisor Eric Mar has reportedly requested a study from the Budget and Legislative Analyst’s office analyzing the impact of sugar-sweetened beverages (SSBs) on Bay Area residents’ health and health care costs, as well as summarizing what initiatives other U.S. cities have taken to reduce consumption of soft drinks, sweet teas and sports drinks. After the study is completed, the board of supervisors will hold a hearing on the findings. See San Francisco Examiner, September 27, 2013.
New York Attorney General Eric Schneiderman recently announced that 19 companies have agreed to stop hiring search engine optimization (SEO) and marketing entities to write fake online reviews after an undercover investigation into digital “astroturfing” allegedly found that such practices violate “multiple state laws against false advertising.” According to a September 23, 2013, press release, “Operation Clean Turf” reportedly revealed that companies posting fake consumer reviews on Yelp, Google Local and similar sites often used techniques to conceal their identifies, including “creating fake online profiles on consumer review websites and paying freelance writers from as far away as the Philippines, Bangladesh and Eastern Europe for $1 to $10 per review.” The investigation also identified SEO companies that purportedly offered to produce fake reviews on behalf of their clients as part of their reputation management services. “Consumers rely on reviews from their peers to make daily purchasing decisions on anything from…
The California Legislature has approved a bill (A.B. 227) that would impose a number of restrictions on private parties seeking to enforce the Safe Drinking Water and Toxic Enforcement Act of 1986 (Prop. 65) and provide relief for small businesses that have been litigation targets since its enactment. If approved by the governor, who has until mid-October to do so, the law would require a person bringing a matter in the public interest to prepare a certificate of merit stating that the person or her attorney “has consulted with one or more persons with relevant and appropriate experience or expertise who has reviewed facts, studies, or other data regarding the exposure to the listed chemical” and, on the basis of that information, the person executing the certificate “believes there is a reasonable and meritorious case for the private action.” If a court concludes that “there was no actual or threatened…
