California residents have filed a putative class action in a federal court against grocery chain Trader Joe’s Co., alleging that a number of its “All Natural” products contain synthetic or artificial ingredients and thus are mislabeled and falsely advertised. Larsen v. Trader Joe’s Co., No. 11-5188 (N.D. Cal., filed October 24, 2011). According to the complaint, “The labeling of products as ‘All Natural’ carries implicit health benefits important to consumers—benefits that consumers are often willing to pay a premium for over comparable products that are not ‘All Natural.’ Trader Joe’s has cultivated and reinforced a corporate image that has catered to this ‘All Natural’ theme and has boldly emblazed this claim on each and every one of its foods identified above, despite the fact Trader Joe’s uses synthetic ingredients in the products identified above.” The listed products include cookies, biscuits, cheese, fruit jellies, and apple juice sold under the Trader…
Seeking to represent a nationwide class of consumers, a New York resident has filed a lawsuit in a New Jersey federal court, alleging that Smart Balance, Inc. falsely labels its fat-free milks enhanced with omega-3 as “Fat Free” when they actually contain 1 gram of fat per serving. Stewart v. Smart Balance, Inc., No. 11-06174 (D.N.J., filed October 19, 2011). Acknowledging that the nutrition facts label indicates that the products contain 1 gram of fat, the plaintiff nonetheless contends that the front-of-package representations are “intentionally confusing and misleading.” She alleges that she paid more for the company’s products than she would have otherwise paid for alternative milk options because she relied on the “Fat Free” labels, which she contends violate federal labeling rules. Alleging violation of the New Jersey Consumer Fraud Act, unjust enrichment, breach of warranty, and injunctive relief, the plaintiff seeks class certification; compensatory, treble and punitive damages; disgorgement;…
A federal court in New Jersey has refused the request to intervene filed by plaintiffs to a California consumer-fraud lawsuit against the company that makes the hazelnut spread Nutella®. Glover v. Ferrero USA, Inc., No. 11-1086 (D.N.J., decided October 20, 2011) (unpublished). The New Jersey action, like its California counterpart, was filed as a putative nationwide class action; the laws under which the cases were filed and the class periods differ. According to the New Jersey court, the intervenors had no interest in litigating the New Jersey case; rather, their stated intent was to dismiss the case or transfer it to California. The court also noted that while the California Nutella® litigation was filed first, “the actions are not truly duplicative.” The Judicial Panel on Multidistrict Litigation has refused to consolidate the California and New Jersey actions for pretrial proceedings.
A federal court in California has issued orders allowing certain claims to proceed in Lanham Act litigation brought by sugar producers against trade associations and companies that make high-fructose corn syrup (HFCS). W. Sugar Coop. v. Archer-Daniels-Midland Co., No. 11-3473 (C.D. Cal., orders entered October 21, 2011). The plaintiffs allege that an advertising campaign the defendants launched in 2008 to tell the public that “HFCS is corn sugar,” “HFCS is natural,” and “sugar is sugar” contains false representations about HFCS “that constitute false advertising under the Lanham Act and a violation of the California[] Unfair Business Practices Act.” The defendants filed a motion to dismiss contending that the plaintiffs had failed to state a claim on which relief can be granted. While the court agreed that the plaintiffs had failed to state a claim against individual trade association members, it found the pleadings sufficient to state a claim for false advertising…
The First Circuit Court of Appeals has upheld a district court ruling that Welch Foods, Inc. was not entitled to defense costs and indemnity under an insurance contract which provided an exclusion for claims involving unfair competition and deceptive trade practices. Welch Foods, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, No. 10-2261 (1st Cir., decided October 24, 2011). Welch was named as a defendant in two lawsuits alleging that the company misrepresented its 100% Juice White Grape Pomegranate Flavored Three Juice Blend® by featuring pomegranates on the product’s label because the juice is primarily apple and grape juice. The company sought defense costs and indemnity from three of its insurers, and two of them settled the claims. As to the third company, the court determined that while the exclusion terms “unfair competition” and “deceptive trade practice” were not defined in the insurance contract at issue, their plain…
The Eleventh Circuit Court of Appeals has upheld in part a district court ruling that denied migrant workers’ claims that a Georgia onion farmer had improperly withheld the cost of housing and meals from their pay, reducing it below minimum wage. Ramos-Barrientos v. Bland, No. 10-13412 (11th Cir., decided October 27, 2011). While the appeals court agreed with the lower court that the farmer could receive wage credits for meal reimbursements, it reversed the summary judgment that the farmer could receive wage credits for housing provided to the workers. The court also upheld the lower court’s determination that certain fees that third-party recruiters charged the workers in Mexico could not be recovered from the farmer who was unaware of them and had not agreed by contract to pay them. The workers and the Secretary of Labor, as amicus, contended that the farmer was “not entitled to wage credits for the…
The New York City Department of Health and Mental Hygiene has unveiled the latest installment of its “Pouring on the Pounds” campaign that describes “how drinking just one 20-ounce soda a day translates to eating 50 pounds of sugar a year.” According to an October 24, 2011, press release, the 30-second TV commercial aims to serve as “a stark reminder to New Yorkers about how sugary drinks can lead to obesity, which can cause diabetes, heart disease, stroke, arthritis and some cancers.” It will be supplemented by bilingual subway ads demonstrating how far a 160-pound person would need to walk at 3.5 miles per hour to burn off the calories from one sugary beverage. “The majority of New York City adults are now overweight or obese, as are 4 in 10 elementary school children and the health consequences are staggering,” said New York City Health Commissioner Thomas Farley. “Sugary drinks…
The European Commission (EC) has reportedly endorsed proposed safety measures aimed at better preventing dioxin contamination in animal food and feed. Prompted by a widespread investigation into an outbreak of the toxin that struck German meat and egg farms in late 2010, the draft regulation will be sent to the European Parliament and the European Council for review before the EC can give its official approval. Implementation is expected throughout the European Union by mid-2012. Details of the outbreak were covered in Issues 376, 377 and 381 of this Update. According to the EC, Germany’s dioxin outbreak occurred when fatty acids intended for technical and industrial use were mixed with vegetable feed fat used in the production of animal feed. To reduce such risks from happening in the future, EU member states approved EC Standing Committee on the Food Chain and Animal Health safety measures designed to “avoid food recalls…
The Food and Drug Administration (FDA) has announced the availability of guidance aimed at helping industry evaluate the safety of flood-affected crops for human consumption. According to FDA, growers are responsible for ensuring the safety of food affected by flood waters, which “may have been exposed to sewage, chemicals, heavy metals, pathogenic microorganisms, or other contaminants.” See Federal Register, October 24, 2011.
The Food and Drug Administration (FDA) has issued industry guidance concerning the “administrative detention of human or animal food.” Providing information about FDA’s authority under the Food Safety and Modernization Act to hold adulterated or misbranded food and prevent it from reaching the marketplace, the guidance explains who can approve an administrative detention order, what food may be subject to detention, who receives a copy of the order, and the appeals process. See Federal Register, October 25, 2011.
