A federal court in California has granted in part the summary judgment motion filed by a coconut water company facing allegations that it overstates the magnesium and sodium content of its “O.N.E.” product and falsely claims that it is a good source of electrolytes. Vital v. One World Co., LLC, No. 12-00314 (C.D. Cal., order entered November 30, 2012). The court dismissed all claims based on a study that allegedly found lower levels of magnesium and sodium than allowed by Food and Drug Administration (FDA) regulations when a product is claimed to be a “good source” of such nutrients. According to the court, the plaintiffs failed to show that the study was conducted under FDA’s § 101.9(g) methodology and would thus impose more stringent requirements on the defendant than federal law. The court allowed the plaintiffs to pursue claims that the product is falsely marketed as a “good source of…
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A federal court in California has determined that Diamond Foods’ investors adequately pleaded knowledge, or scienter, on the part of the company and individual senior officers to allow putative class claims against them for false and misleading statements in violation of federal securities laws to proceed. In re Diamond Foods, Inc., Securities Litig., No. 11-05386 (N.D. Cal., order entered November 30, 2012). The court also dismissed claims filed against the company’s auditor, finding insufficient allegations to raise a strong inference of scienter, but allowed the plaintiffs to amend their complaint to cure its deficiencies. The litigation arises from events occurring in 2010-2012, when Diamond was attempting to purchase the Pringles brand of snack chips from P&G. The company allegedly manipulated prices paid to walnut growers during those years and failed to properly account for the payments, resulting in what appeared to be an inflated value for its shares. When the irregularities…
A putative class action alleging that Dole Food Co. misleads consumers by claiming it is an environmentally friendly and socially responsible company despite purportedly purchasing bananas from growers using pesticides in Guatemala has reportedly been filed in a California federal court. According to a Hagens Berman news release, the suit, filed on November 13, 2012, alleges that Dole’s supplier destroyed wetlands and poisoned water sources. Steve Berman said, “Dole promised its customers it had an ‘unwavering commitment’ to environmental responsibility. Yet, it gave its business to a plantation that showed a complete disregard for the local environment.” See Hagens Berman Press Release, November 13, 2012.
The owners of the California-based Hallmark Meat Packing Co. have reportedly settled claims that they committed fraud under the False Claims Act (FCA) by supplying ground beef to school lunch programs without meeting contractual commitments to treat their animals humanely. The Humane Soc’y of the U.S. v. Hallmark Meat Packing Co., No. 08-00221 (C.D. Cal., partial settlement announced November 16, 2012). The Humane Society of the United States (HSUS) brought the suit after it discovered and videotaped animal abuse at the meatpacking facility. Videotape of employees abusing non-ambulatory animals at the slaughterhouse resulted in the recall of 143 million pounds of beef in February 2008. The U.S. Department of Justice (DOJ) intervened in the litigation, which also involves the Westland Meat Company and other individual defendants. According to HSUS, Donald Hallmark Sr. and Donald Hallmark Jr. have agreed to pay $304,000 from their personal assets and will make structured payments…
A federal court in California recently granted in part and denied in part the Hershey Co.’s motion to dismiss putative class claims alleging that the chocolate maker violates consumer fraud laws by making unlawful nutrient content, “healthy” and antioxidant claims on product labels; failing to comply with chocolate product standards of identity or to use common names for ingredients; making unlawful sugar-free claims; and using improper serving sizes. Khasin v. The Hershey Co., No. 12-01862 (N.D. Cal., order entered November 9, 2012). Because the plaintiff’s claims were based on parallel state laws that “mirror” relevant sections of the Food, Drug, and Cosmetic Act (FDCA) and the Nutrition Labeling and Education Act, the court determined that they were not preempted. In this regard, the court noted, “complying with the demand requested by Plaintiff in this cause of action would not require that Defendant undertake food labeling or representation different from the…
A federal court in California has dismissed putative class claims filed against H.J. Heinz Co. LP by a factory worker alleging that the company denied employees full wages by improperly rounding their time records while also purportedly penalizing and disciplining workers for “clocking in past scheduled start times or clocking out before scheduled end times.” Mendez v. H.J. Heinz Co., L.P., No. 12-5652 (C.D. Cal., decided November 13, 2012). The plaintiff sought to represent putative statewide and nationwide Fair Labor Standards Act (FLSA) classes and alleged violations of the California Labor Code—failure to pay all wages, failure to pay minimum wages owed, failure to timely pay wages at separation, failure to provide accurate wage statements—and violation of the California Business and Professions Code. He also asserted a claim for violation of the FLSA on behalf of the nationwide class. The court agreed with the defendants that the plaintiff failed to…
The Los Angeles City Council has reportedly approved a resolution endorsing the international “meatless Mondays” campaign, which aims to reduce meat consumption for health and environmental reasons. According to news sources, in a unanimous 12–0 vote, the council approved the resolution endorsing the campaign and encouraging residents to give up meat for one day a week. The resolution apparently makes Los Angeles the largest city to adopt the campaign started in 2003 in conjunction with the Johns Hopkins Bloomberg School of Public Health. Other U.S. cities that have reportedly endorsed meatless Mondays include Washington, D.C., San Francisco and Raleigh, N.C. Introduced by Councilwoman Jan Perry and Councilman Ed Reyes, the resolution cites statistics showing that more than one half of Los Angeles County residents are overweight. The campaign claims that cutting meat consumption can reduce the risk of cancer, heart disease, diabetes, and obesity. See The Los Angeles Times, November 12,…
University of Arkansas School of Law LL.M. Candidate Lauren Handel has considered whether food-labeling provisions, such as those that would have been required under California’s Proposition 37 (Prop. 37), which voters defeated this week, are vulnerable to constitutional or preemption challenges. Had it been enacted, Prop. 37 would have required most food companies to label their products with a statement indicating that they contain genetically engineered (GE) ingredients and would have prohibited the use of the term “natural” on processed food products as inherently misleading to consumers. In her article titled “Labeling of Genetically Engineered Foods: A Constitutional Analysis of California’s Proposition 37,” Handel explores the First Amendment standards applied to commercial speech and concludes that the state would not have been able to justify a ban on “natural” claims, and that whether consumers’ “right to know” about GE ingredients trumps food companies’ commercial speech rights is debatable. She also concludes that…
A putative class action filed in a California state court claims that Monster Rehab®, a green tea and energy drink, contains unknown amounts of epigallocatechin-3-gallate (ECGC), “an extremely dangerous and potentially lethal ingredient,” and that the company fails to warn consumers of its potential hepatotoxic side effects. Wooding v. Monster Energy Co., No. 30-2012-00609716 (Cal. Super. Ct., Orange Cty., filed November 5, 2012). While the named plaintiff, a Huntington Beach, California, resident, has not apparently experienced any side effects, she claims to have “suffered injury in fact and has lost money and property as a result of the unfair, deceptive, untrue and misleading advertising described herein, including the purchase price for products that are of little or no value and are dangerous.” Among other matters, the plaintiff claims that those with compromised livers should not drink the product, nor should it be consumed with alcohol. Yet, she points to ads…
The Center for Science in the Public Interest (CSPI) has filed a putative nationwide class action in a federal court in California against Dr. Pepper Snapple Group, Inc., alleging that the company misleads consumers, through marketing and product labeling, to believe that the antioxidants contained in its beverages are derived from fruits and that the company’s use of antioxidants in soft drinks violates contrary Food and Drug Administration (FDA) regulations. Green v. Dr. Pepper Snapple Group, Inc., No. ___ (C.D. Cal., filed November 8, 2012). By using the term “antioxidant” in the names of some of its beverages, the company allegedly distinguishes its products “from similar soft drinks and, thereby, command[s] a premium price for the Products.” According to the complaint, “Contrary to Defendant’s claims and representations, the Products do not contain any real cherries, real berries, or even extracts from those fruits. Nor do the Products derive their antioxidant…
