A federal court in California has approved a motion for preliminary approval of a class action settlement in litigation involving allegedly fraudulent claims that Kellogg Co.’s Frosted Mini-Wheats® cereal “was clinically shown to improve children’s attentiveness by nearly 20%.” Dennis v. Kellogg Co., No. 09-1786 (S.D. Cal., decided October 14, 2010). The settlement class consists of everyone in the United States who bought the product between January 2008 and October 2009. The company has agreed to create a $2.75 million fund “to provide cash payments to class members who submit valid Claim Forms. Class members may recover the full purchase price of the cereal they purchased ($5 per box), up to three boxes.” Any funds remaining will be “distributed to appropriate charities pursuant to the cy pres doctrine.” The company will also distribute specified food items valued at $5.5 million to charities feeding the indigent and will pay the costs of…
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Darden Concepts, Inc. has filed a trademark infringement action against a TGI Friday’s franchisee located in San Diego, California, alleging that its use of “Never Ending Shrimp” to promote one of its menu offerings infringes the “Never Ending Pasta Bowl” mark that Darden has registered and used in its Olive Garden restaurants for 15 years. Darden Concepts, Inc. v. Briad Restaurant Group, L.L.C., No. 10-2077 (S.D. Cal., filed October 6, 2010). Darden alleges that use of the “Never Ending Shrimp” mark has the potential to confuse the public and will mislead consumers to believe that TGI Friday’s restaurants are affiliated with Darden’s Olive Garden and Red Lobster restaurants. Darden alleges violations of federal and state law and seeks injunctive relief, all profits and damages resulting from defendant’s infringing activities, treble damages, attorney’s fees, and costs.
A number of Burger King Corp. franchisees in California have filed a complaint for declaratory relief in federal court, claiming that the company has no basis for demanding that they pay the cost of settlement or its attorney’s fees and costs in a recently settled disability discrimination lawsuit. Newport v. Burger King Corp., No. 10-4511 (N.D. Cal., filed October 5, 2010). They seek an order declaring that Burger King is not entitled to indemnification as well as attorney’s fees and costs. According to the complaint, Burger King has demanded indemnification for a settlement it reached over complaints that its restaurants were not accessible to the disabled. “If the Plaintiff franchisees do not pay BKC’s unfounded demand, BKC threatens to ‘terminate’ their franchise agreements, engage in self-help by withholding money owed to the franchisees, and/or otherwise retaliate against franchisees by preventing them from obtaining new restaurant opportunities or limiting to whom they…
Two days after the Center for Science in the Public Interest (CSPI) announced that Ben & Jerry’s had agreed to phase out claims that its ice creams and frozen yogurts were “All Natural,” when some product ingredients are processed, a putative class action was filed in a California federal court against the company seeking money damages for false advertising and an injunction to stop the company from making such claims. Astiana v. Ben & Jerry’s Homemade, Inc., No. 10-4387 (N.D. Cal., filed September 29, 2010). In August 2010, CSPI claimed that 48 of the company’s products were mislabeled because they contained unnatural ingredients, and the watchdog threatened to bring its concerns to the Food and Drug Administration (FDA). More details about CPSI’s action appear in Issue 360 of this Update. On September 27, CSPI praised the company for amicably resolving the dispute; the company’s response indicated that it would remove the…
A federal court in California has determined that an agency decision to allow planting of genetically modified (GM) sugar beet stecklings (seedlings) without conducting an environmental assessment likely violated federal law and has ordered the parties to file briefs as to the appropriate remedy now that most of the stecklings authorized have been planted. Ctr. for Food Safety v. Vilsack, No. 10-04038 (N.D. Cal., decided September 28, 2010). Additional information about the lawsuit’s challenge to action taken by the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service (APHIS) appear in Issue 363 of this Update. The court first addressed whether seed companies could intervene in the matter and ruled that they could do so as to the remedies, but not as to the merits, that is, whether APHIS violated federal environmental laws including the National Environmental Policy Act (NEPA) by issuing the permits without conducting an environmental review. The…
California EPA’s Office of Environmental Health Hazard Assessment (OEHHA) is seeking public comments on draft changes to those Proposition 65 (Prop. 65) regulatory provisions addressing no observable effect levels for listed chemicals. According to OEHHA, “[t]hese regulations set out the procedures and criteria for determining an exposure level where there would be no observable effect,” and the proposed changes would “clarify these procedures and criteria.” Comments are requested by October 31, 2010. Prop. 65 requires companies to provide warnings before exposing people to chemicals known to the state to cause cancer or reproductive toxicity. OEHHA is the lead agency implementing the law and maintains the Prop. 65 regulations. The agency has announced the availability of updated hazard identification materials for two chemicals widely used in industry and also formed in certain foods during processing. According to the updated materials, 1,3-Dichloro-2- propanol (1,3-DCP) and 3 Monochloropropane-1,2-diol (3-MCPD), were added to the Prop.…
On behalf of a putative nationwide class of indirect potato purchasers, a San Francisco restaurateur has sued a number of potato industry participants, including co-operatives, growers, packers, and distributors, alleging that they have conspired since 2006 to control and reduce the supply of potatoes in an effort to keep crop prices high. Florez v. Idahoan Foods, LLC, No. 10-3984 (N.D. Cal., filed September 3, 2010). The complaint refers to specific meetings of “cartel” members and discusses newspaper articles comparing the cooperative venture to OPEC, the oil-producing country organization that controls output and pricing in that industry. Member growers purportedly reduced their acreage, in some instances plowing under crops already grown, and submitted to audits to confirm that they were complying with production limits. Alleging that class members were harmed by paying “supracompetitive prices for potato products during the class period, higher than that which they would have paid in the…
A federal court in California has denied a walnut producer’s request to dismiss claims alleging that the company falsely advertises its products by asserting that the omega-3 in walnuts has certain health benefits. Zeisel v. Diamond Foods, Inc., No. 10-01192 (N.D. Cal., filed September 3, 2010) (unpublished). Alleging violations of California consumer protection laws, the plaintiff claims that the “statements are misleading because the Shelled Walnut products do not provide the health benefits claimed on the package labels.” The defendant argued that the plaintiff’s claims were preempted by the Federal Food, Drug, and Cosmetic Act and Nutrition Labeling and Education Act. The court disagreed, finding neither express nor implied preemption. According to the court, the claims either did not fall within the scope of federal law or state law imposed identical requirements, which are allowed under federal law.
Concerned about regulatory coordination issues, the omission of new environmental data and an apparent failure to recognize collaborative stakeholder efforts, nanotech industry interests have reportedly urged Cal/EPA’s Office of Environmental Health Hazard Assessment (OEHHA) and researchers with the University of California at San Francisco (UCSF) to revise a draft April 2010 report on nanomaterial regulation. Additional information about the report appears in Issue 346 of this Update. The draft report contains broad recommendations for state regulation of nanoscale materials, and industry is apparently concerned that its findings do not account for rapidly emerging developments. According to a letter submitted to the agency in August 2010, the draft report fails to recognize the efforts of industry, government agencies and other stakeholders to address many of the questions raised in the report, nor does it discuss the “virtual explosion of research, information and real progress in addressing these matters over the past…
A lawsuit filed in a federal court in California by a putative class of parents on behalf of their children alleges that Clearspring Technologies, Inc. and other companies used an online tracking device that enabled their websites to access and disclose users’ online activities and personal information. White v. Clearspring Techs., Inc., No. 10-5948 (C.D. Cal., filed August 10, 2010). Based on research conducted at the University of California, Berkeley, the complaint alleges that the companies install a Flash cookie on user computers without the users’ knowledge or consent, and the cookie can re-spawn itself even when users regularly delete their cookies. According to the research article, the “top 100 websites are using Flash cookies to ‘respawn,’ or recreate deleted HTTP cookies. This means that privacy-sensitive consumers who ‘toss’ their HTTP cookies to prevent tracking or remain anonymous are still being uniquely identified online by advertising companies. Few websites disclose their…
