A federal magistrate judge in Illinois has stayed a putative class action, the fourth of five brought against The Quaker Oats Co., alleging that the company deceives consumers by representing that its granola and oatmeal products are “heart healthy,” “wholesome,” and a “smart choice made easy,” when they actually contain trans fat. Askin v. The Quaker Oats Co., No. 11-111 (N.D. Ill., order entered February 15, 2012). The named plaintiff, a New York resident, filed his complaint on behalf of a putative nationwide class after other similar suits were filed in California, where they are proceeding as one consolidated action. He unsuccessfully sought to consolidate all of the action in Illinois before a multidistrict litigation court. Quaker and the intervening plaintiffs, who filed the California actions, asked the court to dismiss the Illinois action under the first-to-file rule, and the court denied the request despite finding that the suits are…
Tag Archives Illinois
A federal court in Illinois has determined that insurers providing coverage to Phusion Projects, Inc., which makes Four Loko, an alcoholic beverage with large amounts of caffeine and other stimulants, do not have a duty to defend the company in lawsuits alleging injury from intoxication. Netherlands Ins. Co. v. Phusion Projects, Inc., No. 11-1253 (N.D. Ill., decided January 17, 2012). The insurers filed a declaratory judgment action against Phusion claiming that they had no duty to defend or indemnify it in five lawsuits because of an unambiguous exclusion from coverage in the applicable insurance policies. Phusion brought a counterclaim, arguing that they did have a duty to defend it. According to the court, the exclusion applies to any case alleging injury arising from intoxication. Because four of the five cases filed against Phusion involve injury attributable to intoxication, the court found that the insurers have no duty to defend the beverage…
A federal court in Illinois has granted the motion to dismiss filed by Phusion Projects, Inc., which sells Four Loko®, a caffeinated alcoholic beverage, in a case brought by one of the company’s insurers seeking a declaration that it owed no duty to defend or indemnify the beverage maker in third-party lawsuits claiming injury, death or economic harm. Selective Ins. Co. of S.C. v. Phusion Projects, Inc., No. 11-3378 (N.D. Ill., decided November 15, 2011). According to the court, the case presented no case or controversy because Phusion has withdrawn its tender of defense and request for indemnification from this insurer. Because Phusion refused to withdraw its request “with prejudice and for all purposes” and continued to provide the insurer with notice of new claims “in compliance with the policy notice provision,” the insurer argued that the beverage company was reserving its right to reassert a demand for coverage in…
A federal court in Illinois has determined that a plaintiff claiming that he would not have paid a premium for a product advertised as “heart healthy,” “0 grams trans fat” and “wholesome” had he known it actually contained trans fats, has standing to pursue his false advertising claims under state law. Askin v. The Quaker Oats Co., No. 11-111 (N.D. Ill., decided October 12, 2011). Citing a recent Seventh Circuit decision in which the court found standing under similar circumstances, that is, an affirmative product representation and allegations that consumers paid more for the product than they would have had they known of its purported risks, the court ruled that alleged economic harm alone is redressable and confers standing. The court deferred ruling on the defendant’s argument that the named plaintiff in this putative class action cannot file a lawsuit under Illinois law because he is a resident of and purchased the…
A federal court in Illinois has determined that the government did not allege facts sufficient to pierce the corporate veil of related U.S. and foreign corporations and thus could not bring the foreign corporations before the court on charges of avoiding $80 million in customs duties on honey imported into the United States between 2002 and 2009. United States v. Alfred L. Wolff GMBH, No. 08-417 (N.D. Ill., decided September 26, 2011). A federal grand jury indicted the foreign defendants and a U.S. corporate entity on 44 counts in August 2010. The U.S. entity’s attorneys voluntarily accepted service on its behalf and on behalf of its parent and then appointed, via a shareholder resolution, a limited-authority corporate representative to appear before the court and enter a not-guilty plea for the U.S. defendants. This representative did so, and, immediately after the arraignment, the government served the representative with summonses for each of…
A federal court in Illinois has reportedly dismissed on standing grounds the pro se claims of an individual plaintiff who alleged that the food packaging materials used by McDonald’s Corp., when discarded by consumers, pose a threat to the environment. Gencarelli v. McDonald’s Corp., No. 11-5573 (N.D. Ill., decided August 19, 2011). The plaintiff filed his complaint under the Safe Drinking Water Act, Toxic Substances Control Act and National Environmental Policy Act. According to the court, he lacked standing to sue because he alleged “a generalized grievance” only. To establish standing, the plaintiff was required to show a “concrete injury in fact, causation, and redressability,” which the court apparently found he failed to do. See BNA Daily Environment Report, August 24, 2011.
Sara Lee Corp., which makes Ball Park® franks, and Kraft Foods, Inc., which makes Oscar Mayer® hot dogs, have reportedly brought their marketing dispute to a Chicago courtroom where trial recently began on claims each company brought against the other over ad campaigns that sought to distinguish their brands. Stating “let the wiener wars begin,” U.S. District Judge Morton Denlow apparently opened the bench trial on August 15, 2011. Sara Lee takes issue with Kraft claims that its hot dogs beat Sara Lee’s in a national taste test and that its hot dogs are “100 percent pure beef.” According to Sara Lee, the taste test was flawed because the products were not served with condiments or buns, and hot dogs containing filler and chemicals cannot be called 100 percent pure. Kraft defends its testing and asserts that consumers understand that “pure beef” means that the products do not contain other…
Seeking either clarification or dismissal of claims alleging that it has violated state law by republishing the product or service preferences (“Likes”) of children younger than age 18 as accompaniments to paid advertisements without first obtaining parental consent, Facebook, Inc. argues that the claims are insufficiently pleaded, fail to state a claim or are preempted by federal law. Dawes ex rel. E.K.D. v. Facebook, Inc., No. 11-00461 (S.D. Ill., motion filed August 1, 2011). Facebook explains that the plaintiffs are teenagers who shared their Internet “Likes” with their friends and that Facebook may then redisplay the preference to the same friends along with an advertisement for the relevant company’s website. According to Facebook, the plaintiffs have failed to indicate how they have been injured because they failed to allege “that their personal information had any ascertainable ‘value’ or any facts supporting the claimed ‘lessening’ of that value.” Facebook also contends…
Insurance companies with policies covering Phusion Projects, Inc., which makes the caffeinated alcohol beverage Four Loko®, have filed a summary judgment motion in their declaratory judgment action against the company, claiming that a policy exclusion unambiguously frees them from defending or indemnifying the beverage maker. The Netherlands Ins. Co. v. Phusion Projects, Inc., No. 11-1253 (N.D. Ill., filed June 22, 2011). The companies contend that their commercial general liability and commercial umbrella policies have liquor liability exclusions that apply to actions pending in Florida, Illinois and New Jersey alleging that “Four Loko caused a particularly dangerous kind of intoxication” and seeking monetary damages for deaths and injuries. Details about a similar insurance coverage lawsuit involving other insurers appear in Issue 396 of this Update.
Alleging trademark infringement and unfair competition, Vienna Beef Ltd. has sued a descendant of one of its founders and the competing hot dog company he established in 1986. Vienna Beef Ltd. v. Red Hot Chicago, Inc., No. 11-03825 (N.D. Ill., filed June 6, 2011). When Scott Ladany, whose grandfather started Vienna Beef, left that company in 1983, he purportedly signed a severance agreement promising not to share Vienna’s recipes and acknowledging their status as trade secrets. According to the complaint, Ladany made “few inroads into Vienna’s dominance in the marketplace” for the next 25 years and then launched a marketing campaign on behalf of Red Hot, referring to the family history of making “Chicago’s finest hot dogs for 118 years.” He also allegedly referred to “a tradition that’s been handed down through four generations of our family.” The plaintiff contends, “The only way that he can claim that he has…
