The Judicial Panel on Multidistrict Litigation (JPML) has denied a motion to centralize, for pre-trial purposes, 10 lawsuits pending in five districts against Gerber Products Co. and Nestlé USA, Inc. alleging that the companies “misleadingly advertise and market infant formulas and cereals as promoting immunity, digestive health, and visual and cognitive function because they contain probiotic cultures” and other ingredients. In re Gerber Probiotic Prods. Mktg. & Sales Practices Litig., MDL No. 2397 (JPML, decided October 16, 2012). According to the court, five of the 10 lawsuits are already consolidated in the District of New Jersey where Gerber is headquartered. One of these cases was filed in California, “thus one transferor court already has concluded that under Section 1404 the District of New Jersey is the proper venue for this litigation.” Because the defendants filed section 1404 change of venue motions in the remainder of the cases, and if all…
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The day after a California court apparently refused to approve the settlement of class claims against the company that makes “All Natural Ben & Jerry’s Ice Cream,” an Illinois resident filed a putative class action against the company in a New Jersey federal court, alleging that the product contains many unnatural ingredients including those that are genetically modified. Tobin v. Conopco, Inc., No. 12-5881 (D.N.J., filed September 13, 2012). The named plaintiff seeks to represent a nationwide class of individuals who purchased the products since 2006 relying on the allegedly false “all natural” label. According to the complaint, the Center for Science in the Public Interest (CSPI) tested the company’s products in 2010 and found that they contain “alkalized cocoa, corn syrup, partially hydrogenated soybean oil, or other ingredients that either don’t exist in nature or that have been chemically modified.” CSPI’s letter to the manufacturer, claiming that the products…
A federal court in New Jersey has found that most of the named plaintiffs in putative class actions consolidated in a multidistrict litigation (MDL) proceeding lack standing to pursue claims that General Mills, Inc. violated consumer fraud laws by claiming that its Cheerios cereal products reduce cholesterol, the risk of heart disease and certain forms of cancer. In re Cheerios Mktg. & Sales Practices Litig., No. 09-2413 (D.N.J., decided September 10, 2012) (unpublished). Under a choice-of-laws analysis, the court found that California, New Jersey and New York law applied to the claims and thus dismissed four counts alleging violations of Minnesota law. The court also found that most of the named plaintiffs consumed the cereal for reasons other than health benefits, did not know what the cereal cost or had not read the product labels. Accordingly, the court granted the company’s motion for summary judgment as to five of the named plaintiffs.…
A company that supplies specialty ingredients such as vitamins, chemicals and carotenoids to food producers has sued one of its suppliers, alleging that the company was forced to recall from customers more than 33,000 pounds of chromium amino acid chelate after learning that it contained a milk allergen. DSM Nutritional Prods., LLC v. Triarco Indus., Inc., No. C1928-12 (N.J. Super Ct., Morris Cty., filed July 26, 2012). The plaintiff also allegedly reported the matter to the Food and Drug Administration through the Reportable Food Registry. According to the complaint, in 2009, the defendant completed a questionnaire designed to inform the plaintiff “of the existence of any allergens or their derivatives contained in the product” sold to the plaintiff. “Not until July 27, 2010,” however, “did Defendant correctly label the product as containing a hydrolyzed milk protein, thus advising [the plaintiff] that Defendant’s product contained a milk allergen.” Alleging breach of contract…
A federal court in New Jersey has rejected the claims of objectors questioning class notice and most of the settlement terms in a deal which resolves allegations that Ferrero USA, Inc., the company that makes the hazelnut spread Nutella®, misled consumers about the nutritive value of its product; while the court entered an order finally approving the settlement, it did reduce counsel fees by $1.25 million. In re Nutella Mktg. & Sales Practices Litig., No. 11-1086 (D.N.J., decided July 31, 2012). Additional information about the objectors’ challenge appears in Issue 444 of this Update. Counsel had sought $3.75 million in fees, an amount the objectors claimed was unwarranted. According to the court, the reduced fees represent 25 percent of the value of the gross settlement fund, injunctive relief, costs and the incentive award to the class representatives.
The Wisconsin Supreme Court has decided which of the parties sued over an E. coli outbreak that sickened dozens of Sizzler Steak House patrons in 2000 and caused the death of a 3-year-old are liable for consequential damages, indemnity and costs under various supply chain and insurance contracts. Kriefall v. Sizzler USA Franchise, Inc., Nos. 2009AP1212 & 2010AP491 (Wis., decided June 29, 2012). Among other matters, the court ruled that Sizzler was entitled to (i) recover consequential damages for the meat supplier’s breach of implied warranties despite limiting language in the continuing guaranty provision of their contract, and (ii) indemnity from the meat supplier for Sizzler’s advance partial payment to the family of the deceased child “because the payment was not voluntary and the jury found that Sizzler was zero percent liable for the E. coli contamination.” The court also ruled that Sizzler could not recover its attorney’s fees despite a jury finding…
The Judicial Panel on Multidistrict Litigation (JPML) has consolidated before a multidistrict litigation (MDL) court in New Jersey six lawsuits alleging that Tropicana deceptively markets its not-from-concentrate orange juice as “100% Pure & Natural,” despite extensive processing. In re: Tropicana Orange Juice Mktg. & Sales Practices Litig., MDL No. 2353 (J.P.M.L., order entered June 11, 2012). New Jersey was selected as the appropriate venue because plaintiff’s counsel in the case filed there “appear to have significantly investigated and developed the factual issues underpinning their complaint.” Other plaintiffs apparently dismissed their complaints to join the New Jersey action, and JPML found that the court there had the resources to devote to the litigation and an experienced judge not currently overseeing an MDL. The panel refused to include a potential tag-along case brought by a plaintiff who argued for “industry-wide centralization,” that is, an MDL that would include all orange juice manufacturers…
In advance of a July 9, 2012, hearing before a federal court in New Jersey to approve the settlement of claims that Ferrero USA, Inc. misled consumers about nutritive value in its ads for Nutella®, a hazelnut spread purportedly containing high fat and sugar levels, a number of class members have filed objections that challenge class notice, most of the settlement terms and the fee award to plaintiffs’ counsel. In re: Nutella Mktg. & Sales Practices Litig., No. 11-1086 (D.N.J.). Additional details about the proposed settlement appear in Issue 437 of this Update. Class member Clark Hampe, for example, complains that the settlement fund “has a claims procedure that caps the total number of claims that can be made and the maximum amount of compensation for class members. Then, if these arbitrary maximums are satisfied, the settlement is vague about what happens next. Either funds will be paid to a…
A federal court in New Jersey has, for a second time, requested supplemental briefing before approving a stipulated final order for permanent injunction and other equitable relief in the Federal Trade Commission’s (FTC’s) action against a company that allegedly marketed açai-berry weight-loss products with “fake” news reports and deceptive claims. FTC v. Circa Direct LLC, No. 11-2172 (D.N.J., order filed June 13, 2012). Among other matters, the court seeks FTC’s views on whether the agency has shown it was likely to succeed on the merits “without an admission of liability by the Defendants and with no evidentiary submissions before the Court.” The court also requests additional briefing on whether it “may consider the lack of an admission by the defendants in its public interest analysis under the [FTC Act].” When the parties submitted their first supplemental briefs, FTC Commissioner J. Thomas Rosch submitted a letter indicating that, in his view,…
A California resident has filed a putative class action against Starbucks Corp. alleging that the company deceived consumers by failing to disclose that some of its products were made with cochineal extract, a common food-coloring ingredient made from crushed insects. Anderson v. Starbucks Corp., No. BC485438 (Cal. Super. Ct., Los Angeles Cty., filed May 25, 2012). Seeking to represent a nationwide class and statewide subclass of consumers, the plaintiff claims that she and the class members, had they known about the company’s use of the ingredient, would not have purchased the products for a number of reasons, including objections to consuming animal products, allergic responses to the ingredient or “sheer disgust.” Alleging violations of the California Unfair Business Practices Act and False Advertising Act, unjust enrichment, fraud by omission/concealment, and violation of California’s Consumers Legal Remedies Act, the plaintiff seeks disgorgement, restitution, compensatory and punitive damages, payment to a cy pres fund,…
