The American Beverage Association, other industry groups, retailers and distributors have filed a lawsuit against the city of Philadelphia challenging its tax on sugar-sweetened beverages (SSBs), arguing the statute unlawfully attempts to circumvent Pennsylvania’s taxation supremacy. Williams v. City of Philadelphia, No. 160901452 (Penn. Ct. C.P., Philadelphia Cty., filed September 14, 2016). The plaintiffs assert the statute creates “a roadmap for every local government in the Commonwealth [of Pennsylvania] to evade the Commonwealth’s supreme taxation structure on thousands of products— from over-the-counter pharmaceuticals to cars—merely by imposing a duplicative tax at a different level in the distribution chain than a tax already imposed by the Commonwealth.” Because the beverages subject to the Philadelphia tax are also subject to Pennsylvania tax, the city tax duplicates the state tax, the plaintiffs argue, which amounts to “seizing the taxing authority expressly reserved to the Commonwealth in contravention of the Sterling Act’s prohibition on…
Tag Archives Pennsylvania
Contradicting an advisory jury verdict, a Pennsylvania federal court has allowed Starr Surplus Lines Insurance Co. to void its policy with H.J. Heinz Co. covering damages related to the manufacture and sale of lead-tainted baby cereal. H.J. Heinz Co. v. Starr Surplus Ins. Co., No. 15-0631 (W.D. Penn., order entered February 1, 2016). Surplus sought to rescind the policy, and the jury agreed with its argument that Heinz had made material misrepresentations on its application for product contamination coverage. The jury concluded that the insurance company knew about the misrepresentations and sold the policy anyway, thus losing its grounds for rescinding the policy; the court disagreed, finding “Heinz did not prove by a preponderance of the evidence that Starr had sufficient knowledge of the misrepresented facts prior to issuing the policy.” Accordingly, the court voided the policy. Additional information about the jury decision appears in Issue 588 of this Update.…
A Pennsylvania jury has found that Starr Surplus Lines Insurance must uphold H.J. Heinz Co.'s $25 million policy covering damages related to baby cereal tainted with lead. H.J. Heinz Co. v. Starr Surplus Lines Ins. Co., No. 15-0631 (W.D. Penn., jury verdict entered December 16, 2015). Heinz sought a declaratory judgment that the insurance provider must cover business-interruption costs after China's food-control agency found lead in the company's high-protein dry baby cereal. Starr argued that Heinz had misrepresented the situation when the company applied for the policy because it failed to disclose previous contamination incidents. The jury concluded that although Starr did prove "that Heinz made a misrepresentation of fact(s) in its insurance application which was material," Starr "waived the right to assert a rescission claim" either because it sold the policy with knowledge of the misrepresentation or because it failed to rescind the policy after learning of the misrepresentation.…
H.J. Heinz Co. has filed a lawsuit against Boulder Brands USA seeking to vacate and reverse a Trademark Trial and Appeal Board (TTAB) decision finding that the marks representing Heinz’s Weight Watchers Smart Ones® and Boulder’s Smart Balance® are sufficiently distinct, allowing both to exist. H.J. Heinz Co. v. Boulder Brands USA, Inc., No. 15-0681 (W.D. Penn., filed May 26, 2015). In its opposition to the Smart Balance® mark, Heinz asserted that the Smart Ones® mark was famous and would be diluted by Smart Balance®, but based on insufficient evidence TTAB disagreed in its March 2015 decision. In addition to the reversal, Heinz seeks a declaration of likelihood of confusion and a declaration of dilution under the Lanham Act and asks the court to direct the U.S. Patent and Trademark Office to invalidate the Smart Balance® mark. Issue 566
A federal jury in Pennsylvania has found that H.J. Heinz Co. did not appropriate the idea of a dual-opening condiment packaging, the “Dip & Squeeze” packet, from a man who proposed a similar idea during a meeting with the company. Wawrzynski v. H.J. Heinz Co., No. 11-1098 (W.D. Penn., verdict entered April 1, 2015). The plaintiff claimed that after he presented his “Little Dipper” packaging to the company in 2008, Heinz commissioned him to create samples for testing then abruptly ended the relationship in 2009. The “Dip & Squeeze” packet was introduced in 2010. After a three-day trial, the jury found that the man’s idea was novel but different from the product that Heinz ultimately pursued. Additional details on the case appear in Issues 531 and 552 of this Update. See Law360, April 1, 2015; Legal Intelligencer, April 2, 2015. Issue 560
Let’s Buy British Imports (LBB Imports) has reportedly agreed to stop importing Cadbury chocolate made overseas pursuant to the settlement of a lawsuit in which Hershey Co. alleged that the importer violated the candy company’s trademarks and trade dress of Cadbury, Kit Kat® and other products by selling versions produced internationally. Hershey Co. v. LBB Imports LLC, No. 14-1655 (M.D. Penn., settlement date unknown). The settlement agreement apparently restricts the importation of all Cadbury chocolate as well as Kit Kat® bars, Toffee Crisps, York Peppermint Patties, and Maltesers®. Many consumers have responded negatively to the settlement terms; a campaign to boycott Hershey began on Twitter, and a MoveOn.org petition to protest Hershey’s trademark protection actions has garnered more than 25,000 signatures. The protesters reportedly argue that British Cadbury chocolate tastes better because of its ingredients—the British version of Cadbury’s Dairy Milk bar contains milk as its first ingredient while the American…
A Pennsylvania federal court has denied H.J. Heinz Co.’s motion for summary judgment in a lawsuit alleging that the company stole the idea for the “Dip & Squeeze” ketchup packet. Wawrzynski v. H.J. Heinz Co., No. 11-1098 (W.D. Penn., order entered January 7, 2015). The plaintiff asserts that he met with the company in 2008 and presented the idea for the dual-opening packet, but they never reached a deal; Heinz later released its Dip & Squeeze packet, which the plaintiff argues was too similar to his concept. The court noted that although Heinz presented evidence showing that it was actively developing a dual-function condiment container before meeting with the plaintiff, the plaintiff had also shown that Heinz had been unsuccessful in creating or marketing a feasible container. “Given the evidence presented by both parties to this lawsuit,” the court concluded, “whether either or both of Plaintiff’s ideas were novel and concrete…
Hershey Co. has filed a complaint in Pennsylvania federal court alleging that LLB Imports infringes its trademarks and trade dress for several of its products, including Reese’s, York, Cadbury, Malteser, Kit Kat, and Rolo. Hershey Co. v. LLB Imports LLC, No. 14-1655 (M.D. Penn., filed August 25, 2014). According to the complaint, LLB Imports has been selling Toffee Crisp, Yorkie, Maltesers, Cadbury, Kit Kat, and Rolo products manufactured outside of the United States bearing nutritional information panels required by other countries, and the sale of the products allegedly infringes trademarks and trade dress owned by or exclusively licensed to Hershey. In addition to several trademark infringement claims, the candy company alleges that Toffee Crisp infringes the trade dress for Reese’s, citing its shade of orange and outlined yellow script, as well as the trade dress of Cadbury, Kit Kat and Rolo. Hershey asks for an injunction, a declaration that LLB violated the…
Echoing a putative class action filed in Massachusetts federal court on August 1, 2014, a plaintiff has filed a lawsuit against Whole Foods Market in Pennsylvania state court accusing the retailer of mislabeling its 365 Everyday Value yogurt’s sugar content as 2 grams despite containing 11.4 grams, according to test results published in the July issue of Consumer Reports. Clemente v. Whole Foods Market Inc., No. 140801271 (Ct. of C.P. of Pa., Philadelphia Cty., filed August 11, 2014). The plaintiffs accuse Whole Foods of knowingly mislabeling its yogurt, citing a statement on the Whole Foods website that allegedly reads, “Our Private Label registered dietician reviews each nutrition label for accuracy and completeness before the label is printed. All attempts are made to review nutrition labels on a regular basis to ensure accuracy.” In the complaint, the plaintiffs argue, “Unless this statement on Defendant’s website is false, then Whole Foods Market was…
A federal multidistrict litigation (MDL) court in Pennsylvania has determined that individual-purchaser plaintiffs and a direct-purchaser class failed to discover evidence that U.S. chocolate companies conspired to increase prices for immediate-consumption products between 2002 and 2007, and, with “nothing more than speculation as to the who, what, when, where, and how of communications that allegedly facilitated the parallel price increases,” the court was compelled to grant the defendants’ motions for summary judgment on the plaintiffs’ Section 1 antitrust claims under the Sherman Act. See In re Chocolate Confectionery Antitrust Litig., MDL No. 1935 (M.D. Pa., decided February 26, 2014). The litigation involves some 91 lawsuits transferred to the MDL court for pre-trial proceedings. Defendants Nestlé U.S.A., Inc., The Hershey Co., and Mars, Inc. and Mars Snackfood U.S. LLC control about 75 percent of the U.S. chocolate-products market, and during the relevant time period, which saw prices for cocoa increase 53…
