The U.S. Court of Appeals for the Seventh Circuit has ruled that the Guinness World Records holder for hacky sack kicks has no valid claims for false advertisement, false endorsement or right of publicity against Wendy’s International Inc., which distributed a hacky sack with a children’s meal and challenged children to break the plaintiff's record. Martin v. Wendy's Int'l Inc., No. 15-6998 (7th Cir., entered March 9, 2018). An Illinois district court previously dismissed the plaintiff’s suit for failure to state a claim. “No reasonable consumer would think [the plaintiff] endorsed the footbags,” the appellate court held, because “Guinness World Records” was printed on both the toy and its packaging and the instructional card identified the plaintiff as the holder of the record rather than an endorser. The court also found that “no reasonable consumer would believe that free toys accompanying kids’ meals to encourage intra-family play were the same…
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An alert appearing on Yelp that discloses San Francisco health inspection scores may “improve the functioning of markets” and help consumers make “better decisions," but critics reportedly say the posted scores illustrate the failures of the city's food-safety inspection system. Two researchers, who authored “Digitizing Disclosures: The Case of Restaurant Hygiene Scores,” previously helped Yelp design the alert boxes, which appear on pages for about five percent of San Francisco restaurants. According to the San Francisco Chronicle, the alert boxes reduced Yelp users’ “intention to visit” by 21 percent, despite the intention of the alerts to be a system of accountability rather than a warning of deterrence. The Golden Gate Restaurant Association (GGRA) told the Chronicle that the scores are based on routine inspections conducted every six to 18 months. If restaurants earn a low inspection score, they have a week to correct the violations or face closure. “If you see [a low…
A Florida magistrate has recommended that a district court deny Chipotle Mexican Grill Inc.’s motion for $1.5 million in attorney’s fees and costs after the company was granted summary judgment against claims that its advertising misled consumers into believing its food products only contained ingredients free of genetically modified organisms (GMOs). Reilly v. Chipotle Mexican Grill, Inc., No. 15-23425 (S.D. Fla., report and recommendation filed January 26, 2018). Although Florida’s Deceptive and Unfair Trade Practices Act (FDUPTA) permits prevailing parties to recover costs and fees, the magistrate noted that the trial court has broad discretion to consider various factors, including: (i) the scope and history of the litigation; (ii) the ability of the non-prevailing party to satisfy an award; (iii) whether an award of fees would deter similar litigants; (iv) the merits of the respective positions; and (v) whether the claim was brought to resolve a significant legal issue. The…
Panera Bread has reportedly petitioned the U.S. Food and Drug Administration (FDA) to establish a clear definition of the term “egg” after learning that agency rules dictate that “no regulation shall be promulgated” to define eggs. The company asserts that under existing regulations, restaurants can sell processed substances containing artificial flavorings, gums, coloring and fillers as "eggs." Panera’s director of wellness and food policy said in a press release, “Panera and our competitors use the FDA definitions to guide our product descriptions and names. But in the case of ‘eggs,’ we have no guidance. Brands can say they offer an egg sandwich, but sell an egg product that contains multiple additives.”
An Illinois federal court has dismissed a franchisee’s lawsuit alleging KFC wrongfully prevented him from advertising halal chicken, finding the franchise contract gave KFC control over advertising and promotional material. Lokhandwala v. KFC Corp., No. 17-5394 (N.D. Ill., entered January 23, 2018). Although the plaintiff alleged that KFC's prohibition on advertising dietary claims contradicted the earlier representations KFC had made to him, the court found that the franchise agreement gave KFC express power to change its advertising policies. In particular, the contract stated that “[n]o failure, forbearance, neglect or delay of any kind or extent on the part of KFC in connection” with enforcing and exercising its rights “shall affect or diminish KFC’s right to strictly enforce . . . this Agreement at any time.” The court ruled that given the contract’s “unambiguous language on advertising” as well as its integration clause, it would not consider extrinsic evidence of KFC’s…
A New York federal court has held that a vegetarian who alleged Buffalo Wild Wings charged a premium price for non-meat food items fried in beef tallow failed to plead any injury in her complaint because loss of the purchase price does not constitute “actual injury” under state consumer-protection law. Borenkoff v. Buffalo Wild Wings, No. 16-8532 (S.D.N.Y., entered January 19, 2018). Although it was a “close call,” the court held that the plaintiff had standing to sue, finding “some ‘concrete and particularized’ injury in paying for one item and receiving another, even if you ultimately receive the ‘benefit of your bargain’ from a purely objective economic standpoint.” However, the alleged economic injury was insufficient to state a claim, the court held, because the plaintiff failed to explain “exactly how” the cost of the food was affected by the use of beef tallow or why she believed she paid a premium.…
A former employee has filed a discrimination lawsuit alleging Five Guys Operations paid female employees less than similarly situated male employees, echoing a similar lawsuit she filed in 2016. Finefrock v. Five Guys Operations, LLC, No. 17-2214 (M.D. Pa., filed December 1, 2017). The plaintiff asserts that after she and two other female general managers confronted executives about the alleged pay disparity, she was placed on a performance improvement plan and later fired. Alleging violations of Title VII and the Equal Pay Act provisions of the Fair Labor Standards Act, the plaintiffs seek class certification, damages, back and front pay and attorney’s fees.
The U.S. Judicial Panel on Multidistrict Litigation (JPML) has transferred five class actions related to a data breach at Sonic restaurants to the Northern District of Ohio, where the assigned court is presiding over a potential tag-along case. In re Sonic Corp. Customer Data Sec. Breach Litig., MDL No. 2807 (entered December 6, 2017). Sonic confirmed on September 27, 2017, that point-of-sale systems had been breached at its drive-in restaurants.
After reviewing an ad for Subway’s “Fresh Fit for Kid’s Meal” featuring premium toys and offering a sweepstakes for a tablet, the Children’s Advertising Review Unit (CARU) has recommended that the restaurant chain clearly disclose material information and avoid sales pressure when advertising to children. CARU determined that while the contest rules were available on Subway’s website, the ad itself did not disclose that the contest was only open to those 18 and older, did not provide a free means of entry and did not disclose the odds of winning the tablet. CARU also found that the language “Hurry into Subway … otherwise you’ll miss out” could create undue sales pressure on children. CARU recommended that future ads contain audible disclosures understandable to children, and Subway agreed to take the recommendations into account.
The National Restaurant Association (NRA) has filed a lawsuit seeking to invalidate a New York City law requiring fast-food restaurants to remit voluntary deductions from employees' wages to nonprofit groups, including “ideological and political organizations with whom those employers may and do disagree.” Rest. Law Ctr. v. City of New York, No. 17-9128 (S.D.N.Y., filed November 21, 2017). NRA asserts that the city’s “Deduction Bill,” which took effect November 26, 2017, violates the free speech rights of restaurant owners by compelling them to subsidize nonprofits that advocate for labor-related issues such as higher minimum wages. The law resulted from lobbying by the Service Employees International Union (SEIU), the complaint argues, and is ultimately intended to force restaurants to allow unionization of fast-food employees. The Deduction Bill bars labor organizations from seeking remittances, but NRA asserts that “Fast Food Justice,” a group working toward registration as a qualifying nonprofit, shares a mailing…
