Food Litigation Newsletter - November 2012

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This newsletter aims to keep those in the food industry up to speed on developments in food labeling and nutritional content litigation. We welcome your comments. For a subscription to the electronic copy with links to complaints and opinions, please  email Erin Banks at Perkins Coie LLP. 


Table of Contents [please select the link below to navigate to each section]

Recent Significant Rulings

General Mills Wins Summary Judgment in Cheerios MDL When Judge Rejects Class Members’ Damages Theories

Ninth Circuit Rejects Frosted Mini Wheats Settlement for a Second Time

National Class Certified in POM Wonderful False Advertising MDL

Another Class Action Settlement Rejected Over Cy Pres Distribution

Court Stings Plaintiff Who Claimed Honey Wasn’t “Honey”

Putative National Class of Benecol Purchasers Dismissed for Lack of Standing and Preemption

Restaurateurs, Foie Gras Producers Challenge California Ban

Preliminary Approval Granted in Organic Milk MDL

Plaintiff Avoids CAFA in “All Natural” Suit by Seeking Less Than $5 Million in Damages

Court Allows Consumers to Challenge Chipotle’s Claim That It Sells “Naturally Raised Meat”

Court Allows Jamba Juice Suit to Proceed, Nixes Warranty Claim

Class Actions Allege Falsely Advertised Kobe Beef Menu Items

Court Grants Limited Class Certification in Kraft Packaging Suit

Four Loko Class Action Allowed To Proceed Even After Named Plaintiff Offered Full Refund

Smucker’s Named Plaintiff Dismissed For Want of Standing After Settling Her Bankruptcy Claims

Summary of New Filings

Perkins Coie Food Litigation Group


General Mills Wins Summary Judgment in Cheerios MDL When Judge Rejects Class Members’ Damages Theories

On September 10, 2012, the court presiding over In re Cheerios Marketing & Sales Practices Litigation, 09-cv-2413 (D.N.J.), granted General Mills’ motion for summary judgment.  The plaintiffs, Cheerios buyers from California, New York and New Jersey, alleged that General Mills had overstated the ability of Cheerios to lower consumers’ cholesterol.  First, the court rejected plaintiffs’ attempt to apply the law of Minnesota, where General Mills is headquartered, to all claims, ruling instead that each named plaintiff’s claims were controlled by the laws of his or her home state.   Second, the court then ruled that both of plaintiffs’ theories of damages were legally barred, ruling that plaintiffs may not recover either a full purchase price refund or “benefit of the bargain” damages.  The court also rejected plaintiffs’ attempt to disgorge all profits earned by General Mills on the sales of Cheerios.  In dismissing the action, the court ruled the plaintiffs had failed to establish that they would not have bought the cereal but for the health-related claims.  The court entered summary judgment, dismissing all claims of three of the five plaintiffs and dismissing the class action allegations of the two remaining plaintiffs. A copy of the Court’s opinion can be found here.

Ninth Circuit Rejects Frosted Mini Wheats Settlement for a Second Time

For the second time in two months, the Ninth Circuit rejected the settlement of a nationwide class of consumers who allege they were misled by claims that the cereal improves attentiveness.  See Dennis v. Kellogg Co., ___ F.3d ___, 2012 WL 3800230 (9th Cir. Sept. 4, 2012).  On July 13, 2012, the court ruled that the settlement must be rejected based on its conclusion that a $2 million award of fees was excessive.  The settlement value of the suit was over $10 million.  The court also held that the proposed cy pres distribution of funds and food items to charities that feed the indigent bore no relationship to the purpose of the suit, which was to control allegedly false advertising.  Following plaintiffs’ petition for rehearing or for rehearing en banc, the court amended the July opinion to remove reference to the excessive attorney’s fees.  However, the amended opinion restated the court’s conclusion that the cy pres distribution had “little or nothing to do” with combating allegedly false advertising, and must therefore be rejected.  A copy of the opinion can be found here.

National Class Certified in POM Wonderful False Advertising MDL

In In re Pom Wonderful LLC Marketing & Sales Practices Litigation, No. 10ml2199 (C.D. Cal.), the court certified a national class of consumers who purchased POM’s pomegranate beverages and supplements, allegedly in reliance on false and misleading claims that the products would improve heart health and reduce the risk of heart disease, cancer and other ailments. POM argued that the Ninth Circuit’s recent decision in Mazza v. American Honda Motor Corp., 666 F.3d 581 (9th Cir. 2010) precluded certification of a nationwide class, but the Pom Wonderful court disagreed. Noting that POM is headquartered in and developed and managed the marketing campaign from California, the court concluded that California law could permissibly apply to the claims of all consumers nationwide based on its conclusion that POM had not adequately demonstrated conflicts between California law and the laws of other states. The court also rejected POM’s argument that differences in marketing materials precluded certification because individual inquiry would be needed to determine which consumers saw which advertisements, finding that it could infer reliance under California law because POM allegedly made material misrepresentations to the entire class. A copy of the opinion can be found here.

Another Class Action Settlement Rejected Over Cy Pres Distribution

In Astiana v. Ben & Jerry's Homemade, Inc., No. 4:10-cv-4387 (N.D. Cal.), the court rejected the parties' proposed settlement of plaintiffs' claims alleging that defendants falsely labeled their ice-cream as "all natural."  Although the settlement had been preliminarily approved on March 30, 2012, the court found the settlement legally unconscionable in light of the Ninth Circuit's recent decision in Dennis v. Kellogg Co., discussed above.  The proposed settlement included a $7.5 million restitution fund for the plaintiff class, from which each class member would be compensated $2.00 for each package of qualifying ice-cream purchased, up to ten packages.  If the class members' claims did not fully deplete the fund, any residual restitution would be donated to non-profit charities or other causes related to food or nutrition in the United States.  The court concluded that it did not have sufficient information to determine how the cy pres funds would be distributed to ensure that it was consistent with Dennis, which requires that cy pres distributions sufficiently relate to the plaintiff class or to the class's underlying claims.  The parties are reported to be working on crafting a settlement that will garner court approval.

Court Stings Plaintiff Who Claimed Honey Wasn’t “Honey”

In Brod v. Sioux Honey Assoc., No. 3:12-cv-01322 (N.D. Cal.), the court granted Sioux Honey's motion to dismiss in a proposed class action alleging that Sioux Honey violated state law by marketing its "Sue Bee Clover Honey" as "honey" even though the product contains no pollen. The court held that a California statute that essentially prohibits a product from being labeled as honey if it contains no pollen was preempted by federal law that allows foods not otherwise subject to specific regulatory definitions to be labeled with their common or usual names. Because there is no specific regulation pertaining to honey, federal law requires Sioux Honey's product to be labeled as “honey" in clear conflict with the state statute. The court noted that neither party disputed that Sue Bee Clover Honey meets the typical definition of honey found in dictionaries and that no definition requires honey to contain non-filtered pollen. The court dismissed defendants’ argument that plaintiff lacked standing, holding that "California law recognizes an injury when a product is mislabeled in violation of the law and consumers rely on that labeling in purchasing the product or paying more than they otherwise would have."  A copy of the opinion can be found here.

Putative National Class of Benecol Purchasers Dismissed for Lack of Standing and Preemption

In Reid v. Johnson & Johnson, No. 11-cv-1310 (S.D. Cal.), the court dismissed claims on behalf of a national class of purchasers of Benecol spread, brought under California’s consumer protection statutes, who alleged that they paid a price premium for the product.  The court found that the statements at issue would not have deceived a reasonable consumer as a matter of law, and that certain of plaintiff’s claims were preempted by the Nutrition Labeling and Education Act of 1990 (“NLEA”).  First, the court concluded that no reasonable consumer would be misled by the product labels, which claimed “No Trans Fat” and “No Trans Fatty Acid.”  Noting that the product’s ingredients list disclosed that it contains hydrogenated oils and trans fats, the court concluded that no reasonable consumer could interpret the label to mean the product did not contain any trans fat.  In addition, the court noted that the trans fat claims were preempted by the NLEA, which required products containing less than .5 grams of trans fat to be labeled “Trans Fat 0g.”  The court also rejected as preempted plaintiffs’ attempts to establish liability based on the claims that the product was “proven to reduce cholesterol” and related to plant esters.  A copy of the opinion can be found here.

Restaurateurs, Foie Gras Producers Challenge California Ban

A California-based restaurant group and Canadian foie gras producers have challenged a California law that bans the sale of products from the forced feeding of birds, including foie gras. The lawsuit, filed in the U.S. District Court for the Central District of California, argues that the law violates the Commerce Clause of the U.S. Constitution because it disproportionately hurts out-of-state producers by requiring them to adhere to California's restrictions on feeding fowl. Plaintiffs allege that bird sellers and restaurateurs have no way of knowing whether their products are made from ducks or geese that were fed more than the law allows because such a determination is impossible to make after the products have been processed. The foie gras producers also argue that the law is unconstitutionally vague because it does not adequately guide farmers on how much food they may feed their birds.  Litigation will proceed after the court denies plaintiffs’ motion for injunctive relief.

Preliminary Approval Granted in Organic Milk MDL

Preliminary approval has been granted in a nationwide class against Aurora Dairy Corp. and a number of retailers where plaintiffs allege that Aurora and the retailers sold milk falsely certified as organic.  See In re: Aurora Dairy Corp. Organic Milk Mktg & Sales Practices Litig., No. 08-md-01907 (E.D. Mo. Sept. 14, 2010).  Valued at $7.5 million, the settlement allows class members to recover up to $30 apiece in cash payments in addition to injunctive relief related to Aurora’s production and sale of organic milk.  However, to claim more than $10, class members will be required to provide proofs of purchase.  There is also a cy pres component, with plaintiffs choosing one beneficiary (Consumers Union) and defendants picking the other (Organic Farming Research Foundation).  No reversion of unclaimed funds will go back to the defendants.  A copy of the court’s order granting preliminary approval can be found here.

Plaintiff Avoids CAFA in “All Natural” Suit by Seeking Less Than $5 Million in Damages

In Deaton v. Frito-Lay North America, Inc., No. 12-cv-01209 (W.D. Ark.), the court granted plaintiff’s motion to remand a class action on behalf of Arkansas residents who purchased products labeled as “all natural” but allegedly containing GMO corn and soy.  In the complaint, the plaintiff stipulated that she “[did] not seek and will not accept” more than $5 million.  Citing Eighth Circuit precedent, the court concluded that it was required to accept the stipulation, which would bind the class.  It should be noted that the United States Supreme Court will consider the effectiveness of this sort of stipulation when it hears Standard Fire Insurance Co. v. Knowles, No. 11-1450 (U.S. cert. granted Aug. 31, 2012).  A copy of the trial court’s opinion can be found here.

Court Allows Consumers to Challenge Chipotle’s Claim That It Sells “Naturally Raised Meat”

In Hernandez v. Chipotle Mexican Grill, Inc., No. 2:12-cv-05543 (C.D. Cal.), the court denied Chipotle's motion to dismiss in a proposed class action alleging that Chipotle fraudulently concealed the true nature of the meat used in its restaurants, ruling that plaintiff had standing to bring suit because he need only show that he purchased non-naturally raised meat at a premium from Chipotle. The court also held that plaintiff adequately stated a claim for fraudulent concealment by alleging that Chipotle "engaged in a prominent, highly visible in-store advertising campaign touting its use of naturally raised meat" while the data revealing the "true nature of the meat" was available on the Internet "buried in 100-page Annual Reports." The court also rejected as premature Chipotle's arguments relating to national class allegations, noting that such arguments should be raised during the class certification stage.  A copy of the opinion can be found here.

Court Allows Jamba Juice Suit to Proceed, Nixes Warranty Claim

In Anderson v. Jamba Juice Co.,  No. 4:12-cv-01213 (N.D. Cal.), the court denied a motion to dismiss a proposed class action alleging that Jamba Juice's "all natural" do-it-yourself smoothie kits contain synthetic ingredients, holding that plaintiff can bring claims based on products he never purchased. Even though plaintiff alleged that he purchased only two of the five kits at issue, Judge Rogers found that the class representative had standing to bring claims regarding smoothie kit flavors that he did not buy because the products were sufficiently similar and the labels contained the same alleged misrepresentation.  According to the court, any material differences in the products can be addressed at the class certification stage.  The court granted Jamba Juice's request to dismiss plaintiff's Magnuson-Moss Warranty Act claim, however, holding that the term "all natural" on the smoothie kit labels does not constitute a written warranty within the meaning of the MMWA.  In line with other Northern District judges, the court noted that the term "all natural" is a general product description rather than a promise that the product is free of defects.  A copy of the opinion can be found here.

Class Actions Allege Falsely Advertised Kobe Beef Menu Items

Two recently filed class actions allege that a pair of restaurant groups have been falsely advertising menu items containing Kobe beef, the import of which was banned in 2010 by the USDA over mad cow disease concerns. The suits, both of which were filed in California state court, allege violations of the state's False Advertising Act and Unfair Business Practices Act in addition to intentional misrepresentation, negligent misrepresentation and fraud. The suits seek to represent all California consumers who purchased Kobe products from restaurants owned by the defendants within the last four years. The USDA relaxed restrictions on the import of Kobe beef in August. The defendants are Barney's Worldwide Inc., which owns the Barney's Beanery chain, and Innovative Dining Group LLC, which owns Sushi Roku and Boa Steakhouse chains and other high-end restaurants. View a copy of the first and second complaints.

Court Grants Limited Class Certification in Kraft Packaging Suit

In Evangeline Red v. Kraft Foods Inc., No. 2:10-cv-01028 (C.D. Cal.), the court granted certification to two subclasses of consumers who claim that Kraft mislabeled Vegetable Thin and Ritz crackers as "made with real vegetables." The court tentatively ruled that it would find allegations by eight other subclasses moot if Kraft agrees to a court order mandating compliance with an executive's promise not to use certain labeling. The tentative ruling, should it become final, would substantially limit the scope of the long-running lawsuit, which was filed in February 2010 and alleges that Kraft's claims that various cookies and crackers are nutritious are misleading because the products contain trans fat, high fructose corn syrup and other allegedly unhealthy processed ingredients. The remaining eight subclasses include purchasers of Saltines and Teddy Grahams.  A copy of the opinion can be found here.

Four Loko Class Action Allowed To Proceed Even After Named Plaintiff Offered Full Refund

The judge hearing Yourth v. Phusion Projects LLC, No. 11-1261 (N.D.N.Y.), refused to dismiss the case even after the defendant offered the named plaintiff a full refund. Plaintiff alleged that the caffeinated alcohol drink Four Loko was marketed to target young people, allowing the defendant to charge a premium above the cost of similar beverages that did not contain caffeine. It should be noted that the United States Supreme Court will consider whether a defendant’s offer to settle with a named plaintiff moots the case. A copy of the opinion can be found here.

Smucker’s Named Plaintiff Dismissed For Want of Standing After Settling Her Bankruptcy Claims

Named plaintiff Mary Henderson sued J.M Smucker Co., arguing that she had been misled because Smucker’s Uncrustables and Crisco shortenings were marketed with phrases like “all-vegetable” and “wholesome” but actually contained partially hydrogenated vegetable oil, which plaintiff alleged leads to heart disease, diabetes, and various cancers.  Plaintiff sought certification of a national class of all purchasers of the products since January 2000.  Last week, a Los Angeles federal judge held that the named plaintiff lacked standing to represent the putative class.  Plaintiff had filed for bankruptcy before she sued Smucker, and she did not identify the suit in her Chapter 7 petition.  Smucker opposed her motion for class certification on the grounds that she had failed to disclose her interest in this suit.  Plaintiff’s bankruptcy trustee eventually settled with Smucker, and the District Court ruled that the settlement deprived Plaintiff of standing to representing the class.  A copy of the opinion can be found here.

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Altman v. Frito-Lay North America Inc., No. 12-61803 (S.D. Fla.) (bean dip marketed as “all natural” but contained genetically modified organisms)

Barnes v. Campbell Soup Co., No. 12cv5185 EDL (N.D. Cal.) (class action for false advertising and unfair competition where product claims “all natural” ingredients but contains genetically modified organisms)

Bohac v. General Mills Inc., No. 12cv5280 MEJ (N.D. Cal.) (complaint alleges that Nature Valley brand products are mislabeled as “100% Natural” because they include genetically-modified corn and soy)

Bronson v. Johnson & Johnson Inc., No. 12cv4184 (N.D. Cal.) (Splenda Essentials products marketed as having nutritional benefits that they allegedly do not and costing 25% more than comparable products)

Cahill v. Citrus World Inc. dba Florida’s Natural Growers, No. 12cv4691 (N.D. Cal.) (Florida’s Natural orange juice marketed as “100% Pure” and “Squeezed From Our Fresh Florida Oranges” when it allegedly is unnatural and heavily-processed)

Freeman v. Arctic Zero, Inc., No. 12cv2279 (S.D. Cal.) (Arctic Zero Frozen Dessert products marketed as a healthy ice cream alternative containing only 150 calories per pint, when they allegedly actually contain up to 68 percent more calories than advertised)

Glover v. Steven Mahrt dba Petaluma Egg Farm, No. RG12-650058 (Cal. Super. Ct., Alameda County) (Judy’s Family Farm Eggs, labeled “old fashioned,” claim hens are raised “free of cages,” and feature a picture of hens running free in a grassy field when hens are allegedly raised in “barren industrial sheds” and spend no time outdoors)

Janney v. General Mills, No. 12cv3919 (N.D. Cal.) (alleging that Nature Valley brand products are mislabeled as “100% Natural” because they include genetically-modified corn and soy)

Martin v. Kellogg Company, No. 12cv4846 (N.D. Cal.) (defendants claim Kashi cereals are “All Natural” when they use plants grown from genetically modified organisms)

Michelle v. Arctic Zero, Inc., No. 12cv22792063 (S.D. Cal.) (Arctic Zero Frozen Dessert products marketed as a healthy ice cream alternative containing only 150 calories per pint, when they allegedly actually contain up to 68 percent more calories than advertised)

Robles v. Frito-Lay North America Inc., No. 12cv5170 (N.D. Cal.) (Smartfood Selects popcorn products marketed as “All Natural” but contain genetically modified organisms)

Rosales v. Chobani, Inc., No. 12cv2071 (S.D. Cal.) (Chobani Greek yogurts marketed as “all natural” or “only natural ingredients” that are non-fat or low-fat, yogurt and fruit contain one to three teaspoons per six ounce serving of dried cane syrup, a highly refined added sweetener)

Route v. Meade Johnson Nutrition Co., No. 12cv2350 (C.D. Cal.) (Enfamil Premium probiotic products lack support for claims that probiotics improve the immune systems of very young children)

Smith v. Cabot Creamery Cooperative Inc., No. 12cv4591 (N.D. Cal.) (Greek yogurt allegedly misbranded as “Greek” and “Greek yogurt” because it is thickened with whey protein concentrate and milk protein concentrate instead of by straining)

Takeda v. Quest Nutrition LLC, No. BC493336 (Cal. Super. Ct., Los Angeles County) (alleged failure to disclose that “healthy” protein bars have sugar in them without labeling product as such for diabetics) 

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