Monthly Archives: September 2012

Lawsuit Over Benecol “Cholesterol-Busting” Spread Dismissed

As reported by FoodNavigator-USA , a federal judge has dismissed a proposed class action lawsuit against Johnson & Johnson and McNeil Nutritionals over the labeling and marketing of the “cholesterol-busting” spread Bencol.   The lawsuit was filed last June and alleged that Benecol misled consumers because, at 0.85 g per serving, it contained insufficient plant stanol esters to merit the relevant health claims.   It was also alleged that the claim “proven to reduce cholesterol” rendered the product a drug and not a food.

Generally, the court found that plaintiffs claims were preempted because the FDA  issued a statement in 2003 allowing use of the claim in connection with products containing lesser amounts of phytosterols (at least 400mg per serving), and that “Federal agency action short of formal notice and comment rulemaking can preempt state law.”  Please see the full article here.

Rat Study of GMO’s “Severely Tainted” By Release Strategy Designed to Avoid Scrutiny

Here’s a link to a link to a NY Times opinion piece on how the French group that authored the rat study on genetically engineered corn generated press coverage that didn’t have the benefit of analysis or cross-checking.  The article quotes extensively from the Embargo Watch blog which first reported on a disconcerting aspect of how the study was promoted:

Breaking with a long tradition in scientific journalism, the authors allowed a selected group of reporters to have access to the paper, provided they signed confidentiality agreements that prevented them from consulting other experts about the research before publication.

Normally, a press embargo on scientific research allows journalists to seek outside comment during the embargo period to provide appropriate analysis and comment on the merits (or lack thereof) of the research.  Thus, the French research group created a situation where journalists felt compelled to provide an essentially verbatim report on the alleged findings of the study after the embargo lifted.  Evolutionary biologist Michael Eisen labels this a suspect study “done by people out to prove something rather than investigate something.”

“This affects every aspect of the work, from study design, to execution, interpretation and publicity…. The result of all of this severely tainted work (and there’s plenty from the pro-GMO side too) is that the really good science in the field gets drowned out, and isn’t taken seriously because people just assume that it, too, must be biased. Total mess.”

The elephant in the living room is California’s Proposition 37, on which I’ve written about extensively in prior posts.  It seems self-evident that the release strategy by the French research group was designed to help influence popular opinion on this issue where the fear-mongering tactics of some anti-GMO groups has been attacked by opponents of GMO labeling as lacking any scientific support.

Frito-Lay and the “Peppering” of Food Co.’s with Labeling Lawsuits

NBC News posted an article today titled “Lawyers Pepper Food Firms With Lawsuits Over Labeling.”  It’s a general overview of the flood of labeling lawsuits, with some notable quotes from consumer “watchdog” groups and plaintiff’s attorneys who are leading the attack against food companies for their labeling practices.

On a related note, another class action suit is challenging the “All Natural” labeling on Frito-Lay’s bean dip on the grounds that it contains genetically modified soy.  See Altman v. Frito-Lay North America, Inc., No. 12-cv-61803 (S.D. Fla.).  The Altman suit follows on the heels of Foust v. Frito-Lay, No. 1:12-cv-21975 (S.D. Fla.) and Berkowitz v. Frito-Lay, No. 1:12-cv-22436 (S.D. Fla.) which target Frito-Lay’s bean dip and “all natural” chips because of GMOs.  The “nearly identical” Foust and Berkowitz suits were found to be related actions and are now pending before the same judge.  And on September 21, 2012, Frito-Lay moved to transfer the Altman suit to the same judge for the exact same reasons.

Frito-Lay wants to include the new lawsuit in a pending motion to transfer the Foust and Berkowitz suits to the Eastern District of New York because of “substantial overlap” between the Florida cases and three earlier-filed and consolidated lawsuits in New York.   See Frito-Lay North America, Inc. “All Natural” Litigation, No. 12-cv-408 (E.D.N.Y).   Frito-Lay asserts that all of these suits have copy-cat complaints relating to the use of GMO’s with “all natural” claims and that they include the same basic allegations and seek the same types of relief.

Notably, one of the New York cases was just transferred to that venue from the Northern District of California.  Plainly then, Frito-Lay wants to have the question of whether it’s deceptive or misleading to use GMO ingredients in a product labeled as “all natural” answered in a New York courtroom.  This makes sense for a host of reasons while also decreasing defense costs.  Moreover, this tactic takes advantage of the principle that, when a plaintiff seeks to represent a nationwide class, her choice of forum receives less deference than in other circumstances.

Dannon Calls New Lawsuit Targeting Activia Yogurt “Baseless”

 

According to FoodNavigator-USA, The Dannon Company, Inc. has labeled a new class action complaint targeting its Activia yogurt as “poorly informed and frivolous.”  The class action plaintiff alleges that Activia includes Milk Protein Concentrate (“MPC”), added water and filler materials that are prohibited by the Standards of Identity for yogurt products promulgated by FDA under 21 C.F.R. 131.200, 131.203.   Dannon counters that food companies have been adding MPCs under the direction of the FDA since 1982 and that the the addition of MPCs is permitted in yogurts.   Evidently, the FDA’s regulations in this regard are in some flux but appear to favor Dannon.

Allegations in the complaint include the following:

  • Food starch, corn starch, gelatin, inulin, and xanthan gum are inexpensive filler materials. It is cheaper to add water and fillers than it is to use more milk.  Instead of making an authentic yogurt product, Dannon simply added water and fillers to increase Activia’s thickness and protein content.
  • Dannon’s conduct is not industry standard. The majority of yogurt brands in the U.S. do not add water, MPCs, and filler materials. Dannon intentionally added water and fillers to shortchange consumers.  …. [I]t is not necessary to add MPCs and filler materials to yogurt. Most domestic manufacturers do not add MPCs, and there is no plausible reason why these ingredients are needed to make yogurt.

This case is pending as Conroy v. The Dannon Company, Inc., Case No. 12-cv-6901 in the Southern District of New York.  Please see the full report by FoodNavigator-USA here and the class action complaint here.

 

Sixth Circuit Finds Issues of Material Fact Remain in Battle of Energy Shots

In a long-running dispute between Innovation Ventures LLC, the maker of “5-Hour ENERGY” products, and NVE Inc., the maker of a competing “6 Hour POWER” product, the Sixth Circuit reversed a district court’s granting of summary judgment against each side’s respective claims.  Specifically, in its September 13th Opinion, the Sixth Circuit held issues of material fact precluded summary judgment (1) in NVE’s favor that a likelihood of confusion did not exist between its “6 Hour Power” and the senior “5-Hour Energy” mark, and (2) in Ventures’ favor that it was not liable for false advertising in issuing a recall notice relating to a different “6 Hour” energy product.  

First, the Court of Appeals reversed the district court’s grant of summary judgment in NVE’s favor on the trademark claims, ruling that the marks were too dissimilar to justify a finding of likelihood of confusion.  The Sixth Circuit, though, found that the issue was such a “close call” that summary judgment was not appropriate.  Critical to that ruling was the dubious finding that “5-Hour POWER” mark was “suggestive” and not merely “descriptive” and thus not protectable.

 The connection between “5-hour” and “ENERGY” is “not so obvious that a consumer seeing [5-hour ENERGY] in isolation would know that the term refers to” an energy shot rather than, for example, a battery for electronics, an exercise program, a backup generator, or a snack for endurance sports. … Connecting the mark “5-hour ENERGY” with the energy-shot product requires “imagination and perception to determine the nature of the goods.”

In evaluating the factors for evaluating the likelihood of consumer confusion, held as follows:

This factually intensive issue is a close call and could, on a fair comparison of the evidence to date, be decided either way.  However, when the factors, as found by the district court, were so evenly balanced—a 4 to 3 split, with the eighth factor not at issue in this case—precedent counsels in favor of not granting summary judgment.

Second, the Sixth Circuit reversed the district court’s grant of summary judgment  on NVE’s false advertising counterclaim relating to a recall notice issued by Innovation Ventures in 2008 after a different suit against another competitor marketing a “six-hour” energy shot (where trade dress was also a significant issue).  The problem with the recall notice was that it failed to specifically identify the name of the other company or the its product, but instead mentioned “the immediate recall of the ‘6 hour’ product.”  NVE argued that this constituted false advertising because it was harmed by resulting confusion and a jury could reasonably determine that the press release was either literally false or, at a minimum, deceptive.

The district court had found that though the notice was ambiguous—“it did not state which product had been recalled” — it was not deceiving.   Again, the Sixth Circuit  reversed and found that a “genuine dispute” as to whether the recall notice was deceptive, and that the issue deserved to be heard at trial.   “The language of the recall notice teeters on the cusp between ambiguity and literal falsity in two main respects—descriptive and grammatical.”  In addition, this close call deserved to move forward because the Sixth Circuit found that the district court should have allowed certain evidence of consumer confusion on the issue of deception that had been excluded on hearsay grounds.

Finally, the Sixth Circuit did agree with the district court that the recall notice could not support antitrust claims under the Sherman Act, and summary judgment was thus appropriate on that counterclaim.   For false advertising to rise to the level of a Sherman Act violation, it must be “so difficult for the plaintiff to counter that it could potentially exclude competition.”  That was not the case with the recall notice issued by Innovation Ventures.

Read the complete opinion here.

Dairy Agrees to Pay $7.5 Million To Settle “False and Deceptive” Organic Claims

Aurora Dairy, a large organic farm operator with operations in Colorado and Texas, has agreed to pay plaintiffs $7.5 million to settle an almost five-year long consumer class action lawsuit involving fraudulent marketing claims concerning organic milk.

In 2007, a USDA Complaint by organic industry watchdog the Cornicopia Institute was adjudicated by federal regulators who found that Aurora was in violation of federal organic standards requiring pasture for their animals, and that it used non-organic subcontractors and brought conventional cows into their organic operations.  Those findings resulted in the USDA and Aurora signing a consent agreement requiring the producer to adopt more stringent practices or risk losing its organic certification.

A consumer class-action complaint followed that same year which alleged that Aurora’s labeling, graphics and marketing claims — depicting cows happily grazing on lush pasture, and in some cases family farm scenes — were deceptive because, in reality, “the animals were living short, stressful lives being forced to produce copious quantities of milk in the kind of filthy industrial conditions that organic consumers thought they were avoiding.”

According to Mark A. Kastel, Senior Farm Policy Analyst at the Cornucopia Institute, “Aurora, and other giant factory farm operators … are … bringing so much organic milk into the marketplace that they have suppressed pricing for family-scale organic dairy producers forcing some out of business.”  Kastel contends that “[o]rganic consumers do not just buy milk, they are buying the story behind the label.”

On the other hand, Aurora notes that its organic certifications were not challenged by the lawsuit at the end, and it admitted no wrongdoing but settled to avoid the cost and distraction of prolonged litigation.  Please see its full press release here.

In addition to the financial terms, Aurora agreed to continue the following practices at its Platteville Dairy:

  1. Aurora will certify that all of the certified organic dairy animals at the Platteville Dairy that transitioned under the 80/20 rule have been retired and removed;
  2. All dairy animals incorporated into the Platteville Dairy organic milking herd shall be under continuous organic management from the last third of gestation;
  3. All dairy animals at the Platteville Dairy, whether lactating or dry, shall receive daily access to pasture for 120 days per year or as otherwise set forth in current or amended NOP regulations or USDA exceptions thereto;
  4. The lactating organic milking cows at the Platteville Dairy shall have access to pasture at a grazing density that does not exceed four animals per acre;
  5. The dry cows at the Platteville Dairy shall have access to pasture at a grazing density that does not exceed five animals per acre;
  6. The number of dairy animals at the Platteville Dairy shall be maintained in accordance with the pasture metric described above;
  7. The calves born to animals at the Platteville Dairy shall be permitted to remain at the operation until weaned and ready to be put on pasture, typically between 4 and 6 months of age; and
  8. Aurora’s Woodward facility located in Greeley, Colorado has been removed from the Platteville OSP and Aurora will not renew its use.

An independent “Monitor” would review Aurora’s compliance with these terms.  The consolidated case is pending as In Re Aurora Dairy Corp. Organic Milk Marketing and Sales Practices Litigation (Case No. 08-md-01907) in the  U.S. District Court for the Eastern District of Missouri (St. Louis).

Ben & Jerry’s Wins TRO Against Makers of Adult DVDs

Ben & Jerry’s obtained a TRO today in its just-filed case against the producers of a series of adult DVDs called “Ben & Cherry’s” with titles that echo the trademarked names of Ben & Jerry’s ice cream flavors and packaging that mimics design elements of its cartons.   Allegedly infringing DVD titles that are “safe for public consumption” include NEW YORK SUPER FAT & CHUNKY, BOSTON CREAM THIGH, and PEANUT BUTTER D-CUPS.  The DVD packaging features unclothed persons against backgrounds that copy Ben & Jerry’s well-known ice cream containers, including grazing cows and puffy white clouds.

No counsel for defendants has yet appeared and defendants have until September 12, 2012 to show cause why the TRO should not be followed by a preliminary injunction.  The case is pending as Ben & Jerry’s Homemade Inc. v. Rodax Distributors Inc., Case No. 12-CV-6734, U.S. District Court, Southern District of New York.  A copy of the TRO order may be found here.