Notable Ruling: Alien Tort Statute Focus in Aiding and Abetting

On Tuesday, October 23, 2018, the Ninth Circuit Court of Appeals issued an important opinion reviving a decade-old Alien Tort Claims Act (ATS) suit based on alleged aiding and abetting slave labor in cocoa farms on the Ivory Coast. Doe 1 v. Nestle, et al., No. 17-55435, 2018 WL 5260852 (9th Cir. Oct. 23, 2018). In doing so, the Court ruled that even if the ATS applied only to domestic conduct, the facts alleged in the case could be used, if properly plead, to support an ATS suit against domestic corporations. This lawsuit was initiated over a decade ago by former child slaves who were kidnapped and forced to work on cocoa farms. The complaint alleges that defendants, large food manufacturers, purchasers, processors, and retailers of cocoa beans, provided financial support and technical farming aid despite allegedly knowing that the farmers with which the defendants had exclusive buyer/seller relationships were utilizing child slave labor in violation of the law of nations.

The United States Supreme Court, in Jesner v. Arab Bank, ––– U.S. ––––, 138 S.Ct. 1386, 1407, 200 L.Ed.2d 612 (2018), ruled that the ATS, which gives District Courts “original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States,” is not extraterritorial and applies only to domestic conduct. Invoking this doctrine, defendants urged the Ninth Circuit to focus on the location where the principal offense or injury occurred, rather than the location where the aiding and abetting allegedly occurred. The Ninth Circuit disagreed, finding (1) that the focus of the ATS can be on conduct that constitutes aiding and abetting another’s violation of the law of nations, and (2) that aiding and abetting in and of itself can constitute a tort committed in violation of the law of nations. The Court stated that defendants’ alleged provision of spending money from the United States to Ivory Coast farmers to maintain buyer/seller relationships was “outside the ordinary business contract” and was done for the purpose of receiving cocoa at a price that could not be obtained without employing child slave labor, which the Court likened to “kickbacks.” Furthermore, the Court noted that defendants sent representatives to regularly inspect operations in the Ivory Coast and “report back” to headquarters in the United States. Thus, these actions were “both specific and domestic.”

In sum, the Court reversed and remanded, allowing plaintiffs to amend their complaint to remove foreign corporations and to specifically allege what conduct is attributable to which domestic defendants. The court also permitted the plaintiffs to re-allege their aiding and abetting claims in accordance with recent precedent Jesner and RJR Nabisco, Inc. v. European Community, ––– U.S. ––––, 136 S.Ct. 2090, 195 L.Ed.2d 476 (2016).

PC Food Litigation Index: October 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

October 2018 filings continued an upward trend exceeding 2017’s pace.  As in the later months of 2017, October 2018 filings focused on false labeling, slack-fill, and all-natural. Both slack-fill claims filed this month pertained to products in opaque bags—Justin’s mini peanut butter cups and Harvest Snap snack products. Natural claims targeted La Croix sparkling water, Hershey fruit-flavored chocolate, and maple syrup.

White chocolate and pasta sauce were popular targets also. Plaintiffs in Ruiz v. Living Intentions LLC and Rafael v. Starbucks Corp. sued in New York over products that allegedly do not contain white chocolate as defined by the FDA. Plaintiffs in Illinois and California, (Kubilius v. Barilla America, Inc. and Flolo v. Cucina & Amore Inc.) sued claiming that that the defendants’ pasta sauces, which are advertised as containing no preservatives, actually contain citric acid—a chemical both plaintiffs allege constitutes a preservative. Mr. C.K. Lee of the Lee Litigation Group represents all four sets of plaintiffs in the white chocolate cases and the pasta sauce cases.

Continue Reading

Industry Insights: The New Nutrition Facts Panel

The Food and Drug Administration (FDA) is implementing changes to the Nutrition Facts Panel for food and beverage labels. Manufacturers are required to comply with the new requirements by January 1, 2020, although manufacturers with less than $10 million in annual food sales have an additional year, until January 1, 2021. Key changes include the following:

  • Serving sizes are being changed to reflect the amounts typically consumed. In addition, larger packages may now be considered a single serving.
  • The amount of added sugars must be stated in addition to total sugar.
  • The nutrients that must be listed will now include Vitamin D and Potassium, replacing Vitamins A and C.
  • Calories from fat will no longer be required.
  • Daily values for certain nutrients have changed based on updated science.
  • The format and look of the NFP is being changed to draw attention to certain information, such as calories and serving size.

 Learn more about these changes here

Industry Insights: Fit for Fido? The Rise Of ‘Natural’ Pet Food Claims

Sixty-eight percent of households in the United States — or approximately 85 million families — own a pet, according to the 2017 to 2018 National Pet Owners Survey conducted by the American Pet Products Association. Because most pet owners treat their pets as members of the family, it is no surprise then that what they feed their pets is as important to them as what they feed their family. As consumers shift toward “organic,” “natural” and “clean” foods for themselves and their families, they are also making similar purchasing decisions when it comes to pet food. These “premium” pet foods come at a premium price, however — and consumers expect to receive a premium product.

As sales of “premium” pet food have increased in recent years, so has the number of consumer class actions filed against pet food manufacturers, specifically those involving claims that marketing and labeling pet foods as “natural” is false and misleading when they contain artificial ingredients, synthetic ingredients, chemicals, heavy metals and/or toxins. Bisphenol A, or BPA, lead and arsenic are among the most commonly alleged “unnatural” chemicals contained in pet food.

Pet food manufacturers argue that these lawsuits challenge truthful and accurate labeling by purporting to impose a standard of absolute purity for trace levels of “unnatural” contaminants. Manufacturers contend that trace levels of any alleged contaminants in their products do not exceed any maximum permissible levels for pet food as established by the U.S. Food and Drug Administration, U.S. Environmental Protection Agency or other regulatory agency, and that their products are safe for pet consumption. Still, these class actions allege that the “natural” label is misleading and that manufacturers are required to disclose the presence and levels of the alleged contaminants contained in their pet food products.

Read the full article on Law360 here.

PC Food Litigation Index: September 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

September filing activity included several cases challenging the marketing and labeling claims attached to beverage products, with well-known brands like Coca-Cola and Arizona Beverages in plaintiffs lawyers’ sights. Nelson v. Coca-Cola is among the latest in a long string of consumer suits that take issue with “natural” or “all natural” food and beverage labels. The plaintiff in the case contends that a reasonable consumer would take the “natural” label on Hansen’s Natural Sodas to mean that the beverages are “free of any artificial or synthetic ingredients.” She alleges that she would not have purchased the products if she had known that they contain such ingredients. A similar lawsuit, Froio v. Ocean Spray Cranberries, contests the labeling claims on several of the defendant’s juice beverage products, which represent that the products contain no artificial colors or flavors. The plaintiffs alleges that these claims, bolstered by “pictures of water, fields, and fruits pertaining to the specific fruit juice blend in question,” are misleading, because the products do in fact contain artificial ingredients.

Challenges to health-related labeling claims were also particularly high this month, the Neville v. Arizona Beverages case representing this trend. In this case, the plaintiff argues that nutrition facts panel misleads consumers, setting out the sugar and calorie counts for a single serving, even though the standard can actually contains two servings. In another beverage case, Levin v. Stremicks Heritage Foods, the plaintiff argues that while the defendant’s labels “convey to the consumer that these are healthy, natural beverages, brimming with healthful fruit juices,” they are in fact primarily water and high fructose corn syrup. Further, the plaintiff argues that the “excellent source of vitamin C” claim is false, as the “excess sugar” contained in the products “interferes with the body’s metabolism of vitamins.”

Continue Reading

Industry Insights: The Rise of Natural Pet Food Claims

On August 1, plaintiff and putative class representative Markeith Parks sued celebrity chef Rachael Ray’s dog food brand Nutrish® alleging that the products are falsely labeled and marketed as “natural.” The complaint states that Nutrish® contains the chemical glyphosate, which Parks alleges is “unnatural.”[1]

Given Rachael Ray’s national fame, this case has caught the attention of multiple media outlets and legal powerhouses with experience in similar claims. Perkins Coie’s food litigation team conducted research into the number of “natural” pet food claims filed nationwide since 2013. Results can be found in the bar chart below.

“Natural” Pet Food Claims Filed Since 2013

Continue Reading

Back to School: Food Litigation Trends Webinar

With summer drawing to an end and the kids going back to school, it’s time to check in on the latest food litigation trends. Please join Perkins Coie on Tuesday, September 18 at 1:00 PM ET/12:00 PM CT/10:00 AM PT for a review of the key developments and trends in food litigation. This 60-minute webcast reflects our active monitoring of food litigation filings in jurisdictions nationwide and will include an analysis of the key legal developments in cases involving claims challenging the labeling, composition, and regulatory compliance of food and beverage manufacturers.

Please register here.

PC Food Litigation Index: August 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

August 2018 continued this year’s trend of higher monthly filings than in 2017. False advertising, slack-fill and health maintenance claims were filed this month. Some claims were filed in batches. For instance, two class action suits were filed in the Central District of California in two days, Garcia v. Himalayasat-Sustainable Sourcing, LLC, et al. and Garcia v. Frontier Natural Products Coop., et al., alleging that salt is a mineral and not an agricultural product so therefore salt cannot be identified as organic. Thus, Erika Garcia claims, the defendants’ mislabeling falsely and deceptively induced her to purchase the product based on misrepresentations.

In addition, the Center for Food Safety filed a slew of claims in late August against multiple grocery chains claiming the chains sold peanut and almond butter products that contain acrylamide, a substance “known to the state of California to cause cancer,” and despite exposing its customers to the chemical, the chains fail to provide the required Proposition 65 warning.  These filings continued into the month of September.

Continue Reading

PC Food Litigation Index: July 2018

Each month we will be sharing the PC Food Litigation Index, a summary of latest class action filings in the food and beverage industry. This data is compiled by Perkins Coie based on a review of dockets from courts nationwide.

Food litigation filings in July were in line with the year’s overall trend, pacing slightly ahead of 2017 numbers. The general false fact category of filings remains the largest, with several new filings in July. In Moore v. Trader Joe’s Company, for example, the plaintiff argues that the defendant’s manuka honey product, sold either as “100% New Zealand Manuka Honey” or “New Zealand Manuka Honey,” is falsely and misleadingly labeled, testing confirming that the product is approximately three-fifths Manuka Honey.

Also in the false fact category this month was a challenge to the marketing and labeling of Ben and Jerry’s ice cream, in particular, claims that it is made from the milk of “happy cows” in “caring dairies.” The plaintiff’s suit contends that the milk actually derives “from cows raised in regular factory-style, mass-production dairy operations.” Continue Reading

LexBlog