Supply Chain Updates: Human Rights Issues

Food companies are increasingly being challenged to police their worldwide supply chains to eliminate human rights violations.  It is no longer sufficient to focus solely on one’s own company as businesses are held responsible for the acts of others—often unknown and hidden in today’s complex supply chains.  Food companies have heightened exposure because human trafficking can be prevalent on commercial fishing boats, in agricultural fields and in food processing plants.  Plaintiff lawyers, activists and government agencies are alleging new legal theories to hold companies accountable in United States courts. Perkins Coie’s lawyers are leaders in developing and implementing effective and defensible supply chain compliance programs.

Information on the Freedom Initiative: Freedom Seal _ Public Notice.

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Palm Oil Supply Chain Abuses Reported by Amnesty International: Steps to Mitigate Legal Risk

Amnesty International recently released a report alleging that supply chains for production of palm oil—a common ingredient in many consumer products—are tainted by forced and child labor. In the nearly 150-page report titled “The Great Palm Oil Scandal: Labour Abuses Behind Big Brand Names,” Amnesty International accuses several major brand-name consumer goods companies of sourcing palm oil from suppliers that operate plantations where the alleged abuses took place.

The report has already received substantial media attention, including articles published by Forbes, The Washington Post, Reuters and Yahoo News. Although the accuracy of the report’s assertions have not been tested, it nonetheless emphasizes the growing importance of proper diligence in supply chain management and compliance with associated legal obligations for a company’s disclosures about its supply chain practices.

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Watkins Incorporated v. McCormick & Company

Watkins Incorporated v. McCormick & Company, No. 1:15-mc-01825 (D.D.C.): In this putative class action alleging that Defendant deceptively “slack-filled” its black pepper containers, which Plaintiff says caused it to lose pepper sales by confusing consumers, the Court granted in part Defendant’s motion to dismiss. Defendant moved to dismiss Plaintiffs’ claims for lack of constitutional or statutory standing under the Lanham Act, failure to state a claim, and because Minnesota’s choice-of-law rules preclude Plaintiff’s claims under the California and Florida statutes. In its order, the Court held that Plaintiff alleged enough to enjoy Article III standing and standing under the Lanham Act. It also held that Plaintiff’s Lanham Act false advertising claim was adequately alleged. Similarly, because the Court found that Plaintiff had adequately stated a claim under the Lanham Act, it also rejected Defendant’s argument that the state law claims (under the Minnesota Deceptive Trade Practices Act, the California UCL, and the Florida Deceptive and Unfair Trade Practices Act) should fail for the same reasons as the Lanham Act. However, because Plaintiff did not oppose Defendant’s motion to dismiss its common law claim of unfair competition, the Court dismissed that claim.

Decerbo v. Melitta United States of America Inc.

Decerbo v. Melitta United States of America Inc., No. 8:16-cv-00850 (M.D. Fl.): In this putative class action alleging Defendant deceptively mislabeled its flavored coffee products by omitting federally- and state-mandated language about artificial flavorings on its “French Vanilla” and “Hazelnut Creme” flavored coffees, the Court granted in part Defendant’s motion to dismiss. Defendant moved to dismiss Plaintiffs’ claims on the grounds that the Plaintiff’s consumer fraud claims fail to allege any unlawful conduct by Defendant and for failure to allege an ascertainable loss, and argued that its labels expressly identify that its flavored coffee products are made with “Natural and Artificial Flavors.” The Court held that Plaintiff has standing to pursue claims for monetary damages and prospective injunctive relief only with respect to products she has actually purchased from the Defendant. The Court also held that Plaintiff had failed to state a claim based on failure to attach or incorporate clear, complete and accurate images or descriptions of the allegedly offending product labeling, which made it impossible for the Court to determine whether the representations at issue could plausibly violate state consumer fraud and warranty laws.

New Filings for November 11, 2016

McCartney v. Whole Foods Market California Inc., et al., No. CGC-16-555096 (Cal. Super. Ct. – San Francisco Cnty.): Proposition 65 action alleging Defendant failed to warn consumers its Himalayan Bulk Goji Berries contain lead.

Scholder v. Ebro North America, et al., No. 2:16-cv-6002 (E.D.N.Y.): Putative class action alleging Defendant advertises and promotes its wheat pasta products  as “all natural,” “100% natural,” “100% whole grain,” and made from a single ingredient, 100% whole wheat,” when the products contain the chemical glyphosate.

Environmental Research Center, Inc. v. Singerman & Braun, LLC, No. RG16-837062 (Cal. Super. Ct. – Alameda Cnty.): Proposition 65 action alleging Defendant failed to warn consumers its nutritional products contain lead.

Holve v. McCormick & Co., No. 6:16-cv-6702 (W.D.N.Y.): Putative class action alleging several varieties of Defendant’s McCormick spice and seasoning products are labeled as ”All Natural,” when they contain synthetic, artificial, and/or genetically modified ingredients.

McCartney v. Whitmore Family Enterprises, LLC, No. CGC-16-555059 (Cal. Super. Ct. – San Francisco Cnty.): Proposition 65 action alleging Defendant failed to warn consumers its Taza Organic Roasted Cacao Nibs contain cadmium.

Pellitteri v. Publix Super Markets, Inc., No. 9:16-cv-81786 and Rudder v. Publix Super Markets, Inc., No. 9:16-cv-81777 (S.D. Fl.): Putative class actions alleging Defendant falsely advertises its grated parmesan and Romano cheese products as containing “100% cheese,” when the products contain significant amounts of adulterants and fillers, including cellulose, a filler and anti-clumping agent derived from wood pulp.

Consumer Advocacy Group, Inc. v. Island Pacific Distribution, Inc., et al., No. BC638152 (Cal. Super. Ct. – Los Angeles Cnty.): Proposition 65 action alleging Defendant failed to warn consumers its turmeric powder contains lead.

Consumer Advocacy Group, Inc. v. Rom America, Inc., et al., No. BC638122 (Cal. Super. Ct. – Los Angeles Cnty.): Proposition 65 action alleging Defendant failed to warn consumers its whole cinnamon contains lead.

Amaya v. Dole Packaged Foods, LLC, No. 2:16-cv-7734 (C.D. Cal.): Putative class action alleging Defendant’s health and wellness advertising for its Dole Fruit & Oatmeal and Dole Parfait products is deceptive because the products contain substantial amounts of added sugar, which plaintiff claims increases risk of chronic disease.

Court Grants-in-Part and Denies-in-Part Defendant’s Partial Motion to Dismiss in False Labeling Action Involving Yogurt

Stolz v. Fage Dairy Processing, S.A., No. 1:14-cv-3826 (E.D.N.Y.): The Court granted-in-part and denied-in-part Defendant’s partial motion to dismiss in this putative class action alleging consumers were misled by Defendant’s “Total 0%” packaging on its yogurt products because consumers believe the product lacks fat, sugar sodium, cholesterol, calories or carbohydrates. First, the Court dismissed Plaintiffs’ claims for injunctive relief for lack of standing because they failed to allege they will purchase the product again in the future. The Court dismissed Plaintiffs’ negligent misrepresentation claims under California, Florida, New Jersey and Pennsylvania laws because the claims are premised on omissions rather than positive assertions and the parties did not have a fiduciary or fiduciary-like relationship.

Plaintiffs’ UCL and CLRA claims, however, survived dismissal.  The Court held Plaintiffs’ allegations sufficiently alleged misrepresentations that could deceive a reasonable consumer, as well as that they alleged reliance.  Finally, the Court rejected Defendant’s contention that Plaintiffs could not seek restitution under the CLRA because they did not provide notice.  The Court analyzed the California Supreme Court’s explanation of the distinction between restitution and damages and reasoned that a CLRA claim for restitution is not a damages claim and does not require advance notice of the lawsuit.  Order.

Court Grants Defendant’s Motion for Summary Judgment, Dismissing the Remaining Claim in Tito’s Handmade Vodka False Labeling Lawsuit

Pye v. Fifth Generation, Inc., No. 4:14-cv-493 (N.D. Fla.): The Court granted Defendant’s motion for summary judgment, dismissing the only remaining claim—breach of express warrant —in this false labeling putative class action involving Tito’s Handmade Vodka.  The claim pertained solely to the representation that Tito’s is made in “an old fashioned pot still.”  Undisputed evidence established that Defendant manufactured Tito’s in pot stills, but Plaintiffs challenged that the pot stills are not truly “old fashioned” because pot stills have changed over time.  The Court, however, found nothing in the record to support Plaintiffs’ interpretation of “old fashioned” and declined to interpret the term so narrowly.  The Court also dismissed the express warranty claims because Plaintiffs did not provide evidence that they provided notice to Defendant of the alleged breach of warranty, as Florida law requires. Order.

Court Rejects Repeat Plaintiff’s Unsupported Bid for Class Certification in False Labeling Action Involving Goji Berries

Torrent v. Ollivier, et al., No. 2:15-cv-02511 (C.D. Cal.):  The Court denied Plaintiff’s motion for class action certification in this putative class action asserting violations of California’s CLRA and UCL, based on the allegation that Defendants false represent that their goji berries were harvested from the Himalayas, when they, in fact, came from the Ningxia province of China.  Continue Reading

Court Grants-in-Part and Denies-in-Part Defendant’s Motion for Judgment on the Pleadings in False Labeling Action Involving Coconut Oil

Jones v. Nutiva, Inc., No. 4:16-cv-711 (N.D. Cal.): The Court issued an order granting in part Defendant’s motion for judgment on the pleadings in this putative class action alleging violations of California’s UCL, CLRA, and FAL, based on the claim that Defendant misleadingly labels and markets its coconut oil product as “inherently healthy, and a healthy alternative to butter and other oils,” when in fact it is inherently unhealthy and a less healthy alternative.   Continue Reading

Court Grants Defendants’ Motion, Staying Consolidated Action Involving “Healthy and All Natural” Claim on Primary Jurisdiction Grounds

In re Kind LLC “Healthy and All Natural” Litig., No. 1:15-md-02645 (S.D.N.Y.): The Court entered an order granting in part Defendants’ motion to dismiss this consolidated putative class action asserting violations of multiple states’ consumer protection laws and raising claims for breach of express warranty, unjust enrichment, and negligent misrepresentation.  Plaintiffs allege Defendants deceptively marketed its snack food products with labels including the words “healthy,” “all natural,” and/or “non GMO.” Continue Reading