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Courts From Coast To Coast Address “Natural” In Food Labeling Class Actions

MissionTortillasCross-posted at WLF’s Forbes.com contributor site

Food makers’ use of “natural” on product labels and advertisements continues to provide class action lawyers with litigation fodder. Such a case-by-case approach to determining what is and is not natural, we have argued previously, poorly serves consumers and producers. Recent judicial developments, described below, have done nothing to sway our opinion that, regardless of how torturous it will be, formal federal rulemaking is preferable to regulation-by-litigation.

A Divided Food Court? As we noted in a May 22 Legal Pulse post, Northern District of California Judge Hamilton rejected General Mills’ request that Janney’s class action be put on hold under the “primary jurisdiction doctrine” to give the Food and Drug Administration (FDA) a chance to act. Such a delay would be “futile” in Judge Hamilton’s words. Janney v. General Mills.

Fast forward to June 7 in the same court, where Judge Rogers issued a tentative ruling in Cox v. Gruma Corp. that she was “inclined to order that this matter be stayed under the doctrine of primary jurisdiction” for six months to await FDA action to define natural. Plaintiff Cox argues that Gruma’s Mission Tortilla products are mislabeled as natural because Gruma uses genetically-modified grains. Without referring to Janney, Judge Rogers drew a distinction between the facts there, which involve sweeteners, and in Cox, which involve so-called GMOs, a subject “FDA has not addressed, even informally” with regards to “natural.” FDA has been asked to address the issue, as Cox herself cited in a potentially counterproductive June 10 response. That filing referenced an agency website passage on a pending GMO labeling citizen petition. Judge Rogers has asked for further briefing to be completed by Friday. Continue reading →

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Will Expanding Post-Grant Review Deter Abusive Patent Litigation?

usptoGuest Commentary

by Cory Clements, a 2013 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.

The act of patent trolls asserting patent rights without first proving them is parallel to the actions of the troll in the fairy tale Three Billy Goats Gruff. Like the troll asserting a right to control who may and may not pass over his bridge, so too the patent troll asserts control over those who may be using technologies covered by broad patents – the acquisition of which makes up their entire business. The troll neither invented the bridge nor the patent troll the patent. These “trolls” are in the business, as one Forbes contributor puts it, to “buy up patents, sometimes by the tens of thousands, then scour the marketplace for people who may be infringing these patents.”

A New York Times article illustrates an interesting aspect of how this trend of patent litigation began. Many critics of patent litigation argue that big corporations are to blame in initiating this type of litigation, and it’s not hard to see why. Apple has spent billions of dollars litigating patent suits initiated both by and against it. According to the article, Steve Jobs’ attitude was to patent every idea Apple employees came up with because even if they didn’t move forward with the idea, they would have a defensive tool.

This attitude might lead one to believe corporations like Apple are to blame for the influx of troll-initiated patent litigation. That is, until one learns of some of the first lawsuits against Apple. A few notable cases include a 2004 settlement with E-Data over Apple’s popular iTunes, after which E-Data initiated lawsuits against 14 other companies. Then there was the 2005 Hong-Kong based Pat-rights suit demanding 12 percent from all iTunes and iPod sales followed by a 2006 suit by Singapore-based Creative Technology resulting in a $100 million settlement. Continue reading →

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Past Author of WLF Paper, Speaker at Programs, Nominated to D.C. Circuit

PMillettCourt decisions, regulations, and new legal policy developments have been flying around so fast and furiously this month that we at The Legal Pulse have until this morning not offered our congratulations to one of Washington Legal Foundation’s pro bono authors and speakers, Patricia Ann Millett of Akin Gump Strauss Hauer & Feld LLP. On June 4, the President nominated Patti for a judgeship on the U.S. Court of Appeals for the D.C. Circuit (she’s standing to the right of the President in the photo).

We have been honored to have Patti speak at WLF Media Briefing programs on the U.S. Supreme Court in each of the past four years. Those programs can be viewed by clicking on the title links below:

Along with colleague Hyland Hunt, Patti expanded upon the thoughts she provided at the October 2011 term review on the Court’s preemption rulings in a September 23, 2011 WLF Legal Backgrounder, Crumbling Cornerstones: The Evolution Of Preemption Law In The Supreme Court’s 2010 Term.

Congratulations, Patti!

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Free (Speech for) Alcohol!: Government Allows Voluntary Nutrition Labels

TTBGuest Commentary

by Stephanie Chipley, a 2013 Judge K.K. Legett Fellow at the Washington Legal Foundation and a student at Texas Tech School of Law.

On May 28, 2013, the Treasury Department, via the Alcohol and Tobacco Tax and Trade Bureau (TTB), issued Ruling 2013-2, a temporary, voluntary labeling regulation that aims to help alcohol companies “provide truthful, accurate, and specific information to consumers about the nutrient content of their products on a per serving basis” in “Serving Facts” statements on labels and in advertisements of wine, distilled spirits, and malt beverages. For those companies who choose to use the new labels on their product packaging, the ruling allows the labels to include “serving size, the number of servings per container, and the number of calories and the number of grams of carbohydrates, protein, and fat per serving size.” In addition, companies may include the alcohol content of a product as a percentage of alcohol by volume and a statement of the fluid ounces of pure ethyl alcohol per serving.

TTB’s ruling shows just how far companies’ ability to share truthful information with consumers has come since Rubin v. Coors Brewing Co., 514 U.S. 476 (1995). In Rubin v. Coors, Coors Brewing Company applied to the Bureau of Alcohol, Tobacco and Firearms (BATF) for approval of labels and advertisements that revealed “truthful, verifiable, and nonmisleading factual information about alcohol content in its beer labels.” Id. at 478, 483. BATF rejected the application because it believed that § 205(e)(2) of the Federal Alcohol Administration Act (FAAA) “prohibited disclosure of the alcohol content of beer on labels or in advertising.” Id. Further, BATF argued that “the ban was necessary to suppress the threat of ‘strength wars’ among brewers, who, without the regulation, would seek to compete in the marketplace based on the potency of their beer.” Id. Coors argued that the § 205(e)(2) violated the First Amendment’s protection of commercial speech. Id. Ultimately, the United States Supreme Court held that although the Government had a “substantial interest in suppressing strength wars in the beer market,” the ban nevertheless failed to “directly and materially advance [the Government’s] asserted interest.” Id. at 488, 491. Consequently, the ban violated the First Amendment. Id. at 478. TTB’s viewpoints on allowing companies to share truthful information with consumers has come a long way since Rubin v. Coors, and its recent ruling reflects that change. Continue reading →

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In Attack On Commercial Speech, Law Professor Sadly Supports Selective Rights

censorsip

Cross-posted at WLF’s Forbes.com contributor page

Those who support increased government regulation of free enterprise have been doing quite a bit of hand-wringing lately about purported obstacles to their agenda that are imposed by the First Amendment.  To their way of thinking, this is a faux First Amendment being flacked by powerful businesses intent on undermining the democratic process.  The latest such complaint comes from Columbia Law Professor (and former senior adviser to the Federal Trade Commission) Tim Wu in a New Republic article, “The Right to Evade Regulation: How Corporations Hijacked the First Amendment.”

What such critics fail to confront, however, is that the rule of law requires that constitutional rights be applied in a consistent manner.  Unless Professor Wu is willing to sacrifice his own First Amendment rights, he is in no position to complain when those rights are extended to everyone, including those whose agenda he apparently opposes.

Wu labels as “extreme” a D.C. Circuit decision holding that the First Amendment prevents the government from forcing tobacco companies to include gruesome pictures of dying smokers on their product labels.  Yet in the next breath, he applauds other “compelled speech” decisions, such as the Supreme Court decision that prevents the government from forcing individuals to recite the Pledge of Allegiance.  Continue reading →

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U.S. Supreme Court to Rule on Class Action Fairness Act’s “Mass Action” Provision

Cruz-Alvarez_FFeatured Regular Expert Column

Frank Cruz-Alvarez, Shook, Hardy & Bacon, L.L.P. (co-authored with Jared Sherr,  Shook, Hardy & Bacon, L.L.P.)

The Supreme Court granted certiorari on May 28 in Mississippi ex rel. Hood v. AU Optronics Corp., No.  12-1036, to determine whether the State of Mississippi’s parens patriae action against manufacturers, marketers, sellers, and distributors of LCD panels for an alleged price-fixing scheme is removable as a “mass action” under the Class Action Fairness Act (“CAFA”).  The U.S. Court of Appeals for the Fifth Circuit held that the district court erred in remanding the case to state court on the grounds that, while the suit was not a “class action” within CAFA, it satisfied CAFA’s “mass action” provision of § 1332(d)(11)(B).

The crux of the case turns on the question of whether the suit involves the claims of “100 or more persons” to satisfy CAFA’s “mass action” provision.  Id.  The Fifth Circuit reasoned, as it did in Louisiana ex rel. Caldwell v. Allstate Ins. Co., 536 F.3d 418, 424-25 (5th Cir. 2008), that “persons” in the “mass action” context are the “real parties in interest,” and not simply the named party in the pleadings.  Mississippi ex rel. Hood v. AU Optronics Corp., 701 F. 3d 796, 800 (5th Cir. 2012).  The court ruled that Mississippi’s complaint, the statutes under which Mississippi brought suit, and common law parens patriae authority led to the conclusion that the real parties in interest in the case far exceeded 100 people. Indeed, the Fifth Circuit found that, in actuality, Mississippi brought the case as a representative of its many citizen consumers who purchased the products at the center of the case.  Accordingly, it ruled that the suit was properly removed to federal court because it met the CAFA definition of a “mass action.”

The Supreme Court has never addressed federal “mass action” jurisdiction under CAFA and its ruling here is likely to have a significant impact.  In our opinion, the Court should affirm the Fifth Circuit’s interpretation of the “mass action” provision in CAFA because such an interpretation is consistent with Congress’s intent, which was to broaden federal court diversity jurisdiction to encompass “interstate cases of national importance,” as a means of protecting out-of-state defendants from potential state-court bias.  CAFA § 2(b)(2).  This lawsuit, brought by the Mississippi Attorney General for significant damages against leading domestic and foreign manufacturers of LCD panels, is precisely the type of case contemplated by CAFA.

Because the State of Mississippi is suing for significant damages in a representative capacity on behalf of numerous Mississippi citizens and consumers of LCD displays, CAFA’s “mass action” provision is satisfied. States like Mississippi should not be permitted to circumvent CAFA and evade removal jurisdiction simply by pleading a parens patriae action.  A different result would allow plaintiffs’ lawyers to game the system to avoid removal.

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Unanimous Court, Differing Views In Comcast v. FCC Appeals Ruling

tenniscourtGuest Commentary

by John Andren, Washington Legal Foundation*

The U.S. Court of Appeals for the D.C. Circuit released its eagerly awaited decision in Comcast Cable Communications v. FCC last week. Although the decision was unanimous, all three judges on the panel had something to say on the matter.

The case concerned whether or not Comcast violated section 616 of the Communications Act of 1934 by refusing to provide the same carriage for the Tennis Channel, which Comcast has no ownership in, as it does for the Golf Channel and Versus (now NBC Sports Network), both of which Comcast has ownership in. The FCC and Tennis Channel accused Comcast of “unreasonably restraining” Tennis Channel from competing fairly with Comcast’s own proprietary sports networks, while Comcast contended their decision to not offer Tennis Channel more broadly was based on nothing more than “a straight up financial analysis.”

The court’s opinion was authored by Senior Circuit Judge Stephen F. Williams, while Circuit Judge Brett M. Kavanaugh and Senior Circuit Judge Harry T. Edwards each filed concurring opinions. Continue reading →