New York Court Halts Overreaching Government with NYC Soda Ban Decision

statue-crownGuest Commentary

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

New Yorkers will still be able to purchase large fountain drinks at restaurants, movie theaters, and stadiums thanks to the New York State Supreme Court, Appellate Division’s unanimous opinion that the Portion Cap Rule was an overreach of executive power.

The brain child of New York City Mayor Michael Bloomberg and City Health Commissioner Thomas Farley, the Portion Cap Rule (aka “soda ban”) would have prohibited the sale of sugary sodas and energy drinks over 16 ounces in many, but not all, city venues. The city officials viewed large soft drinks as an unnecessary evil that contribute to obesity.

The appeals panel took a different approach to the soda ban than did Justice Milton Tingling in her lower court opinion. Whereas Justice Tingling struck the ban down as arbitrary and capricious, Justice Renwick relied upon the separation of powers doctrine in her ruling. She held that the power to impose such a ban resides solely with the legislature (the New York City Council, in this instance) rather than an administrative agency such as the Department of Health. WLF had similarly warned in its comments on the soda ban that the Mayor and his agencies could not engage in such legislative action.

As Justice Renwick pointedly reminded the Department, “14 members of the New York City Council wrote to the Mayor opposing the proposal and insisting that, at the very least, it should be put before the Council for a vote. This did not occur.” Continue reading “New York Court Halts Overreaching Government with NYC Soda Ban Decision”

Update: N.D. of California Judge Vacates Ruling in Food Labeling Class Action

ChobaniLast week’s, In Food Class Actions, Two Courts Conflict On FDA’s “Primary Jurisdiction  discussed the July 12 ruling by Judge Koh in Kane v. Chobani, which dismissed most of the plaintiffs’ claims but allowed Kane to pursue one related to “evaporated cane juice” (ECJ). Judge Koh has now vacated that July 12 ruling and set a schedule for its reconsideration.

On July 22, Chobani filed a motion for leave to seek reconsideration of the July 12 order. They cited two grounds justifying reconsideration.

First, in permitting the ECJ claim to proceed, Judge Koh advanced a theory of that claim which had not, at any point, been advanced by the plaintiffs. On page 11 of her July 12 order, Judge Koh dismissed the plaintiffs’ assertion that they did not know that ECJ was a form of sugar as “simply not plausible.” She then goes on, however, to string together, and specifically cite to, certain allegations from the plaintiffs’ compliant about ECJ. She then concludes, with no supporting citation, that “to the extent ECJ suggests that the product is derived from a juice, it may have plausibly suggested that the product is healthier than refined sugars and syrups.”

Chobani argued in its July 22 motion that Kane never argued that it was misled into believing ECJ is a healthier form of sugar, and thus Chobani had never presented counterarguments on that theory.  The reconsideration motion then explained why, under Judge Koh’s version of the ECJ claim, plaintiffs could not establish standing to sue or prove reasonable reliance under California law. Chobani also argued that the “‘healthy sugar’ via ‘juice’ theory is expressly preempted.”

Chobani’s second justification for reconsidering the July 12 order was Judge Rogers’s contrary July 12 ruling in Hood v. Wholesoy on the issue of FDA’s primary jurisdiction over ECJ. The reconsideration motion noted that Chobani was prepared to file a request for interlocutory appeal of Judge Koh’s July 12 order to the U.S. Court of Appeals for the Ninth Circuit, based in part on the conflict within the Northern District.

With her July 25 order, Judge Koh granted Chobani’s reconsideration motion, and agreed to entertain a similar motion from Kane on claims which the judge’s July 12 order dismissed.

Finger on the Pulse: From Our Blogroll and Beyond

  • Sen. Ron Wyden floats proposal to split “fracking” regulation between state and federal regulators, with bulk reserved for states (The Hill E2 blog)
  • Perfect storm for reforming how the US ITC considers patent issues? (Cato @ Liberty)
  • Anti-smoking activists flack junk science studies in quest to ban public smoking (Time)
  • USDA “country of origin” labeling mandate faces intriguing First Amendment challenge (FDA Law Blog)
  • Small tech company CEOs relate what it’s like to be sued by a patent troll (Washington Post Wonkblog via Overlawyered)
  • Fourth Circuit confirms booting of “expert witnesses” testifying outside their area of expertise from leaking-freezer-caused-my-injury suit (Product Liability Monitor)
  • Supreme Court’s antitrust law framework for challenging “reverse payment settlements” in drug patent cases: Will it work in practice? (SCOTUSblog)
  • Will the Southern District of New York’s decision finding Apple’s e-book pricing violated antitrust law survive on appeal? (Truth on the Market)

Appeals Court Judicially Amends Superfund Law To Empower Plaintiffs

4th CircuitGuest Commentary

by John Andren, Washington Legal Foundation*

It’s not often that a court decision like Waldburger, et al. v. CTS Corporation comes along, one which is interesting not only because of its potentially broad impact, but also because of the case’s intriguing ancillary characteristics. The case featured plaintiffs (represented by law students) arguing for federal preemption so they could bring their state law nuisance claim; a defendant and the U.S. government opposing preemption; and a deeply divided 2-1 outcome in the U.S. Court of Appeals for the Fourth Circuit, where all three judges were Obama appointees.

Waldburger was at its core a case about statutory interpretation and the crucial distinction between statutes of limitations—laws barring claims brought after a certain amount of time has elapsed since either the tortious or criminal act was committed or the claim was discovered—and statutes of repose—which bar claims brought later than a (typically longer) set number of years after the date of the defendant’s last action regardless of when any claim was discovered.

Plaintiffs in the case, who were represented at oral argument by a third-year law student from Wake Forest University, sought compensation for real property damage from CTS Corporation for the alleged dumping of toxic chemicals by one of CTS’s subsidiaries almost 30 years ago. CTS argued that CERCLA’s statute of limitations provision did not preempt North Carolina’s 10-year statute of repose, and since the defendant’s last actions were well over 20 years ago, plaintiff’s claims were barred. Interestingly, the Department of Justice shared time with CTS at oral argument to argue against preemption.  DOJ is involved in an Eleventh Circuit case where the United States is the defendant and is opposing application of CERCLA’s limitations provision. Continue reading “Appeals Court Judicially Amends Superfund Law To Empower Plaintiffs”

Courts In Patent Suits Tell Turncoat Trial Lawyers To Take A Hike — Twice

Eastern District of Tx.
Eastern District of Texas

This is the first Legal Pulse commentary of WLF’s new General Counsel, Mark Chenoweth, who assumed that post on July 15, 2013.

Kudos to U.S. District Magistrate Judge Roy Payne (E.D. Tex.), who disqualified Los Angeles-based law firm Russ, August & Kabat (RAK) and partner Marc Fenster from serving as lead counsel to plaintiff TQP Development, LLC (a patent assertion entity, cf. here) in a lawsuit against Adobe Systems, Inc. on July 13.  After representing Adobe from 2006 through February 2012 in an ongoing series of opinion letters about whether Adobe products infringed particular patents, RAK and Fenster turned around and filed suit against their longtime client in two other patent cases.

Judge Payne would have none of it.  Noting that “Adobe had a reasonable expectation that RAK would continue to act as its lawyer” and that “RAK failed to give Adobe reasonable notice to the contrary before undertaking the adverse representation,” he held that RAK violated Model Rule of Professional Conduct 1.7(a), which prohibits lawyers from representing clients with concurrent conflicts of interest and Texas Rule of Professional Conduct 1.15 regarding the provision of reasonable notice to a client upon termination of representation.

Adobe only found out about RAK’s adverse representation in the Texas case (filed on August 31, 2012) when RAK filed a motion (on August 13, 2012) to appear pro hac vice as counsel in a separate lawsuit against Adobe it had filed in Delaware on July 12, 2012.  RAK estimated at the disqualification hearing that it began pre-suit investigation no earlier than August 1 in the Texas case.  Judge Payne commented, “It is surprising and disheartening that RAK appeared at the hearing without having reviewed its own records to determine when it began its representation … in this case, which is at the heart of this issue.  The Court can only assume that the estimate of August 1 is at least as favorable to RAK as the actual date.” Continue reading “Courts In Patent Suits Tell Turncoat Trial Lawyers To Take A Hike — Twice”

In Food Class Actions, Two Courts Conflict On FDA’s “Primary Jurisdiction”

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

On July 12, two different Northern District of California federal judges in two separate food “mislabeling” class actions issued conflicting decisions on an issue that arises routinely in such cases — when should courts decline to resolve disputes which fall under the primary jurisdiction of a federal agency?

While the timing of the rulings may be coincidental, the similarities between the suits are not. As we note briefly in a post below, they are two of over thirty suits filed in the last year in the Northern District of California by a consortium of class action lawyers, some of whom cut their teeth on tobacco litigation. All allege violations of federal food labeling rules, which, they argue, can be enforced through litigation under California consumer protection laws.

Hood v. Wholesoy & Co. Hood claimed that Wholesoy’s use of the term “evaporated cane juice” instead of “sugar” on the ingredient list violates federal labeling rules, and that Wholesoy cannot lawfully call its product “yogurt” because it contains soy.  Wholesoy argued in its motion to dismiss that Congress had committed these issues to the Food and Drug Administration’s (FDA) purview, and that because FDA has not clearly stated a firm position on the issues, the court should defer to FDA’s regulatory authority. Judge Rogers, who on July 11 ordered a stay in another food labeling suit (Cox v. Gruma) based on this primary jurisdiction doctrine, ruled the same way in Hood v. Wholesoy. On the use of evaporated cane juice, Judge Rogers wrote that “FDA’s position is not yet settled” and that the draft guidance and several warning letters plaintiffs cited as reflecting FDA’s view on cane juice don’t constitute legally enforceable standards. On whether defendant can use the term “soy yogurt,” Judge Rogers noted “FDA does not appear to have spoken at all.” She granted defendant’s motion to dismiss without prejudice. Continue reading “In Food Class Actions, Two Courts Conflict On FDA’s “Primary Jurisdiction””

Who’s Filling The “Food Court” With Lawsuits: Consumers Or Lawyers?

The Northern District of California?
The Northern District of California?

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

Public health activists and their allies in the plaintiffs’ bar want us to believe that consumers are fed up with food and beverage company misinformation and are marching into lawyers’ offices seeking help to redress their grievances.

This is an appealing, Erin Brockovich-like conception of litigation, but is quite far from reality with regards to why scores of class action lawsuits are pending in federal courts against companies like Kraft, Dole Foods, and even Costco. Such litigation, like the 1990s lawsuit crusade against tobacco companies, is lawyer-driven and industry-targeted. An article last March from American Lawyer Media’s Recorder related:

The latest push in food cases are so-called misbranding claims based on allegations that food labels are not simply misleading to consumers but explicitly violate federal standards.

That has been the primary legal weapon of the consortium led by Don Barrett, a Mississippi lawyer who made millions suing Big Tobacco, and Robert Clifford, a Chicago lawyer whose practice previously focused on commercial airline accidents.

Advised by a former director of the FDA’s Office of Food Labeling, the group spent two years poring over FDA regulations. Also on board as a consultant is UCSF professor Robert Lustig, author of a new book linking sugar and processed foods to obesity and disease.

Last year the group filed 24 suits in less than two months against companies like Procter & Gamble Co., Unilever and ConAgra Foods. More recent suits target smaller brands in the natural food market, like Wallaby Yogurt Co., WholeSoy & Co. and Green Valley Organics.

A motion filed by Chobani to disqualify this consortium of lawyers from a lawsuit against the company in the U.S. District Court for the Northern District of California offers a more detailed view of the lawyers’ tactics and indiscriminate targeting. Chobani argues that the lawyers should be disqualified because they hired a federal labeling law expert whom Chobani had previously retained and who had participated in discussions with Chobani’s legal team about litigation strategy.

Chobani is one of over 30 food-related companies sued by the same lawyers in the same court, the Northern District of California. The disqualification motion notes that “the cases substantially overlap,” to the point that “in the initial paragraph of the Factual Allegations, the Complaints all contain nearly identical language about the FDA.”

Why the Northern District of California? The plaintiff’s lawyer targeted by Chobani’s motion told The Recorder, “The law is more favorable here than in any other jurisdictions that we’ve looked at.” Arnold & Porter partner William Stern, a recent author of a WLF Legal Opinion Letter, said pointedly, “It’s like having a welcome mat on the front door.”

In case there’s any doubt about the copycat nature of these suits, we offer a spreadsheet that features links to each complaint. The companies this consortium of lawyers has sued include:

  • 7-Eleven, Inc.
  • Blue Diamond Growers
  • The Bromley Tea Company
  • Bumble Bee Foods, LLC
  • Chobani, Inc.
  • ConAgra Foods, Inc.
  • Costco Wholesale Corporation
  • Del Monte Corporation
  • Dole Foods Company, Inc.
  • Frito-Lay Food Company, Inc.
  • Gerber Products Company
  • The Hain Celestial Group, Inc.
  • The Hershey Company
  • Kraft Foods Global, Inc.
  • Nature’s Path Foods, Inc.
  • Nestle USA, Inc.
  • Ocean Spray Cranberries, Inc.
  • Odwalla, Inc.
  • Proctor and Gamble Company
  • R.C. Bigelow, Inc.
  • Green Valley Organics, L.P.
  • Sunsweet Growers, Inc.
  • Tetley USA, Inc.
  • Turtle Mountain, LLC
  • Twinings North America, Inc.
  • Unilever United States, Inc.
  • Wallaby Yogurt Company, Inc.
  • Whole Foods Market, Inc.
  • Wholesoy & Co.
  • Wrigley Sales Company