Here we go again. Lawsuits over allegedly deceptive food labels have become commonplace—a tried-and-true tactic for some plaintiffs’ attorneys to earn an easy buck. By claiming that the labels were intentionally misleading in some way, these lawyers and the purportedly confused clients they represent, seek to leverage the specter of a class action to force quick settlements. Unfortunately, this tactic often works. In fact, it has worked so well that entire subsets of labeling lawsuits have sprung up, among them “healthy food” labels, “all natural” labels, and slack-fill cases. We can now add a new category to the list: plaintiffs alleging they were deceived because their beer was not brewed where they thought it was.
Plaintiffs Sara Cilloni and Simone Zimmer filed a putative class action, Cilloni v. Craft Brew Alliance, Inc., in the Food Court (also known as the US District Court for the Northern District of California) against Craft Brew Alliance, the owners of Kona Brewing Company (Kona). Kona was founded in 1995 on Hawaii’s Big Island. Taking pride in the company’s origins, Kona stylizes each of its beers in an overtly Hawaiian theme, inviting customers to enjoy the “Liquid Aloha” and “Catch A Wave.” With names like Big Wave Golden Ale, Longboard Island Lager, and Wailua Wheat, Kona’s products celebrate their history and ties to Hawaiian culture.
According to plaintiffs, however, this branding is merely an elaborate plan to “exploit strong consumer sentiment for Hawaiian-made products.” Plaintiffs allege that the labeling on Kona’s products is false and misleading because, even though Kona was founded in Hawaii and produces beer in Hawaii for that state’s market, none of the beer Kona sells in the continental United States is produced in Hawaii. Thus, Kona “intentionally misleads” its consumers into purchasing Hawaiian beer, when in fact the beer is produced in several states throughout the continental US. According to plaintiffs, consumers “would not have purchased the beer, or would have paid significantly less for the beer, had they known the true origins of the Kona … beer they purchased.” Plaintiffs join an increasing list of litigants claiming that beer labels are false or misleading because a beer with foreign origins is actually produced in the US. The owners of Fosters, Becks, Guinness, and Kirin Ichiban have all faced mislabeling claims.
Over the last two decades, the False Claims Act (FCA) has become a popular tool for plaintiffs—and qui tam attorneys—to enrich themselves at the expense of government contractors. To keep the profits flowing, private plaintiffs, called relators, have invented new legal theories under which to bring their claims. As they test the FCA’s bounds, defendants have urged courts to maintain the law’s traditional limits. Last June, the US Supreme Court addressed one of FCA relators’ more successful liability expansions: the “implied-certification” theory. As a recent WLF Legal Backgrounder notes, though the Court affirmed the availability of this liability theory in Universal Health Services v. US ex rel. Escobar, it also urged lower courts to carefully scrutinize relators’ complaints as a way of limiting the implied-certification claims. Federal appellate courts have begun taking the Supreme Court at its word and have rejected claims that cannot establish materiality or satisfy the FCA’s scienter requirement. Continue reading
*Note: This is the third in a series of posts compiling Washington Legal Foundation papers, briefs, regulatory comments, and blog commentaries relevant to critical legal and constitutional issues facing new senior leaders at specific federal regulatory agencies. To read posts addressing other federal agencies, click here.
As the federal government’s primary prosecutor, the Department of Justice (DOJ) serves an important role in enforcing criminal penalties. However, DOJ frequently oversteps its bounds and advances overzealous enforcement policies.
Through its public-interest litigation, publishing, and other advocacy, WLF influenced debates over DOJ’s recent policies and actions with timely papers and blog commentaries, and weighed in directly through amicus briefs. Those activities have resulted in an impressive body of reference materials that are instructive for new leadership in the agency. This post provides a summary of and links to those documents below to simplify access to relevant work product from WLF in each of those areas.
In November 2015, WLF released the third edition of its Timeline: Federal Erosion of Business Civil Liberties (Overcriminalization Timeline). Each category in the Timeline reflects a separate concern with DOJ’s approach to white-collar criminal enforcement: mens rea, DOJ criminal enforcement, attorney-client and work product privileges, deferred prosecution and non-prosecution agreements, and criminal sentencing. Continue reading
On November 18, the US Court of Appeals for the Ninth Circuit held that federal and state law preempted three county laws in Hawaii that put restrictions on commercial farmers’ planting of genetically-engineered seeds. The WLF Legal Pulse blogged about the oral arguments this summer. The decisions, Atay v. County of Maui, Hawaii Papaya Industry Assoc. v. County of Hawaii, and Syngenta Seeds, Inc. v. County of Kauai, collectively represent a win in the fight against unscientific regulations on so-called Genetically Modified Organisms (GMO), and highlight the need for uniform, national rules.
The cases arose when the three Hawaii counties, Maui, Hawaii, and Kauai, passed anti-GMO ordinances. Those of Maui and Hawaii banned outright the growing of genetically modified crops, while Kauai’s ordinance created an extensive public-disclosure scheme for anyone using certain pesticides—the application of which is an essential part of modern commercial farming. Local farmers and seed suppliers challenged the three ordinances, alleging that they were preempted by federal and state law. Continue reading
On November 10, 2016, a California federal judge dismissed a putative class-action lawsuit designed to force the Classifications and Rating Administration (CARA) to give an “R” rating to any film containing tobacco use. Alleging that around 200,000 young people would start smoking every year after seeing tobacco use in G, PG, and PG-13 rated movies, the plaintiff in Forsyth v. Motion Picture Association of America, Inc. sued the Motion Picture Association of America (MPAA) (CARA is operated as a division of the association), the National Association of Theater Owners, and various major movie studios. Because injunctive relief alone isn’t enough in most class actions, the complaint also sought $20 million in damages. Continue reading
On September 30, just two weeks after hearing oral argument in the case (which we previewed here), the Ninth Circuit released an unpublished opinion in Brazil v. Dole Packaged Foods, partially reversing the district court. The opinion correctly upheld the district court’s dismissal of one of Brazil’s “outlandish theor[ies]” and its decertification of the class. Unfortunately, the Ninth Circuit relied on nonbinding FDA guidance and warning letters to evaluate what would mislead a reasonable consumer, reversing the district court’s dismissal of his other claims. Although not officially precedential, the opinion is worth reviewing because it has the potential to guide lower courts and gives insight into the Ninth Circuit’s future food-labeling decisions. Continue reading
Today, September 12, the United States Court of Appeals for the Ninth Circuit will hear oral arguments in two class-action food-labeling cases. The issues before the court are similar and the cases arise from nearly identical facts: the plaintiffs allege that the defendants’ product labels are false or misleading in violation of various state laws because they claim to be “natural.” The appeals will also be heard by the same panel—Judges Fletcher, Christen, and Friedland. In considering these two appeals, the Ninth Circuit will have a chance to set a major precedent that could either reduce the flow of food-labeling suits into California-based federal courts or open the spigot even wider.
The similarities between the two cases, Brazil v. Dole Packaged Foods, LLC and Briseno v. ConAgra, Inc., are striking. The plaintiffs filed putative class actions alleging that the defendants violated various statutory and common-law causes of action by labeling some of their products as “All Natural” or “100% Natural.” Brazil claims that Dole’s use of “All Natural” on several of its juices’ labels is false or misleading because the company added ascorbic acid (vitamin C) and citric acid. Both additives occur naturally in the juice products. Similarly, Briseno claims that ConAgra’s “100% Natural” label is false or misleading because the Wesson Oil in question contains genetically modified organisms (GMOs). Continue reading