Monthly Archives: September 2011

In re: Southeastern Milk Antitrust Litigation

Dairy Farmers of America (DFA) membership of some of the 7,200 current and former dairy farmers who comprise the plaintiff class continues to complicate the Southeastern Milk Antitrust Litigation, where DFA is a defendant. On August 31, 2011, District Judge Ronnie Greer, on motion of defendant Dean Foods Company (Dean), reluctantly shelved, at least temporarily, proceedings to approve the $140 million settlement between Dean and the plaintiff class announced on July 12, 2011. Judge Greer, in a 10-page memorandum opinion, candidly acknowledged he “would like nothing better than to deny Dean’s motion,” but concluded he “ha[d] no choice but to grant” it. (Slip. Op. at 7, 9.) Relying on Amchen Products, Inc. v. Windsor, 521 U.S. 591 (1997), and Ortiz v. Fibreboard Corp., 527 U.S. 815 (1999), Judge Greer decided the court could not “make an ‘undiluted’ determination that the class including both DFA member dairy farmers and independent dairy farmers meets the requirement of Rule 23,” as required to approve the class-wide settlement. This determination was not possible, since the court on July 28, 2011, had found “‘a conflict of interest [between DFA dairy farmers and independent dairy farmers] requiring the Court to decertify’ the DFA member subclass.” (Slip Op. at 5.) The Dean settlement may yet be approved. The motion for preliminary approval of the settlement will be taken “under advisement pending appointment of separate counsel and class representatives for the DFA subclass,” after which “it may be possible for the Court to certify the DFA subclass for settlement purposes, [and] grant the motion to preliminar[il]y approve the settlement agreement . . . .” (Id. at 10.) The memorandum opinion is available on Comp Law360.

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In re Ferrero Litigation; and POM Wonderful v. Ocean Spray Cranberries

Developments in two food & beverage false-advertising cases related to the Committee’s consumer-protection focus are noted below.  

 On August 29, 2011, the federal court entered an order denying defendant Ferrero U.S.A., Inc.’s (“Ferrero”) Fed. R. Civ. P. 12(b)(6) motion to dismiss the first amended consolidated complaint in In re Ferrero Litigation, No. 11-CV- 205 H (CAB).   The plaintiffs claim to represent a class of consumers who purchased Ferrero’s “Nutella” brand spread in reliance on allegedly deceptive and misleading labeling and advertisements promoting the spread as healthy and beneficial to children, when it allegedly “contains dangerous levels of fat and sugar.”  (Order, 8/30/11, at 1.)  The plaintiffs claim violations of California’s Unfair Competition Law (UCL), False Advertising Law (FAL) and Consumer Legal Remedies Act (CLRA), among other claims.  District Judge Huff rejected Ferrero’s argument that the plaintiffs’ attempt to plead exposure to a long-term advertising campaign was flawed, thereby requiring pleading and proof of individualized reliance on specific misrepresentations.  She concluded that Ferrero had raised valid issues for summary judgment or class certification, but that the plaintiffs had sufficiently pled reliance to confer standing on them to assert their UCL, FAL and CLRA claims.

 Meanwhile, on August 29, 2011, defendant Ocean Spray Cranberries filed a summary judgment brief (available at Comp Law360) that details its legal argument that the Lanham Act and California UCL claims of rival juice-maker POM Wonderful are precluded and preempted, respectively, by the Federal Food, Drug and Cosmetic Act (FFDCA) and Food and Drug Administration (FDA) regulations under the FFDCA.  Ocean Spray’s 14-page supporting brief explains in part that: “The Lanham Act and the FFDCA have overlapping jurisdiction in areas such as marketing and product labeling, which are at issue in this case.  There is no private right of action for alleged violations of the FFDCA, and courts have consistently held that ‘[p]laintiffs may not seek to enforce the FFDCA through the Lanham Act.'”  (Brief, at 2.)