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Unnaturally Stupid Lawsuits

Of all the failed would-be class actions, the ones targeting food labels for false advertising strike me as uniquely stupid.

There was the claim that Froot Loops cereal doesn't contain real fruit, and that Cap'n Crunch with Crunch Berries cereal doesn't contain crunch berries. Which are imaginary. Eight separate lawsuits made those claims.

There was also the one claiming Krispy Kreme “glazed raspberry filled” donuts don't contain real raspberries. Which might be legit, except plaintiffs said the reason this is bad is because “raspberries help fight against cancer, heart and circulatory disease.” OR MAYBE JUST DON'T EAT DONUTS.

To this pantheon we add another—a suit against Dannon Co. for touting its yogurt as “all natural.”

“The cows that produce the milk in the products are fed GMO corn or GMO soy, neither of which are natural,” wrote lawyers from Reese LLP and Halunen Law in a complaint filed last year in Manhattan federal court. “Thus, the milk defendant uses to make the products is not All Natural, and the final yogurt products are not All Natural.”

OK, but that's not how it works.

“Plaintiff does not allege that any ingredient used in the products is unnatural; her claim is that, several steps back in the food chain, there may have been something unnatural ingested by a cow,” wrote U.S. District Judge Katherine Forrest of the Southern District of New York.

Forrest dismissed the suit on Dec. 3, finding “no legal support for the idea that a cow that eats GMO feed or is subjected to hormones or various animal husbandry practices produces 'unnatural' products; furthermore Dannon does not specifically represent that its products are either GMO-free or not given hormones or antibiotics.”

Dannon was represented by Angel Garganta and Brian Featherstun of Venable.

The Food and Drug Administration is currently reviewing its longstanding refusal to formally define the term “natural” when used on food labeling, which may put the kibosh on some of these suits.

In the meantime, Mayer Brown partner Keri Borders, who was not involved in the case but followed the litigation, applauded the ruling by Forrest.

“It's a terrific decision rejecting—at the very outset and before the court and parties spend significant time and resources—a lawyer-driven consumer class action against Dannon,” she said.

“These types of court decisions—that take a common-sense and careful look behind allegations of deception and find them legally baseless at the pleading stage—are all too rare, but this decision is consistent with a handful of decisions across the country rejecting far-flung false advertising theories built around the use of the word 'natural' to describe products.”

Shout Out: Simpson Thacher (Liability Limits? What Liability Limits?)

In other milk-related news (not a transition sentence I get to write every day)…

A team from Simpson Thacher & Bartlett won an international arbitration award of $125 million for French food group Danone after the company recalled infant milk products based on incorrect information from its supplier.

The recall came after New Zealand dairy giant Fonterra warned that its whey protein was potentially contaminated with botulism.

It turns out, it wasn't. According to the Financial Times, the incorrect technical information came from a third party. Still, Danone spent $125 million to pull its products in eight countries including China.

What makes the Simpson team's win especially noteworthy is that Fonterra's contract with Danone stipulated a liability limitation of $7.6 million—and indeed, that's all Fonterra in financial statements reported setting aside for the case.
The arbitrators apparently didn't care, and socked the company with a penalty that was more than 16 times higher.

In a news release, Fonterra's CEO, Theo Spierings, said, “We are disappointed that the arbitration tribunal did not fully recognize the terms of our supply agreement with Danone, including the agreed limitations of liability, which was the basis on which we had agreed to do business.” He also noted it was an arbitration, so the company has “limited options” (a.k.a. none) to challenge it.

The UNCITRAL international arbitration was conducted in Singapore and governed by English law.

The Simpson Thacher team for Danone included partner Tyler Robinson and retired partner Robert Smit; and associates Joshua Slocum, Alessia De Quincey and Lauren Brazier.

Fonterra was represented by Chapman Tripp, which bills itself as New Zealand's largest commercial law firm.

Side note: Are runaway arbitrators a new trend? In August, I wrote about a $41 million arbitration award to an ex-employee of Kargo Global Inc. for gender discrimination, retaliation, breach of contract, equal pay and wage law violations. Her original demand: $3 million. So much for arbitrators being in the pocket of defendants.

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A Remarkable Run

On Wednesday, Lambda Legal announced that Jon Davidson is stepping down as legal director after 13 years.

His legacy is truly impressive.

“Jon has led—with wisdom, with humility and with style—the largest LGBTQ legal team in the nation during the most thrilling and productive period in our movement's history,” wrote acting legal director Camilla Taylor in a tribute essay. “During Jon's tenure, Lambda Legal secured nationwide marriage equality, along with massive advances in the rights of LGBTQ and HIV+ people at work, at school, in health care, in immigration and criminal justice and beyond.”

More Legal News

RICO Class Action Ties Boies, K&L Gates To 'Weinstein Sexual Enterprise'
The complaint casts the lawyers and law firms surrounding Weinstein as central figures in the alleged scheme to cover up his misconduct.

Three Key Quotes From the Ninth Circuit's Travel Ban 3.0 Hearing
My favorite: When Neal Katyal said, “Boy, that's a dog that really didn't bark.”

California Judge William Alsup Writes SCOTUS to Correct Trump's DOJ
Judge Alsup does not appreciate being misquoted.

Auto Safety Group Wants Records Unsealed in Case Over Goodyear Tires
It sounds like a John Grisham plot: Did Goodyear and its lawyers cover up a major safety defect through confidential legal settlements?

Why Did Feds Hand Over Former Uber Employee's Explosive Letter in Waymo Fight?
It's unlikely that the U.S. attorneys' manual provides clear answers about what to do in such a situation—and former prosecutors are divided whether the feds handled it appropriately.

Ex-VW Compliance Chief Gets Maximum Sentence in Emissions Case
Seven years in prison and a $400,000 fine. That hurts.

Judge Sides With NFL Class Counsel in Fee, Claims Administration Disputes
More than $112 million is expected to be disbursed to attorneys representing the injured players, but lawyers have disputed how that money should be divided up and if they should get paid before all the players.

What You Should Be Reading

Almost 20 years ago, Scott Graham hired me as a cub reporter at The Recorder, ALM's legal newspaper in San Francisco.

Since then, I've counted him as a mentor and friend—and been awed by his command of law and journalism.

He's a particular expert on intellectual property, and recently launched a new briefing, “Skilled in the Art,” on everything IP. I encourage all of you—IP and non-IP specialists alike—to check it out on a free trial basis.

Here's an excerpt from Wednesday's edition:

Thursday is Pearl Harbor Day, so what more appropriate occasion for Oracle and Google to renew hostilities over the Java API copyright?

The tech giants will return to the Federal Circuit to once again argue whether Google's copying of 11,000 lines of code was fair use, as a San Francisco jury found last year.

Orrick's Josh Rosenkranz is back for Oracle, while King & Spalding partner Daryl Joseffer takes over for Google from Keker, Van Nest & Peters.

What's that, you say? The last appeal was about copyrightability, not fair use? Go back and listen to the argument. Nearly half of was about fair use and whether that issue had to be resubmitted to a jury—which had hung on it in the first trial—before the appellate court could decide it.

Which is why I make the following prediction: The Federal Circuit judges will huff and puff and say there's no way on earth they personally would consider Google's copying a fair use. And then they'll affirm the jury verdict of fair use.

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