Sugar Companies and Corn Refiners Settle Lawsuit

Written by M. Sean High - Staff Attorney

On November 20, 2015, less than one month into a trial that pitted sugar companies against corn refiners, parties announced a settlement had been reached.  The lawsuit in question involved the advertisement of various health claims relating to high fructose corn syrup.  According to the parties, the terms of the settlement agreement are confidential.

In 2011, sugar companies brought suit against the Corn Refiners Association for using advertisements that referred to high fructose corn syrup as “corn sugar” and “natural.” Furthermore, the sugar companies disputed those advertisements that claimed high fructose corn syrup was “nutritionally the same as table sugar.”

According to the sugar companies, sugar and high fructose corn syrup are distinct products and any advertisement to the contrary is false and misleading.  The sugar companies claimed that this false advertisement resulted in damages in excess of $1.1 billion.  Relatedly,  in 2012, the Food and Drug Administration issued a ruling denying the Corn Refiners Association petition to use “corn sugar” as an alternate name for high fructose corn syrup.

In a joint statement announcing the settlement agreement, the parties expressed that they will “continue their commitments to practices that encourage safe and healthful use of their products, including moderation in the consumption of table sugar, high fructose corn syrup and other sweeteners.”

Insurance Company’s Request For Summary Judgment In Heinz Case Denied

Written by Katharine Richter

U.S. District Judge, Arthur Schwab, denied Starr Surplus Lines Insurance Co.’s (Starr) request for summary judgment against H.J. Heinz Co. regarding an insurance payment dispute.

According to Law360, the lawsuit arose because Starr, as alleged by Heinz Co., “breached its contract in a $25 million-per-occurrence product contamination by refusing to pay for damages after China’s food control agency found high levels of lead in high-protein dry baby cereal sold in China.”  Starr filed a counterclaim, alleging that Heinz misrepresented material facts pertaining to previous contamination incidents, therefore rendering the contract null.  This case is being decided under New York law and coverage cannot be denied to Heinz unless it is found that the misrepresentation by Heinz is material.  Starr claims if they had known about these previous incidents, they would not have extended the policy to Heinz Co.  If Starr is able to establish this, the facts will be considered material.  Heinz argued that any omission of the facts was because Starr failed to ask for it.

Schwab found there were still issues of fact that needed to be resolved which made summary judgment inappropriate.  According to the legalintelligencer, the specific issue that needs to be determined is whether the misrepresentations by Heinz Co., if there were any, were material and should be determined before a jury.  

USDA Motion to Dismiss Granted In Organic Case

Written by Katharine Richter

On October 9, the United States District Court of Northern California ruled in favor of the United States Department of Agriculture (USDA) motion to dismiss a complaint brought against them by the Center for Food Safety (CFA) and other consumer groups.  The groups had claimed the USDA did not issue a proper notice and comment period regarding a new review process for certified organic foods.

The complainants originally filed on September 16, 2013.  The USDA was seeking to revise which “substances may be used in food certified as ‘organic’ under the Organic Foods Production Act (OFPA).”  Under the act, there is a 15 member board called the National Organic Standards Board (NOSB), which determines what substances can be used in products and considered “organic” for labeling purposes.  USDA proposed a new framework that would alter the review process from requiring a two-third vote for renewal of allowable substances. to now requiring all members of the group to remove the substances from the allowable substance list. 

The Court found the plaintiffs lacked standing because they had failed to show the new review procedures would cause them any concrete harm.  The complainants will have 21 days to file an amended complaint.

Monsanto Facing Lawsuits for Glyphosate Exposure

Written by Tyler R. Etter

Two lawsuits have been brought against Monsanto, alleging that the company’s herbicide Roundup (glyphosate) caused their cancers. The suits have been filed in federal court in New York and California.

The complaints state that Monsanto has misled consumers regarding the safety of their herbicide, and are seeking punitive damages for harm caused by exposure to the products. Both complaints cite the recent report by the United Nation’s World Health Organization’s International Agency for Research on Cancer (IRAC) report about the safety of glyphosate. The IRACreport listed glyphosate as potentially carcinogenic to humans. The complaints allege that this report is proof that Monsanto has been misrepresenting the safety of glyphosate to consumers.

Monsanto has called the suits baseless, and claims that the IRAC report is unwarranted and misleading. The company cites more than 30 years of research and safety reviews from around the world that found glyphosate safe, when used as instructed.

The claims alleged are broad, based in strict liability, negligence, and failure to warn. The plaintiffs claim that Monsanto has known for decades that the products were unsafe, and concealed this information from the public. They want the case to be decided by a jury, as they feel punitive damages are appropriate for Monsanto’s actions.

Eight States Now Backing Vermont’s GMO Labeling Bill

Written by Tyler R. Etter

On August 31, 2015, the Attorney Generals of eight states filed an amicus brief in support of the hotly-contested Vermont GMO labeling bill. The states consist of Connecticut, Maine, Maryland, Massachusetts, Hawaii, Illinois, New Hampshire, and Washington. Of these states, Connecticut and Maine have enacted similar statutes to Vermont.

The labeling bill will require manufacturers to provide labeling on products to verify that a product is GMO-free. If the product is not GMO free, then a label must be provided that discloses in some manner that the product is produced with genetic engineering.

The bill has been challenged in court under the lead of the Grocery Manufacturers Association. The plaintiffs sought a preliminary injunction against the bill, which was denied in April of 2015. The plaintiffs appealed, stated that the bill will harm both companies and consumers.  The plaintiffs have since gained the support of the U.S. Chamber of Commerce, the American Beverage Association, Biotechnology Industry Organization, American Chemistry Council, National Cotton Council of America, and the National Corn Growers Association.

The amicus brief contends that Vermont’s law simply requires a “neutral, accurate factual statement.” The brief claims that the law does not mandate any statement that is not truthful or factual.

Oral arguments for the appeal are expected this fall. The outcome of the case will carry significant ramifications for the future of similar bills.

First Cucumber Salmonella Lawsuit Filed

Written by Katharine Richter  

On September 7, 2015, the first lawsuit related to a Salmonella outbreak that occurred due to tainted cucumbers distributed by Andrew & Williamson Fresh Produce Inc. was filed by Marler Clark law firm on behalf of Kathleen Dvergsten in the Minnesota United States District Court.

Kathleen Dvergsten of Minnesota allegedly contracted Salmonella after eating a contaminated salad at a Red Lobster on August 11, 2015.  According to filed complaint, the plaintiff was hospitalized from August 14 to August 20, where she was treated for Salmonella.  According to Marler Clark law firm press release, “285 people from 27 states [became] ill from eating Mexican-grown cucumbers imported by California company [Andrew & Williamson].”

The causes of action being brought against Andrew & Williamson Fresh Produce Inc. are strict liability, breach of warranty, negligence, and negligence per se.

Chipotle Faces Class Action Lawsuit Over ‘GMO-Free’ Advertising

Written by Katharine Richter

On August 28, 2015, Kaplan Fox & Kilsheimer LLP filed a class action complaint in the United States District Court for the Northern District of California against Chipotle Mexican Grill, Inc. The complaint claims Chipotle violated the “California Consumer Legal Remedies Act, the California False Advertising Law, and the California Unfair Competition Law” due to Chipotles claim of using non-GMO ingredients.  

According to the complaint filed, around April 27, 2015, Chipotle began advertising it was using only GMO free ingredients.  The complaint alleges this “was a strategic marketing campaign to entice new health-minded consumers and retain current ones.”  The complaint mentions the GMO free marketing was prominent, being featured on billboards, social media, and store fronts; chipotle even tweeted they were “’literally dropping’ the letter G, M, and O from their menu, including taking out the ‘O’ in ‘Chicken Burrito’…even though Chipotle knew that its meat products come from animals that consume GMO feed.”     

The complaint alleges that Chipotle’s claims it was GMO free were false, misleading and deceptive.  According to the complaint, Chipotle’s “omissions regarding the GMOs used in certain of the meat and dairy ingredients it uses in its Food Products, have been, and continue to be, material to consumers…and Defendant knows that its misleading representations are material in nature.”  After Chipotle launched the non-GMO advertising, it continued to use meat and dairy products from animals which were fed GMO products and soda containing GMOs.    

Twelve Waters of the U.S. Lawsuits Consolidated

On July 29, 2015, the United States Judicial Panel on Multidistrict Litigation approved the Environmental Protection Agency (EPA) and Army Corps of Engineers request that twelve different lawsuits filed in relations to the Waters of the United States (WOTUS) rule be consolidated.  The panel randomly chose the Sixth Circuit Court to hear the consolidated cases.

Some of the lawsuits consolidated were filed against the EPA by environmental groups who want stricter pollution protection.  The rest of the lawsuits were filed by industry groups and states who believe the EPA has overstepped its bounds and argue for rules that will not so greatly burden businesses.

It is expected the consolidation of the lawsuits will help bring a faster resolution to the challenges.   

Written by Katharine Richter - Research Assistant

July 31, 2015

Avian Influenza Struck Egg-Layer Farm Company Hit with Breach of Contract Lawsuit

  On June 26, 2015, Michael Foods Egg Products Co. filed suit against Hawkeye Pride Egg Farms, LLP, in the United States District Court for Southern District of Iowa.  The claim alleges Hawkeye Pride breached a January 2014 contract in which they were to supply eggs to Michael Foods.  Michael Foods is claiming they suffered irreparable harm and are seeking injunctive relief enjoining Hawkeye from breaching the contract and judgment for damages sufficient to compensate plaintiffs for the breach as well as interest and costs.

  The case was brought into federal court and the exact amount of damages requested is unknown.  The contract at issue has been sealed and is unavailable for viewing. 

  Michael Foods is a subsidiary of cereal producers Post Holdings Inc., and supplies liquid and precooked eggs products primarily.  Hawkeye Pride, located in Iowa, is a division of Center Fresh Group which owns egg farms in Iowa.  Center Fresh Group has lost approximately 7 million chickens in Iowa to Avian Influenza, 5.5 million of which were egg-laying hens.

  The death of more than 30 million laying hens in Iowa has contributed to a deficit in egg availability.  In a USDA report released June 22, 2015, Iowa egg production during May 2015 was 1.03 billion eggs, which is the lowest egg production since February 2005.  The average amount of layers for May 2015 was 44.2 million, this is the lowest inventory since May 2004.      

  Those with access can view Docket No. 4:15-cv-187 at PACER. 

Written by Katharine Richter - Research Assistant

July 2, 2015

States File Suit Challenging WOTUS

The Waters of the United States (WOTUS) rule has given rise to three separate lawsuits against the Environmental Protection Agency and the United States Army Corps of Engineers, with multiple states behind each suit.

The first suit has been filed in the District of North Dakota, joined by the states of Alaska, Arizona, Arkansas, Colorado, Idaho, Missouri, Montana, Nebraska, Nevada, South Dakota, Wyoming, as well as the New Mexico Environment Department and New Mexico State Engineer. The suit seeks declaratory and injunctive relief against the WOTUS rule, stating that WOTUS “unlawfully expands the Agencies’ jurisdiction over state land and water resources beyond…the Clean Water Act.” The suit is seeking the relief under violations of the Administrative Procedure Act, the Clean Water Act, the National Environmental Policy Act, the Commerce Clause of the U.S. Constitution, and the Tenth Amendment.

The second suit has been filed in the U.S. District Court for the Southern District of Georgia, joined by Alabama, Florida, Kansas, Kentucky, South Carolina, Utah, West Virginia, and Wisconsin. The requested relief is to vacate the WOTUS rule, enjoin enforcement of the rule, and for any other relief deemed proper, for “usurp[ing] the States’ primary responsibility for the management, protection, and care of intrastate waters...” The suit is seeking the relief under violations of the Administrative Procedure Act, the Clean Water Act, the Commerce Clause of the U.S. Constitution, and the Tenth Amendment.

The third suit has been filed in the Southern District of Texas, joined by Mississippi and Louisiana. The suit calls the rule an “unconstitutional and impermissible expansion of federal power over the states and their citizens and property owners.” The relief sought by the suit is for the rule to be vacated, enjoined from enforcement, and for any other relief deemed proper. The legal theory for the relief is under violation of the Clean Water Act, the Administrative Procedure Act, and the United States Constitution.

All information has been gathered from the filed complaints obtained from www.pacer.gov.

Written by Tyler R. Etter- Research Assistant
July 1, 2015

Chesapeake Bay Update: Farm Groups Appeal Chesapeake Bay Ruling

On October 8, the American Farm Bureau Federation and the National Corn Growers Association are among the groups who said they have each filed a notice to appeal the September 13^th federal district court decision which upheld the Environmental Protection Agency’s rights to work with the six states in the 64,000 square foot Chesapeake Bay watershed to regulate runoff.

AFBF, the Pennsylvania Farm Bureau, the Fertilizer Institute, the National Chicken Council, the U.S. Poultry & Egg Association, National Pork Producers Council, National Corn Growers Association, National Turkey Federation, and the National Association of Home Builders originally filed suit in January 2011 in federal district court in Harrisburg, Pennsylvania.  The ruling of Judge Sylvia Rambo gave EPA wide discretion to work on a “pollution diet” saying in her decision that “[t]he EPA is within its rights under the Clean Water Act to partner with the six states in the bay watershed to cut the pollution that pours in from sewers and construction developments, and particularly chemical and biological waste from farms.”

The AFBF press release states that AFBF seeks an appeal “to preserve the primary role of states in setting land use policy and determining how to achieve water quality goals.”  According to AFBF, “the Clean Water Act puts states in the drivers’ seat to determine how farmers, builders, homeowners and towns will share the responsibility of achieving clean water.  EPA’s framework puts EPA in control of these decisions.”

For more information on the appeal, see the AFBF press release.  For more information on the district court ruling, see the District Court Opinion and our September 16 blog post.  Visit the Penn State Agricultural Law Center’s Chesapeake Bay Resource Area for further resources.

Written by Alyssa Looney – Research Assistant

The Agricultural Law Resource and Reference Center

@PSUAgLawCenter

October 9, 2013