The FDA is expected to announce a final rule that could effectively eliminate most trans fat from food in the United States.  In 2013 the FDA announced its preliminary finding that partially hydrogenated oils (PHOs) – – the source of most trans fatty acids in American’s foods – – are not generally recognized as safe (GRAS) for use in any food.  If the FDA makes final its preliminary finding, PHOs will no longer enjoy GRAS status and will be subject to greater scrutiny by the FDA.

The regulation of trans fats can be traced back to 1999 when the FDA first proposed that manufacturers be required to declare the number of grams of trans fat on their nutrition labels.  Due to growing public health concerns, the FDA finalized this rule in 2006.  That rule resulted in reduced amounts of trans fat in food products.  A final rule that strips trans fat of GRAS status would subject food products with trans fat to greater scrutiny and may effectively eliminate all trans fat from those products.
Continue Reading FDA Poised to Ban Most Trans Fats

The Seventh Circuit has struck down a common feature of preliminary approval orders of federal class action settlements. The Seventh Circuit held that a federal court may not preliminarily enjoin class members from prosecuting related state lawsuits while the court decides whether to give final approval to the class settlement.  Adkins v. Nestlé Purina PetCare Co., No. 14-3436, 2015 WL 864931 (7th Cir. Mar. 2, 2015).

These types of preliminary injunctions are commonly used in a broad range of consumer and other class settlements, and they are particularly important when a defendant is facing several competing class actions on the same issue.  But the Seventh Circuit held that these injunctions violate the Anti-Injunction Act, 28 U.S.C. § 2283—even though the court acknowledged that federal settlements “may well collapse” if state actions go to judgment before federal courts can approve the settlements.    
Continue Reading Seventh Circuit Guts Important Tool for Resolving Federal Class Actions

In California, a federal judge approved a class certification motion in a suit against ConAgra Food Inc. for alleged mislabeling of its Wesson oil products.  The dispute is based on allegations that ConAgra mislabeled oil as “100% natural.”  Plaintiffs argue the oil is not natural because it contains genetically modified ingredients. Further up the coast in Oregon, voters will decide this fall whether to require genetically modified food sold in the state to be labeled as such.  This issue has come up in several states, including Washington and California, where voters have rejected similar proposals in recent years.

The California case, In re: Conagra Foods Inc., includes certified classes of consumers from California, Colorado, Florida, Illinois, Indiana, Nebraska, New York, Ohio, Oregon, South Dakota, and Texas.  U.S. District Judge Margaret M. Morrow will allow plaintiffs to pursue claims brought under the states’ various consumer protection statutes, but she will not allow an injunctive relief class to proceed.
Continue Reading Updates on West Coast GMO Battles

Mass tort and consumer product class actions are on the rise as courts grow more willing to certify classes solely on the issue of liability. In the past, certification of such class actions was rare, because courts generally forced the named plaintiff to demonstrate that common issues predominated across an entire claim before any portion of the action could be certified. Recently, some courts have held that FRCP 23(c)(4), which states, “[w]hen appropriate, an action may be brought or maintained as a class action with respect to particular issues,” allows for the resolution of liability on a class-wide basis, regardless of how individualized other aspects of the claim may be. In other words, one jury could be asked to determine whether a product is defective on a class-wide basis, and that decision could apply to every individual purchaser’s claims across the state or country. Courts have also certified issue classes on settlements, cause-in-fact, and punitive damages.

Continue Reading The Rise of Issue Class Certification Presents New Risks For Mass Tort and Consumer Product Defendants

On Monday, December 15, the U.S. Supreme Court issued an opinion that makes it easier for defendants to remove class actions to federal court under the Class Action Fairness Act of 2005 (“CAFA”). Dart Cherokee Basin Operating Co. v. Owens does so in three ways:

1.     A defendant’s Notice of Removal does not have to include evidentiary submissions to establish federal jurisdiction under CAFA.  A CAFA class action can be removed to federal court if the amount in controversy – i.e. value of the case – exceeds $5 million.  Under Dart, defendants need only make a “plausible allegation” that the value of the case satisfies this jurisdictional amount.  Evidence supporting the amount alleged is not required. This “plausible allegation” standard echoes the “short and plain statement” pleading standard in Federal Rule of Civil Procedure 8(a). If neither the plaintiff nor the district court contests the defendant’s allegations regarding the amount in controversy, no “evidence” is necessary.  But if the allegations are contested, both sides submit proof, and the court will decide, by a preponderance of the evidence standard, whether the amount in controversy is met.
Continue Reading Supreme Court Eases Removal of CAFA Actions

“Made in the USA” does not necessarily mean the same thing outside of California.  In a recent decision, Paz v. AG Adriano Goldschmied Inc., a federal judge refused to dismiss a class action “Made in the USA” lawsuit, based on California’s strict regulation about the use of “Made in the USA” labels, suggesting that retailers may need to use different labels on the same goods depending on whether they are being sold inside or outside of California.

The issue stems from the fact that California is the only state in the union with its own statute governing the use of “Made in the USA” labels on consumer products.  Most states use the Federal Trade Commission’s (FTC) regulation, which requires “all or virtually all” of the product be made in the United States to qualify for a “Made in the USA” label.  The FTC regulation allows small amounts of foreign parts to be included as long as the product’s final assembly or processing happens in the U.S.  In contrast, California’s stricter regulation prohibits use of the label if the merchandise “or any article, unit, or part thereof, has been entirely or substantially made, manufactured or produced outside the United States.”
Continue Reading “Made in the USA” Continues to be Fodder for Class Action Lawsuits

Speculative risk of future injury is not enough to support a class action claim according to a recent decision from the First Circuit. On November 4, 2014, the First Circuit affirmed the United States District Court of Massachusetts’ decision to dismiss a putative class action for lack of standing, finding that the alleged risk of future injury was too speculative to give rise to a case or controversy.

In Kerin v. Titeflex Corp., the named plaintiff alleged that corrugated stainless steel natural gas tubing manufactured by the defendant and built-in to residential homes was vulnerable to puncture in the event of a nearby lightning strike, which could instigate a natural gas-fueled fire.  The putative class action asserted design defect, manufacturing defect, and failure to warn claims against the manufacturer, seeking damages of overpayment for a defective product and the cost of replacing the tubing with a safer alternative.
Continue Reading First Circuit Deals a Blow to Speculative Risk Class Actions

A putative class action plaintiff’s affidavit  claiming that they qualify to be a class member may not be sufficient in many cases going forward.  This “self-selection” of class members is coming under fire from more federal courts.  A growing trend suggests that courts have started taking a harder look at how class membership is defined under Rule of Civil Procedure 23, and demanding that named plaintiffs show that the proposed class is ascertainable when there is no reasonably objective means of determining class membership – i.e. no receipts or business records establishing proof of purchase in consumer product class action.

Ascertainability requires an administratively feasible means of identifying class membership using objective criteria.
Continue Reading Self-Selection of Lawsuit Class Members Coming Under Fire

The National Highway Traffic Safety Administration (“NHTSA”) issued a final rule requiring vehicle manufacturers to install rear view cameras in all vehicles by May 1, 2018.  Will this new rule lead to new avenues of litigation risk and potential liability for vehicle manufacturers?  If past history is a guide, the answer may well be yes.

This new rule, announced on April 7, 2014, applies to all vehicles under 10,000 pounds gross vehicle weight, excluding motorcycles and trailers.   NHTSA established a 48-month phase-in period for manufacturers to equip vehicles with rear view cameras.  The phase-in period runs from May 1, 2016 to May 1, 2018.  The rear view cameras must have a 10-foot by 20-foot field of view directly behind the vehicle.  Small volume and multi-stage vehicle manufacturers are excluded from the phase-in but must comply with all requirements by May 1, 2018.
Continue Reading Rear-View Liability: NHTSA Issues New Rule Requiring Rear Visibility Technology