A New York bankruptcy court and federal court have issued orders certifying classes in litigation against Kangadis Food, Inc. d/b/a The Gourmet Factory and related entities, alleging that the company falsely labeled its products as “100% Pure Olive Oil” when they actually contain the industrially processed substance “olive-pomace oil,” “olive-residue oil” or “Pomace.” In re Kangadis Food Inc., No. 14-72649 (U.S. Bankr. Ct., E.D.N.Y., order entered September 19, 2014); Ebin v. Kangadis Family Mgmt. LLC, No. 14-1324 (U.S. Dist. Ct., S.D.N.Y., order entered September 18, 2014). Additional information about the federal court proceeding appears in Issue 507 of this Update.
While the federal court dismissed the direct claims against the company’s owners, it found that the claims could proceed against them “under the veil piercing and alter ego theories.” The court further rejected the defendants’ “ascertainability” challenge to class certification, noting that “whether or not an individual purchased during the class period a tin of Capatriti in the United States labeled ‘100% Pure Olive Oil’ that actually contained Pomace is about as objectively determinable a question as one can ask. . . . Although the limitations of both [the defendant’s] records and the retailers’ records may make it somewhat challenging to identify every single class member, there is no requirement that all class members be identified; what is required is merely individual notice to those class members ‘who can be identified through reasonable effort.’ Finally, concerns that fraudulent claims would dilute recovery are misplaced and should not preclude class certification.”