A federal court in New York has granted the motion for summary judgment filed by the owners of Kangadis Food Inc., a company that declared bankruptcy when faced with class claims that it falsely labeled its products as pure olive oil when they actually contain an industrially processed substance. Ebin v. Kangadis Family Mgmt. LLC, No. 14-1324 (U.S. Dist. Ct., S.D.N.Y., order entered October 24, 2014). Additional information about the litigation appears in Issue 539 of this Update.
According to the court, the “plaintiffs have failed to adduce competent evidence from which any reasonable juror could conclude that defendants used their alleged domination of Kangadis Food Inc. as a means to accomplish the fraud here alleged.” Counsel for the defendants reportedly surmised that the court agreed that the plaintiffs’ “derivative claims are nothing more than a desperate attempt to extract some value from the defendants, individuals and a separate entity with perceived deep pockets.” An opinion elaborating the ruling “will issue in due course”; until then, the proceedings are stayed and the court’s reasons for granting the relief remain unspecified. In September, the court dismissed direct claims against the company owners, but found that claims could proceed against them under veil piercing and alter ego theories. See Law360, October 24, 2014.