The litigation arena for the consumer products industry is as active as ever. Each newsletter we bring you a summary of the most important litigation developments from the past two months, from complaint filings and key court decisions to trial results and settlements. For more information about these and other developments, please visit our Food & Beverage Industry Tracking Report.
Amazon.com Blinded by Class Action Regarding ‘Defective’ Solar Eclipse Glasses
A South Carolina couple filed a putative class action in federal court against Amazon.com on August 29, 2017, claiming that allegedly defective solar eclipse glasses sold by the online retailer caused them to experience central blind spots, impaired vision, discomfort, and dizziness after wearing the American Paper Optics glasses to watch the August 21, 2017 eclipse. Plaintiffs seek restitution, an injunction and damages for negligence, negligent misrepresentation, unjust enrichment, breach of warranty, negligent failure to warn, deceptive trade, and consumer law violations. Thomas Corey Payne et al. v. Amazon.com, Case No. 2:17-cv-2313-PMD, U.S. District Court for the District of South Carolina.
Equifax Hit With Multiple Suits One Day After Announcing Massive Data Breach
Just one day after disclosing a massive cyberattack potentially affecting the personal data of almost 143 million consumers, Equifax was hit with class actions in Georgia and Oregon. Both lawsuits allege that Equifax failed to secure personally identifiable information (PII), though the Georgia plaintiffs also allege that Equifax knew of the breach as early as late July but elected to keep its customers in the dark. The Georgia plaintiffs seek costs associated with the detection and prevention of identity theft and unauthorized use of their financial accounts, damages arising from the inability to use their PII and access to their account funds, the loss of their privacy, and potential fraud and identify theft posed by their PII being placed in the hands of criminals, while the Oregon plaintiffs request compensation for third party credit repair and monitoring services. McGonnigal et al. v. Equifax Inc., Case No. 1:17-cv-03422, in the U.S. District Court for the Northern District of Georgia, and McHill et al. v. Equifax Inc., Case No. 3:17-cv-01405, in the U.S. District Court for the District of Oregon.
Beachbody LLC Pays $3.6 Million to Settle Recurring Charge Case
California fitness company Beachbody LLC, which sells supplements and fitness videos such as P90x, has agreed to pay $3.6 million to settle a lawsuit brought by Santa Monica prosecutors accusing it of subjecting customers to recurring credit card charges without consent. Beachbody, which has 23 million customers, will pay $2.6 million in fines and $1 million in restitution to nutrition and health-focused nonprofits, and will now be required to prominently disclose renewal terms, allow subscription cancellations, and issue notifications of renewal dates. The company must also alter its website and provide credible scientific support for the health claims of its supplements, which prosecutors alleged were misleading. After announcing the settlement, the City Attorney called the agreement “an important victory to ensure that consumers will not be subject to recurring charges imposed without their clear approval and consent.” People of the State of California v. Beachbody LLC, Case No. 55029222, Superior Court for the State of California, Los Angeles County.
Payment Processing Company Pays $52 Million to Restaurants and Retailers to End Bogus Fee Claims
On September 1, 2017, a Georgia federal judge approved a $52 million settlement to end class claims that Mercury Payment Systems LLC, a payment processing company, charged restaurants and retailers fabricated fees in violation of its contracts. The settlement uses an allocation system to account for size and volume differences among the class members and also provides for performance awards to the class representatives. Multiple plaintiffs objected to the deal, including one plaintiff who argued that the $17.33 million in attorneys’ fees were unwarranted. Notwithstanding the objections, the court found that the deal was fair and determined that all objections were meritless, ending the class action case filed in January 2016. Champs Sports Bar & Grill Co. et al. v. Mercury Payment Systems LLC et al., Case No. 1:16-cv-00012, U.S. District Court for the Northern District of Georgia.
Johnson & Johnson Hit With $417 Million Award in Talcum Powder Case
A Los Angeles Superior Court jury ordered Johnson & Johnson to pay $417 million in damages to a 63-year-old medical receptionist who developed ovarian cancer after using the company’s talcum powder since age 11. The plaintiff claimed that Johnson & Johnson knowingly withheld decades of knowledge of talc’s dangers from its customers in order to protect sales of the product. The case is the first ovarian cancer talc trial in state court outside of Missouri, where much of the prior talc litigation was centered, and proceeded against Johnson & Johnson alone after the talc supplier was released on summary judgment. The verdict came shortly after the court excluded ‘specific causation’ testimony by the plaintiff’s epidemiology expert, but permitted causation testimony by her gynecologic expert following a lengthy Sargon hearing. Eva Echeverria et al. v. Johnson & Johnson et al., Case No. BC628228, Superior Court of the State of California, County of Los Angeles.
Federal Judge Throws Out Portion of False Ad Suit in Generic Viagra Case
On September 8, 2017, a California federal judge dismissed a RICO claim against a nutritional supplement company brought by a competitor alleging the defendants are engaged in false and misleading advertising. According to the plaintiff, the defendant advertises and sells illegal chemicals (including generic versions of Viagra and Cialis) to consumers as “research chemicals” that are “not for human consumption” in an alleged effort to avoid FDA regulation. The plaintiff alleged that the defendants were engaged in a comprehensive scheme to obtain money and property through fraud, but the judge pointed out that the plaintiff was unable to allege sufficient facts to allege a pattern of racketeering activity. Thus, while the plaintiff’s false advertising claims under the Lanham Act remain, the RICO claims were dismissed. Nutrition Distribution LLC v. PEP Research, LLC, et al., Case No. 16cv2328-WQH-BLM, U.S. District Court for the Southern District of California.
Naked Juice Can’t Bounce ‘No-Sugar Added’ Class Action With Unauthenticated Evidence
A California judge rejected Naked Juice’s attempts to bounce a putative class action this week, saying that the plaintiff adequately alleged the company’s coconut water label was deceptive and misleading. The plaintiff claims that PepsiCo and its subsidiary Naked Juice improperly market coconut water with a “no sugar added” claim on its label in violation of FDA regulations addressing juice products that do not normally contain added sugar. Because coconut water does not typically contain sugar, the plaintiff claims, Naked Juice’s label is misleading and illegal. Though Naked Juice insisted that the court should consider a recent letter from the director of the FDA’s Center for Food Safety and Applied Nutrition addressing the “no sugar added” concern that it claims dispositively decides the issue in its favor, the judge declined to take judicial notice of the letter as it was not authenticated. Naked Juice intends to file a public records request with the FDA to get an official copy of the letter; in the interim, Naked Juice’s motion to dismiss is denied. Malawi Karim v. Naked Juice Co. of Glendora et al., Case No. BC649121, and Sonia Perez v. Naked Juice Co. of Glendora et al., Case No. BC649296, Superior Court of the State of California, County of Los Angeles.