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Here are the highlights from our analysis of litigation during the week of Feb. 17:
► A string of class actions accuses businesses of mislabeling products as ‘made in the USA.’
► Shareholder suits take aim at Fortune 500 companies for falling short of revenue projections.
► Food and beverage companies were hit with a wave of class actions.
► An environmental group is going after the Trump administration.
► Video game companies are cracking down on sales of counterfeit goods.
Litigation Surge – Consumer Protection | Kazerouni Law Group
The Kazerouni Law Group is backing a flurry of consumer class actions in California federal courts alleging that ‘made in the USA’ or similar labels on food items and consumer goods are deceptive because the products contain ingredients from other countries. For instance, PepsiCo is accused of mislabeling Pure Leaf Tea as ‘brewed in USA’ even though tea and other ingredients are not grown or sourced in the U.S., and It’s a New 10 LLC was sued for labeling its hair care products as ‘made in the USA’ when the products allegedly contain foreign ingredients like palm oil, tea leaf extract and hydrolyzed silk. Other defendants include Goya Foods, McCormick & Co. and Mielle Organics.
Litigation Surge – Fortune 500 | Securities
Major companies were hit with a swarm of federal securities lawsuits during the week of Feb. 17. At least nine securities cases targeting Fortune 500 businesses were initiated in federal court, triple the usual weekly average. What triggered the surge? Several lawsuits accuse companies of failing to disclose inventory backlogs and declining sales caused by weakening demand; for instance, memory and storage device producer Micron Technology was hit with a pair of lawsuits claiming that the company concealed a drop in revenue based on slow market activity in the semiconductor industry, and a Feb. 21 suit against Hasbro alleges that the business failed to disclose a decline in demand for toys after the COVID-19 pandemic.
Litigation Surge – Food, Beverage & Tobacco | Class Actions
Major food and beverage companies were swarmed with class actions, according to Law.com Radar. Between Feb. 17 and Feb. 21, the platform surfaced 13 federal class actions targeting businesses on Radar’s sector watchlist, four times higher than the typical weekly average. Several cases pursue false advertising claims, including a pair of lawsuits brought by the Kazerouni Law Group in California alleging that ‘made in the USA’ or similar labels on PepsiCo’s iced tea products and McCormick’s mustard products are deceptive because the products contain ingredients from other countries. PepsiCo was also hit with an antitrust class action on Feb. 17 claiming that the company engages in unlawful price discrimination by charging smaller convenience stores higher prices than it charges larger grocery chains for Frito-Lay products.
Litigation Surge – Environmental | Center for Biological Diversity
The Center for Biological Diversity launched a cluster of environmental lawsuits against the Trump administration on Feb. 18 and Feb. 19. At least four federal cases were filed by the nonprofit organization in Alaska, Idaho, Oregon and Texas. The claims vary: One suit challenges President Donald Trump’s recent executive order cancelling former President Joe Biden’s protection of certain areas from oil and gas development, while another suit contends that the expansion of an open-pit mine in Idaho would eliminate local fish and wildlife habitats. Also, the U.S. Department of Agriculture is accused of failing to properly assess the impact of predator killing on mountain lion and black pear populations in Texas, and the National Marine Fisheries Service was sued for allegedly failing to list Chinook salmon as endangered.
Litigation Surge – Gaming & Esports | Illinois
Law.com Radar detected a cluster of lawsuits in the gaming and esports industry in Illinois Northern District Court. Six cases were surfaced by the platform during the week of Feb. 17, more than half of which seek to enjoin e-commerce operators from selling counterfeit merchandise and other goods; plaintiffs include Atari, Mob Entertainment, P4S and Sony.
Also of note, a Feb. 19 class action accuses online casino platforms Zula Casino and Sportzino of deceptively marketing their websites as free-to-play ‘sweepstakes’ casinos when in fact the platforms are unlicensed gambling platforms. The complaint alleges that while ‘Gold Coins’ purchased by customers to play casino games on the platforms cannot be redeemed for real money, the coins are unlawfully bundled with ‘Sweepstake Coins’ which can be wagered on casino-style games and redeemed for cash. The suit is part of a string of cases targeting gambling platforms: DraftKings was hit with a similar swarm of lawsuits in January over allegedly misleading promotional statements, and on Feb. 26, Underdog Fantasy was hit with a class action claiming that its ‘interactive fantasy’ contests are actually unlicensed gambling operations.
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