Tuesday, October 26, 2010

Northern California Daily Digest

Here are some of the other recently decided cases in the U.S. District Court for the Northern District of California.

American Small Business League v. Small Business Administration is a case requesting documents under the Freedom of Information Act.  SBL wants SBA to provide, all "contracts or agreements between SBA [United States Small Business Administration] and any firm engaged in public relations, public relations consulting, or lobbying that was in effect during FY 2007."  SBA produced two contracts with redactions under exemption four which covers material that would be harmful to the party described in the document.  SBA moved to dismiss the complaint, stating that they provided all the records and the court lacked subject matter jurisdiction.  SBL disagreed stating that it wanted the information in the redactions.  Judge Saundra Brown Armstrong stated that the redactions were sufficient to give the court jurisdiction to hear the case.  She denied the motion to dismiss.

Chacanca v. The Quaker Oats Company is a putative class action regarding Quaker Chewy bars.  The bars are advertised as being healthy, yet the plaintiffs complain they contain a dangerous amount of Partially Hydrogenated Vegetable Oil (PHVO) and trans fat.  They allege this discrepancy violates the Lanham Act and is an unfair trade practice in violation of state law.  Judge Richard Seeborg explained that the Food Drug and Cosmetics Act preempted the state law false advertising claims with regard to nutrition claims and they lacked standing to pursue the Lanham Act claim.  However, the state law claims that focus on the term "wholesome,' on images of children, nuts, or oats, or the "smart choices made easy" language or decal will go into discovery.

Board of Trustees of the Sign, Picture and Display Industry Welfare and Pension Trust v. Event Productions, Inc. is a labor dispute.  Both parties are subject to a Collective Bargaining Agreement (CBA) which states that Event Productions will fund the trust on the basis of the number of reported covered hours worked.  The Trust complains that Event Products is deficient in its contributions by $37,437.97. The CBA contains a provision under Waggoner v. C&D Pipeline Co. (9th Cir. 1979) which requires contributions for all union employee hours worked including those hours not covered by the CBA.  Event Productions attempts to explain that Waggoner doesn't apply because the parties have never interpreted the CBA in this manner.  Judge Susan Illston stated that Waggoner applies and granted summary judgment for the trust.

In re Webkinz Antitrust Litigation is a class action antitrust action about the Webkinz stuffed animals distributed by Ganz USA.  Judge Richard Seeborg explains:
Plaintiffs are relatively small “mom and pop” retailers. They complain that Ganz, (1) has conditioned the sale of Webkinz to them on their purchase of unrelated Ganz products from its so-called "core product line," and (2) took orders for Webkinz, which it did not intend to deliver in a reasonably timely manner.
Judge Seeborg explained that the purchase of unrelated products is a "tying agreement" and it may impose antitrust liability where: (1) that the defendant tied together the sale of two distinct products or services; (2) that the defendant possesses enough economic power in the tying product market to coerce its customers into purchasing the tied product; and (3) that the tying arrangement affects a ‘not insubstantial volume of commerce’ in the tied product market.  Here, the first element is not disputed; the plaintiffs seek to prove the second element by website traffic and Ganz states that sales would be a better determining factor.  Judge Seeborg stated that there is no economic analysis at the pleading stage and that this was a sufficient allegation.    For the final element the plaintiffs allege that they could not buy competitor products because they had to purchase Ganz's products.  Judge Seeborg found this was sufficient and denied the motion to dismiss.

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