Articles Posted in US Court of Appeals for the Seventh Circuit

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Minerva, an Ohio‐based, family‐owned dairy company, produces Amish‐style butters in small, slow‐churned batches using fresh milk supplied by pasture‐raised cows. Minerva challenged Wisconsin’s butter‐grading requirement under the Due Process Clause, the Equal Protection Clause, and the dormant Commerce Clause. Wisconsin’s law applies to butter manufactured in‐state and out‐of‐state and provides that butter may be graded by either a Wisconsin‐licensed butter grader or by the USDA. Wisconsin’s standards are materially identical to the USDA’s standards. The district court rejected the challenges on summary judgment, holding that the statute is rationally related to Wisconsin’s legitimate interest in consumer protection and does not discriminate against out‐of‐state businesses. The Seventh Circuit affirmed. Consumer protection is a legitimate state interest; the butter‐grading requirement is rationally related to the state’s legitimate interest in “protect[ing] the integrity of interstate products so as not to depress the demand for goods that must travel across state lines.” The state presented some evidence that the statute effectively conveys consumer preferences. The statute does not violate the Equal Protection Clause simply because Wisconsin failed to implement mandatory grading for other commodities. Wisconsin’s butter‐grading law confers a competitive advantage on prospective butter-graders who live closer to testing locations but this geographical fact of life does not constitute discrimination against out‐of‐state applicants. View "Minerva Dairy, Inc. v. Harsdorf" on Justia Law

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Arla, a Denmark-based global dairy conglomerate, launched a $30 million advertising campaign aimed at expanding its U.S. cheese sales, branded “Live Unprocessed.” The ads assure consumers that Arla cheese contains no “weird stuff” or “ingredients that you can’t pronounce,” particularly, no milk from cows treated with recombinant bovine somatotropin (“rbST”), an artificial growth hormone. The flagship ad implies that milk from rbST-treated cows is unwholesome. Narrated by a seven-year-old girl, the ad depicts rbST as a cartoon monster with razor-sharp horns. Elanco makes the only FDA-approved rbST supplement. Elanco sued, alleging that the ads contain false and misleading statements in violation of the Lanham Act. Elanco provided scientific literature documenting rbST’s safety, and evidence that a major cheese producer had decreased its demand for rbST in response to the ads. The Seventh Circuit affirmed the issuance of a preliminary injunction, rejecting arguments that Elanco failed to produce consumer surveys or other reliable evidence of actual consumer confusion and did not submit adequate evidence linking the ad campaign to decreased demand for its rbST. Consumer surveys or other “hard” evidence of actual consumer confusion are unnecessary at the preliminary-injunction stage. The evidence of causation is sufficient at this stage: the harm is easily traced because Elanco manufactures the only FDA-approved rbST. The injunction is sufficiently definite and adequately supported by the record and the judge’s findings. View "Eli Lilly and Co. v. Arla Foods USA, Inc." on Justia Law

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Arla, a Denmark-based global dairy conglomerate, launched a $30 million advertising campaign aimed at expanding its U.S. cheese sales, branded “Live Unprocessed.” The ads assure consumers that Arla cheese contains no “weird stuff” or “ingredients that you can’t pronounce,” particularly, no milk from cows treated with recombinant bovine somatotropin (“rbST”), an artificial growth hormone. The flagship ad implies that milk from rbST-treated cows is unwholesome. Narrated by a seven-year-old girl, the ad depicts rbST as a cartoon monster with razor-sharp horns. Elanco makes the only FDA-approved rbST supplement. Elanco sued, alleging that the ads contain false and misleading statements in violation of the Lanham Act. Elanco provided scientific literature documenting rbST’s safety, and evidence that a major cheese producer had decreased its demand for rbST in response to the ads. The Seventh Circuit affirmed the issuance of a preliminary injunction, rejecting arguments that Elanco failed to produce consumer surveys or other reliable evidence of actual consumer confusion and did not submit adequate evidence linking the ad campaign to decreased demand for its rbST. Consumer surveys or other “hard” evidence of actual consumer confusion are unnecessary at the preliminary-injunction stage. The evidence of causation is sufficient at this stage: the harm is easily traced because Elanco manufactures the only FDA-approved rbST. The injunction is sufficiently definite and adequately supported by the record and the judge’s findings. View "Eli Lilly and Co. v. Arla Foods USA, Inc." on Justia Law

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The National Organic Standards Board, an advisory committee, has 15 members, all appointed by the Secretary of Agriculture, 7 U.S.C.6518(b), (c); its principal task is advising the Secretary what belongs on the “National List of approved and prohibited substances that shall be included in the standards for organic production and handling” Plaintiffs, who operate organic farms, asked the Secretary to appoint them to the Board, but the Secretary appointed Beck and Swaffar. Plaintiffs contend that Beck and Swaffar are ineligible to fill the seats to which they were appointed. The Seventh Circuit affirmed the dismissal of the suit for lack of standing. Beck and Swaffer, appointed to seats reserved for “individuals who own or operate an organic farming operation,” were office employees of agribusinesses that produce some organic products and some non-organic products. Plaintiffs argued that by deflecting the Board from making recommendations most likely to promote organic farmers’ interests, Beck and Swaffar have called organic-farming into disrepute and reduced organic sales; that is not the kind of person-specific loss needed to show standing. Any injury plaintiffs assert could not be redressed by a favorable decision. The Secretary has a statutory right to appoint Board members but no corresponding duty to evaluate any particular applicant. View "Cornucopia Institute v. United States Department of Agriculture" on Justia Law

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From 2006-2012 Packerland deceived at least one of its customers about the protein content of its Whey Protein Concentrate. Land O’Lakes purchased Packerland’s protein concentrate for use in making foods for calves and other young animals. Buyers infer protein levels from measuring nitrogen: a seller can add another nitrogen-rich substance to produce higher scores. The Ratajczaks, who owned Packerland, started adding urea to its protein concentrate. in 2006. Land O’Lakes suspected that the concentrate was high in nonprotein nitrogen but could not learn why; the Ratajczaks made excuses that Land O’Lakes accepted. The Ratajczaks sold Packerland in 2012. The new owner kept them as employees; they kept adding urea until the buyer learned what the truth. The Ratajczaks lost their jobs and settled for about $10 million before the buyer filed a complaint. Land O’Lakes stopped buying Packerland’s product and asserted claims of breach of contract, fraud, and violation of the Racketeer Influenced and Corrupt Organizations Act. Packerland’s insurers refused to defend or indemnify it or the Ratajczaks; the Ratajczaks’ personal insurer refused to indemnify them for their settlement with Packerland’s buyer. The district court dismissed Land O’Lakes’s suit and ruled in favor of the insurers. The Seventh Circuit affirmed, rejecting Land O’Lakes’ claim to treble damages under RICO and state-law and the Ratajczaks’ claims that Packerland’s insurers and their own insurers had to defend and indemnify them. View "Land O'Lakes, Inc. v. Ratajczak" on Justia Law