ContractsProf Blog

Editor: Jeremy Telman
Valparaiso University Law School

Tuesday, February 23, 2021

Judge Shaves the Foam off the Cold Brew Served up at Red Robin

I guess this is a breach of Red Robin contract case.  As reported here (and elsewhere), a bunch of Stella Artois enthusiasts filed a nationwide class action against Red Robin, alleging that they had paid for sixteen-ounce beers but were served in fourteen-ounce glasses. If you multiply those two ounces by all the sales at the franchise-owned stores, you get yourself to the $5 million amount in controversy requirement and qualify to make a claim under the Class Action Fairness Act.  Or so Red Robin Claimed in trying to move the case to federal court.  U.S. District Judge Jennifer Dorsey rejected Red Robin's math and remanded back to state court.  Red Robin's calculations left out the inconvenient fact that  the issue was only two ounces of beer per each sixteen-ounce sale and that not all beer sales were for sixteen-ounce beer sales.

StellaJudge Dorsey then lit up Red Robin with beer puns:

  • Red Robin's figures are mostly foam 
  • [Plaintiff's] remand motion takes the fizz out of those numbers
  • Red Robin distills this number down further
  • [T]emperance must be exercised
  • Red Robin tries to tap into sales 
  • Nor has Red Robin shown that a fee award will get it to the fill line
  • Red Robin attempts to satisfy [its] burden with a strange brew
  • Red Robin makes no effort to address that stout disparity

I'm generally not a fan of jokey legal opinions, as it denigrates the parties' claims.  But as this is only a ruling on a procedural motion in a case where not much seems to be at stake, I raise my glass to Judge Dorsey.

[h/t to OCU 1L Howard Hennessey]

 

February 23, 2021 in Food and Drink, Recent Cases | Permalink | Comments (2)

Friday, December 11, 2020

Weekend Frivolity: Happy Chanukah!

Sorry, Nancy Kim, my wife already got me the gift you were thinking of getting me.

Cat book

Tomorrow, we make latkes!

December 11, 2020 in Books, Food and Drink | Permalink | Comments (0)

Sunday, December 6, 2020

Weekend Frivolity: Where Does Almond Milk Come From?

My brother is a great source of zany humor.

December 6, 2020 in Food and Drink | Permalink | Comments (1)

Tuesday, November 24, 2020

Tyson Foods Succumbs to the Power of the ContractsProf Blog

TysonOn Thursday, we blogged about a wrongful death claim filed against Tyson Foods.  Plaintiff alleged, among other things, that managers at the plant established a betting pool to see who could come up with the best estimate of how many workers would get infected with COVID.  

On Friday, according to this CNBC report, Tyson announced that it was suspending without pay the managers named in the complaint and that it had hired former U.S. Attorney General Eric Holder to investigate alleged misconduct at its facility in Waterloo, Iowa.  The report makes no mention of the role the ContractsProf Blog's expose had in prompting Tyson's response, but the timing could not be coincidental.

November 24, 2020 in About this Blog, Current Affairs, Food and Drink, In the News, Recent Cases | Permalink | Comments (3)

Thursday, November 19, 2020

A Follow-Up on Yesterday's Post

Yesterday, we linked to and summarized some of the findings of a New Yorker article by Eyal Press, highlighting Eugene Scalia's Labor Department's laissez faire approach to regulation of health and safety violations during the COVID pandemic.

TysonToday, we noticed this related article from the Huffington Post  by Sanjana Karanth(h/t Ben Davis).  The article reports on a wrongful-death lawsuit filed by the family of a worker at a Tyson plant in Iowa who died from COVID, allegedly after exposure at work.  The plaintiff was one of five workers from the same factory who died from COVID; about 1000 employees -- over a third of the workforce -- were infected.  The complaint alleges that managers at the plant set up a betting pool in which managers would try to guess how many workers would become infected.  The complaint also alleges that the plant manager called COVID "a glorified flu" and instructed workers to show up, even if they had symptoms.  

And now the link to yesterday's post:  here is the closing paragraph of the article:

The Occupational Safety and Health Administration and the Centers for Disease Control and Prevention issued guidance at the beginning of the pandemic recommending that meatpacking companies put up physical barriers, enforce social distancing and install more hand-sanitizing stations, among other steps. But the guidance is not mandatory and is mostly unenforceable.

November 19, 2020 in Current Affairs, Food and Drink, In the News, Labor Contracts, Recent Cases | Permalink | Comments (0)

Tuesday, November 17, 2020

Taboo Trades: Marijuana

Riddle me this: what is the opposite of the Bermuda Triangle?

Answer: Corona Winter in Oklahoma City.

Why?

KrawiecBecause when you combine munchies-inducing medical marijuana joints on every corner, easy access to Trader Joe's, and obstacles to exercise indoors or out, unwelcome things that disappeared last summer (like my love handles) return.

Which is just our way of saying that we have neglected to plug the on Taboo Trades podcast, hosted by Kim Krawiec (pictured, right) , which is about things we maybe shouldn't be selling but do anyway .  The latest episode, on Marijuana Legalization, is available.  Kim interviews Pat Oglesby on pot taxes.

November 17, 2020 in Contract Profs, Food and Drink, Weblogs | Permalink | Comments (0)

Saturday, October 10, 2020

Weekend Frivolity: Of Muffins and Market Failure

Bran muffinIf you follow the blog's Twitter feed, you already know that I love bran muffins.  I think I got addicted in college or perhaps in grad school.  In any case, it was in the 80s.  As far as I can recall, I believe I could confidently walk into any coffee shop throughout the 90s and into the aughts, order coffee and a bran muffin and settle in for a satisfying mid-afternoon snack, lupper, or linner. 

Life was good.  Bran muffins were something I could just assume would be a constant in my life, like Cheerios, or Yoplait yogurt, or French Roast coffee.  Sure, sometimes the cafe would be out of bran muffins, but they felt bad about that, and it only signified that I was not alone in my love of bran muffins.

And then, somehow, imperceptibly, the world shifted.  I had a child, I got a real job, and I stopped having time to frequent cafes.  In the meantime, people's taste seems to have moved away from bran muffins.  Now, when I see muffins on display that seem to fit the description of the wanted suspect, they almost always turn out to be something slightly off -- like banana nut muffins -- or highly objectionable -- like chocolate chip muffins.  I'm sorry, if you want whatever that is, you don't want a muffin, and your cupcake masquerading as a muffin is squeezing out shelf space that ought to be occupied by the object of my affection.

OatbranmuffinsWhat has happened here?  First, I think there has been a generational shift.  My generation (I'm a boomer) grew up on Euell Gibbons telling us to eat healthy cereals like Grape Nuts, and we associate foods made from bran with digestive regularity and general well-being.  Along came GenX, who had never been exposed to Euell Gibbons' homespun charm, and they think a blueberry muffin every bit as beneficial as a bran muffin.  Slowly, demand declined, and shops catering to the younger folks stopped stocking bran muffins and started ordering desserts that look like muffins instead.  And now it is near impossible to find them in a grocery store.  When I do find them, they are likely to be too moist and too sweet, because people now think that a muffin is a pastry.  

BagaelAside: there really no reason for bakeries to offer varieties of bagels other than plain, poppy seed, sesame, and everything.  What of onion? you say.  Well, a bialy can be quite nice, but the amount of onion (and garlic and salt) on an everything bagel is perfectly adequate.  A bagel that features only onion or garlic or salt is like a sit-com that features a secondary character from a successful sit-com.  Remember the Mindy show, featuring Mindy from Mork and Mindy?  Of course you don't; that's a terrible idea!  The George Costanza hour?  No thank you.  Joey?  We know where that went.  (But I do recommend Episodes!) Yes, I concede that cinnamon-raisin bagels have their place, but their place is with a smear of cream cheese.  Any other topping is likely an error, and ordinary consumers just can't be trusted with such consequential matters.  Moreover, cinnamon-raisin bagels are the slippery slope that leads to war crimes such as blueberry bagels, asiago cheese bagels, and the bagel-shaped bread you can buy at Panera.

Here's the thing.  I never ate bran muffins with an eye to my health.  I eat them because they are delicious and just the right kind of filling.  That's why when bran muffins show up in my house, the only evidence thereof that you will see will be empty wrappers.

I suspect I am not alone.  There is an untapped market of bran muffin eaters who hunger for the comfort of the company of a familiar but now estranged companion. 

October 10, 2020 in Commentary, Food and Drink | Permalink | Comments (0)

Wednesday, September 30, 2020

A Series of Takes on Hamer v. Sidway, Part III: A Lighter Take on Promises Not to Curse

In Part I of this series, I provided an overview of my reasons for thinking that courts ought not to be in the business of enforcing twenty-year-old oral promises between family members made at a family gathering.  In Part II, I summarized Douglas Baird's work reconstructing alternative narratives of what might have been going on in Hamer v. Sidway.  Today, I want to focus on my view that it would always be impossible to verify Willie's performance of his promise to refrain from swearing.  

Douglas Baird's piece already notes that Willie was unable to provide witnesses who could verify his claim.  Apparently he was unable to remember the names of or identify his college chums.  To which I say,

This is fine

But in this post, I am more concerned with Willie's promise not to swear.  In my non-professional life, I swear like a sailor.  When my daughter was born, I committed myself to checking my language when speaking in her presence.  When she was 2 or 3, we started to notice that, when experiencing mild frustration, she would lower her head a bit and whisper, "Oh, shhh---."  I have no idea where she got that from.

More recently, just as I was about to start a class, I realized that I left some papers that I needed for teaching in my office.  I teach with a microphone for the benefit of my Zoomers, and I forgot to turn it off as I dragged my aging body down the stairs, into my office, and then up the stairs again.  When I came back in, the students of Section 5, "The Fighting Fifth,"* was in hysterics.  They were amused by the jangling keys that accompanied me on my journey, and, they informed me, "You may have dropped an f-bomb."  I have no recollection of having cursed.  But a room full of amused students will confirm that I did.

OCU Law School
My takeaway from this is that Willie's unverifiable promise could not have been a serious one, and so he can never be rewarded for having "performed."  It's just a very hard thing to monitor.  Even the mild-mannered legal philosopher, Scott Shapiro, has been known to speak colorfully when inclusive legal positivists are his subject matter.

*Our first-year class is divided into seven sections.  I teach four of them face-to-face.  I have concluded that it is boring to call them sections two through five, so I want them to come up with nicknames for themselves.  They have refused, so I am making up names for them.

September 30, 2020 in Commentary, Famous Cases, Food and Drink | Permalink | Comments (0)

Tuesday, May 5, 2020

Ben Davis on the Executive Order Pertaining to Meat & Poultry Processing Plants

DavisBen Davis, of the University of Toledo College of Law, has posted Worker Endangerment in the Meat Industry During COVID-19 on Jurist.  The post comments on the President's Executive Order relating to the food supply chain. The Executive Order was a response to the closing of some meat and poultry processing plants in response to outbreaks of COVID-19 at the plants. 

The executive order suggests that the plants closed due to state action and alleges that state regulations "may differ from or be inconsistent with interim guidance recently issued by the Centers for Disease Control and Prevention (CDC) of the Department of Health and Human Services and the Occupational Safety and Health Administration (OSHA) of the Department of Labor."  Ben's post makes clear why state regulations might differ with CDC and OSHA guidances, which are filled with what he calls "mealy-mouthed phrases" but I would call weasel words.  Basically, the guidances say that, ideally, plant operators should consider allowing workers  to socially distance themselves if feasible.   If states imposed stricter guidelines, they saved lives.

It is not true that state action is the cause of the closures.  Rather, the companies are closing their plants on their own.  I didn't know that lying in executive orders was a thing now, but I concede, that was very retro thinking.  Moreover, workers do not want to work in unsafe conditions, and thus the Executive Order many not have any effect, according to this CNN report.

According to the Executive Order, the closures "threaten the continued functioning of the national meat and poultry supply chain, undermining critical infrastructure during the national emergency."  As a pescatarian, I can only say, "Really?"  

But I digress.

Reynolds AbbottBen's post highlights the precarious predicament that workers might face as a result of the Executive Order.  They may face a Hobson's choice of returning to an unsafe work environment or losing their unemployment benefits.  Ben cites to reports that some governors, like Iowa's Kim Reynolds (left) and Texas's Greg Abbott (right), are threatening to withdraw such benefits from workers who "voluntarily quit."  The issue goes beyond the plants and could affect workers in many areas of the economy that are opening up before their workers feel safe returning to their jobs.

May 5, 2020 in Commentary, Contract Profs, Current Affairs, Food and Drink, In the News, Labor Contracts | Permalink | Comments (1)

Sunday, May 3, 2020

Weekend Frivolity: Part of the World

Some of our readers might recognize this new feature of the Blog, "Weekend Frivolity" is ripped off form the frivolity segment of the National Security Law Podcast.  In this case, imitation is indeed the sincerest form of flattery.  If you aren't currently subscribing to the podcast, you should be, even if you aren't interested in National Security Law.  It is fun to listen to Bobby Chesney and Steve Vladeck argue about just about anything.

I'm tipping my hat extra hard in the post because I discovered this video on Bobby's Twitter feed.  It has something of an Austin feel to it, but I'm afraid I don't know if the Bar & Grill responsible for this video is an Austin joint.  Perhaps a knowledgeable reader can enlighten me in the comments!

 

May 3, 2020 in Current Affairs, Food and Drink, Music, Weblogs | Permalink | Comments (0)

Wednesday, June 19, 2019

A brand new apple variety leads to a discussion about extrinsic evidence

Continuing the theme of thinking about fall courses, a recent case out of the Western District of Washington, Phytelligence, Inc. v. Washington State University, Case No. C18-405 RSM (behind paywall), has a discussion about both extrinsic evidence and agreements to agree -- both topics my students often struggle with. Might be worthwhile to take a look at this recent analysis, especially if you teach in Washington. 

Plus it's a dispute about a new apple variety, which is pretty cool. You can read more about it here and here

 

June 19, 2019 in Commentary, Current Affairs, Food and Drink, In the News, Law Schools, Recent Cases, Teaching, True Contracts, Web/Tech | Permalink | Comments (0)

Wednesday, May 22, 2019

Salmonella-infected Chicken is not a "Defective" Product

Salmonella-infected raw chicken meat is not “defective” under Maine law.  Anyone selling such meat also do not violate the implied warranties of merchantability or fitness for a particular purpose.  This is so even if tons of meat have been recalled by a manufacturer precisely because of a salmonella outbreak affecting the meat. Such held the United States Court of Appeals for the Tenth Circuit recently. Unknown

The result may seem both incredibly gross and grotesque, but in a strange way, makes sense.  In the case, a raw food manufacturer sold almost 2 million pounds of raw meat to a food processor preparing chicken products such as frozen chicken cordon bleu products.  The manufacturer recalled the meat, causing losses to the processor in excess of $10 million.  The processor filed suit for breach of contract.  Both the trial and appellate courts held that the processor had failed to state a claim under F.R.C.P. 12(b)(6).

Why?  Because salmonella is an “inherent, unavoidable, and recognized component of raw chicken that is eliminated by proper cooking methods.”  Even though the recall admitted that the recall was adulterated with salmonella, the complaint did not allege that the chicken was contaminated with a form of salmonella that could notbe eliminated by proper cooking.  The sick consumers could have contracted the infections from merely touching the raw meat. Images

This shows the relatively low level of sanitary integrity that can be expected in today’s meat market. Bon Appetit! 

The case is Scarlett v. Air Methods Corporation, 2019 WL 1828908

May 22, 2019 in Current Affairs, Food and Drink, Miscellaneous, True Contracts | Permalink

Thursday, May 2, 2019

The difficulties in establish an oral agreement, the difficulties in establishing promissory estoppel

A recent case out of the Fifth Circuit, Mr. Mudbug, Inc. v. Bloomin' Brands, Inc., No. 18-30626 (behind paywall), reminds us that, in the case of establishing the existence of an oral agreement, it helps to have testimony that comes from a third party.

The plaintiff asserted that it had entered into an oral agreement with the defendant where the defendant promised to buy 28 million pounds of various dressings. However, all of the testimony about the existence of the oral agreement came from the plaintiff's executives. While it was true that the plaintiff and the defendant had a ten-year business relationship, that by itself did not establish the existence of the 28-million-pound contract, especially where the defendant had provided evidence that it consistently refused to commit to a specific volume of purchasing. 

Having failed to establish the existence of a contract, the plaintiff turned to promissory estoppel, but you can only have promissory estoppel where a promise exists. The plaintiff asserted that the defendant told it that it would have to "substantially enlarge its . . . facilities" if it wanted "to produce all of the food products" that the defendant would need. But this was a declaration of fact, not a promise that the defendant would enter into contracts with the plaintiff if it expanded. 

May 2, 2019 in Food and Drink, Recent Cases, True Contracts | Permalink | Comments (0)

Tuesday, March 12, 2019

At the intersection of illegal contracts, immigration policy, and fast food restaurants

When I teach about illegal contracts, I often find myself talking about paid assassins, because for some reason it's the only example I can come up with on the fly (let's not psychoanalyze that too much). A recent case out of California, Lin v. Chiu, B285053, has a different illegality analysis. The case involved a contract concerning an investment of money into the opening of a fast food restaurant franchise. Chiu alleged that Lin used the contract to apply for permanent residency in the United States, even though the contract did not fulfill the requirements for such an application, and therefore the contract was illegal and unenforceable. 

The court disagreed. Even if Lin's attempt to use the contract as the basis for residency might be questionable, the central purpose of the contract itself was a straightforward investment, not anything illegal. Nothing about the alleged illegal use of the contract had anything to do with Lin's contractual rights to repayment of his investment, and there were no allegations that the contract was merely a sham to defraud the U.S. government. It was a bona fide contract in and of itself, with the objective of receiving a return on investment, and not the objective of winning Lin permanent residency. Maybe Lin had an illegal motive underlying his actions, but that did not change the fact that his actions were a legitimate business transaction. Enforcing the investment contract, the court found, would not encourage others to use such contracts as an illegal basis for permanent residency. 

March 12, 2019 in Food and Drink, Recent Cases, Teaching, True Contracts | Permalink | Comments (0)

Tuesday, June 12, 2018

The Meaning of “Iced Tea”

Here’s a nice little case that lends itself well to classroom use.

The Robertson family owned Duck Commander, Inc. (“DC”), a hunting supplies company that eventually morphed into an iced tea maker after Si Robertson ("Uncle Si") became known for the its members’ affinity for ice tea on a reality TV show about duck hunting.  This was broadcast on the A&E network. Uncle-Si-Iced-Tea_0

In late 2013, DC contracted with Chinook USA, LLC (“Chinook”), a ready-to-drink beverage company, to produce and market the Robertson family’s ice teas in cooperation with the Robertsons.  A fairly elaborate contract is drawn up.  This spells out the corporations’ mutual obligations in relation to “iced tea,” “ready-to-drink [RTD] teas,” and “RTD beverages.”  This includes an integration clause purporting to make the agreement the “entire understanding between the parties.”

A few months later, in the summer of 2014, sales of iced tea apparently did not go as well as the parties had hoped and planned for.  The Robertson family thus branched out into energy drinks and vitamin water.  DC contracted with another marketer of those products.  Chinooks sued DC for breach of contract, among other things claiming that the contractual terms “iced tea,” “ready-to-drink teas,” and “RTD beverages” also encompassed vitamin water and energy drinks and that DC should thus also have dealt with Chinook in relation to those products.

The contract was held to be ambiguous.  Parol evidence was brought in showing that during the contract negotiations, iced tea accounted for about 95% of the focus of the negotiations with coffee products for the other 5%.  No mention had been made of energy drinks or similar products.  After contract execution, a Chinook negotiator sent Chinook an email stating “[T]hank you for taking the time to ask for a confirmation of Chinook USA’s rights as our exclusive licensee of tea ….  This email confirms the same.”

Oops, it’s difficult to claim afterthe fact that when you yourself – a seasoned company with professional negotiators – get a deal for “tea,” you really intended something more than that.  The appellate court thus also affirmed the district court’s judgment against Chinook on its breach of contract claims (see Chinook USA, L.L.C. v. Duck Commander, Incorporated, 2018 WL 1357986).  https://law.justia.com/cases/federal/appellate-courts/ca5/17-30596/17-30596-2018-03-15.html

This case lends itself well to students issue-spotting issues such as contract interpretation, ambiguity, the PER, etc., but could also be used to discuss bargaining powers, party sophistication, and the smartness of, if nothing else, sending confirmatory memos… only they should, of course, be drafted such that they truly represent the parties’ intent.  If that was the case in this matter, was Chinook simply regretting not getting a broader agreement at a point when sales of the originally intended product was already known to falter?  This appears to be the case here.

June 12, 2018 in Food and Drink, Recent Cases, True Contracts | Permalink | Comments (0)

Wednesday, June 6, 2018

A good cause termination clause operates to save oral agreement from statute of frauds writing requirement

Here's another helpful teaching case, this time for the statute of frauds section. Out of Delaware, World Class Wholesale, LLC v. Star Industries, Inc., C.A. No. N17C-05-093 MMJ, discusses the "one year" statute of frauds category. The parties entered into an oral agreement "in which WCW agreed to be the exclusive distributor of Star's products in Delaware for an indefinite period of time." Star contended that the oral agreement violated the statute of frauds and should have been in writing. 

The court disagreed. WCW had alleged that the oral agreement contained a "'good cause' termination clause." This meant that either party could have terminated the agreement with good cause at any time, including within a year. Therefore, under Delaware law, there was a possibility this oral agreement could have been permissibly terminated and therefore performed within one year, and therefore the statute of frauds did not block enforcement of it. 

June 6, 2018 in Food and Drink, Recent Cases, True Contracts | Permalink | Comments (0)

Tuesday, April 17, 2018

"Similar in concept" IHOP diner follow-up!

Thanks to Andy Feldstein of Huntington Technology Finance, who sent me an email after reading yesterday's IHOP post. Reading the opinion left me confused, but Andy points out that a visit to the Gunther Toody's website sheds a lot of light on the matter. Andy wrote that to the extent "similar in concept" has meaning, it's pretty clear IHOP and Gunther Toody's are two diners with extremely dissimilar concepts. Agreed. This was very helpful in clearing things up! 

April 17, 2018 in Commentary, Food and Drink, Recent Cases, True Contracts, Web/Tech | Permalink | Comments (0)

Monday, April 16, 2018

Court answers the question: Is IHOP a diner?

I could not resist blogging this case out of the District of Colorado, Northglenn Gunther Toody's v. HQ8-10410-1045 Melody Lane, Civil Action No. 16-cv-2427-WJM-KLM (behind paywall), because it tackles these questions: "First, what is a diner? Second, is the IHOP restaurant a diner?"

I greatly enjoyed reading the court's definition of "diner," which, after evaluating expert testimony, settled on "a table service restaurant with a broad array of breakfast, lunch, and dinner offerings, most of which are perceived as American cuisine." The court then decided that IHOP qualifies as a diner. 

After that, though, things get a bit of a mess. The lease at issue prohibited the opening of "a diner similar in concept" to the one operated by the plaintiff. The court found that the parties provided it with no answer as to what that phrase meant. The court concluded it must be something more than just being "a diner," because otherwise there was no reason to include the "similar in concept" language. But plaintiff kept insisting that IHOP being a diner was enough to violate the clause. The court did not hold with that interpretation, since it left "similar in concept" with no work to do. The "concept," the court thought, had to refer to something more than just diners generally. The clause required the court to ask if IHOP was similar in concept to the plaintiff's restaurant, whereas plaintiff just kept arguing that the answer was yes, because they were both diners, without tackling the concept language (although I think the plaintiff was trying to argue that the concept was being a diner). Therefore, the court found that plaintiff offered no reasonable interpretation of the covenant and therefore there was no ambiguity. 

This ruling is confusing, because the "similar in concept" language was so slippery that no one seemed able to advance any meaningful definition of it at all...and that resulted in a finding that it was unambiguous. I would avoid this language in contracts, as I think this case proves it's actually pretty ambiguous. 

At any rate, the court went on to conclude that IHOP was not similar in concept to the plaintiff's restaurant, because the plaintiff failed to rebut the defendant's argument that they were different in concept. Which means that it sounds like there is some understanding of what "concept" means, after all...? I am confused by this case and have decided to mull it over at my local IHOP. 

April 16, 2018 in Commentary, Food and Drink, Recent Cases, True Contracts | Permalink | Comments (0)

Thursday, January 11, 2018

Starbucks Wins: Enough Coffee in Cup

As we all know, there is a lawsuit for everything, including whether Starbucks deliberately underfills its lattes to save on the cost of milk. This could constitute a breach of express warranty. So argued a group of plaintiffs in the United States District Court for the Northern District of California recently. The court dismissed the argument on a motion for summary judgment. Unknown

Plaintiffs’ arguments were threefold: First, that “when filled to the brink,” Starbucks’ cups hold only exactly the beverage volumes listed on the menus. The court dismissed that argument because Starbucks requires its cup manufacturers to make the cups 8-12% larger than the promised beverage volume. Second, that the milk foam added to lattes should not count towards the beverage volume. However, as plaintiffs themselves had argued that milk foam is a component of a latte, the court quickly dismissed that argument as well. Third, plaintiffs argued that the “fill-to” lines in steaming pitchers used by baristas to make the lattes are too low for the finished product to contain the expressly promised volume. The court also dismissed that as the steam is an essential part of a latte.

In short, the court agreed with Starbucks that plaintiffs could not prove that any false statements had been made at all. What was warranted was also what was sold.

Incidentally, Starbucks is – as many other previously very popular brands – increasingly suffering from an image problem: they have apparently become too boring and basic. Once seen as cool and edgy, they are now seen as too ubiquitous, in large part because they simply have too many stores. Their solution is to open upscale Roasteries and Reserve stores.

Images
Meanwhile, the competition – Dunkin’ Donuts and McDonald’s for example – charge $3 less for coffee than Starbucks. The same fate might be countered by Subway Sandwiches, previously the nation’s second-largest fast-food chain.  They too might have grown too much and too fast. Additionally, Subway’s menus are seen as too boring, especially by younger millennials who prefer a more diverse range of options, including salads and healthier choices."

The Starbucks case is Strumlauf et. al. v. Starbucks Corporation, Case No. 16-cv-01306-YGR.

January 11, 2018 in Commentary, Current Affairs, Famous Cases, Food and Drink | Permalink

Monday, November 13, 2017

Red Lobster's employee arbitration clause found enforceable

A recent case out of the District of New Mexico, Laurich v. Red Lobster Restaurants, LLC, No. CIV 17-0150 JB/KRS (behind paywall but you can read an article written about the complaint here), enforced an arbitration agreement between Red Lobster and a former employee, Laurich. Laurich was working at a Red Lobster when the restaurant chain was sold to the current corporate entity, the defendant in this case. When the defendant bought the restaurant chain, Laurich was informed during a shift that she had to look over an employment agreement. She asked for a paper copy but was told there were none and it was only available on the computer. She was also told that she had to sign the electronic document or she would be taken off the work schedule. So Laurich signed the document and went back to work. Unsurprisingly, the document contained an arbitration provision.

Laurich alleged that a fellow employee at Red Lobster eventually began harassing her on the basis of her race and sex, escalating to physical assault. She complained to her supervisors and eventually requested that the other employee not be there while she was there. She then learned that Red Lobster had terminated her employment. Laurich then filed this complaint and Red Lobster moved to compel arbitration under the agreement. 

Laurich argued that the arbitration agreement was both illusory and unconscionable. The court found that it was not illusory: Laurich agreed to arbitrate and Red Lobster agreed to continue employing Laurich. That was sufficient consideration on both sides. It wasn't as if Laurich was already working for this corporate entity when she was asked to sign the agreement "out of the blue." Rather, she was presented the agreement as soon as Red Lobster became her employee. 

Nor was the agreement unconscionable. The agreement was only half-a-page long and it was similar to one Laurich had been working under before. And the threat to be taken off the work schedule was only a temporary threat, not a threat of termination. So there was no procedural unconscionability, nor was the arbitration agreement substantively unconscionable. Both sides were bound by the clause, and Laurich was excused from paying arbitration fees. 

Therefore, the court enforced the arbitration agreement. 

November 13, 2017 in Food and Drink, Recent Cases, True Contracts | Permalink | Comments (0)