Timing Is Everything

By Michael Caruso 

I rarely write about pending cases, but this case caught my attention as a former line cook and current lawyer.

Recently, Amanda Ramirez filed a $5 million class action lawsuit against Kraft Heinz Foods Company in Miami—the Hon. Beth Bloom is presiding. The lawsuit doesn't need any embellishment. Here are the allegations (slightly paraphrased but CAPS in original):

1. Kraft sells microwavable single-serve cups of mac and cheese represented as "READY IN 3½ MINUTES" under the Velveeta brand.

2. The statement "ready in 3½ minutes" is false and misleading because the mac and cheese takes longer than 3-and-a-half minutes to prepare for consumption. 

3. There are four steps in preparing the mac and cheese:

      a. Consumers must "REMOVE lid and Cheese Sauce Pouch;

      b. Next, they must "ADD water to fill the line in the cup. STIR."; 

      c. Third, "MICROWAVE, uncovered, on HIGH 3-1/2 min. DO NOT DRAIN."; 

          and

      d. Finally, they should "STIR IN contents of cheese sauce pouch." 

4. Kraft notes that the "CHEESE SAUCE WILL THICKEN UPON STANDING." 

Here's the crux of the suit: "Consumers seeing 'ready in 3½ minutes' will believe it represents the total amount of time it takes to prepare the [mac and cheese], meaning from the moment it is unopened to the moment it is ready for consumption. 

However, the directions outlined above show that 3-and-a-half minutes is just the length of time to complete one of several steps. The label does not state the mac and cheese takes '3½ minutes to cook in the microwave,' which would have been true."

Ms. Ramirez then states the obvious: "To provide consumers with mac and cheese that is actually 'ready in 3½ minutes,' it would need to be cooked in the microwave for less than 3-and-a-half minutes so that all the preparation steps could be completed in the 3-and-a-half minute timeframe. Consumers are misled to expect the mac and cheese will be ready for consumption in a shorter amount of time than it really takes to prepare."

Exactly. 

I understand that Tarantino has acquired the film rights.

 

Ramirez v. Kraft Heinz, 22-cv-23782-BB

"Whether the U.S. Court of Appeals for the 2nd Circuit’s “right to control” theory of fraud — which treats the deprivation of complete and accurate information bearing on a person’s economic decision as a species of property fraud — states a valid basis for liability under the federal wire fraud statute."

That's the question presented in Ciminelli v. United States, which SCOTUS will hear tomorrow morning. The government's use fraud statutes is out of control; it has criminalized basic breach of contract cases.  As an example, in a recent case in this district, a group of defendants were sentenced to 18 years (!!) under a right to control theory where the alleged fraud was based on a lie on how the defendants would use the product they purchased.  So Ciminelli is a big one, not just for the Second Circuit.

From SCOTUSblog:

This case has similarities with prior corruption disputes selected by the Supreme Court. It involves millions in New York state funds and thus raises federalism concerns: How much flexibility should states have in governance decisions without federal interference? The bidding process may have been unfair to Ciminelli’s competitors, but did the unfairness merit federal intervention? The harm calculation in this case is also unclear: Did Ciminelli intend to cause any loss to Fort Schuyler? There may have been a stronger case that Ciminelli wanted to cause business losses to his competitors by denying them a chance at the Buffalo Billion. Finally, because this is a criminal case, there is the specter of overcriminalization. Was Ciminelli on notice that he was committing a federal crime as opposed to utilizing sharp business practices to edge out competitors?

Deception in the government contracting process is a legitimate threat, and courts face a challenge in determining which forms of deception are serious enough to merit criminal sanctions. Some level of insincerity is expected — when a contractor makes its “best” offer, there is likely some puffery or gamesmanship involved in the negotiations. On the other hand, collusive price-fixing behavior among the contractors bidding for business is both improper and illegal. When are financial penalties sufficient to deter sketchy contractors, and when does federal prison become important in limiting bad behavior?

In Ciminelli’s case, the main wrongdoing appears to be his “sneaking to the front of the line” in the negotiation process. If the Supreme Court continues its trend of narrowing the scope of federal fraud criminalization, it can do so by eliminating the “right to control” theory of fraud. A decision that narrows or nixes that theory could reduce uncertainty among government contractors. Potential contractors would face a reduced risk of prison time when engaging in pre-negotiation talks with government insiders. Less clear is how much such a narrowing decision would benefit Ciminelli. Because the jury instructions and facts give room for having proven tangible economic harm, it is uncertain how much influence the “right to control” language had upon the jury’s decision to convict.

Hope everyone had a great Thanksgiving.

Sorry for the slow blogging

 Gonna take this week off.

I hope all of you have the best Thanksgiving.

I'm thankful for all of you and the great comments, tips, and readers.  And also thankful for the great posts by John Byrne and Michael Caruso.  Such wonderful stuff.

If you are looking for a good read during this Thanksgiving week, check out Rumpole's great posts on Elizabeth Holmes' sentencing here and here.  

Great stuff on why a first-time non-violent offender should not have gotten 11 years.  

Catch up soon.

Crypto Lawsuit Names High Profile Defendants

 

By John R. Byrne

If you've been following the news, you know about the cryptocurrency collapse. Here comes the litigation. A plaintiff has sued Sam Bankman-Fried (the founder and former CEO of FTX, a crypto trading platform) and a host of celebrities, alleging they misled them about the functionality of the FTX platform and/or failed to disclose their compensation for promoting FTX. FTX has filed for bankruptcy. 

You'll recognize the names of some of the defendants: Tom Brady, Gisele Bundchen, Shaq, Larry David, Udonis Haslem, and the Golden State Warriors (yes, the team), among others. The complaint asserts a claim under the Florida Securities and Investor Protection Act, FDUTPA, and civil conspiracy.

The case was assigned to Judge Moore. You can read the complaint here. 

In the meantime, the arena where the Heat play--now FTX Arena--is getting a new name. With the way the Dolphins are playing, maybe Joe Robbie would be nice callback.

Mar-a-lago special master/search case set for oral argument in 11th Circuit on November 22

JUST IN: Appeals court scheules oral arguments in DOJ appeal of Judge Cannon's special master order from Nov. 22 -- in case anyone was naively hoping for a quiet Thanksgiving week. pic.twitter.com/hKrHD5oTY6

— Kyle Cheney (@kyledcheney) November 15, 2022