Legal Roundup: Counties Fight Marijuana Home Delivery, Meatless Meat Labeling Dispute and More

A look at recent court decisions and how their rulings have an impact on risk management and the insurance industry.
By: | July 26, 2019

Popular Sriracha Hot Sauce Maker to Pay $23.3 Million to Jalapeno Farmer

The Case: At one time, Underwood Ranches served as the exclusive jalapeno provider to popular sriracha sauce maker Huy Fong Foods Inc.

Advertisement




You know them — they popularized the iconic hot sauce with the rooster logo and the green capped bottle.

Huy Fong sued Underwood after demanding they return more than $1 million in overpayments to the farm.

“The grower filed a cross-complaint in February 2018, alleging that Huy Fong caused the breach in the partnership and that as a result, Underwood Ranches sustained more than $20 million in losses,” according to the Los Angeles Times.

Scorecard: A civil jury in California found that Huy Fong “breached its contract with the chili grower and committed fraud by intentionally misrepresenting and concealing information” and awarded Underwood $23.3 million, according to the Los Angeles Times.

Takeaway: At issue was Huy Fong’s prepayments to Underwood for the estimated costs of harvesting the chilies. Although not explicitly laid out, the partly oral contract established a specific business practice that had to be continued.

The Next Stop in the Marijuana Fight: Home Delivery

The Case: East of Eden Cannabis Co. sued Santa Cruz County in California claiming that prohibiting pot deliveries from out-of-state retailers into certain areas violates state law.

The Associated Press reports: “In court papers, the company said the county threatened to initiate a criminal investigation and seek to have its state license revoked if it continued to make deliveries into unincorporated areas. The county’s actions are ‘in direct violation of state law permitting East of Eden to make deliveries into any jurisdiction in California,’ the lawsuit said.”

Scorecard: Some say state laws supersede county laws that restrict pot sales in their jurisdictions — meaning home delivery is legal anywhere in the state.

Others say pot deliveries help sick and frail people who live in so-called “pot deserts” far from a distributor. We’ll watch as this case plays out.

Takeaway: The details of legal marijuana are still being figured out.

Former Iowa Governor Discriminated Against Gay Employee, Jury Says

The Case: Former Iowa Workers’ Compensation Commissioner Chris Godfrey sued the state of Iowa and former Governor Terry Branstad for discrimination based on sexual orientation.

When Branstad took office in 2011, he asked all department heads and division directors to resign so he could form his own team.

Godfrey and two others refused.

“Months later, after again asking Godfrey to resign, Branstad then cut Godfrey’s salary from $112,070 to $73,250 — the lowest allowed by law for the job,” according to the Des Moines Register.

Godfrey claims the governor took those actions because Godfrey is gay.

“Branstad testified at trial that he did not know Godfrey’s sexual orientation until after Godfrey had threatened a lawsuit.

“Branstad said he made the decisions regarding Godfrey because he had heard concerns about the former commissioner and wanted someone on his team who supported his plan for Iowa,” according to the newspaper.

Scorecard: A Polk County jury ruled in favor of Branstad and awarded him $1.5 million in damages.

Takeaway: It’s a he-said, she-said case but the jury clearly believed there was some wrongdoing on Gov. Brandstad’s part.

Is It Legal to Call Meatless Meat, Meatless Meat?

The Case: Upton’s Naturals has joined with the Plant Based Foods Association in a lawsuit against the state of Mississippi, challenging a law that prohibits companies from labeling plant-based foods with “meaty” titles.

Advertisement




The law, passed in March, states that names like vegan bacon, or meatless meatballs are off limits— even if the packaging explicitly states that it’s 100 percent vegetarian, according to Chicago Business.

Scorecard: The state claims it’s trying to eliminate food labeling that’s purposefully confusing. Upton’s Naturals says that if their consumer base believed they were biting into real meat, their company would suffer greatly.

The PBFA claims the government is pandering the meat industry. We’ll see what happens as the case progresses.

Takeaway: Proper packaging labels for food are a big issue but it’s hard to imagine that a plant-based company is really trying to fool people into thinking its products are actually meat. &

Jared Shelly is a journalist based in Philadelphia. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

Risk Matrix: Presented by Liberty Mutual Insurance

10 Critical Risks Shaping the Workers’ Comp Landscape Today

Emerging risks like workplace violence, disabling injuries and inexperienced workers are driving up workers' comp claims and costs.
By: | August 1, 2019




The R&I Editorial Team can be reached at [email protected]