In the Courtroom: Soda Tax Delayed in Ill., Objector to GT’s Settlement

SODA TAX BLOCKED IN COOK COUNTY

A judge in Cook County, Ill. postponed a one-cent-per-ounce tax on sugary beverages just 24 hours before it was due to take effect.

Circuit Judge Daniel Kubasiak issued a temporary restraining order on June 30, a move which will delay the implementation of the so-called “soda tax” until at least July 12. The tariff was originally scheduled to begin on July 1.

The decision came three days after the Illinois Retail Merchants Association, an industry group representing over 20,000 stores, and several other grocers filed a suit against the Cook County Department of Revenue alleging the tax is excessively vague and unconstitutional.

The restraining order will remain in place at the judge’s discretion, while the possibility of a permanent block still stands.

On Monday, Cook County budget director sent all county elected officials and department heads a letter explaining that analysts would be providing recommendations on how to compensate for lost revenue in the event that Judge Kubasiak does not lift the restraining order, including job cuts.

Frank Shuftan, a spokesperson for county board President Toni Preckwinkle, said on Wednesday that the temporarily restraining order has created “a serious financial situation and we have to be prepared to take serious action.”

The Cook County Sweetened Beverage Ordinance, passed last November, is projected to collect $67.5 million in taxes through November 30 of this year. Estimates for 2018 collection are over $200 million.

OBJECTOR IN GT’S CLASS ACTION SETTLEMENT

A class member in the mislabeling suit against Millennium Products, the parent company of GT’s Kombucha, and Whole Foods Market has objected to the $8.25 million settlement agreed upon by plaintiffs in February.

Under the terms of the settlement, class members were entitled to receive a cash payment of up to $60 or free product vouchers for each eligible product purchased between March 11, 2011 and February 27, 2017. Millennium and Whole Foods did not admit to any wrongdoing in the case, but the former agreed to make changes to the product label.

In a document filed in the U.S. District Court for the Central District of California on July 2, Justin Ference of Boulder, Colo. claimed that the proposed class action settlement was “not fair, adequate or reasonable.”

In the filing, attorneys for Ference argue that the settlement is unfair because “it does not include any procedural mechanisms or other safeguards to ensure minor class members are fairly represented and adequately compensated.” It asks for the court to appoint a guardian ad litem “to ensure settlement fairness as to minor Class Members.”

In addition, Ference’s complaint asks to allow Class Members to retain the option to seek claims against third parties not included in the initial action and to participate in future actions that may or may not be brought forth by state or federal government agencies.

It also asks that vouchers be stackable, so that they may be combined with other vouchers or coupons, and crackable, as to ensure no value is lost or given up on a single transaction.

CLASS ACTION SUIT AGAINST SOUTHERN GLAZER’S

A class action suit filed in U.S. District Court for the Northern District of California on Wednesday alleges that Southern Glazer’s Wine and Spirits of America, the largest wine and spirits distributor in the U.S., ran an elaborate scheme in which customers’ sensitive information was shared without their knowledge with third-party entities.

The complaint, filed by James C. Nguyen on behalf of himself and all persons/entities within the U.S. who had an account with Southern Glazer and/or Southern Wine & Spirits of America during the last four years, details a wide range of alleged violations by the company.

According to the filing, Southern Glazer provided customer account numbers and liquor license numbers to third-parties which used the information to charge alcohol purchases to the accounts of licensees. It also alleges that company employees were allowed to purchase alcohol on those accounts and return product without refunding customers. Furthermore, employees were allegedly permitted to purchase alcohol on those accounts using cash and then store the product in order to meet sales quotas.

The complaint also claims that the company actively sells and distributes alcohol “to different parties at different prices,” including to persons or entities who may not hold valid liquor licenses.

The plaintiff is seeking “damages, interest thereon, restitution, injunctive and other equitable relief, an accounting of all monies unlawfully collected and held by Southern, reasonable attorneys’ fees and costs and disgorgement of all benefits Southern has enjoyed from its numerous unlawful and/or deceptive business practices.”