Del Monte Foods' fresh fruit claims ruled fraudulent - The Packer

Del Monte Foods' fresh fruit claims ruled fraudulent

04/09/2012 09:46:00 AM
Tom Karst

For more background, see:  Del Monte vs. Del Monte: What makes fruit fresh?

(UPDATED COVERAGE, 5 p.m.) Jurors have awarded $13.15 million in damages to Fresh Del Monte after deciding that Del Monte Foods went too far in marketing processed fruit in the produce department as fresh — but jars of the tropical fruit won’t necessarily disappear from refrigerated cases.

The April 6 ruling is from a 2008 lawsuit filed by the Coral Gables, Fla.-based fresh produce company against San Francisco-based Del Monte Foods. Under the terms of a licensing agreement in place since the splitting the company’s fresh and processed divisions in 1989, Fresh Del Monte has the ongoing and exclusive right to sell “fresh fruit, fresh vegetables and fresh produce” under the Del Monte name and brand.

According to the jury, marketing refrigerated fruit in the produce department under the labels “Fruit Naturals,” “Superfruit” and “SunFresh” misled consumers and violated trademark infringement and false advertising laws.

“Obviously, We were extremely pleased with the jury’s verdict, and that they found our rights had been violated under our license agreement,” said Bruce Jordan, senior vice president and general counsel for Fresh Del Monte Produce Co.

Jordan said the advertising, marketing, packaging and labeling of those products were confusing to some consumers, who believed those products were fresh rather than processed. The jury also ruled that Del Monte Food’s “Fruit Undressed” print advertising campaign violated the Lanham Act’s false advertising standards.

The jury said, however, that Del Monte Foods' marketing of the Orchard Select line does not violate the act.

Jurors awarded $7.2 million for to willful violation of the Lanham Act, according to court documents.

The six-member jury also found that Del Monte Foods Co. breached the license agreement by selling refrigerated products containing pineapple, melon, berries, papayas and bananas. Damages tied to Del Monte Foods' breach of contract were $5.95 million.

“Those five products were at the core of our breach of contract claim,” Jordan said. “We maintained we had exclusive right to those products as refrigerated products, whether fresh or preserved,” he said.

Jordan said it was too early to say how Fresh Del Monte might adjust its product line in reaction to the verdict.

The next step in the case will depend on a number of factors, he said.

The judge in the case is expected to schedule a hearing for the parties to gather views on how an injunction should be fashioned — how to remove the products from retail shelves.

“It will be up to the judge to decide,” Jordan said April 9.

Arturo Gonzalez, lawyer Del Monte Foods, said the company is disappointed in the verdict but pleased that damages fall short of Fresh Del Monte’s request of more than $70 million.

Gonzalez said Del Monte Foods will continue to have a strong presence in the refrigerated part of the produce department.

“The difference is that pineapple will have to be eliminated from that selection,” Gonzalez said.

One alternative would be to sell refrigerated pineapple under a different name. Other fruits in question in the license agreement — melons, berries, bananas and papayas — don’t have a significant presence in the refrigerated section of the produce department, Gonzalez said.

He said in an e-mail that marketing of refrigerated grapefruit won’t be affected by the jury’s verdict.

Gonzalez said Del Monte Foods won’t fold up shop in the refrigerated produce case as a result of the jury’s verdict.

“There is no question in my mind that (Del Monte Foods) will continue to be No. 1 in the refrigerated part of the produce department because they have the best product,” he said.

Gonzalez said the jurors found fault with the “Fruit Undressed” advertising campaign that has not been used for more than a year.

“It’s unfortunate that the jurors thought there was something about the advertisement that they were not happy, but it’s a moot point,” he said.

Gonzalez said Fresh Del Monte has three weeks to file a motion for an injunction and Del Monte Foods would have three weeks to respond. After that, Gonzalez said the court will make a decision.

He said he anticipates Fresh Del Monte will want Del Monte Foods Co. to remove the commodities from refrigerated cases.

“There are a number of legal options that Del Monte is considering, including the possibility of an appeal,” Gonzalez said.



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JC Cook    
Wilmington,NC  |  April, 09, 2012 at 12:08 PM

Mom was right. I should have been a lawyer.

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