Legal Proceedings | 9 Months Ended |
Jan. 25, 2015 |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings | Note 9. Legal Proceedings |
Except as set forth below, there have been no material developments in the Company’s legal proceedings since the legal proceedings reported in the 2014 Annual Report. |
On February 2, 2015, Plaintiff filed a complaint in the U.S. District Court of the Northern District of Florida (Thomas v. Big Heart Pet Brands), alleging false and misleading advertising and misbranding under Florida’s consumer protection laws, negligence and breach of warranties. Specifically, the complaint alleges that Nature’s Recipe claims of “all natural” and “no artificial preservatives” on its packaging are inaccurate and misleading. Plaintiff seeks certification as a class action and damages in excess of $5.0 million. The Company denies these allegations and intends to vigorously defend itself. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability. |
On October 31, 2014, the Ecuador National Court of Justice issued a final, non-appealable decision relating to the appeal by Empresa Pesquara Ecautorian S.A. Empesec (“Empesec”), an Ecuadorian corporation, of tax assessment claims made by the Ecuador Internal Revenue Service (“EIRS”) against Empesec for the 1999 tax year. Empesec is a former indirect subsidiary of H.J. Heinz Company (“Heinz”) involved in the North American tuna business (including the StarKist brand) that the Company acquired from Heinz in December 2002 and subsequently sold in October 2008. Empesec has been disputing the 1999 tax year assessment in court along with an assessment related to the 2000 tax year (an appeal relating to the 2000 assessment is currently pending). The Company did not have a business relationship with Empesec during 1999 or 2000. The assessment for the 1999 tax year is subject to enforcement against Empesec; however, Empesec believes that Heinz has an indemnification obligation. The Company understands that as of May 2013 the amount assessed for the 1999 tax year was approximately $4.5 million and the amount assessed for the 2000 tax year was approximately $5.2 million (including interest). The Company believes that Heinz retained the obligation to indemnify Empesec for these tax assessments. Recently, beginning in June 2013, Heinz has asserted that the Company was responsible for indemnifying Empesec for the assessments. The Company responded to Heinz that the language of the agreements relating to the 2002 acquisition of the North American tuna and other businesses from Heinz and its decade-long course of conduct made Heinz responsible for the indemnification obligation. Heinz and the Company have continued these discussions with no resolution. No litigation against the Company has been initiated or threatened by Heinz. The Company plans to continue to vigorously assert its position that Heinz bears full responsibility for the indemnification obligation. Since the Company believes that Heinz is responsible for the indemnification obligation, it does not believe that a loss is probable at this time. However, the Company cannot currently predict the ultimate outcome of this matter and therefore cannot at this time reasonably estimate a range of exposure, if any, of the potential liability. |
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On January 31, 2014, Plaintiff filed a complaint in the Superior Court of California, San Francisco County (Gamez v. Del Monte) alleging violations of various California wage and hour statutes. This lawsuit was transferred to Del Monte Foods, Inc. pursuant to the terms of the purchase agreement. However, liabilities associated with Kingsburg, CA and Terminal Island, CA facilities were retained by the Company. On August 7, 2014, the Court approved to transfer this case to the Superior Court of California, Fresno County. On October 14, 2014, the Company was served with the Complaint. Del Monte Foods, Inc. is maintaining primary defense of the litigation, but any settlement made with the class will likely include the Company. The Company denies these allegations and intends to vigorously defend itself. The Company has accrued an estimated amount to resolve this matter that is not considered material. |
On April 19, 2013, Plaintiff filed a complaint on behalf of himself and all other similarly situated employees in Superior Court of California, Alameda County (Montgomery v. Del Monte) alleging, inter alia, failure to provide meal and rest periods and pay wages properly in violation of various California wage and hour statutes. This lawsuit was transferred to Del Monte Foods, Inc. pursuant to the terms of the purchase agreement. However, liabilities associated with Kingsburg, CA and Terminal Island, CA facilities were retained by the Company. Del Monte Foods, Inc. is maintaining primary defense of the litigation, but any settlement made with the class will likely include the Company. The Company denies these allegations and intends to vigorously defend itself. Mediation was held on June 24, 2014. A settlement was preliminarily approved by the Court on December 4, 2014. The hearing for final Court approval is set for May 18, 2015. The Company has accrued an estimated amount to resolve this matter that is not considered material, and the Company’s share of the settlement is expected to be covered by the amount accrued. |
On January 31, 2013, a putative class action complaint was filed against the Company in the Circuit Court of Jackson County, Missouri, (Miller v. Del Monte, formerly known as Harmon v. Del Monte) alleging that Milo’s Kitchen chicken jerky treats (“Chicken Jerky Treats”) and Milo’s Kitchen Chicken Grillers Recipe home-style dog treats contain “poisonous antibiotics and other potentially lethal substances.” Plaintiff seeks certification as a class action, as well as restitution and damages not to exceed $75,000 per class member and the aggregated claim for damages of the class not to exceed $5.0 million under the Missouri Merchandising Practices Act. The complaint also alleges the Company continued to sell its Chicken Jerky Treats in Jackson County, Missouri after it announced its recall of the product on January 9, 2013. The Company successfully removed this case to federal court on March 12, 2013. On April 9, 2013, Plaintiff filed a Second Amended Class Action Petition against the Company. The Company filed its Motion to Transfer to the Western District of Pennsylvania on April 19, 2013 and its Motion to Stay Pending the Motion to Transfer on April 25, 2013. The Motion to Stay was granted the same day it was filed. On May 6, 2013, Plaintiff filed an Opposition to Defendant’s Motion to Transfer. The Company filed its Reply in Support of its Motion to Transfer on May 23, 2013. The Court denied the Company’s Motion to Transfer on July 22, 2013. The Company filed its Answer on August 13, 2013 and discovery has commenced. On February 3, 2014, Plaintiff filed a Third Amended Complaint and filed a Fourth Amended Complaint to include an additional named plaintiff on April 22, 2014. The Plaintiffs filed a Fifth Amended Complaint on July 14, 2014 to include an additional Plaintiff and remove Harmon as a named Plaintiff. The Opposition to the Plaintiffs’ Motion for Class Certification was filed on January 20, 2015. The Company denies these allegations and intends to vigorously defend itself. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability. |
On September 6, 2012, October 12, 2012 and October 16, 2012, three separate putative class action complaints were filed against the Company in U.S. District Court for the Northern District of California (Langone v. Del Monte, Ruff v. Del Monte, and Funke v. Del Monte, respectively) alleging product liability claims relating to Chicken Jerky Treats. Specifically, the complaints allege that Plaintiffs’ dogs became ill as a result of consumption of Chicken Jerky Treats. The complaints also allege that the Company breached its warranties and California’s consumer protection laws. Each of the complaints seeks certification as a class action and damages in excess of $5.0 million. The Company denies these allegations and intends to vigorously defend itself. On December 18, 2012, Plaintiffs filed a motion to relate and consolidate the Langone, Ruff and Funke matters. The Company agreed that the cases are related but argued in its response that they should not be consolidated. The Court ordered the cases are related in an Order on January 24, 2013. In the Langone case, the Company filed a Motion to Transfer/Dismiss on February 1, 2013. Plaintiff in the Langone matter voluntarily dismissed his Complaint without prejudice on February 21, 2013 and re-filed in the U.S. District Court for the Western District of Pennsylvania on May 21, 2013. The Company filed its Motion to Dismiss in the Langone case with the U.S. District Court for the Western District of Pennsylvania on August 2, 2013. The individual claims in the Langone case were settled for a de minimus amount, and a stipulation to dismiss with prejudice was filed on November 25, 2013. On April 9, 2013, the Court transferred Ruff and Funke to the U.S. District Court for the Western District of Pennsylvania but denied without prejudice Defendant’s motions to consolidate and dismiss. On April 23, 2013, the Company filed its Motion to Dismiss in Ruff and Funke with the U.S. District Court for the Western District of Pennsylvania and its Reply in Support of its Motion to Dismiss in both cases on June 3, 2013. On February 11, 2014, the Magistrate Judge issued a Report and Recommendation that the Motion to Dismiss be granted as to Plaintiffs’ claim for unjust enrichment and denied in all other respects. The Company filed its objections to the Report and Recommendations on March 5, 2014. The District Judge adopted the Magistrate Judge’s Report and Recommendation on March 25, 2014. The Company filed its Answer on April 8, 2014. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability. |
On July 19, 2012, a putative class action complaint was filed against the Company in U.S. District Court for the Western District of Pennsylvania (Mazur v. Del Monte) alleging product liability claims relating to Chicken Jerky Treats. Specifically, the complaint alleges that Plaintiff’s dog became ill and had to be euthanized as a result of consumption of Chicken Jerky Treats. The complaint also alleges that the Company breached its warranties and Pennsylvania’s consumer protection laws. The complaint seeks certification as a class action and damages in excess of $5.0 million. The Company denies these allegations and intends to vigorously defend itself. On August 3, 2012, Plaintiff’s counsel filed a Motion to Consolidate the previously filed two similar class actions against Nestle Purina Petcare Company, owner of the Waggin’ Train brand of chicken jerky treats, in U.S. District Court for the Northern District of Illinois under the federal rules for multi-district litigation (“MDL”). Plaintiff’s Motion also sought to include the case against the Company in the proposed MDL consolidation as a “related case.” On September 28, 2012, the Court denied the MDL Motion. The case will now proceed in the jurisdiction in which it was originally filed. Plaintiff filed a Motion for Leave to Commence Limited Discovery on the subject of the voluntary recall of Chicken Jerky Treats on January 25, 2013. The Company filed its response opposing the Motion on February 8, 2013. The Court denied Plaintiff’s Motion on March 12, 2013; thus, discovery is stayed until the Court rules on the Company’s Motion to Dismiss, which was filed on September 24, 2012. On May 24, 2013, the Judge in the matter issued a Report and Recommendation stating that the Motion to Dismiss be granted as to Plaintiff’s claim for unjust enrichment and denied in all other respects. The Company filed its Objections to the Report and Recommendation on June 7, 2013. The Court issued an Order adopting the Magistrate Judge’s Report and Recommendation on June 25, 2013. The Court denied the Company’s Motion for Reconsideration on July 8, 2013. The Company filed its Answer on August 2, 2013. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability. |
On August 16, 2013, the Langone, Ruff, Funke and Mazur cases were consolidated. |
On June 22, 2012, a putative class action complaint was filed against the Company in Los Angeles Superior Court (Webster v. Del Monte) alleging false advertising under California’s consumer protection laws, negligence, breach of warranty and strict liability. Specifically, the complaint alleges that the Company engaged in false advertising by representing that the Chicken Jerky Treats are healthy, wholesome, and safe for consumption by dogs, and alleges that Plaintiff’s pet became ill after consuming Chicken Jerky Treats. The allegations apply to all other putative class members similarly situated. The complaint seeks certification as a class action and unspecified damages, disgorgement of profits, punitive damages, attorneys’ fees and injunctive relief. The Company denies these allegations and intends to vigorously defend itself. On September 6, 2012, the Company filed a Notice of Removal to remove the case to the U.S. District Court for the Central District of California. Plaintiff subsequently filed a motion to amend its complaint to remove the federal class action claims and remand the case back to Los Angeles County Superior Court. The Company subsequently stipulated to Plaintiff’s motion, and the case has been remanded to Los Angeles County Superior Court. The Company filed a Motion for Judgment on the Pleadings on July 3, 2013. The Plaintiff filed an Opposition on August 21, 2013. The Company filed its Reply on August 27, 2013. The Court denied the Company’s Motion for Judgment on the Pleadings on February 20, 2014. The Company cannot at this time reasonably estimate a range of exposure, if any, of the potential liability. |