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CDB is everywhere these days. Products containing CBD can be purchased online, at health-food stores, and even at gas stations. The market for CBD containing or infused products is burgeoning and represents a lucrative opportunity for entrepreneurs as the market is expected to expand to a more than $16 billion industry by 2025. Despite its popularity, there is little in the way of regulation or guidance regarding the advertising and selling of CBD products.

In recent months, there have been a series of class-action lawsuits filed against the manufacturers and sellers of CBD products alleging false and misleading advertising and labeling of these products in violation of consumer protection statutes. In one of these newly filed class-action lawsuits, a putative class of consumers from Massachusetts filed a class-action lawsuit against Global Widget LLC, d/b/a Hemp Bombs (“Hemp Bombs”). The complaint alleges misleading labeling and statements concerning numerous Hemp Bombs products, including gummies, lollipops, capsules, syrup, vape and pet products.

According to the complaint, Cannabidiol (CBD) is a naturally occurring chemical compound known as a phytocannabinoid. CBD is typically derived from hemp plants for its purported medicinal qualities. CBD is used to treat anxiety, insomnia, depression, diabetes, PTSD, and chronic pain. CBD can be taken into the body in multiple ways, including by inhalation of smoke or vapor, as an aerosol spray into the cheek, and by mouth. Food and beverage items can be infused with CBD as an alternative means of ingesting the substance. Continue reading ›

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After the manufacture of granola bars went awry, the company that hired the manufacturer sued the manufacturer alleging breach of contract among other claims. The granola company alleged that the manufacturer failed to supply the required number of granola bars and supplied bars that were defective. The suit was filed in Illinois, and the defendant manufacturer, headquarters in Illinois, attempted to transfer the case to Michigan where the production of the bars had occurred. The trial court denied this motion, finding that Illinois was an appropriate forum, and the appellate panel of the Illinois Appellate Court agreed and affirmed.

18 Rabbits, Inc. is a California corporation with headquarters in San Francisco, CA. Hearthside Food Solutions is a Delaware corporation with headquarters in Downers Grove, IL. 18 Rabbits hired Hearthside to toll manufacture its premium organic granola bars, in a process by which 18 Rabbits would supply the raw materials for the bars, Hearthside would manufacture them, and 18 Rabbits would own the completed product. In August 2016, the two companies executed a mutual confidentiality agreement.

The two companies met shortly thereafter to discuss the possibility of Hearthside manufacturing the bars. Beginning in September 2016, Hearthside’s Illinois-based managers participated in multiple, weekly telephone calls with 18 Rabbits. Hearthside represented that it could manufacture the bars to 18 Rabbits’ specifications and to satisfy all of 18 Rabbits’ customers’ orders for bars. Continue reading ›

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The difference between an individual and class-action lawsuit can be significant for a business. What few business owners realize, however, is that every case begins as an individual case and only later does a court decide whether or not to certify the case as a class action. The question that class action defense attorneys have long considered is whether it possible to pay the named plaintiff’s individual claim and resolve the entire case before the issue of class certification is even considered. This tactic, known as a “pick off,” has been attempted for decades. Although a number of states have rejected the effectiveness of this tactic, Illinois has long been an outlier. Recently, the Illinois Supreme Court revisited its previous pick-off jurisprudence to clarify that a defendant can successfully pick off a named plaintiff in Illinois by “tendering” full relief before a motion for class certification has been filed.

According to the Illinois Supreme Court, tendering full relief entails paying the full amount demanded into the court’s registry, agreeing to pay the plaintiff’s reasonable attorney’s fees and costs, and effectively admitting liability. If there is injunctive or other non-monetary relief sought, the defendant may have to agree to that relief unconditionally as well. Continue reading ›

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Attention Business Owners Who Purchased Business Interruption Insurance Coverage.  If your insurance carrier is refusing to provide business interruption coverage for coronavirus then call at 630-333-0333 or email us.  We are investigating this unfortunate practice and will be filing lawsuits in the right case.  We have handled a number of wrongful denial of insurance coverage cases in the past and are looking to file individual or class action cases on this if your carrier has wrongfully denied coverage.  Illinois and other states have enacted statutes to protect your business from this type of wrongdoing.

Super Lawyers named Chicago business dispute lawyers Peter Lubin a Super Lawyer and Patrick Austermuehle a Rising Star in the Categories of Class Action, Business Litigation, and Consumer Rights Litigation. Lubin Austermuehle’s Chicago auto fraud lawyers near Oak Brook and Naperville have over thirty years of experience in litigating complex class action, insurance and dealer termination, breach of contract, copyright, partnership, and shareholder oppression suits, non-compete agreement, trademark and libel suits, consumer rights and many different types of business and commercial litigation disputes.  Our Naperville, Schaumburg and Lake Forest insurance coverage and consumer and business protection attorneys near Chicago litigate insurance coverage disputes against major insurance carriers. We also assist Chicago, Evanston and Oak Brook area used businesses who are victims of fraud and consumer fraud. You can contact one of the insurance coverage and business rights attorneys near Chicago and Oak Brook by calling (630) 333-0333.  You can also contact us online here.

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Jeff Bezos, the founder of Amazon and currently the world’s richest man, has been sued for defamation by Michael Sanchez, the brother of Bezos’s girlfriend/fiancé. In his complaint, filed in a California state court, Sanchez alleges that Bezos has falsely spread rumors that Sanchez obtained and provided explicit text messages from and nude photos of Bezos to The National Enquirer. Sanchez claims that the allegedly defamatory comments have caused him to lose clients and be shunned by family and friends. In addition to Bezos, the suit also names Gavin de Becker, a security consultant hired by Bezos, and ten other “john does” as defendants.

The complaint, which reads like a lurid tell-all, is replete with salacious details concerning the Amazon founder. The complaint alleges numerous previously unknown details including when Bezos’s affair with Sanchez’s sister Lauren began, that Bezos and Lauren allegedly consulted a psychic concerning the affair and that Bezos and Lauren are currently engaged. And although the lawsuit requests actual and punitive damages, it does not specify how much money is being sought.

The lawsuit alleges that Bezos began his extramarital affair with Lauren in 2017 when her production company was hired to do work for Bezos’s space exploration company. Bezos and Lauren decided to keep the relationship secret based on advice from a psychic in New Mexico, according to the complaint. At the time, Bezos was still married to his now ex-wife MacKenzie Bezos. Sanchez, who claims that he has acted as Lauren’s agent since at least 2010, claims that he agreed to keep the affair secret to protect his sister’s personal and professional reputation. Instead, the complaint alleges that Sanchez “was instrumental in covering up first, the existence, and second, the timing of the affair.” Continue reading ›

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When a corporation hires an independent auditor to inspect its financials does that auditor owe fiduciary duties to its client? If no fiduciary duties exist as a matter of law, do they arise by virtue of a “special relationship” between the parties? In a matter of first impression, an Illinois appellate court wrestled with these questions and answered both in the negative.

Asian Human Services, Inc. (“AHS”) is a non-profit organization dedicated to helping lower income immigrants obtain health, dental, and employment assistance. After AHS was sued by another non-profit organization, AHS brought a third-party claim for breach of fiduciary duty against its long-time independent auditor, James Wong.

AHS alleged that Wong owed fiduciary duties to the non-profit by virtue of the special circumstances of the parties’ relationship. The complaint alleged that Wong had served as the independent auditor of AHS for more than a decade during which time he became an important advisor to the organization. Additionally, the complaint alleged that AHS relied heavily on Wong and that he even served an integral role in AHS’s hiring process for four separate Chief Financial Officers.

Wong filed a section 2-619 motion to dismiss AHS’s claim arguing that: (1) independent auditors do not stand in a fiduciary relationship with their clients, and (2) there were no special circumstances that created a fiduciary relationship. After briefing and oral argument on the motion, the trial court granted appellee’s motion to dismiss, with prejudice, and included Supreme Court Rule 304(a) language.

AHS appealed and argued that the trial court erred in relying on a federal case, Resolution Trust Corp. v. KPMG Peat Marwick, 844 F. Supp. 431 (N.D. Ill. 1994), which held, as a matter of law, that generally, an independent auditor does not owe a fiduciary duty to its client. Instead, the non-profit argued that the trial court should have relied on case law from various other state courts which have found that independent auditors owe fiduciary duties to their clients.

The appellate court acknowledged that no Illinois case law addressed the issue of whether independent auditors owe fiduciary duties to their clients. But ultimately the appellate court found that AHS waived the argument. In the trial court, AHS expressly stated that it was “not arguing that Mr. Wong became a fiduciary to AHS because he acted as an auditor.” AHS’s attorney in the trial court told the trial judge at oral arguments on the motion to dismiss: “One thing I want to make clear is that we’re not arguing that Mr. Wong became a fiduciary to AHS because he acted as an auditor. Now, clearly that would be the antecedent relationship and it makes his actions that much more strange, but that’s not the basis.” Continue reading ›

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Linda Fairstein was once lauded as a champion of women and victims of sexual assault when she was prosecuting the case against the Central Park Five in 1989 and after she succeeded in getting them convicted. Fairstein was in charge of the sex crimes division of the Manhattan district attorney’s office at the time the high-profile case was being investigated and prosecuted, but since all the convictions of the Central Park Five were overturned, the narrative on Fairstein’s career has been similarly upended.

In 2002, Matias Reyes, a man who had already been convicted of murder and a series of rapes, confessed to raping a white woman as she was out jogging in Central Park 13 years earlier. The problem was that Reyes was not one of the five black and Latino men who had been accused and convicted of the crime, and his confession led to the public questioning of the role racism played in how the New York City Police Department and Manhattan district attorney’s office handled the case. Continue reading ›

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Facebook has agreed to pay $550 million to settle a class-action lawsuit over its use of facial recognition technology in Illinois. According to the complaint, Facebook’s photo-labeling service called Tag Suggestions, violated the Illinois Biometric Information Privacy Act by harvesting biometric from the photos of millions of Illinois users without their permission and without telling them how long Facebook would store the data. The case proceeded to settlement after a federal appellate court rejected Facebook’s attempt to have the case dismissed and ruled that the case could go to trial. We previously wrote about that decision here.

Under the terms of the settlement, Facebook will pay $550 million to eligible Illinois users and cover the plaintiffs’ legal fees. The firms representing the plaintiffs called it the largest cash settlement ever to resolve a privacy related lawsuit. The settlement dwarfs the $380.5 million that Equifax recently agreed to pay to settle a class-action suit over its 2017 data breach.

Facebook disclosed the settlement as part of its quarterly financial results, in which it took a charge on the case. The sum, while appearing large at first blush, barely amounts to more than a rounding error for Facebook, which reported $21 billion in revenue in the fourth quarter of 2019 alone. This represents a 25% increase in revenue over the same quarter in 2018. Continue reading ›

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When a high-level employee left Archer Daniels Midland (ADM) to start his own consultancy company, ADM filed suit against the former employee alleging that his new business violated the non-disclosure agreement he signed. A trial court sided with ADM and enjoined the former employee from engaging in consultancy activities. In a case recently added to the official reports, an Illinois appellate court reversed finding that ADM failed to establish a likelihood of success on its claim that the former employee’s activities would violate the NDA he signed.

Lane Sinele worked at ADM for 28 years. At the time he left, he was the manager of national accounts for ADM’s sweetener division. In that position, he represented ADM soliciting, procuring, and servicing buyers of sweeteners. While employed by ADM, Sinele had access to ADM’s Tableau database, a customer profitability database, which contained information about freight systems, manufacturing costs by facility, individual customers’ procurements of corn, manufacturing costs of the corn products, customers’ margins, and margins by location. ADM considered the information contained in its Tableau database to be trade secrets. To maintain their secrecy, ADM limited access to the database to salespeople, like Sinele, and then only for those customers for which that salesperson had responsibility.

In 2018, Sinele left ADM and formed his own consultancy business in which he planned to act as an agent of sweetener buyers in their negotiations with the five major sweetener manufacturers, of whom ADM is one. Shortly after leaving ADM, Sinele sent an email to his former boss requesting a meeting with ADM to negotiate on behalf of two of Sinele’s clients who happened to be ADM customers whose accounts Sinele handled while at ADM. ADM responded by filing suit against Sinele shortly thereafter. Continue reading ›

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As the sexual assault trial of Harvey Weinstein gets underway, people are reminded of the impact of the #MeToo movement on our justice system. We are also reminded of another truth that many victims of sexual assault know all too well, waiting to speak out can mean that the guilty party is immune from criminal prosecution because of the short statute of limitations periods on sexual assault in many states. Victims, unable to pursue justice directly, have begun in increasing numbers turning to the centuries-old tool of defamation lawsuits, opening an alternative legal battleground for dealing with accusations of sexual misconduct.

No one exemplifies this growing trend more than the actress, Ashley Judd. In 2017, Ms. Judd raised allegations about a sexual assault she claims to have suffered at the hands of Weinstein some twenty years earlier. However, like many of the claims of sexual misconduct leveled against Weinstein in the months that followed, Ms. Judd’s claims were too old to prosecute. Undeterred, Ms. Judd sued the producer for defamation in 2018 after reading that Mr. Weinstein’s studio, Miramax, had described Ms. Judd as a “nightmare to work with.”

Ms. Judd’s slander suit is hardly the only high profile defamation suit to come out of the #MeToo era. This year alone several highly publicized defamation cases involving President Trump, the Senate candidate Roy Moore and the actor Johnny Depp are expected to go to trial.

In one such case, Summer Zervos, a former contestant of the president’s popular reality TV show “The Apprentice,” filed a defamation lawsuit against President Trump for his comments on the campaign trail that her accusations of unwanted kissing and groping were fabricated. The president has sought to avoid the suit by arguing that he cannot be sued in state court while in office. E. Jean Carroll filed a similar lawsuit against President Trump after he accused her of lying about his raping her to increase sales of her new book.

While the facts of each libel suit differ, many #MeToo plaintiffs are basing their suits on statements by the men they accused calling them liars. For many plaintiffs, suing for defamation provides them the opportunity to air the facts of what happened years ago, even if they are unable to hold the accused criminally liable. On the other hand, men like Mr. Depp are using defamation suits defensively to preserve their reputations against allegations from women, in his case, his ex-wife Amber Heard, who accused him of domestic abuse. In another case, writer Stephen Elliott sued Moira Donegan, the creator of a widely circulated list of men accused of sexual misconduct that included his name. Continue reading ›

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