Plaintiff former employee sued defendant former employer in which he sought declaratory and injunctive relief pursuant to Cal. Bus. & Prof. Code §§ 16600 and 17200. The court granted summary judgment in favor of the employer on grounds that the action was moot. The employee moved pursuant to Fed. R. Civ. P. 59(e) to alter the judgment.
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The employee sought to invalidate an anti-competition covenant with the employer. The employer initially provided ambiguous statements about whether it planned to enforce the covenant to prevent the employee from engaging in competitive activities outside of California. At the hearing on the summary-judgment motion, however, defense counsel categorically committed to the position that the employer would not so enforce the covenant. The employee now sought to amend the judgment so that it was without prejudice and sought a determination that the employer was not a prevailing party for purposes of attorney’s fees. The court found that because the employer had provided judicial admissions that it would not seek to enforce the anti-competition covenant, such admissions would estop any enforcement action brought by the employer in the future. A judgment for dismissal without prejudice would be inconsistent with the definition of a judgment under Fed. R. Civ. P. 54(a). Neither party prevailed because the employee did not derive any actual benefit and if the employer never had an intention to enforce the anti-competition covenant it should have been more forthcoming. Appellant was represented by a business lawyer.
The motion to alter the judgment was denied with regard to the request that the judgment be without prejudice. However, the motion was granted in the respect that neither party was deemed the prevailing party for purposes of costs and attorney’s fees.
HOLDINGS: -Where a consumer alleged that a tea company’s tea labels and website violated U.S. Food and Drug Administration (FDA) regulations, which California incorporated into state law, and were misleading, summary judgment was inappropriate regarding reliance because a triable issue of fact existed as to whether or not the antioxidant label was a substantial factor in influencing her purchasing decision; -Although the “natural source of antioxidants” label did not include a qualifying term describing the level or quantity of antioxidants, it did imply a sufficient amount to be significant, and therefore, the court did not find as a matter of law that the statement was not a nutrient content claim under Cal. Health & Safety Code § 110670 and 21 U.S.C.S. § 321; -The tea company did not make a health claim under 21 C.F.R. § 101.14(a)(1); -The consumer had standing.
Tea company’s summary judgment motion granted in part and denied in part.