Capatriti Olive Oil Class Action Lawsuit Dismissed

A company’s bankruptcy has protected its owners from liability, a judge wrote in a brief order granting a motion for summary judgment in a Capatriti olive oil class action lawsuit.

In both the original Capatriti olive oil class action lawsuit and the amended complaint, the plaintiffs alleged that while Capatriti olive oil was marketed as “100% Pure Olive Oil,” the product actually contained pomace oil, which uses leftover olive pieces in a process that also involves high temperature and chemical solvents creating a “highly processed industrial fat.”

As a result of the litigation, Kangadis Food Inc., which oversaw the production of the Capatriti olive oil, went bankrupt rather than face liabilities of up to $261 million following a federal judge’s certification of the Class. However, the corporation was not owned by the Kangadis family, whom the plaintiffs sought to target. Instead, the family had a partnership in the form of an LLC, Kangadis Family Management.

An amended Capatriti olive oil class action lawsuit followed, still claiming that “because Pomace can be obtained only through heating and solvent treatments, it does not appear in pure olive oil. And, although it comes from olives, it is not olive oil.” Instead, the plaintiffs named Kangadis Family Management LLC as the defendant, arguing that the company was merely another corporate layer that had the lion’s share of control over Kangadis Food Inc., and that the three family members were simply trying to avoid losing potentially hundreds of millions of dollars.

Following a bankruptcy court hearing, U.S. District Judge Judge Jed S. Rakoff reportedly granted summary judgment for the defendants. Although the legal argument has not been issued underlying that decision, a legal liability corporation such as the one formed by the three Kangadis family members is usually set up, in part, to provide protection from litigation.

So while the plaintiffs argued that the LLC was simply a means for the family to move around money to protect it from the class action lawsuit, Judge Rakoff wrote in the terse, three-sentence order that they failed to find evidence that a “reasonable juror” could use to conclude that, “defendants used their alleged domination of Kangadis Food Inc. as a means to accomplish the fraud here alleged.”

The plaintiffs are represented by Bursor & Fisher PA.

The Capatriti Olive Oil Class Action Lawsuit is Joseph Ebin, et al. v. Kangadis Family Management LLC, et al., Case No. 1:14-cv-01324, in the U.S. District Court for the Southern District of New York.