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(Dippin Chips). I make this declaration based on personal knowledge. If called as a witness,
I could, and would, testify competently to the facts stated herein.
A.
2.
Defendant Dippin Chips is a small start-up snack food company that contacted
my office after receiving a January 16, 2014 demand letter and draft complaint from Mr. Howard
Rubinstein of the Law Offices of Howard Rubinstein. A true and correct copy of Mr.
Rubinsteins letter is appended hereto as Exhibit 1.
3.
The letter claimed that Mr. Rubinstein represented a Plaintiff named David
Scarola and a purported class of people who had been buying Dippin Chips for the last four
years. He accused Dippin Chips of violating Floridas Deceptive and Unfair Trade Practices
Act (FDUPTA) for labeling its products as natural even though the products contain only
plant-based ingredients.
4.
The letter demanded that Dippin Chips disclose national aggregate retail sales
figures for the Products during the past four years, along with the aggregate retail sales figures
for the Products sold in the State of Florida in the past four years. Mr. Rubinstein enclosed a
draft class action complaint and threatened that Mr. Rubinstein would file it promptly if
Defendant did not provide the requested sales data.
B.
5.
On January 30, 2014, my office sent a letter in response to Mr. Rubinstein at 6:33
p.m. EDT via email and First Class U.S. Mail. A true and correct copy of this letter and covering
email is appended hereto as Exhibit 2.
6.
The letter explained that, contrary to the allegations in the draft complaint,
Dippin Chips had only been in stores for approximately six months, since mid-2013 (not four
years), that Defendant already had decided to remove the natural label in late 2013, and that
Defendant did not charge any price premium for its previous natural labeling.
7.
The letter further advised Mr. Rubinstein that such facts were intended to provide
him and his client with pre-filing notice that [his] allegations are false and do not conform to the
strictures of Rule 11. Pursuant to Defendants standard policy providing refunds to any
dissatisfied customers, the letter also enclosed a refund check for $200 to Plaintiff for any
alleged product purchases with which he was unhappy.
8.
Within two minutes of receiving my letter, at approximately 6:35 p.m. EDT, Mr.
Rubinstein emailed me to reject the proposed offer, stating we have returned your check. A
true and correct copy of this correspondence is appended hereto as Exhibit 3.
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9.
Mr. Rubinsteins denial did not explain how he could have consulted with his
alleged client, plaintiff David Scarola, during that two minute window, or why his client would
reject a full refund for any purchases. Such time period was, at minimum, insufficient for Mr.
Rubinstein to advise plaintiff of the potential consequences for failing to evaluate the factual
issues identified in the draft complaint.1
C.
10.
Shortly after sending the letter, in early February 2014, I spoke to Mr. Rubinstein
on the phone. He stated that he was interested to settle the case on a private, non-class basis, but
that in order to reach similar private settlements with other food companies, he required national
sales data to calculate a private, pre-litigation settlement figure in the six or seven figures.
He then insisted on obtaining Dippin Chips national sales information.
11.
During the call, I explained to Mr. Rubinstein that the sales information he was
requesting was irrelevant to any non-class settlement because those sales have nothing to do with
any damages to his client or to any attorneys fees for time actually spent, but that Dippin
Chips would obviously prefer to avoid litigation. I also noted that he had no reason to ask the
national sales data given that the purported class claims were limited to Florida residents.
12.
Between February 2013 and May 2013, I engaged in numerous conversations and
correspondence with Mr. Rubinstein and tried to convince him that the sales numbers he
requested were irrelevant. He, however, insisted on obtaining the information, and Defendant
eventually complied because defending a putative class action can be expensive and disruptive to
a business, especially a nascent one.
We later came to learn that Mr. Scarola is the son of John Scarola, a well known personal injury lawyer in Florida,
which is how he likely came to be acquainted with Mr. Rubinstein.
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13.
learned that Mr. Rubinstein had sent dozens, if not hundreds, of demand letters similar to the one
received by Defendant. According to Mr. Rubinstein those letters have resulted in large private
payments to Mr. Rubinstein, with nothing to any purported consumer class.
14.
companies had paid six or seven figure settlements, meaning hundreds of thousands to millions
of dollars, to resolve similar allegations on a private basis. For example, on March 28, 2014, Mr.
Rubinstein sent me an email explaining his sliding scale approach (typos in the original):
Noah, the sales data is not complete. We need 4 years not 2...
Assuming natl sales using your numbers. A private settlement of
sales over 5 million would exceed 200,000 and those approaching
20 million in sales would approach 7 figures.. Other variables
would need to be considered.. How long before the Ads would be
changed... Would you wait for the product to be sold or taken off
the shelves... We don't want this matter to linger on much longer.
We would consider a mediation of this matter as well....
15.
In June 2014, Mr. Rubinstein made another demand for a large six figure
payment based on private settlement, and rejected any settlement based solely on his alleged
actual attorneys fees spent on the case.
16.
In a final effort to avoid unnecessary and costly litigation, on June 26, 2014, my
office sent Mr. Rubinstein a further offer. A true and correct copy of this letter is appended
hereto as Exhibit 4. In the letter, Dippin Chips offered a product refund for his client and to
reimburse any reasonable attorneys fees and costs actually incurred in litigating this case, as of
the date of the offer. My client also stipulated (as it has from the beginning) that it would
continue not to use the word natural on the products in dispute.
17.
The letter also set forth some of the facts of our recent investigation into Mr.
Rubinsteins past misconduct in similar cases. A chronology of that information is set forth
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below. The letter explained that Dippin Chips intended to seek cost shifting pursuant to
FDUPTA 501.2105 if the offer was rejected. Mr. Rubinstein never responded to this offer, and
I do not know if he ever provided a copy of it to his client. Instead, he proceeded to file this suit
through Mr. Michael Fraser, Esq., who was not involved in pre-suit negotiations.
D.
18.
Mr. Rubinstein was disbarred from Bar of the Texas in 1983 for misappropriating
client funds involving twelve separate clients and guilty of professional misconduct as defined
in the Article XII, Section 9 of the Rules Governing the State Bar of Texas, in violation of ten
different rules of professional conduct. A true and correct copy of the Formal Complaint by the
State of Texas against Howard Rubinstein, and the Harris County District Court Judgment
resulting in Mr. Rubinsteins 1983 disbarment are appended hereto as Exhibits 5 and 6,
respectively. The State established that Mr. Rubinstein had, inter alia:
prepared [checks] payable to [his clients] for an amount less than the
settlements so that he could take the remaining amounts for himself;
deposited client funds into a general purpose bank account into which
[Rubinstein] deposited his own funds and from which [he] paid his
personal bills and accounts; and
allowed the balance in [this account] to fall below the [amount] still
owed to [his clients] and for the account to be overdrawn.
E.
19.
According to his State Bar records, in 2006, Mr. Rubinstein was suspended from
the State Bar of Texas for failing to maintain records of client trust account transactions and was
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unable to provide his clients with a complete accounting of funds paid. A true and correct copy
of a 2006 Texas Bar Journal article covering the 2006 Disciplinary Action is appended hereto as
Exhibit 7.
F.
20.
In November 2009, in Weeks et al. v. Mead Johnson Nutrition Co., et al., 09-cv-
5835 (C.D. Cal.) the Honorable Dale S. Fischer denied Mr. Rubinsteins application to appear
pro hac vice because:
(1) the application fails to disclose that the applicant has also filed
such applications in certain Central District of California cases
within the relevant time frame (thought it does list others); (2) the
applicants name has appeared on one or more other cases filed in
this district, but no application to appear pro hac vice has been
filed in those matters (despite being notified by the court in some
cases that such an application should be filed); (3) many of the
cases in which counsels name has appeared in the caption have
been dismissed by the court for failure to state a cause of action or
for lack of prosecution; and (4) counsel has appeared in a number
of cases, raising the question of whether he may be regularly
engaged in business, professional, or other similar activities in
California, and therefore is not eleigible for pro hac vice status.
See Central District of California Local Rule 83-2.3.2. Under the
above circumstances, and in the absence of an explanation for the
above, it does not appear appropriate to approve the application.
21.
A true and correct copy of the Order Denying Without Prejudice Applications of
the Honorable Josephine S. Tucker twice ordered Mr. Rubinsteins pro hac vice application
stricken for failure to comply with local rules. After the defendant opposed Mr. Rubinsteins
application on much the same grounds outlined herein, Mr. Rubinstein withdrew his application
to appear pro hac vice. True and correct copies of the Order to Strike Mr. Rubinsteins pro hac
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vice application and Mr. Rubinsteins request to withdraw his pro hac vice application are
appended hereto as Exhibits 9, 10, and 11, respectively.
23.
Cal.), the Honorable George Wu issued an order to cause why Mr. Rubinstein should not be
sanctioned for failing to file a pro hac vice application. In response to the Order to Show Cause,
Mr. Rubinstein filed a pro hac vice application which defendant opposed. On July 11, 2011 the
Court denied Mr. Rubsinteins pro hac vice application and issued another Order to Show Cause
Why This Matter Should Not Be Dismissed for Lack of Subject Matter Jurisdiction. True and
correct copies of both order are appended hereto as Exhibits 12 and 13, respectively.
G.
24.
inadequate to serve as class counsel to represent a class of consumers who had purchased VPX
sport supplement products. Aaronson v. Vital Pharm., Inc., No. 09-cv-1333, Dkt No. 76 (S.D.
Cal. Feb. 3, 2012). The Honorable Thomas J. Whelan found that Mr. Rubinstein consistently
failed to follow court orders, abide by court deadlines, and vigorously litigate the case. Id. The
court described Mr. Rubinsteins motion for class certification as half-coherent and
gibberish, and noted repeatedly that Mr. Rubinstein failed to file a reply in support of
plaintiffs motion for class certification. Id. A true and correct copy of the Courts decision is
appended hereto as Exhibit 14.
H.
25.
In November 2012, Mr. Rubinstein was sued by a defendant in a former case, the
makers of 5-Hour Energy products. Innovation Ventures, LLC v. Howard W. Rubinstein et al.,
2012 WL 5992116, at *7 (Cal. App. 4th, Nov. 29, 2012). A California state appellate court held
that Innovation Ventures could pursue its claims against Mr. Rubinstein for bad faith conduct,
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including demanding substantial monetary payment to himself for supposed attorneys fees
and brazenly offer[ing] to sell protection to Innovation in return for such payment. Id. A
true and correct copy of the Appellate Courts decision is appended hereto as Exhibit 15.
I.
26.
Last month, the State Bar of Texas again suspended Mr. Rubinstein until
September 2016. In the Disciplinary Petition, the Commission for Lawyer Discipline stated that
Mr. Rubinstein had made several material misrepresentations in pro hac vice applications in
the Northern District of Illinois. Specifically, the Disciplinary Petition alleged Mr. Rubinstein
had made misleading submissions to courts around the country and failed to satisfy the terms of
his prior suspensions and disbarment. As shows by the State of Texas, Mr. Rubinstein, inter
alia:
1) [mis]stated that he was never disbarred, suspended or
disciplined by any court, thereby failing to disclose that he was
disbarred in Texas in 1983 and received a Fully Probated
Suspension in Texas in 2006. 2) failed to disclose that he was
transferred to inactive status with the State Bar of Texas in 2005;
3) failed to disclose that he was licensed to practice in Texas; 4)
failed to disclose that his application to appear in pro hac vice in
Cause Number 2:09-cv-8102 in the United States District Court for
the Central District of California was denied; 5) [mis]represented
that he was a member in good standing of the United States
District Court for the District of Columbia and the United States
District Court for the District of Colorado when he was only
admitted pro hac vice; and 6) failed to disclose that he had filed
another application to appear pro hac vice in another case he filed
on the same date.
27.
The Disciplinary Petition also showed that Mr. Rubinstein made materially false
and misleading statement in several pro hac vice applications in the Central District of
California:
Specifically, the following misrepresentations were made: 1) in
Cause Number 2:11-cv-02972, Pelatti v. Nestle USA, Inc.,
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The Disciplinary Petition found that Mr. Rubinstein failed to file pro hac vice
applications in over 21 cases in which he appeared in states where he was not admitted to
practice, and failed to file pro hac vice applications in an additional seven cases even after being
directed to do so by the court.
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29.
In the Travis County District Courts Judgment of Probated Suspension, the court
held Mr. Rubinstein has committed Professional Misconduct as defined by Rule 1.06(V) of the
Texas Rules of Disciplinary Procedure and that though all relevant conduct occurred outside
of the State of Texas, Texas Disciplinary Rule of Professional Conduct 8.05(a) provides
authority for investigation and adjudication of the matter in the Texas attorney discipline
system.
30.
A true and correct copy of the Commission for Lawyer Disciplines 2013
complaint against Mr. Rubinstein and the resulting Judgment are appended as Exhibits 16 and
17, respectively.
31.
A true and correct copy of Mr. Rubinsteins public record before the State Bar of
32.
Our office has compiled a list of approximately 60 labeling cases Mr. Rubinstein
has filed against food companies since 2009. The majority of those have been filed in California,
which has become known by the pejorative as the nations Food Court:
a.
b.
c.
d.
e.
f.
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h.
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m.
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w.
x.
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cc.
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gg.
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ii.
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nn.
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pp.
qq.
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ccc.
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lll.
As a result of the deluge of litigation against food companies, the United States
District Court for the Northern District of California has been referred to as the Food Court.
Appended as Exhibit 19 is a true and correct copy of a recent news article discussing this
development, which has been cited by Judges in the Northern District. See e.g. Jones v.
ConAgra Foods, Inc., Case No. 12-01722, 2014 WL 2702726, *1 (N.D. Cal. June 13, 2014). In
the ConAgra case, Judge Breyer noted:
This is a putative consumer class action about allegedly deceptive
and misleading labels on three types of food products. This district
has seen a flood of such cases, in which plaintiffs have challenged,
with varying degrees of success, marketing claims on everything
from iced tea to nutrition bars. See Nicole E. Negowetti Defining
Natural Foods: The Search for a Natural Law, 26 Regent U.L.
Rev. 329, 333 (2014) (recognizing that the Northern District of
California is known as the Food Court).
34.
In the last six months, District Courts in California have repeatedly denied class
certification of food cases. See, e.g., Bruton v. Gerber Prods. Co., Case No. 12-cv-02412, 2014
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WL 2860995 (N.D. Cal.); Jones v. ConAgra Foods, Inc., Case No. 12-cv-01633, 2014 WL
2702726 (N.D. Cal. June 13, 2014); In re POM Wonderful LLC, Case No. 10-ml-02199, 2014
WL 1225184 (C.D. Cal.); Sethavanish v. ZonePerfect Nutrition Co., 2014 WL 580696 *6 (N.D.
Cal. Feb. 13, 2014); Astiana v. Ben and Jerrs Homemade, Inc., Case No. 10-cv-4387, 2014 WL
60097 (N.D. Cal.).
35.
As a result, Plaintiffs lawyers have begun searching for more receptive venues
and have increased their filing of labeling cases in other jurisdictions, including, most recently,
in this District:
I declare under penalty of perjury of the laws of the United States that the foregoing is
true and correct.
Dated: October 9, 2014
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