This past week a jury in Portland awarded $10.8M to the plaintiffs in a legal malpractice suit that originally stemmed from claims that Poland Spring water was mislabeled as “spring water” when in fact it comes from a well, not a spring. In Glenwood Farms v. Ivey, a jury in the District of Maine found that lawyers from Seattle-based class-action law firm Hagens Berman Sobol Shapiro LLP violated their duty of loyalty to three small water bottlers that were on the verge of settling a claim with Nestle Waters North America, the owner of Poland Spring Water Co., in June 2003.
An article on MaineToday.com describes the dispute that arose from a claim that Poland Spring water is mislabeled because it is well water, not spring water, and that it is pumped at such volumes that it could include contaminated surface water. Competitors of Poland Spring, Glenwood Farms Inc. and Carrabassett Spring Water of Maine, along with Tear of the Clouds LLC in New York (owned by Robert F. Kennedy, Jr.), were preparing to sue Nestle for false advertising, and also planned to find customers who paid a premium for what they believed was spring water to join a potential class-action case.
Before filing lawsuits, the plaintiffs instead attempted to negotiate a deal that would get Poland Spring to correct the situation without a public disclosure that would damage the entire Maine bottled water industry. The agreement, arrived at with Nestle during a series of mediation sessions in the spring of 2003, reportedly would have been worth $39 million. However, Hagens Berman’s lawyer Thomas Sobol complained that the consumer portion of the deal was weak and, along with another member of the legal team, filed class-action lawsuits on behalf of consumers in five states. Faced with fighting the lawsuits, Nestle withdrew its settlement offer to the bottlers.
In an interesting side note, the bottlers were represented in the underlying matter by Jan Schlichtmann, a personal injury lawyer who was portrayed by John Travolta in the 1999 film “A Civil Action.”
According to an article in Insurance Journal, the case now returns to the jury to determine punitive damages.