NOT FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

TOWNSEND FARMS, INC., 

Plaintiff-counterdefendant-Appellee, 

 v. 

UNITED JUICE CORP., 

Defendant-Appellant, 

GÖKNUR GIDA MADDELERI ENERJI 

IMALAT ITHALAT IHRACAT TICARET 

VE SANAYI A.S, DBA Göknur Foodstuffs 

Import Export Trading and Production Co., a 

Turkish corporation doing business in 

California, 

Defendant-counter-claimantAppellant.

No. 18-55067 

D.C. No. 

8:15-cv-00837-DOC-JCG 

MEMORANDUM*

TOWNSEND FARMS, INC., 

Plaintiff-counterdefendant-Appellant, 

 v. 

UNITED JUICE CORP., a New Jersey 

No. 18-55068 

D.C. No. 

8:15-cv-00837-DOC-JCG 

* This disposition is not appropriate for publication and is not precedent 

except as provided by Ninth Circuit Rule 36-3.

FILED

NOV 27 2019

MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS
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corporation doing business in California, 

Defendant-Appellee, 

GÖKNUR GIDA MADDELERI ENERJI 

IMALAT ITHALAT IHRACAT TICARET 

VE SANAYI A.S, DBA Göknur Foodstuffs 

Import Export Trading and Production Co., a 

Turkish corporation doing business in 

California, 

Defendant-counter-claimantAppellee.

Appeal from the United States District Court

for the Central District of California

David O. Carter, District Judge, Presiding

Argued and Submitted November 5, 2019

Pasadena, California

Before: MURGUIA and HURWITZ, Circuit Judges, and GUIROLA,** District 

Judge.

Townsend Farms, Inc. (“Townsend”) included pomegranate arils supplied 

by Göknur Gida Maddeleri Enerji Imalat Ithalat Ihracat Ticaret ve Sanayi A.Ş. and 

United Juice Corp. (collectively, “Göknur”) in its Townsend Farms Organic 

Antioxidant Blend (the “Antioxidant Blend”). Some of those arils were 

contaminated with hepatitis A. After consumers of the frozen fruit mixture 

** The Honorable Louis Guirola, Jr., United States District Judge for the 

Southern District of Mississippi, sitting by designation.
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contracted the virus, Townsend recalled the product in coordination with the Food 

and Drug Administration and the Center for Disease control and Prevention. In the 

wake of the Outbreak and subsequent recall of the Antioxidant Blend, injured 

consumers filed numerous lawsuits against Townsend. Townsend and its 

insurance companies defended and settled most of those lawsuits.

Townsend then sued Göknur seeking equitable indemnity for the entire cost 

of defending and settling the consumer lawsuits. Göknur raised a counterclaim 

arguing that Townsend’s recall press releases constituted false advertising under 

the Lanham Act.

Before trial, the parties stipulated that Townsend and its insurers incurred 

$13,705,832.43 in litigation and settlement costs as a result of the contaminated 

product. In this action, Townsend sought to recover these costs from Göknur, plus 

compensatory and punitive damages. 

The district court dismissed Göknur’s Lanham Act counterclaim for failure 

to state a claim. A jury awarded Townsend $2.7 million for underlying settlements 

and associated litigation expenses and $4.8 million in punitive damages. The 

district court denied Göknur’s motion for judgment as a matter of law on punitive 

damages. The court also denied Townsend’s motion to alter or amend the 

judgment or, alternatively, for a new trial on damages, which requested 

enforcement of the parties’ damages stipulation. Finally, the district court 
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dismissed Townsend’s claims for declaratory relief and violation of the California 

Unfair Competition Law (“UCL”), CAL. BUS. & PROF. CODE § 17200. We have 

jurisdiction over the parties’ appeals pursuant to 28 U.S.C. § 1291. We affirm in 

part, reverse in part, and remand.

1. The district court correctly dismissed Göknur’s claim for false 

advertising. The Lanham Act holds liable “[a]ny person who . . . in commercial 

advertising or promotion, misrepresents the nature, characteristics, quality, or 

geographic origin of his or another person’s goods, services, or commercial 

activities.” 15 U.S.C. § 1125(a)(1)(B). Here, Göknur’s false advertising claim 

fails as a matter of law because Townsend’s recall press release did not propose a 

commercial transaction. Rice v. Fox Broad. Co., 330 F.3d 1170, 1181 (9th Cir. 

2003) (quoting City of Cincinnati v. Discovery Network, Inc., 507 U.S. 410, 422 

(1993)). Therefore, it was not “commercial advertising” for purposes of the 

Lanham Act. Id.

2. The district court did not abuse its discretion in refusing to adjust the 

jury’s compensatory damages award. Göknur and Townsend stipulated only that 

Townsend and its insurers spent approximately $13.7 million in “settlement” costs, 

and that these costs were reasonable. But the damages stipulation failed to discuss

who was responsible for those costs. Therefore, in seeking equitable 

indemnification, Townsend bore the burden of proving the degree of Göknur’s 
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fault in causing the stipulated damages. See Great W. Drywall, Inc. v. Interstate 

Fire & Cas. Co., 74 Cal. Rptr. 3d 657, 663 (Cal. Ct. App. 2008); Gem Developers 

v. Hallcraft Homes of San Diego, Inc., 261 Cal. Rptr. 626, 629–30 (Cal. Ct. App. 

1989). Thus, it was not an abuse of discretion for the district court to instruct the 

jury to consider apportionment of fault. The jury’s award of less than Townsend’s 

full stipulated losses was an implicit finding that Göknur was not fully at fault. 

3. Under California law, Townsend was required to produce “meaningful 

evidence of the defendant’s financial condition” in order to obtain punitive damages. 

Adams v. Murakami, 813 P.2d 1348, 1349 (Cal. 1991). Townsend provided 

evidence of Göknur’s income and assets, but none about its expenses and liabilities. 

“In most cases, evidence of earnings or profit alone are not sufficient ‘without 

examining the liabilities side of the balance sheet.’” Baxter v. Peterson, 58 Cal. 

Rptr. 3d 686, 691 (Cal. Ct. App. 2007) (quoting Kenly v. Ukegawa, 19 Cal. Rptr. 2d 

771, 776 (Cal. Ct. App. 1993)); see also Boyle v. Lorimar Prods., Inc., 13 F.3d 1357, 

1361 (9th Cir. 1994) (“The rule established by lower California courts is that only 

net, not gross, figures are relevant.”). Because a reasonable jury could not have 

relied on evidence of assets and income alone to arrive at a measure of Göknur’s 

financial condition or net worth without speculation, the award cannot stand. “When 

a punitive damage award is reversed based on the insufficiency of the evidence, no 

retrial of the issue is required” if the plaintiff “had ‘a full and fair opportunity to 
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present his case for punitive damages.’” Baxter, 58 Cal. Rptr. 3d at 692 (quoting 

Kelly v. Haag, 52 Cal. Rptr. 3d 126, 131 (Cal. Ct. App. 2006)). We thus “remand to 

the district court with instructions to dismiss the punitive claims.” Kaffaga v. Estate 

of Steinbeck, 938 F.3d 1006, 1019 (9th Cir. 2019). 

4. Townsend Farms contends that the district court erred in denying relief 

under the UCL because of its “mistaken interpretation that the jury did not find 

Göknur fully liable for the pomegranate adulteration.” But the district court’s 

interpretation was not mistaken. The decision of the district court is affirmed. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 

Each party shall bear its own costs.