Editors' note: Lisa A. Rickard is the president of the U.S. Chamber Institute for Legal Reform.
Food labeled as “healthy,” “natural” or “preservative-free” might attract a consumer’s interest when shopping at their local grocery store. But these labels also attract plaintiffs’ lawyers looking to cash in on different interpretations of those words.
Lawsuits over food labeling can bring big paydays for attorneys, but leave consumers with nothing more than higher prices in the checkout line.
Food labeling litigation has become a growing legal industry in recent years, with more than 425 active cases in federal courts between 2015 and 2016 -- a staggering increase from the 19 cases in 2008 – according to “The Food Court: Trends in Food and Beverage Class Action Litigation,” a new study by the U.S. Chamber Institute for Legal Reform.
This trend is particularly prevalent in the federal courts of four states where three-quarters of food class action suits are filed: California (36%), New York (22%), Florida (12%) and Illinois (7%). This isn’t surprising, as three of these states are at the very bottom of the list of worst climates for lawsuits in America.
U.S. District Judge Robert Hinkle of the Northern District of Florida presided over a case that claimed Tito’s Handmade Vodka deceived the public by advertising its product as made in an “old-fashioned pot.” The plaintiffs asserted in their allegations that the pot was not old-fashioned enough. Luckily, Judge Hinkle found the plaintiffs’ definition too narrow, finding the pot “may be quite modern in some respects, but [it] still can be called ‘old fashioned.’ ”
Some state courts, such as those in Missouri, also see significant food litigation. In these states, attorneys have discovered that vague laws allowing them to challenge business practices as “unfair” or “deceptive,” combined with courts that are hesitant to throw out even the most ridiculous of cases, are conducive to securing large settlements from food producers.
Cases increasingly target products marketed as healthy. Lawyers often claim, for instance, that images of fruits and vegetables might somehow mislead a consumer to believe the product is healthier than it actually is.
Most consumers know that eating doughnuts won’t help increase their intake of potassium and vitamins A and K, but a lawsuit against Krispy Kreme claims the plaintiffs were deprived of the nutritional value of real berries from the doughnut maker’s raspberry filling.
Breakfast cereals with added sugar have also been targeted in this way, with litigators arguing that consumers may mistakenly believe Cocoa Puffs and Lucky Charms are healthy simply because they are labeled as containing whole grains.
“Slack fill” litigation, or suits that challenge the extra space in food packaging, are also common. Fortunately, courts have thrown out some of the most questionable cases – including claims that ice in Starbucks iced coffee deceptively reduces the amount of coffee in the cup, or that containers of Nabisco mini-Oreos are deceptively larger than the amount of cookies inside, despite labels that indicate the precise number included. Other slack fill suits have forced food and beverage producers to settle for significant sums. Faced with steep litigation costs and reputational harm, there is often little choice.
The attorneys leading this class action litigation trend don’t appear to have much respect for the consumers they claim to represent. The arguments grounding the suits assume consumers lack not only nutritional knowledge, but also the basic cognitive skills required to read a product’s ingredients and make educated decisions.
While the merit in the plaintiffs’ lawyers’ arguments could be debatable, there is no debate over whether consumers actually benefit from these lawsuits. They don’t.
In the lawsuit against Subway over their signature foot-long subs, which allegedly did not measure a full 12 inches, the lawyers received over $500,000 in the settlement. The majority of plaintiffs received nothing.
In other cases, plaintiffs are forced to choose between a free product or token cash. In 2013, Red Bull settled a class action suit that claimed its slogan “Red Bull gives you wings” led consumers to believe the drink provided more benefits than coffee or caffeine pills. The plaintiffs’ lawyers walked away with $3.4 million, while class members received a 4-pack of Red Bull or $4.23.
There are ways food litigation could be more equitable to consumers. Different branches of government all need to get involved and do a part. This includes:
Congress should pass the Fairness in Class Action Litigation Act, which will alleviate many of the problems discussed in this paper by eliminating “no-injury” class actions and requiring that the majority of settlement dollars go to the class members, instead of to the lawyers.
Courts should reject attorney fee awards that are disproportionate to the actual benefit to consumers.
State legislatures should amend consumer protection statutes to require that plaintiffs show actual injury, reliance, and out-of-pocket loss.
Regulatory agencies should provide clarity on common labeling terms, and closing off further litigation avenues.
Shopping for groceries is a part of life. Consumers shouldn’t have to pick up the costs for attorneys who shop for lawsuits.