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Litigation Against the Food Industry

In order to initiate a lawsuit, the plaintiff must have a cause of action against the defendant. This means that the plaintiff must identify a law that the defendant violated and explain how this action harmed the plaintiff. Most cases initiated by private plaintiffs or state attorneys general against the food industry are brought pursuant to state consumer protection statutes. Every state and the District of Columbia has consumer protection statutes that are patterned after the Federal Trade Commission Act to varying degrees and that generally prohibit unfair and deceptive acts and practices.[1] Attorney general litigation is premised on protecting the public by forcing companies to change their marketing or business practices or by obtaining financial recovery to punish deceptive practices or to restore losses to the state or its citizens. Private plaintiffs, on the other hand, may seek personal financial gain, damages for losses incurred due to deceptive practices, or they may have loftier goals to protect the public. Consumer advocacy groups sometimes bring cases on behalf of individuals for the purpose of protecting the public and changing business practices. It is important to note that even though both attorneys general and private plaintiffs bring litigation under the same state consumer protection statutes, there are more procedural barriers to private plaintiffs initiating such lawsuits; as a consequence, attorney general lawsuits are generally more successful and can achieve broader reaching results—although they are rarer.[2] As discussed in Chapter 1, attorneys general have pre-litigation powers that they may utilize more often than litigation in the context of food marketing.

Private plaintiffs also sue according to common law theories of tort liability. This refers to case law that established the precedent for viable causes of action based on a civil, as opposed to criminal, wrongdoing. There are many types of torts, for example, that a defendant was negligent, or failed to warn of dangers inherent in the product, or manufactured a product defectively, thus causing injury. In very general terms, most torts require a plaintiff to show that the defendant owed the plaintiff some type of duty of care and breached that duty, which caused the plaintiff an actual loss or damage.[3]

One of the most notorious food-related cases, Pelman v. McDonald’s, stemmed from a 2002 lawsuit by two teenagers from New York City against the restaurant company, McDonald’s. The plaintiffs claimed that McDonald’s advertising campaign and the company’s failure to disclose certain facts about its food increased the likelihood that the teenagers and other consumers would develop poor health conditions such as obesity and diabetes as a consequence of consuming McDonald’s food.[4] The public reaction to this novel lawsuit was decidedly negative. The plaintiffs were not able to certify a class, meaning the court found that the plaintiffs’ claims did not support a class action, and the case was ultimately dismissed in 2010. However, Pelman v. McDonald’s had farther reaching consequences than anyone could have expected for litigation against restaurants, as explored in Box 8.1.

The Nutrition Labeling and Education Act of 1990 (NLEA) has spurred a great deal of litigation.[5] The Food Drug and Cosmetic Act does not provide a private right of action, which means it does not permit a private plaintiff to sue a food company for violating the NLEA as a method to privately enforce the FDCA in the absence of FDA enforcement. Therefore, consumers and consumer advocates sue food companies under state consumer protection laws when they believe a company’s action harmed them. The company’s action may have violated the NLEA, but a legally viable claim is not that the violation itself harmed the plaintiff, but rather that the false or misleading label violated the state consumer protection law’s prohibition on unfair and deceptive acts or practices. So, for example, a lawsuit arguing that a company’s violation of the NLEA in and of itself harmed plaintiffs would likely get dismissed as was the case when plaintiffs sued Coca-Cola over its product, Diet Coke Plus. The plaintiffs argued that their harm was that they purchased a product that violated the FDA’s regulation prohibiting the fortification, or addition of vitamins, to soda. The court dismissed the case finding that the plaintiffs suffered no damages.[6] Conversely, a legally viable claim is one in which the food company’s label is false or deceptive, regardless of whether it violates the NLEA. Thus, a viable claim would be that they would not have purchased the product but for the deception and a court should allow this claim to go forward.

There are two other potential barriers to private plaintiffs seeking to address labeling deficiencies through litigation. The NLEA has a preemption provision that explicitly prohibits efforts that seek to compel manufacturers to label food in a manner that is “not identical to” the federal requirements.[7] Therefore, it is not a legally viable complaint for a plaintiff to argue that a different labeling scheme is necessary for the label to not be unfair or deceptive under the state consumer protection law. For example, if plaintiffs think a food company’s “0 grams of trans fat” statement is deceptive because this number is based on the true amount rounded down, they do not have a legally viable argument that the company’s

BOX 8.1

How Litigation Against McDonald’s Changed the Food Litigation Landscape

Two teenagers who ate at McDonald's several times a week, usually for lunch during the school day or on the way to or from school, sued the restaurant in 2002.a The plaintiffs' main causes of action were based on New York's consumer protection laws. They alleged that McDonald's misled the girls, through advertising campaigns and other publicity, to believe that its food products were nutritious and part of a healthy lifestyle if consumed on a daily basis. They also alleged that McDonald's failed to disclose the fact that certain foods were substantially less healthy due to processing and ingredient additives. The plaintiffs argued that as a result of McDonald's deceptive acts and practices, they suffered damages including an increased likelihood of developing obesity, diabetes, coronary heart disease, hypertension, and elevated cholesterol.

Lawyers representing McDonald's publicly opposed this litigation, telling the press that “if this case were allowed to proceed ‘it would lead to an avalanche of litigation.' ”b They also admonished the plaintiffs, stating: “Every responsible person understands what is in products such as hamburgers and fries, as well as the consequence to one's waistline, and potentially to one's health, of excessively eating those foods over a prolonged period of time.”c The public seemed to agree with McDonald's. A CNN poll from 2003 found that 96% of the almost 50,000 respondents said that McDonald's should not be held responsible in court for an individual's obesity.d

In response to this litigation, the National Restaurant Association led a nationwide campaign urging state and federal legislators to adopt what were euphemistically called “Cheeseburger Bills,” although the real names for the bills are more telling.6 The first of these, the Personal Responsibility in Food Consumption Act, was first introduced in the United States House of Representatives in 2003.f This was followed by the Commonsense Consumption Act, introduced in the Senate in 2005. These bills, and the state bills that followed, sought to thwart the ability of potential plaintiffs to bring Pelman- like litigation in court. The representatives who introduced these bills argued that consumers had to take personal responsibility for their food intake,g and others argued that the laws were needed to protect businesses from frivolous litigation.11

Federal legislation never passed; however, the restaurant industry was much more successful at the state level due to intense lobbying efforts, which included drafting the legislation for state legislators. By 2005, 20 states had passed common-sense consumption acts and by 2013, 25 states passed such laws. These effectively withdraw the ability of a plaintiff to bring a claim arguing that consuming products from food service establishments caused them poor health outcomes. Legal scholars who have analyzed all 25 laws explained the “point” of common-sense consumption laws “was not to prevent frivolous litigation, from which industry already had plentiful protection, but rather to limit legally and factually sound litigation, which might eventually have harmed industry's bottom line and forced it to change its practices.”1 By avoiding litigation, the restaurant industry also avoids plaintiffs' discovery into its food production practices. Although 25 states do not have common-sense consumption acts, the negative backlash from Pelman and the unsuccessful litigation itself discourage plaintiffs' lawyers from bringing similar cases. aPelman v. McDonald’s Corp., 2003 U.S. Dist. LEXIS 15202 (S.D.N.Y. 2003).

Jonathan Wald. McDonald’s obesity suit tossed. CNN. February 17, 2003. http://money.cnn. com/2003/01/22/news/companies/mcdonalds/

(continued)

164 Food Law for Public Health BOX 8.1

Continued

'Jonathan Wald. McDonald’s obesity suit tossed. CNN. February 17, 2003. http://money.cnn. com/2003/01/22/news/companies/mcdonalds/

Jonathan Wald. McDonald’s obesity suit tossed. CNN. February 17, 2003. Poll: http://money.cnn. com/POLLSERVER/results/2223.html

eM. Warner. The Food Industry Empire Strikes Back. The New York Times. July 7, 2005. http:// www.nytimes.com/2005/07/07/business/07food.html?pagewanted=all&_r=1&

fDavid Burnett. Fast-Food Lawsuits and the Cheeseburger Bill: Critiquing Congress’s Response to the Obesity Epidemic. Virginia Journal of Social Policy and Law. 2007;14:357.

gDavid Burnett. Fast-Food Lawsuits and the Cheeseburger Bill: Critiquing Congress’s Response to the Obesity Epidemic. Virginia Journal of Social Policy and Law. 2007; 14:357.

hCara L. Wilking and Richard A. Daynard. Beyond Cheeseburgers: The Impact of Commonsense Consumption Acts on Future Obesity-Related Lawsuits. Food Drug Law Journal. 2013;68:229.

iM. Warner. The Food Industry Empire Strikes Back. The New York Times. July 7, 2005. http:// www.nytimes.com/2005/07/07/business/07food.html?pagewanted=all&_r=1&

JCara L. Wilking and Richard A. Daynard. Beyond Cheeseburgers: The Impact of Commonsense Consumption Acts on Future Obesity-Related Lawsuits. Food Drug Law Journal. 2013;68:229, 237.

product should disclose the true amount of trans fat because the NLEA permits rounding down for amounts less than 0.5 grams. In such a case, the claim that defendant should label the product differently than as required by the NLEA is preempted.[8]

Sometimes a claim might not be preempted, but a court will decline to hear the case based on the doctrine of primary jurisdiction. This means that the issue in the litigation is one that the regulatory agency has not decided but it is one under that agency’s purview. If this doctrine applies, the courts’ perspective is that the agency has the primary jurisdiction to decide this novel or complex issue, rather than the courts.[9] The goal is to allow the agency to create the regulatory scheme and not have judges’ decisions take the place of a scheme intended by the agency. Permitting such claims to go forward would be particularly problematic if different courts take on the same question and come to conflicting conclusions on how the food industry should act on the topic in dispute, leaving them with contradictory guidance going forward.

One method to avoid preemption or the doctrine of primary jurisdiction would to bring a lawsuit based on the broader marketing campaign, such as a television commercial that either uses the same misleading language as the label or that displays the product itself in the advertisement. As opposed to the FDCA, the Federal Trade Commission Act contains a savings clause expressly permitting litigation based on state statutes that prohibit unfair and deceptive marketing.11

A private plaintiff must have seen the commercial in question and under almost all state consumer protection acts, must have suffered an injury. Conversely, in all states the state attorney general can bring a lawsuit to protect the public from a deceptive advertisement without these additional requirements.

State attorneys general more rarely bring consumer protection litigation against food companies for unfair and deceptive marketing or labeling practices than do private plaintiffs, but when they do, they generally have more success and positively settle the case. For example, in 2010, 39 attorneys general brought an action against The Dannon Company for making health claims about their Activia and DanActive yogurt products that were not substantiated by scientific evidence.[10] Dannon settled the case for $21 million, which was the largest payment in a multistate settlement between attorneys general and a food producer as of that date. In comparison, it is interesting to note that the Federal Trade Commission (FTC) simultaneously brought charges against Dannon for the same violations. The FTC likewise settled the case but unlike the attorneys general, the agency’s settlement involved Dannon agreeing to refrain from making unsubstantiated health claims about its two products in the future.[11] Attorneys general have agreed to similar types of settlements in the past that require companies to change their marketing practices.[12] In the Dannon case, the attorneys general and the FTC coordinated their efforts. Had the FTC not brought an action, the attorneys general likely also would have included a requirement for the company to refrain from such practices in their settlement agreement. Nevertheless, a large financial settlement is always considered a big win in the context of litigation.

Private plaintiffs’ lawsuits against food companies have had mixed results in the pure litigation sense. The seminal case representing a true litigation win in the context of food labels is the 2008 case of Williams v. Gerber.[13] In this case, a private plaintiff sued Gerber under California consumer protection laws. She argued among other things that Gerber’s Fruit Juice Snacks were deceptively labeled because the term “fruit juice” on the packaging was placed alongside images of oranges, peaches, strawberries, and cherries despite the fact that the product did not contain fruit juice from these fruit. The Ninth Circuit Court of

Appeals agreed. It found that, “reasonable consumers should not be expected to look beyond misleading representations on the front of the box to discover the truth from the ingredient list in small print on the side of the box.”[14] The court further stated: “We do not think that the FDA requires an ingredient list so that manufacturers can mislead consumers and then rely on the ingredient list to correct those misinterpretations and provide a shield for liability for the decep- tion.”[15] It is noteworthy that the California Attorney General wrote an amicus brief, or friend of the court brief, in support of the plaintiff. An amicus brief is filed by a non-party who has an interest in the outcome of the case and seeks to suggest the way the court should decide.

Many cases do not result in positive outcomes for private plaintiffs, such as when the plaintiff cannot point to any actual damages, as in the Diet Coke Plus case mentioned above, or because the court finds that the plaintiff’s position is not akin to that of a “reasonable consumer.” An example of this latter finding is a case in direct contrast to Williams v. Gerber: the 2009 case of Sugawara v. PepsiCo, also brought pursuant to California consumer protection law.[16] In that case, a private plaintiff sued the manufacturer of Cap’n Crunch with Crunchberries, arguing that the packaging and marketing campaign were deceptive. Specifically, the plaintiff alleged that the colorful pictures of Crunchberries, combined with use of the word berry in the product name, conveyed the message that the cereal contained real fruit. The district court disagreed that a reasonable consumer would have understood the product packaging or the term “Crunchberries” to indicate that “brightly colored cereal balls” contained real fruit.[17] It further stated: “As far as this Court has been made aware, there is no such fruit growing in the wild or occurring naturally in any part of the world.”[17] Thus, the court dismissed the case, finding that because a reasonable consumer would not have been deceived by the term, the food company could not be found to have violated the consumer protection act.

Consumer advocacy groups sometimes pair up with individual plaintiffs to initiate lawsuits solely intended to change the food information environment. Courts call this acting like a “private attorney general” because the goal is to protect the public. These lawsuits do not necessarily define success by what happens in court, but rather whether the case pressures the company to change its behavior or rouses the public to put pressure on the company. This type of litigation can sometimes be viewed as a method of “regulating” the industry through the court system and may be considered a form of activism rather than plaintiffs seeking to redress their grievances. Three diverse examples illustrate this strategy.

The first example is when a lawsuit is intended to encourage broader change, but the judge dismisses the case outright because there is no true legal violation stated in the Complaint. This occurred when a consumer advocacy group teamed up with a private plaintiff to sue McDonald’s over the toys in Happy Meals. The lawsuit argued that McDonald’s uses toys “to lure small children into McDonald’s,” which it alleged was unfair and deceptive marketing under state consumer protection laws.[19] The judge dismissed the case without writing an opinion, which means he thought there was no set of facts under which this claim could be found to violate the law. The lawsuit itself, however, was discussed in the media, which started a national conversation about toys in Happy Meals. Such a result is considered one positive outcome by the advocacy community.

The second example of activist litigation was more successful. In May 2003, a lawyer sued Kraft Foods seeking an injunction for the food company “to cease and desist from marketing and selling Oreo Cookies to children in the State of California, until such cookies contain no partially hydrogenated oil or other trans fat.”[20] The lawyer’s goal was to get trans fat out of the food supply. He hoped that a positive outcome with this case would have a “domino effect” and other food companies would remove it from their products.[20] The lawyer ended up withdrawing his own case because: “Just one day after the media coverage about the lawsuit began, Kraft announced that it would reduce or eliminate the trans fat in the Oreo.”[20] Kraft and other companies later removed trans fat from many of their products due to the FDA’s new labeling rule that required trans fat to be listed on the Nutrition Facts Panel by January 2006.[23]

The third strategy takes a long-term view that a few losses in court, in the end, still may result in an overall change. This is exemplified by litigation over the term “natural.” Consumers and advocacy groups initiated a substantial amount of litigation related to the term “natural.” The FDA has explained that it will not “restrict the use of the term ‘natural’ except for added color, synthetic substances, and flavors;”[24] however, it has not issued a final regulation defining the term. As a result, “All Natural,” “100% Natural,” and “Natural” were found on a wide variety of products, ranging from ice cream, juice, sugary beverages, and artificial sweetener, to creamer, cereal, and snacks.27,28 Plaintiffs brought litigation over these products, arguing that ingredients such as high fructose corn syrup, alkalized cocoa, citric acid, and genetically modified organisms render the products not natural and thus the label is false.

This series of litigation had mixed results in court. Courts dismissed some cases based on the doctrine of primary jurisdiction while others allowed the case to go forward; one court found that the plaintiffs’ claim was simply “rhetoric” and not based on any evidence.[25] [26] [27] After years of litigation ups and downs starting in 2003,[28] the tide seemed to turn in 2013 when two major food manufacturers were subject to class action lawsuits and settled for $4 and 39 million respectively—in both cases tied to “natural” claims on food containing genetically modified organisms. In 2013, the Wall Street Journal reported the use of the term, “natural,” was down significantly, and that, amid the aforementioned lawsuits, a growing number of food and beverage companies were removing such claims from packages.[29] In 2014, more settlements followed.[30] As part of these settlement agreements, the companies agreed to remove the natural claims from the products. Consumer advocacy groups view this as the goal of the litigation and consider the label change a litigation “win.” The plaintiffs involved in the class action lawsuits generally receive refunds for the products they purchased.[31]

  • [1] Glenn Kaplan and Chris Barry Smith. Patching the Holes in the Consumer Product SafetyNet: Using State Unfair Practices Laws To Make Handguns and Other Consumer Goods Safer. YaleJournal on Regulation. 2000117:253, 318.
  • [2] J. L. Pomeranz. Litigation to Address Misleading Food Label Claims and the Role of the StateAttorneys General. Regent University Law Review. 2014;26:421-455.
  • [3] L.O. Gostin. Public Health Law: Power, Duty, Restraint (2nd ed.). Los Angeles: University ofCalifornia Press; 2008, p. 184.
  • [4] Pelman v. McDonald’s Corp., 2003 U.S. Dist. LEXIS 15202 (S.D.N.Y. 2003).
  • [5] J. L. Pomeranz. Litigation to Address Misleading Food Label Claims and the Role of the StateAttorneys General, Regent University Law Review. 2014126:421.
  • [6] Mason v. Coca-Cola Co., 774 F. Supp. 2d 699 (D.N.J. 2011).
  • [7] 21 U.S.C. § 343-1(a)(5).
  • [8] Chacanaca v. The QuakerOats Co., 752 F. Supp. 2d 1111,1119-21 (NDCA 2010).
  • [9] Ivie v. Kraft Foods Global Inc., 2013 U.S. Dist. LEXIS 25615 (N.D. CA February 25, 2013).
  • [10] Attorney General of Massachusetts. Massachusetts Attorney General Martha Coakley and38 Other States Settle with Dannon for $21 Million Regarding Deceptive Advertising of Activiaand DanActive Yogurt Products. December 15, 2010. http://www.mass.gov/ago/news-and-updates/press-releases/20i0/ag-coakley-and-38-other-states-settle-with.html
  • [11] Federal Trade Commission. Dannon Agrees to Drop Exaggerated Health Claims forActivia Yogurt and DanActive Dairy Drink. December 15, 2010. http://www.ftc.gov/news-events/press-releases/2010/12/dannon-agrees-drop-exaggerated-health-claims-activia-yogurt
  • [12] California Attorney General. Brown Secures Agreement with American Spirit CigarettesMaker over Alleged Misleading Marketing of Organic Tobacco Products. March 1, 2010. http://oag.ca.gov/news/press-releases/brown-secures-agreement-american-spirit-cigarettes-maker-over-alleged-misleading
  • [13] Williams v. Gerber Prods. Co., 523 F.3d 934 (9th Cir. 2008).
  • [14] Williams v. Gerber Prods. Co., 523 F.3d 934, 939-940 (9th Cir. 2008).
  • [15] Williams v. Gerber Prods. Co., 523 F.3d 934, 940 (9th Cir. 2008).
  • [16] Sugawara v. PepsiCo, Inc. 2009 U.S. Dist. LEXIS 43127, 69 U.C.C. Rep. Serv. 2d (Callaghan)326 (E.D. CA 2009).
  • [17] Sugawara v. PepsiCo, Inc. 2009 U.S. Dist. LEXIS 43127 at *12, 69 U.C.C. Rep. Serv. 2d(Callaghan) 326 (E.D. CA 2009).
  • [18] Sugawara v. PepsiCo, Inc. 2009 U.S. Dist. LEXIS 43127 at *12, 69 U.C.C. Rep. Serv. 2d(Callaghan) 326 (E.D. CA 2009).
  • [19] Center for Science in the Public Interest. Litigation Project—Closed Cases. http://www.cspinet.org/litigation/closed.html
  • [20] Ban Trans Fats. The Oreo Case. http://www.bantransfats.com/theoreocase.html
  • [21] Ban Trans Fats. The Oreo Case. http://www.bantransfats.com/theoreocase.html
  • [22] Ban Trans Fats. The Oreo Case. http://www.bantransfats.com/theoreocase.html
  • [23] Lorraine Heller. Kraft Slashes Trans Fats in Time for Labeling Deadline. Food Navigator-USA. December 23, 2005. http://www.foodnavigator-usa.com/Suppliers2/Kraft-slashes-trans-fats-in-time-for-labeling-deadline
  • [24] 58 Fed. Reg. 2302, 2407 (Jan. 6, 1993).
  • [25] Mike Esterl. Some Food Companies Ditch 'Natural’ Label; Amid Lawsuits Over the Claim,More Producers Drop the Word. The Wall Street Journal. November 6, 2013.
  • [26] J. L. Pomeranz. Litigation to Address Misleading Food Label Claims and the Role of the StateAttorneys General, Regent University Law Review. 2014; 26:421.
  • [27] J. L. Pomeranz. Litigation to Address Misleading Food Label Claims and the Role of the StateAttorneys General, Regent University Law Review. 2014^6:421.
  • [28] Elaine Watson. PopChips Agrees 32.4m 'All-natural’ Lawsuit Settlement; SettlementsAlso Likely in Kashi and Bear Naked Cases. Food Navigator-USA. February 26, 2014 http://www.foodnavigator-usa.com/Regulation/PopChips-agrees-2.4m-all-natural-lawsuit-settlement-settlements-also-likely-in-Kashi-and-Bear-Naked-cases
  • [29] Mike Esterl. Some Food Companies Ditch 'Natural’ Label. The Wall Street Journal. November6, 2013. http://online.wsj.com/news/articles/SB10001424052702304470504579163933732367084
  • [30] Elaine Watson. PopChips Agrees 32.4m 'All-natural’ Lawsuit Settlement; Settlements AlsoLikely in Kashi and Bear Naked Cases. Food Navigator-USA. February 26, 2014.
  • [31] Elaine Watson. Judge Gives Initial Thumbs Up to 33.4m Settlement Over Trader Joe’s'All-natural’ Claims. Food Navigator-USA. February 11, 2014. http://www.foodnavigator-usa.com/Regulation/Judge-gives-initial-thumbs-up-to -3.4m-settlement-over-Trader-Joe-s-all-natural-claims
 
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