“Food companies will argue that these are harmless crimes – the tobacco companies said the same thing.” - Don Barrett, Barrett Law Group
Throughout 2012, a wave of new class-action lawsuits in the food industry continued to roll forward. A powerful and well-financed consortium of plaintiffs’ attorneys, some of whom have in the past challenged big tobacco, asbestos manufacturers, the automobile industry and pharmaceutical companies, have set their sights on the food industry. In August 2012, The New York Times reported that at least 25 class actions had been filed in 2012 against food industry defendants, with more filed in the fall and winter. These cases challenge some of the largest food companies in the world including Chobani, ConAgra Foods, Dr. Pepper Snapple Group, General Mills, Heinz, Kellogg, Pepsico, Unilever, Welch Foods, Inc. and others. Industry experts are watching these cases closely to see how they fare, what food industry companies should do to immediately reduce the risk and what lessons other industries can learn to avoid becoming the next targets.
Some of the onslaught of new cases that came in 2012 were revealed to be a long-researched strategic project. The Barrett Law Group, one of the primary players in these cases, stated they researched labels and regulations for two years before filing their first case. With industry-challenging positions such as “sugar is just as deadly as poison” to diabetics, these lawsuits threaten billions of dollars in potential liability. The lawsuits have been strategically orchestrated across multiple states with parallel actions and use a variety of legal theories including Food Drug and Cosmetic Act regulations, Food and Drug Administration regulations, Lanham Act false advertising claims and a host of state consumer protection statutes and common law legal theories.
Many of the advertising and labeling claims at issue are common messages food companies have been delivering to consumers for years. They include: zero calories, zero fat, low fat, natural, nothing artificial, healthy, organic, antioxidant, fruit, vegetable, immune system booster and heart healthy. Some of the claims are directed at words that merely suggest some type of health benefit, such as defense, rescue, energy and endurance. Other suits challenge whether labels adequately identify artificial ingredients such as flavoring additives, propellants, glutens and genetically modified ingredients.
The latest and subject of much notoriety, is a New Jersey class action filed just days ago that challenges Subway’s “footlong” sandwich advertising. As these cases progress, some will be guided by federal regulations defining exactly what the challenged term communicates. The majority, though, will hinge on whether or not each particular jury finds that in context, the communications were literally false or misleading.
As these cases approach trial, similarly situated companies should pay close attention. The restaurant and hotel industries, for example, present likely targets. It is a rare restaurant menu that does not identify some of the items as “heart healthy,” “organic” or “low fat.” Further, if any of these cases results in a large false advertising verdict, plaintiffs will be incentivized to target other industries. Accordingly, this is a critical time for in-house counsel to communicate with their marketing and labeling teams. Developing a strong plan to educate marketing personnel about these risks and maintaining legal oversight and review of product labeling and advertising claims will help guard against the company becoming the next target and keep the company’s customers well informed.