With more and more class-action lawsuits against the food and beverage industry making headlines, FoodNavigator-USA caught up with an attorney specializing in complex corporate litigation to discuss the proper role of the courts, the shorter window for addressing crises and when ‘no comment’ just won’t cut it.
As the industry has witnessed in the ongoing state-vs.-federal battle on GMO labeling, actual food industry legislation is a very involved process that moves quite slowly. Part of the challenge is that new products come to market at a much faster clip than the process of Food and Drug Administration (FDA) rulemaking, which “leaves a gaping hole for litigation,” said Ron Levine, who co-chairs the litigation department at Herrick, Feinstein LLP in New York. But that doesn’t mean the courts should decide labeling laws, he added.
“My feeling is that the courts are not the proper forum for making decisions on labels. Since labeling is a national issue and you do not manufacture a product for New Jersey only or Arkansas only, it’s very important to have consistent, national rules. I’m a strong advocate of consistent, clean, unambiguous labeling rules, so companies aren’t faced with endless litigation in which they have to reinvent presentations they already may have made to the FDA.”
‘No comment’ not always the best comment
Not only that, but watchdog agencies like the FTC and plaintiff lawyers alike are constantly scrutinizing F&B companies’ advertising and social media channels for opportunities beyond product labels to make claims against companies.
“Because of social media, they have a very short cycle of news in order to respond,” Levine said. “Lawyers have to act quickly in response to these issues as they arise. When I began my practice, we received letters in mail and had a week to respond. Now you have a minute.”
Most lawyers aren’t well trained to deal with media, often defaulting to the famous “no comment” when approached about high-profile litigation because they’re afraid anything they say will bite them back in court, Levine added. “’No comment’ has gotten a bad name in the world of crisis management because it’s perceived as an admission of guilt.”
So what’s the best practice when it comes to crisis management in real time? Levine said to consider moral responsibility first.
“In my view, corporate America can’t sound as if it’s cold and uncaring, but needs to get to bottom of any problem. The public understands that a good corporate citizen can’t come up with an answer in 10 minutes. But there’s a limit to how much time public will give a company to respond, especially when it’s a question of food.”
Social media can clue firms into to early warning signs of problems
Indeed, food is a unique area, both because it’s a highly emotional topic and one everyone understands it. “We’re not talking about advanced computer science. It’s something you put in mouth.” It’s for that reason that companies need to be especially sensitive to social media.
“Some companies haven’t gotten their arm around social media and put it in the hands of few employees,” Levine said. “They’re not taking advantage of the opportunity to monitor it, which to me is an early warning sign of problems. A good analogy is a heart attack. Though the crisis comes suddenly, you have early signs. There are early signs on the internet, too. That’s where some plaintiff lawyers troll for clients.”
The same goes for warning letters and recalls, in that companies need to be prepared for the likelihood that they’ll result in litigation—though 90% of litigation results in settlement. “It’s a changing landscape, and it becomes a question of priorities and where companies’ attention is focused. It often depends on size of company, but smaller, mid-size food companies need to figure out where they’re going to put their attention as well.”
Ron Levine also co-chairs Perrin Conferences, which is hosting a day-long seminar in Chicago on April 8 tackling complex consumer litigation in the food and beverage industry. Click here for more information.