The number of consumer fraud class actions brought in federal court against food and beverage companies skyrocketed from 19 cases in 2008 to more than 100 in 2012, according to the U.S. Chamber Institute for Legal Reform (ILR)*.
Between March 2012 and March 2013 a network of plaintiffs’ lawyers filed 28 food labeling class actions in the U.S. District Court for the Northern District of California alone, says the ILR in a report called ‘The New Lawsuit Ecosystem’.
“Courts are seeing an unprecedented surge in consumer class actions against food manufacturers. The epicenter of such lawsuits is California, where a few lawyers have taken advantage of the most plaintiff-friendly consumer laws in the nation to bring lawsuits alleging trivial violations of federal regulations and to seek millions of dollars where no reasonable consumer was deceived."
While plaintiff’s attorneys claim these lawsuits are consumer-driven complaints designed to force ‘Big Food’ to stop duping shoppers over how healthy their products are, ILR says most are frivolous cases without genuine victims that focus on highly technical infringements of food labeling legislation or exploit the lack of regulatory clarity over what is ‘natural’.
Courts are seeing an unprecedented surge in consumer class actions against food manufacturers
Several factors have driven the recent surge in lawsuits, alleges the report:
• Plaintiffs’ lawyers viewing the food industry as a relatively untapped ‘deep pocket’.
• Plaintiff-friendly consumer protection laws that provide an opportunity to attempt to recover without showing an actual injury.
• A perception that certain courts are willing to entertain such claims.
• An expectation that the discovery process will uncover unflattering or inflammatory documents that can be taken out of context and exploited to attack the industry.
• Un-addressed or uncertain positions of the FDA with respect to aspects of food labeling (eg. 'natural').
• An increasingly health-conscious public.
These lawyer-driven claims recycle complaints and re-use plaintiffs
According to the ILR, food class action litigation is “largely driven by the financial interests of plaintiffs’ lawyers and the regulatory agenda of certain advocacy groups, not consumers”.
Meanwhile, some plaintiffs’ firms repeatedly use the same person to file multiple class actions involving different companies and products, says the report: “These lawyer-driven claims recycle complaints and even re-use plaintiffs to file lawsuits against manufacturers.”
CSPI: One or two lawsuits are truly trivial, hundreds more are the result of clear deceptive behavior by some food companies
So what do the plaintiff’s attorneys and consumer advocacy groups attacked in the report say?
Stephen Gardner, director of litigation at the Center for Science in the Public Interest (CSPI), which has sued several food and beverage giants over allegedly false and misleading claims, told FoodNavigator-USA that he found it "plain silly that the Chamber... thinks there's something wrong with looking to the third branch of government to address the multiple frauds perpetrated on Americans by some unscrupulous food companies".
He added: “The claim that 'advocacy groups' bring these suits to advance an agenda is absolutely the case. CSPI deliberately created the Litigation Project nine years ago because at that time neither Congress nor federal agencies were helping consumers in this area. Now, the FTC is definitely back on the job and even FDA shows some signs of life. Congress is, well, still Congress."
Meanwhile, as for the profit motive, he added: "Defense lawyers represent defendants to make money. Plaintiff lawyers try to change behavior and make companies give up some of their ill-gotten profits, and only get paid if they win. Defense lawyers get paid if they lose.
"I've seen one or two lawsuits that were truly trivial, dozens and hundreds more are solid and the result of clear deceptive behavior by some food companies."
Top plaintiff’s attorney: ‘We’re eating all this sugar without even realizing it because it’s hidden behind terms like ‘evaporated cane juice’
Meanwhile, in an interview with FoodNavigator-USA earlier this month, Pierce Gore of Pratt & Associates, one of the top plaintiffs' attorneys taking aim at the food and beverage industry, also rejected claims that the lawsuits he was filing were frivolous.
“People will always say that these cases are frivolous. But when you really look at what’s on food labels you start to arrive at the conclusion that the food industry needs to clean up its act.”
Gore, who has sued scores of big names from Chobani to Trader Joe's over the past 18 months, added: “Our kids are swimming in sugar; there’s an epidemic of type two diabetes, and part of the problem is that we’re eating all this sugar without even realizing it because it’s hidden behind terms like ‘evaporated cane juice’.”
As for the allegation that aggrieved consumers are not really the driving force behind all this civil litigation, but are instead cynically sought out and co-opted by attorneys that have scoured labels for technical violations of labeling rules, Gore was dismissive.
"I don’t have to go out looking for clients, they find me.”
*The U.S. Chamber Institute for Legal Reform (ILR) is a tax-exempt, separately incorporated affiliate of the U.S. Chamber of Commerce on a mission “to restore balance, ensure justice, and maintain integrity within the civil legal system”.