According to an article this week in the New York Times, food mislabeling litigation is on the rise. Following on the heels of a wave of such litigation over the last few years, a group of litigators who made their names representing plaintiffs in Big Tobacco litigation are getting in on the action. According to the Times, this cohort has filed 25 cases against some of the most prominent names in the food and beverage business, including PepsiCo, Heinz and General Mills.
The suits, filed over the last four months, assert that food makers are misleading consumers and violating federal regulations by wrongly labeling products and ingredients. While there has been a barrage of litigation against the industry in recent years, the tobacco lawyers are moving particularly aggressively. They are asking a federal court in California to halt ConAgra’s sales of Pam cooking spray, Swiss Miss cocoa products and some Hunt’s canned tomatoes.
The Times reports that plaintiffs’ attorneys believe damages from these cases could total in the billions. The companies and their lawyers are more skeptical, citing a 2009 California case against PepsiCo that was dismissed using a “reasonable consumer” standard.
Yet some in the industry are urging companies to become more vigilant about compliance. Even if many or most of these claims are ultimately unsuccessful, the increase in litigation is costly for the companies and increases the risk of potentially large settlements or public relations trouble. Madeleine M. McDonough, co-chair of Shook, Hardy & Bacon’s agribusiness and food safety practice, recently emphasized the importance of compliance in the current environment. With so many lawsuits now in court, regulatory missteps could become very costly if they are not caught and remedied.
McDonough’s point is valuable, and calls to mind our post from last week on the role of outside counsel in compliance, and how outside firms might help clients avoid potentially expensive litigation. Susan Hackett, you’ll recall, offered as an example the experience of Stanford University in using outside firms to help the university and its subsidiaries avoid future litigation. It would be interesting to see the same approach applied in a consumer products industry like food and beverage, where a single successful mislabeling case could have a potentially major impact on the company’s reputation and bottom line.
At this point, it is impossible to know whether food mislabeling cases could have the same effect on the legal market as tobacco litigation once did. While agribusiness is an enormous global industry that could potentially keep litigators and regulatory attorneys in business for decades, food mislabeling cases often lack the evidence of serious harm that helped lead to big damages in the tobacco industry.
One sign that might indicate that food mislabeling cases have staying power is when government agencies get involved. The tobacco wars were fought on several fronts, and federal and state agencies played a major role. Yet high-profile investigations in food mislabeling have not emerged. Within the last three months, the Food and Drug Administration has issued only two warning letters concerning food mislabeling, out of nearly 120 warning letters total. For now, the food wars are primarily limited to court documents.
Posted by Emily Fisher