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By Thomas Hanrahan, Sidley Austin LLP | 01/03/2013
In the past few years, food companies have found themselves enmeshed in a growing tide of class action lawsuits brought by consumers alleging that the label on the package, or the advertising for the product, was misleading. A couple of months ago, The New York Times reported that lawyers who made their fortunes suing tobacco companies are now turning their sights on the food industry.
What's going on here? How did food become the target du jour for consumer lawsuits? And how can food manufacturers and sellers minimize litigation risks in this environment?
This wave of consumer lawsuits comes from a number of directions. A warning letter from the FDA or the Federal Trade Commission often triggers a lawsuit. Foods labeled as "natural" have been an especially frequent target because basic ingredients such as corn or soy are alleged to be genetically modified or because some ingredients are processed in some way (e.g., "Dutch" cocoa).
Claims that suggest some health benefit are common targets. Plaintiffs have alleged that health benefits are unsubstantiated by clinical studies (e.g., probiotic foods), or the claimed benefits are unavailable because the product contains too little of the healthy ingredient to make a difference.
Other cases take the opposite tack, alleging that the food contains ingredients or combinations of ingredients that are supposedly unhealthy (e.g., high-fructose corn syrup and fats) but the manufacturer did not disclose that "fact." The manufacturer of a nut-flavored chocolate spread promoted as part of a breakfast meal was accused of deceiving parents into thinking this spread was the centerpiece of healthy breakfast.
Even a seemingly simple and straightforward claim is not always immune. A maker of "100 percent whole grain" crackers was sued because there was more to the cracker than whole grain. Cereal manufacturers who pictured fruit on the box were sued because there was no whole fruit in the product.
It is tempting to think — and it may be true — that no one would take most of these claims seriously. But courts tend to give complaining consumers the benefit of the doubt. So getting even frivolous cases thrown out quickly is not easy, and the cost in both legal expense and adverse publicity can be high.
So how can you design marketing messages to sell the product while limiting your litigation risk? Here are five steps to consider:
These steps do not assure protection from litigation. But they make your company a less attractive target.
This article originally appeared in the January 2013 issue of Food Processing Magazine.