I have a new hero: federal judge M. James Lorenz.
His Honor, who sits on the bench of the U.S. District Court for the Southern District of California, informed plaintiff’s attorneys in a recent case that they would not be getting paid $725,000 for an asterisk.
This was one of those class action lawsuits about how the use of this or that ingredient contradicts this or that claim in a product’s labeling or marketing. In this case, the product was General Mills’ dried fruit snacks, the claim was “no artificial flavors,” and the ingredient was dimalic acid, used to impart a tart flavor.
Suits like this are a staple of the plaintiff’s bar. Find a contradictable marketing claim and a few folks willing to put their name on a lawsuit, and it’s off to court. One lawyer has made a career out of suing CPG companies over the word “vanilla” used for flavors not derived from actual vanilla beans.
Now, I’m willing to admit – very grudgingly – that litigation like this serves a purpose: keeping CPG companies honest. The feds don’t have the time or resources to police sketchy marketing claims directly, except for the most wildly inaccurate and exploitive ones – “cures cancer,” that kind of thing.
But most of these lawsuits end in settlements that result in big paydays for the plaintiffs’ lawyers, while the purportedly wronged class of consumers might get access to a coupon for a dollar off, if they’re lucky.
With a proposed settlement for the General Mills fruit-snack case, consumers would have gotten an asterisk. It would have been next to the phrase “no artificial flavors,” and it would direct them to a website explaining about the dimalic acid.
That’s it. And what would the plaintiffs’ lawyers get?
$725,000.
General Mills’ attorneys went along, but Lorenz rejected that deal on June 4, saying it “appears excessive on its face.” He noted that to date, all the plaintiffs’ lawyers did was file the complaint, defend a motion to dismiss, engage in preliminary discovery, and engage in settlement negotiations. Lorenz said there was evidence of “collusion” between plaintiffs’ and defense lawyers, and sent them back to the drawing board.
Bravo, Judge Lorenz. The plaintiff’s bar may keep CPG companies honest, but more judges should do the same for the plaintiff’s bar.
Pan Demetrakakes is a Senior Editor for Food Processing and has been a business journalist since 1992, mostly covering various aspects of the food production and supply chain, including processing, packaging, distribution and retailing. Learn more about him or contact him
