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Food lawsuits

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A New York Times story seems drafted from a press release as it implies that billionaire tobacco lawyers are successfully targeting the food industry. While it's true that food manufacturers have been buffeted with dozens of class actions over labeling, plaintiffs' lawyers only successes have been nuisance class action settlements—and even many those have been only partial success. A $2M fee from a hit-and-run lawsuit against Kellogg over Frosted Mini-Wheats was thrown out for settlement irregularities; Center for Class Action Fairness attorneys knocked out over a third of a $1.3M fee in a similar harm-less lawsuit against Kelloggs over Rice Krispies. In the New Jersey edition of the widely derided Nutella class action settlement, CCAF attorneys succeeded in reducing a fee request from $3.7M to $1.1M. (The California judge rubber-stamped the same settlement.) This is profitable, but small potatoes to Big Food and to the billionaire Big Tobacco lawyers who, as Walter Olson points out, aren't really the ones involved in this litigation.

Of course, there's more than one way to skin a cat. If current law doesn't permit gigantic recoveries against food companies, create a law that will. Prop 37 in California is being sold as a disclosure law, but the real purpose is, of course, as Walter OIson argues, to create a new cause of action transferring wealth to the plaintiffs' bar. As a WLF analysis shows, the definition of "natural" is so narrow in the proposition—excluding such things as sliced apples, because apples aren't naturally sliced—that consumers will receive no useful information. As such, it is a repeat of the infamous Prop 65, which led every California establishment to warn of cancer-causing agents regardless of actual level of risk. When everyone discloses a Prop 65 warning, no one is actually warned of anything, because one cannot distinguish between a parking garage and a uranium mine with an asbestos-fiber-spewing machine.

A Corporate Counsel article heavily quoting defense attorney Kristen Polovoy shows a distinct lack of outrage; after all, such lawsuits, she says, suggest that food companies should hire more attorneys to review their marketing materials. That such nonsense is a pure social deadweight loss never enters the equation.

If there is a silver lining in all of this, it is no longer the case, as it was when I wrote about these lawsuits in 2006, that the plaintiffs' bar is selling the litigation as a public-policy measure against obesity. Nor can they: the ludicrous injunctive relief in the Nutella settlement changes the sugary spread's tagline from "An example of a tasty yet balanced breakfast" to "Turn a balanced breakfast into a tasty one." Settlements like that demonstrate the degree to which these lawsuits are simply rent-seeking vehicles.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.