Food Labeling Litigation: Are Consumers Cutting Off Their Nose to Spite Their Face?

“Makes You Well All Over . . . Cures All Aches And Pains . . . New Obesity Food Quickly Reduces Your Weight To Normal And Requires No Starvative Process . . . New Kind of Hat Grows Hair In 30 Days.”

In the late 19th and early 20th centuries, “snake oil” advertisements for cure-alls and medical miracles peppered newspapers, without any form of regulation or oversight.

Prior to that, in the 18th and early 19th centuries, product advertisements were dense with explanatory paragraphs including sophisticated vocabulary, such as “an astringent and antiscorbutie tooth powder, a delicate aromatic, extremely grateful to the palate” that would “increase the beauty of the enamel and promote the durability of the tooth.” Brands, images and slogans did not become advertising mainstays until the 1890s (Sold American: Consumption and Citizenship, 1890-1945).

Fast forward to the 21^st century: Advertising relies on adjectives to prompt positive product images and consumer responses, such as “superior,” “genuine,” “unique,” “pure” and “natural.” This isn’t shocking, since advertising is defined as “Techniques and practices used to bring products, services, opinions, or causes to public notice for the purpose of persuading the public to respond in a certain way” (Merriam Webster). However, advertising’s use of adjectives has fueled a runaway train of aggressive and costly food labeling class actions over the past several years.

For example:

• California consumers sued the manufacturer of a men’s body wash who advertised it as a product that will “help attract women” and allow you to “stand back and watch the magic happen” (The judge ruled this past August that the ad language cannot be interpreted as anything other than exaggerated, hyperbolic advertising that no reasonable consumer would interpret literally and lacks the quantifiable nature needed for consumers to have standing to sue).
• A shampoo manufacturer agreed this summer to a $1.6 million settlement and a revamping of its product labeling and packaging after plaintiff challenged its “naturals” line of hair care products.
• In a federal case in Illinois, a plaintiff alleged that a coffee manufacturer misrepresented the nature of the product by suggesting it contained ground coffee and a filter, rather than instant coffee, although other would-be class member consumers had reported comments such as, “I have no problem with it being instant, if it tasted good” (The judge declined to certify the sub-classes as overly broad, since the class definition included consumers who had not been harmed by the coffee label).
• This past September, a California judge dismissed (with leave to re-plead) a case targeting baby food labels that stated the products were “good” or “excellent” sources of certain vitamins and minerals.
• Drink, chip and other food manufacturers have been sued for electing to use “evaporated cane juice” in lieu of “sugar” on product labels.
• This past September, a federal court approved a $4 million settlement in a class action alleging that a breakfast cereal did not improve children’s attentiveness to the level suggested in advertising.
• A sweetener manufacturer agreed to pay a $5 million settlement and change its advertising to settle a class action arising from its use of the word “natural” in its labeling.
• One of the food labeling grand-daddies that led the parade was the 2009 class action alleging that colorful Crunchberries on Cap'n Crunch cereal boxes, combined with use of the word “berry,” suggested the product contained real fruit.

However, these “pro-consumer” lawsuits may be pyrrhic victories.

Consider:

1. Courts across the country allow class action plaintiffs to sue not only for products they purchased, but also non-purchased items, provided the latter are “substantially similar” to the purchased products. This exponentially increases food manufacturers’ liability exposure in these cases.
2. Food companies’ insurance policies do not cover defense costs or liability judgments in the vast majority of these cases. Defense costs and settlement funds are on the companies’ dime.
3. To avoid the risk of a trial that would involve sizeable defense counsel fees as well as a potential monetary judgment for a nationwide class, food manufacturers often try to settle the matter early in the case. Frequently, these settlements involve not only monetary relief to plaintiffs, but also an agreement by the defendant to change existing product labeling and advertisements. So companies wind up having to spend millions revising ad campaigns and labels that they had already spent millions on during the first time around.

Someone has to pay for all of this, so are consumers biting off more than they can chew by biting the hands that feed them? 

In the food chain of this nationwide phenomenon, won’t the costs at some point be passed downstream to consumers in the form of higher product prices for companies to recoup these litigation expenditures? The costs of “Food Court” are likely to begin showing up in your local food court.

Of course, consumers should not be misled by intentionally false or misleading labels. But if the ultimate goal of consumer protection statutes and class action litigation is advancement of consumers’ best interests, should we all have to pay higher prices for products because of the way some purchasers allegedly interpret words such as “natural”? Or because some buyers do not read ingredient lists to compare whether they are, in fact, “healthier” than other products or flavors in the consumers’ opinion?

One might argue that these cases make a negative statement about the consuming public, suggesting, for example, that consumers:

1. Are not discerning enough to recognize that the manufacturers’ goal with product labeling and advertising is to persuade the public and induce a purchase
2. Are lackadaisical and lazy to such a degree that they do not closely read what they are purchasing or compare products, ingredient lists and their labels
3. Are gullible to a fault and unable to think critically about information placed before them

How far afield have we gone from the original intent of consumer protection statutes and the reasons behind why they were enacted in the first instance? 

Kristen E. Polovoy serves as of counsel in Montgomery McCracken's Cherry Hill, N.J. office. She concentrates her practice on class action litigation with a focus on consumer fraud and product-related class action defense. She can be reached at [email protected] or on Twitter at @KristenPolovoy.