From Big Tobacco to Big Food ..... Deny! Deny! Deny! Sue! Sue! Sue!
By Stephanie Strom
Saturday, August 18, 2012
Don Barrett, a Mississippi lawyer, took in hundreds of millions of dollars a decade ago after suing Big Tobacco and winning record settlements from R. J. Reynolds, Philip Morris and other cigarette makers. So did Walter Umphrey, Dewitt M. Lovelace and Stuart and Carol Nelkin.
Ever since, the lawyers have been searching for big paydays in business, scoring more modest wins against car companies, drug makers, brokerage firms and insurers. Now, they have found the next target: food manufacturers.
More than a dozen lawyers who took on the tobacco companies have filed 25 cases against industry players like ConAgra Foods, PepsiCo, Heinz, General Mills and Chobani that stock pantry shelves and refrigerators across America.
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.
“It’s a crime — and that makes it a crime to sell it,” said Mr. Barrett, citing what he contends is the mislabeling of those products. “That means these products should be taken off the shelves.”
The food companies counter that the suits are without merit, another example of litigation gone wild and driven largely by the lawyers’ financial motivations. Mr. Barrett said his group could seek damages amounting to four years of sales of mislabeled products — which could total many billions of dollars.
“It’s difficult to take some of these claims seriously, for instance, that a consumer was deceived into believing that a chocolate hazelnut spread for bread was healthy for children,” said Kristen E. Polovoy, an industry lawyer at Montgomery McCracken, referring to a lawsuit that two mothers brought against the maker of Nutella. “I think the courts are starting to look at the implausibility of some of these suits.”
A federal judge in California in 2009 dismissed a case against PepsiCo, which accused the company of false advertising because Cap’n Crunch’s Crunch Berries cereal does not contain real berries. He ruled that “a reasonable consumer would not be deceived into believing that the product in the instant case contained a fruit that does not exist.”
While the lawyers are being questioned about their motives, they are not alone in pursuing the food industry.
In recent weeks, the Center for Science in the Public Interest has sued General Mills and McNeil Nutritionals over their claims on Nature Valley and Splenda Essentials products, and warned Welch’s it would sue unless the company changed the wording on its juice and fruit snacks. The Federal Trade Commission won settlements from companies like Dannon and Pom Wonderful for claims about their products’ health benefits. And PepsiCo and Coca-Cola face lawsuits over claims that their orange juice products are “100% natural.”
The latest playbook — like the one that paid off in the wave of tobacco litigation — could prove potent, as the food companies’ own lawyers have warned.
Other plaintiffs’ lawyers have largely taken aim at food products marketed as “healthy” or “natural,” subjective claims that can be easily disputed by expert witnesses. Unlike foods labeled “organic,” there are no federal standards for foods that are called “healthy” or “natural.”
The new batch of litigation argues that food companies are violating specific rules about ingredients and labels. Mr. Barrett’s group, for example, has brought a case against Chobani, the Greek yogurt maker, for listing “evaporated cane juice,” as an ingredient in its pomegranate-flavored yogurt. The Food and Drug Administration has repeatedly warned companies not to use the term because it is “false and misleading,” according to the suit.
“If you’re going to put sugar in your yogurt, why not just say it’s sugar?” said Pierce Gore, a lawyer affiliated with Mr. Barrett’s group.
Food companies dispute the accusations, defending their packaging and marketing. Nicki Briggs, a spokeswoman for Chobani, said the lawsuit was “frivolous” and “without merit.”
Even so, such cases are raising concerns within the industry.
At a recent food and beverage conference attended by more than 100 lawyers, Madeleine M. McDonough, a lawyer at Shook, Hardy & Bacon who is co-chairwoman of the agribusiness and food safety practice, warned in a session on fraud litigation that it was imperative for companies to comply with federal regulation.
“Otherwise, we are dead in the water,” she said, according to two lawyers present, including J. Price Coleman, who is working with Mr. Barrett’s group.
If the lawsuits prove successful, the liability could be sizable. The lawyers are looking to base damages on products’ sales. While companies do not typically break out figures for individual items, Chobani’s revenues are expected to total $1.5 billion this year. The lawsuit filed by Mr. Barrett cites 18 flavors of yogurt, more than half its line.
The lawyers are being selective about where these suits are filed. Most have been filed in California, where consumer protection laws tend to favor plaintiffs. Food companies are already fighting a legal battle there, spending tens of millions of dollars to stop a ballot initiative that would require them to specify genetically modified ingredients.
The lawyers who took on Big Tobacco decided the time was ripe to go after Big Food. Consumers are increasingly conscious of their eating habits as rates of heart disease, Type 2 diabetes, obesity and other health problems rise. State and local governments are also becoming alarmed at the escalating costs of caring for people with those diseases and are putting pressure on food companies.
“People want to put good, healthy, nutritious food in their bodies,” said Keith M. Fleischman, a former federal and state prosecutor who is now working with the tobacco lawyers group. “They are very aware of what’s on labels.”
Plaintiffs’ lawyers realize that critics may counter that their lawsuits do not have real victims.
Mr. Barrett fought tobacco cases for years on behalf of smokers dying of cancer — and lost because juries agreed with the tobacco companies that smoking was a personal choice. Not until he and Richard Scruggs sued on behalf of states, which had spent hundreds of millions of dollars caring for sick smokers, did they win their record settlement.
“Food companies will argue that these are harmless crimes — the tobacco companies said the same thing,” Mr. Barrett said. “But to diabetics and some other people, sugar is just as deadly as poison.”
Consumers like Christine Sturges, one of the plaintiffs in a suit against ConAgra, has gluten allergies and reads labels vigilantly.
When she heard about a lawsuit involving the Pam cooking spray, she took a closer look. “There was nothing scary on it, just this innocuous word, ‘propellant,’ ” said Ms. Sturges, a hairdresser from Los Gatos, California.
After digging deeper, she learned that “propellant” included petroleum gas, propane and butane. “I’d been spraying that on muffin tins to make muffins for my grandchildren — oh my God!”
The only way Ms. Sturges could have known what the “propellant” consists of was to have read the materials data safety sheet that ConAgra files separately with the government, according to Mr. Gore.
The suit also claims, among other things, that Swiss Miss and Hunt’s labels bear improper claims about nutrients and antioxidant properties.
“We researched regulations and labels for two years before filing our first case, and our cases don’t remotely resemble the Cap’n Crunch’s Crunch Berries case,” Mr. Gore said. “Frankly, that one made me laugh.”
posted by Clare L. Pieuk at 11:25 AM
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