Lessons from Food Litigation: Managing the Interaction of Litigation, Legislation, and Regulation

Food-borne illnesses and tainted food products have been a staple of product liability litigation for many decades and continue to be so now. In the last five years, however, food litigation has also turned to broader policy questions: Does tuna contain too much mercury and, if so, should someone have told us? Are fast-food restaurants to blame when someone gains too much weight or develops diabetes? Does the fact that certain foods contain partially hydrogenated oil (or trans fat, salt, sugar, or caffeine) create a cause of action on anyone's part? A new generation of food-related litigation, and class action litigation in particular, has been launched.

By and large, these policy-oriented food lawsuits have failed to survive early dispositive motions, regardless of the legal theory under which they are brought. See Mills v. Giant of Maryland, 441 F. Supp.2d 104 (D.D.C. 2006) (dismissing, as pre-empted by the Food, Drug and Cosmetic Act, plaintiffs' strict product liability claim against milk producers for failing to warn of potential lactose intolerance). Partly in response, a trend has emerged in the last 12 to 24 months. Local legislatures and public health departments are enacting ordinances and regulations concerning food, which purport to address pressing public health problems such as obesity. Some enactments ban the sale or use of certain food ingredients, while others seek to compel new or additional labeling of food products. These laws and regulations are themselves being challenged in court, sometimes successfully. This dance of litigation, legislation and regulation, and responsive litigation creates particular challenges for manufacturers and sellers and calls for a particular set of strategic responses.

Policy-Oriented Food Litigation

While companies and defense lawyers have been justifiably focused on class action suits alleging widespread bacterial contamination of common foods, consumer advocacy groups, individuals, and groups of plaintiffs also have been filing or threatening a series of policy-oriented suits attacking the inherent characteristics of certain ingredients or food products. The initial case was Pelman v. McDonald's Corporation, 237 F. Supp.2d 512 (S.D.N.Y. 2003), in which parents sued individually and on behalf of a class of parents whose children had consumed McDonald's products and allegedly had become obese as a result. Plaintiffs also alleged that their children had developed or had the potential to develop obesity-related illnesses including diabetes, hypertension, heart disease, and others. Id. at 519-20.

Plaintiffs expressed their motive for bringing suit as, in part, a desire to prevent childhood obesity in others. Their complaint therefore sought, among other things, an education fund 'to inform children and adults of the dangers of eating certain foods sold, marketed [and] produced by the Defendants and containing high levels of fat, salt, sugar and cholesterol content.' Pelman, Amended Verified Complaint, 2003 WL 23474873 (S.D.N.Y. filed Feb. 12, 2003). Plaintiffs' broad 'design defect' and failure-to-warn claims based on the salt, sugar, fat, and cholesterol content of McDonald's foods were dismissed because these ingredients and their effect were common knowledge and, further, because any associated risk was open and obvious.

Although the Pelman complaint generated public scorn, 237 F. Supp.2d at 518 and n.5, it signaled the start of a series of cases fueled as much by public health and public policy concerns as by compensable injury. In Mills v. Giant of Maryland, 441 F. Supp.2d 104 (D.D.C. 2006), plaintiffs claimed that 'the industry's milk marketing campaign, combined with government support of milk,' coupled with an absence of warnings about lactose intolerance, had caused lactose intolerant consumers to ingest milk, with mild, but unpleasant, results. Plaintiffs' product liability and negligence claims were dismissed, the court finding that 'Here, the only alleged danger is purportedly posed by the inherent qualities of milk, hence, defendants have no duty to warn ” Id. at 111. An appeal is pending. Similar suits have been brought or threatened seeking nutritional labeling on menu boards, elimination of a particular ingredient, regulatory reclassification of certain foods, or new labeling requirements. See, e.g., Hoyte v. Yum! Brands, Inc. d/b/a KFC, 489 F.Supp.2d 24 (D.D.C. 2007) (seeking warning labels about trans fat on restaurant food); In Re Center for Science in the Public Interest Petition for Writ of Mandamus, available at http://cspinet.org/new/pdf/salt_law suit.pdf (last accessed Oct. 30, 2007) (seeking to force the FDA to reclassify salt as a food additive); Ban TransFats.com v. Kraft Foods North America, Inc., Case No. CV 032041 (Super. Ct. filed May 1, 2003) (seeking elimination of trans fat from Oreo cookies).

Legislative and Regulatory Responses

Suits alleging design defects or a failure to warn based on the inherent characteristics of food have little or no legal basis and have been uniformly rejected by the courts. That, however, has not been the end of the story. Increasingly, state and local governments are taking legislative and regulatory steps to achieve some of the same goals sought in policy-oriented litigation. City and county bans on trans fat in restaurant food are just one example. See www.restaurant.org/government/state/nutrition/bills_trans_fat.cfm (listing seven local bans on trans fats in restaurant food and 17 states in which one or more local governments are considering similar bans, all proposed in the last 12 months) (last accessed Oct. 26, 2007). Animal welfare groups have adopted this model in an effort to ban foie gras, a move that has been proposed in New Jersey and has succeeded in Chicago. See 'Business Set to Battle Food Bans,' NJBiz, www.njbiz.com/weekly_article.aspaID=22738614.9782016.893412.1085283.1750067.069&aID2=68715 (last accessed Oct. 25, 2007); Municipal Code of Chicago, '79-39-001 (eff. Apr. 26, 2006).

While single-item food and ingredient bans have potentially far-reaching and costly effects, New York City has recently taken an even more aggressive approach. In December 2006, the city's Department of Health and Mental Hygiene adopted a regulation, effective July 1, 2007, requiring restaurants that serve standardized products and that already voluntarily provide nutritional information through Web sites or brochures to place calorie information about each item on menus and/or menu boards. The Department justified this regulation by pointing to the rising obesity rate among American adults and children, which it assumes is associated with a rise in restaurant meals in the last 35 years. In 2006, Americans 'spent almost half (48%) of their food dollars eating out' and obtained 'about one third of calories from foods from restaurants.' 24 RCNY Hlth. Code '81.50, Notes. The Department's notes on the proposed rule included menu mock-ups in which the calorie count for each item was interjected between the item name and price. Emboldened by New York's example, 14 states and three other major cities have enacted similar laws or regulations in the last year. Others are considering bills requiring some degree of disclosure of nutritional information by restaurants. See New York Restaurant Ass'n v. New York City Board of Health, 2007 WL 2778817 (S.D.N.Y. Aug. 2, 2007) (amicus brief filed on behalf of multiple governmental entities supporting New York's regulation against trade association challenge).

Before New York City's regulation could take effect, the New York Restaurant Association filed suit seeking to prevent its enforcement. New York State Restaurant Ass'n v. New York City Board of Health, No. 2007 Civ. 5710 (RSH), 2007 WL 2778814 (S.D.N.Y. June 14, 2007) (Memorandum in Support of Association's Motion for Summary Judgment). In September, the district court granted summary judgment in favor of the Association, finding that 'the City's regulation, as enacted, is preempted by federal law.' New York State Restaurant Association v. New York City Board of Health, 2007 WL 2593025 at *1 (S.D.N.Y. Sept. 11, 2007). The court found that the Nutrition Labeling and Education Act pre-empted plaintiffs' complaint by exempting restaurants from mandatory nutritional labeling requirements. '[S]tates are broadly preempted from regulating voluntary claims that characterize the level of any nutrient, including … those made by restaurants.' Id. at *6 (emphasis added). However, the court also reached the much broader conclusion that the city is 'not precluded [under the NLEA] from establishing requirements for mandatory nutrition labeling of restaurant food.' Id. (emphasis added).

Predictably, on Oct. 25, 2007, the New York City Board of Health proposed a new mandatory regulation requiring all restaurants that are part of a group of 15 or more establishments offering the same or substantially the same standardized food items to provide calorie information for each item on menus and menu boards. While roughly more equitable because it sets standards for all restaurants of certain kinds, the new regulation is presumably not the result the Restaurant Association intended. Moreover, the new regulation, like similar statutes, ordinances, and regulations in other jurisdictions, may set a standard, the violation of which, plaintiffs are certain to argue, gives rise to causes of action, including failure-to-warn claims under either negligence or product liability theories.

Strategic Responses

Restaurant food items are by no means the only products that get caught in the whipsaw between policy-oriented litigation and legislative or regulatory action. The plaintiffs' product liability bar is increasingly organized and sophisticated about legislative 'solutions.' This is so, particularly where concern about a product emanates from its inherent characteristics or function, which make traditional strict product liability actions less viable. While legislative proposals to ban, warn of, or restrict the formulation, design, or distribution of products are not new, they create additional challenges and may require strategic responses different from the defense of traditional product liability suits. Defendants facing the interaction between litigation and legislation or regulation have found the following approaches useful.

Know your critics. Companies that manufacture controversial or newsworthy products are accustomed to widely monitoring relevant media, consumer advocacy groups, public dialogue, and political and legal trends related to the product category. Companies that do not manufacture these types of products may not be so well prepared. Lack of a thorough understanding of the public and governmental perception of one's products can leave a company flat-footed in a crisis. At the very least, if a product category begins to generate 'heat' in the media, prudent manufacturers of products falling into that category will follow these events broadly and carefully, and will formulate a response. Moreover, sophisticated product manufacturers know that early and potentially ongoing communication with disgruntled consumers, advocacy groups, or regulators may address concerns without the need for litigation, legislation, or regulation. While such dialogues must be approached carefully and with substantial preparation, they can be quite productive.

Guard your flank. Trade associations play many vital roles on behalf of their members. One of the most important is articulating a consistent voice in legislatures and regulatory bodies on behalf of disparate industry members faced with the same threat. However, care and attention are required of trade association members. Depending on the structure and function of a trade association, its positions can become standards against which individual company conduct is measured. Trade associations' statements may be attributable to the association's members. This can be troublesome in local debates over products, where consumers may be cast as 'David' fighting an industry 'Goliath.' Voting trade association members should review and approve any major public statement, or some other mechanism for vetting intended positions should be implemented.

Respond appropriately. Local governments are not smaller versions of state or federal government. Working with municipal regulatory and administrative agencies may require a different approach. City and county governments are on the front lines of public health. Their resources are more limited and their needs are more immediate. Product or ingredient bans are more common and easier to enact at the local level. If a product engenders widespread concern, forethoughtful manufacturers and their counsel will consider supporting locally responsive programs that will help to address the problem and thereby defuse potential litigation or regulation.

Consider self-regulation. Occasionally, it appears that a product line will be the focus of considerable and extended scrutiny and repeated government intervention. Some manufacturers have responded by adopting a systematic process for self-examination and possible product adaptation. Having a consistent self-regulatory process in place makes it possible to respond rapidly to concerns. It also provides a framework in which to evaluate and withstand pressure to reformulate products or to issue warnings. Finally ' certainly not least of all ' self-regulatory processes can provide a substantial defense in courtrooms, legislatures, regulatory agencies, the media, and beyond.

Sarah ('Sally') L. Olson is a partner in the Litigation Department of Wildman, Harrold, Allen & Dixon, LLP, in Chicago, where she is a Litigation Practice Group Leader and the Chair of the firm's Diversity Committee. Olson represents manufacturing companies and, through trade associations, industries facing litigation, legislative change, or regulatory action in relation to the design, manufacture, marketing, and distribution of their products.

Food-borne illnesses and tainted food products have been a staple of product liability litigation for many decades and continue to be so now. In the last five years, however, food litigation has also turned to broader policy questions: Does tuna contain too much mercury and, if so, should someone have told us? Are fast-food restaurants to blame when someone gains too much weight or develops diabetes? Does the fact that certain foods contain partially hydrogenated oil (or trans fat, salt, sugar, or caffeine) create a cause of action on anyone's part? A new generation of food-related litigation, and class action litigation in particular, has been launched.

By and large, these policy-oriented food lawsuits have failed to survive early dispositive motions, regardless of the legal theory under which they are brought. See Mills v. Giant of Maryland, 441 F. Supp.2d 104 (D.D.C. 2006) (dismissing, as pre-empted by the Food, Drug and Cosmetic Act, plaintiffs' strict product liability claim against milk producers for failing to warn of potential lactose intolerance). Partly in response, a trend has emerged in the last 12 to 24 months. Local legislatures and public health departments are enacting ordinances and regulations concerning food, which purport to address pressing public health problems such as obesity. Some enactments ban the sale or use of certain food ingredients, while others seek to compel new or additional labeling of food products. These laws and regulations are themselves being challenged in court, sometimes successfully. This dance of litigation, legislation and regulation, and responsive litigation creates particular challenges for manufacturers and sellers and calls for a particular set of strategic responses.

Policy-Oriented Food Litigation

While companies and defense lawyers have been justifiably focused on class action suits alleging widespread bacterial contamination of common foods, consumer advocacy groups, individuals, and groups of plaintiffs also have been filing or threatening a series of policy-oriented suits attacking the inherent characteristics of certain ingredients or food products. The initial case was Pelman v. McDonald's Corporation , 237 F. Supp.2d 512 (S.D.N.Y. 2003), in which parents sued individually and on behalf of a class of parents whose children had consumed McDonald's products and allegedly had become obese as a result. Plaintiffs also alleged that their children had developed or had the potential to develop obesity-related illnesses including diabetes, hypertension, heart disease, and others. Id. at 519-20.

Plaintiffs expressed their motive for bringing suit as, in part, a desire to prevent childhood obesity in others. Their complaint therefore sought, among other things, an education fund 'to inform children and adults of the dangers of eating certain foods sold, marketed [and] produced by the Defendants and containing high levels of fat, salt, sugar and cholesterol content.' Pelman, Amended Verified Complaint, 2003 WL 23474873 (S.D.N.Y. filed Feb. 12, 2003). Plaintiffs' broad 'design defect' and failure-to-warn claims based on the salt, sugar, fat, and cholesterol content of McDonald's foods were dismissed because these ingredients and their effect were common knowledge and, further, because any associated risk was open and obvious.

Although the Pelman complaint generated public scorn, 237 F. Supp.2d at 518 and n.5, it signaled the start of a series of cases fueled as much by public health and public policy concerns as by compensable injury. In Mills v. Giant of Maryland, 441 F. Supp.2d 104 (D.D.C. 2006), plaintiffs claimed that 'the industry's milk marketing campaign, combined with government support of milk,' coupled with an absence of warnings about lactose intolerance, had caused lactose intolerant consumers to ingest milk, with mild, but unpleasant, results. Plaintiffs' product liability and negligence claims were dismissed, the court finding that 'Here, the only alleged danger is purportedly posed by the inherent qualities of milk, hence, defendants have no duty to warn ” Id. at 111. An appeal is pending. Similar suits have been brought or threatened seeking nutritional labeling on menu boards, elimination of a particular ingredient, regulatory reclassification of certain foods, or new labeling requirements. See, e.g., Hoyte v. Yum! Brands, Inc. d/b/a KFC, 489 F.Supp.2d 24 (D.D.C. 2007) (seeking warning labels about trans fat on restaurant food); In Re Center for Science in the Public Interest Petition for Writ of Mandamus, available at http://cspinet.org/new/pdf/salt_law suit.pdf (last accessed Oct. 30, 2007) (seeking to force the FDA to reclassify salt as a food additive); Ban TransFats.com v. Kraft Foods North America, Inc., Case No. CV 032041 (Super. Ct. filed May 1, 2003) (seeking elimination of trans fat from Oreo cookies).

Legislative and Regulatory Responses

Suits alleging design defects or a failure to warn based on the inherent characteristics of food have little or no legal basis and have been uniformly rejected by the courts. That, however, has not been the end of the story. Increasingly, state and local governments are taking legislative and regulatory steps to achieve some of the same goals sought in policy-oriented litigation. City and county bans on trans fat in restaurant food are just one example. See www.restaurant.org/government/state/nutrition/bills_trans_fat.cfm (listing seven local bans on trans fats in restaurant food and 17 states in which one or more local governments are considering similar bans, all proposed in the last 12 months) (last accessed Oct. 26, 2007). Animal welfare groups have adopted this model in an effort to ban foie gras, a move that has been proposed in New Jersey and has succeeded in Chicago. See 'Business Set to Battle Food Bans,' NJBiz, www.njbiz.com/weekly_article.aspaID=22738614.9782016.893412.1085283.1750067.069&aID2=68715 (last accessed Oct. 25, 2007); Municipal Code of Chicago, '79-39-001 (eff. Apr. 26, 2006).

While single-item food and ingredient bans have potentially far-reaching and costly effects, New York City has recently taken an even more aggressive approach. In December 2006, the city's Department of Health and Mental Hygiene adopted a regulation, effective July 1, 2007, requiring restaurants that serve standardized products and that already voluntarily provide nutritional information through Web sites or brochures to place calorie information about each item on menus and/or menu boards. The Department justified this regulation by pointing to the rising obesity rate among American adults and children, which it assumes is associated with a rise in restaurant meals in the last 35 years. In 2006, Americans 'spent almost half (48%) of their food dollars eating out' and obtained 'about one third of calories from foods from restaurants.' 24 RCNY Hlth. Code '81.50, Notes. The Department's notes on the proposed rule included menu mock-ups in which the calorie count for each item was interjected between the item name and price. Emboldened by New York's example, 14 states and three other major cities have enacted similar laws or regulations in the last year. Others are considering bills requiring some degree of disclosure of nutritional information by restaurants. See New York Restaurant Ass'n v. New York City Board of Health, 2007 WL 2778817 (S.D.N.Y. Aug. 2, 2007) (amicus brief filed on behalf of multiple governmental entities supporting New York's regulation against trade association challenge).

Before New York City's regulation could take effect, the New York Restaurant Association filed suit seeking to prevent its enforcement. New York State Restaurant Ass'n v. New York City Board of Health, No. 2007 Civ. 5710 (RSH), 2007 WL 2778814 (S.D.N.Y. June 14, 2007) (Memorandum in Support of Association's Motion for Summary Judgment). In September, the district court granted summary judgment in favor of the Association, finding that 'the City's regulation, as enacted, is preempted by federal law.' New York State Restaurant Association v. New York City Board of Health, 2007 WL 2593025 at *1 (S.D.N.Y. Sept. 11, 2007). The court found that the Nutrition Labeling and Education Act pre-empted plaintiffs' complaint by exempting restaurants from mandatory nutritional labeling requirements. '[S]tates are broadly preempted from regulating voluntary claims that characterize the level of any nutrient, including … those made by restaurants.' Id. at *6 (emphasis added). However, the court also reached the much broader conclusion that the city is 'not precluded [under the NLEA] from establishing requirements for mandatory nutrition labeling of restaurant food.' Id. (emphasis added).

Predictably, on Oct. 25, 2007, the New York City Board of Health proposed a new mandatory regulation requiring all restaurants that are part of a group of 15 or more establishments offering the same or substantially the same standardized food items to provide calorie information for each item on menus and menu boards. While roughly more equitable because it sets standards for all restaurants of certain kinds, the new regulation is presumably not the result the Restaurant Association intended. Moreover, the new regulation, like similar statutes, ordinances, and regulations in other jurisdictions, may set a standard, the violation of which, plaintiffs are certain to argue, gives rise to causes of action, including failure-to-warn claims under either negligence or product liability theories.

Strategic Responses

Restaurant food items are by no means the only products that get caught in the whipsaw between policy-oriented litigation and legislative or regulatory action. The plaintiffs' product liability bar is increasingly organized and sophisticated about legislative 'solutions.' This is so, particularly where concern about a product emanates from its inherent characteristics or function, which make traditional strict product liability actions less viable. While legislative proposals to ban, warn of, or restrict the formulation, design, or distribution of products are not new, they create additional challenges and may require strategic responses different from the defense of traditional product liability suits. Defendants facing the interaction between litigation and legislation or regulation have found the following approaches useful.

Know your critics. Companies that manufacture controversial or newsworthy products are accustomed to widely monitoring relevant media, consumer advocacy groups, public dialogue, and political and legal trends related to the product category. Companies that do not manufacture these types of products may not be so well prepared. Lack of a thorough understanding of the public and governmental perception of one's products can leave a company flat-footed in a crisis. At the very least, if a product category begins to generate 'heat' in the media, prudent manufacturers of products falling into that category will follow these events broadly and carefully, and will formulate a response. Moreover, sophisticated product manufacturers know that early and potentially ongoing communication with disgruntled consumers, advocacy groups, or regulators may address concerns without the need for litigation, legislation, or regulation. While such dialogues must be approached carefully and with substantial preparation, they can be quite productive.

Guard your flank. Trade associations play many vital roles on behalf of their members. One of the most important is articulating a consistent voice in legislatures and regulatory bodies on behalf of disparate industry members faced with the same threat. However, care and attention are required of trade association members. Depending on the structure and function of a trade association, its positions can become standards against which individual company conduct is measured. Trade associations' statements may be attributable to the association's members. This can be troublesome in local debates over products, where consumers may be cast as 'David' fighting an industry 'Goliath.' Voting trade association members should review and approve any major public statement, or some other mechanism for vetting intended positions should be implemented.

Respond appropriately. Local governments are not smaller versions of state or federal government. Working with municipal regulatory and administrative agencies may require a different approach. City and county governments are on the front lines of public health. Their resources are more limited and their needs are more immediate. Product or ingredient bans are more common and easier to enact at the local level. If a product engenders widespread concern, forethoughtful manufacturers and their counsel will consider supporting locally responsive programs that will help to address the problem and thereby defuse potential litigation or regulation.

Consider self-regulation. Occasionally, it appears that a product line will be the focus of considerable and extended scrutiny and repeated government intervention. Some manufacturers have responded by adopting a systematic process for self-examination and possible product adaptation. Having a consistent self-regulatory process in place makes it possible to respond rapidly to concerns. It also provides a framework in which to evaluate and withstand pressure to reformulate products or to issue warnings. Finally ' certainly not least of all ' self-regulatory processes can provide a substantial defense in courtrooms, legislatures, regulatory agencies, the media, and beyond.

Sarah ('Sally') L. Olson is a partner in the Litigation Department of Wildman, Harrold, Allen & Dixon, LLP, in Chicago, where she is a Litigation Practice Group Leader and the Chair of the firm's Diversity Committee. Olson represents manufacturing companies and, through trade associations, industries facing litigation, legislative change, or regulatory action in relation to the design, manufacture, marketing, and distribution of their products.