Lawyers, Food and Money

Without evidence of the serious harms that propelled personal injury litigation against tobacco companies, the claimants in these consumer-fraud class actions are seeking damages for economic loss based on future health risks and the theory that they would not have purchased the products had they known the truth about their ingredients. Citing a yogurt maker's use of “evaporated cane juice” as an example, one of the lawyers who fought tobacco cases for years said: “Food companies will argue that these are harmless crimes ' the tobacco companies said the same thing. But to diabetics and some other people, sugar is just as deadly a poison.” Id.

Even before the recent involvement of the lawyers who took on the tobacco industry, parallels between food litigation and tobacco litigation were being drawn or dispelled. Only time will tell whether the comparison is apt or not, but tobacco litigation had similarly modest beginnings in the 1950s, with the first wave of cases majoring on theories of warranty and deceit. See, e.g., Green v. The American Tobacco Co., 304 F.2d 70 (5th Cir. 1962) (affirming defense verdict).

The Tobacco Parallel: Apples and Oranges?

Without doubt, the legal landscape for food companies is different. For starters, in response to the first obesity-related lawsuits, a number of states passed legislation ' so-called “cheeseburger bills” ' designed to limit or immunize the food industry from liability for damages arising from the health consequences of long-term consumption of food and non-alcoholic beverages, including obesity. Things have a way of changing, however. The tobacco industry once also enjoyed fairly broad liability protection as part of tort reform measures in a number of states, but that cover was quickly swept away as a function of both politics and dramatic change in public opinion about smoking and tobacco companies in the 1990s.

Another factor likely to continue limiting personal injury claims against food companies is the combination of the Class Action Fairness Act and the Iqbal-Twombly effect, referring to the adoption of heightened pleading standards in federal courts for civil actions, including traditional class-action lawsuits. See Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (requiring that civil complaints in antitrust cases be demonstrably “plausible”); Ashcroft v. Iqbal, 556 U.S. 662 (2009) (expanding Twombly to all federal civil complaints). Food cases also lack a signature, high-value, stand-alone harm equivalent to, say, lung cancer ' although the availability of trebled damages and attorneys fees on certain statutory theories of liability on a class-action basis raises the possibility of sizable damages. Tobacco litigation is further distinguished by the manner in which plaintiffs succeeded in using evidence of addiction and second-hand smoke to overcome the strong American ethic of “individual responsibility.” This evidentiary combination eventually enabled tobacco claimants to sidestep the traditional libertarian defense of smoking as “personal choice” by reframing debate about the health risks of tobacco use as “a systemic problem” rather than a personal lifestyle issue: “a risk that individuals do not assume fully voluntarily, a risk arising from the environment itself and threatening to everyone” as well as “a risk knowingly created by others.” R. Lawrence, Framing Obesity: The Evolution of News Discourse on a Public Health Issue, The Joan Shorenstein Center on the Press, Politics and Public Policy Working Paper Series, at 59 (Harvard University 2004); see also id. at 62 (“The environmental frame puts individual choice in a larger context of environmental influences and policy choices.”).

The Trojan Horse

For now, these differences in the legal landscape ' especially the legislative protections against personal injury suits ' are likely to keep food litigation limited to claims for consumer fraud, false labeling, and deceptive or unfair trade practices: that a product is mislabeled, or not “natural” or “healthy,” because it contains processed ingredients, added sugars, fats, synthetic or artificial chemicals, or genetically modified organisms. See, e.g., The Chicago Faucet Shoppe, Inc. v. Nestl' Waters of N. Am., Inc., No. 1:2012cv08119 (N.D. Ill. Oct. 10, 2012) (putative class action alleging that Nestl' falsely marketed its Ice Mountain water as spring-sourced); Rojas v. Gen. Mills, Inc., No. 4:12cv05099 (N.D. Cal. Oct. 1, 2012) (putative class action comparing shoppers not wishing to consume genetically modified organisms with people who follow restricted diets for “religious,” “moral,” and “personal” reasons, as well as those who “physically cannot eat certain foods” due to allergies); Zeisel v. Diamond Foods, Inc., No. C10-01192 JSW (N.D. Cal. Oct. 16, 2012) (order approving settlement of class action claims that Diamond's shelled walnut products bearing certain labels were misleading because the product “did not provide the health benefits that were claimed on the package labels”); but see Sugawara v. PepsiCo, Inc., 2009 U.S. Dist. LEXIS 43127 (E.D. Cal. May 21, 2009) (order dismissing deceptive trade practice claims on ground that “a reasonable consumer would not be deceived into believing that ["Cap'n Crunch's Crunchberries"] contained a fruit that does not exist”).

Public health advocates, however, warn that “[a] number of threats lie in the food industry's future” with the potential to turn public opinion against it, including heightened health consciousness among the population at large, an increased focus on health-benefit claims in advertising, rising rates of heart disease, obesity, Type 2 diabetes and other health problems, and escalating healthcare costs generally. K. Brownell and K. Warner, The Perils of Ignoring History: Big Tobacco Played Dirty and Millions Died. How Similar is Big Food?, 87 Milbank Quarterly 259 (2009), at 286, citing D. Vogel, Fluctuating Fortunes: The Political Power of Business in America (NY: Basic Books 1989). And they suggest that a turn could “occur more rapidly with food because of the cynicism bred by tobacco and a general anti-industry outlook inspired by players such as Enron, Tyco, WorldCom, and subprime lenders.” Id.

Food Addiction

With past as prologue, litigation is likely to lead “shifting opinion” about food, “with addiction potentially a looming target.” Id. at 286. Indeed, the scientific and public health community is already making claims that food can be as addictive as drugs (or even more so). See, e.g., M. Szalavitz, Can Food Really Be Addictive? Yes, Says National Drug Expert, TIME (Apr. 5, 2012) (quoting Dr. Nora Volkow, the Director of the National Institute on Drug Abuse); Food and Addiction: A Comprehensive Handbook (K. Brownell and M. Gold eds., Oxford Univ. Press 2012); N. Volkow and R. Wise, How Can Drug Addiction Help Us Understand Obesity, 8 Nature Neuroscience 555 (May 2005). Scientific evidence like this has the power to shift both public opinion and the policy-making environment about the health risks of the modern food environment, enabling plaintiffs to reframe the litigation dynamic to their advantage. R. Lawrence, supra, at 59.

Plaintiffs in tobacco litigation did the same thing, marshaling evidence of addiction to argue that the modern cigarette was a highly engineered product cynically designed to deliver addictive levels of nicotine to keep people smoking cigarettes despite the health risks involved. In food litigation, the theme will be that defendants engineered their products “to deliver as much sugar and fat as cheaply as possible.” In sum, the language of addiction ' foods that “hijack” the brain ' has the potential to influence food litigation in a similar, paradigm-shifting way.

Escalating Healthcare Costs As a Second Litigation Front

Another threat to food makers, and those up and down the supply chain, could be coordinated efforts by state attorneys general and government generally to use the court system to recover diet-related healthcare costs associated with the treatment of heart disease, diabetes, and obesity. These which might be likened to the “secondhand smoke” of food litigation, which helped to change the course of tobacco litigation. Tobacco companies faced a similar situation in the 1990s, and the opening of this second litigation front ' together with the cost of its historic, multi-hundred-billion-dollar settlement in 1998 ' fundamentally transformed both public opinion about tobacco as well as the industry's liability exposure. The other threat to food companies is if the discovery phase of the consumer-fraud class actions they now face leads to the disclosure of negative company documents that fuel more litigation and larger verdicts. Here again, only time will tell.

Whither Personal Responsibility?

The twin concepts of personal responsibility and common sense can still serve as a bulwark for defendants in food litigation, but they are increasingly under siege in America in what amounts to a wider cultural framing contest over who should bear the costs of diet-related and other health risks in society at large. As with tobacco litigation, plaintiffs, advocacy groups, and policy-makers can be expected to use a variety of fronts and strategies to reframe and shift “the debate on nutrition and physical activity away from a primary focus on personal responsibility and individual choice to one that examines corporate and government practices and the role of environment in shaping eating and activity behaviors.” R. Lawrence, supra, at 62. Whether food litigation actually ends up resembling aspects of tobacco litigation will turn in large measure upon how this dynamic plays out.

David L. Wallace, a member of this newsletter's Board of Editors, is a trial attorney and litigator with Herbert Smith Freehills LLP in New York, where he is a partner in the disputes practice. He can be reached at [email protected] or 212-519-9860.

The first food litigation claims were filed a decade ago against McDonald's for obesity-related health problems. Pelman v. McDonald' s Corp., 2003 WL 22052778 (S.D.N.Y. Sept. 3, 2003). As public-interest lawyer Joe Banzhaf said at the time, these personal injury claims were an “opening gun” meant “to make fast food companies bear ' some of the responsibility for the huge cost of the epidemic of obesity” in America. See J. Banzhaf, Who Should Pay for Obesity, S.F. Daily J. (Feb. 4, 2002). The number of potential claimants is staggering, given the dramatic increase in obesity rates in the U.S. over the past two decades. According to government statistics, more than one-third of adults in the U.S. (35.7%) and approximately 17% (or 12.5 million) of children aged 2-19 years are obese. Centers for Disease Control & Prevention, Overweight and Obesity: Data and Statistics (Apr. 27, 2012). It has proved difficult for a variety of reasons, however, for plaintiffs to get food-related personal injury actions off the ground, not least of which is factual causation ' the need “to isolate the particular effect of McDonald' s foods on their obesity and other injuries,” as opposed to other causal factors. See Pelman, supra, at *11

Consumer-Fraud Class Action 'Food Fights'

More recently, a number of lawyers who made hundreds of millions of dollars after winning a record settlement from cigarette makers in the late 1990s have taken notice and aim at major food makers. See S. Strom, Lawyers from Suits Against Big Tobacco Target Food Makers, N.Y. Times (Aug. 18, 2012). Having themselves once been stuck between a rock a hard place in cases like Pelman, these history-making veterans of tobacco litigation are taking a different tack by filing consumer class actions against food companies for mislabeling based on the use of unhealthy ingredients, such as sugar, high-fructose corn syrup, and trans or saturated fats. Food products marketed with health-benefit claims (e.g., “heart-healthy,” “cholesterol-reducing,” etc.) are also being targeted. For the most part, these cases are being run under plaintiff-friendly unfair and deceptive trade practice statutes now common in many states, particularly California and New Jersey. See, e.g., Kane v. Chobani, No. 5:2012cv02425 (N.D. Cal. May 14, 2012).

Without evidence of the serious harms that propelled personal injury litigation against tobacco companies, the claimants in these consumer-fraud class actions are seeking damages for economic loss based on future health risks and the theory that they would not have purchased the products had they known the truth about their ingredients. Citing a yogurt maker's use of “evaporated cane juice” as an example, one of the lawyers who fought tobacco cases for years said: “Food companies will argue that these are harmless crimes ' the tobacco companies said the same thing. But to diabetics and some other people, sugar is just as deadly a poison.” Id.

Even before the recent involvement of the lawyers who took on the tobacco industry, parallels between food litigation and tobacco litigation were being drawn or dispelled. Only time will tell whether the comparison is apt or not, but tobacco litigation had similarly modest beginnings in the 1950s, with the first wave of cases majoring on theories of warranty and deceit. See, e.g., Green v. The American Tobacco Co. , 304 F.2d 70 (5th Cir. 1962) (affirming defense verdict).

The Tobacco Parallel: Apples and Oranges?

Without doubt, the legal landscape for food companies is different. For starters, in response to the first obesity-related lawsuits, a number of states passed legislation ' so-called “cheeseburger bills” ' designed to limit or immunize the food industry from liability for damages arising from the health consequences of long-term consumption of food and non-alcoholic beverages, including obesity. Things have a way of changing, however. The tobacco industry once also enjoyed fairly broad liability protection as part of tort reform measures in a number of states, but that cover was quickly swept away as a function of both politics and dramatic change in public opinion about smoking and tobacco companies in the 1990s.

Another factor likely to continue limiting personal injury claims against food companies is the combination of the Class Action Fairness Act and the Iqbal-Twombly effect, referring to the adoption of heightened pleading standards in federal courts for civil actions, including traditional class-action lawsuits. See Bell Atlantic Corp. v. Twombly , 550 U.S. 544 (2007) (requiring that civil complaints in antitrust cases be demonstrably “plausible”); Ashcroft v. Iqbal , 556 U.S. 662 (2009) (expanding Twombly to all federal civil complaints). Food cases also lack a signature, high-value, stand-alone harm equivalent to, say, lung cancer ' although the availability of trebled damages and attorneys fees on certain statutory theories of liability on a class-action basis raises the possibility of sizable damages. Tobacco litigation is further distinguished by the manner in which plaintiffs succeeded in using evidence of addiction and second-hand smoke to overcome the strong American ethic of “individual responsibility.” This evidentiary combination eventually enabled tobacco claimants to sidestep the traditional libertarian defense of smoking as “personal choice” by reframing debate about the health risks of tobacco use as “a systemic problem” rather than a personal lifestyle issue: “a risk that individuals do not assume fully voluntarily, a risk arising from the environment itself and threatening to everyone” as well as “a risk knowingly created by others.” R. Lawrence, Framing Obesity: The Evolution of News Discourse on a Public Health Issue, The Joan Shorenstein Center on the Press, Politics and Public Policy Working Paper Series, at 59 (Harvard University 2004); see also id. at 62 (“The environmental frame puts individual choice in a larger context of environmental influences and policy choices.”).

The Trojan Horse

For now, these differences in the legal landscape ' especially the legislative protections against personal injury suits ' are likely to keep food litigation limited to claims for consumer fraud, false labeling, and deceptive or unfair trade practices: that a product is mislabeled, or not “natural” or “healthy,” because it contains processed ingredients, added sugars, fats, synthetic or artificial chemicals, or genetically modified organisms. See, e.g., The Chicago Faucet Shoppe, Inc. v. Nestl' Waters of N. Am., Inc., No. 1:2012cv08119 (N.D. Ill. Oct. 10, 2012) (putative class action alleging that Nestl' falsely marketed its Ice Mountain water as spring-sourced); Rojas v. Gen. Mills, Inc., No. 4:12cv05099 (N.D. Cal. Oct. 1, 2012) (putative class action comparing shoppers not wishing to consume genetically modified organisms with people who follow restricted diets for “religious,” “moral,” and “personal” reasons, as well as those who “physically cannot eat certain foods” due to allergies); Zeisel v. Diamond Foods, Inc., No. C10-01192 JSW (N.D. Cal. Oct. 16, 2012) (order approving settlement of class action claims that Diamond's shelled walnut products bearing certain labels were misleading because the product “did not provide the health benefits that were claimed on the package labels”); but see Sugawara v. PepsiCo, Inc., 2009 U.S. Dist. LEXIS 43127 (E.D. Cal. May 21, 2009) (order dismissing deceptive trade practice claims on ground that “a reasonable consumer would not be deceived into believing that ["Cap'n Crunch's Crunchberries"] contained a fruit that does not exist”).

Public health advocates, however, warn that “[a] number of threats lie in the food industry's future” with the potential to turn public opinion against it, including heightened health consciousness among the population at large, an increased focus on health-benefit claims in advertising, rising rates of heart disease, obesity, Type 2 diabetes and other health problems, and escalating healthcare costs generally. K. Brownell and K. Warner, The Perils of Ignoring History: Big Tobacco Played Dirty and Millions Died. How Similar is Big Food?, 87 Milbank Quarterly 259 (2009), at 286, citing D. Vogel, Fluctuating Fortunes: The Political Power of Business in America (NY: Basic Books 1989). And they suggest that a turn could “occur more rapidly with food because of the cynicism bred by tobacco and a general anti-industry outlook inspired by players such as Enron, Tyco, WorldCom, and subprime lenders.” Id.

Food Addiction

With past as prologue, litigation is likely to lead “shifting opinion” about food, “with addiction potentially a looming target.” Id. at 286. Indeed, the scientific and public health community is already making claims that food can be as addictive as drugs (or even more so). See, e.g., M. Szalavitz, Can Food Really Be Addictive? Yes, Says National Drug Expert, TIME (Apr. 5, 2012) (quoting Dr. Nora Volkow, the Director of the National Institute on Drug Abuse); Food and Addiction: A Comprehensive Handbook (K. Brownell and M. Gold eds., Oxford Univ. Press 2012); N. Volkow and R. Wise, How Can Drug Addiction Help Us Understand Obesity, 8 Nature Neuroscience 555 (May 2005). Scientific evidence like this has the power to shift both public opinion and the policy-making environment about the health risks of the modern food environment, enabling plaintiffs to reframe the litigation dynamic to their advantage. R. Lawrence, supra, at 59.

Plaintiffs in tobacco litigation did the same thing, marshaling evidence of addiction to argue that the modern cigarette was a highly engineered product cynically designed to deliver addictive levels of nicotine to keep people smoking cigarettes despite the health risks involved. In food litigation, the theme will be that defendants engineered their products “to deliver as much sugar and fat as cheaply as possible.” In sum, the language of addiction ' foods that “hijack” the brain ' has the potential to influence food litigation in a similar, paradigm-shifting way.

Escalating Healthcare Costs As a Second Litigation Front

Another threat to food makers, and those up and down the supply chain, could be coordinated efforts by state attorneys general and government generally to use the court system to recover diet-related healthcare costs associated with the treatment of heart disease, diabetes, and obesity. These which might be likened to the “secondhand smoke” of food litigation, which helped to change the course of tobacco litigation. Tobacco companies faced a similar situation in the 1990s, and the opening of this second litigation front ' together with the cost of its historic, multi-hundred-billion-dollar settlement in 1998 ' fundamentally transformed both public opinion about tobacco as well as the industry's liability exposure. The other threat to food companies is if the discovery phase of the consumer-fraud class actions they now face leads to the disclosure of negative company documents that fuel more litigation and larger verdicts. Here again, only time will tell.

Whither Personal Responsibility?

The twin concepts of personal responsibility and common sense can still serve as a bulwark for defendants in food litigation, but they are increasingly under siege in America in what amounts to a wider cultural framing contest over who should bear the costs of diet-related and other health risks in society at large. As with tobacco litigation, plaintiffs, advocacy groups, and policy-makers can be expected to use a variety of fronts and strategies to reframe and shift “the debate on nutrition and physical activity away from a primary focus on personal responsibility and individual choice to one that examines corporate and government practices and the role of environment in shaping eating and activity behaviors.” R. Lawrence, supra, at 62. Whether food litigation actually ends up resembling aspects of tobacco litigation will turn in large measure upon how this dynamic plays out.

David L. Wallace, a member of this newsletter's Board of Editors, is a trial attorney and litigator with Herbert Smith Freehills LLP in New York, where he is a partner in the disputes practice. He can be reached at [email protected] or 212-519-9860.