Food is the new tobacco, for big class-action payouts

Alan Daley Writer, American Consumer Institute
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Winning lawyers from the big tobacco award of $246 billion are preparing to take on “big food.”  We can expect disruptions in our food supply due to packaging, promotion and labelling changes, ultimately ingredient changes and price hikes, and especially limits on that most heinous of demons – sugar.

To date, most class action success against the food industry has been about ingredient and promotional labelling.  For example, Chobani yogurt, listed “evaporated cane juice” as an ingredient.  The court and FDA both held that was deceptive to some customers and the ingredient should have been called “sugar.”

In a 2003 case, “Caesar Barber v. McDonald’s Corporation, et al.,” Barber claimed he was unaware of the nutritional and fat content of the fast food he ate on a near-daily basis for decades, and which he claimed caused his multiple illnesses.  The court ruled that his selection of food was the cause, not the restaurants which supplied it.  But the court’s expectation of personal responsibility in food selection will probably soon go out of style.

Recently, a successful class action suit against Nutella claimed that contrary to its advertising, it was not a healthy breakfast food.  This rare verdict revolved on whether food was “healthy,” not whether a consumer should behave differently. Nutella settled out of court for $3 million and its advert was ordered off the air. Attorneys usually keep 25 percent of the award, so they may have pocketed, say, $750,000. Each claimant was awarded the value of up to 5 jars of Nutella ($20 max).

In the big tobacco case, the 25 percent attorney payout would be a whopping $61 billion. After sucking the juice out of big tobacco, attorneys smell an even bigger victory. They are launching dozens of class action suits over mislabeled products that violate FDA regulations. Since victims are needed to launch a class action suit, attorneys or their feeder-pipeline seek claimants through television adverts or recruiters on the internet. To improve their edge, attorneys conduct “venue shopping” to find courts that favor populist causes and are prone to oversized financial awards.

In 2004, Morgan Spurlock directed a documentary “Super Size Me” in which he consumed about 5,000 calories of McDonalds food each day for 30 days. He gained 24 pounds. That tie between fast food and obesity persists in consumers’ minds. But it is not yet a common finding in the courts.

Indeed, court awards based on the tie between food and ill-health are the payoff for which many state attorneys general sign onto class action suits. They need monster-sized awards to alleviate the crushing burdens of funding Medicaid and Medicare.

It is not helpful for states to hear that health problems were caused by people’s unwise behaviors. Surely obesity, diabetes, and cardiac problems can be laid at the feet of the food industry. Unlike in the context of medical malpractice, tort attorneys and state government are moving to the same side for financial reasons. That further erodes expectations of personal responsibility for our health status. It’s easier to blame someone else.

Alan Daley The American Consumer Institute Center for Citizen Research.  For more information about the institute, visit www.theamericanconsumer.org.