Legal Liability for Lying on Labels

July 9, 2013 | Charles Bowen

bowen_logoSeveral articles have appeared online over the last few months that have discussed what may be the next huge wave of class action lawsuits: the food industry. Experts have pointed out that many of the law firms that made their names (and money) battling the tobacco industry have now shifted attention to companies that make and market food.

The approach to these lawsuits may not be what you think, as no one is suing because Oreos or Cheetos made them fat. Instead, the focus of the class actions is consumer fraud. The suits claim that the food conglomerates knowingly market their products in less-than-honest--if not outright illegal--ways and that they should pay for having knowingly misled millions of consumers.

The numbers tell a pretty stark tale. In 2008, there were 19 class actions brought in federal court against food and beverage companies. In 2012, that number jumped to 102. The vast majority of these cases are concentrated in the Northern District of California, an area of the state dubbed the “Food Court” due to the overwhelming number of food class actions heard in the jurisdiction.

One big class action case that has received national attention is the suit filed against Trader Joe’s. The grocery store chain has been sued by plaintiffs who claim the company intentionally mislabeled several foods to fool customers into believing they were healthier than they actually are. The complaint revolves around a decision to list an ingredient as “evaporated cane juice” rather than what it really is: sugar. Though the FDA has claimed that such labeling misrepresents the true ingredients, Trader Joe’s slapped it on a variety of products including soy milk and organic yogurt.

Whole Foods was also sued in the Northern District of California earlier this year by plaintiffs who claimed that the company mislabeled its in-house cola. The soda was described as “all natural” on the label despite containing caramel flavoring and other artificial ingredients. Lawsuits over use of the term “natural” have boomed in popularity as companies have seized on a relatively ambiguous term to create more positive associations in the minds of shoppers, something that may now be getting them in trouble.

In almost every case, plaintiffs are not claiming to have been physically harmed as a result of the labeling wordplay. California law does not require physical harm to sue a company; only that economic injury can be shown. Plaintiffs claim that they would not have purchased the products but for the misleading labels and that’s all the lawyers need to get the ball rolling. While the motives of some of the litigants may rightfully be up for debate, any actions that ultimately result in more truth in labeling would at least ultimately have a positive result.