From Cheese to Chicken

costly litigation

Investigative journalists are harbingers of future actions.

By J. Christian Nemeth and Daniel Campbell

“The cheese police are on the case.”

This was the opening phrase penned by Bloomberg Pursuits author Lydia Mulvany on February 16, 2016. The article discussed a variety of studies analyzing the cheese versus filler content of popular brands of parmesan cheese. After the heightened news exposure surrounding the presence of wood pulp and cellulose fillers in parmesan cheese, aggressive plaintiffs’ attorneys pounced on the opportunity and filed a spate of lawsuits alleging fraud in advertising and labeling of cheese products.

Indeed, class actions were filed against major parmesan cheese retailers and distributors just days after the news broke. In total, more than 45 class actions were filed against large companies in the few weeks following the Bloomberg report. These class actions referred to, and relied on, the data and underlying studies cited by the Bloomberg story as a basis for their misrepresentation and false advertising claims.

History teaches us that investigative journalism provides a new tool in the plaintiff lawyer toolbox to building a complaint. Indeed, the use of the investigative journalist stories to provide a basis for complaint allegations is the newest challenge for food industry clients facing an ever-increasing number of product labeling and advertising lawsuits.

The news story and independent lab tests of various cheese products took much of the leg work from the plaintiffs in preparing lawsuits against major cheese manufacturers and retailers. Although the parmesan cheese cases were recently dismissed, the defendant companies were involved in contentious litigation for more than a year before the trial-level court dismissed the action. Plaintiff-side lawyers use investigative journalist reports as third-party “experts” or sources of information that can be useful in surviving early challenges to a lawsuit. The lawyers use the reports to bolster the credibility of the claims in a lawsuit, and this approach can increase the chances of the lawsuit surviving and proceeding into the expensive discovery phase of a case.

The parmesan cheese cases provide but one example of this new tactic. As expected, however, the parmesan cheese cases are not the only example. Other plaintiff-side lawyers are using investigative journalist reports to aid their lawsuits as well.

Chicken Content

In a report published on February 26, 2017 by CBC Marketplace, Canada’s “consumer watchdog,” CBC retained university researchers to test the chicken content of grilled chicken sold at certain quick-service food companies. The CBC forensic analysis claimed to show that the grilled chicken at several quick serve establishments were all less than 90 percent chicken, with some results as low as 43 percent chicken content.

costly litigation 2Indeed, plaintiffs’ lawyers used the CBC study to wage a new food law war. On March 3, 2017, Subway was sued in a class action relying on the CBC study in the District of Connecticut (Moskowitz, et al. v. Doctor’s Associates, Inc., 17-cv-00387, (D. Conn. March 3, 2017)).

Although Subway became the first target of a lawsuit, other food industry manufacturers are also at risk, as we learned from the litigation use of the parmesan cheese study. Unlike previous lawsuits, it appears that Subway is challenging the CBC study and has filed a $210 million defamation-style lawsuit against the CBC in Canada. Filing a lawsuit against a third-party is a decision that should be made after consultation with counsel.

The exploitative tactics of the plaintiff-side lawyers in the food class action space is becoming more pronounced. Food industry companies are shifting marketing strategies to promote various health benefits of their products and lawyers are heavily scrutinizing these claims in an attempt to gain a quick payday from a class action that alleges deceptive advertising or labeling of food products.

Targeting the Food Industry

We have seen a drastic increase in the quantity of food industry class actions that are filed across the country. The food industry has become the focus of plaintiff-side lawyers that once targeted big tobacco companies. These aggressive lawyers file dozens of cases and often force the food industry companies to engage in expensive discovery before the lawsuit is resolved.

Often, food industry class actions are resolved with monetary settlements. More frequently, however, we are seeing settlements that require companies to change advertisements, food labels or other business and supply chain processes to resolve litigation. These settlements can be costly for food industry companies in both a monetary and reputational manner. It is important for food industry businesses and decision makers to anticipate and understand any newfound tactics of the plaintiff class action bar, and to form a plan of action to respond to these new tactics. These crafty lawyers typically work on a contingent fee basis, meaning the lawyers only recover money if the case settles or if they otherwise win a monetary award.

Thus, the cost to the consumer-plaintiff is incredibly low in pursuing these actions. Investigative journalism provides these plaintiff-side lawyers with a cheap and reliable source of information that can be used to build a lawsuit and a complaint.

While we cannot predict the nature, timing or location of additional lawsuits based on these reports, history indicates that crafty plaintiffs’ lawyers will continue to utilize report findings to assert claims and refute early motions to dismiss. Regardless of how these reports are used now, or in the future, it is more important than ever to involve attorneys familiar with the industry, class actions, and related issues. Industry clients selling grilled chicken products are on notice from the CBC Marketplace: The “chicken police” are on the case.

J. Christian Nemeth is a partner at McDermott Will & Emery where he provides legal counsel on complex commercial litigation, including class actions and other commercial disputes in the food, beverage and agribusiness industries. He can be reached at jnemeth@mwe.com.

Daniel Campbell is an associate at McDermott Will & Emery where he focuses on commercial litigation matters, including collective and class actions and products liability actions. He can be reached at dcampbell@mwe.com.

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