Monday, June 17, 2013


The great land of litigation, claiming all sorts of compensation by the citizens, viz the US seems to be moving towards a situation where food industry is now the focus of attention from the lawyers. Such a conclusion is being drawn based on the latest data on such cases which shows that law suits filed during the last few years registered a phenomenal increase. Probably this may be worrying the food industry as it is a reflection of decreasing trust consumers repose on the credibility of this sector and this is largely due to the rapidly growing obesity epidemic which threatens to swamp that country. There is a growing perception that food industry's intentions are not honest and they prefer profit over the well being their constituency, viz the citizens. In spite of dire warnings, persuasion, policy orchestrations and consumer pressure, food industry continues to persist with promoting unhealthy foods most of them rich in sugar, fat and salt, the villainous triumvirate, all indicted for their role in many life style disorders faced by the community as a whole. There is some talk that food industry, if it does not respond to the pulses of its customers, may end up in a situation similar to that faced by Tobacco industry decades ago, forced to fork out billions of dollars of as reparation to millions of consumers in the country. Here is a take on this interesting development. 

"A dramatic uptick in the number of consumer fraud lawsuits has put the food industry on the defensive against a wave of litigation, lawyers said at a panel Wednesday. The number of consumer fraud class actions brought in federal court against food and beverage companies has skyrocketed in the last five years, from roughly 19 cases in 2008 to more than 102 in 2012, according to data compiled by the food litigation department at Perkins Coie. At Wednesday's panel at the Intercontinental New York Barclay hotel, Perkins Coie partner David Biderman, a consumer and mass tort defense lawyer, said the legal and political environment has created the "perfect storm" for consumer fraud class actions against food and beverage companies. This "litigation explosion" has sparked fears that the food and beverage industry is being targeted by plaintiffs' lawyers, as the tobacco industry was several decades ago, said Ronald Levine, co-chair of the litigation department at Herrick Feinstein. "None of these companies would have predicted this wave of litigation even five years ago," Levine said. The majority of consumer fraud litigation against the food and beverage industry has landed in California federal courts, according to the Perkins Coie data. From 2008 until 2012, 186 class actions were filed in California court, many of them in the U.S. District Court for the Northern District of California, which has been dubbed the "Food Court." That's compared to just 18 in the second-busiest state, New Jersey".

There may be a point in the stand taken by the industry that it produces products demanded by the consumer and their business can thrive only when consumers patronize their offerings. They further aver that it is purely an individual's decision as to what should be purchased and which one should be shunned. Naturally if these calorie rich foods are more popular and others with healthy credentials are shunned in the market, can the industry continue with latter types of foods without risking bankruptcyHowever this stand is contested by the protagonists of healthy foods who want the industry to be forced to change their product lines to include more balanced foods vis-a-vis good nutrients and change the market place into a "dessert" as far as foods with empty calories and high salt are concerned. If past trend is any indication the spate of litigation currently being seen may eventually subside because food is not like cigarette, being an essential part of daily life. Having said this one has to remind the industry that by claiming their products to be safe after suppressing evidence of their research to the contrary it will have to face the consequences as this amounts to criminal fraud deserving severe retribution.

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