Ice cream lawyers on retainer: Food fraud cases on the rise in US

CHICAGO (CN) — Is your ice cream organic? Was your honey actually made by bees? What does "vanilla" mean? If you don't know, you're not alone. Judges have had to spill pages of ink giving their own answers in dozens of food fraud cases litigated across the U.S., and they don't always agree.

In 2020, aggrieved consumers filed over 100 class-action lawsuits targeting food and beverage products in New York federal courts alone, according to a 2021 report from the U.S. Chamber of Commerce's Institute for Legal Reform. That's quadruple the amount of similar class actions filed in 2015, when the group first began tracking the cases. Many of the suits target the flavoring and ingredients used in food products, as well as alleged traces of chemicals that were not disclosed in the products' ingredient list.

The Institute for Legal Reform projected in its report that the number of food fraud filings will keep growing in the 2020s. Despite this, Cary Silverman, one of the report's authors, said very few of these class actions ever go before a jury.

"These cases virtually never go to trial," said Silverman, who is also a practicing attorney with the New York City-based law firm Shook, Hardy & Bacon. "They settle usually between three and six months."

And when they don't settle, Silverman said, the cases usually get dismissed. For example, a common type of litigation brought against food producers is over the issue of vanilla. These cases often allege that any item marked as being vanilla-flavored should contain a high percentage of actual vanilla bean extract. Judges seem to disagree. Courts in New York, Chicago and California have all tossed such cases, finding that vanilla is a flavor descriptor, not necessarily an ingredient.

"Courts have dismissed vanilla lawsuits in cases targeting ice cream, granola bars, almond milk, soy milk, protein drinks, and cereal, among other products," the Institute for Legal Reform report stated. "These courts have generally recognized that when a consumer is looking for a vanilla-flavored product and they get a vanilla-flavored product, there is no misrepresentation."

To some consumers, this may seem like the legal system protecting unscrupulous food producers. Timothy Lang, a professor emeritus studying food safety policy with the City University of London, characterized several food regulations in the U.S. as weaker than those in the European Union in a 2019 editorial in The Lancet, a medical journal. He praised the EU's food standards as being more proactive to prevent food safety lapses than reactive to any lapses that do occur.

"Few analysts think EU standards are perfect, but comparing EU, US, and other food standards, we concluded that EU regulatory standards are among the highest in the world and rightly prioritize prevention over remediation," Lang wrote.

The U.S. also allows for a broader range of additives, like brominated vegetable oil and bovine growth hormone, to be used in foods than are tolerated in the EU. Another difference is companies producing food for the U.S. are effectively allowed to vet the safety of their own products using the Food and Drug Administration's list of ingredients it considers "generally recognized as safe." This list contains common food additives that are not subject to FDA premarket approval, deemed safe by the agency "under the conditions of [their] intended use, or unless the use of the substance is otherwise excepted from the definition of a food additive."

A 2014 report by the nonprofit environmental research group Natural Resources Defense Council characterized the FDA's so-called GRAS list as allowing food producers to market unsafe or misleadingly labeled products clandestinely, forcing federal authorities to investigate them for any possible infraction. The list was first formulated in 1958 when then-President Dwight Eisenhower signed the Food Additives Amendment into law, updating the Food, Drugs and Cosmetic Act of 1938. The list initially included common ingredients such as vegetable oil and vinegar, but has since expanded to include hundreds of items.

"[The GRAS list] may have appeared reasonable at the time, but that exemption has been stretched into a loophole that has swallowed the law," the NRDC report said. "The exemption allows manufacturers to make safety determinations that the uses of their newest chemicals in food are safe without notifying the FDA... no other developed country in the world has a system like GRAS to provide oversight of food ingredients."

Or as Germinal Organic - a company that produces foods for both the U.S. and European markets - put it, "in the United States, food additives are innocent until proven guilty, while in Europe, only those additives proven not to be harmful are approved for use."

But Silverman offered an additional explanation for the discrepancy between the number of food fraud suits that get filed and the number that actually go to trial, much less win. Having studied the history and trends of food fraud cases in the U.S. since the mid-2010s, he called the growing body of litigation a "cottage industry" of legal profiteering. He compared these cases to the unethical practice of "ambulance chasing," where attorneys seek out business by soliciting recently injured accident victims or recently deceased victims' loved ones.

Like ambulance chasing, Silverman said food fraud class actions allow attorneys who are aware of the unlikelihood of the cases to succeed in court to sustainably profit off people's shock and anger. Not at the health system or a drunk driver or an employer violating safety guidelines, but at less-than-honest food producers and grocery corporations. Because even if the cases almost always get tossed, Silverman said, the lawyers always get paid.

A Whole Foods Market in Portland, Maine. (AP Photo/Pat Wellenbach)

A common target for these types of suits is Whole Foods, an upscale grocery corporation that markets many of its products as being organic and health-conscious. The company has had no shortage of controversies surrounding its products - since March 2020 alone it has recalled 43 food items, mostly due to the products containing undeclared, sometimes allergenic ingredients. But as Silverman noted, in both Chicago and New York courts the company often prevails against food fraud allegations.

U.S. District Judge Manish Shah, a Barack Obama appointee based in Chicago, tossed a fraud suit against Whole Foods earlier this month that was brought over the company's line of "organic chocolate"-coated ice cream bars. The chocolate coating on the ice cream bars contains palm kernel oil, an ingredient not advertised on the packaging except in the ingredient list fine print. Shah found the inclusion of palm oil didn't make the "organic" labeling dishonest.

In a December 2021 case in one of New York City's federal courts, another class of customers sued Whole Foods for labeling the sugar in its instant oatmeal as "dehydrated cane juice solids." U.S. District Judge Rachel Kovner, a Donald Trump appointee, dismissed the suit. She found that wily labeling aside, the company had been honest – it never claimed the oatmeal was sugar-free.

Silverman said these results were predictable, but that likely did not phase the attorneys representing the consumers.

"It's been a cottage industry for a good couple years now. I think the courts are becoming much more skeptical of these types of claims, and the lawyers know that," Silverman said, though he did not mention any specific law firms or attorneys he considered guilty of acting unethically.

He added that lawyers are not solely to blame for the situation. Courts in general are hesitant to allow food fraud cases to survive to trial, he said, out of fear that setting that kind of precedent would open the floodgates for even more litigation in an already swiftly growing arena of law. It's not judges' position to legislate, Silverman said, and so in the absence of stricter food legislation they're not eager to make their or their staff's jobs harder.

"I think judges are reluctant to put their feet in the position of a usual consumer... they don't want to get inundated" by these types of complaints, Silverman said.

While he declined to comment on the boarder structural issues behind food fraud in the U.S., Silverman said that one way to end predatory litigation of hopeless food fraud cases was for states to bolster their own consumer protection laws. He pointed to amendments the Missouri Legislature made to the state's Merchandising Practices Act in 2020. Though it's a business-friendly law that makes it easier for companies to avoid fraud claims and limits the punitive damages consumers can pursue, the amendments also mandate "attorneys' fees to bear a reasonable relationship to the amount of the judgment."

In other words, unsuccessful food fraud cases in Missouri aren't very profitable for the attorneys that pursue them.

In arenas where food fraud cases lack this strict limit on attorney fees, particularly New York, Silverman said attorneys are likely to continue to take advantage of the almost symbiotic relationship they have with the businesses their clients are suing. It's easier and cheaper for most companies to settle a food fraud case than take it to trial, Silverman said, so that's what they'll do. Individual consumers will thus get limited recompense for the alleged fraud even if the the issue itself may go unrectified, while the attorneys take their cut and move on.

"When there is a private settlement, the attorneys who filed the case are paid several thousand dollars," the Institute for Legal Reform's 2021 report stated. "The person whose name appeared on the complaint as the class representative receives a smaller sum, and the consumers who were purportedly misled get nothing."

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Categories / Consumers, Law, National

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Ice cream lawyers on retainer: Food fraud cases on the rise in US

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