New developments in food litigation in US

United Kingdom

The latest couple of litigious battles in the war between anti-obesity campaigners and the fast food industry both occur in the US and concern McDonald's. McDonald's is being targeted by legal activists who claim it has not informed consumers appropriately on the content of food in its restaurants.

Pelmans -v- McDonald's – obesity litigation re-started

McDonald's is again facing the threat of obesity-related litigation after a US Appeal court ruled in January 2005 that part of a dismissed lawsuit pertaining to deceptive advertising could be reinstated.

Plaintiffs in Pelmans -v- McDonalds alleged that McDonald's food was inherently dangerous and addictive and caused obesity and diabetes among a group of teenagers. The action also alleged that the outlets misled people into thinking that its products were nutritious. The claim was successfully struck out in 2003. U.S. District Judge Robert Sweet dismissed the lawsuit because he said it failed to link the children's alleged health problems directly to McDonald's products.

A federal appeals court however ruled that some of these questions might be answered with information that is appropriately the subject of discovery.

This therefore allows the claims to survive procedurally at least in the short term. Matters of further disclosure may be pre-empted by the requirement that plaintiffs provide more detailed allegations as to what they ate and what information they relied upon in ordering their meals.

Trans fat litigation settled

McDonald's Corp. will pay $8.5 million to settle a lawsuit accusing the fast-food giant of failing to inform consumers of delays in a plan to reduce fat in the cooking oil used for its french fries and other foods.

BanTransFats.com, a non-profit advocacy group, sued McDonald's in California state court in 2003, alleging the company did not effectively disclose to the public that it had not switched to a healthier cooking oil. McDonald's has agreed to donate $7 million to the American Heart Association and spend another $1.5 million to inform the public of its trans fat plans.

The settlement is the result of litigation from a San Francisco-area activist Stephen L. Joseph who has been seeking to raise public awareness of the health dangers from the trans fatty acids (TFAs) in hydrogenated or partially hydrogenated oils. Trans fats, which occur naturally in small amounts in dairy products and meat, are also formed artificially when manufacturers hydrogenate fat or oil, primarily to extend the shelf life of their products. It has been claimed that ongoing research suggests trans fats raise LDL cholesterol levels, causing the arteries to become more rigid and clogged. An increase in LDL cholesterol levels can lead to heart disease.

McDonald's announced in September 2002 that it was voluntarily changing to a cooking oil with less trans fat and that the change would be completed by February 2003. However, McDonald's encountered operational issues and the oil was not changed. Plaintiffs claimed in the lawsuits that McDonald's did not take sufficient steps to inform the public that it had not changed the oil.

Mr Joseph's organisation BanTransFats.com first gained publicity for his cause by suing Kraft Foods two years ago to highlight the trans fat content of Oreo cookies. The company has since moved to remove trans fats from its snack foods. Oreo cookies were targeted as Kraft had not at that time indicated they would be taking any steps to reduce trans fat content whereas other manufacturers had. It now looks like Mr Joseph, whose aim is to publicise the dangers of trans fats, is turning on the food restaurant business.

There were two lawsuits that have been settled: (i) a representative California action for injunctive relief filed by BanTransFats.com, and (ii) a separate nationwide class action for damages filed by an individual plaintiff, Katherine Fettke. Mr Joseph acted both as the attorney for BanTransFats.com and for Katherine Fettke in the separate class action. McDonald's will pay $7,500 to BanTransFats.com, and $7,500 to Katherine Fettke, plus all reasonable legal fees, costs and expenses. 

McDonald's is to publish notices to ensure that the public knows the status of its trans fat initiative. If the cost of publishing the notices is less than $1.5 million, the difference will be donated to the American Heart Association along with the $7 million that is to be used by the charity to encourage substitution of partially hydrogenated oils by the food industry, educate the public on trans fat, hold conferences on health issues associated with trans fat and other activities regarding the impact of trans fat on public health.

The aim of the litigation, as was the case against Oreo cookies, was to increase publicity and inform consumers about trans fats in McDonald's oil. The aim of the settlement is stated to be to focus media and consumer attention on the issue of partially hydrogenated cooking oils in many restaurants, not just McDonald's. 

The US Food and Drug Administration ("FDA") has now introduced the requirement for trans-fat labelling that will come into force on 1 January 2006. Europe has yet to introduce a similar rule, but consumer organisations are pressing for such transparency and food makers are feeling market pressure to reduce TFAs from their products. The UK Co-op supermarket chain has this year announced its' aim to list the amount of trans-fats in its own-brand food products.

Comment:

In the UK whilst there has been no high profile litigation there has been increased consumer pressure and awareness. The issue of obesity in the UK has become one predominantly protecting brand reputation in seeking to limit any future legislation in this area through self-regulation.

Law suit or publicity stunt? The level of media attention given to the above US actions highlight concerns over the relationship between the general level of consumer knowledge in relation to the specific properties of a product and the respective labelling obligations on the manufacturer for that product. There is clearly a risk in relation to brand reputation where products' "healthy" qualities are marketed, or excessive consumption encouraged, where the products have corresponding high levels of another ingredient that should not be consumed to excess.