It’s not just the government that functions as the food police. Two California mothers took on Nutella in a class action lawsuit, winning cash for being ‘duped’ by the company’s advertisements, which they claim indicated the hazelnut and chocolate spread was a healthy food.
Laura Rude-Barbato and Athena Hohenberg claimed they were deceived by the company’s marketing campaign, which depicts Nutella as a delicious breakfast for kids. Nutella settled for $3.5 million, equaling a $4 to $20 cut for consumers who purchased the product between Jan. 1, 2008 and Feb. 3, 2012.
Attorney Sam Kazman, general counsel for the Competitive Enterprise Institute, criticized Nutella for settling the suit.
“I really regret that the company did not stand up for its product,” said Kazman. “Nutella should have had some backbone, and they didn’t. I viewed one of those ads, and I frankly did not find anything there that was deceptive. It was about Nutella making things taste better.… I think the plaintiffs had to use language like it was ‘suggested’ that it was healthy versus it was actually claimed. I think they were just trying to scare the company into a quick settlement.”
Scared Into Settling
According to Kazman, the ‘addiction model’ that was used against tobacco companies a few years ago is now being applied to the obesity issue in America, with food companies taking the fall.
“What you’ve got really is socialization of what really are personal issues through the so-called obesity epidemic,” Kazman said. “The figures for childhood obesity started plateauing several years ago. It’s not an increasing issue, it’s overblown.”
Justin Wilson, a senior research analyst for the Center for Consumer Freedom, says companies targeted by these health-based legal attacks often settle instead of fighting back.
“What’s most frustrating here is corporations take a very realistic take on all this, and oftentimes they settle,” said Wilson. “They know they would win, but it would cost more in lawyers’ fees.”
Kazman said McDonalds is one franchise that has remained “relatively proud of their products instead of apologetic,” positioning consumers as the decision-makers.
Court Cases in Lieu of Regulation
According to Michele Simon, a lawyer and president of Eat Drink Politics, an activist group which advocates heavier regulation of the food and beverage industry, lawsuits like this are a result of “Congress being in bed with the food industry.”
“There is way more deception going on in the marketplace than there are plaintiffs to file lawsuits,” Simon claims.
Though Simon admits consumer awareness is important, she argues the food industry is ultimately responsible for dishonest marketing, and she says she would prefer more regulation instead of costly lawsuits.
“I don’t think the court system is a good place to police industry behavior,” Simon said. “It’s certainly not efficient, it takes very long for a court case to work its way through, it can be very expensive, and we don’t often get a good result.”
Wilson, however, says the motivation for these lawsuits isn’t primarily consumer protection but lawyers hunting for class-action profits.
“I’m glad the government doesn’t regulate these things, so as to not create even more of these lawsuits,” Wilson said. “It’s a problem more rooted in our judicial system. Class action was not created by Congress but by a series of lawsuits. The fact that these lawsuits are as expensive as they are should be an indication there’s a set of lawyers who know this and who are more than willing to just feed off of the system.”
Driven by Sensationalism
Wilson notes lawsuits against the food industry tend to produce “copycat” suits filed soon after and using nearly identical language to claim wrongdoing, something the Nutella settlement could exacerbate.
“This is sort of legal terrorism that corporations face,” Wilson said.
Kazman said he expects politicians to overreact to cases like the Nutella settlement, viewing it as an excuse for more regulation.
“It gives them a reason to raise taxes and exert more control, and plaintiffs’ lawyers love it,” Kazman said. “There’s nothing wrong with companies trying to make their food tasty for consumers. If government starts laying down laws on what is a wholesome food, it’s going to lead to even more nonsense.”