Note: This is the first in a series of columns by OMelveny & Myers attorneys, focusing on key legal issues specific to a variety of U.S. industries.
In recent years, food manufacturers have been peppered by class action lawsuits based on the alleged mislabeling of their products. Plaintiffs attorneys have seized on consumers health consciousness and the surge of products catering to this trend: foods that advertise antioxidants, no sugar added, all natural, 0g trans fat, and no artificial colors, flavors, or preservatives. If you are a food maker, you have likely faced (or will at some point) a claim that you are misleading consumers and violating federal regulations with these representations on product labels and accompanying websites.
Such claims are often brought under state consumer protection statutes, including Californias Unfair Competition Law, Consumers Legal Remedies Act, and False Advertising Law. In the Northern District of California alone, more than 25 food-labeling cases have been filed in just the past nine months. Rather than wishing this trend away, companies should craft a defense. If faced with a food-labeling lawsuit, what will be your first steps?
1. Responding to the Demand Letter
Before filing suit, a consumer or attorney may send a demand letter to the company, alleging violations of particular laws or regulations and requesting certain relief. In fact, to pursue a damages claim in a class action under Californias Consumers Legal Remedies Act, a potential plaintiff must send a written demand letter at least 30 days before bringing any claim for damages. While the demand letter and response may not change a plaintiffs decision to file suit, a company may be able to gain some legal advantage with a well-considered response.
Specifically, the company should point out that it guarantees its product and offers any consumer a refund if he or she is unsatisfiedthereby obviating the need for litigation, much less a class action. The companys response is also an opportunity to explain to the potential plaintiff why litigation in this case is a risky and expensive avenuenot one to be pursued lightlyparticularly because of scientific substantiation or other defenses the food maker may have.
While the plaintiff may decide not to abandon his claim, the company may be able to reach a resolution and save the costs of litigation. Its at least worth a try.