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Despite the claims of its latest ad campaign, McDonald’s cannot be “lovin’ it.” The fast-food chain has been under fire all summer, first as the subject of the satirical movie “Super Size Me,” then as the subject of a suit charging the corporation with false advertising for failing to deliver on its 2002 promise to cut the amount of trans fat in its products. The plaintiff, California-based BanTransFats.com, also sued Kraft Foods in 2003 to ban the marketing and sale of Oreos to children. It dropped the suit after Kraft agreed to reduce trans fat in the cookies and to stop in-school marketing. Fat suits are perhaps a sign of the times — a representation of America’s obsession with weight and its penchant for blame. Regarded widely as frivolous actions, the suits have nonetheless had enough momentum to prompt several states, including Georgia, to pass laws limiting the liability of food manufacturers and distributors in weight-related cases. The latest statistics from the Centers for Disease Control and Prevention show that, in 2000, 64 percent of U.S. adults and 15 percent of U.S. children and adolescents were overweight or obese. Officially categorized as an epidemic by the CDC, obesity is now recognized by Medicare as a disease. As restaurants and food manufacturers scramble to meet consumer demand for low-fat, low-carb or simply fast food, and as restaurants increasingly advertise the dietary value of their foods, are they increasing their exposure to weight-related suits? Will states seek to recover weight-related Medicare costs, placing restaurants and manufacturers at greater risk? Over a lunch that was not altogether low-fat, four local attorneys recently gathered in the Daily Report offices to chew on those questions and to look at liabilities in the food industry. Led by Polly J. Price, a professor at Emory University School of Law, the panelists were Scott A. Farrow, of Troutman Sanders; Michael J. Goldman, of Hawkins & Parnell; W. Michael Holm, of Womble Carlyle Sandridge & Rice; and James E. Looper Jr., of Hall, Booth, Smith & Slover. Their discussion has been edited for length and clarity. — Beth Wade
Price: We have lots of publicity recently about the potential liability of the food industry for obesity and related lawsuits. [ The New York Times recently reported that there have been] “10 prominent cases against the food industry so far, five of which had some success. McDonald’s paid $12 million to settle a complaint that it failed to disclose beef fat in its French fries; Kraft agreed to stop using trans fat in Oreos; the makers of Pirate’s Booty, a puffy cheese snack, paid $4 million to settle a claim over understating fat grams.” We have seen state legislatures now join with Congress in proposing some kind of response to the potential for more lawsuits of these types. [Georgia legislators passed the Common-sense Consumption Act (HB 1519), which amended O.C.G.A. �26-2 and was signed by the governor in May.] As I understand it, 19 states have enacted these so far, modeled after one version that has passed in the U.S. House of Representatives but is not expected to pass the Senate. There are another six states in which this bill has been introduced. How about an overview of the Common-sense Consumption Act? Does it accomplish what its proponents claim that it should? Goldman: It is interesting that they have, by definition and the title of the act, legislated common sense. But it certainly seems to be the intent of the Georgia Legislature that these kinds of you-made-me-fat lawsuits be barred from the get-go. The sort of thing that would survive would be the case you mentioned of the beef tallow, when that is a nondisclosed additive — something of that nature. Holm: I think one of the problems with this type of legislation is the limitation that arises out of it. It does not bar the kinds of consumer fraud, deceptive marketing types of claims, which is where the real problems are going to lie for the food industry. I don’t think you are going to see many suits anywhere that [do not] include within them either an adulterated food claim or a claim that there was deception in the advertising�that the food companies knew that their products were not healthy or knew that certain ingredients in their products could contribute to obesity or Type II diabetes, and they just simply didn’t tell. You know, tobacco companies, at least, had the warning on the label that said, “Use of this product can be hazardous to your health.” There’s nothing like that on food. And as a consequence, I think that there is a real [possibility that these you-made-me-fat] claims could survive these statutes. There is a significant threat out there for the food industry that comes from the potential for suits by attorneys general, like you saw in tobacco, even if some of these consumer fraud statutes don’t allow private rights of action in various states. That’s where the real problem could ultimately lie: A bunch of attorneys general get together, take on the industry or segments of the industry, and look to disgorge profits from the food companies. Price: Similar to an unjust enrichment claim? Holm: Similar to that, yes, but based on deception in advertising. Price: Under consumer protection laws already in existence? Holm: Yes. Looper: And with the recovery of health costs like tobacco? Holm: Right. The public costs. If you look at what we’re seeing in newspapers, the public health costs associated with the obesity crisis are staggering already, and the numbers of people that are affected are rising every year. It is likely that they’re going to try to take profits from the food companies to repay those health costs. In [ Committee on Children's Television v. General Foods, 35 Cal. 3d 197 (1983), the court] didn’t require reliance, and it didn’t require that the plaintiffs show that they had personally suffered a particular injury. If the threat of injury was substantial enough, the court said, you can collect damages for the public good to repay the public for the harm that is potentially out there. If you get judges to start paying attention to that kind of logic, I think there could be some significant exposure here. At least cases will go through discovery; they will get past the Rule 12 motions or the motions to dismiss. Farrow: I agree that the suits that seem to pose the most significant threat to the food industry have got to be ones that have some form of deceptive advertisement involved in them. You have to keep in mind that [the Georgia statute] really only deals with state law claims, and a lot of food handling laws are federal in nature. And so you really have a whole realm of claims that aren’t covered by state acts. Price: Some of the opposition to the [liability bills], both in Congress and within Georgia, was that these are, in fact, frivolous suits. The courts handle frivolous suits all the time; they dismiss them. But as I hear your point earlier, you still have to deal with discovery and make your way through the court system. Holm: Well, the big threat for food companies, just like it was for tobacco companies, is what’s in the files. You get into discovery, you allow a plaintiffs’ lawyer to have access to the research and development and marketing files in some of these food companies, and they are going to have a field day. Somewhere, someone will have pointed out, “If we add this, it will make it taste better.” Someone else may say, “But there is a potential risk that adding it could cause X, Y or Z.” [The company] will have ignored the memo that says there is a potential risk. There will be marketing memos that say, “If we increase the portion size, our profits double or triple, and, therefore, let’s push and push and push to get people to consume larger portions because of the margins that are associated with those large portions.” And those kinds of memos provide tremendous fire to plaintiffs’ lawyers. Looper: And [the Common-sense Consumption Act] doesn’t stop that. It will allow that to proceed. It allows the fraud, the false advertising, the additional components to the food, anything of that nature. And, as far as frivolous lawsuits go, you still have to defend the frivolous lawsuits; you still have to go through discovery; and there’s still substantial defense costs incurred. I don’t know that [the Common-sense Consumption Act] necessarily addresses what it wants to address. Farrow: But I do think it is unique in Section 435 [of the act] that they actually have a provision that says, “all discovery … will be stayed during the pendency of any motion to dismiss … .” That’s very unique in the state system, and I’m not aware of that existing in any other Georgia statute. Goldman: What is deceptive advertising when it comes to food? [If you claim] the food that my company sells tastes better than the food the other company sells? You know, it’s a tremendous, slippery slope in all aspects. Looper: Look at the low-carb craze right now. What is low carb? Goldman: What is low carb, and what is the danger of a low-carb diet? Holm: And there are other issues along that same line. During the low-fat craze that went on some years ago, the food companies didn’t necessarily tell you that, when they reduced the fat, they upped the sugar content. They added high fructose corn syrup, which is probably one of the most interesting aspects of the science that is out there right now. Some of the newer studies show that high fructose corn syrup is directly linked to obesity and directly linked to the rise in Type II diabetes. And that’s pretty staggering because that corn syrup is used in almost all processed foods these days, and particularly in sodas and fruit juices. Looper: The tobacco companies adjusted the nicotine to, in essence, hook people to cigarettes. And, by analogy, the food companies are adjusting the fat or other ingredients to make it more palatable and, in essence, “hook” — and I use the word in quotes — people to that kind of food. But people really are not hooked to food in the medical way that they would be hooked to nicotine. It’s a choice. Holm: But there is a real push by public health advocates to get obesity labeled a disease. And, indeed, a couple of years ago, the IRS came out with a ruling that allowed the deduction under medical expenses of costs to combat obesity if someone is obese. And the moment they get it labeled a disease, then the patient is a victim. So there has to be within the food industry an effort to try and prevent obesity from being labeled a disease. But, boy, the public health advocates are pushing and pushing and pushing for that label to be applied. [Editor's note: On July 16, a week after this roundtable discussion, the U.S. Department of Health and Human Services announced that Medicare now recognizes obesity as an illness, allowing medical claims for its treatment.] Looper: What about the causation issue? So I eat at McDonald’s once a week; how do I link that to whatever medical problem I allegedly have? Goldman: If you look at [O.C.G.A. �4-34-3], before you can go forward with the case, you’ve got to show facts demonstrating proximate cause. I think that’s just hugely difficult. Even if you could show, for example, that somebody ate all of their meals at McDonald’s, like the guy in “Super Size Me,” was that the proximate cause of his obesity, or was it a failure to exercise? Price: Or any number of other things. Looper: And it fits into that study that just came out — that the longer you commute, the more chance you have to be heavier and to be obese. So if you are in Roswell or Alpharetta or Cumming and you’re driving to downtown Atlanta [and eating] 16 meals a week at McDonald’s and you gain 50 pounds, is it because you are driving instead of walking, or is it because you are eating at McDonald’s? Price: There is a correlation also between poverty and obesity, but it is not clear what that’s about. Is it food selection? Is it lifestyle? Is it stress from poverty? Holm: We have seen, through the last 10 to 15 years, a huge increase in portion sizes in restaurants and in fast-food facilities, in particular. There was a study out of the University of North Carolina a year or so ago that found that … the portion sizes at home increased, too. So making the linkage that it’s just the restaurants’ fault as opposed to having to take some responsibility for the amounts that you are eating at home is another complicating factor on causation. Goldman: You know, they have these same fast-food restaurants in Europe, but they don’t have the obesity problems and the health problems [that we have in the United States]. Cardiovascular disease may be lower in some of these places. It shows people obviously do make a choice and are not addicted to the food. Price: [Regarding] similarities with tobacco litigation: We question whether there’s any actual way to prove an addiction to fats added to food, but what about marketing [to] children? They’re treated differently than adults in terms of how the law might protect them. Goldman: That’s why they have parents. Holm: I read recently that there are more than 10 [food] ads per hour on kids’ TV shows. I don’t think there is any question that a lot of food companies are trying to brand at a very early age. Price: But do we perceive this as a potential problem area in the future for products liability suits? Holm: I do, because look at the increase in obesity in kids, the staggering rates of obesity in kids. Farrow: I have a hard time seeing liability arising simply because you market your product to children. I mean, that’s done in so many different areas. If the advertising is not deceptive, then the marketing alone will [not] cause exposure. Price: The argument might be posed that, if parents knew more about the content of these meals, if there were some sort of disclosure requirement about fat content and so forth … . Goldman: There is. You can go into any of these fast-food restaurants and get the fat, carbohydrate, sugar [content]. If you are going to require food purveyors to do some kind of a disclosure or a warning, that’s really got to be at the federal level. Unless it says, “Do not eat this food,” you are going to find a plaintiffs expert who is going to be critical of whatever warning you put on there. So it’s really got to be almost like a cigarette-type warning that is legislatively developed. Then if you comply with it, you can’t have a claim based on failure to warn. [What does the group think about] these things as class actions — assuming you could get past some of these hurdles? Farrow: I think the causation hurdle would be huge in a class action setting. There was some reference in [the recently dismissed Pelman v. McDonald's Corp., 2003 WL 22052778 (S.D.N.Y. 2003)] that the plaintiffs attorneys wanted to get by that hurdle through statistical sampling and things like that. But it would seem to me that obesity is necessarily a different issue with each individual person. Goldman: You don’t have the typicality under Rule 23 or whatever. Farrow: But they were able to do that with tobacco. Holm: I think in this instance it’s going to be much tougher. Finding the commonality among all the plaintiffs in terms of the impact is going to be noted, and the injury to each one is going to be considerably different than the other in quantity, in terms of measurement. I think the class actions are going to be a difficult vehicle. Looper: You would actually have two hurdles to get over. One, you would have to show that the underlying disease, such as diabetes or whatever, was caused by the obesity and, two, that the obesity was caused by the consumption of Taco Bell or McDonald’s or whatever. So there are really two causation hurdles. Holm: Let’s look at it from a slightly different perspective and get away from just the McDonald’s of the world. Let’s move it back to the Coca-Colas and the soft-drink industry and the beverage industry. I will give you a scenario that a plaintiffs lawyer could use. There’s a study [that] came out a couple of years ago that showed that sugar can be as addictive as nicotine and morphine and cocaine — that it stimulates the same pleasure center in the brain. Whether it’s good science or junk science, it’s out there. So the plaintiffs have a study that they can rely on. Then you’ve got this high fructose corn syrup issue, which is a new thing that is being talked about. If you look at the rise in the use of high fructose corn syrup over the last 20 years, the increase parallels exactly the increase in obesity. The problem with high fructose corn syrup is that fructose, when it’s absorbed by the body, doesn’t stimulate insulin, which tells the body, “I’m not hungry anymore.” And you have high fructose corn syrup being used in more and more and more products and particularly in the juices that kids drink. So you’re injecting a chemical into these drinks that the body doesn’t process the same way it processes glucose, and it doesn’t tell the body to stop eating. And you are giving kids box after box of fruit juice, which is pumped full of this high fructose corn syrup, and you are getting a major increase in obesity in kids. Now, when you look at it hard, scientifically, you can attack [that] study. But at least on its face, it’s probably enough to get past the initial motions. If you get past those initial motions and then you find the memos where the companies knew about it and did nothing, I think there are some risks out there — some significant risks. Farrow: Isn’t one of the best defenses, though, that the beverage industry has been marketing diet drinks with virtually no calories and that they are now marketing water more than ever? And so you get down to [the concept that] the drink you choose to drink is a personal decision. They don’t really care which drink you drink; they just want to sell you a drink. Looper: That doesn’t fit into the arguments made in the cigarette lawsuits. [They said,] “We have light cigarettes, low tar,” but then it was found out that those really had the exact same effect. We know Diet Coke does not have the high fructose corn syrup in it, and it does not have any calories in it. Price: At least with respect to beverages that are regulated by the FDA, they disclose what’s in them. Holm: But they don’t tell you what percentage of high fructose corn syrup is used to sweeten it. Goldman: [In the Pelman case, the judge addressed where the line should] be drawn between an individual’s own responsibility to take care of herself and society’s responsibility to ensure that others shield her. Laws are created in those situations where individuals are somehow unable to protect themselves and where society needs to provide a buffer between the individual and some other entity. The whole idea here is personal responsibility: making your own choices to eat what you want to eat, exercise or not, live a healthy lifestyle or not. The court [in Pelman] determined that it’s a matter of personal responsibility, and I think that’s really the intent behind the legislation that we have in Georgia and other states — to make this a matter of personal choice and personal responsibility. Daily Report: How has the alcohol industry avoided these types of suits? What pre-emptive measures has that industry taken, or what is present in that industry that [insulates it from suits such as those in] the tobacco and food industries? Goldman: I think the labeling that you see now on alcohol is FDA-required, and, if you have [that labeling], I think that you are insulated. Looper: One real difference is alcohol has never been alleged to have been marketed to children. Even the beer ads that ended up on television [do not run in] children’s prime time or children’s type shows. And liquor has been off TV until just recently, since about 1972 or so. Goldman: I guess it’s just a matter of the plaintiffs’ bar figuring that people that put themselves in the position to develop these alcohol-related diseases have done it voluntarily. I realize there is certainly evidence that alcoholism is a disease, but I’m not aware of any successful alcohol suits. Daily Report: I’d like to go back to the issue of portion size. If you walk into a restaurant and you get a plate of food that’s equal to four servings, but it’s presented to you as one serving, is that analogous to [putting an addictive amount of nicotine] in a cigarette? Goldman: I think that is probably the theory — that restaurants put people in a position of doing something that is bad for them and they can’t help themselves. I just have a hard time finding that a restaurant is responsible for that, when I can push the plate away. Price: Right. But isn’t that the same argument in the tobacco industry? That you would have a hard time blaming the tobacco manufacturer if you have a choice of putting the cigarettes away? Goldman: I think there are several differences. One, of course, is that nicotine is addictive. And, two, it’s hard to find any redeeming health benefit from cigarettes. You’ve got to have food. It may vary in nutrition from foodstuff to foodstuff, but [you have to have it]. Looper: Well, there’s some kind of a common-sense difference, too. If you get a plate that’s got four servings on it, you know what one serving is — or you arguably should know what one serving is — so you know what the amount of food is on that plate. They added nicotine back in after the cigarettes were processed, [so] you might not necessarily know the amount of nicotine in that cigarette, what was natural in the cigarette, what was added back to it. Price: Or you may not know the amount of trans fat in the food serving. Looper: That might be a distinction. Holm: I think the issue with portion size will be brought back to what the restaurant or food company is saying about the nutritional aspects of the meal. If there are things added to the food that can contribute to obesity or diabetes and yet they market that this is a nutritious meal, then you’ve got deceptive advertising. And the portion size plays right into that. Farrow: McDonald’s has backed off of the super-sized meals. And a lot of it was because the portions were just getting to be so large that it was hard to justify it as a meal for one person. Except they were continuing to promote it. Holm: That’s exactly right. And that is part of the problem the industry has to deal with. If you can create the linkages between the portion sizes and what’s in the food and obesity, I think there are problems out there. I think McDonald’s has done the right thing by backing off of it. Other companies probably need to do similar things. Goldman: The only value to the threat of this kind of litigation is that maybe some of the companies have at least in some way acknowledged that there is a problem, whether [as a result of] potential litigation or just a response to what they think the consuming public now wants. But they are making some changes, and they are taking out saturated fats, and they are making the portion sizes smaller. So, from a social engineering standpoint, I guess there is some benefit to the threat of litigation. I have a hard time with actually seeing how this could be successful. Price: It may be that some of these changes have come along at the same time as the litigation but in response to consumer desires [and a] sense that there is some benefit to the company to disclose more about its food. Holm: It’s almost like there’s a new paradigm where food companies have to balance the issue of being responsive to what market demand is — and presumably market demand is what helped drive larger portion sizes — against being responsible in today’s environment (all of the focus on becoming healthier and eating a healthier diet). Price: How do you advise food-industry clients, either about the Georgia Common-sense Consumption Act and its likely effect or [about] how they might best avoid the specter of an attorney general suit along the lines of tobacco litigation? Farrow: I think rule No. 1 is they have to be accurate in any kind of disclosure they make about the contents of the food or the nutritional value of the food and be careful not to overstate or misstate what’s in the food. If they do that, I think that goes a long way toward protecting them. Holm: Food companies need to invest some time in figuring out what’s in their files. They need to assess the threat that is out there to them and to their company alone as opposed to the whole industry. You better make sure that you know what’s in your marketing and your research and development files, and that your public message does not conflict with what’s buried in your files. Price: The federal Menu Education and Labeling Act, which has been proposed in both the [U.S.] House and Senate, [would require restaurant] chains with at least 20 locations to include information about calories, fat and sodium on menus or menu boards. Assuming that it does not pass, is it advisable for clients in the food industry to voluntarily provide that kind of information? Farrow: I don’t know about the menu board. I think it would be advisable to have something available in the restaurant in the way of a pamphlet. I know McDonald’s does that in some locations, so that a person who wants that information can get the information. Goldman: It’s hard to get that information if you are running 20 outlets or more, with menus changing and people making the food fresh. It makes it difficult to know how many grams of fat are in something, how much of that is trans fatty acid and how much is some other sort of fat. Holm: Unless your portion size is absolutely controlled by weight, and that’s very hard. Goldman: And then you get into the problem of [whether you have been] accurate in what you tell your customers. Price: Then you’ve created a worse problem for yourself than if you hadn’t disclosed at all, arguably. Would you recommend to restaurants, in light of the fact that they can’t control every meal that goes out of the kitchen, that they not publish nutritional data on their menus? Farrow: If they can’t control the variation in the food, then they need to put ranges in the disclosure or somehow structure the disclosure so that they aren’t accused of misrepresenting things. If I had to advise a national chain today on this issue, I think one of the best ways they could spend their money is on more lobbying for legislation like [the Common-sense Consumption Act] throughout the country, because this statute goes a long way towards eliminating those kinds of suits. Goldman: [What about Banks v. ICI Americas, 264 Ga. 732 (1994)], which basically adopts a risk utility analysis in products liability cases in this state? You could always say that, if you took out fat or calories or some ingredient that’s in the food to make it better or tastier, it would have the same utility, and it wouldn’t be as risky. Holm: As in a defective design? Looper: I think the difference might be that if you take the calories out of food, [the food] loses its utility. You’ve got to have some fat in your diet. You’ve got to have some carbohydrates in your diet. You’ve got to have some protein in your diet. So those ingredients all have utility. And if you tie it back into the tobacco litigation, there is no utility to a cigarette. Goldman: Right. But if the double cheeseburger with 30 grams of fat could be sold with 15 grams of fat, I’m wondering whether [by selling it with 30 grams of fat] you’re increasing the risk without increasing the utility. Looper: There’s some question in my mind whether this is a product within the meaning of [the Banks] case. But still somebody more clever than I will try to test that one. Goldman: So is anybody going to take any bets on when one of these lawsuits gets filed? Holm: It’s probably going to be in Mississippi. The CDC has a fascinating series of maps [ www.cdc.gov/nccdphp/dnpa/obesity/trend/maps] that shows the increase in the percentages of people that are obese in all the states. You now have three states that have more than 25 percent of their population obese: Alabama, Mississippi and West Virginia. It shouldn’t shock anybody if plaintiffs go to some of those states to file some of their initial suits. Daily Report: Is the food industry paying attention to [the specter of suits], or is this primarily a media creation? Farrow: I think it’s clear the companies are looking at it, and they are studying it very carefully. They are working with their marketing people and their legal people to figure out how to respond. And my advice for any company that doesn’t want to look at it is to go view the “Super Size Me” movie. They will quickly change their view of how they need to react to this issue.

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