Tuesday 27 June 2017

Taco Bell Labeling Lawsuit (No. 8:11-cv-00101-DOC-FFM)

Food labeling lawsuits are on the rise. An interesting, illustrative, example came last week when a consumer rights class action lawsuit was filed against Taco Bell. The suit challenges Taco Bell’s representation of “seasoned beef” and “seasoned ground beef” to consumers. As is common with food labeling suits, the complaint raises state tort law claims for fraud and misrepresentation.

The Taco Bell suit relies on misrepresentation using regulatory definitions. The basis of the claims lies in the U.S. Department of Agriculture (USDA) and Food and Drug Administration’s (FDA) definition of “season beef” and “taco meat filling.” Under federal regulations “seasoned [ground] beef” must contain only 30% fat and no “extenders” or “binders” while “taco meat filling” must contain at least 40%fresh meat. The lawsuit alleges Taco Bell’s products fail to meet the minimum standard requirements to be labeled beef and should instead be labeled as “taco meat filling.” In essence seasoned beef should simply be beef with seasonings, while taco meat can contain up to 60% non-beef ingredients. The suit alleges the beef served and advertised as “seasoned beef” contains extenders such as soy-letchin, anti-dusting agent, and modified corn starch. The complaint contains advertisements from Taco Bell claiming its products contain “seasoned beef” which the lawsuit claims is misleading.

As awareness of what’s in our food grows the number of lawsuits seeking to enforce labeling requirements is on the rise. The tricky part about these suits is how exactly a consumer initiates such a suit. It should be noted that a good number of these claims are enforced by the FDA or by state agencies (see the McDonald’s maple syrup case as an example). Those cases brought by consumers rely on state fraud claims and are typically aggregated in a class action. Class actions are a great vehicle for small dollar claims to build into larger awards because claims are multiplied by the number of products sold.

Food labeling law suits are unique and challenging for consumers to bring. Unlike food recalls there is no direct injury – i.e. buying the product made the consumer sick. Instead the consumer alleges that they would not have purchased the product, or paid less for the product, if they knew the truth. For example, the consumer in the Taco Bell suit alleges they would not have bought a taco if they knew it contained fillers instead of seasoned meet. The problem with such a claim can be readily seen when the allegations involve technical definitions drafted by the FDA. Thus, it’s not uncommon for these suits to also rely on dictionary definitions of products. This definitional problem goes to the hear of a fraud claim – reliance. A plaintiff must establish they relied on the claim as advertised. Some states don’t require individualized reliance be shown, but instead the plaintiff must demonstrate that an objectively reasonable consumer would be damaged by the false advertisement.

Food labeling laws are also challenging suits because it’s hard for plaintiffs to have all of the facts. The Supreme Court ruled in a series of procedural cases (Iqbal and Twombly) that a court must include plausible allegations. In other words there must be some evidence to substantiate the claim. In the Taco Bell lawsuit a container that stated on the labeling “taco meat filling” which varied from what was advertised served as this evidence. How the evidence came to the lawyer’s attention (outside of discovery) is unclear. This is, however, the type of evidence a consumer must have in order to keep their complaint alive.

The benefits of brining a labeling claim are great if a plaintiff can survive the challenges. Often obtaining class certification is enough for plaintiffs to change behavior and possible reach a settlement. The challenges should not be ignored and until the process is changed these will not be easy suits for lawyers to bring.

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