Food Fight: Do lawsuits challenging product labels benefit consumers?
Illustration by Taylor Callery/ABA Journal.
New York attorney Spencer Sheehan has taken on food companies for making “fudge” cookies he says aren’t coated with real fudge; “strawberry” toaster pastries that also contain apples and pears; and sodas with “aged vanilla” that contain artificial flavoring.
Legal actions against food and beverage companies over the wording on their labels have exploded in recent years, from just 19 class action lawsuits in 2008 to a record 325 cases filed last year, according to one firm’s tally.
Sheehan, 43, of Great Neck, New York, is responsible for much of that increase. He’s filed more than 400 lawsuits alleging deceptive labeling of food products, racking up enough wins to expand his practice.
He has good company in the plaintiffs bar. Lawsuits over whether a “foot-long” sandwich really is 12 inches or whether the unfilled space in a food package is cheating consumers have grabbed headlines over the years.
But while Sheehan and others style these lawsuits as a fight for consumers’ rights, lawyers defending food and beverage makers describe some of them as the height of silliness, and Sheehan has certainly seen his share of losing cases. Moreover, consumer advocacy groups who work on labeling issues say the lawsuits nibble around the edges of consumer protection but don’t really change anything.
Says Lisa Mankofsky, director of litigation for the Center for Science in the Public Interest: “We’re not looking for technical mistakes. … We’re looking for cases with a broader impact.”
When Sheehan talks about his work, he doesn’t pretend to be saving the world. But he’s irked by what he considers consumer rip-offs.
His first case as a newly minted attorney in 2012 didn’t center on a food label, but it did have to do with words: the fine print in an online music service’s terms, which he says made it hard to cancel. Sheehan pitched his class action idea to “dozens” of attorneys before finally persuading a California firm to help file a lawsuit against the company, Rhapsody International. The case ended in a 2015 settlement.
He got a taste of food label litigation in 2013, when he worked with another firm on class action suits in federal courts in New York and California against a juice company that labeled its product as “100% raw,” even though it used high-pressure processing.
Both lawsuits were dismissed—the California case by a judge and the New York one voluntarily by the plaintiffs—and Sheehan says that early disappointment made him want to figure out how to succeed.
“It always bothers me,” he says, explaining his reaction to labels he believes go overboard. “I know this is not some way to achieve any great change. But it does give me some enjoyment to try to handle what I believe are deceptive practices.”
Root beer and Pop-Tarts
Sheehan liked food and beverage label cases so much that he began practicing almost exclusively in this area. He mostly files class action cases in federal courts in New York and Illinois, two states with strong consumer protection laws, and he typically seeks $5 million in damages.
The legal theory is “false claims,” and he uses state consumer protection laws and sometimes the federal Magnuson-Moss Warranty Act to argue that the companies didn’t provide the product described on the label and used misleading words to get consumers to pay “a price premium” for something they otherwise wouldn’t have wanted.
“It just means that somebody paid more for something than they should have,” he says.
So if a “fudge” cookie doesn’t contain any butter or a “whole wheat” cracker is mostly made of refined flour, Sheehan will call it out. Ditto for the word “smokehouse” on a label describing almonds that contain smoke flavoring but aren’t cooked with real smoke. He has filed more than 100 suits on vanilla flavoring claims alone, earning him the nickname “Vanilla Vigilante.”
Between wins and settlements, Sheehan—who declined to discuss specifics about his earnings—has made enough money to hire three attorneys and three paralegals to help with the work. Plaintiffs attorneys typically take home between one-quarter and one-third of an award or settlement.
Some of his claims have gone further than others.
His 2019 lawsuit in federal court in New York against Keurig Dr. Pepper Inc., alleging that A&W-brand root beer and cream soda do not really contain the “aged vanilla” stated on labels, has been granted class action status. The company, which denies mislabeling the beverages, has filed to try to decertify the class.
More recently, some of his lawsuits against Kellogg for its Strawberry Pop-Tarts have run into what’s becoming a sturdy legal defense: the “reasonable consumer” standard. In March, U.S. District Judge Marvin E. Aspen invoked the reasonable consumer viewpoint in dismissing Sheehan’s case in Chicago.
The Pop-Tarts litigation, filed in various courts in Illinois and New York, got national attention for alleging that the breakfast treats are deceptively labeled because they contain only small amounts of strawberry and contain apples, pears and red food coloring.
Aspen wasn’t buying it. Writing in his March 1 opinion granting Kellogg’s motion to dismiss the Chicago case, he said the packaging—with the word “strawberry” and an image of half a strawberry and a Pop-Tart oozing red filling—isn’t misleading to shoppers because “no reasonable consumer could conclude that the filling contains a certain amount of strawberries based on the package’s images and its use of the term ‘strawberry.’”
Later that month, U.S. District Judge Andrew L. Carter Jr. made a similar reference to a “reasonable consumer” in dismissing one of the New York Pop-Tarts cases.
Late-night TV comedian Stephen Colbert channeled that same notion of reasonable consumers in his monologue after the lawsuits were filed last year, joking that Kellogg was being sued because the Pop-Tarts “contain 2% or less of dried strawberries, dried pears and dried apples.”
“Yeah. We know,” Colbert grinned, pausing for effect. “That’s why we like ‘em.”
Suits are soaring
Charles Sipos, a partner at Perkins Coie in Seattle and co-chair of the firm’s food litigation practice, says some label lawsuits verge on the absurd. And there is no sign of the filings letting up, he says, as plaintiffs lawyers are finding new aspects to challenge and then applying those claims to multiple brands within a category of food or drink.
“The short answer is, it is getting worse,” says Sipos, who has defended brands such as General Mills and Campbell Soup Co. against labeling complaints.
His firm keeps a tally of class action lawsuits against food and beverage makers as well as against consumer packaged goods like pet food, cleaning products and cosmetics.
Most of the complaints allege deceptive labels, “slack fill” problems or misleading “all natural” wording, but increasingly, lawsuits are targeting products’ claims of being environmentally friendly or using humane supply chain practices.
Defense attorneys try to shut down these lawsuits early on with a motion to dismiss, citing the “reasonable consumer” standard.
They also can argue that there wasn’t meaningful harm to the named plaintiff, much less to every other shopper who bought the product.
“It’s often the case that these are just lawyer-driven lawsuits with not much harm alleged,” Sipos says.
Even so, some food companies settle because they don’t want to waste time and money fighting.
In New York, thanks to a quirk in state law that allows up to $550 per consumer in actual and statutory damages, a class action loss in court could potentially turn a case about $3 breakfast bars into a billion-dollar legal headache, Sipos warns.
Spencer Sheehan says he has challenged the labeling of these products in lawsuits. (Photo by Len Irish/ABA Journal)
How to read a label
In Sheehan’s eyes, companies shouldn’t be allowed to overstate what’s in their products because their hype results in consumers losing money. He often gets tips from eagle-eyed shoppers who let him know when a product they bought seems to have made an overblown claim on a label.
Sheehan, who says he almost never cooks at home and prefers to dine out on vegetarian fare, rarely shops at grocery stores. But when he’s grabbing a coffee at a convenience store, he does wander the aisles. “I often take a look,” he says. “It’s good to survey the landscape.”
Along the way, he’s had to learn the accepted meanings of words and phrases used on food labels. This can involve researching industry standards and even traditional recipe definitions.
For example, the Food and Drug Administration provides guidance on the meaning of “whole grains,” and one industry group advises that “whole grain” products should contain at least 51% whole grain.
Sheehan says he can eyeball the order of ingredients on a product claiming to contain “whole wheat,” and if he sees a lot of enriched flour and a very low fiber content, he assumes it doesn’t contain much actual whole wheat.
The same goes for the fudge lawsuits he’s filed: If the product label has the word “fudge” but the ingredients list doesn’t include butter, he cries foul. In court filings, he cites dictionary and recipe definitions to explain what constitutes real fudge.
“Like anything you do, it becomes easier and easier,” he says of filing his lawsuits, which now average three per week. “I can do something in a fraction of the time that others can.”
To file cases, he needs plaintiffs, some of whom he finds through social media posts. The key is to identify an entire class of consumers because each person has spent only a small amount of money.
Sometimes, he says, “the stars will align” and someone will contact him with a claim, and they’re also eligible as a main plaintiff in the state where he’d like to file.
Leroy Jacobs is one such tipster-turned-plaintiff. Jacobs, of Chicago, already was a plaintiff in a ginger ale lawsuit brought by another attorney and a vanilla ice cream lawsuit with Sheehan when he went to Whole Foods last fall and bought a package of organic long grain and wild rice pilaf.
“I brought it home, and I said, “Wow, this is half-empty,’ ” Jacobs says. “When I bought it, you can’t see in the box, and you can’t feel the product inside.”
It didn’t seem fair to Jacobs. “The consumers are being ripped off,” he says. “Companies need to be held accountable.” So he snapped a photo and sent it to Sheehan along with a second, unopened box so the attorney could see for himself. Sheehan filed a class action complaint in January in Illinois alleging unnecessary slack fill.
Whole Foods did not respond to an ABA Journal request for comment.
As for the label lawsuits, Sheehan admits that the big food and beverage companies in his sights “often do not engage in wholesale fraud.” But he says it’s annoying to find products touting real vanilla that have little if anything in them that’s extracted from an actual vanilla plant—“like a drop in a sea of ethyl vanillin.”
“Nobody is dying from almonds that weren’t smoked,” he adds, “but it’s something that’s still significant. And there has to be a way in our society to stop these sort of things.”
As for criticisms that he’s just out to get money from settlements, Sheehan likes to point out that about 95% of all civil complaints get settled before trial. He says his interest in consumer issues always comes first.
“Yes, you make money. Making money is not my goal in itself,” he says. “If I won the lottery tomorrow, I’d do the same thing.”
Nonprofits in the fight
Others in the food litigation space draw a distinction between quibbling over a word on a label and going after companies that make sweeping, unproven claims of healthfulness that could harm consumers.
Mankofsky, of the Washington, D.C.-based Center for Science in the Public Interest, says money isn’t her motivator. Going after products that falsely claim a “health halo” is.
“There is a different economic calculus if you’re a law firm that needs to make a certain amount of money, as opposed to a nonprofit public interest organization,” she says.
Sometimes that work involves suing a company; other times it’s filing citizen petitions asking the Food and Drug Administration to ban certain chemicals or additives used in food processing or packaging. Often, sending a letter to a company pointing out an alleged deceptive claim is enough to get them to fix it, Mankofsky says.
CSPI sued PepsiCo in federal court in New York in 2016, calling out its Naked Juice brand Kale Blazer juice for a label that boasted “dark leafy goodness” with images of kale leaves—even though the product is mostly made of sugary fruit juices. The group won a settlement in early 2017, and while the company denied wrongdoing, it agreed to change the label’s images as well as the wording.
The nonprofit got another significant settlement with CVS in 2019 over its Algal-900 DHA supplement, which claimed it could provide “clinically shown memory improvement.” The settlement included a comprehensive class notice, refunds for consumers and injunctive relief resulting in more accurate wording on the label.
Like the private attorneys’ lawsuits, CSPI’s class action complaints are often filed in New York or California, states where “they have very strong state consumer protection laws that are excellent vehicles for bringing these cases,” Mankofsky says.
One consumer group focused squarely on how companies promote their products is the nonprofit advocacy organization Truth in Advertising. It tracks class action complaints, including Sheehan’s, on its website, though legal director Laura Smith says the quickest path to getting lasting change is to go straight to the offending companies when their hyperbole crosses a line.
“Lawsuits can take years to resolve and don’t always resolve to the benefit of consumers,” Smith says. “We’re pretty effective in getting the deceptive marketing taken down by connecting with companies.”
If the misleading labels or ads continue, the group typically turns to regulators—most often the Federal Trade Commission, but also the FDA, state attorneys general or even self-regulatory bodies run by industry associations—and asks them to step in.
The organization receives “hundreds and hundreds” of tips from consumers and looks for patterns of behavior by a company or category of companies.
It has sought better rules for common phrases found on product labels, such as a petition it filed with the FTC in 2019 seeking an official ruling on what “Made in USA” means. Last year, the commission took action, voting 3-2 to finalize a rule stating that only products that are “all or virtually all” made in the United States can be labeled as such. It allows the FTC to seek civil penalties of up to $43,280 per violation from companies that cheat.
Smith says the only downside to this focus on regulation is that individual consumers don’t get their money back. But she says it often results in more meaningful change.
She says the attention given to labeling cases may make shoppers stop and think about what they’re reading on a package or hearing in an ad. The group also tries to educate consumers about online marketing tactics, such as the use of fake countdown clocks or phony warnings of “limited supplies” to rush shoppers into making a purchase. “We try to at least spread the word,” Smith says. “I do think it’s had an effect.”
Product defenders
David Forkner, who heads the food, beverage and pet practice at Williams & Connolly in Washington, D.C., and has defended against some of Sheehan’s lawsuits, says defense attorneys need to continuously stay on top of the latest litigation trends because as soon as one case is filed over a certain word or phrase on a label, other plaintiffs attorneys will try it with other products. “Then it kind of dies down until a new trend comes up,” he says.
Forkner is no stranger to grocery store aisles, and his office wall is filled with food packages and containers for dog treats, pet food, cookies, candy, chips and popcorn that have been accused of one thing or another.
He knows that his opponents’ goal is to survive a motion to dismiss and strengthen their hand in a settlement negotiation. Though the products involved aren’t expensive, the possibility of class actions and the sheer volume of lawsuits can make it a profitable endeavor for plaintiffs attorneys.
Some issues begin and end with demand letters sent to food manufacturers when plaintiffs attorneys are seeking a pre-suit settlement. Such letters also avoid a public filing in which the plaintiffs attorney would have to reveal a legal theory and risk having other attorneys mimic it.
“The vast majority of these letters are either ignored or they’re settled for a very small amount,” Forkner says.
Not measured in money is the risk to a company’s reputation, which can take a hit with sensationalized headlines about a lawsuit. Forkner’s colleague at Williams & Connolly, attorney David Horniak, says company leaders are often genuinely shocked by allegations. What you see on a product label, he says, “is the end of a long and expensive process.”
“I think it’s always a bit of a surprise,” Horniak says of the lawsuits. “Because really, those companies try very, very, very hard not to say anything that would be misleading to consumers.”
There’s only a small amount of space on a label for manufacturers to describe their product, Horniak says, and often the answer to a plaintiff’s concern can be found on the back of the package in the ingredients list. He advises clients to review and analyze all their labels with an eye toward whether something could be misunderstood or taken out of context.
When an allegation arises, Horniak carefully looks at the label in question. If there’s nothing substantial in the critique, he urges a robust defense. Often, he says, judges recognize truly silly cases and dismiss them.
If not, the next step is to try to prevent class certification. That’s because the individual purchase price is small, and if a class isn’t certified, it won’t be worth it for a plaintiffs attorney to continue.
As for Sheehan, he’s still notching victories, even when they don’t involve refunds. He recently saw a new label design on A&W root beer that’s missing the words “aged vanilla.” And he noticed cartons of vanilla ice cream—made by a brand he hadn’t sued—with new, more accurate phrasing on the packaging.
Sheehan says he’s looking to branch out into other product claims beyond food and beverages. He expects to have plenty of work as some companies stretch the truth to grab shoppers’ attention.
“People are always trying to get ahead,” he says. “There’s always going to be these sorts of deceptions, whether it’s food, electronics or any other area.”
Stephanie Zimmermann is a consumer reporter based in Chicago.
