California has long been known as the nation’s breadbasket, but now it’s also becoming notorious as its food lawsuit capital.
Lawyers file class-action lawsuits claiming that Starbucks puts too much ice in its iced coffee and too much milk foam in its lattes. They sue over salt and vinegar potato chips allegedly not having enough vinegar, and they sue Krispy Kreme because its donuts supposedly don’t contain real raspberries.
About 36 percent of all of the food-related class-action lawsuits in the nation are filed in California because the state’s laws are so biased the lawyers believe they can file meritless claims and get away with it – and sometimes they do.
During 2015-16, California’s federal courts heard about 150 of these cases, all based on state consumer protection laws. Twenty percent of all food class actions nationwide are filed in the Northern District of California, dubbed the “food court.”
Food class-action lawsuits are cash cows for lawyers with little or no benefit at all for consumers.
For example, Nutella was sued for allegedly misleading a consumer that the well-known chocolate-hazelnut spread was a health food. Despite the ridiculous allegation, the family-run business settled the case and the lawyers received nearly twice as much ($985,920) as all of the class members combined ($550,000).
Companies that are repeatedly targeted by these meritless suits often settle them secretly out of court because the cost of paying the lawyers to go away is less expensive than prolonged litigation.
The vast majority of these food cases are not the result of aggrieved consumers. Rather, the lawsuits are because law firms search supermarkets for product packages that could lead to a lawsuit, then find a plaintiff willing to put their name on a complaint.
The newest trend in food litigation, especially in California, is to sue companies in “slack fill” lawsuits that claim manufacturers package products to make customers think there is more food or drink inside than there is, even if the actual quantity is clearly marked.
These kinds of abuses extend to other kinds of lawsuits. For example, California lawyers perfected the “drive-by” lawsuit targeting small businesses for technical violations of the Americans with Disabilities Act and then extorting settlements in the thousands of dollars. More than 40 percent of the nation’s ADA access lawsuits are in California.
The Legislature has chipped away at eliminating some ADA lawsuit abuses, but still has a long way to go.
A new Harris Poll ranks California as one of the five worst states for the fairness of its laws, courts, judges and juries. The survey, commissioned by the U.S. Chamber Institute for Legal Reform, is a compilation of rankings by more than 1,300 senior attorneys and corporate CEOs.
California has ranked among the 10 worst since the survey began in 2002. But this year, an all-time high of 85 percent say a state’s lawsuit climate is expected to affect decisions about where to locate or expand their businesses.
If the Legislature wants to keep the state’s economy growing, it must reform its laws that open its legal system to rampant abuse.
John Doherty is president and CEO of the Civil Justice Association of California and can be contacted at firstname.lastname@example.org.
Lisa Rickard is president of the U.S. Chamber Institute for Legal Reform and can be contacted at Lisa.Rickard@uschamber.com.