NJCJI President, Marcus Rayner, has been asked to speak about the rising tide of food label lawsuits at NJBIZ’s upcoming Food BizNJ event.
Lawsuits about food and beverages gain notoriety because they are viewed by the public as a shocking or humorous anomaly. But as the number of these suits grows, the novelty wears off. People begin to view these sorts of lawsuits as legitimate, and the prediction that food is the next tobacco (aka the next big payday for trial attorneys) begins to sound less far-fetched.
What is driving the uptick in food-related lawsuits?
Between 2015 and 2016, there were 425 active food class-action suits in federal courts, while in 2008 there were only about 20. This data comes from a report by the U.S. Chamber’s Institute for Legal Reform. The report suggests that the increase in lawsuits is due to the fact that food labels, advertising, and packaging make suing easy, and every person in the world is a potential class member since we all have to eat and drink to survive.
We see a large number of food lawsuits filed in New Jersey because our state’s legal system welcomes them. Plaintiffs like our evidence rules and our expert witness rules, and our state’s consumer protection laws are some of the strongest in the nation.
Having strong consumer protection laws is a good thing. Having strong consumer protection laws that are virtually impossible to comply with, and that generously reward attorneys for bringing lawsuits under them is a recipe for disaster. Even New Jersey’s Law Revision Commission, which has been tasked with cleaning up the New Jersey Consumer Fraud Act, has noted that in its current form, the CFA is “infirm” and “one of the state’s most complicated statutes.”
These “Consumer” Lawsuits End Up Hurting Consumers
No matter how ridiculous the subject of a food-based consumer lawsuit is, defending against it is always costly. Those costs are passed along to consumers in the form of higher retail prices. So, ironically enough, excessive litigation in the name of consumer protection actually ends up hurting consumers.
Despite this, the number of food-based CFA lawsuits filed in New Jersey remains high thanks to the incentive structure set up in the Act’s remedy provisions. The law requires judges to award treble damages (triple damages in non-lawyer speak) and attorneys’ fees in all CFA cases. There are few other types of lawsuits that allow attorneys to reap such bountiful rewards.
It Is Time For Common Sense Reform
Unfortunately, the nature of the food industry – highly regulated and dependent on advertising – makes it an easy target. That’s why the New Jersey Civil Justice Institute is asking for some common sense reform to New Jersey’s Consumer Fraud Act and other state laws and court rules that make our state a magnet for food lawsuits.