Candy industry leaders recently came together for The National Confectioners Association’s annual Washington Forum fly-in to discuss various issues with policymakers, including burdensome regulations and litgation. One example of such litigation is the recent lawsuit against Perfetti Van Melle USA, the maker of popular breath mint and gum brand, Mentos.
The company is being sued in federal court over allegations that their Mentos 50-piece, sugar-free chewing gum product uses packaging too large for the amount of gum inside – despite the listing on the container of exactly how many pieces are included. The plaintiffs are seeking damages in excess of $5 million plus court costs.
Preposterous consumer class action lawsuits like this are becoming the norm. Especially those that target food producers and sellers across the country. We’ve seen this recently with the case brought against Greek yogurt manufacturer Chobani where plaintiffs alleged that Chobani misled consumers by claiming that their products were “all natural” because they included fruit and vegetable juice concentrates. The plaintiffs claimed to suffer “economic injury” as a result of the labeling.
Another case sought millions from a potato chip maker, alleging that truthful front-of-the-bag advertising about “0 grams Trans Fat” could somehow mislead consumers about the healthfulness of the chips inside – despite federally mandated nutrition labeling on the back.
These are just a few of the hundreds of cases of runaway litigation that have occurred in recent years. Whereas state Consumer Protection Acts (CPAs) once appropriately limited themselves to regulating real consumers’ direct relationships with merchants, too many of them now enable lawsuits by citizens with no relationship to a merchant over literally hypothetical misunderstandings. These costly suits affect prices for products and services all across the retail spectrum. They also delay justice for other litigants as court docket are further backlogged.
Both through legislative amendments and judicial interpretations, CPAs have expanded far beyond their original scope. Private rights of action have been widely embraced and, in many states, plaintiffs no longer have to prove an injury, demonstrate that they had relied upon a merchant’s allegedly deceptive representations, or had even behaved reasonably in order to prevail in lawsuits. These lax evidentiary standards have come to be used to push lawsuits such as the one against Chobani, the potato chip manufacturer, and now Perfetti Van Melle USA.
Restoring CPAs to original purpose
Some state policymakers truly concerned with consumers’ welfare have begun to rethink their respective CPAs in order to stop this growing abuse of our civil justice system. Outlined below are policies that state legislators and courts, working together, should enact in order to restore state consumer protection acts to their original purpose:
- All plaintiffs must show actual injury. This will dissuade trial lawyers from abusing consumer protection acts by inventing a “theory of misrepresentation” and then searching for clients.
- Require all consumer protection act claims to demonstrate “reasonableness” a factor. Obligating consumers to at least minimally demonstrate that they acted reasonably given the circumstances could significantly decrease the amount of speculative consumer protection act claims.
- Only allow attorneys’ fees to be awarded when state laws have knowingly been violated. This will drive trial lawyers to only pursue cases where businesses are actively trying to deceive consumers.
- Limit the awarding of class-action remedies, such as statutory damages and attorneys’ fees. Limiting statutory damages will discourage many of the unnecessary and socially harmful consumer protection act claims. Additionally, capping attorneys’ fees will prevent lawyers from walking away with enormous amounts of money, while class members only receive a small amount of the overall settlement, which has frequently been the case in the past.