MANAGING AND RESOLVING DISPUTES IN THE FOOD & BEVERAGE INDUSTRY
CD: To what extent have you seen a recent rise in disputes across the food & beverage sector? Why does the sector seem to be a fertile ground for litigation?
Snail: In the US, there is a rising tide of food & beverage class action litigation in matters alleging false or deceptive advertising and unfair competition. While most of these cases have been filed in California federal district courts, an increasing proportion are now being filed in other jurisdictions, such as New York which now accounts for a third of filings, Illinois, Missouri and Florida. Many of these cases now do not survive motions to dismiss due to courts’ stricter scrutiny and companies’ efforts to avoid the most disputed labelling and packaging claims. In recent decisions, courts have emphasised the role of the ‘reasonable consumer’ defence. Although food & beverage classes are rarely certified, the classes often involve millions of putative members. Even small monetary claims per class member can give plaintiffs substantial settlement leverage and encourage case filings. While several courts have accepted plaintiffs’ class-wide damages models in granting class certification, at least one commonly asserted model relying on conjoint analysis was recently rejected by the 9th US Circuit Court of Appeals in Zakaria v. Gerber.
Jul-Sep 2019 issue
Charles River Associates
Shook, Hardy & Bacon L.L.P.