Case Dismissed

Sept. 18, 2003

The Aug. 22 dismissal of an amended obesity-related lawsuit against Oak Brook, Ill.-based McDonald's Corp. sent cheers and sighs of relief through much of the U.S. restaurant industry.

National Restaurant Association President and CEO Steven Anderson praised U.S. District Judge Robert Sweet's decision, telling PizzaMarketplace the suit itself gave the term "frivolous a bad name." The ruling, he said, "does reflect that we do have common sense and basic logic on the bench in some of our courts. From the outset we'd said these lawsuits are frivolous, baseless and ridiculous."

In a statement released to the press, McDonald's called the New York court's ruling "total victory. ... Today's dismissal is further recognition that the courtroom is not the appropriate forum to address this important issue."

According to multiple pizza industry sources, the outcome of the case, known officially as Pelman v. McDonald's Corp., was well received. But at the headquarters of the nation's largest pizza companies -- companies many suspect could be targeted in later obesity-related lawsuits -- mum's the word.

Requests for comments from representatives at Pizza Hut, Domino's Pizza and Papa John's went either unanswered or were declined. Those who did speak off the record said silence is prudent for the present in order not to draw attention to their companies.

Such comments echo a general restaurant industry feeling that similar obesity court cases will follow the Pelman dismissal.

"I believe this will not be the last suit," said Anderson, by phone from the NRA's Washington, D.C. headquarters. "But I think this is a good landmark case. It's the first one people will see and remember."

Failure to prove ...

Representing the plaintiffs, attorney Samuel Hirsch alleged three causes of action that resulted in two teens becoming obese:

* that McDonald's engaged in deceptive advertising to mislead them to believe its food products were nutritious

* that McDonald's didn't disclose adequate and detailed nutritional information about its products

* and that McDonald's engaged in unfair and deceptive practices by claiming to New York's Attorney General that such information was available to customers.

In his 36-page ruling, Judge Sweet wrote that the plaintiffs failed to prove McDonald's engaged in any of the claims or that consumption of its foods was the sole cause for the teens' obesity.

Regarding the deceptive advertising allegation, Sweet wrote, "The standard for whether an act or practice is misleading is objective, requiring a showing that a reasonable consumer would have been misled by the defendant's conduct."

Citing a 1987 advertising campaign of McDonald's, Hirsch said the burger giant claimed its products were safe to eat on a daily basis. However, not only did the plaintiffs not allege they'd ever even seen

"The bottom line is education and honesty. So clean up your marketing campaign," Cook said. "Be up front about the things you're selling and tell the truth."

-- Brendan Cook
   partner, attorney, Baker & McKenzie, Houston, Texas

the ads, McDonald's lawyers pointed out the plaintiffs either hadn't been born at the time or weren't old enough to read.

Sweet wrote in his ruling, "Absent an example of an alleged false advertisement on which plaintiffs relied, the amended complaint states only a legal conclusion -- that the campaign in its entirety is deceptive -- without making a factual allegation. Such conclusory allegations are not entitled to a presumption of truthfulness."

Sweet also ruled plaintiffs failed to demonstrate the McDonald's ads led them to consume foods that caused their obesity. "... the plaintiffs have stated, albeit just barely, a causal connection between the deceptive acts and the plaintiffs' decisions to consume McDonald's food, or to consume it more frequently that they would have otherwise.

"Plaintiffs have failed, however, to draw an adequate causal connection between their consumption of McDonald's food and their alleged injuries."

The judge also ruled the plaintiffs hadn't addressed how factors other than McDonald's food might have added to their obesity. He asked in the ruling, "What else did the plaintiffs eat? How much did they exercise? Is there a family history of the diseases which are alleged to have been caused by McDonald's products?"

As Sweet wrote, the plaintiffs' claim implied that the role McDonald's foods played in their becoming obese -- no matter how small -- was all that was needed to blame McDonald's for the problem. "(T)heir susceptibility to obesity and related disease are irrelevant so long as McDonald's can be found to have caused the plaintiffs' injuries in some way."

This won't be the last ...

Though Sweet dismissed the suit completely, several sources said it's just a matter of time before more suits like it are filed. According to Anderson, both a Gallup poll and the NRA's own data show overwhelming public support for banning frivolous lawsuits against foodservice companies, but that won't deter lawyers from filing them.

"As long as we have lawyers and academics who are attempting to find ways to enrich the trial bar at the expense of the hardest working people we have in this country -- restaurant operators and their employees -- we will have lawsuits filed," Anderson said.

Brendan Cook, a Houston-based partner at the law firm of Baker & McKenzie, agreed that other obesity lawsuits are imminent as lawyers pursue suitable plaintiffs and favorable venues in which to plead their cases. Proving his point, Cook pointed to the multi-decade effort of lawyers who sued large tobacco companies for billions.

"I don't think there's much doubt they'll keep trying," said Cook, whose firm specializes in tort defense and represents clients who he said face "potential exposure" in obesity-related lawsuits.

John Banzhaf III, a George Washington University law professor who led a host of liability suits against large tobacco companies, likely will be one lawyer to make Cook's prediction a reality. Banzhaf told the Washington Times following the Pelman dismissal that neither he nor other lawyers were discouraged by the setback. "It took more than 700 lawsuits and 30 years to bring down Big Tobacco."

In June, Banzhaf was among a group of nutrition activists and anti-foodservice industry lawyers that held a conference in Boston called "Legal Approaches to the Obesity Epidemic." He also stated in a USA Today report he'd sent letters to leaders at Pizza Hut, McDonald's, Burger King, Wendy's, KFC and Taco Bell demanding they warn customers about the alleged addictive nature of fatty foods.

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According to the report, the letters claimed "a growing body of evidence" indicates fast food "can act on the brain the same way as nicotine or heroin."

Unlike many tobacco lawsuits in which juries not only blamed smoking for users' health problems, but found tobacco companies guilty of altering their products without users' knowledge, Cook expects such cause-and-effect relationships to be far more difficult to prove against foodservice companies.

Despite the high calorie content of many foods sold by restaurant companies, consumption of burgers, fries, pizza, tacos or fried chicken haven't been linked directly to poor health. Additionally, separating those foods from other obesity influencers such as family history, sedentary lifestyles or other illnesses will be a challenge, he said.

Batten down the hatches

Brendan Flanagan, director of legislative affairs for the National Restaurant Association said two bills currently on Capitol Hill -- the Personal Responsibility in Food Consumption Act (H.R. 339, filed by Ric Keller, R-Fla.) and the Commonsense Consumption Act (S. 1428, filed by Mitch McConnell, R-Ky.) -- that would prevent filing frivolous lawsuits are gaining strong support, despite early concerns the bills might not garner a Democratic following.

"We think that we have a good chance of getting this legislation passed, given the fact that there's overwhelming public support for it," said Flanagan. Citing the recent passage of the Protection of Lawful Commerce in Arms Act, which protects gun manufacturers from liability in frivolous lawsuits, Flanagan added, "We have a great deal of precedence in the House and Senate for this type of legislation."

The NRA's Anderson said the passage of either bill will go a long way to ensure restaurant operators aren't forced to waste resources defending themselves in court. But as happens in government, he said, the bill that goes to committee and the bill that emerges from it are two different things.

At the very least, Anderson said the NRA wants to see increased tort reform that would protect foodservice companies.

"General tort reform bills will shift class action lawsuits from state courts to federal courts, where you have a much higher standard" for proving liability, he said. "That will prevent lawyers from venue shopping and going into a state where they think they have a pretty good shot at getting the verdict they want."

Despite the usefulness of both bills, Cook questions their constitutionality.

"It's awfully hard to flat-out bar particular kinds of lawsuits from being filed," he said. "Burden of proof and the conditions of filing these suits can be clarified so you do establish parameters designed to stem flow of frivolous litigation. But in general terms you have some potential constitutional problems providing thresholds."

An ounce of prevention ...

Cook said foodservice operators should be proactive in avoiding potential lawsuits by clarifying all their advertising messages, providing easily understood nutritional information on all products sold and making it readily available to consumers. "The bottom line is education and honesty," he said.

He predicted future legislation will center more on false advertising claims than the more difficult to prove cause-and-effect relationship between products and users' health. As an example, he pointed to the original complaint filed by Hirsch nearly a year ago on behalf of Pelman; Judge Sweet dismissed the claim initially, but recommended Hirsch amend and re-file it with a clearer proof of deceptive advertising.

"So clean up your marketing campaign," Cook said. "Be up front about the things you're selling and tell the truth."

Topics: Domino's Pizza , Papa John's , Pizza Hut

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