Food Court Follies—A WLF Legal Pulse Series
Litigation involving processed foods and other packaged goods has become so popular that cases are now routinely filed not only over what’s in the package, but also over what’s not in the package. Lawsuits over empty space, colloquially known as “slack-fill,” enrich plaintiffs’ lawyers while according little or no benefit to consumers. These lawyers have flocked to courts that have broadly interpreted already flexible consumer-protection laws. Targeted businesses have started to express their concerns, and elected officials are beginning to listen.
One state where reform is afoot is Missouri. A very recent federal court decision there in a slack-fill suit reflects why that state’s law is under reconsideration.
A Food and Drug Administration (FDA) regulation defines slack-fill as “the difference between the actual capacity of a container and the volume of product contained therein.” More simply, it is the empty space in a packaged product. That empty space renders the product misbranded, according to the rule, unless it fits into one of six prescribed exceptions. Those exceptions include protection of the contents or if the space is part of standard manufacturing processes.
Using this federal standard as a de facto guide, state-law legal claims assert a package’s empty space constitutes unnecessary or “nonfunctional” slack-fill that misleads reasonable consumers into making incorrect conclusions about what’s in the package.
That is the very type of claim advanced in Hawkins v. Nestlé. Ms. Hawkins purchased a box of Raisinets and was disappointed to find that there were fewer chocolate-covered raisins inside than she expected. She asserted in her legal complaint that the “opaque and non-pliable” packaging misled her to conclude, in the “13 seconds that the average consumer spends on making an in-store purchasing decision,” that it was filled to the brim. The complaint alleges that all similar boxes of Raisinets are “uniformly under-filled” and that anyone who purchases them is robbed of the “actual value” they expect to receive. She brought two causes of action against Nestlé; we’ll focus on the Missouri Merchandising Practices Act (MMPA) claim.
On February 7, the U.S. District Court for the Eastern District of Missouri denied Nestlé’s motion to dismiss the putative class action. Considering the way the court began its analysis of the MMPA unfair-practice claim, Nestlé never had a chance to prevail: “The Missouri Supreme Court has characterized the MMPA as ‘paternalistic legislation designed to protect those that could not otherwise protect themselves.’” The statute provides no definition of “unfair.” The term, according to the state high court, “cover[s] every practice imaginable and every unfairness to whatever degree.” Further, the law focuses entirely on the nature of a defendant’s conduct, and thus plaintiffs need not show they relied on the company’s statement or action.
Nestlé presented several defenses that may seem convincing to the average person, but were utterly futile in the face of the paternalistic Missouri law. The company argued that a reasonable consumer would, upon picking up the package, hear a “maraca-like rattle” demonstrating that there is space in the container. However, the court found that that argument was not included in its pleadings, and in any event, what a “reasonable consumer” would think is a question of fact that cannot be resolved at the motion to dismiss stage.
Further, the defendant argued that the packaging clearly and accurately listed the product’s net weight, number of pieces of candy per serving, and number of servings per box. The court batted that defense aside as well, citing Missouri state-court precedent that held the on-label information was immaterial in the context of an MMPA claim.
The Hawkins decision was issued amidst a reform effort to amend the MMPA. Specifically, the proposed amendments would require a plaintiff to “demonstrate that he or she acted reasonably in light of all the circumstances” and to establish objective proof of damages with a reasonable degree of certainty. Additionally, in the class-action context, each class member would be required to prove that his or her damages were proximately caused by the allegedly fraudulent practices. Further, the proposal bars punitive damages and any attorney’s fees must be reasonably related to the judgment amount.
The reform proposal’s language advances a causation standard for fraud claims—consumer reliance on the deceptive statements or practices—similar to requirements under other states’ consumer-protection laws (including California, home of the “Food Court”). The provisions on punitive damages and attorneys’ fees would impact two major incentives for plaintiffs’ lawyers to recruit clients to take advantage of Missouri’s friendly forum. Finally, judges in Missouri would perhaps be less likely to defer a “reasonable consumer” determination until trial and could weed out such cases at the earliest possible stage.
Attorneys who wander the aisles of grocery stores searching for their next litigation target are no doubt sensitive to costs and benefits. They can take advantage of profoundly paternalistic laws like the MMPA and make easy money with cut-and-paste complaints that plug in a slack-filled consumer product and allege deception. No matter how unreasonable the plaintiff’s claims are, judges must apply such laws broadly and allow those suits to pass the first hurdle. Defendants then face the Hobson’s choice of spending millions to defend the suit or perhaps much less to settle.
One way to deter this type of lawsuit shopping is to change the cost-benefit calculus. Force plaintiffs’ lawyers to represent consumers who reasonably and actually relied on the alleged deception, and reduce the chances for quick settlements and windfall profits. Those changes, in turn, can return laws like the MMPA to their original purpose—protecting consumers.