SCOTTSDALE, Ariz. -- Supermarket retailers may have greater exposure to liability in issues concerning fat content and obesity causation than is generally believed, well-known litigator John F. Banzhaf III told a session of Food Marketing Institute's Midwinter Executive Conference here.
At the same time, though, he said there are actions retailers can take that would minimize exposure to liability.
Banzhaf, professor of public-interest law at George Washington University Law School, Washington, teaches a course intended to train public-interest lawyers. As an element of the course, hundreds of suits have been brought against various business enterprises in an effort to correct perceived wrongs. His best-known activities have been aimed at tobacco companies, and it's generally acknowledged that he played a major role in actions taken against smoking and in favor of non-smokers' rights.
In a fast-paced staccato, Banzhaf set out his intent in unambiguous terms to use litigation to leverage change in the food sector, apparently starting with fast-food retailers, then moving to food manufacturers and finally retailers.
In another part of the session, held earlier this month, Susan Finn, chair, American Council for Fitness and Nutrition, outlined some of the actions the industry-sponsored ACFN has in the works to mitigate problems associated with foods possessing little nutritional value.
Yet as for Banzhaf, he said the road to success using litigation to drive social change is clear: "Using legal action as a social tool certainly is not new. There are many situations where there wasn't much legislation, and there wasn't much consumer support. People first brought litigation. Litigation brought publicity. Publicity, in turn, created public support and that lead to legislation."
Examples of the success of such tactics, he averred, include the civil-rights movement, the environmental-protection movement, the quest for rights for the disabled and, to some extent, the women's rights movement. And, huge judgments have been won in the efforts to win non-smokers rights and to discourage smoking itself. In each of these instances, litigation led to strong public support and to legislation.
"We're trying to do the same overall tactic [to fight obesity]," he said. "We will use a wide variety of different kinds of lawsuits, different plaintiffs, different defendants and different forums against the overall problem of obesity."
Indeed, he said, although it's not long after the public has become aware of the problem, nearly $20 million in settlements have been won, all from the fast-food industry and most centering on failure to properly disclose fat content.
In one instance, which he chalks up in the win column, a suit against a food manufacturer was dropped in the wake of the manufacturer's pledge to change the fat content of a product, he said. Other results flowing from the spate of litigation include that "virtually every fast-food company and many food [manufacturing] companies have made very significant changes in their offerings, in their disclosures, and in their provision of nutritional information. And the press is almost uniformly attributing this to the pressure and publicity of fat lawsuits.
''I think this can have a tremendous impact on the problem of obesity, if it continues. Many companies have said these are only first steps, and they have formed advisory committees that are just meeting that will advise them on a myriad of things to do.
"Also, there are reports that insurance companies will reevaluate the rates they're charging fast-food and food companies. Traditionally, these rates have been very, very low, and they're now thinking of increasing them. One insurance company, I believe, has come up with guidelines that food companies can use to reduce or limit their legal liability."
None of the wins, to date, he said, have directly involved claims associated with obesity. However, the legal way is clear toward such action: "From a legal point of view, all we have to do is prove two things: partial causation, and some kind of legal wrongdoing. All we have to prove is that the fast-food company or the [products of a] food company are a significant cause of a heart attack or stroke. I think that's going to be relatively easy. There are lots of surveys that tell us the public already believes that," he asserted.
As for how these may some day end up to the detriment of retailing, Banzhaf said there are two legal situations. Broadly, retailers may escape liability if they sell products that they had no way of knowing could be harmful. Yet, there are many instances in which that protection doesn't exist.
"Under many legal theories, retailers may be held liable even if they are not culpable. This is called strict liability. If the manufacturer is held liable, then retailers can be sued, and a win against the retailer can be obtained," he said.
"Under other legal theories, there is liability only if the retailer knew or should have known -- that is, if it's a totally hidden [product] defect and something [a retailer] couldn't possibly find out about, then the manufacturer may be liable, but the retailer not."
He said there are at least three ways in which retailers could fall under the legal theory holding that they could be liable, "and retailers ought to be very concerned."
House brands: "It's hard to argue that [retailers] don't know what's going on with regard to their own brands."
Lunch products marketed to children: "Some have 44% of the [adult] daily requirement of fat. They are routinely given to kids 3 to 4 years old. So if that's the adult requirement, what is that to a kid?"
Serving sizes: Some packages offer calorie counts based on several servings, even though it's acknowledged that the package content is typically consumed at one sitting. "Where is the warning," he asked? "Where is the disclosure of total calories in that package? There are Food and Drug Administration regulations, but I know of nothing that says retailers can't go beyond them and provide additional disclosure."
What can a retailer do to be part of the solution, or "avoid being a defendant," he asked? "If you clearly spell out calories, fat, trans-fat and so on, it is a measure that protects you in terms of legal liability. To the extent that the information is not there or is not clear, then, I think, there may very well be liability. I suggest you be proactive. Go for a higher standard. Do more than the minimum the law requires. I suggest that's good business and good for business: to be consumer-oriented, to be out in front, to be ahead of the curve," Banzhaf said.
In a separate presentation at the session, Columbus, Ohio-based nutritionist Finn, representing the action group ACFN, sponsored by the food and beverage industry, said, "We have to do something [about the obesity problem], but this is a complicated issue. It's about food, but it's about our attitudes, our values, our traditions, our community, our schools, and about how we live our lives."
ACFN's industry sponsors "are committed to arresting and reversing the growth of obesity around the world. Achieving this goal will require multiple strategies and integrated efforts from many sectors. And long-term resolve will be needed," she said. Among the possible lines of action, Finn said, are: