Last week, Naked Juice agreed to settle a very important class action lawsuit which accused the company of deceptive labeling.
The primary basis of the lawsuit stemmed from the company’s use of the words “All Natural” on products that contained Archer Daniels Midland’s Fibersol-2 (“a soluble corn fiber that acts as a low-calorie bulking agent”), fructooligosaccharides (an alternative sweetener), other artificial ingredients, such as calcium pantothenate (synthetically produced from formaldehyde), and genetically-modified soy.
Since these ingredients are either genetically-engineered or synthetically produced and do not exist in nature, it is completely misleading to consumers for these juices to claim to be “All Natural.”
As part of the settlement, Naked Juice, a subsidiary of PepsiCo, has agreed to remove the label “All Natural” from all of its juices and to pay a $9 million settlement to the class action group.
Without a question, this is a big, big win for consumers and is a huge step forward for more accurate labeling in the U.S. It also puts other food manufacturers on serious notice that GMOs are anything but natural and cannot be marketed as such.
Yet, as one digs deeper into the fine details of this lawsuit settlement, there are some extremely troubling details of which the general public is completely unaware.
THE DETAILS THEY DON’T WANT YOU TO KNOW ABOUT
The lawyers representing four of the five plaintiffs (Adhoot & Wolfson; Glancy Binnkow & Goldberg; Finkelstein Thompson; Ridout Lyon & Ottoson), who negotiated and signed off on the settlement, agreed to a provision which said that they would not freely communicate with the press in order to publicize the case. Any communication would have to contain language that was agreed upon in the settlement or would need prior approval from Naked Juice.
If lawyers who are supposed to represent the interests of the class action group cannot freely talk to the press about the settlement and cannot have complete freedom to spread information about how consumers can make a claim to the $9 million dollars, it begs the question: whose interests are the plaintiffs’ lawyers truly representing?
Shouldn’t the plaintiff’s lawyers be speaking to as many members of the press as possible in order to increase awareness of the case, so as to maximize the number of people who participate in the settlement?
As it stands now, the only way consumers will be informed about the details of the settlement is if they were to somehow read an announcement in one of the following media outlets.
Publishing Schedule of Class Action Announcement
– Once in the West Coast and Northeast regional editions of Parade magazine
– Twice in People magazine
– Four times in USA Today, but only for California
By putting a muzzle on the plaintiff’s lawyers, Naked Juice is trying to achieve two objectives – to severely limit the amount of media coverage of this case and to minimize the number of consumers who will claim a piece of the settlement, both of which cause serious damage to the Naked Juice brand.
One reason that class action lawyers pursue these cases is that a serious injustice is taking place in the marketplace which needs to be reversed. Here, it is misleading labeling.
As such, one important aspect of class action lawsuits is that there are non-profits appointed to be the beneficiaries of any unclaimed amounts awarded to the class action group (consumers).
So, let’s say the group is awarded $100M but only $40M is claimed by consumers, the remaining $60M will go to the designated non-profits. As established by the courts, the designated non-profits in class action lawsuits MUST be related to the case.
In the Naked Juice case, the non-profits must be related to accurate labeling. However, two of the three designated non-profits, Mayo Clinic (50% of unclaimed funds) and local Legal Aid groups (25% of unclaimed funds), have nothing to do with accurate labeling.
One of the plaintiff’s lawyers, Tina Wolfson of Adhoot & Wolfson, e-mailed me and said that “The Mayo Clinic works to protect consumers from false advertising through education.” A consumer can be extremely educated but if a company is lying about claims on its packaging, education is not going to solve the problem.
She also went on to say that the “Legal Aid groups work to redress injuries caused by false advertising.” Their mission is to help people after the fact but does nothing to correct the problem going forward.
While these two non-profits are fine institutions, they don’t work to promote accurate labeling of food, and the goal is to support those organizations who are already working to make this happen.
Even if the unclaimed funds were a few hundred thousand dollars, this is a very, very significant amount to non-profits and can make a real difference in impacting public policy.
And the last thing that PepsiCo would want is to have their settlement money go directly into the pockets of organizations that are vigorously pursuing accurate labeling (i.e., pushing for the labeling of genetically-modified organisms.) Why do I say this?
It just happens that PepsiCo donated $2.5 million to defeat Proposition 37, California’s 2012 ballot initiative to label genetically-modified organisms.
One final note of importance.
The lawyers representing four of the five plaintiffs (Adhoot & Wolfson; Glancy Binnkow & Goldberg; Finkelstein Thompson; Ridout Lyon & Ottoson), who negotiated and signed off on this agreement, comprise one group of plaintiff’s lawyers.
Yet, there is another group of plaintiff’s lawyers (The Golan Firm, Francis & Mailman, Center for Science in the Public Interest). This second group DID NOT agree to the terms of the settlement and have since filed an opposition with the District Court to contest certain aspects of the settlement.
Among other reasons, this second group of lawyers did not believe that two of the three designated non-profits were appropriate choices.