February 2012/Prepared Foods -- There’s no doubt regulatory agencies have ramped up the level of scrutiny given to food and beverage companies in the U.S. over the last several years. In 2011, the number of inspections by the Food and Drug Administration (FDA) increased dramatically as the agency sought to determine whether industry companies were in compliance with Current Good Manufacturing Practices (CGMPs). Numerous warning letters were sent to companies, sometimes jointly from the FDA and the Federal Trade Commission (FTC), for alleged violations of labeling and advertising laws. Shipments were held up at entry ports by U.S. Customs and Border Protection for claims made in advertising materials, including websites.
However, even as the number of regulatory actions rise, those involved in the food and beverage industries are more aware of an equal, if not greater, trend that threatens the very livelihood and existence of their businesses. That trend, which increased exponentially in 2011, is the filing of civil lawsuits against food, beverage and supplement companies by private litigants, district attorneys, consumer advocacy groups and, essentially, “professional plaintiffs” in areas traditionally the purview of the FDA and FTC. And hold on tight, because it doesn’t look as if the litigation wave will subside any time soon.
Some might argue that private plaintiffs have altruistically taken it upon themselves to step into the shoes of the FDA and the FTC and take industry companies to task for perceived violations of state and federal regulations, statutes and practices, because the FDA and FTC are spread too thinly to do it themselves. Realistically, however, there is a more self-serving reason for the marked increase in litigation: money. Plaintiff lawyers in California and elsewhere are lining up to bring civil actions—often seeking class action treatment—for alleged violations of state and federal regulations and laws, looking for big payoffs.