The plot to make Big Food pay
By: Helena Bottemiller Evich
February 12, 2014 05:11 AM EST
Lawyers are pitching state attorneys general in 16 states with a radical idea: make the food industry pay for soaring obesity-related health care costs.
It’s a move straight from the playbook of the Big Tobacco takedown of the 1990s, which ended in a $246 billion settlement with 46 states, a ban on cigarette marketing to young people and the Food and Drug Administration stepping in to regulate.
There are plenty of naysayers, just as there were in 1994 when Mike Moore, Mississippi’s attorney general, famously suggested suing the tobacco industry. But a number of nutrition and legal experts think a similar strategy could be applied on the food front — especially as obesity-related diseases have surpassed smoking as a major driver of health care costs.
“I believe that this is the most promising strategy to lighten the economic burden of obesity on states and taxpayers and to negotiate broader public health policy objectives,” Paul McDonald, a partner at Valorem Law Group in Chicago, said, leading the charge.
McDonald’s firm has sent proposals to AGs from California to Mississippi explaining how suing “big food” could help their states close budget gaps as billions in Medicaid expenditures eat a growing share of tax revenues.
In a letter to Pennsylvania Attorney General Kathleen Kane last year, McDonald noted that the state faced a $3.7 billion budget shortfall in 2012 and had to cut back on certain services. The state’s total Medicaid burden that year was $10 billion — and getting a piece of that back could help close the gap.
Similar proposals, tailored to each budgetary situation, also have been sent to AGs in Connecticut, Delaware, Iowa, Kentucky, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, New York, Nevada, North Carolina and Oregon, McDonald told POLITICO in an exclusive interview. So far none have agreed to sign on.
The central argument is that food and beverage companies have, to some extent, contributed to the nation’s obesity crisis, and they should pay for the costs of that portion.
The food industry, for its part, thinks the whole idea misses the mark.
“Regulation through litigation is not an effective or appropriate mechanism for policymaking,” said Ginny Smith Clemenko, senior director of communications at the Grocery Manufacturers Association, the food industry’s most influential lobbying group. “Proponents of bans, taxes and lawsuits as a means to curb obesity don’t truly understand the nature of the problem and lack the collaborative vision shared by first lady Michelle Obama and the vast majority of stakeholders who are working passionately to solve it.”
Food and beverage companies have, over the past decade, introduced 20,000 healthier products, voluntarily removed full-calorie drinks from schools and adopted self-regulatory standards for marketing to kids, Smith Clemenko adds.
The attorney looking to organize an attack against the food industry is an unlikely crusader. McDonald has represented both the tobacco industry when the feds went after it for racketeering and fraud and the food industry as senior counsel at Kraft Foods. He is quick to note he does not think food executives are “evil” or that the industry is full of “horrible people,” but he believes some of their practices have had consequences.
“It’s not a matter of casting the food industry as villains,” McDonald said. “There’s a cost of what they’re doing that they’re not internalizing, and the taxpayers are paying for it. The states don’t have many choices.”
McDonald’s law firm has allied with a number of well-known obesity and diabetes researchers, including Barry Popkin at the University of North Carolina Chapel Hill, Robert Lustig at the University of California San Francisco and economist Frank Chaloupka at the University of Illinois at Chicago, to help hash out the strategy.
Lustig, a pediatric endocrinologist, is known for his lecture “Sugar: The Bitter Truth,” which went viral, attracting more than 4 million views. He believes litigation should zero in on diabetes. “It’s the diseases related to obesity that are expensive,” he said.
More research is linking added sugars not only to diabetes but also to cardiovascular disease. According to one study, about 75 percent of all the packaged foods in U.S. supermarkets contains added sugars — from pasta sauce to Wheat Thins.
“We need policy to change,” said Lustig, who recently got a law degree and launched a nonprofit to continue his advocacy. “I think we’re going to have to battle [the food industry] like we battled tobacco.”
There are a number of obesity policy experts who don’t think what McDonald and his allies are attempting is such a crazy idea.
“I don’t think it’s far-fetched at all,” said Kelly Brownell, dean of Duke University’s Sanford School of Public Policy and one of the most-recognized obesity and nutrition policy experts. “I think it’s quite likely to occur,” said Brownell, though he is not involved in the effort. “It’s probably not something that will happen immediately, but I don’t think it’s that far off.”
But there are some in the legal realm who are more than skeptical.
James Tierney, director of the National State Attorneys General Program at Columbia Law School and former attorney general of Maine, laughed when asked about the proposal.
“It’s just not going to happen,” said Tierney, who noted that tobacco companies lied about the health effects of their products for decades. “The food industry doesn’t deny that eating lots of food causes obesity.”
Whether such a lawsuit could ever survive in court, let alone result in a settlement or policy changes, is an open question, but food industry lawyers are already talking about, if not begrudgingly expecting future attempts aimed at the industry’s potential role in driving up health costs.
Bruce Silverglade, a principal at Olsson Frank Weeda Terman Matz, warned food industry attorneys two weeks ago about the litigation they should expect in the future. Food companies are already facing between 150 and 200 lawsuits centered on labeling and marketing disputes, many of them over use of the term “all natural.”
But the next waves of litigation are likely to be much different, Silverglade said at the meeting in San Francisco. He predicted lawyers will eventually home in on “food addiction,” a legal theory pioneered by former FDA Commissioner David Kessler.
“If certain fats, sugars, and salt were ‘addictive,’ and companies nonetheless proceeded to market products containing those nutrients … the consumer class action bar could attempt discovery in hoping to find company documents that validate Kessler’s addiction theory,” Silverglade noted in his presentation.
In other words, lawyers could go fishing in the hopes of finding some kind of “smoking gun.”
“Food and tobacco are different,” Silverglade said in an interview. “It’s a leap to think state AGs and class action lawyers could get to that point.”
McDonald’s pitch has also caught they eye of the Chamber of Commerce. The letter sent to Pennsylvania was cited in a recent report on emerging litigation threats to industry.
The proposal drew ire, in part, because it would rely on a contingency fee agreement, which allows a private firm to do legal work for attorneys general offices in exchange for a cut of the settlement. It’s an increasingly common practice because it allows cash-strapped AG offices to tackle expensive litigation without taking as much risk.
“Pay-to-play relationships between [plaintiff’s attorneys and attorneys general] that exchange campaign contributions for lucrative government lawsuit contracts mean the food industry has a big target on its back,” said Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform.
For now, McDonald is hoping to get a working group started through the National Association of Attorneys General. He wants states to coordinate on any future legal strategy from the very beginning.
Moore, Mississippi’s attorney general from 1988 to 2004, recalls how he first attempted to organize states around a similarly contentious cause in the early ’90s. He tried to set up a meeting at an NAAG conference to discuss taking on the tobacco industry, but he was unable to get a spot on the agenda or even a conference room.
“The issue was too controversial,” Moore says, so a small group of AGs met around some couches in a hallway. “Nobody thought we had a chance to win.”
Moore ended up filing the first lawsuit against the tobacco industry and spearheaded what would become the largest class action settlement in U.S. history.
When asked about attempts to take on the food industry, however, Moore doesn’t sound convinced.
“It’s just not the same,” said Moore, who now has his own law firm. “There is no safe use of cigarettes, but we live off food.
“I’d never say you can’t make a case. That’s all I heard for five years,” he said. “But you’d really have to have some significant proof.”