Obesity Lawsuits Duplicate Strategy of Tobacco Torts, Levy Says

September 17, 2004
Levy, left, and Walker
Bob Levy, left, argued that litigation by states against the food industry would be a "shakedown." Law professor Larry Walker responded to Levy's lecture by noting that tort litigation serves as an effective private protector of consumer interests.

Lawsuits against the food industry are following the pattern of tobacco litigation, said Bob Levy, Senior Fellow in Constitutional Studies at the Cato Institute, at an event sponsored by the Federalist Society Sept. 15. States might contract with private attorneys again to win a massive legal settlement-this time to pay for obesity-related medical costs incurred by Medicare and Medicaid. Private plaintiffs are now looking to lawsuits instead of taking responsibility for their actions, Levy suggested, and the cases could lead to further government regulation and less citizen choice.

The tobacco cases "were just the first step down a pretty slippery slope," Levy said. He said he predicted six years ago the tobacco lawyers would attack other products, likely targeting the food industry. "Now we know that the risk is real. The risk is imminent." The states are "eager to refill their depleted Medicare coffers."

Levy mocked the claims of plaintiffs suing the fast-food industry who said they didn't know the food was bad for them (one memorably remarked that he thought his hamburgers were healthy because they were made of 100-percent beef).

In January 2003 a federal judge threw out a class-action suit filed on behalf of obese children against the fast-food industry, but left enough room in his dismissal to encourage further claims, Levy said. "If the tobacco litigation holds up, it will be not just private actors, but states."

Signs are mounting that more lawsuits are on the way. Levy said a Northeastern law professor held a strategy session for nearly 100 attorneys interested in suing big food. The nonprofit Physicians Committee for Responsible Medicine announced that obesity caused $61 billion each year in U.S. medical costs, and suggested the fast-food industry be held accountable.

There is "an insatiable appetite for social engineering, and of course, the big bucks that go along with it," Levy said.

Plaintiffs will have to prove that they bought fatty foods and were misled by ads, that they are physiologically addicted, that the food causes obesity, and that obesity is responsible for their medical problems.

On the side of the food companies, the data showing connections between fat and disease are unreliable because other competing factors like genetics can complicate the picture. Blaming fatty foods alone is "virtually impossible," Levy said.

"When I was young, the nutritional gurus were pushing steak and eggs," he said, and after that they promoted potatoes and pasta. So who should be sued, he wondered-cattlemen or Idaho potato farmers?

"The trial lawyers have a ready response, and that is, sue all of them." Levy played devil's advocate: "If fatty foods are injurious, let's make sales to kids illegal." But banning sales of candy to juveniles, for example, likely wouldn't receive public support.

Levy denounced the idea of having private attorneys act as government subcontractors. He equated it to policemen receiving incentives for writing speeding tickets. "The potential for corruption is enormous, and yet that was the tobacco model," he said. Contingency-fee contracts between the state and private attorneys, like those used in the tobacco litigation, should be illegal, he said. The ultimate aim of the tobacco litigators and class-action lawsuits blaming fast food is "not to go to trial, but merely to go to negotiations."

Levy said laws should be enacted by legislators, not attorneys or courts who are responding to failed legislation. In 1919, lawmakers believed a constitutional amendment was necessary to prohibit the sale of alcohol, but now drug control is entirely statutory, he pointed out. The FDA can ban products, but with food, you only need a lawsuit to bypass the legislative branch.

The House of Representatives has weighed in on the lawsuit debate by proposing legislation blocking obesity-related lawsuits in federal and state courts. But where in the Constitution does the national government have the authority to tackle obesity-and do it in state courts also? "Not every national problem is a federal problem," Levy argued.

Proposals for reform are never far behind the explosion of torts. "I sympathize with those goals," Levy said, but commercial laws do not permit Congress to commandeer state courts. The commerce clause, which defines congressional power to regulate interstate commerce, is often used to push social programs, he said. But none of the fast-food lawsuits has reached a jury yet, so congressional action is premature. He suggested Congress might preclude suits affecting business outside the state in which the lawsuit is filed. "A sensible rule like that would give firms an exit," he said. The "choice of law" doctrine determines which state's laws will control litigation in a national class action suit, but Congress could enact a federal choice of law rule, making the location of the business determine which laws apply. There might be a race for companies to look for the state with the most favorable tort laws, but voters will want adequate redress too. State governments would aim to please both parties, assuming they want to attract businesses. The fixes to the tort problem can be procedural, Levy said, and connected to the federal function to ensure state sovereignty doesn't extend beyond the state's borders. But however real the problem, if there is no authority imbued by the Constitution, the federal government must step aside. If Congress claims it can regulate anything that affects anything that crosses state lines, then federal lawmakers effectively control everything. "My preference is to restore sanity to tort law," he said.

Law professor Larry Walker responded to Levy's argument by agreeing that causation may be difficult to prove in fast-food torts. Wisconsin prison guard Don Gorske recently broke the Guinness world record by eating his 20,000th Big Mac sandwich. But he's in excellent health because "he has been walking to work both ways and eating little else except one or two Big Macs a day." The story highlights how unlikely fast-food lawsuits are to be successful, Walker suggested, because proving causation is almost impossible.

"I don't think this is a serious threat," he said. "It's very, very unlikely-because of the hurdle [of causation]-to be the same as tobacco."

Walker pointed to the toxic-tort standard of causation: "at core is the requirement…that there be some connection between a medical ailment that has cost the plaintiff money and the allegedly toxic substance." Two types of causation must be proven: general causation, in which an expensive, complicated epidemiological study is required to show a chemical can cause medical harm; and secondly, that the food or chemical caused a specific medical problem. "It's, plainly speaking, extraordinarily difficult," he said.

Walker said the "so-called trial lawyers" have brought positive impacts to consumers. "We have the very finest consumer protection apparatus in the world," he said, not because of the government, but "we have it chiefly because of the private bar." Private attorneys supply the kind of daily analysis and constant vigilance of a sort no government could possibly apply, he said. "The virtue of that system…is because it's private. It's privatized. It's market-driven." Torts focusing on a particular product don't last because businesses respond to litigation by making their products safer, and lawyers move on. A government agency would just monitor a product forever and likely would be more expensive, Walker said. Even if Americans are getting too much consumer protection, legal incentives to file torts should be reduced only modestly.

Levy responded that the private system Walker described cost about $7,700 per hour in the tobacco litigation case, in which lawyers received 30 percent of the settlement of $246 billion. There's evidence that lawyers working on the suit in Texas earned a hefty $92,000 per hour. Consumers "surely can be protected at less than $92,000 an hour. I would do the job for $90,000."

Responding to Walker's assertion that individuals must show the food made them ill, Levy said states simply eliminated private causation in the tobacco cases. "All you had to show was generalized statistics," he said. The states and their contracted lawyers also retroactively abrogated the traditional rules of tort law, he said, when they removed the assumption of risk from the arsenal of weapons the tobacco companies could use. He noted the Maryland legislature admitted they changed centuries of precedent in order to ensure a win.

Levy suggested Secretary of Health and Human Services Tommy Thompson may have further paved the way for food-related lawsuits when he decided that obesity will be considered a disease, opening the door for Medicare and Medicaid to pay for treatment. Levy argued that taxpayers have a right to demand responsible behavior from people getting Medicare or Medicaid benefits. Allowing food lawsuits to go forward further sends a warped message to children that they can foist their conduct off on someone else.

In the end, consumers may not always be protected by massive settlements, Levy suggested. The tobacco litigation turned out to be a sweetheart deal for all parties: The tobacco companies ensured they wouldn't face increased competition by including language in the settlement requiring uninvolved tobacco companies to pay the same damages for 25 years, with the net result that smaller companies couldn't compete by cutting prices. The tobacco companies involved in the settlement made their money back by raising prices, and the people who bore the costs were those who weren't represented at the negotiating table-the smokers. Levy said the collaboration between private companies, private lawyers and the states was "fearful."

Walker said the private attorneys assumed risk as well when taking the case because they could have lost.

Levy retorted, "Who do you think won the bids [to work on the lawsuit]?"-the attorneys who were bankrolling the officeholders. He said the state does not need help to get access to the legal system, and thus does not need private attorneys.

In response to a question about the food industry's reaction to looming lawsuits, Walker said the fast food industry has modified its behavior only slightly-for example, McDonald's now includes a pedometer with some meals, but "they desired for business reasons to make that adjustment." In response to the argument that causation was dropped from state laws in the tobacco cases for the advantage of the plaintiffs, he noted that "you would find that the causation standards employed by the EPA are much, much less demanding."

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