Facts Alleged in CSPI Sodium Suit Incongruent with Claims Asserted
Thought to be the first putative class action against a restaurant chain related to disclosure of sodium content on menus, Center for Science in the Public Interest (CSPI) has filed what appears to be a test case against Denny’s. Best guess is the case will fail on its merits (though for CSPI, success in litigation may not be the point).
The case, DeBenedetto v. Denny’s Corporation, asserts claims under New Jersey law for consumer fraud, N.J.S.A. 56:8-1, et seq., and breach of the implied warranty of merchantability under the New Jersey U.C.C., N.J.S.A. 12A:2-314(1)-(2). The theory advanced in CSPI’s complaint is that consumers have been “duped” about sodium content and that the “ordinary consumer, unschooled in nutrition and perhaps preoccupied with other matters, would not reasonably expect to encounter these high levels of sodium in one meal.”
Big incongruency in the complaint is that Denny’s does disclose sodium content in its meals. CSPI admits that Denny’s provides this information both online and in store pamphlets, but it complains that the information is “incomprehensible.” A review of Denny’s online disclosures shows a detailed nutritional chart, including sodium levels for every item on its menu. Here's an excerpt of Denny's online disclosures:
But, CSPI's complaint does not really seem to be that disclosures are not clear enough. Indeed, CSPI argues that regardless of such disclosures by restaurants, studies show that “almost no one reads the nutrition information . . . .”
What CSPI is really saying is that sellers of salty foods (not unlike foods contaminated with E. coli) are strictly liable no matter the disclosures. If this were the law (which as of now, it is not), few restaurants (or food manufacturers) would be exempt from paying the medical bills of their customers who develop heart disease. No doubt CSPI's real goal is "regulation through litigation" and the jury is still out whether CSPI's penchant for the court system will affect change.
Is More Bad By-Products News Coming for Biofuels Producers?
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2008 was a terrible year for makers of ethanol and biodiesel. Huge spikes in the prices of raw materials, natural gas and transportation and drops in the prices they received for their main products have driven many of them to cut back production, shutter plants or even seek bankruptcy protection. In additiion, U.S. biodiesel producers saw themselves faced with an antidumping investigation by the EU that might affect their export market.
If you thought it couldn’t get any worse, hang on.
The National Grain and Feed Association reports that at the International Feed Expo in Atlanta on January 27, Dr. Daniel McChesney of the Food and Drug Administration spoke about studies the agency has reviewed concerning distillers’ grains, the main by-product of ethanol, and glycerin, the main by-product of biodiesel. The information presented by the FDA’s Center for Veterinary Medicine is of concern to anyone in the biofuels industry, as well as anyone who feeds livestock or purchases, processes or consumes meat and poultry.
The FDA has tested 45 samples of distillers’ grains from ethanol plants and in over half of them detected antibiotics, including virginiamycin, erythromycin and tylosin. NGFA later learned that the concentration of those antibiotics exceeded the level (0.5 ppm) from a letter of no objection relating to virginiamycin issued in 1993 to the predecessor of Philbro Animal Health. There are no safe levels established for the other two antibiotics in feed grain. The FDA has 15 more samples to test and intends to make its final report available this summer.
With regard to biodiesel-derived glycerin, Dr. McChesney stated that the FDA does not consider it to be GRAS, or generally recognized as safe, for use as animal feed. Two issues raised concerns:
· Many samples contained more methanol than the 150 ppm level recognized as safe for animal feed; and
· Samples contained salt in concentrations as high as 16,500 ppm.
Accordingly, the FDA will be conducting a safety review of glycerin as a by-product of biodiesel. This will focus on the type of feedstock used, the manufacturing process and how the glycerin is introduced into feed.
Developing markets for by-products has been a significant challenge for the emerging biofuels industry. The latest news of the FDA’s concerns about both distillers’ grains and glycerin will increase those challenges in an already difficult environment.
