McDonald’s Sidesteps San Francisco Toy Ban, Will Appeal $1.8 Million Brazilian Fine
McDonald’s Corp. has reportedly responded to a San Francisco ban on giving away toys with its Happy Meals® by allowing parents to purchase the toys with a 10-cent charitable contribution when they buy a Happy Meal®. While the toy purchase is purportedly a separate transaction that complies with the new ordinance, it will still require a Happy Meal® purchase because toys cannot not be obtained by those who do not purchase the meal for their children. Previously, the toys could be purchased without buying a Happy Meal®. According to the company, the donations will help build a new Ronald McDonald House where parents of sick children at a University of California, San Francisco, hospital currently under construction will be able to stay.
At least one public health advocate, evidently unhappy with the company’s
action, was quoted as saying that McDonald’s “has developed a response
to the law that allows them to continue marketing this unhealthful food to
children in the midst of an obesity crisis. Not only have they attempted to do
that, they’ve added in the veneer of additional whitewashing by linking the
whole thing to charitable contributions.”
Meanwhile, the company has reportedly been fined US$1.8 million in Brazil
for selling its Happy Meals® with toys after a nonprofit organization headed
by one of the richest people in the country complained that the free toy
“distorts values” and encourages “unhealthy eating habits” among children.
The company has not apparently commented on the litigation other than to
indicate that is has already filed an appeal.
And in a related development, the Ninth Circuit Court of Appeals recently denied McDonald’s petition to appeal a lower court ruling remanding to state court a class action charging the company with engaging in unfair business practices by including toys with its Happy Meals®. Parham v. McDonald’s Corp., No. 11-80188 (9th Cir., decided October 19, 2011). To reach the jurisdictional threshold under the Class Action Fairness Act, McDonald’s sought to include in the “amount in controversy” required changes to its business practices if the plaintiff succeeds in her California Unfair Competition Law claims. According to the district court, such costs are incidental to rather than directly produced by the requested injunctive relief. More information about the lawsuit appears in Issue 375 and Issue 391 of this Update. See SF Weekly, November 30, 2011; Mealey’s Litigation Report: Class Actions, December 2, 2011; Advertising Age, December 7, 2011.
