Report Examines Rise of Class Actions in New York
Shook Partner Cary Silverman has authored a report exploring the rise in class actions filed in New York, which, he explains, “is largely a result of lawsuits targeting businesses that sell food and beverages.” Class Action Chaos: The Rise of Consumer Class Action Lawsuits in New York, created in partnership with the New York Civil Justice Institute, details how “the percentage of class action lawsuits targeting products that New Yorkers place in their shopping carts, grab at a grocery store, or buy at a restaurant has gone up.”
“Lawsuits claiming that businesses mislead consumers in how they labeled, marketed, or advertised food made up about one-third of deceptive practices class actions in 2015. Now, these ‘food court’ lawsuits account for about 60% of New York’s consumer class actions – exceeding deceptive practices claims against all other products and services combined. Over 100 food class actions were filed in New York in 2020 alone,” Silverman explains. He breaks down which types of claims have been increasing—e.g., ingredient-based claims such as lawsuits centered on the legitimacy of “vanilla” appearing on a label—and which types of filings have been receding, such as excessive slack fill claims. Silverman goes on to pick “contenders for the dubious distinction of being named among the Top 10 most ridiculous consumer class actions filed in New York,” including lawsuits alleging consumers believe that Yumions will contain real onions rather than onion powder or that carrot-cake donuts will contain real carrots.
Silverman concludes by offering three steps to rein in abusive litigation, including actions the New York legislature can pursue. “Dubious consumer class actions are often settled or withdrawn before reaching a ruling on a motion to dismiss or soon thereafter,” he notes. “Despite the cost, disruption, and risk, businesses must be willing to fight back in court against meritless claims. Otherwise, the sue, settle, and sue-again cycle will continue unabated.”
The report’s conclusions have been amplified by coverage and commentary in the New York Post, The Center Square and the New York Daily News. Mike Durant, president and CEO of Food Industry Alliance, told the Daily News that the report should be “required reading for every lawmaker in New York.” The editorial board of the Post agreed with Silverman’s conclusions, asserting, “Lawmakers should be looking to rein in this kind of legal blackmail, not encourage it. New York’s small businesses have enough troubles as it is.”