California Courtrooms Inundated by Small Cases
On 18.01.12, In Legal Industry, by Blake Houser
Athena Hohenberg, just like any concerned mother, wanted to ensure that her 4-year old will be getting a good breakfast. So she gave her preschooler Nutella, a cocoa and hazelnut spread that is being promoted as part of a balanced breakfast. According to the TV ads, “Start your day with Nutella spread.”
However, she was surprised to learn that the sandwich spread is full of sugar and fats, which she claimed in a lawsuit she filed in February to be “the next best thing to a candy bar.”
The manufacturer of Nutella, Ferrero USA Inc., has agreed to settle the lawsuit filed by Hohenberg on behalf of thousands of other consumers, who may have also been deceived by Nutella’s advertisement. This is despite the fact that the ads also specified that milk, whole wheat bread and fruits also form part of that balanced meal.
Details of the settlement were not disclosed by the lawyers, but similar suits suggest millions of dollars in five or ten dollar sums will likely be paid by Ferrero to Nutella consumers. Lawyers will get at least a quarter of the settlement.
Pro-business groups argue that successes in small claims like that of Nutella have transformed California as the place to go for trial lawyers hoping to enrich themselves on frivolous class-action lawsuits.
The tough consumer-protection laws of the state, as well as its consumer-friendly courts, created what was recently termed by the American Tort Reform Foundation as a “judicial hellhole,” which delays legitimate cases from being heard and scares away investments and jobs.
The attempts of lawmakers to put a stop to these types of lawsuits have been spoiled by legal lobbies. Critics now say that the problem has deepened as court budgets become smaller and cases get backlogged.