I think this article is relevant to this thread and other discussions on CF on several levels:
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It’s a way some vegetable oil is alleged to be bad: I tentatively disagree with this though. I don’t think it being “natural” vs. having some GMO ingredients would make the vegetable oil a meaningfully better product. But I don’t know a ton - maybe there’s a reason I’m missing why GMO Vegetable Oil is worse than non-GMO Vegetable Oil.
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It’s a real example of a big food company allegedly committing fraud: I tentatively agree from what I know, which isn’t a ton, that ConAgra did commit fraud in this case. They advertised a thing which wasn’t true in an attempt to make their product look better and increase sales.
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As a practical matter, some readers here might be eligible and want to get in on the fraud settlement. I don’t think it’s worth doing, as I’ll explain below, but others may disagree and appreciate knowing about it.
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Most importantly, it’s a real example of how fraud enforcement against a big food company currently works. This example illuminated some additional problems with going after companies under existing fraud laws that I either wasn’t aware of or wasn’t aware of the scope:
- Size: The size of the settlement is just…utterly ridiculous? (ridiculously small) It’s like the Austin Powers movies where “One Million Dollars” is spoken as if it’s a lot of money. In this case it’s three million dollars, but a quick search says ConAgra’s revenue last year was in the range of $12 billion, so the settlement is like 0.025% of 1 year’s revenue. It’s like having to pay $30 for committing fraud if your salary is $120k. Less than a parking ticket! But unless the lawyers for the plaintiffs are incompetent (a possibility) that probably represents a better deal than the risk-and-time-and-expense adjusted deal they could expect to get out of going to trial. I’m gonna go out on a limb and speculate that although ConAgra may have changed the specific wording of this specific claim, this settlement will have approximately zero effect on their future decisions/behavior and propensity to commit fraud.
- Time: The article says the lawsuit was filed in 2011. Over 11 years just to reach this ridiculously small settlement. If it had to go to trial how many more years would plaintiffs have to wait? Justice delayed is justice denied indeed.
- Compensation: The article notes that the estimated payout to the victims of the fraud will be 15 cents per bottle that they purchased over a multi-year period. So you’re defrauded multiple times over years by a huge food company and your compensation is almost certainly less than the value of the time it will take you to learn of the settlement, fill out the paperwork, and deposit the funds.
- Limitations on which victims can even be compensated: You can’t just be a victim. You had to reside in certain states on certain dates to be eligible, not have purchased the product in a business, and have some idea how many bottles you purchased, know about, have the skill to fill out and submit the form correctly. That last requirement in particular doesn’t seem like much but is probably a significant hurdle to many of the victims, perhaps even a majority.
As in my recent post(1), I also think these problems exist for reasons that would make solving them controversial. It’s easy and probably uncontroversial to think that the effective penalty for fraud should much larger and/or faster than this, that all victims should be compensated, that the victims should be compensated more and that the compensation should be net of their required efforts to obtain it - I think those things myself. But what changes to the legal system should be made to actually achieve those outcomes? I think those changes will be controversial.
(1) Elliot Temple and Corentin Biteau Discussion - #116 by Lebowski