Post Holdings’ recent $15 million settlement is just another example of entrepreneurial trial lawyers bullying their way into a payday, according to a spokesperson for the American Tort Reform Association (ATRA).
Plaintiffs sued the Brentwood consumer packaged goods holding company five years ago, alleging that Great Grains, Bran Flakes and Raisin Bran cereals are deceptive about the amount of sugar they contain, according to media reports.
“It’s disheartening to see courts continue to allow such frivolous lawsuits clog the court systems and drag down the economy,” said Tiger Joyce, ATRA president.
As part of the settlement, cereals that have more than 10% calories deriving from sugar will withdraw labels that state: "no high fructose corn syrup," "less processed," "wholesome," and "nutritious."
“These food labeling lawsuits that don’t actually claim any sort of injury are common in places like California and New York City, perennially named Judicial Hellholes by the American Tort Reform Foundation,” Joyce told the St. Louis Record.
As previously reported, ATRA classifies cities and states as a Judicial Hellhole based on the evaluation of court systems. Formerly number one on the annual Judicial Hellhole ranking, St. Louis has dropped to number seven in 2020 thanks to a few legislative changes.
“There is a very high cost to continue litigating these cases, which can go on for years,” Joyce said in an interview. “And when trial lawyers use tactics like anchoring, where they’ll throw out an arbitrary number in front a jury, the verdict amounts become almost unbelievable.”
The cereal company is also charged with establishing a settlement fund so that shoppers who bought Post cereals between 2012 and 2020 will potentially receive an award.
“Determining whether the risk of continued litigation is worth the cost of a potentially bankrupting jury verdict is an unfortunate calculation many companies today are forced to make,” Joyce added. “It’s disheartening to see courts continue to allow such frivolous lawsuits clog the court systems and drag down the economy.”