A Call for Truth in Labeling

Alan Lyons was quoted in Risk & Insurance regarding the California State Supreme Court’s decision to allow a class action suit to move forward in state court against a company accused of labeling a mixture of organically grown and conventionally grown fresh herbs as “fresh organic.” With food companies typically asking the court to pre-empt state law consumer fraud claims in favor of federal law, Alan told the publication that the “decision may prompt a significant increase in consumer class action lawsuits alleging state law fraud and misrepresentation against businesses that use the ‘organic’ label.” He added, “As a result, insurers may seek to increase premiums to address the potential increased exposure to ‘organic’ lawsuits against insureds” or “seek to tighten up the language of their fraud exclusions so as to more clearly and expressly avoid a duty to indemnify for a finding of fraudulent mislabeling.”