Animal Agriculture: Areas of Risk Defending Against Activist Threats: Legal Defenses to Activist Challenges Animal Agriculture Alliance Michelle C. Pardo 2017 Annual Stakeholders Summit May 4, 2017 Federal and State Court Litigation Legislative Regulatory Public Relations 2 ASPCA v. Feld Entertainment, Inc. Filed in federal court in Washington, DC pursuant to citizen suit provision of Endangered Species Act. 9 years to get to trial 6 ½ week trial Discovery uncovered scheme among plaintiff organizations and their law firm to pay plaintiff. RICO suit filed against activists and lawyers. Feld Entertainment won right to attorneys fees, leading to a combined settlement; animal rights groups paid over $25 million to Feld. Significant Case Events: Judgment Against Activists In 2009, Ex-circus employee found to be a paid plaintiff with a motive to falsify his testimony. Testimony rejected in its entirety as not credible. In 2013, Court ruled that Feld Entertainment was entitled to attorneys fees. Court found that the case was frivolous, vexatious and groundless from its inception frivolous suits... do not aid the cause of protecting the earth s species Plaintiff had a motive to falsify his attachment to the elephants ($190,000 paid to him by his co-plaintiffs over 8 years, funneled to him through plaintiffs counsel ). 4 1
Anatomy of a Paid Plaintiff : The RICO Scheme The RICO Case: HSUS s payment Rider received more than $190,000 to be a plaintiff Payments funneled through law firm and their own 501(c)(3) Paid by animal activist coplaintiffs and his lawyers Payments called grants to avoid detection; media work was a cover Lies and concealment of payments during discovery Rider s sole source of income; no tax returns filed until called out in this case 5 6 Settlement of the Two Cases ASPCA Settlement December, 2012 $9.3 million paid in cash No confidentiality HSUS, et al. Settlement May, 2014 $15.75 million paid in cash No confidentiality Activists in the Courtroom: Consumer Fraud Litigation Total recovery: $25,206,358.40 100% recovery of FEI s ESA Case attorneys fees Equals more than 9 years of elephant care Largest settlement by 501(c)(3)s or public interest lawyers Results in donor advisory from Charity Navigator 7 8 2
Consumer Fraud Lawsuits: A Growth Industry Sea change about consumer concerns Capitalism with a Conscience Consumers care about buying goods and services from socially responsible brands Treatment of employees Treatment of animals Transparency & Corporate oversight Impact on environment/society An Activist s Best Friend: Consumer Fraud Actions Alternative means to challenge animal welfare conditions in state and federal court where private cause of action is unavailable. Targets producers and private certification groups. A consumer (together or in connection with an activist group) brings a lawsuit (usually as a class action). Attacks some representation made by the producer or certifier, such as statements about animal care or conditions made on the label, website, and/or advertisements; ties with loss of money. Demands for verification of information Reading packaging and websites Independent research Social media engagement 9 10 Consumer beliefs and expectations Animals products labeled and advertised as humane or natural mean that the animals were raised with: access to the outdoors and sunlight access to pasture opportunities to graze and forage no unnecessary drugs or hormones freedom to express normal behaviors absence of procedures such as tail-docking; debeaking; certain euthanasia practices Consumer Statutes (California) Unfair Competition Law Consumer Legal Remedies Act False Advertising Law in environments that are not factory farm conditions Federal government: no regulations for use of humane (non-organic) 11 12 3
Animal Welfare Standards on Trial Sample Complaint: Meat products are approved by a third party certifier to be humanely raised Consumer disagrees that animal welfare standards are rigorous enough and/or allow practices that are inherently inhumane Plaintiff cites competing standards or international regulatory bodies as minimum/gold standard Plaintiff features undercover video or images to show that standards are not being met Even if standards are rigorous enough, certifier did not adequately investigate producer s operation before certifying Unfair Competition Law (UCL) Ø UCL prohibits unfair, unlawful and fraudulent conduct in connection with virtually any type of business activity. Ø Injunctive relief, restitution, civil penalties (government enforcement). Ø Damages not available; attorneys fees not available. False Advertising Law (FAL) Ø Unlawful for an individual or entity to make any untrue or misleading statement to induce the public to purchase goods or services. Ø Provides for restitution or injunctive relief (civil penalties for government enforcement). Ø No liability if statement qualifies as mere puffery (e.g. simple statements of general superiority). 13 14 Consumer Legal Remedies Act (CLRA) Legal Strategies and Defenses Ø Proscribes 24 specified business acts or practices that are unlawful in connection with a transaction intended to result in the sale or lease of goods or services to any consumer. Ø Provides for actual statutory and punitive damages (statutory additional award of up to $5,000 for senior citizens or disabled persons). Ø Provides mandatory attorneys fees and costs to prevailing plaintiff. Ø Example: Misrepresenting affiliation/certification of another ( Veterinarian Approved ). Can the case be removed to federal court? Is the case subject to CAFA (Class Action Fairness Act)? Does the plaintiff have standing to pursue the litigation? (Do they have an injury in fact?) Did the plaintiff actually rely on the statements complained of in making the purchase? Are the standards or practices upon which the statement is based available to the consumer? 15 16 4
Legal Strategies and Defenses Litigation Challenges Are the statements complained of capable of objective verification or are they subjective? Consumer Confidence Are the claims preempted by federal law? Widereaching discovery Public Relations Does a federal agency have primary jurisdiction? Judicial Precedent Do additional claims (e.g. negligent misrepresentation) contain required affirmative misrepresentations? Can we litigate this under a protective order? Cost of litigation Uncertainty for producers Confusion with regulatory requirements 17 18 5