Egg producer target of advertising lawsuit
By MATEUSZ PERKOWSKI
An animal rights group claims that a California egg producer misled consumers to believe its chickens were raised outdoors when they're actually housed in "industrial sheds."
Attorneys from the Animal Legal Defense Fund have filed a legal complaint alleging that Petaluma Egg Farm of Petaluma, Calif., used label descriptions and illustrations that violated false advertising and unfair competition laws.
Capital Press was unable to reach the farm for comment.
Because the USDA doesn't have rules using terms like "free range" for egg-laying chickens, the "regulatory void coupled with consumer concern for animal welfare creates a perverse incentive to market eggs as humanely produced without bearing the costs of providing enhanced animal welfare," the complaint said.
The complaint said Petaluma Egg Farm markets its eggs under several brands, including Judy's Family Farm, with cartons that show chickens in "an open grassy field. At least some of the eggs are labeled as organic.
The packages also contain "demonstrably false" statements that hens can roam, scratch and play in fresh air, "are raised in wide open spaces" and "have access to the outdoors," the complaint said.
Outdoor chicken production costs roughly one-third more than cage-free barns but the eggs can command a 25 percent premium, the complaint said. "Thus, defendant gains an unfair competitive advantage in the marketplace both against producers who do not provide outdoor access as well as those who do."
A California egg consumer, Camilla Glover, is named as a plaintiff in the case, which seeks certification as a class action that would allow others to join in the litigation.
The lawsuit requests an order prohibiting Petaluma Egg Farm from using phrases and images that misrepresent the conditions of its egg production as well as compensatory and punitive damages in an amount to be determined at trial.
Cases over false advertising generally hinge on consumer confusion, said Rebecca Tushnet, a law professor at Georgetown University who specializes in free speech issues.
"What does the consumer think the term means?" she said. "The law generally looks to what the consumer thinks is going on."
Attorneys can submit evidence such as surveys and expert testimony from marketers about what consumers believe regarding claims used by advertisers, Tushnet said.
Consumer beliefs would even trump industry standards for what terms such as "free range" actually mean, she said.
Health and production-based claims have become more prevalent among food producers in recent years, which has made such statements more attractive targets of lawsuits, Tushnet said.
Though legal rulings have set a precedent for the definition of some terms, like "antibiotic-free," there still isn't much consensus about other claims, she said.
"The courts are going to be a couple years behind but they will catch up with these representations," Tushnet said.
Most large egg producers in the U.S. do not provide outdoor access for hens due to disease concerns, so the industry hasn't developed standards for terms like "free range," said Gene Gregory, president of the United Egg Producers cooperative.
"There's really none of that in the commercial business," he said.
The USDA does have standards for cage-free labeling, which allows birds to be housed in barns, as well as organic labeling, which requires hens to have outdoor access, Gregory said.
The Cornucopia Institute, an organic watchdog group, doesn't believe Petaluma Egg Farm complies with organic rules for outdoor access, said Charlotte Vallaeys, its director of farm and food policy.
The farm has openings in barns that allow sunlight in, but the hens can't actually go outside, she said. The institute is concerned such practices undermine consumer confidence in organic labeling.
"It's misleading and it's wrong," Vallaeys said.